Punjab-Haryana High Court
Vijay Kumar Bhardwaj And Others vs Shunila And Others on 15 October, 2024
Author: Sudeepti Sharma
Bench: Sudeepti Sharma
Neutral Citation No:=2024:PHHC:137737
FAO-4568-2006 and
X-objections 8 C-II of 2007
1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
FAO-4568-2006 (O&M) and
X-objections No.8 C-II of 2007
Reserved on : September 02, 2024
Date of Decision: October 15, 2024
Vijay Kumar Bhardwaj and another ......Appellants
Vs.
Shunila and others .....Respondents
CORAM: HON'BLE MRS. JUSTICE SUDEEPTI SHARMA
Present: Mr. Uday Agnihotri, Advocate
for the appellants.
Mr. Deepak Sabherwal, Advocate
for claimants/Cross objectors
Mr. Brij Bhushan Sharma, Advocate for
Mr. Deepak Suri, Advocate
for respondent -Insurance Company.
----
SUDEEPTI SHARMA J. (ORAL)
Vide this common judgment, this Court shall dispose of the appeal
filed by the owner-driver of the offending vehicle as well as cross objections filed
by the claimants.
2. The instant appeal has been preferred by the owner of the offending
vehicle-respondent No.2 for setting aside the award dated 19.01.2006 passed by the
learned Motor Accident Claims Tribunal, Jalandhar (for short, ‘the Tribunal’),
whereby the claimants were awarded compensation of Rs.6,60,000/- alongwith
interest @ 9% per annum vide which the claim petition filed by the claimants-cross
objectors under Section 166 of the Motor Vehicles Act, 1988 on account of death
of J.R.Philip in road accident was allowed, whereas, the cross objections have been
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preferred by the claimants-cross objectors for enhancement of award amount
granted to them by the learned Tribunal.
FACTS NOT IN DISPUTE
3. The brief facts of the case as mentioned in the claim petition are that
on 9.09.2003, J.R. Philip was going towards Focal Point (Extension), Jalandhar
from his residence. One Parveen Kumar met him on the way. Both were going
towards Focal Point on their respective scooters. At about 11:30 a.m. when they
reached near Pathankot Chowk, in the meantime a truck bearing registration
No.PB-13-D-6507 came from back side and struck at the back side of the scooter
driven by J.R. Philip whereupon J.R. Philip fell down alongwith scooter on the
road and his head was run over by the truck. He died on the spot. The accident took
place due to rash and negligent driving of the offending truck by respondent No.1.
The matter was reported to the police whereupon F.I.R. was registered against
respondent No.1.
4. Upon notice of the claim petition, respondents appeared and denied
the factum of accident/compensation.
5. From the pleading of the parties, the Tribunal framed the following
issues:-
1. Whether Shri J.R. Philip died due to rash and negligent
driving of truck No. PB-13-D-6507 by respondent No.1 on
9.09.2003? OPP
2. To what amount the claimants are entitled by way of
compensation and from whom? OPP
3. Whether driver of offending vehicle was not holding a
valid driving licence at the time of accident? OPR
4. Whether the application is bad for non joinder of
necessary parties? OPR
5. Relief.
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6. After taking into consideration the pleadings and the evidence on
record, the learned Tribunal awarded compensation of Rs.6,60,000/-, alongwith
interest @ 9% per annum. Vijay Kumar and Vinay Kumar-owners (respondent
No.2), and the National Insurance company Ltd. (respondent No.3) were jointly
and severally held liable to pay the said amount. Hence, the owner-respondent
No.2 filed the present appeal.
7. However, the cross objections have also been filed by the claimants-
cross objectors for enhancement of the award amount.
SUBMISSIONS OF THE COUNSELS FOR THE PARTIES
8. The learned counsel for the appellants contends that the appellants
had employed Baljinder Singh-respondent No.1 on his truck bearing registration
No.PB-13D/6507 as driver after having verified his driving licence and his
experience in driving. Since, he verified the licence of respondent No.1-Baljinder
Singh therefore, the Tribunal has wrongly held that Insurance company to pay the
compensation in the first instance and recover the same from respondent No.2 for
committing the breach of terms and conditions of the Insurance Policy.
i) Further, learned counsel for the appellants has placed reliance on the
judgment passed by Hon’ble the Apex Court in United India Insurance company
Limited Vs. Lehru, wherein it has been held as under:-
“The insurance company cannot avoid its liability towards third
party on ground that the licence of the driver of the vehicle was a fake
licence. In order to avoid liability under Section 149(2)(1)(ii) it must
be shown that there is a ‘breach’ on part of the insured. To hold
otherwise would lead to absurd results.” It has also been that :-
“When an owner is hiring a driver he will therefore have
to check whether the driver has a driving licence. If the
driver produces a driving licence which on the face of it3 of 28
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4looks genuine, the owner is not expected to find out
whether the licence has in fact been issued by a
competent authority or not. The owner would then take
the test of the driver. If he finds that the driver is
competent to driver the vehicle, he will hire the driver. It
is rather strange that Insurance Companies expect
owners to make enquiries with RTO’s which are spread
all over the country, whether the driving licence shown to
them is valid or not. Thus where the owner has satisfied
himself that the driver has a licence and is driving
competently there would be no breach of Section 149(2)
(a)(ii).”
ii) He further has placed reliance upon the judgment passed by Hon’ble
the Apex Court in National Insurance Company Limited Vs. Swaran Singh and
others,2004(3) SCC 297, wherein it has been held as under:-
“(iii) The breach of policy condition e.g. Disqualification of the
driver or invalid driving licence of the driver, as contained in sub-
section (2)(a)(ii) of Section 149, has to be proved to have been
committed by the insured for avoiding liability by the insurer. Mere
absence, fake or invalid driving licence or disqualification of the
driver for driving at the relevant time, are not in themselves defences
available to the insurer against either the insured or the third parties.
To avoid its liability towards the insured, the insurer has to prove that
the insured was guilty of negligence and failed to exercise reasonable
care in the matter of fulfilling the condition of the policy regarding use
of vehicles by a duly licensed driver or one who was not disqualified
to drive at the relevant time.”
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9. The learned counsel for the cross objectors contends that the learned
Tribunal has wrongly assessed the income of the deceased as Rs.8000/- per month,
however, as per the salary certificate, the salary of the deceased was Rs.10,000/-
per month .
i) He further contends that the deceased was less than 55 years of age
and multiplier of 11 instead of 10 should have been applied and that no amount
was granted for funeral expenses, loss of consortium, loss of estate and future
prospects. Therefore, he prays that the cross objections be allowed and
compensation should be enhanced as per latest law.
10. Per contra, learned counsel for the respondent-Insurance Company,
however, vehemently argues that the award has rightly been passed and the amount
of compensation as assessed by the learned Tribunal has rightly been granted.
11. I have heard learned counsel for the parties and perused the whole
record of this case.
12. The relevant paragraphs of the award dated 19.01.2006 is as under:-
“22. Respondent insurance company examined Clerk a from DTO
Office, Hoshiarpur in order to prove that Baljinder Singh was not
holding an effective and valid driving licence on the date of this
accident. As per the record brought by this witness the Driving
Licence of Baljinder Singh bearing No.6759/REN was renewed
11.9.2003. This witness has also proved on the on record that the old
licence No.3845/R/99/00 stood in the name of Kundan lal son of
Milkhi Ram.
23. The learned counsel for respondent No.2 Shri S.K.Verma Advocate
has submitted that Darshan Lal a witness from the DTO office
Hoshiarpur, could not produce that licence bearing No.3845/R/99/00,
therefore, the benefit of the same should be given to respondent No.1
and 2. He has next submitted that this witness has admitted in cross-
examination that he cannot say if the licence was originally issued by
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6the Transport Authority of District Hoshiarpur or some authority. The
learned counsel has contended strenuously that keeping in view cross-
examination of this witness coupled with the factum that he could not
produce the licence No.3845/R/99/00 despite his cross-examination
having been deferred on the date for the said purpose, it cannot be
held that Baljinder Singh was not holding a valid driving on 9.9.2003.
The next submission made by the learned counsel that it is quite
possible that Baljinder Singh might have obtained the earlier licence
from some other authority than DTO Hoshiarpur and that is why
licence bearing No.3845/R/99/00 does not stand in the name of
Baljinder Singh as per the record produced by the witness. The last
submission made by the learned counsel is that since Baljinder Singh
was given employment by respondent No.2 after seeing his licence and
his experience in driving, respondent No.2 cannot be held guilty of
committing breach of the terms and conditions of the insurance policy
in order to allow the insurance company to wriggle out of its liability
or to recover the amount of compensation from respondent No.2 after
payment thereof to the applicants.
24. On the other hand, the learned counsel for respondent No.3 has
submitted that keeping in view the statement of Darshan Lal, RW2,
Baljinder Singh was not holding a valid driving licence on the date of
accident and, therefore, the insurance company may be liable to pay
compensation to the applicants but the Insurance company can
recover the said amount from the insured in view of the judgment of
the Supreme Court of India in New India Assurance Co. Ltd. Versus
Kamla and others. 2001 ACJ 843.
25. Balinder Singh has not stepped into the witness box in order to
depose with regard validity of his driving licence. There is no
evidence on the record as to from where Baljinder Singh got any
driving licence prior to the renewed licence issued by DTO
Hoshiarpur оп 11.9.2003. Even respondent Vijay Kumar Bhardwaj has
not appeared in the dock in order to say as to what facts were verified
by him before giving employment to respondent Baljinder Singh tto
drive the truck owned by him. Therefore. no such contention of the
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7counsel for respondents no.1 and 2 can be accepted that either
Baljinder Singh was holding a valid driving licence or respondent
No.2 cannot be fastened with the liability because he employed
Baljinder Singh after due verification. The respondent insurance
company has been successful in proving on the record that Baljinder
Singh was not holding a valid driving licence on the date of accident
i.e. on 9.9.2003. Though the insurance company is liable to pay the
amount of compensation to the third party but at the same time, the
insurance company can recover the same from respondent No2. ‘For
committing the each of the terms and conditions of the insurance
policy. With these observations, issue No.3 is decided in favour of
respondent No.3 and against respondent No.2. ”
13. A perusal of the award shows that respondent- Vijay Kumar Bhardwaj
(appellant herein, who is owner of the offending vehicle) has failed to appear
before the Ld. Tribunal to testify regrading the purported verification of facts prior
to employing respondent-Baljinder Singh (driver of the offending vehicle) as a
driver of the offending vehicle. Consequently, the arguments put-forth by
respondent/appellant-Vijay Kumar Bhardwaj that Baljinder Singh-driver was
employed after due verification, cannot be accepted. Further, it is a settled
proposition of law as held by the Hon’ble the Supreme Court in Parminder Singh
Vs. New India Assurance Co. Ltd. & Ors., 2019 ACJ 2401, wherein it was held
that if the driver of the offending vehicle does not possess a valid driving license,
the principle of `pay and recover’ can be ordered to direct the insurance company to
the pay the victim, and then recover the amount from the owner of the offending
vehicle, the relevant paragraph of the same is reproduced as under:-
“7. On the issue of liability to pay the compensation awarded, we
affirm the view taken by the High Court that the Respondent –
Insurance Company is absolved of the liability to bear the
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8compensation, as evidence has been produced from the office of the
Regional Transport Office to prove that the drivers of the two
offending trucks were driving on the basis of invalid driving licenses.
It is also relevant to note that the owners and drivers of the offending
trucks have not appeared at any stage of the proceedings, including
this Court.
7.1. This Court in Shamanna & Ors. v. The Divisional Manager, The
Oriental Insurance Co. Ltd. & Ors., (2018) 9 SCC 650 held that if the
driver of the offending vehicle does not possess a valid driving license,
the principle of `pay and recover’ can be ordered to direct the
insurance company to the pay the victim, and then recover the amount
from the owner of the offending vehicle.”
14. Further, the Hon’ble Apex Court in Oriental Insurance Company Ltd.
Vs. Prithvi Raj, 2008 ACJ 733 wherein it has been held that fake driving licence
renewed by Licensing Authority will remain fake. Renewal cannot take away
effect of fake licence and transform a fake licence as genuine. The relevant
paragraph of the same is as under:-
“8. This Court had occasion to deal with a similar issue in National
Insurance Co. Ltd. v. Laxmi Narain Dhut, 2007(2) RCR (Civil) 345 :
2007(1) RAJ 956 (SC) : (2007(3) SCR 579). It was inter alia held as
follows :
“8. Section 149 of the Act relates to duty of insurers to satisfy
judgments and awards against persons insured in respect of
third party risks. The language of the provision is clear that it
only relates to third party risk. The corresponding provision in
the Old Act is Section 96. Section 166 of the Act relates to8 of 28
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9application for compensation. The same corresponds to Section
110-A of the Old Act. Section 168 of the Act relates to award of
the Claims Tribunal which corresponds to Section 110-B of the
Old Act. Section 170 deals with impleadment of the insurer in
certain cases. Section 149 of the Act needs to be noted in full.
The same reads as follows :
“149. Duty of Insurers to satisfy judgments and awards against
persons insured in respect of third party risks. – (1) If, after a
certificate of insurance has been issued under sub-section (3) of
Section 147, in favour of the person by whom a policy has been
effected, judgment or award in respect of any such liability as is
required to be covered by a policy under clause (b) of Sub-
section (1) of Section 147 (being a liability covered by the terms
of the policy) or under the provisions of Section 163-A) is
obtained against any person insured by the policy then,
notwithstanding that the insurer may be entitled to avoid or
cancel or may have avoid or cancelled the policy, the insurer
shall, subject to the provisions of this section, pay to the person
entitled to the benefit of the decree any sum not exceeding the
sum assured payable thereunder, as if were the judgment debtor,
in respect of the liability, together with any amount payable in
respect of costs and any sum payable in respect of interest on
that sum by virtue of any enactment relating to interest on
judgments. (2) No sum shall be payable by an insurer under
sub-section (1) in respect of any judgment or award unless,
before the commencement of the proceedings in which the
judgment or award is given the insurer had notice through the
Court or, as the case may be, the Claims Tribunal of the
bringing of the proceedings, or in respect of such judgment or
award so long as execution is stayed thereon pending an
appeal; and an insurer to whom notice of the bringing of any
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10thereto and to defend the action on any of the following
grounds, namely :-
(a) that there has been a breach of a specified condition of the
policy, being one of the following conditions, namely :-
(i) a condition excluding the use of the vehicle –
(a) for hire or reward, where the vehicle is on the date of the
contract of insurance a vehicle not covered by a permit to ply
for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the
vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor
cycle; or
(ii) a condition excluding driving by a named person or persons
or by any person who is not duly licensed, or by any person who
has been disqualified for holding or obtaining a driving licence
during the period of dis-qualification; or
(iii) a condition excluding liability for injury caused or
contributed to by conditions of war, civil war, riot or civil
commotion; or
(b) that the policy is void on the ground that it was obtained by
the non-disclosure of a material fact or by a representation of
fact which was false in some material particular.
(3) Where any such judgment as is referred to in sub-section (1)
is obtained from a Court in a reciprocating country and in the
case of a foreign judgment is, by virtue of the provisions of
Section 13 of the Civil Procedure Code, 1908 (5 of 1908)
conclusive as to any matter adjudicated upon by it, the insurer
(being an insurer registered under the Insurance Act, 1938 (4 of
1938) and whether or not he is registered under the
corresponding law of the reciprocating country) shall be liable
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11to the person entitled to the benefit of the decree in the manner
and to the extent specified in sub-section (1), as if the judgment
were given by a Court in India:
Provided that no sum shall be payable by the insurer in respect
of any such judgment unless, before the commencement of the
proceedings in which the judgment is given, the insurer had
notice through the Court concerned of the bringing of the
proceedings and the insurer to whom notice is so given is
entitled under the corresponding law of the reciprocating
country, to be made a party to the proceedings and to defend the
action on grounds similar to those specified in sub-section (2).
(4) Where a certificate of insurance has been issued under Sub-
section (3) of section 147 to the person by whom a policy has
been effected, so much of the policy as purports to restrict the
insurance of the persons insured thereby by reference to any
condition other than those in clause (b) of sub-section (2) shall,
as respects such liabilities as are required to he covered by a
policy under clause (b) of sub-section (1) of section 147, be of
no effect :
Provided that any sum paid by the insurer in or towards the
discharge of any liability of any person which is covered by the
policy by virtue only of this sub-section shall be recoverable by
the insurer from that person.
(5) If the amount which an insurer becomes liable under this
section to pay in respect of a liability incurred by a person
insured by a policy exceeds the amount for which the insurer
would apart from the provisions of this section be liable under
the policy in respect of that liability, the insurer shall he entitled
to recover the excess from that person.
(6) In this section the expression “material fact” and “material
particular” means, respectively a fact or particular of such a
nature as to influence the judgment of a prudent insurer in11 of 28
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12determining whether he will take the risk and, if so, at what
premium and on what conditions, and the expression “liability
covered by the terms of the policy” means a liability which is
covered by the policy or which would be so covered but for the
fact that the insurer is entitled to avoid or cancel or has avoided
or cancelled the policy.
(7) No insurer to whom the notice referred to in sub-section (2)
or Sub-section (3) has been given shall be entitled to avoid his
liability to any person entitled to the benefit of any such
judgment or award as is referred to in sub-section (1) or in such
judgment as is referred to in Sub-section (3) otherwise than in
the manner provided for in sub-section (2) or in the
corresponding law of the reciprocating country, as the case may
be.
Explanation : For the purposes of this section, “Claims
Tribunal” means a Claims Tribunal constituted under Section
165 and “award” means an award made by that Tribunal under
Section 168.”
“9. In Swaran Singh’s case (supra) on which learned counsel for
the parties have placed reliance undisputedly related to a case
under Section 149 of the Act. This Court elaborately dealt with
the scope and ambit of Sections 147 and 149 of the Act and after
tracing the history of compulsory insurance and the rights of the
third parties, held that the concerned cases were mainly
concerned with third party rights under the policy. It was held
in that context that any condition in the policy whereby the right
of the third party is taken away would be void, as noted in para
23 of the judgment.
10. In paras 69 and 70 the principles were culled out in the
following terms :
“The Insurance Company is required to prove the breach of the
condition of the contract of insurance by cogent evidence. In the12 of 28
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13event the Insurance Company fails to prove that there has been
breach of conditions of the policy on the part of the insured, the
Insurance Company cannot be absolved of its liability. This
Court did not lay down a degree of proof, but held that the
parties alleging the breach must be held to have succeeded in
establishing the breach of the condition of the contract of
insurance, on the part of the Insurance Company by
discharging its burden of proof. The Tribunal, must arrive at a
finding on the basis of the materials available on the records”.
11. In para 110 also the summary of the findings were recorded
which reads as follows :
(i) Chapter XI of the Motor Vehicles Act, 1988 providing
compulsory insurance of vehicles against third-party risks is a
social welfare legislation to extend relief by compensation to
victims of accidents caused by use of motor vehicles. The
provisions of compulsory insurance coverage of all vehicles are
with this paramount object and the provisions of the Act have to
be so interpreted as to effectuate the said object.
(ii) An insurer is entitled to raise a defence in a claim petition
filed under Section 163-A or Section 166 of the Motor Vehicles
Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said
Act.
(iii) The breach of policy condition e.g. disqualification of the
driver or invalid driving licence of the driver, as contained in
sub-section (2)(a)(ii) of Section 149, has to be proved to have
been committed by the insured for avoiding liability by the
insurer. Mere absence, fake or invalid driving licence or
disqualification of the driver for driving at the relevant time, are
not in themselves defences available to the insurer against
either the insured or the third parties. To avoid its liability
towards the insured, the insurer has to prove that the insured
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14in the matter of fulfilling the condition of the policy regarding
use of vehicles by a duly licensed driver or one who was not
disqualified to drive at the relevant time.
(iv) Insurance companies, however, with a view to avoid their
liability must not only establish the available defence(s) raised
in the said proceedings but must also establish “breach” on the
part of the owner of the vehicle; the burden of proof wherefore
would be on them.
(v) The court cannot lay down any criteria as to how the said
burden would be discharged, inasmuch as the same would
depend upon the facts and circumstances of each case.
(vi) Even where the insurer is able to prove breach on the part
of the insured concerning the policy condition regarding
holding of a valid licence by the driver or his qualification to
drive during the relevant period, the insurer would not be
allowed to avoid its liability towards the insured unless the said
breach or breaches on the condition of driving licence is/are so
fundamental as are found to have contributed to the cause of the
accident. The Tribunals in interpreting the policy conditions
would apply “the rule of main purpose” and the concept of
“fundamental breach” to allow defences available to the insurer
under Section 149(2) of the Act.
(vii) The question, as to whether the owner has taken
reasonable care to find out as to whether the driving licence
produced by the driver (a fake one or otherwise), does not fulfil
the requirements of law or not will have to be determined in
each case.
(viii) If a vehicle at the time of accident was driven by a person
having a learner’s licence, the insurance companies would be
liable to satisfy the decree.
(ix) The Claims Tribunal constituted under Section 165 read
with Section 168 is empowered to adjudicate all claims in
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respect of the accidents involving death or of bodily injury or
damage to property of third party arising in use of motor
vehicle. The said power of the Tribunal is not restricted to
decide the claims inter se between claimant or claimants on one
side and insured, insurer and driver on the other. In the course
of adjudicating the claim for compensation and to decide the
availability of defence or defences to the insurer, the Tribunal
has necessarily the power and jurisdiction to decide disputes
inter se between the insurer and the insured.
(x) The decision rendered on the claims and disputes inter se
between the insurer and insured in the course of adjudication of
claim for compensation by the claimants and the award made
thereon is enforceable and executable in the same manner as
provided in Section 174 of the Act for enforcement and
execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the
Tribunal arrives at a conclusion that the insurer has
satisfactorily proved its defence in accordance with the
provisions of Section 149(2) read with sub-section (7), as
interpreted by this Court above, the Tribunal can direct that the
insurer is liable to be reimbursed by the insured for the
compensation and other amounts which it has been compelled
to pay to the third party under the award of the Tribunal. Such
determination of claim by the Tribunal will be enforceable and
the money found due to the insurer from the insured will be
recoverable on a certificate issued by the Tribunal to the
Collector in the same manner under Section 174 of the Act as
arrears of land revenue. The certificate will be issued for the
recovery as arrears of land revenue only if, as required by sub-
section (3) of Section 168 of the Act the insured fails to deposit
the amount awarded in favour of the insurer within thirty days
from the date of announcement of the award by the Tribunal.
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(xi) The provisions contained in sub-section (4) with the proviso
thereunder and sub-section (5) which are intended to cover
specified contingencies mentioned therein to enable the insurer
to recover the amount paid under the contract of insurance on
behalf of the insured can be taken recourse to by the Tribunal
and be extended to claims and defences of the insurer against
the insured by relegating them to the remedy before regular
court in cases where on given facts and circumstances
adjudication of their claims inter se might delay the
adjudication of the claims of the victims”.
12. At this juncture, it would be necessary to test the logic
behind Section 149 of the Act. The conditions under the said
provision relate only to third party risks and claims.
17. Section 149 is part of Chapter XI which is titled “Insurance
of Motor Vehicles against Third Parties”. A significant factor
which needs to be noticed is that there is no contractual relation
between the insurance company and the third party. The
liabilities and the obligations relatable to third parties are
created only by fiction of Sections 147 and 149 of the Act.
18. It is also to be noted that the terms of the policy have to be
construed as it is and there is no scope for adding or
subtracting something. However liberally the policy may be
construed, such liberalism cannot be extended to permit
substitution of words which are not intended. (See United India
Insurance Co. Ltd. v. Harchand Rai Chandan Lal, 2005(1)
RCR (Civil) 217 : (2004(8) SCC 644 and Polymat India (P)
Ltd. v. National Insurance Company Ltd. and Ors., (2005(9)
SCC 174).
19. The primary stand of the insurance company is that the
person driving the vehicle did not have a valid driving license.
In Swaran Singh’s case (supra) the following situations were
noted :
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(i) the driver had a license but it was fake;
(ii) the driver had no license at all;
(iii) the driver originally had a valid license but it had expired
as on the date of the accident and had not been renewed;
(iv) the license was for a class of vehicles other than that which
was the insured vehicle;
(v) the license was a learner’s license.
Category (i) may cover two types of situations. First, the license
itself was fake and the second is where originally that license is
fake but there has been a renewal subsequently in accordance
with law.
20. Chapter II contains Sections 3, 4 and 5 of the Act relating to
licensing of drivers driving the motor vehicles.
24. In the background of the statutory provisions, one thing is
crystal clear i.e. the statute is beneficial one qua the third party.
But that benefit cannot be extended to the owner of the
offending vehicle. The logic of fake license has to be considered
differently in respect of third party and in respect of own
damage claims.
25. It would be appropriate to take note of what was stated in
Complete Insulations (P) Ltd. v. New India Assurance Co.
Ltd., (1996(1) SCC 221). In paras 9 and 10 it was observed as
follows:
“9. Section 157 appears in Chapter XI entitled “Insurance of
Motor vehicles against Third Party Risks” and comprises
Sections 145 to 164. Section 145 defines certain expressions
used in the various provisions of that Chapter. The expression
“Certificate of Insurance” means a certificate issued by the
authorised insurer under Section 147(3). “Policy of Insurance”
includes a certificate of insurance. Section 146(1) posits that
“no person shall use except as a passenger, or cause or allow
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any other person to use, a motor vehicle in a public place,
unless there is in force in relation to the use of the vehicle by
that person or that other person, as the case may be, a policy of
insurance complying with the requirements of this chapter”. Of
course this provision does not apply to vehicles owned by the
Central or State Government and used for Government
purposes not connected with any commercial enterprise. This
provision corresponds to Section 94 of the old Act. Section 147
provides that the policy of insurance to be issued by the
authorised insurer must insure the specified person or classes of
persons against any liability incurred in respect of death of or
bodily injury to any person or damage to any property of a third
party as well as against the death of or bodily injury caused to
any passenger of a public service vehicle caused by or arising
out of the use of the vehicle in a public place. This provision is
akin to Section 95 of the old Act. It will be seen that the liability
extends to damage to any property of a third party and not
damage to the property of the owner of the vehicle, i.e., the
insured. Sub-section (2) stipulates the extent of liability and in
the case of property of a third party the limit of liability is
Rupees six thousand only. The proviso to that sub-section
continues the liability fixed under the policy for four months or
till the date of its actual expiry, whichever is earlier, Sub-section
(3) next provides that the policy of insurance shall be of no
effect unless and until the insurer has issued a certificate of
insurance in the prescribed form. The next important provision
which we may notice is Section 156 which sets out the effect of
the certificate of insurance. It says that when the insurer issues
the certificate of insurance, then even if the policy of insurance
has not as yet been issued the insurer shall, as between himself
and any other person except the insured be deemed to have
issued to the insured a policy of insurance conforming in all
respects with the description and particulars stated in the
certificate. It is obvious on a plain reading of this provision that
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the legislature was anxious to protect third-party interest. Then
comes Section 157 which we extracted earlier. This provision
lays down that when the owner vehicle in relation whereto a
certificate of insurance is issued transfers to another person the
ownership of the motor vehicle, the certificate of insurance
together with the policy described therein shall be deemed to
have been transferred in favour of the new owner of the vehicle
with effect from the date of transfer. Sub-section (2) requires the
transferee to apply within fourteen days from the date of
transfer to the insurer for making necessary changes in the
certificate of insurance and the policy described therein in his
favour. These are the relevant provisions of Chapter XI which
have a bearing on the question of insurer’s liability in the
present case.
10. There can be no doubt that the said chapter provides for
compulsory insurance of vehicles to cover third-party risks.
Section 146 forbids the use of a vehicle in a public place unless
there is in force in relation to the use of that vehicle a policy of
insurance complying with the requirements of that chapter. Any
breach of this provision may attract penal action. In the case of
property, the coverage extends to property of a third party i.e. a
person other than the insured. This is clear from Section 147(1)
(b)(i) which clearly refers to “damage to any property of a third
party” and not damage to the property of the ‘insured’ himself.
And the limit of liability fixed for damage to property of a third
party is Rupees six thousand only as pointed out earlier. That is
why even the Claims Tribunal constituted under Section 165 is
invested with jurisdiction to adjudicate upon claims for
compensation in respect of accidents involving death of or
bodily injury to persons arising out of the use of motor vehicles,
or damage to any property of a third party so arising, or both.
Here also it is restricted to damage to third-party property and
not the property of the insured.”
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26. The restrictions relating to appeal in terms of Section 173(2)
does not apply to own damage cases.
38. The inevitable conclusion therefore is that the decision in
Swaran Singh’s case (supra) has no application to own damage
cases. The effect of fake license has to be considered in the light
of what has been stated by this Court in On New India
Assurance Co., Shimla v. Kamla and Ors., 2001(3) RCR
(Civil) 716 : (2001(4) SCC 342).ce the license is a fake one the
renewal cannot take away the effect of fake license. It was
observed in Kamla’s case (supra) as follows :
“12. As a point of law we have no manner of doubt that a fake
licence cannot get its forgery outfit stripped off merely on
account of some officer renewing the same with or without
knowing it to be forged. Section 15 of the Act only empowers
any Licensing Authority to “renew a driving licence issued
under the provisions of this Act with effect from the date of its
expiry”. No Licensing Authority has the power to renew a fake
licence and, therefore, a renewal if at all made cannot transform
a fake licence as genuine. Any counterfeit document showing
that it contains a purported order of a statutory authority would
ever remain counterfeit albeit the fact that other persons
including some statutory authorities would have acted on the
document unwittingly on the assumption that it is genuine”.
39. As noted above, the conceptual difference between third
party right and own damage cases has to be kept in view.
Initially, the burden is on the insurer to prove that the license
was a fake one. Once it is established the natural consequences
have to flow.”
9. The above aspects were highlighted recently in Laxmi
Narain Dhut case (supra).
10. In the instant case, the State Commission has
categorically found that the evidence on record clearly
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established that the licensing authority had not issued any
license, as was claimed by the Driver and the respondent. The
evidence of Shri A.V.V. Rajan, Junior Assistant of the Office of
the Jt. Commissioner & Secretary, RTA, Hyderabad who
produced the official records clearly established that no driving
license was issued to Shri Ravinder Kumar or Ravinder Singh in
order to enable and legally permit him to drive a motor vehicle.
There was no cross examination of the said witness. The
National Commission also found that there was no defect in the
finding recorded by the State Commission in this regard.
15. On the touchstone of hearinabove discussed findings and judicial
precedents, the findings given by Ld. Tribunal, Jalandhar qua granting recovery
rights to Insurance Company-respondent No.3 are hereby affirmed.
16. Now coming to the cross-objections, a perusal of the award reveals
that the Ld. Tribunal has rightly assessed the income of the deceased to the tune of
Rs.8,000/- per month. However, the Tribunal has erred in applying multiplier of 10
instead of 11.
i) Further, no amount was granted for future prospects, loss of estate,
loss of consortium and for funeral expenses. Therefore, it requires indulgence of
this Court.
SETTLED LAW ON COMPENSATION
17. Hon’ble Supreme Court in the case of Sarla Verma Vs. Delhi
Transport Corporation and Another [(2009) 6 Supreme Court Cases 121], laid
down the law on assessment of compensation and the relevant paras of the same are
as under:-
“30. Though in some cases the deduction to be made towards personal
and living expenses is calculated on the basis of units indicated in
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22Trilok Chandra, the general practice is to apply standardised
deductions. Having a considered several subsequent decisions of this
Court, we are of the view that where the deceased was married, the
deduction towards personal and living expenses of the deceased,
should be one-third (1/3rd) where the number of dependent family
members is 2 to 3, one-fourth (1/4th) where the number of dependent
family members is 4 to 6, and one-fifth (1/5th) where the number of
dependent family members exceeds six.
31. Where the deceased was a bachelor and the claimants are the
parents, the deduction follows a different principle. In regard to
bachelors, normally, 50% is deducted as personal and living
expenses, because it is assumed that a bachelor would tend to spend
more on himself. Even otherwise, there is also the possibility of his
getting married in a short time, in which event the contribution to the
parent(s) and siblings is likely to be cut drastically. Further, subject to
evidence to the contrary, the father is likely to have his own income
and will not be considered as a dependant and the mother alone will
be considered as a dependant. In the absence of evidence to the
contrary, brothers and sisters will not be considered as dependants,
because they will either be independent and earning, or married, or
be dependent on the father.
32. Thus even if the deceased is survived by parents and siblings, only
d the mother would be considered to be a dependant, and 50% would
be treated as the personal and living expenses of the bachelor and
50% as the contribution to the family. However, where the family of
the bachelor is large and dependent on the income of the deceased, as
in a case where he has a widowed mother and large number of
younger non-earning sisters or brothers, his personal and living
expenses may be restricted to one-third and contribution to the family
will be taken as two-third.
* * * * * *
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42. We therefore hold that the multiplier to be used should be as
mentioned in Column (4) of the table above (prepared by applying
Susamma Thomas³, Trilok Chandra and Charlie), which starts with an
operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17 for 26 to
30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for
41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units
for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.
18. Hon’ble Supreme Court in the case of National Insurance Company
Ltd. Vs. Pranay Sethi & Ors. [(2017) 16 SCC 680] has clarified the law under
Sections 166, 163-A and 168 of the Motor Vehicles Act, 1988, on the following
aspects:-
(A) Deduction of personal and living expenses to determine
multiplicand;
(B) Selection of multiplier depending on age of deceased;
(C) Age of deceased on basis for applying multiplier;
(D) Reasonable figures on conventional heads, namely, loss of
estate, loss of consortium and funeral expenses, with escalation;
(E) Future prospects for all categories of persons and for different
ages: with permanent job; self-employed or fixed salary.
The relevant portion of the judgment is reproduced as under:-
“52. As far as the conventional heads are concerned, we find
it difficult to agree with the view expressed in Rajesh². It has
granted Rs.25,000 towards funeral expenses, Rs 1,00,000
towards loss of consortium and Rs 1,00,000 towards loss of
care and guidance for minor children. The head relating to loss
of care and minor children does not exist. Though Rajesh refers
to Santosh Devi, it does not seem to follow the same. The
conventional and traditional heads, needless to say, cannot be
determined on percentage basis because that would not be an
acceptable criterion. Unlike determination of income, the said23 of 28
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24heads have to be quantified. Any quantification must have a
reasonable foundation. There can be no dispute over the fact
that price index, fall in bank interest, escalation of rates in
many a field have to be noticed. The court cannot remain
oblivious to the same. There has been a thumb rule in this
aspect. Otherwise, there will be extreme difficulty in
determination of the same and unless the thumb rule is applied,
there will be immense variation lacking any kind of consistency
as a consequence of which, the orders passed by the tribunals
and courts are likely to be unguided. Therefore, we think it
seemly to fix reasonable sums. It seems to us that reasonable
figures on conventional heads, namely, loss of estate, loss of
consortium and funeral expenses should be Rs.15,000,
Rs.40,000 and Rs.15,000 respectively. The principle of
revisiting the said heads is an acceptable principle. But the
revisit should not be fact-centric or quantum-centric. We think
that it would be condign that the amount that we have
quantified should be enhanced on percentage basis in every
three years and the enhancement should be at the rate of 10%
in a span of three years. We are disposed to hold so because
that will bring in consistency in respect of those heads.
* * * * *
59.3. While determining the income, an addition of 50% of
actual salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and was
below the age of 40 years, should be made. The addition should
be 30%, if the age of the deceased was between 40 to 50 years.
In case the deceased was between the age of 50 to 60 years, the
addition should be 15%. Actual salary should be read as actual
salary less tax.
59.4. In case the deceased was self-employed (or) on a fixed
salary, an addition of 40% of the established income should be
the warrant where the deceased was below the age of 40 years.
An addition of 25% where the deceased was between the age of
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2540 to 50 years and 10% where the deceased was between the
age of 50 to 60 years should be regarded as the necessary
method of computation. The established income means the
income minus the tax component.
59.5. For determination of the multiplicand, the deduction for
personal and living expenses, the tribunals and the courts shall
be guided by paras 30 to 32 of Sarla Verma⁴ which we have
reproduced hereinbefore.
59.6. The selection of multiplier shall be as indicated in the
Table in Sarla Verma¹ read with para 42 of that judgment.
59.7. The age of the deceased should be the basis for applying
the multiplier.
59.8. Reasonable figures on conventional heads, namely, loss of
estate, loss of consortium and funeral expenses should be Rs
15,000, Rs 40,000 and Rs. 15,000 respectively. The aforesaid
amounts should be enhanced at the rate of 10% in every three
years.”
19. Hon’ble Supreme Court in the case of Magma General Insurance
Company Limited Vs. Nanu Ram alias Chuhru Ram & Others [2018(18) SCC
130] after considering Sarla Verma (supra) and Pranay Sethi (Supra) has
settled the law regarding consortium. Relevant paras of the same are reproduced as
under:-
“21. A Constitution Bench of this Court in Pranay Sethi² dealt
with the various heads under which compensation is to be
awarded in a death case. One of these heads is loss of
consortium. In legal parlance, “consortium” is a compendious
term which encompasses “spousal consortium”, “parental
consortium”, and “filial consortium”. The right to consortium
would include the company, care, help, comfort, guidance,
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26family. With respect to a spouse, it would include sexual
relations with the deceased spouse.
21.1. Spousal consortium is generally defined as rights
pertaining to the relationship of a husband-wife which allows
compensation to the surviving spouse for loss of “company,
society, cooperation, affection, and aid of the other in every
conjugal relation”.
21.2. Parental consortium is granted to the child upon the
premature death of a parent, for loss of “parental aid,
protection, affection, society, discipline, guidance and training”.
21.3. Filial consortium is the right of the parents to
compensation in the case of an accidental death of a child. An
accident leading to the death of a child causes great shock and
agony to the parents and family of the deceased. The greatest
agony for a parent is to lose their child during their lifetime.
Children are valued for their love, affection, companionship
and their role in the family unit.
22. Consortium is a special prism reflecting changing norms
about the status and worth of actual relationships. Modern
jurisdictions world-over have recognised that the value of a
child’s consortium far exceeds the economic value of the
compensation awarded in the case of the death of a child. Most
jurisdictions therefore permit parents to be awarded
compensation under loss of consortium on the death of a child.
The amount awarded to the parents is a compensation for loss
of the love, affection, care and companionship of the deceased
child.
23. The Motor Vehicles Act is a beneficial legislation aimed at
providing relief to the victims or their families, in cases of
genuine claims. In case where a parent has lost their minor
child, or unmarried son or daughter, the parents are entitled to
be awarded loss of consortium under the head of filial
consortium. Parental consortium is awarded to children who
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lose their parents in motor vehicle accidents under the Act. A
few High Courts have awarded compensation on this count.
However, there was no clarity with respect to the principles on
which compensation could be awarded on loss of filial
consortium.
24. The amount of compensation to be awarded as consortium
will be governed by the principles of awarding compensation
under “loss of consortium” as laid down in Pranay Sethi². In the
present case, we deem it appropriate to award the father and
the sister of the deceased, an amount of Rs 40,000 each for loss
of filial consortium.
20. In view of the above, the present appeal is dismissed being devoid of
any merits. However, the cross-objections bearing No. X-Obj-8C-II-2007 filed by
the claimants, are allowed. Accordingly, as per the settled principles of law as laid
down by Hon’ble Supreme Court as mentioned above, the appellants – cross
objectors are held entitled to the enhanced amount of compensation as calculated
below:
Sr. Heads Compensation Awarded
No.
1 Monthly Income Rs.8000/-
2 Future prospects @ 10% Rs.800/- (10% of 8000)
3 Deduction towards personal Rs.2200/- (¼ of 8800)
expenditure ¼ (8000+800)
4. Total Income Rs.6600/-(8800-2200)
4 Multiplier 11
5 Annual Dependency Rs.8,71,200/-
( 6600 X 12 X 11)
6 Loss of Estate Rs.18,000/-
7 Funeral Expenses Rs.18,000/-
8 Loss of Consortium Rs.1,92,000/-
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Parental : 48,000/- x 2
Spousal : 48,000/- x 1
Filial : Rs. 48,000/- x 1
Total Compensation Rs.10,99,000/-
Amount Awarded by the Rs.6,60,000/-
Tribunal
Enhanced amount Rs.4,39,200/-
21. So far as the interest part is concerned, as held by Hon’ble Supreme
Court in Dara Singh @ Dhara Banjara Vs. Shyam Singh Varma 2019 ACJ 3176
and R.Valli and Others VS. Tamil Nandu State Transport Corporation (2022) 5
Supreme Court Cases 107, the amount so calculated shall carry an interest @ 9%
per annum from the date of filing of the claim petition, till the date of realization.
22. The Insurance Company is directed to deposit the awarded amount
alongwith interest with the Tribunal within a period of two months from the date of
receipt of copy of this judgment. The Tribunal is directed to disburse the same to
the cross objectors/claimants in their bank account as per ratio settled in the award
dated 19.1.2006. The Cross Objectors/claimants are directed to furnish their bank
accounts detail to the Tribunal.
23. Respondent No.3-Insurance Company is entitled to recover the
enhanced amount of compensation from respondent No. 2/appellants i.e. owner of
the offending vehicle.
24. Pending applications, if any, also stand disposed of.
(SUDEEPTI SHARMA)
JUDGE
October 15, 2024
sonia arora Whether speaking/non-speaking : Speaking
Whether reportable : Yes/No
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