Oriental Insurance Company Ltd. vs Nazir Ahmad Chowdhary and Others

Muzaffar Hussain Attar, J.—On 16th June, 2000, the passenger vehicle bearing registration mark JK02D 7077 fell into a 200 feet deep

gorge. The accident is attributed to the alleged negligence of the driver of the said vehicle. Some passengers lost their lives and some suffered

injuries. Respondent No. 1 (for short ""claimant"") was one such passenger who suffered grievous injuries in the said accident.

Once recovered claimant filed claim petition before learned Motor Accident Claims Tribunal, Srinagar (for short Tribunal), claiming therein

compensation for an amount of Rs. 40,05,000/-. The basis of the filing of the claim petition is that the claimant because of the accident suffered

compound fracture L1 with bladder disturbance and Monoplegia left leg. The claimant claimed to have suffered permanent disability of spine with

limb. In the claim petition, monthly income was stated to be 15,000/- and age was stated to be 30 years. The basis of filing the claim petition was

that because of the accident the claimant suffered permanent disability and was thus disabled to earn livelihood for himself and also for his family

members.

The case FIR No. 54 of 2000 under Sections 279/337,304-A RPC was registered with Police Station Jhajjar Kotli. The vehicle was

admittedly insured on the date the accident took place.

On notice Respondent No. 3, Insurance Company filed written statement/objections to the claim petition.

The Appellant denied the claim put forth by the claimant in the claim petition as also disputed the basis thereof. One of the grounds taken in the

objections was that the driver was not holding a valid driving license.

The learned Tribunal vide its order dated 18.02.2002 framed five issues. The issue No. 3 provided as to whether the driver of the offending

vehicle was not holding valid driving licence on the date of accident and as such the Insurance Company cannot be saddled with the liability

The Learned Tribunal initially passed the interim award on 18.06.2003 directing the Appellant to pay an amount of Rs. 25,000/- under no fault

liability to the claimant. The said interim order has not been challenged by the Appellant. While passing the interim award under no fault liability

prima facie a view was taken by the learned Tribunal that as the insurance policy reveals that on the date of accident the vehicle was insured so the

Appellant company was liable to pay the interim award in an amount of Rs. 25,000/- to the claimant.

The claimant in support of his claim petition examined four witnesses which includes the statement of the claimant as well. The Insurance

Company examined one clerk.

The claimant has succeeded in discharging the burden to prove the issues, whereas Appellant has failed to prove the issues burden whereof was

on it.

The learned Tribunal passed award for an amount of Rs. 7,05,800/- along with interest of 6% per annum from the date of institution till its final

realization. The award has been passed on 26.12.2007 by the learned Tribunal.

The Appellant being aggrieved of the said award has challenged the same inter alia on the grounds that one-third of amount from the award

amount has not deducted by the learned Tribunal and that driver was not holding a valid driving licence, the effect whereof would be that the

Appellant company is not liable to indemnify the insured.

Heard learned Counsel for parties. Considered the matter.

Mr. J. A. Kawoosa, learned Counsel appearing for Appellant while challenging the validity of the award passed by the learned Tribunal

submitted that Appellant company had discharged the burden of proving the issue No. 3 which provided whether the driver of the offending vehicle

was not holding a valid driving license and the Insurance company was not thus liable to indemnify the insured. Learned Counsel further submitted

that one-third of the award amount was required to be deducted by the learned Tribunal and learned Tribunal having failed to do so has committed

a mistake in law. Learned Counsel also referred to and relied upon the case titled New India Assurance Company Ltd. Vs. Smt. Shanti Pathak

and Others, and case titled New India Assurance Co. Ltd. Vs. Charlie and Another, . Learned Counsel accordingly submitted that the appeal

deserves to be allowed and Appellant be absolved to indemnify the insured and from paying the award amount.

Mr. Younis Bhat learned Counsel appearing for Respondents submitted that the claimant has succeeded in proving the claim petition on the

basis of cogent and legal evidence which was lead before the learned Tribunal. Learned Counsel further submitted that the Appellant company has

not succeeded in discharging the burden of proving issues which it was required to prove. Learned Counsel also referred to and relied upon the

case titled Oriental Insurance Co. Ltd. v. Ram Prasad Varma reported in AIR 2009 Supreme Court 1831.

When an award is passed by the learned Tribunal, same can be challenged by filing an appeal as provided by Section 173 of Motor Vehicles

Act, 1988 (for short Act of 1988). Section 149(2) of the Act of 1988 circumscribes and delineates the grounds on which the appeal can be filed

by the Insurance Company. In terms of Section 147 read with Sub Section 1 of Section 149 of Act of 1988, the insurance company is statutorily

liable to pay the insurance claim and/or to satisfy the award passed by the learned Tribunal. The right to file the appeal is conferred on the

aggrieved party, and if the appeal is filed and the award impugned therein is stayed, then the award temporarily comes under eclipse until further

orders from the appellate Court or until final disposal of the appeal. In such eventuality, the insurance company may not be held liable to satisfy the

award.

The right to file an appeal being a right created by the statute, the appeal can be thus filed only on the ground available under the statute. The

Insurance Company can defend a claim only on the ground mentioned in Sub Section 2 of the Section 149 of Act of 1988. The Insurance

Company thus can file an appeal only on the limited grounds contained in the aforementioned provision. The insurance company, however, can

contest the claim and challenge the award on all the grounds or any other ground that are available to a person against whom the claim has been

made if permission thereto is granted by the learned Tribunal in terms of Section 170 of the Act of 1988. Admittedly, no such permission has either

been sought and granted by the learned Tribunal in this case. The appeal can be thus filed on the limited statutory grounds available to the

Insurance Company.

(2) (ii) of Section 149 of Act of 1988 provides that Insurance company can defend the claim petition if the person is not duly licenced. The

Appellant has raised the contention that the driver of the offending vehicle at the time of accident was not holding a valid licence. Section 2(10) of

the Act of 1988 defines ""driving licence"" to mean the license issued by the competent authority under Chapter II authorizing the person specified

therein to drive, a motor vehicle and same is reproduced as under: (10) ""driving licence"" means the licence issued by a competent authority under

Chapter II authorizing the person specified therein to drive, otherwise than as a learner, a motor vehicle of any specified class of description.

Chapter II of the Act of 1988 is a chapter relating to licensing of drivers of motor vehicles. Section 3 of the Act of 1988 provides for necessity for

driving licence and same is reproduced as under:

Necessity for driving licence: (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to

him authorizing him to drive the vehicle; and no person shall so drive a transport vehicle [other than a motor cab or motor cycle] hired for his own

use or rented under any scheme made under Sub-section (2) of Section 75 unless his driving licence specifically entitles him so to do. (2) The

conditions subject to which Sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be

prescribed by the Central Government.

Section 13 of Act of 1988 provides the extent of effectiveness of licences to drive motor vehicles and same is reproduced as under: 3. Extent of

effectiveness of licences, to drive motor vehicles. A learner's licence or a driving licence issued under this Act shall be effective throughout the

India.

Section 15 of the Act of 1988 deals with renewal of driving licence. Sub Section 6 of Section 15 provides that where the authority renewing the

driving licence is not the authority which issued the driving licence it shall intimate the fact of renewal to the authority which issued the driving

licence. The said provision is reproduced as under:

(6) Where the authority renewing the driving licence is not the authority which issued the driving licence it shall intimate the fact of renewal to the

authority which issued the driving licence.

The conjoint readings of the statutory provisions reveal that the driving license is the license issued by the competent authority under Chapter

II. Section 3 provides that no person shall drive motor vehicle in any public place unless he holds an effective driving license. Section 13 provides

that a driving license issued under the Act shall be effective throughout the India. Sub- section 6 of Section 15 provides that there can be two

authorities one issuing the driving licence and another renewing the same. In this case, Appellant joined issue about the validity of driving licence of

the driver on the ground that same has been renewed by some clerk and not by the issuing authority. The statutory scheme as referred to

hereinabove makes it abundantly clear that a licence once issued is an effective licence throughout the territory of India and authority who renewed

the same need not be the issuing authority itself. The Appellant had to discharge the burden of proving the issue about the driver's licence has failed

to do the same. A clerk has been examined as witness by the Appellants who before the learned Tribunal deposed that driving license has been

renewed by some clerk. The witness has not deposed that the authority who has renewed the licence was not authorized to renew the same. From

the perusal of the evidence of the said witness it cannot be said that the competent authority has not renewed the licence. In order to discharge the

burden of proving the said issue, the Appellant ought to have examined the authority who is designated to issue the driving licence and should have

further proved that no other person was designated as an authority to renew the licence. The Appellant has miserably failed to prove that the driver

was not holding valid driving licence, the burden whereof was on it. The contention of learned Counsel for Appellant that the driver was not holding

the valid driving licence at the time of accident thus fails. A presumption in law can also be drawn from the statutory provisions referred to herein

above that the driver was duly licenced. The second contention raised by the learned Counsel for Appellant that the learned Tribunal has not made

one-third deduction from the income of the claimant. Learned Counsel referred to Charlies's case. Paragraph 16 of the said judgment is

reproduced as under:

What would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula by universal application. It

would depend upon circumstances of each case. In the instant case the claimant was nearly 37 years of age and was married. Therefore, as rightly

contended by learned Counsel for the Appellant, l/3rd deduction has to be made for personal expenditure.

The Hon'ble Supreme Court has held that what would be the percentage of deduction for personal expenditure cannot be governed by any

rigid rule or formula by universal application. The Hon'ble Supreme Court has further ruled that the deduction would depend upon circumstances

of each case. The Hon'ble Supreme Court has not thus decided that in all circumstances and in all cases one-third deduction for personal

expenditure is to be made from the income of the claimant. The Hon'ble Supreme Court in Ram Prasad Varma's case had dealt with the situation

at paragraphs 11 and 12 of the said judgment and even Charlie's case has been considered by the Hon'ble Supreme Court. Paragraphs 11 and 12

are reproduced as under:

""One-third amount is deducted from computation of compensation from the total income on the premise that some expenses were necessary

for one's own survival. Incidentally, we may notice that in the note appended to the Second Schedule, the amount of compensation arrived in the

case of fatal accident claims is required to be reduced by one-third in consideration of the expenses which the victim would have incurred towards

maintaining himself had he been alive. A person, although alive, but when he is not in a position to move and even for every small thing he has to

depend upon the services of another, in our opinion, a direction to deduct one-third of the amount from his total income need not always be

insisted upon.

Our attention, however, has been drawn to a decision of this Court in New India Assurance Co. Ltd. Vs. Charlie and Another, ] wherein l/3rd

was directed to be deducted towards personal expenditure, we do not find that any legal principle was laid down therein. It also does not appear

that ;the premise on which such deduction is allowed and what would happen in a case, where such a premise does not exist, did not fall for

consideration.

In Charlie (supra), this Court itself opined that in a case, where the injured had suffered 100% disability, the legal principle for determination of

compensation applicable to a deceased can, in appropriate cases, taking note of all relevant factors be reasonably applied even in a case of totally

permanent disabled person. This Court referred to Halsbury's Laws of England, Volume 34, para 98 wherein it was held that the multiplier may be

increased where the Plaintiff is a high tax payer. That principle is also applicable in this case.

In Halsbury (supra), it was stated that in applying that structured formula it is assumed that the return on fixed interest bearing securities is so much

higher than 4 to 5 per cent that rough and ready allowance for inflation is thereby made:

It was stated:

The multiplier method involves the ascertainment of the loss of dependency of the multiplicand having regard to the circumstances of the case

and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (of that of the

claimants whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would

yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also

be consumed-up over the period for which the dependency is expected to last.

The learned Tribunal has arrived at a finding of fact that the claimant has suffered from permanent disability and is dependent upon service of

another person in view of the injury suffered by him. In this fact situation it is not necessary to order for deduction of one-third of the amount from

the total income of the claimant.

In view of the position obtaining in this case that the claimant has suffered permanent disablement and is life long dependant upon the attendant,

does not warrant for deduction of one-third from the compensation allowed to him.

The contention of the learned Counsel for Appellant in this behalf is accordingly negatived. Learned Counsel made an effort to challenge the

quantum of compensation. The statute does not permit the Appellant to throw any challenge to the quantum of compensation. The judgment in

Smt. Pathak case relied upon by the learned Counsel for Appellant does not support such a contention.

The Doctor has deposed before the learned Tribunal that the claimant is suffering from permanent disability of spinal cord and has about 45%

disability of spinal cord with one limb. Doctor further deposed that the claimant cannot attend day-to-day work and constantly need attendant as

also requires frequent medical check ups because the bladder is not working properly. The Doctor has further deposed that the claimant need life

long medical aid like waking chair, walking aids and medicines. Presiding Officer of learned Tribunal in the award has observed as under:

While recording statement it has been suo moto noted down that while deposing before the Tribunal the witness had to be provided due support

and attention by an attendant which speaks about physical health of the injured.

For the above stated reasons, this appeal, being meritless, is accordingly dismissed along with all connected CMP(s).