AI Structured Summary
Not yet generated for this judgment
Judgment
Anand, J.—A common question of law as to whether it is open to an insurance company to challenge the quantum of compensation
awarded by the Motor Accidents Claims Tribunal in an appeal filed in the High Court arises in the three appeals which are under consideration by
us. The matter was referred to the Full Bench because when one appeal, i.e., Civil Misc. First Appeal No. 80 of 1977, came up for disposal
before a Division Bench of this court, comprising Mian Jalal-ud-Diu, Chief Justice and Mir J., their Lordships were of the opinion that there was
some divergence of opinion on this subject in the different High Courts in the country and, consequently, they made the following order of
reference on October 27, 1979.
The point sought to be raised in this appeal relates to the quantum of compensation awarded by the Motor Accidents Claims Tribunal in favour of
the respondents.
A preliminary objection has been raised on behalf of the respondents that it is not open to the appellant to challenge the quantum of compensation
awarded by the Tribunal. The argument is founded on the language employed in Section 96(2) and Sections 110C and 110D of the Motor
Vehicles Act.
Mr. Ganjoo has sought to meet this point by enunciating the view that it is open to the insurer to challenge the very quantum of compensation.
Sections 96(2) read with Sections 110C and 110D do not operate as a bar to the raising of such a plea in the appeal.
It'seems that there is divergence of opinion among the Indian High Courts on the question of law debated before us. In Ramesh Chandra Vs.
Randhir Singh and Others, , Indian Mutual General Insurance Society Ltd. v. Helen Minezes AIR 1971 KER 207 and New India Insurance Co.
Ltd., Bombay Vs. Smt. Molia Devi and Others, , support the contention of the respondent, whereas United India Fire and General Insurance Co.
Ltd. v. Parvathy [1979] MACJ 103 : [1979] ACJ 101, have laid down the contrary view. We are given to understand that there is a recent
judgment of this court rendered in Civil Misc. First Appeal No. 15 of l978, (Mohi-u-Din v. Ghulam Mohamad Shah) dealing with the point at
issue.
In view of the divergence of opinion expressed by the Indian High Courts on this subject and in view of the recent judgment of this court, it would
be appropriate to refer the case to the Full Bench.
Accordingly the case is referred to the Full Bench for an authoritative pronouncement. The date and the venue will be communicated to the counsel
for the parties.
In the other two appeals also, this question was involved and they were also directed to be heard along with Civil Miscellaneous First Appeal
No. 80 of 1977.
The fact in all the three appeals are somewhat different and I propose to first deal with the legal question and then deal with each of the three
appeals on merits.
At the outset, Lwould like to point out, with due respect to the referring Bench, that in all the judgments noticed in the order of reference, there
is no divergence of opinion and all the judgments noticed therein lay down the proposition that it is not open to an insurer to question an award of
the MACT on the question of quantum only except on the grounds contained in Section 96(2) of the M.V. Act. This position is conceded by Mr.
Ganjoo also but his argument is that Section 96(2) of the Act is not exhaustive and that there are no limitations prescribed by Section 110D of the
Act, of the nature and character of Section 96(2) of the Act, and, therefore, an insurer has a right to challenge an award of the Tribunal on all the
grounds, including the challenge to the quantum of compensation, in an appeal in the High Court. Before proceeding to examine these submissions,
it would be advantageous to notice some of the relevant provisions of the Act.
Section 96. Duty of insurers to satisfy judgments against persons insured in respect of third party risks.--(1) If, after a certificate of insurance has
been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such
liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95 (being a liability covered by the terms of the
policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have
avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay, to the person entitled to the benefit of the decree
any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount
payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the
proceedings in which the judgment is given the insurer had notice through the court of the bringing of the procedings, or in respect of any judgment
so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceeding is so given shall be
entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--
(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability, and
that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit
stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the
insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105 ; or
(b) that there was been a breach of a specified condition of the policy, being one of the following conditions, namely :--
(i) a condition excluding the use of the vehicle --
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a public service vehicle or a goods vehicle, or
(d) without side-car being attached, where the vehicle is a motor cycle ; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been
disqualified for holding or obtaining a driving licence during the period of "" disqualification ; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion ; or
(c) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false
in some material particular.
(2A) Where any such judgment as is referred to in Sub-section (1) is obtained from a court in the State of Jammu and Kashmir or in a
reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of Section 13 of the Code of Civil Procedure, 1908,
conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938, and whether or not he is
registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner
and to the extent specified in Sub-section (1), as if the judgment were given by a court in India:
Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before or after the commencement of the pro ceedings
in which the judgment is given, the insurer had notice through the court concerned of the bringing of the proceedings and the insurer to whom notice
is so given is entitled under the corresponding law of the State of Jammu and Kashmir or the reciprocating country, to be made a party to the
proceedings and to defend the action on grounds similar to those specified in Sub-section (2).
(3) Where a certificate of insurance has been issued under Sub-section (4) of Section 95 to the person by whom a policy has been effected, so
much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in Clause (b)
of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95, be
of no effect:
Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of
this sub-section shall be recoverable by the insurer from that person.
(4) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds
the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall
be entitled to recover the excess from that person.
(5) In this section the expressions ""material fact"" and ""material particular "" mean, respectively, a fact or particular of such a nature as to influence
the judgment of a prudent insurer in determining whether he will take the risk, and, if so, at what premium and on what conditions, and the
expression ""liability covered by the terms of the policy"" means a liability which is covered by the policy or which would be so covered but for the
fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(6) No insurer to whom the notice referred to in Sub-section (2) or sub-Section (2A) has been given shall be entitled to avoid his liability to any
person entitled to the benefit of any such judgment as is referred to in Sub-section (1) or Sub-section (2A) otherwise than in the manner provided
for in Sub-section (2) or in the corresponding law of the State of Jammu and Kashmir or of the reciprocating country, as the case may be.
Section 110B lays down :
On receipt of an application for compensation made u/s 110A the Claims Tribunal shall, after giving the parties an opportunity of being heard,
hold an enquiry into the claim and may make an award determining the amount of compensation which appears to it to be just and specifying the
person or persons to whom compensation shall be paid; and in making the award the Claims Tribunal shall specify the amount which shall be paid
by the insurer.
Section 110C provides:
Procedure and powers of Claims Tribunals.--(1) In holding any inquiry u/s 110B, the Claims Tribunal may, subject to any rules that may be made
in this behalf, follow such summary procedure as it thinks fit.
(2) The Claims Tribunal shall have all the powers of a Civil Court for the purpose of taking evidence on oath and of enforcing the attendance of
witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed ;
and the Claims Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal
Procedure, 1898 (Vof 1898).
(2A) Where in the course of any inquiry, the Claims Tribunal is satisfied that--
(i) there is collusion between the person making the claim and the person against whom the claim is made, or
(ii) the person against whom the claim is made has failed to contest the claim,
it may, for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party
to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to
the person against whom the claim has been made.
(3) Subject to any rules that may be made in this behalf, the Claims Tribunal may, for the purpose of adjudicating upon any claim for
compensation, choose one or more persons possessing special knowledge of any matter relevant to the inquiry to assist it in holding the inquiry.
110D. Appeals.--(1) Subject to the provisions of Sub-section (2), any person aggrieved by an award of a Claims Tribunal may, within ninety
days from the date of the award, prefer an appeal to the High Court:
Provided that the High Court may entertain the appeal after the expiry of the said period of ninety days if it is satisfied that the appellant was
prevented by sufficient cause from preferring the appeal in time.
(2) No appeal shall lie against any award of a Claims Tribunal, if the amount in dispute in the appeal is less than two thousand rupees.
Thus, Section 96 of the Act enables the claimant, the assured and the insurer, interested in any litigation arising out of a motor vehicle accident to
be made parties to the claim petition. The section maintains the respective rights and liabilities of one qua the other. Whereas Sub-section (1) of
Section 96 is only a declaratory provision; it deems an insurer to be a judgment-debtor when a decree is passed against an insured under certain
circumstances rendering him liable to a third party, Sub-section (2) of this section lays down that an insurer, to whom notice of the proceeding is
given, would be entitled to be made a party thereto and to defend the action on any of the grounds specified in various clauses of the sub-section.
Section 110C (2A) provides that in a case where Tribunal is satisfied that there is collusion between the insured and the claimant it may, for
reasons to be recorded in writing, direct that the insurer, who may ultimately be found liable in respect of the claim, if not already a party, be
impleaded as a party to the proceedings and the insurer so impleaded shall have the right to resist the claim on all or any of the grounds which are
available to an insured. Section 110D provides that an appeal may be filed in the High Court against an award of the Tribunal if the amount in
dispute in the appeal is not less than two thousand rupees. Such an appeal may be filed within 90 days from the date of the award, although the
High Court can, if satisfied that the appellant was prevented by sufficient cause to file the appeal in time, condone the delay.
From a plain reading of Section 96 it at once emerges that an insurer apart from the rights under the statute has no right, to be impleaded as a
party to a petition for compensation and once impleaded as a party, it can exercise only those rights which are provided to it by the statute and it is
Section 96(2) which details the grounds which are available to an insurer. A reference to Sub-section (6) of Section 96 which provides that no
insurer shall be entitled to avoid his liability except in the manner provided for in Sub-section (2) also support this view. Dealing with this aspect of
the law, their Lordships of the Supreme Court in British India General Insurance Co. Ltd. Vs. Captain Itbar Singh and Others, . opined as follows:
To start with it is necessary to remember that apart from the statute an insurer has no right to be made a party to the action by the injured person
against the insured causing the injury. Sub-section (2) of Section 96, however, gives him the right to be made a party to the suit and to defend it.
The right, therefore, is created by statute and its content necessarily depends on the provisions of the statute. The question then really is, what are
the defences that Sub-section (2) makes available to an insurer ? That clearly is a question of interpretation of the sub-section.
Now the language of Sub-section (2) seems to us to be perfectly plain and to admit of no doubt or confusion. It is that an insurer to whom the
requisite notice of the action has been given ' shall be entitled to be made a party thereto and to defend the action on any of the following grounds,
namely,' after which comes an enumeration of the grounds. It would follow that an insurer is entitled to defend on any of the grounds enumerated
and no others. If it were not so, then of course no grounds need have been enumerated. When the grounds of defence have been specified, they
cannot be added to. To do that would be adding words to the statute.
Sub-section (6) also indicates clearly how Sub-section (2) should be read. It says that no insurer to whom the notice of the action has been given
shall be entitled to avoid his liability under Sub-section (1) 'otherwise than in the manner provided for in Sub-section (2)'. Now the only manner of
avoiding liability provided for in Sub-section (2) is by successfully raising any of the defences therein mentioned. It comes then to this that the
insurer cannot avoid his liability except by establishing such defences. Therefore, Sub-section (6) clearly contemplates that he cannot take any
defence not mentioned in Sub-section (2). If he could, then he would have been in a position to avoid his liability in a manner other than that
provided for in subjection (2). That is prohibited by Sub-section (6).
We, therefore, think that Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is
not specified in it.
Though, in the Supreme Court judgment, the question involved directly was not as to what defences are available to an insurer, in an appeal
against an award, because that case arose at a stage before any award was made, yet the guidelines given in the judgment and the interpretation
placed on Section 96 is helpful. The following observations of the Supreme Court, throw a flood of light on the question which is before this Bench
Naresh Chandra Ganguli Vs. The State of West Bengal and Others,
The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that
liability to certain grounds specified in it. It is not for us to add to those grounds and, therefore, to the statute for reasons of hardship. We are
furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend
the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence
that he claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured
and this he has full liberty to do.
Apart from the judgment of the Apex Court, this precise question has been the subject-matter of debate before various High Courts in the
country. Reference to some of those judgments, before considering the validity of the submission of the learned counsel for the insurance company
before us, would be helpful.
In Ayesha Begum v. G. Veerappan [1966] ACJ 101, the Madras High Court held that an insurer cannot question the quantum of compensation
awarded by a Tribunal in an appeal, except on the defence available to it u/s 96(2) of the Act. The court repelled the argument raised on behalf of
the insurance company that since it was a party to the action before the Tribunal, it was entitled to challenge the award on all grounds available at
law, including the grounds on which the insured himself could have relied.
In Hindustan Ideal Insurance Co. Ltd. v. Pokanti Ankiah [1969] ACJ 60 the Andhra Pradesh High Court had also an occasion to consider
this question in some depth. After noticing a number of authorities the court opined ;
An insurance company is not entitled to raise any defence other than the defences enlisted in Section 96(2) of the Motor Vehicles Act, 1939. It
cannot, therefore, be permitted to dispute the quantum of compensation awarded by the Claims Tribunal. It makes no difference whether the
proceedings for the recovery of compensation were by way of a suit in a civil court, before the Amendment Act of 1956, or by way of an
application in a Claims Tribunal, after the said amendment. It also makes no difference whether the insurer entered appearance and filed his written
statement after a notice was issued to him under the provisions of Section 96(1) of the said Act or whether he has impleaded as a party at the very
inception.
A Division Bench of the Madhya Pradesh High Court in New India Insurance Co. Ltd. v. Smt. Molia Devi [1969] ACJ 164 : AIR 1970 MP
190 held that in an appeal u/s 110 filed by an insurance company, where the insured had not filed any appeal or applied for being transposed as an
appellant, the appellant could be permitted to raise only those defences which are prescribed by Section 96(2) of the Act and no other defence. In
Mangilal Vs. Parasram and Others, ; [1972] 42 Comp Cas 102 : [1970] ACJ 86; a Full Bench of the M.P. High Court laid down that Section
96(2) limits the defences available to the insurer, where the insured is held liable to pay compensation. However, the insurer can in the name of the
insured raise every such defence as an insured can raise, including the absence of negligence, provided it has reserved that right by policy of
insurance.
This question also came up for consideration before Mr. Justice V. R. Krishna Iyer (as his Lordship then was) in Kesavan Nair v. State
Insurance Officer [1971] ACJ 219 (Ker) and his Lordship held that an insurer was entitled to take up only those defences as are specified in
Section 96(2) of the Act and that it could not question the award of the Tribunal on any other grounds.
In Oriental Fire and General Co. Ltd. v. Vanita Kalyani [1972] ACJ 261 it was opined that apart from the defences which came within the
scope of Section 96(2) of the Act, an insurer could not jtake up any other defence, either in the original claim petition or in an appeal arising from
an award given by the Tribunal.
In The Northern India General Insurance Co. Ltd. Vs. L. Krishnan and Others, itwasopined ( AIR 1973 Karn 107):
...it is clear that insurer can urge all the defences open to the insured, only when the insurer defends the action in the name of the insured. But, in
the present case, it has not been shown that before the Tribunal, the appellant defended the action in the name of the insured. On the other hand,
the insured (the owner of the lorry) and the driver of the lorry who were respondents 1 and 2 before the Tribunal, had filed their objections and the
appellant had filed a separate statement of objections. Unless the appellant had defended before the Tribunal, the action in the name of the insured,
the only defences which it (the appellant) could urge before the Tribunal and which it can urge in this appeal are those specified in Clauses (a) to
(c) of Sub-section (2) of Section 96 of the Act.
Similar view was also expressed by a Single Judge of the Orissa High Court in B. Appa Rao v. Dunna Mukanda Rao [1973] ACJ 229 and by
the Patna High Court in Howrah Insurance Co. Ltd. v. Yukti Nath Jha [1974] ACJ 18. The Madras High Court in General Assurance Society
Ltd. v. Jaya Lakshmi Ammal [1975] ACJ 159 after holding that an insurance company is not allowed any plea outside the scope of the pleas
specified in Section 96(2), added that in case the insurance company has reserved a right in the policy itself to defend an action in the name of the
insured, it could raise all such pleas as may be open to an insured both at the trial of the petition as well as in an appeal against the award.
The matter came up for consideration before a Full Bench of the Orissa High Court in National Insurance Co. Vs. Magikhaia Das (After him)
Mst. Laxmi Dibya and Others, In that case, though the insured as well as the insurer had contested the claim before the Claims Tribunal, after the
award, an appeal was filed only by the insurance company and not by the insured. In that appeal both the quantum of compensation as also the
liability of the insured on grounds of negligence were challenged by the insurance company. The Full Bench, after a review of a catena of
authorities, came to the conclusion that the insurance company could defend an action only on the grounds specified in Section 96(2) of the Act
and not on other grounds unless it had obtained leave of the Claims Tribunal u/s 110C(2A) of the Act. The mere non-filing of the appeal by the
insured, however, was not considered enough for allowing the insurance company to challenge the award on the grounds other than those specified
in Section 96(2) of the Act. The following observations of the Full Bench are significant Kasinath Tripathy and Another Vs. State of Orissa and
Others, :
As the facts of this case show, the insured had entered contest and there is no reason to hold in the absence of any allegation, and something
more, that the insured has been colluding with the claimant. Leave of the Tribunal had admittedly not been taken u/s 110C(2A) of the Act. There
exists a clause in the policy bond authorising the insurer to defend in the name of the insured. As we have already noted, the insured and the insurer
simultaneously wanted to defend, the insured defending in his own name and the insurer in its own name. The term in the policy bond did not
authorise such defence by the insurer. In the instant case, therefore, to the insurer the restriction u/s 96(2) of the Act applies and he could not travel
beyond the restriction imposed by the statute either before the Tribunal or in appeal before this court. None of the grounds in the memorandum of
appeal appertains to a defence raised within Section 96(2) of the Act and what is being mainly challenged is the quantum and liability on a ground
not covered by Section 96(2) of the Act. On these grounds the insurer was not entitled to contest the claim for the award. The appeal filed on its
behalf, therefore, is not maintainable.
Similar view was reiterated in Orissa Co-operative Insurance Co. (now New India Assurance Co. Ltd.) v. Subashini Pradhan [1977] ACJ
283.
A Division Bench of the Madhya Pradesh High Court in New India Assurance Co. Ltd. v. Shiv Kumar [1978] ACJ 137 opined as follows:
That apart Section 110C (Sub-section (2A)) provides that where in the course of any inquiry, the Claims Tribunal is satisfied that (1) there is
collusion between the person making the claim and the person against whom the claim is made has failed to contest the claim, it may for reasons to
be recorded by it in writing, direct that the insurer who may be liable in respect of such claims shall be impleaded as a party to the proceeding and
the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against
whom the claim has been made. None of the conditions as provided in this section exists in the present case. This sub-section empowers an insurer
to contest the claim for compensation only if these conditions are satisfied. Unless these conditions are satisfied, the insurer cannot contest the claim
on any ground other than those specified in clauses (a) to (c) of Sub-section (2) of Section 96 of the Act.
A Division Bench of the Allahabad High Court also had an occasion to consider the point at issue in Ramesh Chandra Vs. Randhir Singh and
Others, . Their Lordships stated the law thus ( AIR 1977 all 334 )
Almost every other High Court has taken the view that the defences open to an insurance company in a claim u/s 110 of the Motor Vehicles Act
are restricted to those specified in Section 96 of the Act, See Hukam Chand Insurance Co. Ltd. v. Subhaskini Roy [1971] ACJ 156 (Cal),
Kesavan Nair v. State Insurance Officer [1971] ACJ 219 (Ker), Orissa Co-operative Insurance Society Ltd. v. Bhagaban Sahu [1971] ACJ 49
(Orissa), Kasturilal Gopaldas and Another Vs. Prabhakar Martand Patki and Another, ; Vanguard Insurance Co. Ltd. v. Rohini Bhan [1970] ACJ
11 (Delhi), Vanguard Insurance Co. Ltd. v. Shafali Mukherji [1970] ACJ 245 (All), Smt. Padmadevi and Others Vs. Gurbakshsingh and Others, ;
B. Appa Rao v. Dunna Mukanda Rao [1973] ACJ 222 (Orissa) and Northern Indian General Insurance Co. Ltd. v. L. Krishnan [1972] ACJ 420
: AIR 1973 Karn 107
We accordingly find that it is not permissible for the appellant in F.A.F.O. No. 422 of 1975 to assail the findings of the Claims Tribunal on merits.
It may, however, be added that, as we shall show while considering the appeal by the truck owner even on merits there is no substance in this
appeal.
In United India Fire and General Insurance Co. Ltd. v. Ayisa [1979] ACJ 526, a Division Bench of the Madras High Court following the law
laid down in United India Fire and General Insurance Co. Ltd. v. Parvathy [1979] ACJ 101 held that an insurance company cannot avoid liability
except on the grounds contained in Section 96(2) of the Act.
The High Court of Punjab and Haryana also reiterated the same view following its earlier judgments and the Supreme Court judgment in
Captain Itbar Singh's case [1959] 29 Comp Cas 60 sc in General Assurance Society Ltd. v. N. A. Mohammed Hussain [1966] ACJ 203.
In Indian Mercantile Insurance Co. Ltd. v. Chamla Devi [1980] ACJ 169 (P&H), it was held that an insurance company cannot raise any
argument regarding quantum of compensation either before the tribunal or in an appeal.
A Division Bench of the Andhra Pradesh High Court in Raddipalli Chinnarao v. Reddi Lorurdu [1980] ACJ 470 again reiterated that an
insurer cannot question the quantum of compensation under the defences enumerated in Section 96(2) of the Act.
A Division Bench of the Calcutta High Court also took the same view in Kantilal and Bros. and Another Vs. Ramarani Debi and Others, .
Their Lordships stated the Jaw thus ( AIR 1979 Cal 154):
Now, in view of the provision of subjection (2) of Section 96 of the the Motor Vehicles Act, 1939, the appeal challenging the claim of the
petitioners is limited within the grounds mentioned therein. Clearly the insurer, here the insurance company, as appellant had no available ground to
challenge the award in the appeal. The insurer-appellants cannot challenge the quantum of compensation fixed by the Tribunal and have, therefore,
no ground to urge in this appeal challenging the award. In this view of the matter, the insurance company had no legal ground to prefer this appeal
to challenge the award.
Thus, from a review of the aforesaid judgments it becomes clear that an insurer cannot resist the claim before the Tribunal or challenge the
award of the Tribunal in appeals on grounds other than those enumerated in Section 96(2) of the Act, except where the insurer has reserved a right
in the policy of insurance to defend the claim in the name of the assured himself or where the Tribunal or the court is satisfied that the assured and
the claimant have colluded with each other and in exercise of the powers u/s 110C(2A) have granted permission to the insurer to defend the claim
on all the grounds on which an assured could defend the claim. An insurer can, however, limit his liability under the terms of insurance, otherwise
the liability extends to the statutory limits set out in the Act itself.
I shall now consider the arguments raised by Mr. Ganjoo.
Mr. Ganjoo has argued that Section 110D of the Act does not impose any limitation on the grounds on which a party can file an appeal against
an award of the Tribunal. It is urged that Section 96(2) is not exhaustive and that it does not cover cases in which compensation has been granted
arbitrarily and that in any event the limitations contained in it cannot be read into Section 110D to restrict the grounds on which an appeal can be
filed. It is urged that the insurer on whom the ultimate liability to satisfy the award falls, must have the right to question the quantum of compensation
awarded by the Tribunal.
To appreciate the arguments raised at the Bar, it would be relevant to remember that the Motor Vehicles Act is a complete code in itself.
Chapter 8 of the Act deals with matters relating to claims for compensation arising out of a vehicular accident. Sections 94 to 96 of the Act
provide for compulsory insurance of a motor vehicle before it can be used on any public road and lay down the liability of the insurer to pay to the
claimant directly, whenever there is a decree or the judgment of a tribunal or a court, as the case may be. It also fixes the limits of the pecuniary
liability on the insurer in certain cases. Section 96 provides that the liability of an insurer shall arise only if the insured is found liable because the
policy of insurance is a policy of indemnity. Section 97 deals with the right of a third party against the insurer on the insolvency of the insured while
Section 98 casts a duty on a person against whom a claim is made to give information as to his insurer. Section 103 sets out the effect of a
certificate of insurance policy. Where the specified sum is less than the sum payable u/s 95(2) of the Act, the maximum liability of the insurer will be
as laid down in Section 95(2). However, if the sum specified in the insurance policy exceeds the sum fixed u/s 95(2) the maximum liability shall be
to the extent of the sum specified in the insurance policy. Sections 110A to 110F were introduced in the Act by Act No. 100 of 1956 to substitute
the ordinary remedy of a civil suit by a special remedy, which is summary in nature. Section 110 provides for the constitution of a Claims Tribunal
and confers jurisdiction on it to adjudicate upon claims for compensation in respect of accidents involving death or bodily injuries to persons
resulting from a motor vehicle accident. Section 110A deals with the procedure for setting up a claim for compensation. Section 110B relates to an
award made by the Tribunal, after an enquiry into the claim. Section 110C deals with the procedure and powers of the Tribunal, while Section
110D provides for an appeal from an award made by the Claims Tribunal. Section 110E provides for the recovery, from the insurer, of
compensation money awarded by the Tribunal, as arrears of land revenue and Section 110F excludes the jurisdiction of civil courts to entertain any
question relating to claims for compensation, arising out of a motor vehicle accident, in such areas where there exists a duly constituted Claims
Tribunal. This, broadly speaking, is the scheme of Chapter 8 of the Act and it is this scheme which one has to keep in mind while appreciating the
contentions raised at the Bar.
An award made u/s 110B has three components: firstly, it specifies the amount of compensation, if any, payable to the claimants, which
appears to the Tribunal to be "" just and reasonable "" ; secondly, it specifies the person or persons to whom the compensation is to be paid ; and,
thirdly, it specifies the amount out of the awarded compensation which is required to be paid by the insurer. In specifying this sum, the Tribunal has
to take into account both the contractual as well as the statutory limits fixed u/s 95 of the Act.
The argument of Mr. Ganjoo that the limitations which are set out in Section 96(2) of the Act in the matter of defending a claim petition before
the Tribunal do not extend to appeals filed u/s 110D of the Act by an insurer or that Section 96(2) is not exhaustive is not sound. The limitations
which are set out in Section 96(2) of the Act are implicit and inherent in Section 110D of the Act and have to be read into that section. Before a
person can file an appeal u/s 110D of the Act, he has to be an "" aggrieved party "". The expression ""aggrieved party "" contains the inherent
limitations in the matter of filing an appeal. The expression "" aggrieved "" in the context of Section 110D of the Act has to be interpreted and
understood in common parlance. (See in this connection Jasbhai Motibhai Desai Vs. Roshan Kumar, Haji Bashir Ahmed and Others, It is not
possible to give an exhaustive definition of the expression "" aggrieved party "" and the expression has to be interpreted in the context in which it
appears in a particular statute. As a general principle, it has been held by the courts that a person who feels disappointed with the result of a case is
not necessarily a "" person aggrieved "", to be so classified, he must be disappointed of a benefit which he would have received if the order had gone
the other way. The order must cause him the legal grievance by wrongfully depriving him of something. If he was not entitled to that relief in the first
place, he cannot be aggrieved if the relief was denied to him but if he was entitled to it and the same has been denied to him, he would be a
person aggrieved "". Thus, a party would be regarded as an "" aggrieved party"" for the purposes of Section 110D where the claim or defence
available to that party did not find favour with the Tribunal in making an award. The party would be "" aggrieved "" only to that extent and no further.
It is unimaginable that an insurer, which before the Tribunal had only limited defences can file an appeal on other grounds also. An appeal is a
rehearing of the claim petition and is, therefore, a continuation of it. It is elementary that in an appeal, a party cannot be allowed to raise a defence
which was not available to it in the forum below. It, therefore, follows that an ""aggrieved party "" for the purpose of Section 110D would only be
such a party which is aggrieved of the award on the ground that its defence or claim as was available to it and was set up before the Tribunal, did
not find favour with it. If a particular defence was not available to a party before the Tribunal, the question of it not having found favour with the
Tribunal does not arise because no party can be aggrieved of any adverse decision on a ground which was not available to it. Thus, it is manifest
that whereas an insured would have the right to challenge an award on all the grounds which were available to it before the Tribunal, an insurance
company would be entitled to challenge the award only on the grounds which were available to it u/s 96(2) of the Act.
Before the Tribunal an insurer can resist the claim against him in two ways: (1) by urging that the insurer is not liable even though the insured
may be liable, and (2) by pleading that the insurer is not liable because the insured is not liable.
Under the first head, an insurer is entitled to escape his liability by showing that the policy of insurance is void as it had been obtained on false
representation or concealment of material facts or that the policy had been cancelled before the accident or that there had been a breach of any
condition of the policy and the like grounds. The insurer is not entitled to raise any other ground of defence to avoid his liability, where the insured
is found to have incurred the liability because of the simple reason that a policy of insurance being in the nature of a contract of indemnity, the
insurer takes upon himself to discharge the liability of the insured arising out of a motor vehicle accident, subject, of course, to the terms and
conditions of the policy and the maximum statutory liabi lity. He cannot, under the first head, avoid his liability except on the grounds mentioned
above. When a party takes out a policy of insurance, it does so after paying the premium for the sum assured and unless the contract between him
and the insurer can be avoided, the insurance com pany which has been benefited by the premium cannot back out of its commitment to indemnify
the insured. This is manifest from the plain phraseology of Section 95(5) of the Act, which reads thus:
Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the
person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those
classes of persons.
However, no sum shall be payable by an insurer u/s 96(1) in respect of any award unless before or after the commencement of the proceeding
in which the award is given, the insurer had notice through the Tribunal of the bringing of those proceedings. It is only an insurer to whom notice of
the bringing of any such proceedings is given who shall be entitled to be made a party to the proceedings and to defend the action on the grounds
contained in Section 96(2) of the Act, unless the insurer had reserved in the policy of insurance a right to defend the action in the name of the
insured, in which event he can defend on all the grounds on which the insured could defend.
Under the second head, an insurer can plead that there was no negligence on the part of the insured and raise all such pleas in defence to the
claim as are available to an insured to show that the insured had not incurred any liability. This, however, can be done by the insurer only if the
insurer had reserved in the policy of insurance a right to defend the claim in the name of the insured. If there is no such reservation made in the
policy of insurance, then Section 96(2) strictly debars an insurer from taking any defence, other than those enumerated therein, to show that the
insurer was not liable although the insured has incurred liability.
Where an insurer finds that it has not reserved such a right but that the insured and the claimant have colluded with each other, as it is a
possibility that cannot be ignored, it is open to an insurer to bring that fact to the notice of the Tribunal and seek its permission u/s 110C(2A) to
contest the claim on all the grounds available to an insured. On being satisfied that there is such a collusion, the Tribunal would grant permission
and on such permission being granted, the insurer steps into the shoes of the insured and defends the claim on all available grounds If the award
goes against the insurer, it can challenge it in appeal also on all such grounds on which it had contended the claim before the Tribunal. Right of
appeal against an award of the Tribunal is the creation of the statute. The Act had confined the right to avoid the liability of the insurer to the injured
on certain grounds specified in it. It is not open to this court to add to those grounds on the plea that hardship would be caused to the insurer. An
insurer can avoid any hardship by remaining vigilant during the trial of the claim petition and also by providing, in the policy of insurance, for a right
to defend the action in the name of the assured and that he had full liberty to do. Where the insurer has failed to do it, he cannot avoid the liability if
the insured is found liable.
The aforesaid discussion leads to the conclusion (1) that an insurer is not entitled to resist the claim or the award, where the insured has been
found liable, on grounds not enumerated u/s 96(2) of the Act; (2) where the term of the policy of insurance provides that the insurer has the right to
defend the action in the name of the insured, the insurer shall have the right to defend and, if he does so, all the defences as are open to the insured
can be urged by the insurer both to resist the claim as well as the award; (3) if it appears that the claimant and the insured have colluded, then after
receiving permission of the Tribunal u/s 110C(2A) the insurer can defend the claim as well as the award on all grounds which are available to the
insured; and (4) except for the aforesaid contingencies, an insurer cannot question an award in appeal and unless the case of the insurer is covered
by (2) or (3) conclusions, as noticed above, an insurer cannot, in an appeal against the award, question the quantum of compensation only.
It is in the light of the aforesaid conclusions that I shall now deal with the three appeals :
Civil Misc. First Appeal No. 80 of 1977
In this case, respondents Nos. 1 to 3 filed a petition for grant of compensation amounting to Rs. 50,000 before the Claims Tribunal in 1973,
against the appellant and respondents Nos. 4, 5 and 7 (the insured and his driver) on the ground that Prithvi Nath Ganjoo had died as a result of
accident caused by the rash and negligent driving of Taxi No. JKT 699 at Badshah Chowk, Srinagar, on 23rd April, 1973. During the proceedings
the owners of the vehicle were set ex parte and the claim for compensation was resisted only by the appellant and the driver of the vehicle. From
the pleadings of the parties the following issues were framed ;
Whether the deceased, Prithvi Nath Ganjoo, had died due to the injuries sustained in the accident that took place on 23rd April, 1973, at
Badshah Chowk caused by Sh. Mukhtar Ahmed who was driving the vehicle No. JKT 699 while the deceased was crossing the road ? OPP.
Whether the said accident was caused by the rash or negligent driving of Sh. Mukhtar Ahmed, driver, while driving his motor taxi No. JKT 699
? OPP.
In case issue Nos. 1, 2 are proved, to what amount of compensation the petitioners are entitled and in what proportion and from whom ? OPP.
Whether the vehicle involved in the accident was insured with
NA No. 3 ?
Whether the claim petition does not comply with the requirement of Section 110A of the M.V. Act and, as such, is liable to be dismissed ? OP
No. 3.
Whether the petition is not signed by the petitioners or any person representing them and, as such, is liable to rejection. If so, how......? OP NA
3.
Whether the deceased himself was negligent and rash in crossing the road and the driver of the said taxi could not avoid the said accident ? OP
NA's.
Whether the claim petition is not within time and is liable to be dismissed. If so, how...... ? OP NA 5.
Whether the vehicle involved in the accident had been sold by NA 2 to NA 1 on 19th April, 1973. If so, what is its effect on the case. OP NA
2.
The insurer had neither sought the permission of the Tribunal u/s 110C(2A) nor had it reserved any right in the policy to defend the claim in the
name of the insured. As a matter of fact, perusal of the record reveals that the insurer did not, at the trial of the petition, resist the action on grounds
other than those enumerated u/s 96(2) of the Act.
The learned Tribunal found that the accident had taken place due to the negligence of Mukhtar Ahmed, driver of taxi No. JKT 699, and that
the deceased could not be held liable for any contributory negligence. The Tribunal also found that at the time of his death, the deceased had an
income of Rs. 205 p.m. and that his age at the time of the accident was 58 years. An amount of Rs. 30,000 was awarded as compensation and the
liability to pay that amount was fixed on the appellant. Neither the driver nor the owner filed an appeal and the award has been questioned by the
insurance company only. A preliminary objection has been raised by the learned counsel for the respondent to the maintainability of the appeal. It is
urged that it is not open to the insurer to question the finding of negligence or to challenge the award on quantum of compensation. It is then argued
that the respondent has filed cross-objections and claimed enhancement of compensation and that these cross-objections merit acceptance.
Since, as already noticed, the insurance company had not reserved in the insurance policy any right to defend in the name of the insured and
further since the insurance company did not seek any leave of the Tribunal, expressly or impliedly, u/s 110C(2A) to defend in the name of the
insured, who had been set ex parte, it is not now open to the appellant to challenge the quantum of compensation or the finding of the Tribunal
about negligence of the driver of taxi No. JKT 699. Thus, the preliminary objection has merit and must succeed. The compensation awarded is not
outside the limits of the liability of the insurer, under the policy or the statute, and as such the insurer cannot avoid the liability to pay the awarded
amount.
This appeal, therefore, is not competent and consequently the cross-objections also must be dismissed. Even otherwise, the cross-objections
have no merit and there is no scope for enhancement of the compensation. The Tribunal while awarding compensation took into account that at the
time of death, the deceased aged 58 years, was having an income of Rs. 205 p. m. and taking the life span as 70 years, the Tribunal awarded
compensation by using the multiple of 12 years for the yearly income of the deceased, i.e., (205 X 12 X 12) and awarded Rs. 30,000 to the
claimants. This was not a correct approach. The Tribunal while calculating the amount did not take into consideration the loss suffered by the family
of the deceased and did not determine as to what sum out of Rs. 205 p. m. was the deceased spending on his family, to assess the loss suffered by
the family. It also made no allowance for accelerated payment. Thus, the compensation awarded definitely erred on the higher side and no further
enhancement can be made in the cross-objections.
Both the appeal and cross-objections, therefore, fail and are dismissed as such but without any order as to costs.
Civil Misc. First Appeal No. 21 of 1979
In this case respondent No. 1 filed a petition for grant of compensation amounting to Rs. 50,000, through his father, against the appellant and
respondents Nos. 2 and 3 (owner and driver of vehicle No. JKB 5190) on the ground that on July 4, 1975, Ferdos Ahmed, respondent No. 1,
was hit by Truck JKB 5190 insured with the appellant, as a result of which accident, Ferdos Ahmed had suffered fracture of his leg and the injured
leg had later to be amputated at the All India Medical Institute where the injured had been removed after initial treatment at the S.M. G.S.
Hospital, Srinagar. The Tribunal awarded compensation amounting to Rs. 50,000 to respondent No. 1 and placed the liability of payment of the
entire amount on the insurer, United India Insurance Co. Ltd. Aggrieved, the insurance company alone has filed this appeal. Mr. Ganjoo,
appearing for the appellant, has urged that the claim petition was barred by time and, therefore, no compensation could have been awarded by the
Tribunal to the claimant. Alternatively, it is urged that the quantum of compensation awarded is very excessive and has been fixed arbitrarily. An
objection has been raised by the learned counsel for the respondent to the very maintainability of the appeal by the insurer.
A, perusal of the file reveals that in the claim petition which was filed on August 2, 1976, it was stated in para. 14 that respondent No, 1 had
remained in the S.M.G.S. Hospital for about three months and, thereafter at the All India Medical Institute, New Delhi, for about eight months and
that for these reasons the petition could not be filed in time and that the petition was filed soon after the return of respondent No. 1 and his father
from New Delhi. To this petition, no objections were filed by any of the parties and no plea of limitation was ever raised before the Tribunal by any
of its respondents. It is also transpires from the record that notice of the claim petition was issued to the respondents, including the appellant, but
they avoided service and consequently on an application filed by the claimant, service on the respondents was effected by publication in a
newspaper. Despite the publication of that notice, nobody appeared and the case was set ex parte against all the respondents, including the insurer.
Mr. Ganjoo then filed an application before the Tribunal for setting aside the ex parte proceedings against the insurance company and notice of the
said application was given to respondent No. 1 on January 29, 1977. By order of the Tribunal dated February 8, 1977, the ex parte proceedings
taken against the appellant were set aside, subject to payment of costs and the appellant herein was given an opportunity to file objections to the
claim petition by February 18, 1977. On February 18, 1977, neither costs were paid nor objections were filed and an adjournment was sought for
by learned counsel for the appellant. The case was, on his request, adjourned to March 10, 1977. On that date, again no objections were filed and
another adjournment was sought for and granted to the appellant subject to payment of further costs and the case was adjourned to April 4, 1977.
On the said date, i.e., on April 4, 1977, again neither the objections were filed nor costs were paid by the appellant and the Tribunal, once again,
granted an adjournment to the appellant on payment of costs to file objections to the claim petition, by April 19, 1977. However, neither costs
were paid nor any objections were filed to the claim petition by the appellant and on April 19, 1977, the appellant-insurance company again
absented itself and the case was set ex parte against it, and the claimant was directed to produce ex parte evidence on May 6, 1977. On that date,
it transpires, Mr. Ganjoo again appeared for the appellant and sought permission of the Tribunal to take part in the proceedings "" from that stage
onward"" without filing objections to the claim petition. Permission was granted and the insurance company participated in the proceedings. While
the evidence was being recorded, on June 17, 1977, again nobody appeared for the insurance company, and onnce again the case was set ex
parte against it. Thereafter, after seeking leave of the Tribunal, on one or two occasions, Mr. Ganjoo put in his appearance and participated in, the
proceedings but mostly the insurance company remained absen,t. Respondent No. 1, the claimant, filed an application on April 10, 1978, seeking
permission to examine two more: witnesses. At that stage, Mr. Ganjoo appeared and sought time to file objections to that application. The case
was adjourned to May 10, 1977, when on that date again some more time was sought for by Mr. Ganjoo to file objections. The case was
adjourned to May 19, 1978. However, despite obtaining two opportunities, no objections were filed and, consequently, the application was
allowed and witnesses named in the application were directed to be examined on June 22, 1978. On that date, i.e., on June 22, 1978, Mr. Ganjoo
appeared before the Tribunal and stated that he was taking up the matter with the insurance company to get it settled by mutual negotiations and
prayed for an adjournment. The case was adjourned to July 8, 1978, and again to July 19, 1978, and to August 19, 1978, every time at the
request of Mr. Ganjoo. On August 19, 1978, it was reported by Mr. Ganjoo that no compromise could be arrived at and the case was put up for
further proceedings for September 16, 1978. The insurance company again did not appear on that date and the case was, for the fifth time, set ex
parte against it.
The aforesaid narration of events shows the erratic manner in which the appellant had conducted the case before the Tribunal. In the face of
these facts, it does not now lie in the mouth of Mr. Ganjoo to say that the claim petition was barred by time and that no award could have been
made in respect thereof. It was open to him to take that objection and controvert what had been stated by the claimant in para. 14 of the claim
petition before the Tribunal but he chose not to do so, despite numerous opportunities granted to him. Even though all the respondents had been
set ex parte, the insurance company, on its own request, had been given permission to take part in the proceedings but it chose not to avail of that
permission and neither the explanation for the delay in filing the claim petition nor the fact that the accident had been caused due to the negligence
of the truck driver was controverted before the Tribunal, by the insurer and despite numerous opportunities granted, it did not file any objections to
the claim petition. The Tribunal, after a proper appreciation of the evidence, returned the findings and made the award. Keeping in view the manner
in which the insurance company had conducted its defence before the Tribunal and also the fact that at no stage during the trial of the claim petition
did it either raise the plea of limitation or question the allegation of negligence, the objection raised by learned counsel for respondent No. 1 to the
maintainability of the appeal is well merited. More so, when Mr. Ganjoo has been unable to show how the insurer can avoid, the liability, when the
insured has been found liable. It is also not shown by Mr. Ganjoo that the liability of the insurer could not extend to Rs. 50,000 under the policy of
insurance. In the facts and circumstances of the case, I hold that this appeal has no merits and I dismiss the same, with costs.
Civil Misc. First Appeal No. 24 of 1979
The salient facts giving rise to this appeal are : that on December 3, 1975, at Sella Sopore, father of respondent No. 1, met with an accident
caused by truck No. JKN 2811, owned by respondent No. 2 and which was being driven at the time of the accident by respondent No. 3. As a
result of the accident, father of respondent No. 1, received injuries and died. The daughter of the deceased, respondent No. 1, through her next
friend, submitted a claim petition before the Motor Accident Claims Tribunal claiming Rs. 50,000 as compensation for the death of her father, who
it was alleged was aged 31 at the time of the accident and was the sole bread-earner of the family. The learned Tribunal awarded the sum as
claimed together with interest at the rate of 6% p.a. from the date of the claim petition till the payment, and made the appellant insufance company
liable for payment of the entire awarded compensation, vide award dated March 16, 1979. The insurer has filed this appeal questioning the award
on all the grounds.
From a perusal of the record, it transpires that despite due service, respondents Nos. 2 and 3, the owner and the driver of the truck
respectively, did not appear before the Tribunal and the case was set ex parte against them. The insurance company, however, appeared and
participated in the proceedings. Objections were filed to the claim petition by the appellant and it was pleaded therein that the accident had not
been caused due to the alleged rash or negligent driving of the vehicle by the driver of the truck. It was also pleaded that the vehicle was being
plied in contravention of the conditions of the insurance policy and further that the owner-insured had procured the policy of insurance by not
disclosing material facts and on representing false facts in material particulars. It was on this basis, asserted that even if the insured and the driver
are held to be liable to pay compensation, the insurance company was not liable to pay any compensation to the claimant, yet another objection
raised was that all the legal representatives of the deceased had not preferred the claim and, therefore, the case could not be adjudicated upon.
The question of compensation claimed was also disputed by the insurance company. Since neither the owner of the vehicle nor the driver had
contested the claim petition, the Tribunal permitted the insurance company to defend the claim petition on all grounds, of course without expressly
making an order u/s 110C(2A) of the Act. The insurer, therefore, with the permission of the Tribunal, and without any objection having been raised
by the claimant, contested the claim petition on all grounds on which an insured could defend the action. In this appeal also, Mr. ZA Qureshi,
learned counsel for the claimant, has conceded that since the insurer had been permitted by the Tribunal to contest the action on all the grounds,
the insurer could challenge the award also on all those grounds, but it is maintained that neither the finding regarding negligence nor the amount of
compensation awarded by the Tribunal called for any interference. I shall, therefore, deal with this appeal on merits.
From the pleadings of the parties the Tribunal framed the following issues :
Has not non-applicant No. 3 any liability to pay the compensation as the vehicle was being plied in contravention of the policy conditions of the
route permit granted for its use. OP non-applicant No. 3.
Does the claim need to be dismissed as it has not been preferred by all the legal representatives of the deceased ? OP non-applicant No. 3.
Was the accident caused due to rash and negligent driving of the driver which resulted in causing the death of the father of the applicant. OP
Applicant.
In case issue No. 3 is proved, to how much compensation the applicant is entitled and from whom and in what proportion OP Applicant.
Relief.
Issue No. 1
The insurer did not lead any evidence in respect of issue No. 1 and consequently the said issue was decided against the insurer.
Issue No. 2
It transpires from the record that before evidence was led, the attorney for the claimant filed an affidavit to the effect that there were no other legal
representatives of the deceased, except the minor daughter. Learned counsel for the insurance company did not controvert that affidavit and
consequently, vide order of the Tribunal dated February 8, 1977, issue No. 2 was not pressed before the Tribunal and the same was also decided
against the insurance company.
Issue No. 3
The claimant examined, Yusuf Shah, Amma, Tali alias Khawaja Ahmad, Kabir Dar, Khawaja Rehman Shaheer, Haji Abdulla, Ghulam Nabi,
Ahmad Shah. The insurance company in rebuttal examined Shri G. M. Paul SHO.
According to Yusuf Shah, A.W., the deceased Rahim Shaheer, was collecting leaves outside the garden when Truck No. JKN 2811 came
from the side of Sopore at a very fast speed and ran over Rahim Shaheer. The said truck was being driven by respondent No, 3 at that time. That
many people collected there and police also arrived at the spot. The body of Rahim Shaheer was taken out from under the truck. That the accident
had been caused due to rash and negligent driving of the driver of truck No. JKN 2811. That Rahim Shaheer was earning about 200/300 rupees
p.m. during those days. Kabir Dar, A.W., corroborated Yusuf Shah, A.W., in all material particulars both as regards the manner in which the
accident took place and the negligence of the driver in causing the accident. During his cross-examination, he stated that the deceased was drawing
about Rs. 300 p.m. at the time of the death and was about 30 years old at that time. He went on to add that when the body was pulled out from
under the truck, the deceased was breathing heavily and that he died soon thereafter.
Khawaja Rehman, A.W., Haji Abdullah, A.W., Gulam Nabi and Ahmad Shah, A.Ws., also corroborated the statement of the aforesaid
witnesses as regards the rash and negligent manner in which the truck was being driven by its driver and the manner in which the accident, causing
the death of Rahim, Shaheer, took place. All these witnesses also deposed that the deceased was about 30 years of age at the time of the accident
and that he was earning about Rs. 300 p.m. at the time of his death. All these witnesses categorically asserted that the deceased had died as a
result of the accident.
Rehman Shaheer, A.W., brother of the deceased, deposed that the deceased was earning about Rs. 300 p.m. and that the claimant Saleema,
is his only daughter. That she has no other relations and that her mother had married another person, leaving her all alone and uncared for. He also
gave the age of the deceased at the time of the accident as about 30 years.
In rebuttal, Shri G.M. Paul, SHO, stated that the investigation of the case relating to the accident in question was undertaken by him and that
according to Mm it was a simple case of accident and that during the investigation, the complainant was unable to establish that the accident had
occurred due to rash and negligent driving of the driver of the truck. He went oh to add that the magistrate had agreed with the police report arid
the case closed. The witness, however, did not produce the final report nor disclosed which of the witnesses he had examined in the investigation.
This is all the evidence in the case.
The evidence of the eye witnesses, Yusuf Shah, Kabir Dar and others, as noticed above, conclusively establishes that the accident took place
due to rash and negligent driving of the truck by its driver. Those eye witnesses were not at all challenged on this aspect of the case during cross-
examination and their testimony inspires confidence. From ""their evidence, it emerges that Rahim Shaheer had been run over by the truck and that
he died due to the injuries received by him in the accident. No rebuttal whatsoever of the evidence led by the claimant was given by the insurance
company. The fact that the accident took place on the main road, opposite a garden, and the 'truck ran over the deceased, whose body had to be
pulled out from under the truck, also lends credence to the evidence led by the claimant about the manner in which the accident took place. It
stands clearly established that the accident was caused by the rash and negligent driving of the truck by respondent No. 3. The statement of Shri
G. M. Paul, SHO, is hardly of any consequence. He did not produce either the final report nor did he disclose as to what investigation he had
carried out or the names of the witnesses1 he had examined. His evidence, thus, does not create any dent in the evidence led by the claimant. As a
matter of fact, instead of disproving the case of the claimant, his evidence lends credence to her case inasmuch as he did not dispute that the
accident in question had taken place on the date and the time alleged and that the deceased had died as a result of the accident. His bald assertion
that the complainant had failed to establish the charge against the driver or it was a simple case of accident is wholly insufficient to discard the
trustworthy testimony of the witnesses produced by the claimant. The Tribunal was, in the face of the evidence led before it, perfectly right in
deciding issue No. 3 in favour of the claimant and holding that the accident had been caused due to rash and negligent driving of the driver and also
that the death of the father of the claimant was caused as a result of that accident. Learned counsel for the appellant has been unable to show any
error in the finding arrived at by the Tribunal and from what I have said above, I find no reason to take a different view either. The finding of the
Tribunal on issue No. 3 is, therefore, confirmed.
Issue No: 4
Findings on this issue has been seriously assailed by learned counsel for the appellant and it is argued that the method adopted by the Tribunal for
assessing compensation was faulty and not proper.
In support of this issue, the evidence led by the claimant, as noticed above, shows that the father of the claimant was earning about Rs. 300
p.m. at the time of his death. He was about 31 years of age at that time. The evidence also reveals that the deceased was a healthy man and was
not suffering from any ailment and but for the accident had reasonable chances to live a long life. The Tribunal awarded Rs. 50,000 as
compensation to the claimant. In the opinion of the Tribunal, for at least 15 years more the deceased would have lived and earned at the rate of Rs.
300 p.m. and, thus, the claimant had been put to a loss of Rs. (300 X 12 X 15) = Rs. 54,000 by the death of her father. Since the claimant had
herself claimed only Rs. 50,000, therefore, the same was awarded to her even though her loss was assessed at Rs. 54,000.
Mr. Chakku, learned counsel for the appellant, has urged that the Tribunal applied wrong principles in determining the compensation, inasmuch
as it failed to work out the monthly dependency of the family to assess the loss of the claimant. It is pointed out that Rs. 300 p.m. was not the loss
of the claimant because the deceased must have been spending some amount on his own upkeep also. It is also urged that the Tribunal should have
taken into account the effect of accelerated payment and made some deduction on that account. To me there appears to be considerable force in
the submissions of Mr. Chakku and for what shall follow, I am of the opinion, the Tribunal had misdirected itself while assessing the just and fair
compensation.
Indeed, for assessing compensation, no rigid formula can be laid down and each and every case depends upon a number of factors peculiar to
the life and circumstances of the family concerned. However, courts have from time to time held that the compensation should be, ' just and fair '
and that it should not be a windfall. Some guidelines were prescribed by this court. In State of Jammu And Kashmir v. Pushpa Devi [1979] ACJ
403 where a Division Bench of this court, comprising Mufti J. (as his Lordship the Acting Chief Justice then was) and myself, while dealing with the
principles which should govern the working out of the amount of compensation, gave the following illustrative guidelines :
A principle which has generally been accepted by most of the courts in India, including the Apex court, for working out the amount of
compensation one is to ascertain the annual income of the deceased, after making allowance for the estimated amount which the deceased was
spending on himself during his lifetime and then capitalising the same by multiplying that amount by the number of years of purchase of dependency.
Out of that amount an allowance is made for any amount which the family of the deceased receives on account of the death of the deceased. The
basic factor for working out compensation, which generally guides the courts, is that the compensation must be ' just and fair'. The family of the
deceased of course do not have to get a windfall or derive any undue benefit from the unfortunate death of the deceased, yet they are entitled to at
least receive so much of the amount which is essential for their upkeep and to meet other necessary expenses which, had the deceased been alive,
would have been provided by him. These considerations assume very great importance in cases where the deceased happens to be the sole bread-
earner of the family.
In Pushpa Devi's case 1979 ACJ 403, the deceased was about 35 years of age. He was earning about Rs. 476 at the time of his death. The
Bench found that the deceased must have been spending about Rs. 360 p.m. out of his salary of Rs. 476 p.m. on his dependants. The court
accepted the evidence that the deceased would have continued to earn Rs. 476p.m. ""till his retirement at the age of 55, i.e., for the next 20 years.
The basic figure was then worked out by this court by adopting a multiple of 20 (the gap between the age at the time of death and the age of
superannuation). The court came to the conclusion that the loss to the dependants Was (360 X 12 X 20) = Rs. 86,400. Out of this amount, the
extent of the pecuniary benefits received by the family of the deceased (according to the evidence) amounting to Rs. 26,614 were deducted. From
the remainder, a further deduction of 1/6th of the amount was made on account of accelerated lump sum payment. Thus, the total compensation
was worked out as Rs. 49,905 rounded up to Rs. 50,000.
In the instant case, the deceased was 31 years of age on the date of his death. Though, keeping the normal life expectancy in the villages as 60
years, the deceased might have lived for about 29 years more, he would have supported the claimant, his 6 year old daughter, for another 15 years
only, till she got married. He would have then spent some amount on her marriage also. Since the claimant and her father were the only two
persons in that family and the deceased was the sole bread-earner it would not be unrealistic to assume that the deceased must have been spending
about Rs. 100 p.m. on his own maintenance and the balance of Rs. 200 from his earnings he must be spending on his daughter as well as saving
some amount for her marriage. Therefore, for capitalising the loss suffered by the claimant in this case, the multiple of 15 for arriving at the basic
figure should have been adopted. The amount of compensation would then wort out to (200 X 12 X 15) = Rs. 36,000. Out of this amount,
deduction for accelerated lump sum payment at 1/6th was required to be made. So deducting Rs. 6,000 from Rs. 36,000 the compensation
payable would come to Rs. 30,000 and that in my opinion would be the "" fair and just"" compensation to be paid to the claimant. I am conscious
that in arriving at this figure, some amount of conjecture has crept in; but in a case like the present, as observed by the Supreme : Court in C.K.
Subramania Iyer and Others Vs. T. Kunhikuttan Nair and Others,
In assessing damages, the court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some ex tent is
inevitable.
--it is unavoidable.
I, accordingly, accept this appeal partially and reduce the amount of compensation from Rs. 50,000, awarded by the Tribunal, to Rs. 30,000.
The claimant snail also be entitled to receive interest'at the rate of 6% on this amount from the date of tne application till the realisation of the
awarded amount.
The claimant is still a minor and her mother has remarried. She is being looked after by her uncle, Rehman Shaheer. I, therefore, consider it
proper to direct that the sum of Rs. 30,000 shall be deposited by her uncle, Rehman Shaheer, in the name of Saleema (minor) infixed deposit with
any Scheduled bank f6f a period of five years initially and, thereafter, it shall be renewed from time to time till Saleema gets married. The amount of
interest shall be withdrawn by her uncle, Rehman Shaheer, every month for meeting the expenses of Saleema. The- entire amount of Rs. 30,000
shall be withdrawn by her uncle at the time of her marriage, and after meeting the necessary expenses of marriage, the remaining amount shall be
given over to Saleema.
Since the appeal has partially succeeded, I leave the parties to bear their own costs of this appeal.
M. B. Farooqi, Actg. C.J.
I agree.
Kotwal, J.
I also agree.