Suresh Khati v. Santosh Chetry @ Santosh Chettri & Ors.

Judgment

#1. The Learned Motor Accidents Claims Tribunal, East Sikkim, at Gangtok (for short, “Claims Tribunal”), vide the impugned Judgment, dated 05-08-2020, computed the total compensation payable to the Claimant as ₹ 24,11,279/-(Rupees twenty four lakhs, eleven thousand, two hundred and seventy nine) only and ordered that the Insurer, OP No.1, pay the compensation amount to the Claimant, with interest @ 9% per annum, from the date of filing of the Claim Petition till full and final payment. It was further ordered that, OP No.1 was at liberty to recover the same from the OPs No.2, 3 and 4 in accordance with law. MAC App. No.06 of 2021 2 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others

#2. The Appellant being aggrieved by the Judgment and Award supra, in MACT Case No.60 of 2017 (Santosh Chetry alias Santosh Chettri vs. The Branch Manager, National Insurance Company Ltd. and Others), dated 05-08-2020, is before this Court.

#3. Before proceeding further with the matter, to bring

clarity with regard to the parties, their order of appearance before the Claims Tribunal and before this Court are being delineated hereunder; (i) Appellant, (owner of the vehicle) was OP No.2 before the Claims Tribunal. (ii) Respondent No.1 (survivor of the accident) was Claimant before the Claims Tribunal. (iii) Respondent No.2 (Insurer) was OP No.1 before the Claims Tribunal. (iv) Respondent No.3, (authorized driver) and Respondent No.4, (unauthorized driver) were OP No.3 and OP No.4, respectively before the Claims Tribunal.

#4. The parties shall be referred to in terms of their appearance before this Court.

#5. Advancing her arguments, Learned Legal Aid Counsel for the Appellant, contended that, the Appellant had handed over the vehicle in accident, Chevrolet Spark (Taxi), bearing registration No.SK-01-T-2614, to Respondent No.3, the driver employed by him for the vehicle, who possessed a valid license and was the authorized driver of the vehicle. That, Respondent No.3 being inebriated at the relevant time had handed over the vehicle to Respondent No.4. The accident occurred on account of the rash and negligent driving of Respondent No.4. The Claims Tribunal, MAC App. No.06 of 2021 3 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others ordered the Insurance-Company, Respondent No.2, to pay the compensation amount to the Respondent No.1, which was then to be realised from the Appellant, the Respondent No.3 and the Respondent No.4. Learned Counsel for the Appellant further urged that, in the Synopsis of arguments submitted before the Claims Tribunal, she had relied on the ratio of this High Court in Binod Kumar Agarwal vs. Ratna Kumar Chettri and Others1, which the Claims Tribunal failed to consider. That, the ratio supra of this High Court had referred to the Judgment of the Hon‟ble Supreme Court in Skandia Insurance Company Ltd. vs. Kokilaben Chandravadan and Others 2 , wherein it was held that the exclusion clause in the contract of insurance, making the owner absolutely liable, irrespective of circumstances leading to an unlicensed driver driving the vehicle, must be “read down”, being in conflict with the main statutory provision. Further, while discussing the extent of vicarious liability of the owner, it was held that the owner was not liable when the accident was caused by the unlicensed person, when the licensed driver employed by the owner left the vehicle unattended, contrary to express or implied orders of the owner. It was canvassed that, as the facts supra are similar to the instant Appeal, the Appellant be absolved from paying the insurer, Respondent No.2, as erroneously ordered in terms of the impugned Judgment, dated 05-08-2020.

#6. Learned Legal Aid Counsel for Respondent No.3 submitted that he is also to be exempted from making payment to the Respondent No.2, in view of the fact that, he had allowed Respondent No.4 to drive the vehicle being conscious of the 1 SIKKIM LAW JOURNAL 2017, VOLUME 40, PART I, SL. NO.39, Page 239-249 2 (1987) 2 SCC 654 MAC App. No.06 of 2021 4 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others circumstance that he was not in a position to drive at the relevant time. That, Respondent No.4 had caused the accident, nevertheless, the Appellant being the owner of the vehicle was vicariously liable to indemnify the claim put forth and not the Respondent No.3 as erroneously ordered by the Claims Tribunal.

#7. Per contra, Learned Counsel for the Respondent No.2 advanced the argument that the Respondent No.2, Insurance- Company had paid the compensation as ordered. That, despite the order of the Claims Tribunal, the amounts as ordered were yet to be recovered from the Appellant, the Respondent No.3 and the Respondent No.4, who being responsible for the accident, were liable to pay the Insurance-Company, as correctly ordered by the Claims Tribunal.

#8. Respondents No.1 and 4 went unrepresented, despite due service of Notice.

#9. The rival contentions put forth have been heard at length and considered. All documents on record including the evidence and the impugned Judgment have been duly perused. (i) This Court is now to consider whether the Claims Tribunal erred in ordering the Respondent No.2 to pay the compensation and recover the same from the Appellant, the Respondents No.3 and 4. (ii) Before embarking on the above exercise, the facts pertaining to the instant matter are briefly set out. Respondent No.1, the survivor of the vehicular accident, sought compensation of a sum of ₹ 1,02,28,560.80/- (Rupees one crore, two lakhs, twenty eight thousand, five hundred sixty and eighty paisa) only, with interest @ 12%, on account of injuries sustained by him, on MAC App. No.06 of 2021 5 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others 06-04-2016, at around 2200 hours, near Hotel Sonam Palgay, Deorali Bazar Road, Gangtok, when the vehicle in which Respondent No.3 amongst others, was travelling, driven by Respondent No.4, met with an accident. That, the authorized driver, Respondent No.3, at the relevant time, was inebriated and was unable to drive the vehicle in accident and had insisted that Respondent No.4 drive it, who accordingly took the wheel. On his inability to control the vehicle, it collided with a parked truck, loaded with cement. Consequent, thereto the Respondent No.1, the cleaner/handy boy of the parked truck, bearing registration No.SK-01-D-1704, who was untying the ropes of the loaded truck, was hit by the vehicle of the Appellant, causing him grievous injuries. He was evacuated and admitted to the STNM Hospital, Gangtok, on the same night, where his left leg, knee downward, was amputated, having been crushed between the two vehicles. The amputation resulted in 70% disability of the Respondent No.1. The Compensation was claimed inter alia on grounds that on account of the accident and the resultant amputation, he had lost his opportunities of future earnings as he was rendered unqualified for obtaining employment in the Government or the Army and consequential retiral benefits, free medical assistance to himself and his parents and travelling concessions etc.

#10. In the first instance, while considering the impugned Judgment, it is noticed that the Respondent No.1 had claimed to have been earning a monthly income of ₹ 12,000/-(Rupees twelve thousand) only, which the Claims Tribunal doubted, in the absence of any documentation. His salary was accordingly placed at ₹ 7,000/-(Rupees seven thousand) only, per month, which has not MAC App. No.06 of 2021 6 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others been objected to by the Respondent No.2. Respondent No.1 being born on 10-04-1994 was aged about 21 years, 11 months and 26 days on the date of accident i.e., 06-04-2016. The Claims Tribunal observed that the age of the Respondent No.1 was 21 years at the time of accident, based on his PAN Card, Exhibit 46 and original Aadhar Card, Exhibit 47. The age of the survivor was not assailed by Respondent No.2. (i) The Claims Tribunal taking into consideration the documents pertaining to the medical expenses incurred by the Respondent No.1, calculated such expenses at ₹ 16,679/-(Rupees sixteen thousand, six hundred and seventy nine) only. In addition to the above amount, at Paragraph 32 of the impugned Judgment, the following computations were made; towards ₹1,00,000/- “32. We may as such add the following amounts to the figures of medical expenses arrived at above. ₹ 7,000/- towards loss of earnings during the period of his treatment(he was admitted in the hospital for one month w.e.f 06.04.2016 to 05.05.2016); ₹ 2,50,000/- towards future medical expenses given the extent of his disablement and his young age; ₹ 1,00,000/- towards pain and sufferings; ₹ 3,00,000/- towards loss of amenities and enjoyment of life including loss of marital prospects and marital happiness; ₹ 50,000/- towards conveyance charges(and cost of attendant); nourishment. We may further add the amount under the head „loss of future earnings‟ which would be as follows. Since the monthly salary of the claimant has been taken as ₹ 7,000/- we may add 40% of the said salary towards prospects in view of his age in which case the amount would come to ₹ 7,000/- + ₹ 2,800/-(40%) = ₹ 9,800/-per month. As such his annual income would be ₹ 9,800/- x 12 months = ₹ 1,17,600/-. If multiplier of 18(as applicable here in view of the age of the claimant i.e., 21 years) is applied, the amount would come to ₹ 1,17,600/- x 18 = ₹ 21,16,800/-. In view of 75% permanent physical functional disability the amount under the head „loss of future income‟ would be 75% of 21,16,800/- which would come to 15,87,600/-. The overall amount would as such come to ₹ 24,11,279/-(Rupees Twenty four lakhs eleven thousand two hundred and seventy (emphasis supplied) nine) only.” MAC App. No.06 of 2021 7 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others

#11. Section 147 of the Motor Vehicles Act, 1988 (hereinafter, the “MV” Act) lays down the requirements of Policies and limits of liability. In order to comply with the requirements of Chapter XI of the MV Act, a policy of insurance must be a policy which is issued by a person, who is an authorized insurer and insures the person or classes of persons specified in the policy, to the extent mentioned in Sub-section 2 of Section 147 of the MV Act. The object of obtaining an insurance policy is to ensure that it covers the liability incurred by the insured, in respect of death or bodily injury to any person, carried in the vehicle of the insured or damage to any property of a third party, caused by or arising out of the use of the vehicle. The provision mandates a compulsory coverage of insurance for passengers travelling in public transport vehicle, passenger vehicle, goods vehicle along with goods and the workmen under the Workmen‟s Compensation Act, 1923, employed in connection with the motor vehicle, etc. (i) Section 149 of the MV Act lays down the duty of the insurer to satisfy Judgments and Awards against persons insured, in respect of third party risk. (ii) It is not in dispute that the vehicle was duly insured vide Insurance policy, Exhibit B, Respondent No.2 being the insurer and the Appellant the owner of the insured vehicle. (iii) That, the contract of insurance is a contract of indemnity is no more res integra. The insurer is an indemnifier, while the insured is an indemnity holder. Thus, the essence of the contract of insurance is to indemnify the insured against the claim of a third party. The expression „third party‟ means a person who is not a party to the contract, but beneficiary of the contract and MAC App. No.06 of 2021 8 Suresh Khati vs. Santosh Chetry @ Santosh Chettri and Others has the right to enforce the terms of contract against the insurer and the insured. (iv) In National Insurance Company Limited vs. Yellamma and Another 3 , the Supreme Court, at Paragraph 11, observed as follows; “11. A contract of insurance like any other contract, is a contract between the insured and the insurer. The amount of premium is required to be paid as a consideration for arriving at a concluded contract. …………..” (v) In Sohan Lal Passi vs. P. Sesh Reddy and Others4, it was observed that when the insured had taken all precaution by appointing a duly licensed driver, to drive the vehicle in question and it was not established that it was the insured who had allowed the vehicle to be driven by a person not duly licensed, due to which the accident occurred, then the Insurance-Company cannot repudiate its statutory liability, on the grounds of contravention of condition of policy, including its liability in case of vehicle being driven by person not duly licensed. (vi) In New India Assurance Co., Shimla vs. Kamla and Others5, the Supreme Court, at Paragraph 25, observed as follows; “25. The position can be summed up thus: The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the licence. vehicle being driven without a valid driving ………………….. In the present case, if the Insurance Company succeeds in establishing that there was breach of the policy condition, the Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover that amount (which the insurer is directed to pay to the claimant third parties) from the insured person.” (emphasis supplied)