Partly allowed

The New India Assurance Company Limited, v. Smt. Are Gangu Bai

Telangana HC12 Dec 2014MACMA/1966/2007

Case brief

AI extract

What is this about?

Appeal by the insurer against the Motor Accident Claims Tribunal's award. The Court largely upheld the quantum but reduced the interest rate applicable prior to the insurer's impleadment date from 7.5% to 6%.

What did the court decide?

Appeal partly allowed; quantum of compensation confirmed; interest rate reduced from 7.5% to 6% from date of claim petition till insurer's impleadment.

The New India Assurance Company Limited, Vs Smt. Are… — Motor Accident Claims | Telangana HC (2014)

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THE HON’BLE Dr. JUSTICE B. SIVA SANKARA RAO

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M.A.C.M.A. No.1966 OF 2007

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JUDGMENT

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This appeal is filed by the 2^nd respondent – insurer against the order/award dated 03.08.2006 in O.P. No.446 of 1999, which was filed under Section 166 of the Motor Vehicles Act, 1988 (for short, ‘the Act’) for a claim of Rs.6,00,000/- filed by the wife and two major sons for the death of Are Narsaiah, wherein the Chairman, Motor Vehicles Accident Claims Tribunal (II Additional District Judge) (FTC) Nizamabad (for short, ‘the Tribunal’) awarded an amount of Rs.3,85,000/- with interest 7.5% per annum.

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02. Heard learned counsel for the appellant and learned counsel for respondents 1 to 3. Though served notice on respondent No.1, he did not choose to appear. Hence the appeal is taken as heard on behalf of respondent No.1 to decide on merits.

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03. The parties will hereinafter be referred to as arrayed before the Tribunal for the sake of convenience.

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04. Learned counsel for the insurer contended in the grounds of appeal that the insurer was impleaded subsequently long after filing of the claim petition that too only as per order in I.A. No.518 of 2005, dated 16.03.2006, on fixing of interest liability on the insurer along with the owner from the date of claim petition is unsustainable, but for if at all to fix prior to that date only against the owner and the quantum of compensation Rs.3,85,000/- awarded by the Tribunal is highly excessive and exorbitant including in arriving Rs.4,500/- per month as earnings of the deceased for mere asking sake without factual foundation against settled propositions of law as well as to reduce the compensation and also to fix the liability to pay interest only from 16.03.2006. Learned counsel reiterated the same in the course of hearing.

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05. Whereas it is the contention of the learned counsel for the claimants that award of the Tribunal holds good. There is nothing to

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interfere, but for no cross-objections to enhance and the insurer is liable to indemnify and once the insurer liability by virtue of the policy issued to indemnify the owner (insured), it makes no difference the insurer is subsequently added as a party though originally not impleaded, to reduce the rate of interest as claimed in the appeal for the period prior to 16.03.2006. Hence to dismiss the appeal in toto.

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06. Perused the material on record.

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07. Now the points that arise for consideration are,

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i. Whether the award of the Tribunal fixing joint liability for interest from the date of claim petition against the insurer even the insurer impleaded by order in I.A.No.518 of 2005, dated 16.03.2006, is unsustainable and requires interference by this Court including on the quantum from the contention as excessive and if with what observation?

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ii. To what result?

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Point No.i:

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08. There is no dispute on the manner of accident and liability of the insurer to indemnify the owner. No doubt the claim is filed under Section 166 of the Act by the wife and two major sons of the deceased and claiming compensation is Rs.6,00,000/- and the Tribunal awarded Rs.3,85,000/- by taking the earnings of the deceased @ Rs.4,500/- per month and to fix the said earnings even what P.W.1 deposed is disputed by the insurer in the cross-examination. There is no material filed much less to the claim of owning agricultural land to say the death of the deceased resulted so called supervisory loss of agriculture, that too when the accident was dated 15.04.1997, R-1 – owner of the crime vehicle/ lorry bearing No.AP 25 T 4949 dashed the deceased cyclist and the claim is that the deceased was owning agricultural lands and also doing business and there is no even a scrap of paper filed in support of the same and there is no proof even for what P.W.1 deposed when disputed by the respondent – insurer in the crossexamination. Thus, as laid down by the Apex Court in Lata Wadhwa

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[1] and others v. State of Bihar and others in the absence of proof of earnings, minimum income Rs.3,000/- can be taken. The accident was even nearly 3 years prior to the said expression as it was on 15.04.1997, then it can be taken @ Rs.2,700/- per month. Among the claimants, first claimant – wife is only dependant and the other claimants are two major sons not totally dependants.

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09. Learned counsel for the appellant placed reliance upon Sarla

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[2] Verma and Others v. Delhi Transport Corporation and Anothe r paragraphs 29 and 30 that when the dependants are one or two like in the case of parents half of the earnings to be taken towards personal expenses deduction. In fact a reading of the expression says that in the case of the claimants are parents, 50% earnings to be deducted and in case of wife and other dependants are up to three in number, 1/3^rd of the income is to be deducted, that such is the case it is not restricted to all dependants but for parents are dependants, 1/3^rd of the income is to be deducted. Even from the expression, if 1/3^rd of the income is deducted out of Rs.2,700/-, the loss from the death of the deceased comes to Rs.1,800/- per month, the multiplier for the age group 41 to 45 years is 14, from the calculation, the loss of earnings comes to 3,02,400/- (1800x12x14). Apart from this, as per the

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expression of the Apex Court in Rajesh v. Rajbir Singh^[3] the petitioners would be entitled for Rs.1,00,000/- towards loss of consortium, Rs.25,000/- towards funeral expenses, Rs.10,000/towards loss of estate, in all the petitioners would be entitled for Rs.4,37,400/-, but for there is no cross-objections, to say what the Tribunal awarded Rs.3,85,000/- no way excessive and there is nothing to interfere with the order of the Tribunal.

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10. Coming to the liability for payment of interest is concerned, no doubt, as pointed out by the learned counsel for the appellant – insurer, the insurer was impleaded as per orders in I.A. No.518 of 2007

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dated 16.03.2006, and as can be seen from the attention drawn by the counsel for the insurer to the wording of Section 171 of the Act, grant of interest is not mandatory but discretionary and it is his contention therefrom that once the insurer is impleaded only with effect from 16.03.2006 there is no justness to exercise the discretion to fasten the liability for payment of interest from the date of claim petition filed in the year, 1999. Importantly, the Court has to bear in mind, no doubt, in exercise of the discretion in awarding rate of interest that the insurer is indemnifying the insured and not the same is an independent claim against the insurer. When such is the case it makes no difference as to the date of impleadment of the insurer, once there is a duty to indemnify the owner, but for from the wording of Section 171 of the Act to exercise the discretion to award rate of interest up to 16.03.2006 @ 6% per annum and thereafter @ 7.5% per annum.

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11. Accordingly, point No.i is answered.

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Point No.ii

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12. In the result, the appeal is partly allowed by confirming the quantum of compensation and joint liability, however, by reducing the rate of interest from the date of claim petition till 16.03.2006 from 7.5% to 6% and thereafter @ 7.5% per annum and in other respects the award of the Tribunal holds good. No costs.

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13. Miscellaneous petitions, if any, pending in this appeal shall stand closed.

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Dr. B. SIVA SANKARA RAO, J

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Date:12-12-2014 bv

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[1] AIR 2001 SC 3280 [2] 2009 ACJ 289 [3] 2013 ACJ 1403

The New India Assurance Company Limited, v. Smt. Are Gangu Bai

Case brief

What is this about?

What did the court decide?

The New India Assurance Company Limited, v. Smt. Are Gangu Bai

Case brief

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What did the court decide?

What the court decided

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