The Oriental Insurance Co Ltd vs Smt Mamta Devi and Ors.

Facts:

The deceased along with two pillion riders were traveling from scooter to Meerut after which they met with an accident and struck against a truck, parked on the road without the indicator lights turned on. They were taken to the hospital after being treated upon which they succumbed to injuries and lost life eventually. A complaint was filed for recovery of an insurance claim, which was repudiated by the Insurance Company on the grounds of negligence. The tribunal court ordered the appellant that is the Insurance company to award a compensation of Rs. 5,72,770, aggrieved by which the Company filed an appeal in the High Court.

Issues:

• Whether both the deceased and truck driver were negligent?
• Whether the family of the deceased is entitled to compensation?

Legal Provisions:

• Section 128, Motor Vehicles Act,1988 – Safety measures for drivers and pillion riders
• Tort of Negligence – Composite negligence

Appellant’s Contention:

It was submitted by the learned counsel from the appellant’s side that there lied partial negligence on the part of the truck driver but it cannot be denied that the deceased was not negligent because he did not conform to the rules of the Motor Vehicles Act, wherein it is clearly mentioned that the sitting capacity in case of a two-wheeler vehicle is only two. The provision of negligence speaks for itself which highlights the failure to exercise care towards others whether be it intentional or accidental.

Respondent’s Contention:

It was contented by the counsel that the truck driver was also negligent by parking the truck alongside the highway by not complying with the traffic rules. The vehicle was insured and therefore the Insurance Company is liable to pay compensation.

Observations of the court:

The court had to thoroughly check the applicability of composite negligence and contributory negligence. The tribunal had not erred in concluding that the scooter driver was 30% negligent. The court read the judgment of T. O Anthony v Karvarnan and Ors. to distinguish between contributory and composite negligence. If proved that the negligence has occurred on the part of a person because of a breach in his prime responsibility and care which any prudent man would exercise, he is liable for the consequences of his act. But herein, the Insurance Company failed to prove if there were more than two persons on the scooter.

Judgment:

The decision of the tribunal court is not liable to be set aside and therefore it was ordered that the entire amount of compensation will be deposited by the Insurance Company.

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The Branch Manager vs Agilan

Facts:

A petition was filed by the respondent for merely spectate of a demolition of a building being carried out, due to which a part of debris fell on the respondent and sustained several injuries. The claimant started to suffer from permanent disability in the lower limbs. The Tribunal decided on awarding compensation to the claimant on the basis of two heads i.e. loss of earning power and permanent disability, however, aggrieved by this decision the appellant that is Insurance Company filed an appeal in the High Court.

Issues:

• Is the area of demolition to be considered as a private place?
• Has the respondent contributed to negligence?

Legal Provisions:

• Tort of Negligence
• Motor Vehicles Act,1988

Appellant’s Contention:

The learned counsel appearing on behalf of the appellants submitted that the place of incidence that is the area of demolition is a private place and knowing that is not safe to enter in the respective arena, the claimant decided to spectate in close premises, hence, he has deemed to contribute negligence on his own. It was also contended that since the respondent was spectating from the backside of the building, it couldn’t have been foreseeable for the bulldozer driver to check any individual’s presence. As per this contention, this is a case of volenti non fit injuria. It was further submitted the basis of deciding compensation by the Tribunal was contrary to the judgment of Full Bench in Cholan Roadways Corporation Ltd vs Ahmed Thambi.

Respondent’s Contention:

It was contented by the counsel on behalf of the respondent that the contention presented by the appellant’s counsel regarding private place doesn’t stand. The counsel drew the attention of the court on the definition of ‘public place’ explainable under the Motor Vehicles Act, 1988 and said that road is a public place to which the public carries a right to access. The counsel relied on the judgment of Pandurang vs New India LIC Ltd. The driver of the bulldozer was solely responsible, therefore, there is no negligence on the part of the claimant.

Observations of the court:

The court was of the view submitting that there was 20% negligence on the part of the claimant as well as 80% on the driver of the bulldozer. The Tribunal had erred in the calculation of the claim of compensation. It was the duty of the driver of the bulldozer to issue a warning in the public place. Compensation awarded on the grounds of permanent disability should be set aside.

Judgment:

The sum decided on account of permanent disability is deducted and the claimant is subjected to a compensation of Rs. 4,11,377 from earlier Rs. 5,11,377 .

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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.

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Beli Ram v. Rajinder Kumar

Facts:

The first respondent- Rajinder Kumar while driving a truck owned by the appellant- Beli Ram on 20-05-1999, met with an accident, resulting in his 20% permanent disability. Respondent no.1 filed a petition under the Workman’s Compensation Act 1923 (Compensation Act) before the commissioner, Bilaspur on 17-02-1999 seeking a compensation of Rs. 50,000/- against the appellant and respondent no.2- the insurance company which insured the vehicle. The Commissioner on 08-12-2004, granted an award of Rs. 94,464/- in favour of respondent no.1 for the injuries suffered by him and Rs. 67,313/- for his medical expenses with an interest rate of 9% p.a., from the date of filling the appeal till the date of payment. The compensation amount was to be paid by the insurance company while the appellant was to pay the interest. The parties filed an appeal aggrieved by different aspects of the award.

The High Court considered the important issue of validity of the license held by respondent no.1 at the time of the accident, this license had expired on 06-09-1997 and there was no approval for renewal afterwards. Thus, respondent no.1 was driving the vehicle as a driver for the appellant for almost there years without a valid license. The High Court took into consideration this aspect in its judgement dated 03-03-2009, whereby the insurance company was absolved of its liability and the appellant was held liable on the ground of material breach of insurance policy. The High Court held that there was no provision in the Compensation Act for payment of medical expenses incurred by the claimant for treatment, since the accident took place in 1999 when the monthly wages were stated to be Rs. 4,500/-and so the maximum amount payable under the Compensation Act would be Rs. 2000/-, the same was required to be paid within 30 days and that the owner could gave recovered the amount from the insurer it if was later established that the insurer was liable to indemnify the insured. The appellant was found to be in breach of statutory duty of a benevolent legislation i.e. Compensation Act, and so the burden to pay interest as well as maximum penal of 50% was on the appellant. The claimant and insured were allowed appeals and they sought review of the judgement on the basis of National Insurance Company v. Suran Singh and Ors. (2004), however the appeal failed and the application was dismissed on 08-07-2009. 

Issues:

• Whether the insurance company is liable to compensate respondent no.1 though his license had expired and was not valid at the time of the accident.
• Whether the appellant had breached the insurance policy by allowing the driver to drive the vehicle without renewing his license and so is liable to compensate. 

Legal Provisions:

•  3- Employer’s liability for Compensation.
• Workmen’s Compensation Act, 1923 Section 4- Amount of Compensation.
• Motor Vehicles Act, 1988 section 149- Duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risks.

Appellant’s Contention:

The appellant’s referred to the judgement of the apex court in Nirmala Kothari v. United Insurance Company Limited (2020), whereby it was held to what extent the care/diligence of the employer/insurer while employing  a driver is expected- to verify if the driving license of the driver, to check if it is genuine, he is not expected to further investigate into its authenticity unless there is reason to believe otherwise. If the employer finds the driver to be competent and his license to be valid, he will not be in breach of sec-149 (2)(a)(ii) of the Motor Vehicles Act, and the insurance company will be liable.

Observations of the Court:

The case was heard before the Supreme Court Bench of Sanjay Kishan Kaul, Aniruddha Bose and Krishna Murari, JJ. The court noted that it would unreasonable to put a high onus of proof on the insured to enquire with the RTO’s all over the country to check the validity of the license. However, if the insurance company is able to prove that the owner was aware of that the driver’s license was fake/invalid and still allowed him to drive than the insurance company would not be liable to compensate. The court on the expiration of valid license referred to the case of Suran Singh where they noted the difference between the terms ‘duly licensed’ given u/s-149(2) of the Motor Vehicles Act and ‘effective license’ u/s-144 of the Act, they held  that a provision which is penal in nature and a provision beneficial to a third party, must be interpreted differently, and so the word ‘effective license’ used in sec-3 cannot be imported to sec-149(2) of the Motor Vehicles Act.

It was noted that though the license had expired and was not valid at the time of accident, the driver could have obtained a valid license in the prescribed period without having to undergo a test or being declared unqualified thereof. Provision u/s-14 states that a license remains valid for a period of thirty days from the date of expiry. The insurance company has to not only show that the conditions u/s-149 (2)(a)(ii) are satisfied but also have to prove the breach on part of the insured. It was submitted that the appellant as the insured had taken due care to verify the driver’s license at the time of employment and the liability to compensate would fall on the appellant only if he was aware that the license was fake or invalid and still permitted the employee to drive. This was stated not be the factual position in the present case as the issuance of license is not doubted rather non-renewal of expired license by respondent no.1 is pleaded to be his own responsibility.

The court noted that once the employer had verified the driving license, he would be aware of the validity period given in the license itself. The present case was not one in which the renewal was delayed by a week  or month as was the case of Swaran Singh whereby, the third party was given the benefit of burdening the insurance company, rather in the present case the driver had not renewed his license for three years that too in respect of a commercial vehicle like a truck and the appellant too had shown gross negligence in verifying the same. The court observed that the beneficiary in the present case is the driver who himself was negligent, but as this was not a claim under the Motor Vehicles Act, rather one under the Compensation Act which provides for immediate relief (not based on fault theory) of limited compensation as specified to be paid.

The court was not to decide the share of burden between the appellant as the owner and the respondent no.1 as the driver as would be required for a proceeding under the Motor Vehicles Act. The court then referred to the cases of different High Court in Tata AIG Life Insurance Co. Ltd. V. Akansha and Ors (2015), Oriental Insurance Co. Ltd v. Manoj Kumar and Ors. (2015) and National Insurance Co. Ltd v. Hem Raj and Ors (2012), whereby it was held that it was the owner/insurer’s duty to ensure that the driver had a valid driver’s license and the same was renewed within time. The burden of proof rests on the owner to prove that the conditions of the insurance company were complied with and in event of breach the insurance company would not be liable.

The court agreed with the view taken by the High Courts in this matter. The court held that the present case is of lack of reasonable care as the appellant allowed the driver to drive a commercial vehicle without renewing his license for a period of three years and thus the appellant has to bear the responsibility and liability for the same. The court noted that though there was no accident with a third-party claimant, the person causing the sufferance and sufferer are the same person i.e. respondent no.1. The court observed that the present case being dealt under the Compensation Act which benefits the workmen even though they maybe at fault, by determining a small amount payable to provide relief at a relevant stage, while the larger issue can be dealt with in other proceedings.

Judgement:

The court held that in the present case the issue of lack of care on part of respondent no.1- the driver will arise along with the issue of lack of care on part of the appellant- the owner. The present case being under the Compensation Act, the consequences would not flow to respondent no.1 as the negligent party. The appeal was thus dismissed.

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