Partly allowed

Smt.Somwati and Ors. v. the National Insurance Co.Ltd. and Ors.

Allahabad HC4 Aug 2022FAFO/80/2000

Case brief

AI extract

What is this about?

This first appeal from a Motor Accident Claims Tribunal order sought enhancement of compensation awarded for death in a road accident. The High Court enhanced the compensation amount by adjusting income calculations, multiplier, and non-pecuniary damages, while modifying the rate of interest on the enhanced portion.

What did the court decide?

Compensation enhanced to Rs. 13,12,000; interest rate modified to 7% pre-award and 4% post-award for pending period; remitted to Tribunal for deposit and disbursement.

Smt.Somwati and Ors. Vs the National Insurance… — Motor Accident Claims | Allahabad HC (2022)

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[A.F.R.]

Court No. - 44

Case :- FIRST APPEAL FROM ORDER No. - 80 of 2000 Appellant :- Smt.Somwati And Ors. Respondent :- The National Insurance Co.Ltd. And Ors. Counsel for Appellant :- R.K.Porwal,P.K. Mukerjee Counsel for Respondent :- Y.K. Saxena,Alok Sharma,Alok Singh,P.K.Sinha

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Hon'ble Dr. Kaushal Jayendra Thaker,J.

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Heard Sri R.K. Porwal, learned counsel for the appellants, Sri P.K. Sinha, learned counsel for respondent-insurance company and perused the judgment and order impugned.

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This appeal, at the behest of the claimant, challenges the judgment and award dated 14.10.1999 passed by the Motor Accident Claims Tribunal/VIIth Additional District Judge, Etawah (hereinafter referred to as 'Tribunal') in M.A.C.P No.121 of 1997 awarding a sum of Rs.3,29,500/- as compensation with interest at the rate of 12%.

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The accident is not in dispute. The issue of negligence decided by the Tribunal is also not in dispute. The issue to be decided is the quantum of compensation awarded and oral objection to finding of fact as far as licence is concerned and compensation is concerned.

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The accident took place on 24.1.1997. The deceased was 56 years of age. Deceased- Man Singh Yadav who was 56 years of age left behind him, his widow, two minor son and two minor daughter which fact is not in dispute. The Tribunal considered his income to be Rs.15,000/- per month, deducted 1/3rd towards personal expenses of the deceased, granted multiplier of 8.

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In this appeal a very technical issue has arisen before this Court in appeal filed under Section 173 of Motor Vehicles Act,1988. It is contended that in the body of the application for compensation, the appellants had mentioned that the application was filed under Section 166 and 163(A) of the Motor Vehicles Act, 1988. Claim petition was filed in the year 2000; namely, much before the judgment in Deepal Girishbhai Soni and Ors. Vs. United India Insurance Company Limited, Baroda, AIR 2004 SC 2017, has held that claim petition preferred u/s 163A is under No Fault Liability and though decided the petition as of it is under Section 166 of Act granted compensation as per Section 163A whether such approach is sustainable.

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It is clear that the matter when it proceeded, the learned Judge also mentioned that it was filed under Section 166 read with Section 163A of Motor Vehicles Act, 1988 and while passing the award granted a sum of Rs.3,29,500/- holding that under the Section 163A of Motor Vehicles Act, the said amount was admissible and granted interest at the rate of 12%. The Tribunal has decided issue no.1, namely, the issue of negligence in favour of claimants.

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It is contended by Sri R.K.Porwal, learned counsel for appellants that the matter has been decided as per Section 166 of Motor Vehicles Act, if the Tribunal had decided the issue of negligence and it cannot grant compensation as per Section 163A which bad in eye of law. The income slab was not considered by the Tribunal as income of deceased was exceeding Rs.40,000/- per annum as per schedule.

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Sri R.K.Porwal, learned Advocate further submits that in the year 1997, it was a general tradition to file claim petition under Section 166 read with Section 163A of Act as it was considered that to be interim application under 163A was interim compensation. Application substituting Section 140 of Act.

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Sri R.K. Porwal, learned counsel for the appellant further submitted that the income of the deceased should be considered to be at least Rs.15,294/- per month. It is further submitted by learned counsel for the appellants that the Tribunal has not added any amount under the head of future loss of income which should be granted in view of decision in of the Apex Court in National Insurance Co. Ltd. Vs. Pranay Sethi and others, 2017 LawSuit (SC) 1093. It is also submitted that the Tribunal has granted the split multiplier of 8 for three years of service which would be 9 in view of the decision of the Apex Court in Sarla Verma and others Vs. Delhi Transport Corporation and Another, 2009 LawSuit (SC).

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As against this, Sri P.K. Sinha, learned counsel appearing on behalf of respondent insurance company submits that just because the issue of negligence was decided it cannot be said that the matter was decided under Section 166 of Motor Vehicles Act, 1988. The compensation is decided as per the claim petition and does not call for any upward enhancement as despite the income being Rs.12,000/per month, Tribunal has considered it as Rs.15,000/- per month.

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Sri P.K. Sinha, learned Advocate further submits that as far as issue no. 4 is concerned, the Tribunal has decided that the income would be Rs.15,000/- p.m. The income on record was Rs.12,294/p.m. and that is what the Tribunal had to consider, therefore, it is submitted that future prospect has not to be added as Rs.15,000/- is

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granted as amount is already granted and the Tribunal has considered the income to be Rs.12,294/- and deducted 1/3rd and granted multiplier of 8 as the deceased was aged about 56 years and therefore it is submitted that the appeal should be dismissed.

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Sri P.K. Sinha, learned counsel for respondent has contended that multiplier of 8 granted by Tribunal is not exorbitant and it would suffice for non grant of amount under the head of non pecuniary loss and future loss of income. Learned counsel further submits that in the year of accident in the State of U.P., no future prospect was granted. Learned counsel further submits that even in the year of accident in 1997, the repo rate was not 12% and interest granted at the rate of 12 % is exorbitant and requires to be reworked. It is submitted by learned counsel on his oral submission that there is breach of policy as licence of driver was not produced and relied the judgment of this Court in F.A.F.O. No.2389 of 2016 (National Insurance Co. Ltd. Vs. Smt. Vidyawati Devi And 2 Others) decided on 27.7.2016 and in First Appeal From Order No.3381 of 2003 ( Raghuraj Singh Vs. Gyan Singh and other) decided on 8.4.2022 . Order 43 Rule 1 (r) of C.P.C. learned counsel would like to press the issue of interest also which should be at the rate of 7% and not 12% as granted by the Tribunal in view of the decision of this Court in National Insurance Company Limited Vs. Lavkush and another, 2018 (1) T.A.C. 431 and U.P. Motor Vehicle Rules .

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Heard the learned counsels for the parties and considered the factual data. It is an admitted position of fact that the Insurance Company has accepted the award and has not challenged the same. There is a categorical finding by the Tribunal that before Tribunal neither the driver was produced nor was policy produced and the Tribunal decided issue no.2 against the insurance company. Thus this ground taken for first time in appeal after 22 years cannot be accepted. This Court finds that the accident occurred on 24.1.1997 causing death of Man Singh Yadav who was 56 years of age at the time of accident. The Tribunal has assessed his income to be Rs.15000/- per month as he was a Principal in a Indra Gandi Inter College, Khadakpur, Saraiya which according to this Court, in the year of accident, is just and proper. To which as the deceased was in the age bracket of 56-60, 15% of the income will have to be added in view of the decision of the Apex Court in Pranay Sethi (Supra). Looking to the general trend even in Gobald Motor Service Ltd. and another Vs. R.M.K Veluswami and other, 1962 SCR(1) 929 , the addition of 15% can be granted. The deduction as granted by the Tribunal is maintained. The multiplier would be 9 to which looking to the

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pendency of the matter which has been pending here since more than 22 years. Rs.70,000/- under the head of non pecuniary damages would suffice for claimants.

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Sri R.K. Porwal, learned Advocate has relied on the judgment of Supreme Court in N. Jayasree and others Vs. Cholamandalam MS General Insurance Company Limited, 2021 LawSuit(SC) 656 on split multiplier and no deduction for pension.

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Hence, the total compensation payable to the appellants is computed herein below:

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i. Annual Income Rs.1,80,000/- ( Rs.15,000/- per month)

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ii. Percentage towards future prospects : 15% namely Rs.27,000/-

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iii. Total income : Rs.1,80,000/- + Rs.27,000/- = Rs.2,07,000/-

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iv. Income after deduction of 1/3rd towards personal expenses : Rs.1,38,000/-

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v. Multiplier applicable : 9( there cannot be split multiplier)

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vi. Loss of dependency: Rs.1,38,000/- x 9 = Rs.12,42,000/-

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vii. Amount under non pecuniary heads : Rs.70,000/-

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viii. Total compensation : Rs.13,12,000/-

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As far as issue of rate of interest is concerned , the Tribunal has granted 12% rate of interest which is disturbed but on enhanced amount it would be slab-wise as held herein below.

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No other grounds are urged orally when the matter was heard.

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In view of the above, the appeal is partly allowed. The award and decree passed by the Tribunal shall stand modified to the aforesaid extent. The respondent-Insurance Company shall deposit the amount within a period of 12 weeks from today. The interest on the enhanced amount would be 7% from the date of filing of claim petition till the award and thereafter it would be 4% as the matter has remained pending without fault of insurance company. The amount already deposited be deducted from the amount to be deposited.

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Record be sent back to Tribunal forthwith.

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The finding of Tribunal in issue no.2 is that firstly, the xerox copy of cover note is there but no policy is filed and secondly that the insurance company has not tried to examine their application to examine the driver is sufficient. The fact that challenge by cross objection is not tried will not preclude from granting.

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On depositing the amount in the Registry of Tribunal, Registry is

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directed to first deduct the amount of deficit court fees, if any. Considering the ratio laid down by the Hon'ble Apex Court in the case of A.V. Padma V/s. Venugopal, Reported in 2012 (1) GLH (SC), 442 , the order of investment is not passed because applicants /claimants are neither illiterate or rustic villagers.

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In view of the ratio laid down by Hon'ble Gujarat High Court, in the case of Smt. Hansagauri P. Ladhani v/s The Oriental Insurance Company Ltd., reported in 2007(2) GLH 291 , total amount of interest, accrued on the principal amount of compensation is to be apportioned on financial year to financial year basis and if the interest payable to claimant for any financial year exceeds Rs.50,000/-, insurance company/owner is/are entitled to deduct appropriate amount under the head of 'Tax Deducted at Source' as provided u/s 194A (3) (ix) of the Income Tax Act, 1961 and if the amount of interest does not exceeds Rs.50,000/- in any financial year, registry of this Tribunal is directed to allow the claimant to withdraw the amount without producing the certificate from the concerned Income- Tax Authority. The aforesaid view has been reiterated by this High Court in Review Application No.1 of 2020 in First Appeal From Order No.23 of 2001 (Smt. Sudesna and others Vs. Hari Singh and another) while disbursing the amount.

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The Tribunal shall follow the guidelines issued by the Apex Court in Bajaj Allianz General Insurance Company Private Ltd. v. Union of India and others vide order dated 27.1.2022, as the purpose of keeping compensation is to safeguard the interest of the claimants. As 22 years have elapsed, the amount be deposited in the Saving Account of claimants in Nationalized Bank without F.D.R.

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In view of the above, the Insurance Company is granted recovery rights subject to the aforesaid rider and in view of the judgment of this Court passed in First Appeal From Order No.3381 of 2003 ( Raghuraj Singh Vs. Gyan Singh and other) decided on 8.4.2022.

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This Court is thankful to both the counsels for getting this old matter decided.

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Order Date :- 4.8.2022/Mukesh

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Digitally signed by MUKESH SRIVASTAVA Date: 2022.08.10 15:33:45 IST Reason: Location: High Court of Judicature at Allahabad

Smt.Somwati and Ors. v. the National Insurance Co.Ltd. and Ors.

Case brief

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Smt.Somwati and Ors. v. the National Insurance Co.Ltd. and Ors.

Case brief

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