Partly allowed

Mr Briju Mohan v. M/S National Insurance Company Ltd.

Karnataka HC20 Nov 2020MFA/2789/2017

Case brief

AI extract

What is this about?

This court modified the tribunal's award in a motor accident compensation case. Applying the 'pay and recover' principle from the Supreme Court, it directed the insurer to pay compensation while reserving the right to recover from the owner who operated the vehicle without a valid permit. The total compensation was reduced from Rs.90 Lakhs to Rs.44 Lakhs.

What did the court decide?

The appeal allowed in part; liability on insurer confirmed under pay and recover principle; total compensation modified to Rs.44,16,000 payable to the claimant with liberty to recover from the owner.

Mr Briju Mohan Vs M/S National Insurance… — Contract and Commercial Disputes | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF NOVEMBER, 2020

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PRESENT

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THE HON'BLE MRS. JUSTICE S.SUJATHA

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AND

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THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

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MFA.NO.2789 OF 2017(MV-I) C/W MFA.CROB.NO.124 OF 2017(MV-I)

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IN MFA.NO.2789 OF 2017

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BETWEEN:

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MR BRIJU MOHAN S/O SRI K UNNIKRISHNAN AGED ABOUT 29 YEARS R/A NO.11, M R RICHES GARDEN NEAR NRI LAYOUT, KALKERE BANGALORE-560 043

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....APPELLANT

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(BY SRI. P. RAVEENDRAN, ADVOCATE)

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AND:

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1 . M/S NATIONAL INSURANCE COMPANY LTD MARTAHALLI DIVISIONAL OFFICE:XI # 86/80, 2^ND FLOOR, MAIN ROAD MARTAHALLI BANGALORE-560 037 REP. BY ITS BRANCH MANAGER

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2 . M/S NATIONAL INSURANCE COMPANY LTD REGIONAL OFFICE, BANGALORE SHUBARAM COMPLEX 2^ND FLOOR, 144 M G ROAD BANGALORE-560 001 REP. BY ITS REGIONAL OFFICER

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3 . SHRI. NAVEEN N C FATHERS NAME NOT KNOWN TO APPELLANT MAJOR IN AGE PROPRIETOR M/S GIRIJA GRANITES AND EARTH MOVERS R/A NO.222-222, GIRJA NIVAS DODDENAKKUNDI, BANGALORE-560 037

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….RESPONDENTS

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(BY SRI. Y.R. SADASHIVA REDDY, SENIOR ADVOCATE FOR SRI. J.M. RAJANNA SETTY, ADVOCATE FOR R3 SRI. A.N. KRISHNA SWAMY, ADVOCATE FOR R1 & R2)

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THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED: 28.12.2016 PASSED IN MVC NO.2679/2014 ON THE FILE OF THE III ADDITIONAL SENIOR CIVIL JUDGE, COURT OF SMALL CAUSES, BENGALURU (SCCH-18), PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.

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IN MFA. CROB.NO.124 OF 2017

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BETWEEN:

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NAVEEN N C S/O CHANDRA REDDY AGED ABOUT 39 YEARS

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PROPRIETOR M/S GIRIJA GRANITES AND EARTH MOVERS R/AT NO.222-222 GIRIJA NIVAS, DODDENAKKUNDI BENGALURU 560 037

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....CROSS OBJECTOR

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(BY SRI. Y.R. SADASHIVA REDDY, SENIOR ADVOCATE FOR SRI. J.M. RAJANNA SETTY, ADVOCATE)

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AND:

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1 . BRIJU MOHAN AGED ABOUT 29 YEARS S/O K. UNNIKRISHNAN R/AT NO.11, M R RICHES GARDEN NEAR NRI LAYOUT, KALKERE BENGALURU 560 043 2 . M/S NATIONAL INSURANCE COMPANY LTD MARTHALLI DIVISIONAL OFFICE: XI #86/80, 2^ND FLOOR, MAIN ROAD MARTHALLI, BENGALURU 560 037 REP. BY ITS BRANCH MANAGER 3 . M/S NATIONAL INSURANCE COMPANY LTD. REGIONAL OFFICE, BENGALURU SHUBRAM COMPLEX 2^ND FLOOR, 144 M.G. ROAD BENGALURU 560 001 REP. BY ITS REGIONAL OFFICER ….RESPONDENTS

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(BY SRI. RAVEENDRAN .P, ADVOCATE FOR R1 SRI. A.N. KRISHNA SWAMY, ADVOCATE FOR R2 & R3)

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THIS MFA CROB IN MFA NO.2789/2017 FILED U/O 41 RULE 22 OF M.V ACT, AGAINST THE JUDGMENT AND AWARD DATED 28.12.2016 PASSED IN MVC NO.2679/2014 ON THE FILE OF THE III ADDITIONAL SENIOR CIVIL JUDGE, COURT OF SMALL CAUSES, BENGALURU (SCCH-18), AWARDING COMPENSATION OF RS.90,85,000/- WITH INTEREST AT 9% P.A. FROM THE DATE OF PETITION TILL THE DATE OF DEPOSIT.

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THIS MFA AND MFA CROB COMING ON FOR HEARING THIS DAY, SACHIN SHANKAR MAGADUM J., DELIVERED THE FOLLOWING:

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JUDGMENT

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The claimant has filed appeal in

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MFA.No.2789/2017 challenging the judgment and award passed in MVC.No.2679/2014, wherein the claim petition is dismissed against the respondent Nos.1 and 2/Insurance Company, whereas the cross objection in MFA.Crob.No.124/2017 is filed by the registered owner challenging the liability as well as quantum.

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For the sake of convenience, the parties are referred to as per their rank before the Tribunal.

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The facts leading to the case are as under:

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The claimant filed claim petition by contending that he met with an accident on 03.02.2014 at about 9.30 a.m. The case of the claimant is that he was riding the motorbike from K.R.Puram to Marathalli side and when he reached in front of Sri Lakshmivenkateshwara Scrap Store, at that juncture, the driver of the Tata Tipper lorry bearing Reg.No.KA03-D-3690 came in a rash and negligent manner and dashed against the claimant's motor bike. On account of the impact, the claimant fell down along with the motorbike. It is also stated that the driver of the lorry was so reckless that after claimant fell down, the lorry virtually dragged the bike along with the claimant to some distance. It is stated that claimant was immediately shifted to Sakra Hospital, Bengaluru,

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where he was administered first-aid and thereafter was shifted to Fortis Hospital, Bengaluru, where he was treated as an inpatient and also underwent surgery. During the course of treatment, claimant's left hand was amputated. The case of the claimant is that he has suffered disability to the extent of 100% to the left arm on account of amputation. The claimant has specifically contended in the claim petition that he has spent amount of Rs.16,00,000/towards medical expenses and out of the said Rs.16,00,000/-, the Insurance Company has paid an amount of Rs.10,00,000/- under Medi Claim scheme and the remaining amount of Rs.6,00,000/- is paid by him. He has also contended that on account of amputation, he has lost the job and also future job opportunities. The claimant has further specifically contended that his engagement was performed on 08.12.2013 and the marriage was fixed on

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09.02.2014. On account of unfortunate accident on 03.02.2014, it is specifically stated that his marriage was also cancelled and on these set of averments, he has specifically contended that he has lost marital prospects also. Hence, filed claim petition claiming compensation of Rs.1,16,65,000/-.

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On receipt of notice, the respondent No.1/Insurance Company was placed exparte. The respondent No.2/Insurance Company has filed written statement and stoutly denied the entire averments made in the claim petition. It is specifically stated in the written statement filed by the Insurance Company that the accident has occurred on sole negligence on the part of the rider of the motorbike i.e., claimant himself and there was absolutely no negligence on the part of the driver of the tipper lorry. The respondent No.2 has also denied the age, occupation and income of the claimant and injuries sustained is also seriously

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disputed. The claim under the head of medical expenses is also seriously disputed by the Insurance Company. The respondent No.2/Insurance Company has further specifically stated in the written statement that owner of the offending vehicle has used the vehicle in violation of terms and conditions stipulated in the policy and as such, the Insurance Company is not liable to indemnify the respondent No.3/owner of the offending lorry. It is also specifically pleaded in the written statement that driver of the tipper lorry was not having valid and effective driving licence. It is also stated that the offending vehicle did not possess valid permit and fitness certificate to ply on the road. On these set of defence, the Insurance Company sought for dismissal of the claim petition.

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The respondent No.3/owner has also filed written statement and has contested the proceedings. The respondent No.3/owner has stoutly denied the entire

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averments made in the claim petition and a specific contention is taken that accident has occurred on account of negligence on the part of the rider of the bike i.e., claimant himself.

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Based on the rival contentions, the Tribunal formulated the following issues:

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"1) Whether the petitioner proves that the accident that occurred on 3-2-2014 at about 9.30 a.m. on Mahadevapura Ring Road, Doddanakundi, Opp. Lakshmi Venkateshwara Scrap store, Bengaluru, was caused due to rash and negligent driving of the Tata Tipper Lorry bearing Reg.No.KA-03D-3690 by its driver and dashed against the petitioner's motorcycle bearing Reg.No.KA03-HA-7245, due to the impact he fell down and sustained grievous injuries?

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2) Whether the petitioner is entitled for compensation? If so, for what amount and from whom?

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3) What order or award?"

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The claimant in support of his contention, has examined himself as PW.1 and has examined two Doctors as PWs.2 and 3 and to corroborate ocular evidence, the claimant has relied on documentary evidence vide Exs.P-1 to P-25. The respondent No.2/Insurance Company to substantiate its defence set up in the written statement has examined the Investigating Officer as RW.1 and an official of RTO, Indiranagar as RW.2. The Administrative Officer of respondent No.2/Insurance Company is examined as RW.3. To substantiate the defence set up in the written statement, the respondent No.2/Insurance Company also produced documentary evidence vide Exs.R-1 to R-7.

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The Tribunal having assessed the oral and documentary evidence has awarded compensation of Rs.90,85,000/-. While examining the question of liability, the Tribunal having perused Ex.R-2, which is

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the copy of permit found that the permit of the offending tipper lorry was valid from 27.03.2008 to 26.03.2013. The Tribunal has also taken note of permit as per Ex.R-3, wherein it is shown that alleged tipper lorry was valid from 17.10.2014 to 16.10.2019. Having perused these two documents, the Tribunal found that in the interregnum i.e., from 27.03.2013 to 16.10.2014, the alleged offending tipper lorry did not possess permit to ply on the road and admittedly the accident has occurred on 03.02.2014 when the lorry did not possess the permit. The charge sheet is also taken note of by the Tribunal as per Ex.P-6, wherein charge sheet is filed against the driver and owner of the tipper lorry for the offences punishable under Sections 279 and 338 of IPC as well as Sections 187, 196, 66 and 56 of Motor Vehicles Act, 1988. The Tribunal having assessed these material evidence on record has come to conclusion that the offending lorry

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did not possess permit to ply on the road. Relying on the judgment rendered by the Hon'ble Apex Court in National Insurance Co. Ltd., vs. Challa Bharathamma & Others reported in 2004 ACJ 2094 , the Tribunal has proceeded to exonerate the Insurance Company and liability is fastened on the respondent No.3/owner on the ground that the lorry did not possess valid permit.

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Learned counsel appearing for the claimant in MFA.No.2789/2017 would vehemently argue and contend before this Court that chapter XI of Motor Vehicles Act, 1988 contemplates compulsory insurance of vehicles against third party risks and same is a social welfare legislation to extend relief to the victims of accidents to pay compensation on account of use of motor vehicles. The grievance of the claimant before this Court is that if Insurance Company is negligent in issuing the policy without

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verifying the documents of the vehicle, insurer cannot escape liability. He would also submit to this Court that claimant who has suffered grievous injuries in a road traffic accident has a statutory right as a third party to recovery amount of compensation so awarded from the insurer. In this background, he would submit to this Court that the defence raised by the respondent No.2/Insurance Company can be set up only against the owner of the vehicle and not against the third party. Even if the Insurance Company succeed in establishing the breach, there cannot be absolute exoneration. The Insurance Company is still liable to pay the compensation and thereafter recover from the registered owner. On these set of grounds, learned counsel appearing for the claimant would contend that the appeal may be allowed and liability to pay compensation may be fastened on the Insurance Company.

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Learned counsel appearing for the

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registered owner in MFA.Crob.No.124/2017 relying on Ex.R-4 would vehemently argue and contend that the vehicle involved in the accident had possessed fitness certificate which was valid till 25.09.2015 and if fitness certificate is valid, for want of permit, the Insurance Company cannot escape the liability. If the policy is in force and the vehicle is having fitness certificate and if these two criteria's are satisfied, the Tribunal ought to have fixed the liability on the respondent No.2/Insurance Company and not on the registered owner i.e., the respondent No.3.

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Learned counsel appearing for the

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registered owner in MFA.Crob.No.124/2017 has relied on judgments of High Court of Kerala in Augustine V.M. vs. Ayyappankutty and Others reported in LAWS(KER)-2015-3-144 and also relied on judgment of the Hon’ble Apex Court in U.P.State

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Road Transport Corporation vs. Rajenderi Devi reported in LAWS(SC)-2020-6-31 .

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In contra, learned counsel appearing for

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the Insurance Company repelling the contentions and grounds urged by the claimant as well as the owner would submit to this Court that the finding recorded by the Tribunal on liability is in accordance with law and the same would not warrant any interference. He would vehemently argue and contend before this Court that plying a vehicle without a permit is an infraction in terms of Section 149(2) of MV Act. The defence is available to the insurer on that aspect and question of policy being operative on the relevant date has no relevance insofar as liability of insurer is concerned. On these set of grounds, he would vehemently argue and request this Court to dismiss the appeal filed by the claimant as well as the cross objection filed by the registered owner.

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Finding regarding liability:

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We have meticulously examined the

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records as per Exs.R-2 and R-3 which is the copy of permits issued for a period from 27.03.2008 to 26.03.2013 and from 17.10.2014 to 16.10.2019. on perusal of these two permit copies, it is clearly evident that the vehicle did not possess permit from 27.03.2013 to 16.10.2014. Admittedly, the accident has occurred on 03.02.2014 at about 9.30 a.m. Hence, it is evident that the vehicle in question did not posses permit as on the date of accident. This would clearly establish that there is a breach on the part of the registered owner. The grounds urged by the owner in regard to liability are untenable. The judgments relied by the owner in MFA.Crob.No.124/2017 has no application to the present case on hand. The judgment rendered by the Hon’ble Apex Court in UPSRTC was in regard to an

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agreement between private bus owner and Uttar Pradesh State Road Transport Corporation. That was a case wherein there was an agreement between the State Road Transport Corporation and the owner of a private bus. The question involved in the said case was as to whether the bus at the relevant point of accident was under the control of UPSRTC was liable to pay the compensation. The Apex Court was of the view that when the bus was entrusted to the Corporation, it became the owner of the vehicle for a specific period and the vehicle being insured at the instance of the original owner, it would be deemed that it was transferred along with the insurance policy in existence to the Corporation and thus the Insurance Company would not escape its liability to pay the compensation. In this background, the Hon’ble Apex Court held that Insurance Company is liable to pay the compensation.

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In the present case on hand, the

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controversy is in regard to breach of policy condition. The Tribunal having meticulously examined the documents has arrived at a conclusion that the breach of policy condition is established. We, on reappreciation of the entire evidence on record, are of the view that the breach is established and we affirm the findings recorded by the Tribunal while dealing with liability. However, this finding arrived at by the Tribunal in dismissing the claim petition against the Insurance Company is contrary to the proposition laid down by the Hon'ble Apex Court in Amrit Paul Singh

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and Another vs. Tata AIG General Insurance Co. Ltd. and Others reported in AIR 2018 SC 2662 . The Hon'ble Apex Court in an identical issue has held that pay and recover principle is applicable where the owner of the offending vehicle ply the vehicle in public place without permit. The Hon'ble Apex Court has

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held that plying the vehicle without permit is a fundamental statutory infraction but, however, the Apex Court was of the view that pay and recover principle is applicable and consequently, the insurer was directed to pay compensation to the claimants reserving liberty to recover the same from the owner of the offending vehicle. The principle laid down by the Hon'ble Apex Court is squarely applicable to the present case on hand. In that view of the matter, the findings recorded by the Tribunal on liability needs modification.

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For the reasons stated supra, we hold that the Insurance Company shall pay the compensation to the claimant and thereafter proceed to recover the same from the respondent No.3, who is the registered

owner.

Re: Quantum:

The Tribunal while assessing the disability has relied on Ex.P-14, which is the disability certificate. The said disability certificate is issued by members of Medical Board of General Hospital, K.R.Puram, wherein it is clearly mentioned that claimant has suffered permanent disability to the extent of 75%. Though claimant has suffered amputation of left hand, the disability has to be assessed in the context of occupation of the claimant. As per Exs.P-18 to P-22, it is forthcoming that claimant was appointed as a Software Engineer and for the month of November 2013 to January 2014, claimant has drawn a salary of Rs.65,629/- p.m. The Tribunal having perused these appointment order and pay slips has assessed the income of the claimant at Rs.7,87,548/per annum and by deducting Professional Tax and also Income Tax, the income of

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the claimant is assessed at Rs.7,16,000/- per annum. However, while assessing the disability, the Tribunal has accepted the disability to the extent of 75% which was only towards the limb and not to the whole body. There is absolutely no evidence forthcoming that appellant has lost job. In that view of the matter, since claimant is a Software engineer, the disability cannot be assessed at 75%. Having regard to the nature of job, we are of the view that the claimant is capable of retaining his job. However, he would face lot of discomfort since he has to work with one hand. In that view of the matter, 1/3^rd of 75% has to be taken as disability to the whole body while assessing future loss of earnings. If the disability is assessed at 25%, the compensation payable under the head future loss of earnings would come to Rs.30,43,000/(7,16,000x25%x17).

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The medical evidence on record clearly indicate that claimant would need future medical expenses. Having regard to the gravity of injuries sustained by the claimant, we are of the view that a sum of Rs.1,00,000/- has to be awarded under the head of future medical expenses. The claimant having lost his left hand, is entitled for a sum of Rs.1,00,000/- under the head loss of amenities instead of Rs.50,000/-. The claimant has produced wedding card as per Ex.P-23 which was scheduled to be performed on 09.02.2014 at Mathan Hotel, Old Airport Road, Bengaluru. It is stated that claimant on account of amputation of left hand, his marriage was cancelled. Having regard to the trauma that claimant has to undergo on account of cancellation of marriage, we deem it fit to award Rs.1,00,000/- towards loss of marriage prospects. The compensation awarded under the other heads remain undisturbed. Thus, the

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total compensation re-determined by this Court under

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different heads are as under:

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Sl. No.	Heads	Amount in Rs.
1	Pain and sufferings	75,000
2	Loss of amenities	1,00,000
3	Future loss of earnings	30,43,000
4	Loss of income during laid up period	1,80,000
5	Towards attendant, nourishment and conveyance charges	30,000
6	Loss of marriage prospects	1,00,000
7	Towards medical expenses	7,88,000
8	Future medical expenses	1,00,000
	Total	44,16,000

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Hence, the following:

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ORDER

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i) MFA.No.2789/2017 filed by the claimant as well as the cross objection filed by the registered owner in MFA.Crob.No.124/2017 are partly allowed.

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ii) The total compensation awarded by the Tribunal is modified and reduced to Rs.44,16,000/- as against Rs.90,85,000/- with interest at the rate of 6% per annum from the date of the claim petition till its realization.

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iii) The liability saddled on the registered owner of the offending vehicle is confirmed. However, the insurer-M/s. National Insurance Company Limited is directed to pay and recover the same from the registered owner of the offending vehicle in terms of the judgment of the Hon'ble Apex Court in the case of Amrit Paul Singh (supra).

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iv) In view of Rs.25,00,000/- deposited by the registered owner of the offending vehicle before this Court and the same being withdrawn by the claimant, the balance compensation amount i.e., Rs.19,16,000/(44,16,000-25,00,000) with interest at the

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rate of 6% p.a. shall be paid by the insurer with liberty to recover the same from the registered owner of the offending vehicle.

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v) Out of the balance amount of Rs.19,16,000/-, 50% of the amount shall be deposited in any Nationalized Bank for a period of 5 years in an interest bearing Fixed Deposit and 50% shall be released to the claimant after due identification and in accordance with law.

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vi) The disbursement shall be made in terms of the order of the Tribunal.

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vii) The Insurance Company shall deposit the amount determined as aforesaid before the Tribunal within 90 days from the date of receipt of the certified copy of the judgment and order.

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