Bansi Ram v. Amarjit Singh

In view of the above evidence, it stands established that the deceased was having a monthly income of Rs.650/- per month, which he was getting by working as a mechanic with M/s Karan Motors. Apart from the statement of AW1 Bansi Ram, there is no other evidence on the file that the deceased was also earning some income by distributing newspapers. Under these circumstances, no reliance can be placed on the self serving statement of AW1 Bansi Ram about the deceased earning some income by selling newspapers during his spare time. The Tribunal was justified in holding that the deceased was earning an amount of Rs.650/- per month only at the time of his death. Out of the amount of Rs.650/- per month, learned Tribunal was justified in deducting an amount of Rs.250/-, which the deceased might be spending upon himself, and in calculating the dependency as Rs.400/- per month or Rs.4,800/- per annum. The deceased was about 21 years of age at the time of his F.A.O. No.

862 of 1990 -5- death. As he was unmarried, learned Tribunal applied the multiplier of 12 only so as to grant an amount of Rs.57,600/- as compensation to his parents, i.e. the claimants. The multiplier of 12 is on the lower side. Even as per the Second Schedule to the Act which can be used as a guideline while deciding the appropriate multiplier, 17 is the suitable multiplier to be applied where the victim is above 20 years but less than 25 years of age. Taking into consideration the aforementioned fact, the Court is of the view that the multiplier of 17 has to be applied in the present case so as to hold the claimants entitled to receive an amount of Rs.81,600/- as compensation, instead of Rs.57,600/- as awarded by the Tribunal. Similarly, an amount of Rs.2,000/- can also be granted to the claimants on account of the expenses incurred by them on the funeral of their deceased son. Resultantly, the compensation amount stands enhanced from Rs.57,600/- to Rs.83,600/-. According to the Tribunal, the offending vehicle stood insured vide policy Ex.R4.

Though the owner-cum-driver and insurer of the offending vehicle were jointly and severally liable to pay the amount of compensation yet it was subject to the conditions of the insurance policy Ex.R4. Accordingly, out of the amount awarded, the Insurance Company was made liable to pay Rs.50,000/- while the remaining amount was made payable by owner-cum-driver of the offending vehicle. In Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu and others, 2001 ACJ 1, the Hon'ble Supreme Court upheld F.A.O. No. 862 of 1990 -6- the decision of the Tribunal and the High Court in directing the Insurance Company to pay whole of the awarded amount to the claimants on the basis of the contractual obligation contained in clauses relating to the liability of the third parties and avoidance clause. Once the Insurance Company paid the awarded amount to the claimants, it was entitled to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal.

While doing so, the Hon'ble Supreme Court observed as follows :-

In the facts and circumstances of this case we find that despite holding the liability under the policy limited to the extent of Rs.50,000/-, the Claims Tribunal and the High Court were not unjustified in directing the appellant company to pay the whole of the awarded amount to the claimants on the basis of the contractual obligations contained in clauses relating to the liability of the third parties and avoidance clause. However, the Claims Tribunal and the High Court were not justified in rejecting the right of the appellant company to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal.

In view of the above, the appeal is accepted by enhancing the amount of compensation from Rs.57,600/- to Rs.83,600/-. The F.A.O. No. 862 of 1990 -7- Insurance Company shall be liable to pay the entire amount to the claimants.

Upon making such payment, the Insurance Company can recover the excess amount from the insured by executing this award against the insured to the extent of such excess as per the provisions of the Motor Vehicles Act, 1939. The claimants shall also be entitled to interest @12% per annum on the amount awarded by the Tribunal from the date of the claim petition till realisation of the same alongwith costs as imposed by the Tribunal. Besides, they shall also be entitled to interest on the enhanced amount @ 9% per annum from the date of claim petition till realisation of the said amount. April 05, 2010 satish ( T.P.S. MANN ) JUDGE