National Insurance Company Ltd. vs Fazal Din

Hasnain Massodi, J.—The Civil First Miscellaneous Appeal, on hand, is directed against award dated 14th March, 2009 passed by Motor

Accident Claims Tribunal (MACT), Jammu in file No. 354/Claims title ""Fazal Din v. National Insurance Company and Ors. "" The appeal arises in

the following factual background:-

Shri Siraj Din S/o Fazal Din - Respondent No. 1 herein lost his life in a vehicular accident on 10.6.2003 at National High Way by pass Channi

Himmat, Jammu. The respondent laid a claim petition before Motor Accident Claims Tribunal, Jammu amongst others against the appellant

Insurance Company with whom the offending vehicle was insured. The appellant resisted the claim petition inter alia on the ground that the driver of

the offending vehicle-respondent No. 3 herein was not holding a valid and effective driving licence at the time of accident. The appellant pleaded

that the respondent No. 3 was competent and authorised to drive ""light transportation only"" whereas the offending vehicle JK02F-8156 was a

Passenger Carrying Commercial Vehicle"".

The Tribunal on perusal of the pleadings settled following issues:-

Whether an accident took place on near Channi Himmat, Jammu on 10.6.2003 due to rash and negligent driving of matador No. JK02F-8156

which crushed the deceased Siraj Din to death? OPP.

What is the amount of compensation to which petitioners are entitled from whom? OPP.

Whether erring driver was not in possession of effective and valid driving license on the date of accident to the knowledge of the insured? OPP.

Relief? OP Parties.

The parties' adduced evidence in support of the case set up in their pleadings and to prove the issues burden whereof was put on them

respectively. The Tribunal held the respondent No. 3 to have been not competent to drive the offending vehicle at the time of accident and the

appellant to be absolved from liability to indemnify respondents 2 and 3. The Tribunal nonetheless directed the appellant to satisfy the claim and

recover the compensation assessed from the owner.

The appellant assails the award on the grounds that the Tribunal after returning a finding in favour of the appellant and holding respondent No. 3

not to have been competent/Authorised to drive the offending vehicle at the time of accident, acted without jurisdiction while asking the appellant to

pay the compensation amount to the respondent No. 1. It is next urged that compensation of Rs. 4,14,999/-on account of loss of dependency and

burial expenses is on the higher side and assessed unmindful of the settled legal position.

I have gone through the memorandum of appeal and the record received from the MACT. I have heard learned counsel for the parties.

The evidence brought on the file reveals that the deceased was 22 years of age, a bachelor and a labourer by profession having Rs. 5,000/- as

his monthly income. The respondent No. 1- father of the deceased as per the evidence on the file was 52 years of age. The Tribunal taking the

monthly income of the deceased as Rs. 5,000/- deducted 1/3rd of the income on account of personal expenses and worked out Rs. 39,999/- as

annual loss of income to the appellant. The Tribunal did not take into account age of the deceased to decide on the multiplier applicable. It rather

took into account the age of the appellant and applied multiplier of 9, assessed the compensation on account of loss of dependency as Rs.

3,99,999/- and awarded an amount of Rs. 15,000/- on account of burial expenses and passed an award of Rs. 4,15,000/-.

Before going through the grounds urged in the appeal, it is pertinent to point out that the Tribunal while assessing the compensation has due to

mathematical error worked out compensation on account of loss of dependency more than the amount one would get even after applying the

formula adopted by the Tribunal. The Tribunal took into account Rs. 5,000/- as monthly income of the deceased and after deducting 1/3rd on

account of personal expenditure took Rs. 3,333/- per month as net income of the deceased. When the net monthly income is multiplied by 12 to

get the annual net income of the appellant, the amount we get is 3,333 x 12 = 39,996/-. When this amount is multiplied by 9 i.e. multiplier applied

by the Tribunal, the total amount on account of loss of dependency works out to be 39,996 x 9 = Rs. 3,59,964/-. The Tribunal instead has due to

mathematical mistake assessed compensation on account of loss of dependency as Rs. 3,99,999/-.

The challenge to the award in question, is two fold. Firstly, it is contended that the Tribunal having regard to the fact that the appellant was a

bachelor ought to have deducted one half of the income on account of personal expenses. It is urged that there was no cogent and convincing

evidence before the Tribunal to arrive at the conclusion that the deceased had an income of Rs. 5,000/- per month and that the Tribunal worked

on surmises and conjectures to take into account Rs. 5,000/-as the monthly income of the deceased. Secondly, the appellant insists that the

Tribunal after returning finding on issue No. 3 in favour of the appellant, lacked jurisdiction to burden the appellant with liability to pay

compensation amount to the respondent No. 1.

There is very little scope for disagreement with learned counsel for the appellant that in view of settled legal position that the Tribunal ought to

have deducted one half of the income on account of personal expenditure. It has been authoritatively laid down in Smt. Sarla Verma and Others

Vs. Delhi Transport Corporation and Another, that where the deceased is proved to have been a bachelor at the time of accident, one half of the

income is to be deducted on account of personal expenditure.

There is, however, no substance in the case sought to be set up by the appellant, that there was no evidence on the file to suggest that the monthly

income of the deceased was Rs. 5,000/- per month. The appellant as a matter of fact has not adduced any evidence to rebut the evidence

adduced by respondent No. 1 on this aspect of the case. However, the Tribunal has erred while applying multiplier of 9 to assess the

compensation. While the opinion of the Tribunal that in case of death, to identify the multiplier the higher age is to be taken into account cannot be

faulted, yet the Tribunal having regard to law laid down in Sarla Verma's case (Supra) ought to have applied the multiplier of 12 to compute the

loss of dependency.

The appellant's case that after the Tribunal after concluding that the driver of the offending vehicle not to have been authorised to drive the

vehicle involved in accident ought not to have asked the appellant to pay compensation and recover it from the owner/insurer, does not sound

convincing. In order to provide immediate relief to the claimants, the Tribunal, even, where it finds that the insurer may escape the liability to pay

the compensation, may ask the Insurance Company to pay compensation to the claimant and ask it to recover the compensation so paid from the

insured. The practice has been consistently followed by the Motor Accident Claims Tribunal and even approved by the Supreme Court. If after a

long drawn trial, the claimant is found entitled to compensation but not in a position to reap the fruits of frustrating litigation and forced to initiate

proceedings against the owner of the offending vehicle and/or its driver, the very object of chapter - of the Motor Vehicles Act would be

frustrated. The Supreme Court in Kusum Lata and Others Vs. Satbir and Others, has put seal of approval on the practice followed by the Motor

Accident Claims Tribunal in such eventualities. The Supreme Court has observed: -

In respect of the dispute about licence, the Tribunal has held and, in our view rightly, that the Insurance Company has to pay and then may

recover it from the owner of the vehicle. This Court is affirming that direction in view of the principles laid down by a three judge Bench of this

Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh and Others, .

For the reasons discussed, the award made by the Tribunal in case title Fazal Din v. National Insurance Company and Ors. is modified as

under:-

The appellant Insurance Company shall pay an amount of Rs. 3,75,000/-to the respondent No. 1 with the following break up:-

Loss of dependency = Rs. 2500x12x12 = Rs. 3,60,000/-

Loss of funeral expense = Rs. 15,000/-

Total = Rs. 3,75,000/-

The conditions subject to which the award has been made by the Tribunal and the rate of interest are left unaltered. The appeal is disposed of

accordingly.