Oriental Insurance Co Ltd v. Sabita Devi & Ors

J U D G M E N T

G. P. MITTAL, J.

¶1These two Appeals arise out of a judgment dated 22.07.2010 passed by the Motor Accident Claims Tribunal (the Claims Tribunal) in Suit No.172/2008 preferred under Section 163-A of

the Motor Vehicles Act by Respondents No.1 to 6 for the death of Gyan Kumar Mandal, who died in a motor accident which occurred on 21.02.2007.

¶2During inquiry before the Claims Tribunal, it was claimed that the deceased was a self employed person. At the time of the accident, he (the deceased) was driving TSR No.DL-1RG-8259 which met with an accident resulting in fatal injuries to the deceased.

¶3The deceased"s income was claimed to be `3,300/- per month. The Claims Tribunal deducted one-fourth towards the personal and living expenses on the basis of Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121, adopted the multiplier of "17" to compute the loss of dependency as `5,04,900/-.

¶4The Claims Tribunal awarded a sum of `10,000/- each towards loss of consortium, loss of love and affection, loss to estate and funeral expenses to award the overall compensation of `5,44,900/-.

¶5MAC APP.662/2010 has been preferred by the Oriental Insurance Company (hereinafter referred to as "the Insurer") and the Cross Objections being MAC APP.115/2012 has been filed by the Respondents No.1 to 6 (hereinafter referred to as "the Claimants").

¶6The contentions raised on behalf of the Insurer are:-

(i) The deceased Gyan Kumar Mandal was not an employee of the insured and as third party risk was not covered under the policy of insurance issued by the Insurer, it could not have been fastened with the liability.

(ii) The Claim Petition was filed under Section 163-A of the Act. There should have been deduction of one-third towards the personal and living expenses instead of one-fourth as in a Petition under Section 163-A of the Act, as compensation can be awarded only on the basis of structured formula.

(iii) The compensation awarded towards the non-pecuniary heads was more than what is provided under the Second Schedule to the Act.

¶7On the other hand, it is urged by the learned counsel for the Claimants that a premium of `25/- was charged for the driver for covering the risk of the hirer or the driver or of any person hiring the TSR and as such the Insurer is liable to pay the compensation for the death of the driver in this case.

¶8It is urged that the compensation awarded towards loss of consortium, loss of love and affection and loss to estate was very meager and needs to be enhanced.

¶9Before adverting to the respective contentions raised on behalf

of the parties, it would be appropriate to refer to the facts. In the Claim Petition under Section 163-A of the Act preferred by the Claimants, it was mentioned that the deceased was a self-employed person. His monthly income was `3,300/-. In Para 23 (Annexure-A), the Claimants averred that the deceased being driver of the TSR used to earn a sum of `3,300/- per month. Thus, it was no where alleged that the deceased was an employee of the Seventh Respondent.

¶10The Seventh Respondent (the First Respondent before the Claims Tribunal) filed a written statement and took up the plea that the deceased was not an employee under the Seventh Respondent. No replication was filed by the Claimants disputing this fact.

¶11In the Affidavit Ex.PW-1/A there was not even a whisper that the deceased was an employee of the Seventh Respondent.

¶12The Seventh Respondent entered the witness box as R2W1 and her testimony that the deceased was paying her `150/- per day as hire charges for hiring the TSR was not challenged by the Claimants. In cross-examination, the Seventh Respondent deposed that the TSR was given to the deceased by Vipin Kumar (Seventh Respondent"s representative) and not by her personally.

¶13Thus, it may be noticed that it was not the specific case of the Claimants that he was an employee driving the TSR either on

salary basis or on commission basis. The owner"s (Seventh Respondent"s) testimony that the deceased used to get TSR on hire basis at the rate of `150/- per day being not challenged either by the Claimants or by the Insurer, it cannot be said that there was any relationship of Master and Servant or that the deceased was an employee under the Seventh Respondent.

¶14The Insurance Policy Ex.R2W3/1 was proved on record by the Seventh Respondent. It is true that the deceased was not an employee under the Seventh Respondent. A perusal of the Insurance Policy Ex.R2W3/1 however, shows that the policy was issued "Subject to IMT Endorsement Printed herein/attached to : IMT-36, IMT-20, IMT-40."

¶15Although, under IMT-29 risk of only an employee is covered. But, under IMT-36, the risk to the hirer is also covered. IMT-36 is extracted hereunder:- "IMT 36 Indemnity to Hirer – Package Policy – Negligence of the insured or Hirer. It is hereby declared and agreed that the company will indemnify any hirer of the vehicle insured against loss, damage and liability as defined in this Policy arising in connection with the vehicle insured by reason of the negligence of the within named insured or of any employee of such insured while the vehicle insured is let on hire. Provided that any such hirer shall as though he/she were the insured observed fulfill and be subject to the terms, exceptions, conditions and limitations of this policy in so

far as they apply."

¶16In the circumstances, the Insurer was not entitled to avoid the liability on the ground that the deceased was neither covered as a third party nor as an employee, the deceased being hirer was covered by the contract of Insurance and the insurer was under obligation to indemnify the insured.

¶17To be entitled to compensation under Section 163-A of the Act, the Claimants are simply required to prove that the accident arose out of use of the motor vehicle in question which has been duly proved. The only defence available to the owner and Insurer is that the accident was caused because of the wrongful act, neglect or default of the victim himself (National Insurance Company Limited v. Sinitha & Ors., 2011 (13) SCALE 84). The same has not been done by the Insurer.

¶18As far as payment of compensation in a Petition under Section 163-A of the Act is concerned, the compensation has to be awarded as per the structured formula given in second schedule to the Motor Vehicles Act. The compensation towards non pecuniary heads has also to be in conformity with the Second Schedule to the Act. (See Oriental Insurance Company v. Hansrajbhai v. Kodala, (2001) 5 SCC 175; Deepal Girishbhai Soni v. United India Insurance Company Limited, (2004) 5 SCC 385; and judgment of this Court in Anarkali & Anr. v. Raj Kumar & Anr. MAC APP.341/2012 decided on 11.04.2012).

¶19The loss of dependency thus comes to `4,48,800/- (3,300/- x 12 x 2/3 x 17).

¶20Compensation of `40,000/- awarded towards non-pecuniary heads was on the higher side. I would award a sum of ` 5,000/- towards loss of consortium, `2,000/- towards loss to estate and ` 2,500/- towards funeral expenses as per the second Schedule to the Act. The overall compensation comes to `4,58,300/-.

¶21Thus the compensation stands reduced from `5,44,900/- to `4,58,300/-.

¶22By an order dated 04.10.2010, the execution of the impugned judgment was ordered to be stayed subject to deposit of 50% of the award amount. By an order dated 25.08.2011, 25% of the amount deposited was ordered to be released in favour of the Claimants.

¶23The balance amount payable along with interest @ 7.5% per annum from the date of the filing of the Petition till its payment shall be deposited in the name of the Claimants. 10% of the compensation awarded along with proportionate interest shall be payable to the Respondents No.2 to 6. Rest of the amount shall be payable to the First Respondent.

¶24The Appellant Insurance Company is directed to deposit the amount in the UCO Bank, Delhi High Court Branch in the name of the Respondents No.1 to 6 (Claimants) within six weeks.

¶25The statutory amount of `25,000/- shall also be refunded to the Insurance Company.

¶26MAC APP.662/2010 is allowed in above terms. MAC APP.115/2012 stands dismissed. No costs.

¶27Pending applications stand disposed of.

(G.P. MITTAL) JUDGE MAY 25, 2012 vk

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14th May, 2012 Pronounced on: 25th May, 2012 + MAC.APP. 662/2010 ORIENTAL INSURANCE CO LTD ..... Appellant Through Mr. Pradeep Gaur, Advocate versus SABITA DEVI & ORS ..... Respondents Through Mr. Peeush Sharma, Advocate for the Respondents No.1 to 6. Ms. Aarti Mahajan with Mr. Gaurav Bisht, Advocate for the Respondent No.7 + MAC.APP. 115/2012 SABITA DEVI & ORS ..... Appellants Through Mr. Peeush Sharma, Advocate versus ORIENTAL INSURANCE CO LTD ..... Respondent Through Mr. Pradeep Gaur, Advocates CORAM: HON'BLE MR. JUSTICE G.P.MITTAL