New India Assurance Co. Ltd. vs Padam Singh and Others

G.P. Mittal, J.—The Appellant New India Assurance Co. Ltd. impugns a judgment dated 31.08.2010 passed by the Motor Accident Claims Tribunal (the Claims Tribunal) whereby a compensation of Rs. 14,40,318/- was awarded in favour of the Respondents No. 1(a) to 1(c) for the death of deceased Ameer Singh who died in a motor vehicle accident which occurred on 16.02.2006. The finding on negligence is not challenged by the Appellant.

There is twin challenge to the conclusion reached by the Claims Tribunal. First, the compensation awarded is exorbitant and excessive in as much as the award towards loss of dependency has been made by taking the monthly income of the deceased to be Rs. 12,054/-, whereas as per the salary certificate, the income of the deceased was Rs. 10,910/- per month. Second, the Appellant proved that the licence held by the Respondent No. 2 was fake, yet the Appellant was made liable to pay the compensation. Even the recovery rights were not granted.

Per contra, the Learned Counsel for the Respondents (Claimants) states that the compensation awarded is just and reasonable. It is urged that the Appellant failed to prove wilful breach of the terms and conditions of the policy and, therefore, the recovery rights were refused.

QUANTUM:

The compensation of Rs. 14,40,318/- awarded by the Claims Tribunal is tabulated hereunder:

Sl. No.

Compensation under various heads

Awarded by the Claims Tribunal

1.

Loss of Dependency

Rs. 14,10,318/-

2.

Loss of Love and Affection

Rs. 10,000/-

3.

Loss to Estate

Rs. 10,000/-

4.

Funeral Expenses

Rs. 10,000/-

Total

Rs. 14,40,318/-

It is urged by the learned for the Appellant that as per the salary certificate Ex. PW1/13, the deceased Ameer Singh was getting a conveyance allowance of Rs. 1,166/- per month. The said amount being incidental to the deceased''s employment was not for the benefit of the family and was liable to be deducted while computing the loss of dependency.

I have before me the salary certificate Ex. PW1/13 proved by the Respondents. Admittedly, the amount of Rs. 1,166/- was paid towards conveyance allowance. The sum was, therefore, liable to be deducted from the deceased''s income of Rs. 12,054/- to compute the loss of dependency. Thus, the loss of dependency comes to Rs. 12,73,896/- ( Rs. 12054/- - 1,166/- = 10,888/- + 50% x 12 x 1/2 x 13).

The Claims Tribunal awarded a sum of Rs. 10,000/- each towards loss of love and affection, loss to estate and funeral expenses. In Sunil Sharma and Others Vs. Bachitar Singh and Others, and in Baby Radhika Gupta and Others Vs. Oriental Insurance Co. Ltd. and Others, , the Supreme Court granted Rs. 25,000/- under the head of loss of love and affection. Thus, I award a sum of Rs. 25,000/- under the head loss of love and affection.

The overall compensation thus comes to Rs. 13,18,896/- as against the award of Rs. 14,40,318/-.

LIABILITY:

It is urged by the Learned Counsel for the Appellant that the Appellant successfully proved breach of the terms of the policy. The owner (Respondent No. 3) did not come forward to give any explanation as to the circumstances under which he entrusted the offending vehicle to the Second Respondent. As, the Appellant discharged the initial onus of proving the breach of the terms and conditions of the policy, thus, argues the Learned Counsel, the Appellant was entitled to recovery rights.

During inquiry before the Claims Tribunal, the Second Respondent (driver of the offending vehicle) filed a written statement denying negligence. He took up the plea that he (Respondent No. 2) was driving commercial vehicles for the last many years. He was a trained driver and possessed a valid driving licence which was taken into possession by the police at the time of the accident. He stated that till date the Second Respondent had not caused any accident (except the accident in question). The Appellant did not controvert the claims made by Second Respondent in the written statement. Rather, a vague and general defence was taken that if the driver did not possess a valid driving licence at the time of the accident, the Appellant would not be liable to pay any compensation to the Claimants.

The Appellant relies on the report Ex. R3W1/A given by an Investigator Prem Gautam. As per this report, the RTO Meerut informed him (the Investigator) that licence No. DL-J-69916/Meerut/1990 was not issued by the Motor Licensing Authority, Meerut. Thus, the licence held by the Second Respondent at the time of the accident issued by the MLO although was genuine cannot be said to be valid as the initial licence was a fake one.

No official from the office of MLO, Meerut was summoned to prove the report Ex. R3W1/B. Amit Kumar Singh, R3W1, Administrator Officer of the Appellant did not depose anything about the signatures on the document Ex. R3W1/B. Moreover, Ex. R3W1/B nowhere states that the initial licence was a fake one. It is well settled that in order to avoid liability, it is for the Insurance Company to prove that there is breach of the terms and conditions of the policy. The Appellant Insurance Company has utterly failed to establish that the initial licence issued in the year 1990 was fake.

Moreover, no notice under Order XII Rule 8 CPC was given to the Respondents No. 2 and 3 calling upon them to produce the original licence or to depose about its genuineness. No explanation was sought by giving any notice to the owner that the licence held by the driver was fake. Thus, there is no escape from the conclusion that the Appellant Insurance Company failed to establish that there was any willful breach of the terms of the policy. The Appellant, therefore, cannot escape its liability to indemnify the insured.

The excess amount of Rs. 1,21,422/- along with proportionate interest and the interest, if any, accrued during the pendency of the Appeal shall be refunded to the Appellant Insurance Company.

The compensation awarded shall be released/held in fixed deposit in terms of the Claims Tribunal''s order.

The Appeal is disposed of in above terms.

Statutory amount of Rs. 25,000/-, if any, shall be refunded to the Appellant Insurance Company. Pending Applications stand disposed of.