The Centurion Bank Limited vs Kumari Reshma, Surendra and Mr. Vikram Shinde <BR> Kumari Reshma Vs Surendra, Mr. Vikram Shinde and The Centurion Bank Limited

S.R. Waghmare, J.—These two cross-appeals, one M.A. No. 2261/2005 has been filed by Centurion Bank Limited as appellant whereas M.A. No. 3243/2005 has been filed by claimant Ku. Reshma Bhatia u/s 173 of the Motor Vehicles Act, 1988 (hereinafter referred as "the Act") against the impugned award dated 12/4/2005 passed by the 1st Additional Member Motor Accident Claims Tribunal, Indore in Claim Case No. 181/2003. By the impugned award, the Claims Tribunal has awarded a total sum of Rs. 1,75,000/- to the claimant by way of compensation. Brief facts in a nutshell are that on 20/12/2002 at around 12.30 in the noon the applicant was going by scooter bearing registration No. MP-09-Q-92 from Shastri Bridge towards Yashwant T-square when from the opposite side non-applicant No. 2 driving the disputed vehicle motorcycle belonging to non-applicant No. 1 bearing registration No. MP-09-J.W. 4432 rashly and negligently turned and dashed against the applicant. As a result of which the applicant received grievous injuries such as fracture in the right had supercondyle bone fracture and humerus bone fracture. She was admitted in the Gokuldas hospital, Indore and took treatment. The information about the accident was given to the police station Chhoti Gwaloti by the hospital authorities and on the next day on advise she was operated at Arihant hospital, Indore and thereafter she took treatment at Choithram hospital, Indore and M.Y. Hospital, Indore and she went for physiotherapy regularly and being an Advocate she could not do the work of an advocate and suffered financial loss also. Her life is also affected and she was unable to do daily routine duties and she spent almost one lakh rupees for treatment. She claimed a sum of Rs. 4,50,000/- for the future treatment and loss. Non-applicant No. 3 Centurion Bank was also made a party, but it is also a joint owner of the disputed vehicle and liable to pay the compensation. Non-applicant No. 3 Centurion Bank and non-applicant No. 2 owner and driver have filed written statement stating that the claimant has not received any grievous injuries. Whereas non-applicant No. 2 was a sweeper (safai Karyakarni) and no eligible to drive.

The trial Court has, on considering the evidence however, held that the non-applicants were jointly and severally liable to pay compensation to the claimant and awarded for a sum of Rs. 1,75,000/- with 6% of interest. Hence, the present appeals by both the Centurion Bank as well as the claimants.

Counsel for the Centurion Bank has vehemently opposed the liability imposed on it by the trial Court on the ground that a loan of hypothecation arrangement was executed on 1/11/2002 by the respondent No. 2 Surendra Karosia. He had deposited a sum of Rs. 6,444/- with the dealer of the motor cycle i.e. Patwa Abhikaran Pvt. Ltd. Whereas he was required to pay Rs. 9,444/-, but he obtained the possession of the vehicle bearing engine No. 41880 and chassis No. 42873 on the same day itself. As per terms of the agreement, the owner of the vehicle respondent No. 2 was responsible to insure the vehicle at his own costs and in the joint name of the Bank. As per clauses 16 and 17 of the said agreement, the Bank was only liable to get the vehicle insured if the borrower (owner) failed to or neglected to get the vehicle insured. The accident took place on 20/12/2002 and the vehicle was insured on 16/1/2003. And in the peculiar facts and circumstances of the case, Counsel submitted that the Bank was not liable to get the vehicle insured since the owner did not neglect or refuse to get the vehicle insured. Whereas the claimant in M.A. No. 3243/2005 categorically stated that the liability of the respondent owner the Bank was joint and several. As per clause 16 of the agreement, the borrower had undertaken to insure the vehicle at his own cost and in the joint name of Centurion Bank limited. Moreover the vehicle was insured with an Insurance Company of the choice of Centurion Bank covering comprehensive risk, including riots, civil commotion risks and unlimited third party risk etc. were to be covered and the borrower would reimburse to the Bank on demand all charges and expenses as may be incurred for such insurance by the Bank. And even according to clause 17 if the borrower neglects or refuse to pay rates, taxes or charges or to effect such insurance or to keep the same in force, the Bank may pay and it shall recover the same from the borrower. And hence, the Bank could not escape from its liability of paying the compensation to the claimants (the third party). Ex. D/4 had been admitted between the owner of the vehicle and the Bank (the hypothecation agreement between the Bank and the owner of the vehicle).

Counsel for the appellant Bava Vs. Cheriya Bava, whereby the Court had held that the financier was not the necessary party in the proceeding and if there was any breach of terms of hire purchase agreement entered into between petitioner and financier it was totally beyond realm and scope of adjudication before MACT. That issue was to be decided before Civil court or any other forum mutually agreed upon between contracting parties.

Counsel further relied on Varapana Seetharami Reddy Vs. Guvvala Sekharamma and Others, : considering sections 166 and 169 of Civil Procedure Code, 1908 Order 1 Rule 10 whether the financier would be deemed to be the owner for the purpose of Motor Vehicles Act and not necessary party to be brought on record in compensation claim. Hence, Counsel prayed that the award pertaining to the liability of the Centurion Bank be set aside

Whereas Counsel for the claimant has submitted that the appeal filed by the claimant for enhancement of the award since disability of the claimant has not been properly assessed. Ex. P/7 was issued by Dr. Arjun Wadhwani an his statement is as Aw-5. Dr. A Wadhwani has categorically pointed out that the disability is of 15%. However, the Claims Tribunal had also failed to consider that due to the disability; the claimant was unable to marry and being a practicing lawyer also she had lost several days of income and her practice was also affected and she could not work in full capacity. The medical expenses are also not properly considered. Counsel submitted that the doctor has advised the claimant for physiotherapy and she had to go by auto rickshaw and incurred Rs. 100/- per day. Thus, the award was meager under the heads of amenities of life, loss of expectation of life, inconvenience, hardship, discomfort, frustration and also under the head of marriage prospects. Hence, Counsel prayed that the award may suitably be modified.

Counsel for the claimant placed reliance on Mohan Benefit Pvt. Ltd. vs. Kachraji Raymalji and others: 1997 ACJ 1438, whereby under the scheme of the hire-purchase, financier and his liability and the agreement was being considered by the Apex Court and whether the financier of the truck which collided with a scooter and three persons were killed and claim would be liable against the driver, owner and financier of the truck. The finance company stated that it was conducting a chit fund scheme and owner of the vehicle had taken loan executing a hire-purchase agreement as security for that loan. Contention was that the financier has no control over the driver of the offending vehicle. Financier produced hire-purchase agreement but it failed to produce the real documents executed between the parties, for deciding the true relationship between them. The R.T.O. confirmed that the truck stood registered in the name of the owner under a hire-purchase agreement with the financier. The Apex Court held that the High Court was justified in drawing adverse inference against the financier on the ground that had the documents which reflected the true relationship between them had they been produced, they would have exploded the case of the financier and there was no infirmity in mulcting the liability on the financier along with the owner and driver.

Counsel for the claimant further relied on R.D. Hattangadi Vs. M/s. Pest Control (India) Pvt. Ltd. and Others, whereby the Apex Court distinguished between the pecuniary and non pecuniary damages; the pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money such as expenses on medical attendance, loss of earning of profit up to the date of trial and other material loss. Non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations, such as damages for mental and physical shock, pain and suffering already suffered or likely to be suffered in future, damages to compensate for the loss of amenities of life, damages for loss of expectation of life, inconvenience, hardship, discomfort, disappointment, frustrate ion and mental stress in life.

Hence, Counsel submitted that in the instant case also for the loss of expectation of marriage and discomfort etc. as already stated above, the award be suitably modified.

On considering the above submissions, evidence on record and the impugned award, the two questions that arise for consideration in these appeals are whether the appellant Centurion Bank/financier is a necessary party and liable to pay the compensation and whether the total amount of award requires to be enhanced:

Taking up the first question, I find that clause 16 & 17 of the agreement of hypothecation need to be considered. Counsel for the appellant Centurion Bank has vehemently urged the fact that u/s 2(30) of the Motor Vehicles Act, in case of hypothecation agreement the owner is a person in whose possession the vehicle is and on the date of accident the vehicle was in the possession of the owner/borrower. And merely entering the name of the Bank in the registration book or in the insurance papers will not bring the Bank within the purview of the definition of the owner as per provisions of 2(30) of the Act so as to saddle the Bank with the liability to pay compensation in a case.

On considering the above, I find that Section 2(30) owner means a person in whose name a motor vehicle stands registered, and in the instant case there is a specific clause 17 which states that the vehicle had to be registered in the joint name of Bank and the purchaser/borrower. Clause 16 of the agreement indicates that if owner neglects to get the vehicle insured the Bank cannot escape from its liability of paying the compensation to the claimants. Under the circumstances, I have no doubt that the liability of the registered owner of the disputed vehicle is to pay compensation. Considering the fact that there is no dispute regarding the registration of the vehicle, which was made in the name of the Bank and borrower and the liability of the Bank is co-extensive between the financier and the owner. Then similarly I have closely scrutinized Ex. D/4 proved by D.W. 5 the Bank Manager that a loan of hypothecation was executed on the first day of November 2002 and thus, the Bank to step in the shoes of the registered owner on the date of accident i.e. on 20/12/2002. Hence no fault can be found with the finding of the Claims Tribunal that the Bank was also the registered owner of the disputed vehicle. I fail to understand how the Bank could not be covered under clause 17 of the agreement. The vehicle was insured on 16/1/2003 after the accident occurred, according to Counsel for the Bank. However, none of the parties had produced the insurance policy before the trial Court or this Court. Moreover, the claimant of the present case is the third party and the Claims Tribunal has given a clear finding that the Centurion Bank would be liable to pay the compensation and recover the same from the owner. Under the circumstance, I find that the Centurion Bank as the financier would be liable to pay the compensation and no inference is called for in the award passed by the Trial Court in this regard. (Mohan Benefit Pvt. Ltd. (supra) relied on).

In this light, the appeal (M.A. No. 2261/2005) filed by the appellant Centurion Bank is hereby dismissed as being sans merit.

Considering the appeal of the claimant the second question raised in the other appeal, I find that the amount of compensation is meager under the circumstances considering the fact that the future of the claimant has been rendered bleak for the marriage of the claimant and her future prospects are vitally affected due to 15% disability in the right hand and it has to be therefore, re-assessed. Considering the fact that no amount has been paid towards transportation and companion charges the amount needs to be enhanced under this head also.

The compensation awarded to the claimant must be just, reasonable and proper looking to the facts and circumstances of the case and taking into account the law laid down by the Supreme Court in various cases and with reference to evidence brought on record by the parties. However, no fixed or any static, formula as such, is provided for determining the compensation and the same is required to be determined on the basis of totality of evidence adduced and the relevant factors which are required to be taken into consideration as mentioned supra. It is on this basis, the Courts have to work out an award of reasonable compensation to the claimant for the injuries sustained. And hence, I hereby further enhance the award in lump sum of Rs. 1,25,000/- on the grounds aforesaid. Thus, in my view the claimant Kumari Reshma is held entitled for a total sum of Rs. 3,00,000/- (1,75,000+1,25,000=3,00,000) as just and equitable compensation for the injuries sustained by her in the accident. The awarded amount shall carry interest @ 6% per annum from the date of application till realization.

In this view of the matter, the appeal (M.A. No. 3243/2005) is partly allowed to the extent herein above indicated. Original judgment be retained in the record of M.A. No. 2261/2005 and a copy thereof be placed in the record of M.A. No. 3243/2005.

No costs.