High Court allowed motor accident appeals partly, enhancing compensation quantum by recalculating income as gross salary with future prospectus, while modifying interest rate from 9% to 6% per annum and affirming insurer's liability to pay despite policy breach.
Compensation enhanced to Rs.67,81,430/- with interest at 6% per annum; insurance company to comply.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 07TH DAY OF DECEMBER, 2020
PRESENT
THE HON'BLE MRS. JUSTICE S.SUJATHA
AND
THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
MFA.NO.7248 OF 2018(MV-D) C/W MFA.NO.69 OF 2019(MV-D)
IN MFA.NO.7248 OF 2018
BETWEEN:
REGIONAL MANAGER NATIONAL INSURANCE CO. LTD. REGIONAL OFFICE, SUBHARAM COMPLEX NO.144, M.G. ROAD, II FLOOR BENGALURU-560 001
....APPELLANT
(BY SRI. A.N. KRISHNA SWAMY, ADVOCATE)
AND:
1 . SMT. SHRUTI W/O. LATE SHIVANAND NOW AGED ABOUT 32 YEARS
2
2 . MASTER YADUVIR S/O. LATE SHIVANAND NOW AGED ABOUT 7 YEARS SINCE MINOR REPRESENTED BY HIS MOTHER AND NATURAL GUARDIAN THE 1ST RESPONDENT HEREIN
BOTH R/A #25, KRUTI ARCADE APARTMENT 13TH MAIN, SRINAGARA BENGALURU-560 050
ALSO AT: NO.1946/41-D.N. VIDYANAGAR DAVANAGERE-577 501
3 . P. RAJASHEKAR S/O. PERIANNAN, MAJOR NO.27C, GANESSAPURAM NAMAKKAL-637 001
….RESPONDENTS
(BY SRI. ADINARAYAN, ADVOCATE FOR R1 R2 IS MINOR REP. BY R1)
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED: 02.06.2018 PASSED IN MVC NO.2148/2016 ON THE FILE OF THE XXII ADDITIONAL SMALL CAUSES JUDGE & MEMBER MACT, BENGALURU, AWARDING COMPENSATION OF RS.47,97,500/- WITH INTEREST @ 8% P.A. FROM THE DATE OF PETITION TILL DEPOSIT.
3
IN MFA.NO.69 OF 2019
BETWEEN:
1 . SMT SHRUTHI W/O LATE SHIVANAND AGED ABOUT 32 YEARS REPRESENTED HIS MOTHER
2 . MASTER YADUVIR S/O LATE SHIVANAND AGED ABOUT 7 YEARS BOTH ARE R/AT NO.25 KRUTI ARCADE APARTMENT 13TH MAIN, SRINAGARA BANGALORE-560 050
AND ALSO AT NO.1946/41 D.N., VIDYANAGAR DAVANAGERE-577 501
....APPELLANTS
(BY SRI. ADINARAYAN, ADVOCATE)
AND:
1 . P RAJASHEKAR S/O PERIANNAN NO.27C, GANESSAPURAM NAMKKAL-637 001 TAMIL NADU (RC OWNER OF THE LORRY BEARING REG. NO.TN-28-AE-6523)
2 . THE NEW INDIA INSURANCE CO. LTD. REGIONAL OFFICE AT NO.144 2ND FLOOR, SUBHARAM COMPLEX
4
M.G. ROAD BENGALURU-560 001 (POLICY NO.651300/31/15/6300008078 VALID FROM 28/07/2015 TO 27/07/2016)
….RESPONDENTS
(BY SRI. A.N. KRISHNA SWAMY, ADVOCATE FOR R2, V/O DATED 07.12.2020 NOTICE TO R1 IS D/W)
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED: 02.06.2018 PASSED IN MVC NO.2148/2016 ON THE FILE OF THE XXII ADDITIONAL SMALL CAUSES JUDGE & MEMBER MACT, BENGALURU, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.
THESE APPEALS COMING ON FOR ORDERS THIS DAY, SACHIN SHANKAR MAGADUM J., DELIVERED THE FOLLOWING:
JUDGMENT
The Insurance Company as well as claimants have filed independent appeals. The appeal in MFA No.7248/2019 is filed by the Insurance Company challenging the judgment and award dated 02.06.2018 passed in MVC No.2148/2016 by the XXII Additional Small
5
Causes Judge & Member, MACT, Bengaluru questioning the "pay and recovery" ordered by the Tribunal, whereas the claimants have preferred an appeal in MFA No.69/2019 challenging the quantum determined by the Tribunal.
The claimants filed a claim petition in MVC No.2148/2016 and specifically contended that on 27.08.2015, the husband of claimant No.1 namely Shivananda was proceeding in his car bearing Reg.No.KA17-N-1177 from Vijayapura towards Hubli. It is the specific case of the claimants that when the husband of claimant No.1 reached near Kolhar Bridge, Bilagi, Bagalkot, at that juncture, the driver of the offending lorry bearing Reg.No.TN-28-AE-6523 came from opposite direction in a rash and negligent manner on the extreme right side and dashed against the car in which the husband of claimant No.1 was proceeding. On account of impact,
6
the husband of claimant No.1 namely Shivananda sustained fatal injuries and succumbed on the spot. The claimants have contended that the deceased was hale and healthy and was working as a Circle Inspector in Kumata Police Station. It is also stated in the claim petition that he was a sole bread earner of the family. The claimants filed the claim petition claiming compensation of Rs.1,50,00,000/- by contending that they are totally dependant on the deceased.
7
formulated the following issues:
2. Whether the petitioners prove that the deceased Sri.Shivanand had died due to the injuries sustained in the Road Traffic Accident that occurred on 27.08.2015 in between 2.00 to 3.00 a.m, HubliVijaypur NH-218, Near Kolhar Bridge, Bilagi, Bagalkot, due to the rash and negligent driving of the Lorry bearing Reg.No.TN-28-AE-6523 by its driver as alleged?
3. Whether the petitioners are entitled for the compensation as claimed? If so, to what amount and form whom?
4. What order or Award?"
8
documentary evidence on record has answered Issue No.2 in the affirmative by holding that the death of Shivananda occurred on account of rash and negligent driving by the driver of the offending lorry. While determining compensation, the Tribunal assessed the income of the deceased at Rs.26,867/- per month, which comes to Rs.3,22,404/- per annum and by deducting 10% towards tax and by adding 50% towards future prospectus and by applying multiplier of 5 and by deducting 1/3rd towards his personal expenses has awarded a sum of Rs.47,27,460/under the head "loss of dependency". Under conventional heads, the Tribunal has awarded a sum of Rs.70,000/-. The Tribunal in all awarded a sum of Rs.47,97,460/-, which is rounded off to Rs.47,97,500/-. Thus, the claimants are awarded total compensation of Rs.47,97,500/- with interest at the rate of 8% per annum from the date of petition till the date of payment and directed the first respondent-owner of the lorry to pay the compensation. Being aggrieved by the same, the present
9
appeals are filed by the claimants as well as the second respondent-Insurance Company.
10
determined by the Tribunal under the head "loss of dependency" is inadequate and the same deserves to be enhanced.
11. Regarding Liability :-
The Insurance Company-second respondent has resisted the liability on the ground that the driver of the offending lorry did not possess a valid and effective driving licence as on the date of the accident. This material aspect has not been taken into consideration by the Tribunal and the finding is recorded that as on the date of the accident, the driver of the lorry did not possess a valid and effective driving licence to drive the lorry. Further, this issue is no more res-integra . The Full Bench decision of
this Court in New India Assurance Company Limited,
11
Bijapur, .vs. Yallavva w/o. Yamanappa Dharanakeri
and another 2020(2) AKR 484 referring to the catena of decisions rendered by the Hon'ble Apex Court has held that breach of policy conditions would not exonerate the Insurance Company to pay the compensation. The Full Bench of this Court in the above cited judgment has held that even if breach of policy condition is established, the Insurance Company is still liable to satisfy the award by paying the compensation to the third party and thereafter, recover it from the owner of the vehicle involved in the accident. In the light of the dictum laid down by the Full Bench of this Court, contentions urged by the Insurance Company in MFA No.7248/2018 cannot be entertained. Accordingly, the contentions are negatived.
12. Regarding Quantum :-
On perusal of records, it is forthcoming that the Tribunal has erred in taking the net income of the deceased while assessing the compensation under the head "loss of dependency". We are of the view that the
12
approach adopted by the Tribunal is erroneous. On perusal of Ex.P.11, it is clearly evident that the gross salary of the deceased is Rs.39,089/- per month. Hence, the annual income of the deceased has to be assessed at Rs.4,69,068/-. For the assessment year 2015-16, the income up to Rs.2,50,000/- is exempted from income tax. On the amount in excess of Rs.2,50,000/i.e., Rs.4,69,068-2,50,000 = 2,19,068/-, 10% slab is applicable and accordingly, a sum of Rs.24,306/- towards income tax and Rs.2,400/- towards professional tax are liable to be deducted. After deducting of the above said amount, the income of the deceased is re-assessed at Rs.4,44,762/- annually. It is borne out from the records that the deceased was aged 39 years as on the date of the accident. It is also borne out from the records that the deceased had a permanent job. Hence, by following the guidelines laid down in Pranay Sethi's case [2017 ACJ 2700] , we deem it fit to add 50% towards future prospectus. By adding 50% of the income towards future prospectus, the total annual income of the deceased is re-
13
assessed at Rs.6,67,143/-. After deducting 1/3rd towards personal expenses of the deceased and by applying multiplier of 15, the total compensation under the head "loss of dependency" works out to Rs.66,71,430/(Rs.6,67,143x15x2/3). Under conventional heads, the claimants are entitled for a sum of Rs.1,10,000/- i.e., Rs.40,000/- to appellant No.1 towards spousal consortium, Rs.40,000/- to appellant No.2 towards parental consortium and Rs.30,000/- towards loss estate and funeral expenses. Hence, the total compensation re-determined by this Court comes to Rs.67,81,430/- to which the claimants are held entitled with interest at the rate of 6% per annum.
14
interest awarded at the rate of 9% stands modified and the Insurance Company is directed to pay compensation at the rate of 6% per annum from the date of claim petition till its realization.
14. Hence, we pass the following:
ORDER
i) Both the appeals are allowed in part.
ii) The total compensation awarded by the Tribunal is modified and enhanced to Rs.67,81,430/- (Rupees Sixty Seven Lakhs Eighty One Thousand Four Hundred and Thirty only) as against Rs.47,97,500/- with interest at the rate of 6% per annum from the date of the claim petition till its realization.
iii] The portion of the order of the Tribunal inasmuch as liability, apportionment and disbursement remains intact. iv] The Insurance Company shall deposit the amount determined as aforesaid before the
15
Tribunal within 90 days from the date of receipt of the certified copy off the judgment and order.
v] The modified compensation amount shall be apportioned and disbursed in terms of the order of the Tribunal.
vi] Draw modified award accordingly. vii] The Registry shall transfer the amount in deposit with original records to the jurisdictional Tribunal forthwith.
viii) All pending I.As. stand disposed of.
Sd/JUDGE
Sd/JUDGE
NBM
3 issues framed by the court
Whether breach of policy conditions regarding the driver's license exonerates the Insurance Company from liability?
Whether the Tribunal erred in assessing compensation based on net income instead of gross income considering tax deductions?
Whether the interest rate awarded by the Tribunal is appropriate?
Colour shows how this judgement treated each authority
New India Assurance Company Limited, Bijapur. vs. Yallavva w/o. Yamanappa Dharanakeri and anotherExplained¶10
New India Assurance Company Limited, Bijapur. vs. Yallavva w/o. Yamanappa Dharanakeri and another 2020(2) AKR 484
Pranay SethiExplained¶12
Pranay Sethi's case [2017 ACJ 2700]
3 provisions across 3 enactments
Regional Manager National Insurance Co. Ltd.
Smt. Shruti W/o. Late Shivanand
Master Yaduvir S/o. Late Shivanand
P. Rajashekar S/o. Periannan
The New India Insurance Co. Ltd.
Sujatha
Sachin Shankar Magadum
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
