RANI & ORS. versus NATIONAL INSURANCE COMPANY LTD. & ORS. on 31 July 2018

[2018] 9 S.C.R. 363

RANI & ORS.

v.

NATIONAL INSURANCE COMPANY LTD. & ORS.

(Civil Appeal Nos. 9078-9079 of 2017)

JULY 31, 2018

[DIPAK MISRA, CJI, A. M. KHANWILKAR ANDDR. D. Y. CHANDRACHUD, JJ.]

Motor Vehicles Act, 1988:

s.166 – Motor accident – Resulting in death of one andinjury to another person – Two separate claims (one by legalrepresentatives of deceased and another by the injured person) –Tribunal granted compensation of Rs.4,53,000/- to the legalrepresentatives of the deceased and of Rs.1,72,700/- to the injuredclaimant – Insurance Company filed appeal – High Court enhancedthe compensation amount in respect of the deceased and absolvedthe insurance company from paying the compensation amountfastening the liability on the owner of the offending vehicle – Inappeal, claimants sought setting aside the order absolving theinsurance company as well as sought enhancement of thecompensation amount – Held: Claimants are not entitled toenhancement of compensation as the High Court has granted morethan just compensation – However, Insurance Company is directedto pay the compensation amount to the respective claimants, withliberty to recover the same from the owner of the offending vehicle.

Partly allowing the appeals, the Court

HELD: 1.1 The legal representatives of the deceased didnot file any appeal challenging the award passed by the Tribunaldetermining the compensation amount. It is Insurance Companywho had challenged the award in favour of the claimants.Nevertheless, the High Court enhanced the compensationamount payable to them by invoking power under Order 41 Rule33 of the Civil Procedure Code (C.P.C.). The InsuranceCompany has not challenged the said view taken by the HighCourt as it has already succeeded in getting a finding from the

363

A

B

CD

E

F

G

H

AHigh Court that the liability to pay compensation amount wasrestricted to that of the owner of the offending vehicle.[Para 11][371-D-F]

1.2 The Tribunal had found that no evidence regarding theincome of the deceased was produced by the claimants. ThatBfinding has not been over-turned by the High Court. The HighCourt, however, relied upon the driving licence and trainingcertificate of the deceased and on that basis, determined thenotional income of the deceased at the time of accident atRs.10,000/- per month. Neither the driving licence nor thecertificate could per se be made the basis to assume or infer thatCthe deceased was gainfully employed at the relevant time andmoreso was earning income of Rs.10,000/- per month. Thus, thereason assigned by the High Court for enhancing the notionalincome of the deceased from Rs. 3000/- to Rs.10,000/- per monthis irrational and tenuous. No tangible logic has been assigned toDdiscard the just finding recorded by the Tribunal in the backdropof lack of evidence regarding the monthly income of the deceased.[Para 13][372-A-C]

1.3 The High Court has already granted more than justcompensation amount to the legal representatives of theEdeceased. In that, even if the claim of the appellants regardingfuture prospects, additional medical expenses and additionalinterest amount was to be accepted, on the basis of the notionalincome of Rs.5000/- (Rupees five thousand) per month, thequestion of awarding additional or further compensation amountto the appellants in M.F.A. No.5874 of 2011 does not arise. TheFappeal, however, would succeed to the limited extent that theamount of compensation determined by the High Court shall befirst paid by Insurance Company with liberty to recover the samefrom the owner of the offending vehicle. [Para 14] [372-D-F]

Singh Ram v. Nirmala and Ors. (2018) 3 SCC 800 ;GPappu and Ors. v. Vinod Kumar Lamba and Anr.(2018) 3 SCC 208 : [2018] 1 SCR 195 – relied on.

2. Even in respect of the appeal filed by the injuredclaimant, the Tribunal had found that he failed to produce anyevidence regarding his monthly income and the permanentHdisability suffered by him had been determined as not exceeding

10% to the whole body and compensation had been awarded tohim on that basis. Resultantly, in this appeal also, InsuranceCompany is directed to pay the compensation amount awardedto the claimant in the first place, with liberty to recover the samefrom the owner of the offending vehicle. [Para 15] [373-A-C]

Case Law Reference

(2018) 3 SCC 800[2018] 1 SCR 195

CIVIL APPELLATE JURISDICTION : Civil AppealNos. 9078-9079 of 2017.

From the Judgment and Order dated 12.02.2016 of the HighCourt of Karnataka at Bengaluru in M.F.A. No. 5874/2011(MV) C/WM.F.A. No.5876/2011(MV).

Anand Sanjay M. Nuli, Dharm Singh, Nanda Kumar K.B.(for M/s. Nuli & Nuli, Advs.) Advs. for the Appellants.

Parmanand Gaur, Ekansh Bansal, Advs. for the Respondents.

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J. 1. These appeals take exception tothe common judgment and order dated 12[th] February, 2016 passed bythe High Court of Karnataka at Bengaluru in M.F.A. No.5874 of 2011(MV) and M.F.A. No.5876 of 2011 (MV). Both these appeals werefiled by the respondent No.1 (National Insurance Co. Ltd.) questioningthe correctness of the judgment and Award passed by the Motor AccidentClaims Tribunal, Bangalore dated 3[rd] January, 2011 in MVC No.7055 of2009 and 7056 of 2009, respectively.

2. The former claim petition MVC No.7055 of 2009 was filed bythe legal representatives of Satish (the deceased) who had succumbedto the injuries suffered, in an accident which occurred on 17[th] March,2009, while he was riding a motorcycle bearing RegistrationNo.KA-05-EJ-4029 along with his friend, Anand, who was travellingwith him as a pillion rider. Police complaint regarding the accident waslodged by Anand, appellant in Civil Appeal No.9079 of 2017. Theaccident was caused by a lorry bearing Registration No.MH-43-U-3365,which was being driven at a high speed in a rash and negligent manner.

A

B

C

D

E

F

G

H

AThe said lorry came from behind and hit the motorcycle on which Satishand Anand were going from Bangalore towards Tumkur. Both of themfell down and suffered serious injuries. Satish, who was riding themotorcycle, succumbed to his injuries. The appellant Anand washospitalized as an indoor patient and had to undergo surgeries forfracture of collies (left) and ACL tear with MCL tear, right knee withBhemarthrosis.

3. Resultantly, separate claim petitions were filed before theMACT at Bangalore by the legal representatives of the deceased (Satish)and by Anand. The claim petitions proceeded ex parte against the ownerof the offending lorry. After analysing the relevant evidence, theCTribunal found that the accident had occurred due to the rash andnegligent driving of the driver of the offending vehicle. The Tribunal alsonoted that the respondents had not challenged the chargesheet materialsand other documents to disprove the case of the claimants and as such,there was no material to suggest that it was a case of contributoryDnegligence.

4. Having said that, the Tribunal proceeded to determine thecompensation amount to be paid to the claimants. While doing so, it hasnoted that the legal representatives of the deceased (Satish) did notproduce any document to show his monthly income from mechanic work.EThe Tribunal noted that the age of the deceased (Satish) was around 30years at the relevant time when the accident occurred, and there werethree dependents in his family namely, his wife, daughter and mother(claimants). In the absence of evidence regarding income of thedeceased (Satish), the Tribunal took notional income at the rate ofRs.3,000/- per month and after providing deduction of 1/3[rd] amountFtowards personal expenses and applying multiplier of 17, determined theloss of dependency at Rs.4,08,000/- (Four Lakh Eight Thousand only).In addition, the Tribunal granted Rs.5,000/- towards transportation ofdead body from hospital to home, Rs.10,000/- under the head of loss ofconsortium, Rs.10,000/- under the head of loss of love and affection,GRs.10,000/- towards loss of estate and Rs.10,000/- towards funeral andobsequies ceremonies. The total compensation amount payable to thelegal representatives of the deceased (Satish) was determined atRs.4,53,000/- (Four Lakh Fifty Three Thousand only) with interest atthe rate of 6% per annum from the date of petition till the date of depositby the respondents. The Tribunal issued further directions about theHdisbursal and appropriation of the amount amongst the three claimants.

5. As regards the claim petition filed by Anand (claimant) in M.V.C.No.7056 of 2009, the Tribunal noted that he had suffered fracture ofcollies (left) and ACL tear with MCL tear, right knee with hemarthrosisand had undergone operation for his left hand with K-wire. He was anindoor patient in the hospital for 4 days and had spent huge amountstowards medicine, treatment, food, conveyance and other charges.After analysing the evidence of PW-2 and PW-3, the Tribunal foundthat the permanent disability suffered by Anand was not exceeding 10%of the whole body due to fracture of collies and right knee injury. TheTribunal further held that no evidence had been produced by him toprove his income and therefore, the Tribunal assessed his notionalincome at Rs.3,000/- per month. The Tribunal then proceeded to grantcompensation amount payable to Anand towards pain and suffering atRs.30,000/-, medical expenses at Rs.26,500/-, loss of earning during laidup period at Rs.15,000/-, loss of future earning on account of permanentdisability at Rs.61,200/-, loss of amenities and future unhappiness atRs.15,000/-, attendant charges, diet and travelling at Rs.10,000/- andfuture medical expenses at Rs.15,000/-. The total compensation amountwas Rs.1,72,700/- (One Lakh Seventy Two Thousand and SevenHundred Only) payable by the respondents with interest at the rate of6% per annum from the date of petition till the date of deposit with therider that the amount towards future medical expenses would not carryany interest. The operative order passed by the Tribunal reads thus:

“O R D E R

Both the petitions M.V.C. No.7055/2009 & 7056/2009 filedby U/Sec. 166 of MV Act by the petitioners are hereby partlyallowed against the respondents with costs.

The petitioners in M.V.C.No.7055/2009 and 7056/2009 areawarded with total compensation amount of Rs.4,53,000/-(Rupees four lakhs fifty three thousand only) and Rs.1,72,700/-(Rupees one lakh seventy two thousand seven hundred only),respectively in both the cases, with 6% interest p.a. from date ofpetitions till date of deposit. Future medical expenses does notcarry any interest in M.V.C. No.7056/2009.

Both the respondents are jointly and severally liable to payabove said compensation amount with costs and interest to thepetitioners. However, it is directed to 1[st] respondent to deposit A

B

C

DE

F

G

H

A

B

C

D

E

F

G

H

above compensation amounts within 30 days from date of thisorder, after deducting any amount paid as interim compensationbeing insurer of offending vehicle.

After depositing of compensation amount awarded in M.V.C.No.7055/2009, a sum of Rs.1,15,000/- and Rs.60,000/-, in namesof first and third petitioners respectively shall be deposited as FDin any nationalized or scheduled Bank of their choice for a periodof 5 years. No loan on said FD is permitted without permission ofthis tribunal.

Remaining amount with occurred interest shall be released inthe names of first and third petitioner through account payeecheques on proper identification respectively and separately.

Entire amount ordered in the name of minor second petitionerrepresented by her natural guardian and mother/first petitioner inM.V.C. No.7055/2009 shall be kept as FD in her name in anyNationalized or scheduled Bank of her choice for a period of 5years or till she attain the age of majority, whichever is later. Noloan on FD is permitted without permission of this tribunal. Firstpetitioner is entitled to receive periodical interest on said FD amountfor maintenance of petitioner No.2.

After deposit of compensation amount in M.V.C.No.7056/2009, a sum of Rs.85,000/- shall be kept as FD in thename of petitioner in any Nationalized or scheduled Bank of hischoice for a period of 5 years. No loan on FD is permitted withoutpermission of this tribunal.

Remaining amount together with accrued interest shall be re-leased in the name of petitioner in M.V.C. No.7056/2009 throughaccount payee cheque on proper identification.

Advocate’s fees is fixed at Rs.500/- in each case.

Draw award accordingly.”

6. Against this common award passed by the Tribunal, therespondent No.1 Insurance Company carried the matter in appealbefore the High Court being M.F.A. No.5874 of 2011 (MV) and M.F.A.No.5876 of 2011 (MV), respectively. The principal issue raised by theInsurance Company was that the Tribunal could not have fastened the liability on the insurer as the offending vehicle did not possess a validpermit to operate in the State of Karnataka in view of Section149(2)(a)(i)(a) of the Motor Vehicles Act, 1988. For, the permit waslimited to the State of Maharashtra.

7. The appellants did not file substantive appeals but filed crossobjections in the appeals filed by the insurer bearing M.F.A.Crob. Nos.187 and 188 of 2013. The said cross objections, however,came to be dismissed for non compliance of office objections.Nevertheless, in the appeal filed by the Insurance Company againstcompensation amount awarded to the deceased (Satish), the High Courtchose to enhance the compensation amount payable to the legal heirs ofthe deceased (Satish) by taking into account his notional income asRs.10,000/- per month. This was done by the High Court withoutoverturning the finding recorded by the Tribunal that no evidence wasproduced by the claimants to substantiate the monthly income of thedeceased (Satish) at the relevant time. What the High Court instead didwas to rely upon the driving licence of the deceased and a trainingcertificate of the deceased issued by Bajaj Auto limited, mentioning thatSatish had attended the training. As aforementioned, the High Courtredetermined the compensation amount payable to the legalrepresentatives of the deceased (Satish) on a higher notional income ofthe deceased at the rate of Rs.10,000/- per month and arrived at thefollowing calculation on the basis of which the appeal was disposed of inthe following words:

“9. The total compensation payable in M.F.A. No.5874/2011 comesto Rs.16,00,068/-, which is rounded off to Rs.16,00,000/- and thebreak up is as follows:-

(iv) Conventional heads : Rs. 40,000/- ---------------------------- TotalRs.16,00,068/-

-----------------------------------

A

B

C

D

E

F

G

H

A10. Accordingly, M.F.A.No.5874/2011 is allowed and the impugnedjudgment and award passed by the Tribunal in M.V.C.No.7055/2009 stands modified granting a compensation ofRs.16,00,000/- instead of Rs.4,53,000/- (enhanced compensationcomes to Rs.11,47,000/-). The enhanced compensation shall carryinterest at 6% p.a., from the date of petition till its deposit. TheBSecretary, Legal Services Committee is directed to communi-cate the order to the owner of the offending vehicle and alsointimate him to deposit the amount within a period of three months.In case of failure to deposit the amount by the owner of theoffending vehicle, the Legal Services Committee to take action Cas per law.”

As regards the appeal preferred by the insurer against the Awardpassed in favour of Anand, appellant in Civil Appeal No.9079 of 2017,the same was disposed of on the following terms:

“11. In M.F.A. No.5876/2011 the contention is liability cannot befastened on the insurer as there is violation of permit by admittedlyplying the vehicle in Karnataka. Therefore, liability is to be fastenedon the owner.

D

12. M.F.A. No.5876/2011 is disposed of. The owner is directed toEsatisfy the award. The amount in deposit is directed to be refundedto the insurer-appellant.”

8. The insurer succeeded before the High Court, as the liability topay compensation amount has been restricted to that of the owner ofthe offending vehicle. Therefore, the insurer did not file appeal againstthe enhancement of compensation amount payable to the legalFrepresentatives of the deceased (Satish). The present appeal (CivilAppeal No.9078 of 2017), however, has been filed by the widow anddaughter of the deceased (Satish). They have challenged not only thecorrectness of the view taken by the High Court absolving the insurerfrom the liability to pay compensation but also for further enhancementGof compensation amount. Similarly, Anand, the injured pillion rider, hasalso filed a separate appeal challenging the decision of the High Court inrestricting the liability to pay compensation amount to that of the ownerof the offending vehicle but also on the quantum of compensation amount.In both the appeals, it is alternatively urged that the compensation amount H

payable to the respective claimants should be first paid by the InsuranceCompany with liberty to recover the same from the owner of theoffending vehicle, respondent No.2 herein.

9. The respondent No.1 Insurance Company, on the other hand,submits that by virtue of statutory provisions, it cannot be made liable topay the compensation amount as the offending vehicle did not have avalid permit for being operated in the State of Karnataka. It is alsocontended that no direction be issued against the Insurance Company topay and recover as it may be difficult for the Insurance Company totrace the owner of the offending vehicle. For, the owner of theoffending lorry has not chosen to appear even before this Court.

10. We have heard Mr. Anand Sanjay M. Nuli, learned counselappearing for the appellants and Mr. Parmanand Gaur, learned counselfor the respondents.

11. Taking the appeal filed by the legal representatives of thedeceased (Satish) first, as mentioned earlier, they did not file any appealchallenging the award passed by the Tribunal determining thecompensation amount payable to them at Rs.4,53,000/- (Four Lakh FiftyThree Thousand only) with interest at the rate of 6% per annum fromthe date of petition till the date of deposit. It is respondent No.1Insurance Company who had challenged the award in favour of theclaimants and in those appeals, the claimants (including appellants inCivil Appeal No.9078 of 2017) filed cross objections which, however,came to be dismissed for non- removal of office objections.Nevertheless, the High Court enhanced the compensation amountpayable to them by invoking power under Order 41 Rule 33 of the CivilProcedure Code (C.P.C.). The Insurance Company has not challengedthe said view taken by the High Court as it has already succeeded ingetting a finding from the High Court that the liability to paycompensation amount was restricted to that of the owner of theoffending vehicle, namely respondent No.2 herein.

12. Assuming that the legal representatives of the deceased (Satish)(appellant in Civil Appeal No.9078 of 2017) could ask for enhancementof the compensation amount in the present appeal whilst challenging thefinding of the High Court to absolve the Insurance Company of itsliability to pay the compensation amount, the question is whether theappellants are justified in claiming further enhanced compensation amount.

A

B

C

DE

F

G

H

A13. The Tribunal has found that no evidence regarding the incomeof the deceased (Satish) was produced by the claimants. That findinghas not been over turned by the High Court. The High Court, however,relied upon the driving licence of the deceased and training certificate ofthe deceased issued by Bajaj Auto Limited and on that basis, determinedthe notional income of Satish (Deceased) at the time of accident atBRs.10,000/- per month. Neither the driving licence nor the certificatecould per se be made the basis to assume or infer that the deceased(Satish) was gainfully employed at the relevant time and moreso wasearning income of Rs.10,000/- per month. In other words, the reasonassigned by the High Court for enhancing the notional income of theCdeceased (Satish) from Rs. 3000/- to Rs.10,000/- per month is irrationaland tenuous. No tangible logic has been assigned to discard the justfinding recorded by the Tribunal in the backdrop of lack of evidenceregarding the monthly income of the deceased (Satish).

14. We are of the view that the High Court has already grantedDmore than just compensation amount to the legal representatives of thedeceased (Satish). In that, even if the claim of the appellants regardingfuture prospects, additional medical expenses and additional interestamount was to be accepted, on the basis of the notional income ofRs.5000/- (Rupees five thousand) per month, the question of awardingadditional or further compensation amount to the appellants in M.F.A.ENo.5874 of 2011 does not arise. The appeal, however, would succeed tothe limited extent that the amount of compensation determined by theHigh Court shall be first paid by the respondent No.1 InsuranceCompany with liberty to recover the same from the owner of theoffending vehicle (respondent No.2 herein). We are inclined to allow theFappeal to this limited extent, keeping in mind the exposition in SinghRam Vs. Nirmala and Ors.[1] and Pappu and Ors. Vs. Vinod KumarLamba and Anr. [2]

15. Reverting to the appeal preferred by respondent No.1Insurance Company against Anand (M.F.A. No.5876 of 2011), as notedGin paragraph Nos.11 and 12 of the impugned judgment reproduced above,the High Court disposed of the said appeal by absolving the insurer fromthe liability to pay compensation amount. As noticed earlier, theappellant (Anand) did not file any appeal against the award passed by

1(2018) 3 SCC 800H2(2018) 3 SCC 208

the Tribunal for enhancement of compensation amount and the crossobjection filed by him in the appeal filed by the Insurance Companycame to be dismissed for non- prosecution. Even in respect of thisappeal, the Tribunal had found that he failed to produce any evidenceregarding his monthly income and the permanent disability suffered byhim had been determined as not exceeding 10% to the whole body andcompensation had been awarded to him on that basis. Resultantly, weintend to dispose of this appeal on the same basis by directing therespondent No.1 Insurance Company to pay the compensation amountawarded to the claimant (Anand) in the first place, with liberty torecover the same from the owner of the offending vehicle (respondentNo.2).

16. In view of the above, the appeals are partly allowed by directingthe respondent No.1 Insurance Company to first pay the compensationamount to the respective claimants as determined by the High Court andTribunal as the case may be, with liberty to recover the same from theowner of the offending vehicle, respondent No.2. The impugnedjudgment and order passed by the High Court stands modified to thislimited extent.

17. The appeals are allowed in the aforementioned terms with noorder as to costs.

Kalpana K. Tripathy

Appeals partly allowed.

A

B

C

D

E

F

G

H