Partly allowed

Oriental Insurance Company Ltd. Faizabad through Its Regional v. Smt. Savitri Devi

Allahabad HC19 Sept 2023FAFO/1178/2008

Case brief

AI extract

What is this about?

The High Court dismissed the insurer's appeal seeking to nullify liability due to alleged driver's licence irregularities but enhanced compensation in the claimants' appeal from ₹1,87,000 to ₹9,95,440 due to inadequate notional income and missing consorsium awards.

What did the court decide?

F.A.F.O. No.1178 of 2008 dismissed; F.A.F.O. No.34 of 2009 allowed with compensation enhanced to ₹9,95,440 plus 6% interest.

Oriental Insurance Company Ltd. Faizabad through Its… — Motor Accident Claims | Allahabad HC (2023)

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Neutral Citation No. - 2023:AHC-LKO:62243

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Court No. - 19

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Case :- FIRST APPEAL FROM ORDER No. - 1178 of 2008 Appellant :- Oriental Insurance Company Ltd Faizabad Through Its Regional Respondent :- Smt. Savitri Devi

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Counsel for Appellant :- Rajeev Misra,Akhilesh Kumar Srivastava Counsel for Respondent :- Vidya Dhar Upadhyay,Akhter Abbas,Chandra Shekher Pandey,Ichchha Singh,Pankaj Pathak,Ritesh Singh

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Alongwith

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Case :- FIRST APPEAL FROM ORDER No. - 34 of 2009 Appellant :- Smt. Savitri Devi Respondent :- Ram Gopal Gupta Counsel for Appellant :- Pankaj Pathak,Akhilesh Kumar Srivastava,Ichchha Singh,Vidya Dhar Upadhyay Counsel for Respondent :- Akhter Abbas,Chandra Shekher Pandey,Rajeev Mishra,V.P.Nagaur

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Hon'ble Jaspreet Singh, J.

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These are a batch of two appeals preferred under Section 173 of the Motor Vehicles Act, 1988. F.A.F.O. No.1178 of 2008 has been filed by the Insurance Company assailing the award dated 15.09.2008 passed in Claim Petition No.67 of 2006 wherein in a death case the Tribunal has awarded a sum of ₹ 1,87,000.00 alongwith 6% interest in favour of the claimant-respondents. The other F.A.F.O. No.34 of 2009 wherein the same award dated 15.09.2008 has been assailed by the claimants seeking enhancement of the awarded sum.

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Since both the appeals arise out of the same accident between the same parties, accordingly both have been connected and have been heard together and are being decided by this common judgment.

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The Court has heard Shri Rajeev Kumar Misra, learned counsel for the appellant-the Oriental Insurance Company Limited, Shri Vidya Dhar Upadhyay, learned counsel for the claimants and Shri Akhilesh Kumar Srivastava, learned counsel appearing for the UPSRTC.

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In order to appreciate the contention of the respective parties, it will be worthwhile to take a glace at the facts giving rise to both the appeals. For the sake of convenience, the facts as well as the parties are being referred in context with FAFO No.1178 of 2008. The claimant-respondents no.1 to 7 had filed Claim Petition No.67 of 2006 before Motor Accident Claims Tribunal, Balrampur with the averments that on 01.11.2006 the husband of the claimant-respondent no.1 and father of the claimant-respondents no.2 to 7, namely, Mangal Prasad Mishra had gone to the market to purchase seeds. It was stated that around 11.40 a.m., a bus belonging to the UPSRTC bearing number UP 42/C-2728 which was being driven rashly and negligently hit Mangal Prasad Mishra as a result he died on the spot. It is in the aforesaid context that the claim petition was filed.

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The defendant i.e. the Insurance Company as well as UPSRTC filed their written statement contesting the claim petition primarily denying the accident as well as the fact that the driver of the bus was rash and negligent. It was further pleaded in paragraph-24 of the written statement filed by UPSRTC that the bus in question possessed all the valid papers including the fitness certificate, registration as well as the fact that the bus was duly insured and its driver had a valid and a subsisting driving licence. Upon exchange of pleadings, the Tribunal framed three issues. Considering the oral as well as the documentary evidence available on record, the Tribunal concluded that the death of Mangal Prasad Mishra occurred on account of rash and negligent driving by the bus driver who was rash and negligent.

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The Tribunal further recorded that the bus in question was being plied on the road alongwith all valid documents. The Tribunal thereafter went on to consider the compensation and found that the deceased was a young man aged between 32 to 35 years leaving behind his wife and six children. The Tribunal also

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noticed that the deceased was having some farming income apart from the fact that he also under took to sell garments as a hawker.

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In this regard, it was stated that the claimant was able to earn ₹ 10,000/- per month. However, considering the evidence that there was no reliable documentary or oral evidence to support it. The Tribunal adopted the notional income of the deceased at ₹ 15,000/- per annum and thereafter adopting multiplier of 18 and making deduction for personal expenses, it finally awarded a sum of ₹ 1,87,000/alongwith 6% interest in favour of the claimant-respondents no.1 to 7.

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It is this award dated 15.09.2008 which is under challenge in both the appeal for different reasons.

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In so far as the FAFO No.1178 of 2008 is concerned, Shri Rajeev Misra learned counsel appearing for the appellant has raised a solitary point to contest the award to the effect that the driver of the bus did not have a valid and subsisting driving licence on the date of the accident i.e. 01.11.2006. It is thus urged that under these circumstances where the driver did not possess a valid licence, no liability could have been fastened on the Insurance Company and even if at all any liability was fastened then at least the remedy to recover the same from the insured should have been granted.

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Shri Akhilesh Kumar Srivastava, learned counsel appearing for the UPSRTC while controverting the aforesaid submissions has stated that first and foremost there was never any challenge to the licence of the bus driver. It is also urged that the Insurance Company did not raise any such plea in their written statement and for the aforesaid reason, no evidence was led.

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It has further been pointed out that the driving licence of the driver was valid from 16.09.2003 to 15.09.2006 and then again from 01.12.2006 to 13.11.2009. It is urged alternatively that even assuming if the licence was not valid on the date of the accident but nevertheless this burden was on the Insurance

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Company to have raised the issue and it was incumbent upon the Insurance Company to have established that this fact was known to the owner and despite knowing the aforesaid fact he permitted the said driver to drive the vehicle in question and unless such pleadings or evidence was led. It is not open for the Insurance Company to shirk its responsibility of indemnifying the award. For the aforesaid reasons, it is urged that the appeal of the appellant Insurance Company deserves to be dismissed.

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The Court has heard the learned counsel for the parties and also perused the material on record.

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Having given anxious consideration to the rival submissions, at the outset, it may be noted that this issue has been fairly settled by the Apex Court in its Constitution Bench decision of National Insurance Company Ltd. Vs. Swaran Singh (2004) 3 SCC 297. From the perusal of the aforesaid dictum, it would be clear that the Apex Court has clearly held that in case of any irregularity in the licence, it is not as a matter of course that the Insurance Company can wash its hands from the liability. In order to press the aforesaid point of avoiding its liability, it is, the burden, on the Insurance Company to establish that the driver did not possess the valid licence and this fact was known to the owner and despite having gained the said knowledge he yet permitted the vehicle to be driven by such a driver who did not possess the valid licence.

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In light of the aforesaid dictum of Swaran Singh (supra) , this Court finds that in so far as the aforesaid plea is concerned, it is conspicuously absent in the written statement filed by the Insurance Company. No evidence was led either oral or documentary by the Insurance Company before the Tribunal. In absence of any such evidence or plea which is not contradicted by the counsel for the appellant, this Court is afraid that such a plea cannot be permitted to be countenanced in appeal.

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There is another way to look at the entire issue and in context with Section 15 of the Motor Vehicle Act 1988. At the time of the accident i.e. 01.11.2006, the proviso to Section 15 provides a window to a driver who had a licence and even though if it had expired and he applied for the renewal within a period of 30 days from its expiry then the proviso provides that the licence would stand valid and renewed from the date of its expiry.

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As already noticed above that the Insurance Company did not raise any plea nor led any evidence, it also cannot be ascertained whether the driver had filed any application for renewal within the window as provided in law. No evidence has also been brought before this Court in terms of Order 41 Rule 27 CPC despite the fact that the appeal has been engaging the attention of this Court since 2008.

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In light of the aforesaid discussions, this Court is of the firm opinion that apparently the plea which is sought to be raised by the learned counsel for the appellant has no legs to stand as neither any plea nor evidence was led neither an attempt to bring any evidence before this Court has been made.

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In view of the aforesaid, this Court does not find that there is any error committed by the Tribunal in fastening the liability upon the Insurance Company and for the aforesaid reasons F.A.F.O. No.1178 of 2008 does not find favour with this Court and is accordingly dismissed.

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Now considering the F.A.F.O. No.34 of 2009 which has been filed by the claimants seeking enhancement of the award dated 15.09.2008, the counsel for the claimants Shri Upadhayay submits that the Tribunal has erred in taking the notional income of the deceased at ₹ .15,000/- per annum. It is stated that the deceased was said to earn from farming and also by undertaking selling of garments as a hawker as and was able to earn ₹ 10,000/- Since the deceased was working in an unorganized sector and belonging to a strata of a society where no formal documentation regarding his income was available but coupled with the

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fact that he was supporting a family comprising of his wife and six children. It would be inappropriate to have adopted the notional income of ₹ 15,000/- per annum.

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It is thus urged that this aspect has not been noticed by the Tribunal in its correct prespective and the notional income ought to have been taken at ₹ 36,000/per annum. It has also been urged that the Tribunal has not awarded consortium and rather a bleak view has been taken; inasmuch as the wife was entitled to spouse consortium whereas each of the children had a right of claiming parental consortium which has not been considered.

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It is also urged that the deduction of 1/3rd as made by the Tribunal is also not appropriate rather looking into the number of dependents even taking as a unit at least 1/4th ought to have been deducted towards personal expenses. Since the age of the deceased was 30 year, accordingly the multiplier of 17 should have been adopted and also future prospects at the rate of ₹ 15,000/- ought to have been considered. For the aforesaid reasons, it is urged that the amount as awarded by the Tribunal is grossly inadequate.

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Refuting the aforesaid contentions, Shri Misra submits that since the income of the deceased was not proved and considering that the accident took place in the year 2006, the Tribunal has appropriately taken the notional income of ₹ 15,000/- per annum. It has further been submitted that 1/3rd has been deducted towards personal expenses and an amount has been calculated towards the nonconventional heads.

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23 It is further urged that compensation as granted to a family having suffered a death of the working head of the family is not a bounty, rather it has to be seen in context that the compensation that should be fair and just looking at the circumstances the family back ground amongst other and in this context if the compensation which has been awarded to the claimants would reflect that it is fair

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and just. In the aforesaid circumstance, there is no requirement to enhance the compensation.

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Having heard the learned counsel on the aforesaid issue, this Court clearly finds that in so far as the income of the deceased is concerned, there is no document to support the same, but apparently, there is some statement of the claimants to indicate that the deceased was supporting a family comprising of his wife and six children. In this regard, looking into the time when the accident occurred any person engaged in agricultural activity or even selling garments as a hawker would be able to earn at least ₹ 100/- per day and thus in the aforesaid circumstances, the income of the deceased which has been taken at ₹ 15,000/- per annum appears to be on the much lower side and the same requires to be enhanced and shall be treated as ₹ 36,000/- per annum.

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This Court is also further of the opinion that looking into the age of the deceased who was 30 years of age and had an entire life in front of him which was cut short by the accident, consequently the future prospects also deserves to be awarded in terms of the decision of the Apex Court in case of National Insurance

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Company Ltd. Vs. Pranay Sethi and others, reported in (2017) 16 SCC page 680 and 40% ought to be added. Since the number of dependents were seven, even though they comprise of the minors yet as a unit, this Court finds that 1/4th deduction should have been made towards personal expenses. The claimants were also entitled to spouse as well as parental consortium as held by the Apex Court in the case of Magma General Insurance Company Ltd. Vs. Nanu Ram 2018 SCC ONLine SC 1546, hence, taking a holistic view of the issue, this Court redetermines the compensation as under: -

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Income =₹ 36,000 per annum Future Prospect @ 40% =₹14,400 per annum Net income =₹ 50,400 per annum Income after deduction of 1/5th

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8 - ₹ 50,400-10,080 =₹40,320 per annum Age = 30 Multiplier = 17 Thus, compensation payable =₹ 40,320X17= ₹ 6,85,440 Parental consortium appellant no.2 to 7 = ₹ 2,40,000 Spouse appellant no.1 =₹ 40,000/Loss of Estate = 15000 ₹ Funeral expenses =₹ 15000 Total =↺ 9,95,440/-

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Thus, total compensation payable shall be ↺ 6,85,440 + 3,10,000= 9,95,440/- ↺

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Having considered the aforesaid, this Court finds that the amount as awarded by the Tribunal was extremely meager and in light of the findings recorded in the aforesaid judgment, the claimants shall be entitled to a total sum of ↺ 9,95,440/-. The said amount shall carry on interest at the rate of 6% per annum.

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Any amount already paid to the claimants shall be adjusted from the amount so determined. The remaining amount shall be paid by the Insurance Company to the claimants within 60 days from the date, a copy of this order is placed before the Court concerned. The amount deposited by the appellantInsurance Company before this Court shall also be remitted to the Tribunal to be released in favour of the claimants.

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In view of the aforesaid, the F.A.F.O. No.1178 of 2008 is dismissed and F.A.F.O. No.34 of 2009 stands allowed . In the facts and circumstances, there shall be no order as to costs. The record of the Tribunal below shall be returned expeditiously.

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Order Dated:- 19.09.2023 ank/-

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Digitally signed by :- ALI NEWAZ KHAN High Court of Judicature at Allahabad, Lucknow Bench

Oriental Insurance Company Ltd. Faizabad through Its Regional v. Smt. Savitri Devi

Case brief

What is this about?

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Oriental Insurance Company Ltd. Faizabad through Its Regional v. Smt. Savitri Devi

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