Partly allowed

Smt. Sarojni Devi v. Girish Narain Shukla

Allahabad HC9 Aug 2019FAFO/1267/1990

Case brief

AI extract

What is this about?

The Appellate Court examined a challenge to the Motor Accident Claims Tribunal's finding that the insurance policy was limited liability. Upholding that the policy was comprehensive due to additional premium paid, the Court recalculated compensation based on the deceased's income and age, directing the insurer to pay a higher sum with revised interest rates and return files to the Tribunal.

What did the court decide?

The Insurance company shall recalculate the compensation amount based on corrected figures and pay the balance within 12 weeks. Record remanded to the Tribunal.

Smt. Sarojni Devi Vs Girish Narain Shukla — Motor Accident Claims | Allahabad HC (2019)

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Court No. - 33

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Case :- FIRST APPEAL FROM ORDER No.1267 of 1990

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Appellant :- Smt. Sarojni Devi Respondent :- Girish Narain Shukla Counsel for Appellant :- R.K.Porwal Counsel for Respondent :- Anand Kumar Sinha

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Hon'ble Dr. Kaushal Jayendra Thaker, J.

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Heard Sri R.K. Porwal for the appellant and Sri A.K. Sinha for the Insurance Company. None has appeared for the owner.

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By means of this appeal, the appellants - claimants challenge the judgment and award dated 15.9.1990 passed by Motor Accident Claims Tribunal, Etawah, (hereinafter referred to as 'Tribunal') in Motor Accident Claim Petition No. 122 of 1989 awarding a sum of Rs. 92,000/- with interest.

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It was averred in claim petition that the deceased was 33 years of age. He used to do masonery work and was having monthly income of Rs.1,200/-per month. On 30.7.1989 at about 11:00 a.m. on Bharthana – Bakewar road, the deceased was coming from Bharthana Bazar side and was going his village Ureng. He was on his cycle and was paddling it on his extreme left side at reasonable speed. When, he reached in Mohalla Raja Ganj of Bharthana town near Sanskrit Pathshala, a bus bearing registration no. UTL 964 came suddenly on its wrong side of the road and dashed the cycle of Mulayam Singh as a result of which Mulayam received various simple and serious injuries. The bus was being driven rashly and negligently at the time of accident and the principle of resipsa loquitor was fully applicable in the facts of the case.

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The Insurance company has contended that it was a limited liability policy and no fault can be found with the

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finding of the Tribunal. It is submitted that additional amount of Rs.75,000/- is for damages to the property which has been disputed by the learned counsel for the appellant. It is further submitted by Sri Sinha that the appellant has no cause of action against the Insurance company as it has no privily of contract with the appellant, who is a third party and, therefore, also the appeal cannot succeed. He has further submitted that the grievance can be that of the owner and not that of the claimants.

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Sri R.K. Porwal has strangely urged and has contended that the policy was never produced only the cover note was produced. He has relied on note on commercial vehicles tariff and has contended that where any property is insured and if additional premium is taken there are slabs of it namely:

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COMMERCIAL VEHICLES TARIFF

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Propertydamage	Section II-I(ii)
The Act cover is upto Rs.6000/-
For the first increase of Rs.44000/- (The total property damage cover is Rs.50000/-)	Rs. 25/- per vehicle
For every additional cover of	Rs.10/- per slab of
Rs.50,000/- orpart thereof	Rs.50,000/- orpart thereof.
For Unlimited Liability cover	Rs.75/- total additional premiumper vehicle

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Learned counsel for the appellant has relied on the following judgments:-

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(I) Hardeo Kaur Vs. Rajasthan State Transport Corporation, 1992 LawSuit (SC) 227;

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(II) Manuara Khatun and others Vs. Rajesh Kumar Singh and others, (2017) 4 SCC 796.

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7. Section 147 of Motor Vehicles Act reads as under:-

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“147 Requirements of policies and limits of liability. —

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(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which—

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(a) is issued by a person who is an authorised insurer; and

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(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)—

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(i) against any liability which may be incurred by him in respect of the death of or bodily²⁷ [injury to any person, including owner of the goods or his authorised representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

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Provided that a policy shall not be required—

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(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee—

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(a) engaged in driving the vehicle, or

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(b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or

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(c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability.

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Explanation. —For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

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(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:— (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand:

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Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

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(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance

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in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

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(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.

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(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.

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149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.—

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(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) 1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

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(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:—

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(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:—

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(i) a condition excluding the use of the vehicle—

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(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or

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(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

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(d) without side-car being attached where the vehicle is a motor cycle; or

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(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

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(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

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(b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact or by a representation of fact which was false in some material particular.

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(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).

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(4) Where a certificate of insurance has been issued under subsection (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

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(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

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(6) In this section the expression “material fact” and “material particular” means, respectively a fact or particular of such a

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nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression “liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

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(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.—For the purposes of this section, “Claims Tribunal” means a Claims Tribunal constituted under section 165 and “award” means an award made by that Tribunal under section 168 .”

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8. Section 166 of Motor Vehicles Act reads as under:-

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"166. Application for compensation. — (1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made—

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(a) by the person who has sustained the injury; or

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(b) by the owner of the property; or

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(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

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(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be:

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Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.

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(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed: Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant. (3) [ * * * ]

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(4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act."

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In view of the provisions and the fact that additional premium was paid by the Insurance company, it cannot now be contended in appeal preferred by claimant that it was a limited liability policy. The finding of fact by the Tribunal was itself erroneous on the following grounds:

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(I) No such issue was framed as it was never contended even in the written statement by the Insurance company that it was not a comprehensive policy; (II) The policy was never produced before the Tribunal only the cover note was produced wherein additional premium of Rs.75/- was mentioned and therefore it was not the objection of the Insurance company also;

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(III) The claimant can prefer appeal against the Insurance company if it aggrieved by a finding of fact which is bad in eye of law and factually incorrect as he has a right of recovery under the Act from the tortfeasors namely the driver and the owner, who have to be indemnify by the Insurance company and, therefore, to contend that appeal at the behest of claimant challenging the said finding cannot lie is not sustainable and requires to be rejected as the claimant need not go to the circuitous route of first claiming against the owner and then against the Insurance company.

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The provisions of Section 168 coupled with provisions of Section 166 and read with 173 would not permit this Court to uphold the finding of fact which is on the face of the record erroneous and the observations and directions was made without any pleadings being there. The Tribunal has misread itself by reading Section 147 and

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holding that the liability was of Rs.50,000/-. There is nothing to show that the liability was limited. The Act came into force on 1.7.1989. The accident took place on 30.7.1989. The finding that the policy was a limited liability policy is itself bad. I have perused the cover note wherein Rs.75/- has been taken by way of additional premium and, therefore, also this finding will have to be upturned.

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This takes this court to the compensation awarded. The Tribunal has held that the income of the deceased was Rs. 800/- and Rs.400/- was the amount available to the family. The age of the deceased was considered to be 40 years hence Rs.96,000/- was awarded to which additional Rs.11,000/- was added but deducted Rs.15,000/- as lump sum payment was made and directed Rs.50,000/- to be paid by the Insurance company and the interest was 12% per annum.

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The deceased even if we take his income to be Rs.800/- per month, he being 40 years of age, 40% will have to be added hence making his income to be Rs. 1,100/- round figure, he being the age of 40 years, 1/3^rd be deducted from his income hence the amount would come to Rs. 825 x 12 x 15 = Rs.1,48,500/- plus additional amount of Rs.30,000/- under the head of non-pecuniary damages hence the appellant would be entitled to a sum of Rs.178,500/- with 9% rate of interest from the date of filing of claim petition till the decision of the Tribunal and 4% thereafter till the amount is deposited.

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The claimant would be entitled to the entire amount from the Insurance company and if recovery has been initiated against the owner, the said amount shall be indemnified to the owner. The appellant shall file an

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Affidavit before the Tribunal as to what amount he has already received.

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The appeal is partly allowed. The Insurance company shall recalculate the amount and pay the balance within 12 weeks from today. If the owner has not paid any amount to the claimant, the entire amount would be payable by the Insurance company in the light of the Act, 1988.

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No amount shall be kept in Fixed Deposit as 30 years have elapsed from the date of accident.

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Record and proceedings be sent back to the Tribunal forthwith.

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Order Date :- 9.8.2019 Irshad

Smt. Sarojni Devi v. Girish Narain Shukla

Case brief

What is this about?

What did the court decide?

Smt. Sarojni Devi v. Girish Narain Shukla

Case brief

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