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Saturday, August 3, 2013

M.V. Act -accident claim = Whether the High Court is justified in reducing the compensation from Rs.10,62,000/- to Rs.8,00,000/- with 6% interest per annum?= The same has been interfered with by the High Court in the Appeal filed by the Insurance Company though it has no right to challenge the quantum of compensation as it has got limited defence as provided under Section 149(2) of the Motor Vehicles Act in the absence of permission from the Tribunal to avail the defence on behalf of the insurer as required under Section 170(b) of the Act. It is relevant to note that Parliament, while enacting sub-section (2) of Section 149 only specified some of the defences which are based on conditions of the policy and, therefore, any other breach of conditions of the policy by the insured which does not find place in sub-section (2) of Section 149 cannot be taken as a defence by the insurer. If we permit the insurer to take any other defence other than those specified in sub- section (2) of Section 149, it would mean we are adding more defences to the insurer in the statute which is neither found in the Act nor was intended to be included.= In our considered view the Tribunal and the High Court have erred in not following the principles laid down in Sarla Verma’ case (supra) in fixing the monthly income at Rs.12,000/- in the absence of documentary evidence having regard to the fact that the deceased was employed as Lecturer in Odisha College of Homeopathy and Research, Sambalpur and she also had private practice. The Tribunal in exercise of its original jurisdiction has taken Rs.12,000/- as her monthly income and has deducted 1/3rd out of the monthly salary towards her personal expenses and computed the compensation both on the loss of dependency as well as the conventional heads and has awarded Rs.10,62,000/-. The same should not have been interfered with by the High Court in exercise of its appellate jurisdiction. Hence, the impugned judgment, award and order passed in the Misc. Case no. 385/2011 in M.A.C.A No. 579/2007 is required to be interfered with. So also the order dated 10.3.2011 in Misc. Case No.385 of 2011 modifying the earlier direction issued by the High Court to deposit 60% of the awarded amount in any of the Nationalized Bank, is required to be interfered with. Accordingly, both the impugned judgment, award and orders dated 24.2.2011 and 10.03.2011 are hereby set aside by allowing the civil appeals. Having regard to the facts, circumstances and the finding recorded by the Tribunal in its judgment, we restore the same in awarding compensation in favour of the appellants at Rs.10,62,000/- with interest at the rate of 6% per annum.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40622
                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                     CIVIL APPEAL NOS.5373-5375 OF 2013
              (Arising  out of SLP (C) Nos. 7407-7409 of 2012)


         REKHA JAIN & ANR.                           ... APPELLANTS

                                     VS.

               NATIONAL INSURANCE CO.LTD.       ... RESPONDENT









                               J U D G M E N T




V. Gopala Gowda, J.

        Leave granted by  this  Court  vide  order  dated  02.07.2013  after
condoning the delay in filing the special leave petitions.

2.    These appeals are filed by the claimants namely Rekha  Jain  and  T.A.
Sebastian. They have questioned the correctness of the  judgment  and  award
and order dated 24.2.2011 passed by the High Court  of  Orissa,  Cuttack  in
MACA No. 579 of 2007 and order dated 10/03/2011 in MC No.  385  of  2011  in
MACA No. 579  of  2007  in  the  aforesaid  appeal  and  final  order  dated
24.11.2011  in  M.A.C.A.  No.844  of  2007  urging  rival  facts  and  legal
contentions.

3.    The daughter and the husband of the deceased have filed these  appeals
seeking just and reasonable compensation on account  of  the  death  of  the
deceased in a motor vehicle accident, which took place on  17.08.2001.
 The
deceased was traveling alongwith her daughter, the first  appellant  in  her
Maruti Car bearing Regn. No. OR  15  D-9005.
The  accident  took  place  on
account of rash and negligent driving of the offending truck  bearing  Regn.
No. MP 23 D-0096.
The deceased Dr. Grace Jain died on the spot, as  she  had
sustained grievous injuries on account of the said accident.  It  is  stated
by the appellants that the deceased was  a  renowned  doctor  serving  as  a
lecturer in Odisha College of Homeopathy and  Research,  Sambalpur  and  had
private practice as well.
4.    It is stated in the claim  petition  and  in  the  evidence  that  the
salary of the deceased was Rs.12,000/- per  month.  
The  appellants  herein
filed  claim  petition  i.e.  Misc.(A)  Case   No.118   of   2002   claiming
compensation of Rs.27,00,000/- before  the  Second  Motor  Accidents  Claims
Tribunal, Northern Division, Sambalpur  (hereinafter  referred  to  as  ‘the
Tribunal’).

5.    The owner of the truck (since  deleted  from  the  array  of  parties)
appeared and filed identical written statement  in  the  claim  petition  as
that of  the  written  statement  filed  in  Rekha  Jain’s  claim  petition.
According to him, the driver of the truck had valid driving licence and  the
same was insured  with  Respondent  -  National  Insurance  Company  Limited
(hereinafter referred to as the ‘Insurance  Company’).   The  owner  of  the
offending vehicle has further stated that his driver was  not  negligent.  A
motor cyclist suddenly came in front of the truck overtaking  him  from  its
left side and hence the driver had to move to the right  side  in  order  to
avoid accident with the motor cyclist. In that process  the  truck  hit  the
Maruti car causing death of the deceased.

6.    The  respondent-Insurance  Company  had  also  filed  similar  written
statement in both the claim petitions denying its liability  on  the  ground
that the driver of the offending truck was negligent and that  the  accident
occurred due to the negligence of the driver of the Maruti  Car.  On  behalf
of Rekha Jain, the first appellant herself was examined as a  witness  PW  3
and two other eye witnesses were examined as PW 1 and  PW  2  to  prove  the
occurrence of the accident.  On the basis of documentary and  oral  evidence
particularly eye witnesses’ evidence, the finding of fact  was  recorded  on
issue Nos. 2 and 3 that the accident took  place  on  account  of  rash  and
negligent driving of the offending truck driver and  it  was  also  answered
that the claim  petition  filed  by  the  appellants  is  maintainable.  The
Tribunal held that the appellant’s mother died and the first  appellant  was
grievously injured due to the  accident  involving  offending  vehicle.  The
Tribunal also recorded the finding of fact holding that  the  accident  took
place on account of  rash  and  negligent  driving  by  the  driver  of  the
offending vehicle.   Consequently,  issue  No.4  was  answered  by  awarding
compensation at Rs.10,62,000/-  with 6% interest per annum by accepting  the
pleading  of  the  appellants  that  the  deceased  was  a  renowned  doctor
practicing in Government Hospital.

7.    The claim petition  Misc.(A)  Case   No.  118/2002  was  allowed  with
interest @ 6% per annum from the date on which the claim petition was  filed
and the respondents were directed by the Tribunal to  deposit  Rs.5,00,000/-
each for both the appellants for a  period  of  five  years  with  quarterly
interest payable to  them.   The  Tribunal  also  directed  the  payment  of
balance amount and interest on the compensation in equal proportion to  both
the appellants in cash.
8.    Aggrieved by the above said judgment  and  award  both  the  Insurance
Company as well as the appellants filed appeals before  the  High  Court  of
Orissa, which were numbered as M.A.C.A. No. 579 of 2007 and M.A.C.A.  No.844
of 2007. as the Insurance Company is aggrieved  by  fastening  of  liability
and quantum of compensation and the appellants  have  prayed  for  just  and
reasonable compensation. The High Court after examining the  appeal  of  the
Insurance  Company,  found  fault  with  the  compensation  awarded  by  the
Tribunal at Rs.10,62,000/-  in  favour  of  the  appellants  taking  monthly
earnings of the deceased  at  Rs.  12,000/-,  in  the  absence  of  material
evidence produced on record regarding the proof of her monthly  salary.  The
Tribunal calculated the compensation by deducting 1/3rd out of  the  monthly
salary  towards  her  personal  expenses  and  her   contribution   to   the
appellants’ family. The same is taken as Rs.8,000/- per  month.  Hence,  her
annual income was assessed at Rs.96,000/-.   The  age  of  the  deceased  is
recorded at about  51  years.  Hence,  a  multiplier  of  11  was  used  for
calculating the loss of dependency of the appellants and Rs.10,62,000/-  was
awarded by the Tribunal, which included Rs.6,000/- towards general  damages.
  The High Court  however,  arrived  at  the  conclusion  and  recorded  the
finding of fact stating that a compensation  of  Rs.10,62,000/-  is  on  the
higher  side  and  hence,  the  same  was  reduced  by  the  High  Court  to
Rs.8,00,000/-.

9.    Aggrieved by the same, the appeal was  filed  by  the  appellants  for
modification of the impugned judgment  for  grant  of  just  and  reasonable
compensation to them.  It is urged that the appeal  of  the  appellants  was
dismissed by the High Court without examining  the  case  independently  and
appreciating the  pleadings,  legal  evidence  on  record  and  law  on  the
question  and  without  following  the  criteria  for  awarding   just   and
reasonable compensation. The correctness of the judgment, awards  and  order
passed on 10.3.2011 in Misc. Case No.385 of 2011 modifying the  order  dated
24.2.2011 is challenged wherein the modification was only to the  extent  of
the direction given by the High Court that out of  the  awarded  amount,  an
amount equivalent to 60% shall be kept in  fixed  deposit  in  the  name  of
appellants in any nationalized bank for a  period  of  five  years  and  the
balance amount should be disbursed to the appellants.

10.   However, the High  Court  has  taken  Rs.12,000/-  per  month  as  the
monthly  income  of  the  deceased  for  the  purpose  of  determining   the
compensation in favour of the appellants.  It is urged  that  this  approach
of the High Court in reducing the compensation awarded by  the  Tribunal  is
erroneous in law.  Further, the multiplier applied by both the  Tribunal  as
well as the High Court is  contrary  to  the  multiplier  mentioned  in  the
schedule which is applicable for special reasons having regard to the  facts
and circumstances of the case placing reliance upon  the  judgment  of  this
Court in the case of United India Insurance Co. Ltd.  &  Ors.   v.  Patricia
Jean Mahajan & Ors.[1] The relevant  paragraph  of  the  judgment  reads  as
under:

      “13. We may refer to the decision in  G.M.,  Kerala  SRTC  v.  Susamma
      Thomas. In this case while considering the law on the subject, it  was
      observed in para 13 of the Report as follows: (SCC p. 183)
      “The choice of the multiplier is determined by the age of the deceased
      (or that of the claimants whichever is higher) and by the  calculation
      as to what capital sum, if invested at a rate of interest  appropriate
      to a stable economy, would yield the multiplicand  by  way  of  annual
      interest. In ascertaining this, regard should also be had to the  fact
      that ultimately the capital sum should also be consumed  up  over  the
      period for which the dependency is expected to last.”



11.   The Tribunal and the High Court have erred in not  awarding  just  and
reasonable compensation in favour of the  appellants  keeping  in  view  the
principles laid down by this Court in various judgments in  the  matters  of
motor accidents claims keeping in view  the  object  of  compensation  which
will be the source of the maintenance for them particularly, in  respect  of
the claimant, appellant no.1.  The  High  Court  instead  of  enhancing  the
compensation though the case  is  made  out  in  the  appeal  filed  by  the
appellants for enhancement, has erroneously exercised its  jurisdiction  and
has reduced the compensation from Rs.10,62,000/-  to  Rs.8,00,000/-  without
taking into consideration the facts of the case  that  the  deceased  was  a
renowned doctor serving  in  Odisha  College  of  Homeopathy  and  Research,
Sambalpur, and she also had private practice and had earned good  reputation
in the area.

12.   The above said important aspect of the matter had  been  ignored  both
by the Tribunal as  well  as  the  High  Court  in  not  awarding  just  and
reasonable  compensation  in  favour  of  the  appellants.   Therefore,  Mr.
Sukumar Pattjoshi, the learned Senior Counsel for the appellants has  sought
for enhancement of compensation as claimed in  the  claim  petition  by  the
appellants.

13.   On the other hand,  Mr.  S.L.  Gupta,  the  learned  counsel  for  the
Insurance Company sought to justify the  impugned  judgment  passed  by  the
High Court in its appeal and the appeal filed by the  appellants  contending
that the High Court has rightly considered the facts and legal  evidence  on
record and has modified the impugned judgment of the  Tribunal  and  awarded
compensation  of  Rs.8,00,000/-  with  6%  interest  per  annum  and  giving
direction as contained in the impugned judgment passed in the appeal of  the
Insurance Company and modifying the same vide order dated 10.3.2011  in  the
instant appeal regarding 60% of deposit of the awarded amount including  the
interests. Therefore, he has prayed for dismissal of the  appeals  as  there
is no merit.

14.   In view of the aforesaid rival  factual  and  legal  contentions,  the
following points would fall for our consideration:
              1. Whether  the  High  Court  is  justified  in  reducing  the
                 compensation from Rs.10,62,000/- to Rs.8,00,000/-  with  6%
                 interest per annum?
              2.  Whether  the  appellants   are   entitled   for   enhanced
                 compensation?
              3. What award?

15.    We  have  perused  the  impugned  judgment  and  evidence  on  record
particularly the evidence of PW 3, the first appellant who is  the  daughter
of  deceased.  It  should  have  been  taken  into  consideration  that  the
employment of the deceased was a public  employment.  Therefore,  it  was  a
stable employment for a period of another seven years and there  could  have
been revision of wages and promotional benefits accrued  in  her  favour  if
she was  alive.   Therefore,  for  determining  the  annual  income  of  the
deceased, the principles laid down in Sarla Verma & Ors. v. Delhi  Transport
Corp. & Anr[2] should have been applied to the case  of  the  appellants  by
taking into consideration the monthly salary of the deceased at  Rs.12,000/-
to which 30% should have  been  added  as  future  prospects  of  income  as
mentioned above and that much  amount  could  have  been  taken  as  monthly
income of the deceased for  the  purpose  of  determining  the  compensation
towards the loss of dependency of the appellants. The relevant paragraph  of
the case reads as under:

      “24. In Susamma Thomas this Court increased the income by nearly 100%,
      in Sarla Dixit the income was increased  only  by  50%  and  in  Abati
      Bezbaruah the income was increased by  a  mere  7%.  In  view  of  the
      imponderables and uncertainties, we are in favour  of  adopting  as  a
      rule of thumb, an addition of 50%  of  actual  salary  to  the  actual
      salary income of the deceased  towards  future  prospects,  where  the
      deceased had a permanent job and was below 40 years. (Where the annual
      income is in the taxable range, the words “actual  salary”  should  be
      read as “actual salary less tax”). The addition should be only 30%  if
      the age of the deceased was  40  to  50  years.  There  should  be  no
      addition, where the age of the deceased is more than 50 years.  Though
      the evidence may indicate a different percentage of  increase,  it  is
      necessary to standardise the addition to  avoid  different  yardsticks
      being applied or different methods of calculation being adopted. Where
      the deceased was self-employed or  was  on  a  fixed  salary  (without
      provision for annual increments, etc.), the courts will  usually  take
      only the actual income at the time of  death.  A  departure  therefrom
      should be made only in rare and exceptional  cases  involving  special
      circumstances.”




      This aspect of the matter is  not  taken  into  consideration  by  the
Tribunal while awarding  compensation.  Nonetheless,  it  has  accepted  the
claim made by the appellants that the salary of the deceased was Rs.12,000/-
 per month and the multiplier 11 was applied  and  awarded  compensation  of
Rs.10,62,000/-.
The same has been interfered with by the High Court in  the
Appeal filed by the Insurance Company though it has no  right  to  challenge
the quantum of compensation as it has got limited defence as provided  under
Section 149(2) of the Motor Vehicles Act in the absence of  permission  from
the Tribunal to avail the defence on  behalf  of  the  insurer  as  required
under Section 170(b) of the Act.  
This  principle  has  been  laid  down  by
three judge Bench decision of this Court in National Insurance Co. Ltd.  vs.
Nicolletta Rohtagi & Ors.[3] The relevant paragraphs of  the  judgment  read
as under:

   “15. It is relevant to note that Parliament, while  enacting  sub-section
   (2) of Section 149 only specified some of the defences which are based on
   conditions of the policy and, therefore, any other breach  of  conditions
   of the policy by the insured which does not find place in sub-section (2)
   of Section 149 cannot be taken as a defence by the insurer.
 If Parliament
   had intended to include the breach of other conditions of the policy as a
   defence, it could have  easily  provided  any  breach  of  conditions  of
   insurance policy in sub-section (2) of Section  149.
 If  we  permit  the
   insurer to take any other defence other  than  those  specified  in  sub-
   section (2) of Section 149, it would mean we are adding more defences  to
   the insurer in the statute which is neither found  in  the  Act  nor  was
   intended to be included.
   16. For the aforesaid reasons, we are of  the  view  that  the  statutory
   defences which are available to  the  insurer  to  contest  a  claim  are
   confined to what are provided in sub-section (2) of Section  149  of  the
   1988 Act and not more and for that reason if an insurer  is  to  file  an
   appeal, the challenge in the appeal would confine to only those grounds.”


16.    In our considered view the Tribunal and the High Court have erred  in
not following the principles laid down  in  Sarla  Verma’  case  (supra) 
 in
fixing the monthly income at  Rs.12,000/-  in  the  absence  of  documentary
evidence having regard to  the  fact  that  the  deceased  was  employed  as
Lecturer in Odisha College of Homeopathy and  Research,  Sambalpur  and  she
also had private  practice.   
The  Tribunal  in  exercise  of  its  original
jurisdiction has taken Rs.12,000/- as her monthly income  and  has  deducted
1/3rd out of the monthly salary towards her personal expenses  and  computed
the compensation both on the loss of dependency as well as the  conventional
heads and has  awarded  Rs.10,62,000/-.   
The  same  should  not  have  been
interfered  with  by  the  High  Court  in   exercise   of   its   appellate
jurisdiction.  
Hence, the impugned judgment, award and order passed  in  the
Misc.  Case  no.  385/2011  in  M.A.C.A  No.  579/2007  is  required  to  be
interfered with. 
So also the order dated 10.3.2011 in Misc. Case  No.385  of
2011 modifying the earlier direction issued by the  High  Court  to  deposit
60% of the awarded amount in any of the Nationalized Bank,  is  required  to
be interfered with.  
Accordingly, both  the  impugned  judgment,  award  and
orders dated 24.2.2011 and 10.03.2011 are hereby set aside by  allowing  the
civil appeals.

17. Having regard to the facts, circumstances and the  finding  recorded  by
the Tribunal in its judgment, we restore the same in  awarding  compensation
in favour of the appellants at Rs.10,62,000/- with interest at the  rate  of
6% per annum. The appeal of the appellants for enhancement  is  disposed  of
in the above terms.  We  further  keep  the  order  of  the  Tribunal  dated
20.3.2007 in so far as the directions issued by it for  deposit  of  awarded
amount in M.A.C. No. 118 of 2002 are concerned.

18.   The appeals are disposed of accordingly.  There will be  no  order  as
to costs.


                                       ………………………………………………J.
                                            [G.S. SINGHVI]






                               ……………………………………………………J.
                                          [V. GOPALA GOWDA]


New Delhi,
August 1, 2013.


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[1]    2002(6) SCC 281
[2]    2009 (6) SCC 121
[3]    (2002) 7 SCC 456

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