United India Insurance Co. Ltd. vs Hukmi and Others

Dinesh Maheshwari, J.—This appeal has been submitted by the insurer of the vehicle involved in the accident assailing the award dated 28th September, 1992 made by the Motor Accident Claims Tribunal, Banner in Claim Case No. 28/1989 in the sum of Rs. 1,74,000 in favour of the claimant-respondents for accidental death of their son Babulal 20 years in age, essentially on the ground of limit of its liability in the sum of Rs. 1,50,000 and not beyond.

At about 12.30 p.m. on 27.12.1988 on Dhorimana to Candhav route near village Dabli the deceased Babulal, son of the claimants, while driving a Jonga bearing registration No. RJC 3815 sustained fatal injuries on being hit head-on by a truck bearing registration No. RNM 6609 driven by non-applicant No. 1 Shankerlal. Narrating the incident, parents of the deceased Babulal submitted the present claim application with the averments that Babulal was 20 years in age earning Rs. 650 per month and contributing Rs. 550 per month to the parents and claimed Rs. 1,98,000 for the loss of contribution for 30 years. The claimants also claimed non-pecuniary loss at Rs. 50,000 and transportation and funeral expenses at Rs. 2,000 and thereby claimed compensation in the sum of Rs. 2,50,000 against the driver, owner and insurer of the offending truck.

The owner of the truck Chandra Ram submitted by way of an application that he has already sold the truck to one Ghewarlal on 28th February, 1987 and executed sale letter and all the instalments were also paid by 11th March, 1989 and, therefore, the proceedings be dropped against him. However, it appears from perusal of record that such application was rejected on 2nd September, 1989 for want of prosecution and then the case though proceeded ex parte against in the reply filed before the Tribunal on 24th March, 1990, purportedly on behalf of non-applicant No. 1 driver Shankerlal, apart from the said driver Shankerlal, an alleged power of attorney of the owner has also signed and verified the contents of reply. It has been contended that the accident was caused by rash and negligent driving of the Jonga driver by hitting against the stationary truck. The insurer, non-applicant No. 3 in its separate reply while denying the claim averments admitted the factum of insurance but submitted that the deceased Babulal was not having a valid driving licence and that the accident was caused by the deceased taking extra passengers in the Jonga and loosing balance and hitting against the oncoming truck. It has been averred that the truck was not having permit and fitness and, therefore, policy conditions were violated.

On the pleadings of the parties, the Tribunal framed the following issues for determination of the questions arising in the case:

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In evidence the claimants, while producing relevant documentary evidence examined AW 1 Suja Ram, claimant No. 2 and AW 2 Jiya Ram, eye-witness to the accident. In relation to the questions involved in this case, relevant it is to notice that no evidence has been led on behalf of any of the non-applicants including the appellant-insurer. A photostat of insurance cover note produced on record by the claimants on 5th October, 1989 bears endorsement of admission at two places (at page C-14/2 of record). Another photostat of the same cover note filed on 24th March, 1990 (at page C-20/2 of record) also bears endorsement of admission at two places and it appears that the Counsel appearing for the Non-applicant No. 3 i.e. the insurer has admitted both the aforesaid photostat.

After hearing the parties, learned Judge of the Tribunal found in issue No. 1 that accident was caused by rash and negligent driving of the truck by the non-applicant No. 1 Shankerlal and consequently found in issue No. 3 that the owner and insurer of Jonga were not necessary parties. In issue No. 2 for quantification of compensation, learned Judge assumed income of deceased as Rs. 600 and his contribution at Rs. 400 per month had applying a multiplier of 30 assessed pecuniary loss at Rs. 1,44,000 and further provided Rs. 15,000 each of the claimant towards pecuniary loss and in this manner found the claimants entitled for compensation in the sum of Rs. 1,74,000. In issue No. 4 against it was observed that there was no fault of the Jonga driver; however, it was observed that burden of proving this issue was on the insurer who has not produced any evidence.

Taking up issue No. 5 framed on the basis of averments of the insurer for its exoneration because of violation of policy conditions; the learned Judge again observed that the insurer has not adduced any evidence and has failed to show as to how insurance policy has been violated. The entire consideration on issue No. 5 reads thus:

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Accordingly, the Tribunal made an award in the sum of Rs. 1,74,000 in favour of the claimants and deducting Rs. 15,000 received by them towards interim compensation, found them entitled for a further amount of Rs. 1,59,000 with interest at the rate of 12% per annum from the date of filing of claim application.

This appeal has been submitted by the insurer against the award aforesaid essentially on the ground that its liability remains limited to the statutory amount of Rs. 1,50,000 and the Tribunal has erred in fastening the entire liability upon the appellant. It is obviously in relation to this very contention of the appellant that while admitting this appeal, by way of interim order dated 14th January, 1993, operation of the award beyond the amount of Rs. 1,50,000 was ordered to be stayed. Learned Counsel Mr. R.K. Mehta appearing for the appellant has strenuously contended that the liability of the insurer remains limited to an amount to Rs. 1,50,000 in view of the statutory requirement as applicable on the date of accident i.e. 27th December, 1988 and no extra premium having been paid and statutory liability having not been extended. The appellant could not have been made liable for payment of the amount beyond Rs. 1,50,000. Learned Counsel relied upon the decisions of the Hon''ble Supreme Court ,in New India Assurance Co. Ltd. Vs. C.M. Jaya and Others, and National Insurance Co. Ltd. v. Jugal Kishore and Ors. I (1988) ACC 327 (SC) : 1988 ACJ 270. Learned Counsel Mr. B.L. Darji appearing for the respondent has opposed with the submissions that the insurer has not taken any such pleadings in its reply nor has led any evidence and is not entitled to raise such objections in appeal. Learned Counsel has referred to the Division Bench decision of this Court in The General Assurance Society Ltd. Jodhpur v. Smt. Chhagan Kanwar and Ors.R.L.W. 1998(1) 369.

Having heard learned Counsel for the parties and having examined the record of the case, this Court is satisfied that this appeal by the insurer raising grounds of its limited liability remains wholly baseless and an exercise in futility and deserves to be dismissed.

Though learned Counsel for the appellant has attempted to raise question about limited statutory liability of the insurer but the fundamental fact remains that not a whisper has been made in the reply submitted by the insurer about its liability being limited to statutory liability only. This apart, no evidence has been led and not even a word of mouth has been stated in this regard. The plea taken by the insurer, of whatever worth it is, so far exonerating itself of the liability is concerned, as stated in paragraph-1 of the additional submissions in the reply reads thus,-

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The insurer never even suggested before the Tribunal that its liability is limited to the extent of statutory liability, whether in the reply or by leading any evidence or even in arguments. Therefore, the contention sought to be raised before this Court in appeal having no foundation at all in the case set up before the Tribunal cannot be countenanced. This Court in the case of Chhagan Kanwar (supra), has dealt with such want of pleadings and evidence after considering the decision of the Hon''ble Supreme Court in Jugal Kishore (supra), and has held thus:

(11) The ground regarding the limited liability was not taken by the appellant before the Trial Court. It does not find place in the written statement nor any evidence was produced by the Insurance Company. The Insurance Company though filed a detailed written statement but his objection was not taken by the appellant. The Insurance Company, also, produced in evidence NAW 1 Shri Murli Manohar Sippy the Branch Manager, National Insurance Company, Ajmer. He, in his statement recorded during the trial, also, did not state that the liability of the Insurance Company is limited to the extent of Rs. 50,000.

(12) It is true that the strict rule of pleadings cannot be invoked in the claim petition but it is desirable that the claimants must know the case of the respondents, which they have to meet. Neither there was any pleading nor was there any issue framed by the learned Judge of the Tribunal regarding limited liability of the Insurance Company. If an objection regarding the limited liability would have been taken by the appellant Insurance Company before the Trial Court then the claimants would have an opportunity to lead evidence to show that extra-premium was paid for any extra contract to cover unlimited liability was arrived at between the parties. In the absence of such pleadings and the evidence on record, the appellant Insurance Company cannot be allowed to agitate this ground in the appeal. The learned Single Judge was, therefore, right in holding the appellant Insurance Company liable to indemnify the full claim. The judgment passed by the learned Single Judge, therefore, does not require any interference.

The status of the plea sought to be raised in the present appeal obviously remains akin to that of Chhagan Kanwar''s case (supra) and deserves to be rejected.

It may be pointed out even in case of C.M. Jaya (supra), the Hon''ble Supreme Court has held.-

Thus, a careful reading of these decisions clearly shows that the liability of the insurer is limited, as indicated in Section 95 of the Act, but it is open to the insured to make payment of additional higher premium and the higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this Court.

Therefore, it is clear that although the statute provided for a minimum liability, the insurer was not prohibited to cover higher risk and, therefore, in such a case where the insurer wanted to take the plea that its liability was limited, it was required of the insurer to have taken specific pleadings and then proved the essential facts by necessary evidence. The insurer having failed to do so, the Tribunal cannot be said to be in error in holding it liable to satisfy the entire award.

Though the insurer has neither pleaded facts nor led any evidence and the entire plea sought to be suggested remains hollow and bereft of substance yet even on a prima facie look at the photostat of cover note as placed on record, one by the claimant and another by non-applicants shows that three different coverages have been stated namely, ''Comprehensive'' ''Third party'' ''Act Liability'' with the requirement to strike out the inapplicable and the significant fact is that here is a distinct tick (sic) mark against ''Third party'' whereas both other kind of coverage i.e. ''Comprehensive'' and so also ''Act Liability'' appear to have been struck off by draw of a horizontal line. It is apparent that the insurer never had any such defence that it were a case of limited statutory liability and, therefore, never raised such plea in the reply and never led any evidence. The insurer has obviously taken this appeal on baseless grounds.

The quantum of compensation in the sum of Rs. 1,74,000 awarded by the Tribunal for the death of 20 years old earning son of the claimants cannot be said to be excessive or exorbitant. Of course, the Tribunal has proceeded to apply a multiplier of 30 and even if that be not countenanced and reasonable component of future prospects be provided in relation to the deceased 20 years in age, the net figure of Rs. 1,74,000 cannot be said to be excessive. The award remains that of just compensation.

The insurer having chosen to submit the appeal and stay application on wholly baseless grounds that resulted in depriving the claimants of a part of compensation amount, deserves to be saddled with quantified costs while dismissing this appeal.

As a result of the aforesaid, this appeal fails and is dismissed with costs quantified at Rs. 3,000 payable by the appellant to the claimants. The due amount under the award and of the costs shall be deposited by the insurer within 30 days from today with the Tribunal and the Tribunal shall make payment of such amount in cash to the claimants.