MACMA/2809/2005 of The United India Insurance Co. Limited, Vs Orsu Mangamma on 31 December 2015

Judgment:

The instant appeal is preferred by the fourth respondent –United India Insurance Company Limited, aggrieved by the order,dated 14[th] July 2004, in MVOP No.593 of 2000 on the file of theChairman, Motor Accidents Claims Tribunal-cum-IV Additional DistrictJudge, Guntur, requesting to set aside the order so far as the appellantis concerned on the ground that the crime was registered against thedriver of the another vehicle that being the jeep and, therefore, only theowner and insurer of the said jeep are liable to pay compensation andthe Tribunal went wrong in fixing the liability on the appellant also.

2. For the sake of convenience, the parties are hereinafter referredto as they were arrayed in the Original Petition before the Tribunal.

3. The facts, in brief, are that on 17.01.2000 at about 4.00 PM, oneOrsu Ramaiah was travelling in a jeep bearing registration No.AP-7D-6345 and when it reached the accident spot, a bus hired to the fifthrespondent - APSRTC by the third respondent, which was insured withthe fourth respondent – Insurance Company, came in oppositedirection and there was collision between both the vehicles, due towhich, the said Orsu Ramaiah sustained severe injuries and he wasshifted to Hospital. He succumbed to injuries while undergoingtreatment. The petitioners, claiming that he was 32 years old on thedate of accident and was a commission agent in supply of houseconstruction material, earning Rs.10,000/- per month, sought a totalsum of Rs.4,00,000/- under Section 166 of the Motor Vehicles Act,1988 (for short ‘the Act’). The claim, thus, was laid by the legalrepresentatives of the deceased, who are the wife, children and motherof the deceased.

4. Before the Tribunal, the respondents 1 and 3 who are owners ofboth the vehicles remained ex parte. The respondents 2 and 4 –Insurance Companies and the fifth respondent - APSRTC contestedthe claim. They raised various pleas in their respective countersincluding the driver of the jeep not holding valid and effective drivinglicence and also that the claim was excessive. The fifth respondent,stating that it hired the bus from the third respondent under anagreement and, therefore, only the fourth respondent – InsuranceCompany being the insurer is liable to pay the compensation, soughtto exonerate it.

5. The Tribunal framed three comprehensive issues as follows.

“1. Whether the accident occurred due to the rashand negligent driving of either jeep No.AP-7D-6345 orBus No.AP 16W 8393 by its respective drivers or byboth?and negligent driving of either jeep No.AP-7D-6345 orBus No.AP 16W 8393 by its respective drivers or byboth?

2. Whether the petitioners are entitled tocompensation and if so, to what amount, from whom? 3. To what relief?”

6. The Tribunal also framed the following additional issue No.1. “Whether the third respondent violated the terms“Whether the third respondent violated the termsand conditions of the policy and whether the fourthrespondent abstained from its liability?”respondent abstained from its liability?”

7. During enquiry, the petitioners examined PWs.1 and 2 andmarked Exs.A1 to A5. On behalf of the respondents, RWs.1 and 2were examined and Exs.B1 to B4 were marked.

8. The Tribunal, having appraised the evidence on record, heldissue No.1 in favour of the petitioners by recording a finding that onaccount of collision between both the vehicles the accident hadoccurred. On additional issue No.1, the Tribunal recorded a findingagainst the fourth respondent – Insurance Company holding that thefourth respondent – Insurance Company failed to prove that the driverof the hired bus had no valid and effective driving licence at the time of

accident and, thus, it held that there was no violation of the terms andconditions of Ex.B1 policy issued to the bus hired by the fifthrespondent- APSRTC. On issue No.2, the Tribunal, by referring to thejudgments rendered by this Court, taken the notional income atRs.15,000/- per annum, as the petitioners failed to prove that thedeceased was deriving Rs.10,000/- per month as contended, appliedthe multiplier ‘17’ taking the age of the deceased as 32 years anddeducted 1/3[rd] towards his personal expenses and arrived the loss ofdependency at Rs.1,70,000/-. Besides the same, the Tribunal hasgranted Rs.25,000/- towards consortium, Rs.3,000/- towards funeralexpenses and conveyance charges and Rs.10,000/- towards loss ofestate, making a total of Rs.2,08,000/- and fixed the liability onrespondents 1, 2, 4 and 5. The Tribunal also granted interest at 9%p.a.

9. Challenging the aforesaid award the instant appeal is preferredby the insurer of the bus hired to APSRTC contending in the groundsthat the Tribunal went wrong in rejecting the evidence of RW.1 andcontents of Exs.A1 and A2, which would reflect that on account of rashand negligent driving of the driver of the jeep the accident hadoccurred. The second ground is that the Tribunal applied wrongmultiplier factor and the Tribunal ought to have applied the multiplier‘14’ instead of ‘17’. The third ground is that the Tribunal awardedexorbitant amount of Rs.25,000/- towards consortium. Another groundis that the interest awarded by the Tribunal at 9% p.a., is excessivewhen compared to the interest given by the Nationalised Banks onterm deposits.

10. Heard Sri N.J. Sunil Kumar, learned Standing Counsel for theappellant – Insurance Company and Sri A. Rajendra Babu, learnedcounsel for the respondents 1 to 5/claimants. No representation for the10[th] respondent - APSRTC. Though, notice was served on respondents 7 to 9, none appears. Respondent No.6/claimant diedduring the pendency of the Original Petition itself.

11. Learned counsel for the appellant would submit that despiteExs.A1 and A2 reflecting rash and negligent driving attributed to thedriver of the jeep and even RW.1 asserting the same, the Tribunal hastendered finding otherwise fastening liability on the appellant -Insurance Company even and, therefore, that finding recorded by theTribunal is incorrect and liable to be set aside. Concerning thequantum of compensation granted by the Tribunal, the learned counselwould submit that higher multiplier was applied. In regard to rate ofinterest, learned counsel would submit that the claimants are entitledto interest at 7.5% p.a., as per the decisional law and, thus, sought toset aside the order, so far as the appellant – Insurance Company isconcerned.

12. On the other hand, learned counsel for the respondents 1 to5/claimants would submit that the appellant - Insurance Companycannot absolve its liability and, in fact, the evidence of RW.1 wouldshow that there was a collision of both the vehicles and, in theabsence of proper material being placed on record, the Tribunalrecorded a finding that on account of direct collision of two vehicles theaccident had occurred, therefore, fixing liability on all the parties i.e.,respondents 1, 2, 4 and 5 cannot be faulted with.

13. Perused the order under challenge and the evidence on record. Though, the evidence of RW.1 is not that material in resolving onwhich of the drivers rash and negligent driving can be thrust, still, in hiscross-examination he makes a positive admission that on account ofcollision only the accident had occurred. As seen from the materialplaced on record, the copy of scene of occurrence report is not findingplace, nor the rough sketch of scene of occurrence. The appellantherein ought to have secured the same and filed before the Court to show that, though, there was collision between two vehicles, but onaccount of rash and negligent driving of the driver of the jeep alone theaccident had occurred. In such an event, the finding recorded by theTribunal cannot be found fault with. Therefore, the same is confirmed.

14. Concerning the compensation determined by the Tribunal, theTribunal, in fact, taken notional amount based on II Schedule toSection 163-A of the Act, though, there has been assertion on the partof PW.1 to show that the deceased was working as commission agentsupplying house construction material. Even concerning the multiplier,it is no doubt true that multiplier ‘16’ is applicable for the age group ofpersons between 31 and 35 years, but the multiplier ‘17’ was appliedby the Tribunal. However, since the dependents are numbering ‘5’,the deduction towards personal expenses ought to be 1/4[th], in view ofthe decision of the Hon’ble Apex Court in Sarla Verma v. Delhi Transport Corporation[[1]]. When viewed in that direction, certainly,the amount awarded by the Tribunal, including the amount ofRs.25,000/- towards loss of consortium, cannot be construed asexcessive or arbitrary. Thus, there is absolutely no merit in the instantappeal so far as liability fixed on the appellant is concerned and eventhe determination of compensation is concerned.

15. Learned counsel for the respondents 1 to 5/claimants, whileplacing reliance on the decision of the Hon’ble Apex Court inManaging Director, KSRTC v. New India Assurance CompanyLimited (Civil Appeal Nos.5293 and 6641 of 2010, dated27.10.2015), submitted that not only the Insurance Company but alsothe Transport Corporation, if in case the vehicle is hired, are liable topay compensation jointly and severally. The observations containedin paragraph ‘34’ would run thus:

“34. In view of the aforesaid discussion, we holdthat registered owner, insurer as well as KSRTC wouldbe liable to make the payment of compensation jointly and severally to the claimants and the KSRTC in termsof the lease agreement entered into with the registeredowner would be entitled to recover the amount paid tothe claimants from the owner as stipulated in theagreement or from the insurer.”

16. Concerning the rate of interest, the Tribunal has granted interestat 9% p.a. The same requires to be reduced to 7.5% p.a., in view ofthe decision of the Hon’ble Apex Court in Rajesh and others v.Rajbir Singh and others[[2]].

17. Accordingly, the instant MACMA is allowed in part reducing therate of interest from 9% p.a., to 7.5% p.a., on the compensation amountas awarded by the Tribunal. There shall be no order as to costs.

18. As a sequel thereto, the Miscellaneous Applications, if any,pending in this appeal shall stand closed.

Date: 31.12.2015Nsr

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A. SHANKAR NARAYANA, J

[1](2009) 6 SCC 121(2009) 6 SCC 121

[2]2013ACJ1403 = 2013(4)ALT35