National Insurance Company LTD. vs. Birender & Ors.

INTRODUCTION:

This case is related to Motor Accident Claim, wherein the claimants are two major sons (respondents nos. 1 and 2) of the deceased. The claim petition was filed against National Insurance Company LTD under Motor Accidents Claims Tribunal, Jind in 2014. An appeal was raised by National Insurance Company LTD against the order of MACT, Jind. Latter these civil appeals emanate from the common judgment and order dated 8.8.2018 passed by the High Court of Punjab and Haryana at Chandigarh. The parties are referred to as per their status in the former appeal for the sake of convenience.

FACTS OF THE CASE:

• The deceased Smt. Sunheri Devi was a government employee and working as a peon in the office of Tehsildar, Uchana. On the day of 20.10.2014 at 9:00 a.m., she was going to attend the office of Tehsildar from Dharoli Khera village, traveling as a pillion rider on a motorcycle.
• At that time, a dumper coming from the opposite side, being driven in a rash and negligent manner, collided with the motorcycle, resulting in fatal injuries sustained to the deceased to which she succumbed.
• The respondent’s nos. 1 and 2 (sons of the deceased, majors and earning) claimed an amount of Rs. 50,00,000 (Rupees fifty lacks only) along with interest at the rate of 12% per annum.
• The matter went to Motor Accident Claim Tribunal, Jind where the tribunal after analyzing the evidence on record, Tribunal held that the accident occurred due to rash and negligent driving of the offending vehicle and ordered in favor of respondents nos. 1 and 2. The tribunal awarded Rs. 17,15,532/- as compensation to claimants.
• Against the award passed by tribunal, cross-appeals were preferred by the appellant (insurance company) in 2016 at Hon’ble High Court of Punjab and Haryana on the contention that claimants are major and have earning hands and also because the Haryana compassionate assistance to the Deceased Government Employees Rules, 2006, they are not eligible to claim the compensation.
• The Hon’ble High Court awarded the compensation in favor of claimants but this time again it deducted the personal expenses of the deceased at 50% of the compensation. Unsatisfied with the order of Hon’ble High Court, respondents nos. 1 and 2 preferred a Special Leave Petition (appeal) in this Hon’ble Supreme Court that the High Court erred in deducting 50% of the amount from compensation instead of one-third (1/3rd).

ISSUES:

The principal issues that arise for considerations are as follows:

1. Whether the major sons of the deceased who are married and gainfully employed or earning, can claim compensation under the Motor Vehicle Act, 1988(for short, the Act)?
2. Whether such legal representative is entitled only for compensation under the conventional heads?
3. Whether the amount receivable by the legal representative of the deceased under the 2006 Rules is required to be deducted as a whole or only portion thereof?

RULE OF LAW:

• Section 166 of the Motor Vehicle Act, 1988
• Section 2(11) of the Code of Civil Procedure
• Dependents of Deceased Government Employees Rules, 2006

OBSERVATION OF THE COURT:

In view of the issues present here; the Hon’ble Supreme Court observed that the first issue needs to be answered based on the scheme of the Motor Vehicle Act, 1988. Section 166 (1)
(c) of the Motor Vehicle Act provide that application of compensation can be made by all or any of the legal representative of the deceased, who has died in a motor accident. The Hon’ble Supreme Court said that the major married son who is also earning and not fully dependent on the deceased would be still covered by the expression “legal representative” of the deceased. In Manjuri Bera (Smt) vs. Oriental Insurance Co. Ltd & Anr., the Hon’ble Court ruled that the proviso 166 (1) (c) of the Act makes the position clear that where all the legal representative had not joined, then an application can be made on behalf of the legal representative of the deceased by impleading as respondents. According to section 2(11) of the Code of Civil Procedure,1908, Legal Representative means a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased. Further, the Court observed that even if there is no loss of dependency the claimant, if he was a legal representative, will be entitled to compensation and have a right to apply for compensation. It is thus settled law by now that legal representative, even the major married and earning sons of the deceased being legal representative have a right to claim compensation and it would be the bounden duty of the Tribunal to consider the application irrespective of the fact whether the concerned legal representative was fully dependent on the deceased and not to limit the claim towards conventional heads only.
The next issue is about the deduction of the amount receivable by the legal representative of the deceased under the 2006 Rules from the compensation amount determined by the Tribunal in terms of the decision of the three-judge bench of this Court in Reliance General Insurance Co. Ltd. Vs. Shashi Sharma and Ors.
The Hon’ble Court opined as follows that Rule 5(1) of the 2006 Rules provides for the period during which the dependents of the deceased employee may receive financial assistance equivalent to the pay and other allowances and Rule 5(2) provides that the family shall be eligible to receive a family pension as per the normal rules only after the period during which they would receive the financial assistance in terms of Rule 5(1).
The harmonious approach for determining a just compensation payable under the 1988 Act, therefore, is to exclude the amount received or receivable by the dependents of the deceased government employee under the 2006 Rules towards the head financial assistance equivalent to “pay and other allowances” that was last drawn by the deceased government employee in the normal course. This is not to say that the amount or payment receivable by the dependents of the deceased government employee under Rule 5(1) of the Rules, is the total entitlement under the head of “loss of income”. So far as the claim towards loss of future escalation of income and other benefits is concerned, if the deceased government employee had survived the accident can still be pursued by them in their claim under the 1988 Act. For, it is not covered by the 2006 Rules. Similarly, other benefits extended to the dependents of the deceased government employee in terms of subrule (2) to subrule (5) of Rule 5 including family pension, life insurance, provident fund, etc., that must remain unaffected and cannot be allowed to be deducted, which, anyway would be paid to the dependents of the deceased government employee.
So, the Hon’ble Court in the view to include the family pension (Rs. 7000 receivables by the deceased) as loss of dependency and in compensation amount.
Further claimant submitted that the deduction for personal expenses of the deceased should be reckoned only as 1/3rd amount for determining loss dependency. It has been held by this Hon’ble Court that if the dependent family members are 2 to 3, as in this case, the deduction towards personal and living expenses of the deceased should be taken as one third (1/3rd). In other words, the deduction towards personal expenses to the extent of 50% is excessive and not just and proper6 considering the fact that respondents Nos. 1 and 2 along with their respective families were staying with the deceased and largely dependent on her income.

JUDGEMENT:

Considering the above observation, the Hon’ble Court allowed the appeals and respondent nos. 1 and 2 would be entitled to compensation to be reckoned on the basis of loss of dependency, due to loss of gross salary of the future prospects and deduction of only one-third amount towards personal expenses of the deceased and applied multiplier of 13 on the basis of age of deceased. The amount payable to respondents on the following basis:
Loss of dependency due to loss of income calculated at Rs. 31,26,229.60/- [(23,123/×12×13) + (30% future prospects) – (1/3rd deduction for personal expenses)] along with interest at the rate of 9% per annum from the date of filing of the claim petition. Also, it ordered that if the respondents are allowed financial assistance from the 2006 Rules then a commensurate amount will have to be deducted from the compensation amount along with the interest component thereon. The appeals are allowed and pending interlocutory application if any shall be disposed of.

The post Can non-dependent children claim compensation under compassionate grounds appeared first on LexForti .

National Insurance Company Limited v. Ashwani Kumari

Facts:

The appellant- National Insurance Company Limited, approached the Jammu and Kashmir High Court against the judgement passed by the Motor Accidents Claims Tribunal, Jammu dated 28^th April 2017. On 12-02-2013 at about 6:30 pm, the driver (respondent no.3) was rashly and negligently driving a motor vehicle (Nano car) bearing registration no- JK02BA-1085, near Nai Balla Camp and hit a scooter bearing no- JK02AA-5268 causing an accident. Due to the accident, respondent no.1- the claimant travelling on the scooter as a pillion rider was seriously injured and suffered permanent disability to the extent of 5%. Respondent no.1 filed a claim petition before the Tribunal claiming a compensation for the injuries and disability suffered by him due to the accident. The tribunal framed the following issues for determination:

1. Whether an accident took place on 12-02-2013 near the Nai Balla Camp due to rash driving of the vehicle bearing the no-JK02BA-1085 by its driver which caused the accident that injured the claimant and caused him permanent disability.
2. If the first issue is proved, is the petitioner (respondent mo.3) entitled to compensation? If so to what amount and from whom? 
3. Whether the driver of the Nano car drove it in a way which violated the insurance policy and if the insurance company is not liable.
4. Relief.

The claimant gave evidence as a witness and also examined another witness to support his claim, the insurance company examined the owner and driver of the vehicle as witnesses to discharge the burden of proof for issue no. 3. The Tribunal went through the evidence and position of law and decided issue no. 1 and 3 in favour of the claimant and directed the insurance company to pay a sum of Rs. 88,045/- along with a future interest @ 7.5% p.a. to the claimant. The appellant insurance company has thus approached the Jammu and Kashmir High Court against this order of the Tribunal. 

Issues:

• Whether the claimant is entitled to compensation from the insurance company for the injuries and disability suffered by him due to the accident.
• Whether the insurance company can escape liability for payment of compensation by proving the driver’s license was fake/invalid which is against the Insurance Policy.

Legal Provisions:

• Motor Vehicles Act, 1988 Section 163 A- Special provisions as to payment of compensation on structured formula basis.

Appellant’s Contention:

The counsel for the appellant submitted that the insurer had proved issue no.3 as it was proved that the license held by respondent no.3 at the time of the accident was fake and so the insurance company is absolved of the liability to pay compensation. They further submitted that despite this finding the Tribunal directing the insurance company to pay compensation to the claimant was not right. 

Observations of the Court:         

The matter was heard by the Jammu and Kashmir High Court, single-judge bench of Sanjeev Kumar, J. The court observed that there was no merit in the ground raised by the insurer for challenging the Tribunal’s award. The court further observed that thought the insurance company had proved that the license of respondent no.3 was fake it was not able to prove if the owner of the vehicle had engaged the services of respondent no.3 even after knowing that his license was fake/invalid. The court referred to the case of National Insurance Company Limited v. Swaran Singh and others (2004), where the three-judge bench of the Supreme Court dealt with the position of law raised in the present case, the apex court going through Chapter XI of the Motor Vehicles Act,1988 had observed that a mere absence of, or fake/invalid driver’s license, or disqualification of driver at the relevant time, are not in themselves relevant defences available to the insurer against the insured or the third parties. The insurance company has to prove that the insured was negligent or had failed to take reasonable care in fulfilling policy condition on use of vehicle by a duly licensed driver or one who was not disqualified, to absolve itself of the liability towards the insured. The insurance company has to not only establish all the available defences but must also establish breach on part of the owner of the vehicle, the burden of proof will then shift on the owner. The breach or breaches should be crucial so as to have contributed to the cause of accident. The court observed that in the evidence produced by the insurer before the Tribunal, it was not suggested that the insured was negligent or had failed to take reasonable care before engaging the service of respondent no-3 as driver to find if his license did not fulfil the lawful requirements. The court held that the present case was not one where the breach on condition of license was so crucial as to contribute to the cause of accident. 

Judgement:

The court found no merit in the appeal of the National Insurance Company Limited and so dismissed it along with the connected application. The judgement and award of the Tribunal was upheld, the court directed the compensation amount to be released in favour of the claimant according to the terms of the Tribunal’s award, after proper identification and verification.

The post Drivers license being fake or invalid is not an exception for Insurance Companies to escape liability appeared first on LexForti .

New India Assurance Company Limited v. Somwati

Facts:

Appeals were filed by three insurance companies i.e. New India Assurance Company Ltd, Cholamandalam MS General Insurance Company Ltd and The Oriental Insurance Company Ltd, raise common questions of law and are decided by this common judgement. The decisions of the High Courts in the cases of New India Assurance Company Ltd v. Smt. Somwati and others; New India Assurance Company Ltd v. Sangita Devi and Ors; New India Assurance Company Ltd v. Nanak Chand and Ors, Cholamandalam MS General Insurance Company Ltd v. Umarani and Ors; The Oriental Insurance Company Ltd v. Smt. Rinku Devi and Ors have been appealed against by the insurance companies in the present case. In all these cases mentioned above, the claimants have been awarded compensation under the heads of ‘loss of consortium’ and ‘loss of love and affection’ by the Motor Vehicles Claims Tribunal (MACT).

Issues:

• Whether compensation can be warded under the two heads of ‘loss of consortium’ and ‘loss of love and affection’.
• Whether only the wife is entitled for consortium or if it can be awarded to children and parents as well. 

Legal Provisions:

• Motor Vehicles Act, 1988, Section 166- Claims Tribunals.

Appellant’s Contention:

The appellant contended that the Constitution Bench if the apex court had laid down in the case of New India Assurance Company Ltd v. Pranay Sethi and others (2017) that there are only three conventional heads for which they decided the compensation amount, namely (i) loss of state- Rs. 15,000/-; (ii) loss of consortium- Rs. 40,000/-; and (iii) funeral expenses- Rs. 15,000/-, the total under these conventional heads amounting to Rs. 70,000/-, which is not to be exceeded. They submitted that the amount given under the head of ‘loss of love and affection’ is without jurisdiction, also the amount under the head of ‘loss of consortium’ is only payable to the wife and the Tribunals and High Courts had erred in granting the same to each of the claimant i.e. wife, parents and children. They also contended that the High Court by warding compensation under the heads of ‘loss of love and affection’ is contrary to the law laid down by the constitution bench in Pranay’s case and thus should be set aside. The appellant challenged the decision of the High Court in Rinku Devi’s case, whereby it directed the statutory amount deposited by the appellant along with the appeal to be deposited to AASRA fund opened in Delhi High Court, stating that the High Court should not have given such a direction as the appellant had raised substantial question of law and appeal deserves to be heard. 

Respondent’s Contention:

The counsel for the claimants contended that the amount granted to each of the claimants under the head of consortium is in accordance to the law laid down by the court. The amount of Rs. 40,000/- awarded under the head of consortium cannot be given a narrow interpretation and has been rightly given not only to the wife but also to children and parents. 

Observations of the court:

The court observed that a claimant is entitled to a just compensation u/s- 166 of the Motor Vehicles Act,1988, it has to be enacted with the intention to facilitate the claimants to get redress for the loss of the family member and to compensate the loss to a reasonable extent. The court referred to the case of Sarla Verma v. Delhi transport Corporation and another (2009), where it was stated that compensation awarded is not intended to be a source of profit rather should be fair and equitable. The court also held that the amount to be awarded under conventional heads, decided by the constitutional bench has to be enhance every three years at the rate of 10%. The court then referred to the case of Magma General Insurance Company Limited v. Nanu Ram alias Chahru Ram and others (2018)- where it explained that consortium is a concise term which covers ‘spousal consortium’ which is awarded to the wife or husband of the husband, ‘parental consortium’ which is awarded to children who lose their parents and ‘filial consortium’ awarded to parents who lose their minor child, unmarried son or daughter. The two-judge bench in this case had awarded amount of Rs. 40,000/- each to the father and sister of the deceased for the loss of filial consortium, the three-judge bench in United India Insurance Company Ltd v, Satinder Kaur and others (2020) where it reaffirmed the view of the two-judge bench in Magma General case, it also approved the comprehensive view given to consortium to include spousal, parental as well as filial consortium. The bench however laid down that ‘loss of love and affection’ is covered in ‘loss of consortium’, so there was no justification to award compensation towards a separate head; the constitution bench in the Pranay Sethi case did not include ‘loss of love and affection’ as a conventional head. The court found that the judgements of the High Court awarding compensation to each of the claimants does not warrant any interference in this appeal, it accepted the interpretation of consortium to include spousal, parental, filial. The court, however, accepted the contention of the appellant that there is no justification for awarding compensation under the separate head of ‘loss of love and affection’.

Judgement:

The court found the order of the High Court awarding Rs. 50,000/- to each of the claimants under the head of ‘loss of love and affection’ to be justified and hence, it was set aside. The direction of the High Court to deposit statutory amount along with the interest accrued to AASRA fund was also set aside. 

The post Compensation under Motor Vehicles Act cannot be granted under the head of ‘loss of love and affection’ appeared first on LexForti .