Allowed

(O&M) United India Insurance Co. Ltd. v. Jaspal Kaur and Ors.

Punjab & Haryana HC11 Aug 2010FAO/2646/2009

Case brief

AI extract

What is this about?

The Hon'ble High Court allowed the appellant's appeal held the insurance company is totally exonerated from liability for the death of a gratuitous passenger in a goods vehicle as the policy cover does not extend to such persons. The cross appeal for enhancement of compensation was also allowed, directing payment only against the vehicle owner.

What did the court decide?

Insurance company exonerated; compensation enhanced to Rs.3,93,500/-. Claimant to recover amount from vehicle owner only.

(O&M) United India Insurance Co. Ltd. Vs Jaspal Kaur and… — Insurance | Punjab & Haryana HC (2010)

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FAO No.2646 of 2009

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IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH

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X Obj No.55-CII of 2009 in/and FAO No.2646 of 2009 Date of Decision. 11.08.2010

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United India Insurance Company Limited, Sangrur through Sh. Baljit Singh Manager, Regional Office, SCO No.123-124, Sector 17-B, Chandigarh duly constituted attorney

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......Appellant

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Versus

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Jaspal Kaur aged about 40 years wife of late Jagdev Singh and others

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......Respondents

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Present: Mr. R.K. Bashamboo, Advocate for the appellant.

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Mr. Munish Kumar Singla, Advocate for the respondents.

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CORAM:HON'BLE MR. JUSTICE K. KANNAN

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Whether Reporters of local papers may be allowed to see the judgment ?

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To be referred to the Reporters or not ?

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Whether the judgment should be reported in the Digest?

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-.-

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K. KANNAN J.(ORAL)

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The only point for consideration in appeal is that the claim arose out of death of a passenger who was a gratuitous passenger in a truck. The Tribunal found the defence of the insurance company to be true but still directed the insurance company to make the payment and secure the refund from the owner. The learned counsel appearing for the insurance company states that the question of payment and recovery as contemplated by Sections 149 (4) and (5) of the Motor Vehicles Act would arise only in cases where there was a valid insurance that could make the insurer liable for a claimant, but for the act of violation of the terms of policy as

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FAO No.2646 of 2009 -2-

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contemplated under Section 149(2) of the Motor Vehicles Act. In a case where the policy cover itself did not extend to a gratuitous passenger, there is no question of making the insurer liable. A gratuitous passenger in a goods vehicle is not merely a case of breach of terms of the policy but the policy cover itself does not extend to such a person. The law has been laid down in New India Assurance Company Limited Vs. Asha Rani 2003 ACJ 1 In the light of the decision of the Hon'ble Supreme Court referred to above, the claim against the insurance company ought to have been dismissed and the award could have been passed only against the owner of the vehicle, having regard to the fact that the driver of the insured was found to have been negligent in causing the accident.

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The award of the Tribunal is under the circumstances modified and the insurer is totally exonerated. The claimant shall have a right of recourse only against the owner of the vehicle in which the deceased was travelling. It is stated that the claimants have already recovered a portion of the amount from the inurer. The insurance company shall not under such circumstance recover the amount from the claimant but it shall be recovered only from the onwer/insured.

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The cross appeal is for enhancement of compensation. The claim had been made under Section 163-A and therefore, the determination of compensation was, therefore, required to be done in the manner provided under Schedule II. The deceased was aged 40 years and it was claimed that he was earning Rs.3300/- per month. The Tribunal took the income to be Rs.3,000/- and after

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FAO No.2646 of 2009

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deduction of 1/3^rd for his personal expenses, took the contribution to the family as Rs.2,000/- per month and the annual dependency at Rs.24,000/-. For a person of 40 years of age, the appropriate multiplier under Section 163-A shall be 16 but the Tribunal adopted a multiplier of 12. The compensation should, therefore, be 3,84,000/-. Schedule II also provides for loss of consortium to the wife at Rs.5,000/- and Rs.2,000/- for funeral expenses and loss to estate at Rs.2500/-. In all, the total compensation that shall become payable would be Rs.3,93,500/-, which will be enforced against the owner only and not against the appellant. The amount in excess over the amount, which is already awarded by the Tribunal, shall also bear interest @7.5% from the date of award of the Tribunal till the date of payment.

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The appeal by the insurance company and the cross appeal by the claimant are allowed to the above extent.

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(K. KANNAN) JUDGE

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August 11, 2010 Pankaj*

(O&M) United India Insurance Co. Ltd. v. Jaspal Kaur and Ors.

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(O&M) United India Insurance Co. Ltd. v. Jaspal Kaur and Ors.

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