M/s United India Insurance Co. Limited, Regional Office, SCO v. Rupesh Kumar & Ors.

Present: Mr. R.K. Bashamboo, Advocate for for the appellant. None for the respondents.

3. FAO No.4178 of 2003 Tara Devi widow of Sh. Darshan Lal and others ......Appellants Versus Bishna Ram son of Asa Ram and others ......Respondents

4. FAO No.4182 of 2003 Rupesh Kumar son of Shri Darshan Lal and others Versus ......Appellants Bishna Ram son of Asa Ram and others ......Respondents FAO No.4411 of 2003 -2- Present: None for the appellants. Mr. R.K. Bashamboo, Advocate for the insurance company-respondent No.4. CORAM:HON'BLE MR. JUSTICE K. KANNAN

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? K. KANNAN J.(ORAL) -.-

1. The insurance company is on appeal denying the liability under the awards released to a claim for compensation for death which is the subject matter of challenge in FAO No.4412 of 2003 and for compensation for damage to the vehicle, which is subject matter of challenge in FAO No.4411 of 2003. The claim for enhancement has come through FAO No.4178 and 4182 of 2003 for compensation of death and for damage to a vehicle.

2. The insurance company would plead that the driver of the vehicle who drove the insured's truck and who was found to be negligent in his driving and causing the death of the passenger in the car, did not have a valid driving licence. He would contend that the driver of the truck had a driving licence from 19.08.1996 to

27.07.1999 and this licence had been renewed only after the accident on 18.12.2000, which was valid till 17.12.2003. The accident had taken place on the invervening night of 23/24.10.2000. Evidently, the driver did not have a valid driving licence at the time of the accident. The insurer could not have been made liable without providing for a right of recovery against the insured. The mere fact that renewal had been made beyond a period of 30 days FAO No.4411 of 2003 -3- from the date of initial expiry was found not to be a situation that would allow for a right of indemnity for the insured, as laid down by the Hon'ble Supreme Court in National Insurance Company Limited Vs. Jarnail Singh (2007) 15 SCC 28 and New India Assurance Company Limited Vs. Suresh Chander Aggarwal (2009) 15 SCC 761 . The insurance company shall, therefore, be liable to satisfy the award to the extent determined and recover the same from the insured-owner.

3. In so far as the liability of the insured is concerned, as regards the claim for damages to the vehicle, it was contended that the insured had merely an Act Policy where under the terms of the policy and as per the statutory limitation, the liability had been capped to Rs.6,000/- and the awarded determined for the entire damage of the vehicle could not have been saddled on the insurer. This aspect has not been considered at all either with reference to terms of the policy or with reference to the ceiling of liability as provided under Section 147(2) of the Motor Vehicles Act. The award of the Tribunal shall, therefore, stand modified to provide for a right of enforcement for the award for damage to the property namely of the car only to the tune of Rs.6,000/- with interest as awarded by the Tribunal and the excessive amount over the same as found by the Tribunal shall be recovered only against the owner and insured of the truck, which was involved in the accident.

4. As regards the enhancement of claim for compensation for damage to the truck, I have also held that the liability shall be only Rs.6,000/- and as regards the enhancement for damage to the car FAO No.4411 of 2003 -4- that could be claimed against owner-insured of the truck, no argument is advanced by the counsel for the appellant since he was himself not present. I do not think any additional amount is required to be paid and therefore, I dismiss the appeal relating to enhancement of compensation for damage to the property.

5. As regards the enhancement of claim for compensation for death of the passenger in the car, the evidence was that he was an income tax assessee and for the relevant year 1999-2000, he had earned Rs.1,11,000/- from his office. He had paid tax of Rs.14,000/- as per P/14 and the Tribunal, therefore, took the salary to be Rs.97,000/-. The Tribunal took contribution to the family at Rs.50,000/- and worked out a compensation by adopting a multiplier of 8. In the grounds of appeal, it is averred that there ought not to have been any deduction towards tax. This is not correct position of law and it has been systematically held that only the gross salary minus the tax shall be taken to the income of the deceased. The amount of Rs.97,000/- taken as income available for distribution including his personal expenses was, therefore, perfectly justified. There were four claimants and as per the decision of the Hon'ble Supreme Court in Sarla Verma Vs. Delhi Transport Corporation 2009(6) SCC 121, the Tribunal should have provided for 1/4th deduction and so reckoned, the contribution to the family must have been to the tune of Rs.72,750/-. The choice of multiplier was low. For a person of aged 50, the appropriate multiplier would have been

13. The amount of compensation under the said circumstances shall, therefore, be Rs.9,45,750/-. I will add the conventional heads of FAO No.4411 of 2003 -5- claim that have been provided are Rs.5,000/- towards loss of consortium and Rs.2,000/- for funeral expenses. The Tribunal has not provided for any amount toward loss to estate, which I will add up another Rs.5,000/-. In all, the amount that shall become payable, would be Rs.9,57,750/-. The Tribunal has already awarded Rs.4,71,000/- only. The amount determined in excess shall carry interest @6% from the date of accident till the date of payment. The liability shall be on the insurer to satisfy the claim with the right of recovery in terms referred to above already.

6. The appeals filed by the insurance company are allowed to the extent indicating above and appeal filed for enhancement for damage to the vehicle is dismissed while the claim for enhancement of compensation for death of the deceased person is allowed to the extent indicated above. August 30, 2010 Pankaj*. (K. KANNAN) JUDGE