United India Insurance Company Limited vs Tabinda Siddiqui And Others

A claim petition, bearing File no.14/Claim, was filed by respondents 1 to 5, before Motor Accident Claims tribunal, Leh (for short “Tribunalâ€)

for payment of compensation of Rs.2.70 Crores on account of death of one Saif-ud-din Siddiqui in a road accident near Rumtse, Leh. Appellant

Insurance Company resisted claim petition.

The Tribunal, in view of pleadings of parties, framed Issues for determination, which are:

Whether an accident occurred on 17.09.2012 at Rumtse within the jurisdiction of P/S Leh by rash and negligent driving of offending vehicle

No.MP-04CC-2006 by its driver respondent No.1 as a result of which deceased Saifuddin Siddiqui received fatal injuries? OPP

If issue No.1 is proved in affirmative whether petitioners are entitled to compensation; if so to what amount and from whom? OPP

Whether driver of offending vehicle, at the time of accident, was not holding a valid and effective driving license and whether there was violation of

terms and conditions of policy of insurance? If so to what effect? OPR-2

Relief. OP Parties

Claimants/respondents 1 to 5 produced and examined witness, namely, Zaffar Ali; besides respondent no.1. In terms of Award dated 23rd June

2014, the Tribunal found claimants/respondents 1 to 5 entitled to receive compensation of Rs.6.83 Lacs along with 7.5% interest per annum from the

date of filing of claim petition till its realisation. It is this Award, of which both appellant and claimants/respondents 1 to 5 are aggrieved and seek

setting-aside thereof on the grounds averred in Appeal and Cross-Appeal.

Heard and considered.

Let me first take up and decide the Appeal, filed by Insurance Company and thereafter Cross Appeal of claimants/respondents 1 to 5.

Mr N. H. Khuroo, learned counsel for appellant Insurance Company has stated that it had been initially reported to police that deceased himself had

been driving vehicle at the time of accident, but subsequently respondent no.6 was shown on the wheels as driver of vehicle, which is not correct as

while concluding investigation, police have in a hush reported that respondent no.6 had been driving vehicle. Since deceased himself had been driving

offending vehicle at the time of accident, claimants/respondents 1 to 5 could not claim compensation, being his legal heirs, for his own wrongs and

negligence and that this fact has been over looked by the Tribunal. This submission of learned counsel for appellant Insurance Company is

misconceived. The reason being that no such assertion has been made by appellant Insurance Company before the Tribunal in its written statement or

pleaded throughout during adjudication of claim petition. It would be appropriate to reproduce below Objections filed by appellant Insurance Company

before the Tribunal:

“1. That the contents of para no.1&2 are matter of facts which needs to be verified.

That contents of para no.3&4 are also matter of facts which again the complainant need to proof through proper evidence and documents.

That the content so para no.5 need not any reply.

That the contents of para no.6 are denied as incorrect and wrong, without any base. It is further submitted that the claimant has failed to submit the

income tax return certificate, moreover the petitioner has only mentioning about the income tax return for the financial year of 2012-13 but did not

speak about the previous income tax return.

That the contents of para no.7 are also denied as incorrect and wrong. The answering respondent further submitted that the petitioner without

having any evidential documents in claiming deceased as Income tax payee moreover the income tax return mention in the claim petition is for the

financial year 2012-13 whereas the deceased was expired in the month of September 2012.

That the contents of the para no.8 to 17 are matter of facts which the petitioners need to prove.

That the contents of para no.18 & 19 are also matter of facts which the petitioners need to prove beyond any doubts.

That the contents of para no.20 are vehemently denied as incorrect and wrong without any base. It is further submitted that the petitioner is

claiming exaggeratedly unfair amount which is beyond the payable amount of any claim.

9.That the answering respondent also denied the content of para no.21 as not maintainable.â€​

Another important aspect of the matter is that driver/owner of offending vehicle, namely, Athar Khan â€" respondent no.6 herein, has in clear terms

admitted that he is driver/owner of offending vehicle and possesses valid driving licence and his vehicle was insured on the fateful day of accident.

Again, witness adduced by complainants, namely, Zaffar Ali, in his statement deposed that in September/October 2012, he along with his friends,

including deceased Saif Siddiqui, had gone to Ladakh for a trip and offending vehicle was being plied by respondent no.7 â€" Athar Khan, at the time

of accident. They informed police about accident and deceased was carried to Leh Hospital in police vehicle.

As regards plying of vehicle by respondent no.7 (Athar Khan) there was no cross-examination of witness (Zaffar Ali). The statement of witness of

claimants, namely, Zaffar Ali, has been corroborated by police challan. In that view of matter also, submission of learned counsel for appellant

Insurance Company that deceased was plying offending vehicle, is baseless.

The validity of driving licence (viz. Issue no.3), framed by Tribunal, was elaborately discussed and rightly decided by Tribunal. Appellant Insurance

Company, to this effect, has not adduced any evidence before the Tribunal to rebut the claim of claimants.

Another submission of Mr Khuroo, learned counsel for appellant Insurance Company, is that Tribunal has erred in passing impugned award as being

not only against facts but also against law inasmuch as during course of trial before Tribunal, it was established beyond any doubt from documentary

evidence of claimants/respondents 1 to 5 that deceased was 50% co-owner of offending vehicle as vehicle was registered in the name of M/s SAM

Enterprises, a travel agency, of which deceased was 50% shareholder as partner and that under provisions of Motor Vehicles Act, respondents 1 to 5

are not entitled to claim compensation on account of his death in accident as deceased was himself owner of vehicle. He further states that under

Insurance Contract, it is provided that insured shall be indemnified against any claim raised against him for compensation on account of any death or

injury caused to any person by use of said vehicle. Since deceased himself was owner, respondents 1 to 5 could not lay claim for compensation for

death of deceased in the capacity as being his legal heirs keeping in view not only limitation under Insurance Contract but also under provisions of

Motor Vehicles Act.

These submissions of learned counsel for appellant Insurance Company are baseless, unfounded and have no force in law. Perusal of record on file

would unequivocally divulge that owner/driver of offending vehicle, namely, Athar Khan â€" respondent no.6, has appeared before the Tribunal,

submitted his written statement and proved his ownership qua offending vehicle, which remained unrebutted. Appellant Insurance Company failed to

refute ownership of respondent no.6 before the Tribunal. In that view of matter above submissions of learned counsel for appellant Insurance

Company has no impetus in law.

It may not be out of place to mention here that the Supreme Court in United India Insurance Company Limited v. Lehru and others (2003) 3

S.C.C. 338, while discussing Section 147 of the Motor Vehicles Act, 1988, has said under Subsection (1), Insurance Company must pay to the person

entitled to the benefit of decree, notwithstanding that it has become “entitled to avoid or cancel or may have avoided or cancelled the policyâ€. The

wording of Subsection (7) viz. “No insurer to whom the notice referred to in subsection (2) or subsection (3) has been given shall be entitled to

avoid his liabilityâ€, indicate that Legislature wanted to clearly indicate that Insurance Companies must pay unless they are absolved of liability on a

ground specified in subsection (2). This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to

restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to subsection (4) is very illustrative. It

shows that the Insurance Company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the

Insurance Company to pay is further emphasised by subsection (5). This also shows that Insurance Company must first pay, then it can recover. If

Section 149 is read as a whole it is clear that subsection (7) is not giving any additional right to Insurance Company. On the contrary, it is emphasising

that the Insurance Company cannot avoid liability except on the limited grounds set out in sub-section (2). Insurance Company, in order to avoid

liability under the provision of Section 149(2), must show that there is a “breachâ€. The Supreme Court while being in full agreement with findings

given in Skandia Insurance Co. Ltd. V. Kokilaben Chandravadan (1987) 2 SCC 654 and Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21, held

that breach must be on part of the insured. After holding so, the Supreme Court gave an example that suppose a vehicle was stolen. Whilst it was

being driven by the thief there was an accident. The thief was caught and it was ascertained that he had no licence. Can the Insurance Company

disown liability? The answer has to be an emphatic “Noâ€. To hold otherwise would be to negate the very purpose of compulsory insurance. The

injured or relatives of person, killed in the accident, may find that the decree obtained by them was only a paper decree as the owner was a man of

straw. The owner himself would be an innocent sufferer. It was for this reason that the Legislature, in its wisdom has made insurance, at least third-

party insurance, compulsory. The aim and purpose being that an Insurance Company would be available to pay. The business of the Company is to

insurance. In all businesses there is an element of risk. The Supreme Court further said that persons carrying on business must take risks associated

with that business. It is equitable that the business, which is run for making profits, also bears the risk associated with it. At the same time innocent

parties must not be made to suffer or loss.

If submission of learned counsel for appellant that Insurance Company is exonerated to indemnify insured, is accepted instinctively, then aim and

purpose of motor vehicle insurance will fail and as a corollary thereof, claimants’ prayer against the insurer is bound to be defeated. Having said

that, aforesaid arguments advanced on the side of the appellant are liable to be discountenanced. Time and again, in a hierarchy of cases, the Supreme

Court and High Courts of the country have uniformly held that the scheme of compulsory insurance of motor vehicles is a welfare measure aimed at

protecting the interest of the victims and legal representatives of victims of vehicular accidents and that the provisions enabling insurer to rescind

contract on the basis of violation of a condition of the policy has been held to govern only the inter se rights and obligations of the insurer and the

insured, without affecting the benefit conferred upon the third party victims.

Learned counsel for appellant Insurance Company also avers that compensation awarded by Tribunal is highly exaggerated and inflated. This

submission is to be looked into through the window of the record on the file. Claimants before the Tribunal maintained annual income of deceased as

Rs.11,38,105/-. Deceased is stated to have been running a travel agency at Bhopal and an income tax payee. The Tribunal found that gross annual

income of deceased for the year 2011-12 was Rs.8,56,705/-, for 2010-11 was Rs.4,70,395/-, and for 2009-10 was Rs.4,01,594/-. The Tribunal has also

rightly said in impugned Award that it is not the income that was being generated from business but it is value of personal input of deceased in running

business. Claimants produced before the Tribunal income tax returns and Computation of Income statements, which would show that deceased had

been receiving the remunerations from business. The Tribunal has not taken into consideration the whole income/remunerations of deceased for

computation of loss of income as it has rightly, after discussing various case laws on the subject, assessed and calculated what should be Loss of

Income/Dependency.

Another submission of learned counsel for appellant Insurance company that Tribunal has wrongly applied multiplier on higher side, is specious as

perusal of impugned Award reveals that Tribunal has applied a right multiplier. The Tribunal for application of multiplier relied upon Sarla Verma v.

Delhi Transport Corporation, (2009) 6 SCC 121, and thereafter rightly applied multiplier of 14.

Submission of learned counsel for appellant Insurance Company is that Tribunal has wrongly given compensation under different heads, to which

respondents 1 to 5 are not entitled. This submission of learned counsel for appellant has sum and substance. In view of law laid down by the Supreme

Court in National Insurance Company Ltd v. Pranay Sethi, (2017) 16 SCC 680, impugned Award is modified to the extent of Funeral Expenses and

Loss of Consortium. Funeral Expenses shall be Rs.15,000/- and Loss of Consortium shall be Rs.40,000/-

There is also sum and substance in submission of learned counsel for appellant Insurance Company as regards grant of interest @ 7.5% by the

Tribunal. The said portion of the Award directing payment of interest @ 7.5% is liable to be set-aside as the same goes against the judgements passed

by the Supreme Court and by this Court. Thus, interest @ 6% shall be paid by appellant Insurance Company from the date of filing of claim petition till

its realisation.

For the reasons discussed above, the Appeal is partly allowed in the following manner:

A. Loss of dependency = Rs.33,60,000.00

B. Funeral expenses = Rs. 15,000.00

C. For loss of care and guidance of minor children = Rs. 1,00,000.00

D. Loss of Consortium = Rs. 40,000.00

E. Transportation charges of dead body = Rs. 25,000.00

Total compensation = Rs.35,40,000.00

Claimants/respondents 1 to 5 are entitled to compensation of Rs.35,40,000/- along with interest @ 6% per annum from the date of institution of

claim petition till its final realisation.

Appellant Insurance Company is directed to pay the aforesaid amount of Rs.35,40,000/- along with interest @ 6% per annum from the date of

institution of claim petition till its final realisation. Amount, if any, received by claimants/respondents 1 to 5 shall be deducted from the amount as

awarded finally.

CMAM no.181/2014 is disposed of in terms of above.

Now advert to Cross Appeal no.12/2017

According to Mr Haqani, learned counsel for claimants/respondents 1 to 5, the Tribunal has given award of lesser amount inasmuch as Tribunal

has not assessed the amount of loss of dependency on the basis of income of deceased at the time of death and has not taken into consideration

income tax returns as were available on record for Assessment Year 2010-11, evidencing his annual income at Rs.8,56,705/-. The Tribunal is said to

have calculated loss on assumed amount of salary to be paid to Manager for running business that too when there was no evidence on record for such

assumption nor was such a defence ever projected by appellant Insurance Company. It is also contended Tribunal has not appreciated the fact that

with the death of deceased, business of tour and travels, run by him, has been closed. Claimants are stated to be entitled to compensation to the extent

of 50% of income of deceased on account of loss of future prospects. According to learned counsel, Tribunal has wrongly applied multiplier of 14,

instead of 15. These submissions of learned counsel for claimants/ respondents 1 to 5 have been elaborately discussed hereinbefore, while deciding

Appeal of appellant Insurance Company (CMAM no.181/2014) and need not be again reiterated. It is made clear here that computation as regards

Loss of Dependency has been rightly made by Tribunal, which need not be interfered with as Tribunal has discussed all aspects of the matter

therefor. The multiplier applied by Tribunal, given discourse herein before, also need not be interfered with.

In view of above, Cross Appeal is dismissed.

Record of the Tribunal, if summoned/received, be sent down along with copy of this judgement.