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Divisional Manager L.i.C. Vs. Raj Kumari Mittal and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtAllahabad High Court
Decided On
Judge
Reported in1(1984)ACC301
AppellantDivisional Manager L.i.C.
RespondentRaj Kumari Mittal and ors.
Excerpt:
- - 28,000/- for loss of fatherly love, affection and care caused toapplicants no. she had solemnly declared that the particulars given in the petition were true and correct to the best of her knowledge. the deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow. (1) the compensation to be assessed is the pecuniary loss caused to the dependents by the death of the person concerned, and no compensation is to be assessed on any extraneous consideration like love, affection, mental agony or any such similar consideration. (3) the suitable multiplier, as referred to in 2 love, shall be determined as held in sudhakar's case (air 1977 s c. 1189) (supra),.....o.p. saxena, j.1. these are four connected f.a.f.os. against the order dated 8-5-80 passed by the motor accident claims tribunal (ii additional district judge,) allahabad.2. the petitions related to an accident in which sri santosh behari mittal, advocate received serious injuries and succumbed to the same. the accident took place on the 6th of july 1975 at about 9 a.m. on the crossing of sarojini naidu marg and mahatma gandhi marg which is in the form of a circle around the church in the centre. the place of the accident was on the south-western sector of the circle near the turning of mahatma gandhi marg. the deceased was on his way home from the allahabad junction railway station. he was going on a rickshaw. ambassador car upf 5720 dashed against the rickshaw from the rear side. the.....
Judgment:

O.P. Saxena, J.

1. These are four connected F.A.F.Os. against the order dated 8-5-80 passed by the Motor Accident Claims Tribunal (II Additional District Judge,) Allahabad.

2. The petitions related to an accident in which Sri Santosh Behari Mittal, Advocate received serious injuries and succumbed to the same. The accident took place on the 6th of July 1975 at about 9 A.M. on the crossing of Sarojini Naidu Marg and Mahatma Gandhi Marg which is in the form of a circle around the Church in the centre. The place of the accident was on the south-western sector of the circle near the turning of Mahatma Gandhi Marg. The deceased was on his way home from the Allahabad Junction Railway Station. He was going on a rickshaw. Ambassador car UPF 5720 dashed against the rickshaw from the rear side. The rickshaw was on the left side of road and the car was driven rashly and negligently. No horn was blown. As a result of the accident the rickshaw was smashed and the deceased received severe injuries. The car was being driven by opposite party No. 3 R.K. Ahuja at a very high speed and he could not buring it to a stop for a considerable distance. Claimant No. 1 is the widow. Claimants 2 and 3 are the minor sons of the deceased. It was said that the deceased was earning not less than Rs. 1,000/- per mensem as a practising lawyer of the Allahabad High Court. The car was registered and insured in the name of opposite party No. 1 Divisional Manager, Life Insurance Corporation of India, Varanasi. The car was in actual use of opposite party No. 4 B.S. Ahuja who was employed as Assistant Branch Manager, Life Insurance Corporation of India, Gyanpur Branch. A sum of Rs. 3,00,000/- was claimed as compensation.

3. Opposite party No. 1 contested the petition with the allegations that it had no knowledge of the accident, that opposite party No. 4 Dr. B.S. Ahuja was for all practical purposes the owner of the car, that there was a Hire Purchase Agreement between the opposite party No. 1 and opposite party No. 4, in accordance with which the opposite party No. 1 advanced the money for the purchase of the car to opposite party No. 4 who was an employee of the Life Insurance Corporation of India, that under Section 2(19) of the Motor Vehicles Act, opposite party No. 4 was the owner and was responsible, that the compensation claimed is highly excessive, that the Oriental Fire and general Insurance Co. Ltd. was the insurer of the vehicle for third party risk and that the opposite party No. 1 is not liable for any damages.

4. Opposite party No. 2 Oriental Fire and General Insurance Co. Ltd. contested the petition with the allegations that it had no knowledge of the accident, that the car was in the possession of opposite party No. 4 B.S. Ahuja subject to a Hire Purchase Agreement, that opposite party No. 3 R.K. Ahuja had no driving licence, that the opposite party No. 2 is not liable to pay any compensation under the Insurance Policy, that the death was not caused due to rash and negligent driving of the car and that the compensation claimed is highly excessive.

5. Opposite party No. 3 R.K. Ahuja contested the petition on a plea of denial. His case was that he was not driving the vehicle and no accident was caused by him.

6. Opposite party No. 4 B.S. Ahuja also contested the petition on a plea of denial. It was said that no accident was caused by UPF 6720.

7. The Tribunal held that opposite party No. 3 R.K. Ahuja was driving the car rashly and negligently and the accident was caused as a result thereof that all the opposite parties are liable to pay compensation under Section 110-A of the Motor Vehicles Act and that claimants are entitled to get a total sum of Rupees 2,10,500/- as compensation as per details given below.

Rs. 1,30,500/-

For death of Sri Santosh Behari Mittal.

Rs. 30,000/-

For loss of conjugal rights and comforts suffered by applicantNo. 1 Smt. Raj Kumari Mittal.

Rs. 20,000/-

For mental torture and agony caused to applicant No. 1 Smt. Raj Kumari Mittal.

Rs. 28,000/-

For loss of fatherly love, affection and care caused toapplicants No. 2 and 3, the minor sons of the deceased.

Rs. 2,000/-

For medical expenses incurred, in the treatment of the deceased.

Total Rs. 2,10,500/-

8. The Tribunal decreed the claim for Rs. 2,10,500 and directed that opposite party No. 1 will pay a sum of Rs. 1,40,500/- that opposite party No. 2 will pay a sum of Rs. 50,000/- and that opposite parties No. 3, 4 will pay a sum of Rs. 10,000/- each. He further directed that applicant No. 1 would receive Rs. 95,500/- and applicants Nos. 2 and 3 would receive Rs. 57,500/- each. He also awarded costs against all the opposite parties in equal share. Hence these four appeals.

9. Sri S.N. Verma, Sri A.B. Saran and Sri Murlidhar learned Counsel for appellants-opposite parties 1, 2 and 4, Divisional Manager, Life Insurance Corporation of India, Oriental Fire and General Insurance Co. Ltd. and Sri B.S. Ahuja respectively did not assail the findings of the Tribunal that Sri Santosh Behari Mittal met with an accident with Ambassdor car UPF 6720 on 6th July 1975 at 9 A.M. or that the car was being driven by opposite party No. 3 Sri R.K. Ahuja, the younger brother of opposite party No. 4 Sri B.S. Ahuja or that the accident took place due to rash and negligent driving of the car by Sri R.K. Ahuja.

10. Sri S.K. Vidhyarthi, learned Counsel for the claimants-appellants in F. A. F. O. No. 811 of 1982 had a grievance that the Tribunal erred in rejecting the application for amendment of petition.

11. The accident took place on 6th July 1975. The petition was filed on 5th January 1976. The application for amendment was moved on 8th November 1977. It was rejected on 19th November 1977. In the petition the claimants gave the income of the deceased as not less than Rs. 1000/- in paras 6 and 7. No amendment was sought in para 6 of the petition. In para 7 the sum of Rs. 100/- was sought to be increased to Rs. 2000/-. It was further sought to be incorporated that the income of the deceased would have risen to Rs. 10,000/- per mensem within five years and Rs. 25,000/- per mensem within ten years. In para 22 the sum of Rs. 3 lakhs was sought to be increased to Rs. 30 lakhs. The petition had been verified earlier by claimant No. 1 Smt. Raj Kumari Mittal. She had solemnly declared that the particulars given in the petition were true and correct to the best of her knowledge. The application for amendment of the petition was given by the counsel for the claimants and there was no verification by claimant No. 1. The application was moved after over a year and half of the riling of the petition. The application does not show as to how the claimants' counsel revised the estimate given by the claimants or the amount claimed by the claimants. The application was hardly bonafide and introduced a highly exorbitant claim. In the circumstances the Tribunal rightly rejected the application.

12. Sri S.N. Verma, Sri A.B. Saran and Sri Murlidhar, learned Counsel for the appellants in F.A.F.O. Nos. 425 of 1980, 685 of 1980 and 430 of 1980 assailed the compensation awarded by the Tribunal on the ground that it is highly exhorbitant. Sri S.K. Vidyarthi, learned Counsel for the appellants in F.A.F.O. No. 811 of 1982 assailed the compensation as inadequate.

13. The monthly income of Sri Mittal was Rs. 1000/- per month. He was a junior lawyer and the Tribunal was in error in allowing an adjustment of Rs. 500/- per mensem for office expenses and Rs. 125/- per mensem for his personal expenses and thereby fixing the dependency at Rs. 375/- per mensem or Rs. 4500/- per annum. The deceased had a wife and two minor sons. He could not have spent more than Rs. 300/- per mensem on himself and his office and the dependency of the family could be fixed at Rs. 700/- per mensem. The deceased was 31 years old at the time of the accident. The Tribunal held that the deceased would have lived upto 60 years. It determined the compensation by multiplying the annual dependency by 29. The Tribunal erred in fixing the annual dependency at Rs. 4500/- instead of Rs. 8400/- and also in applying the multiplier of 29.

14. In the case of M.P.S.R.T. Corporation v. Sudhakar, A.I.R. 1977 S.C. 1189 compensation was awarded to the husband for the death of his wife who was 23 years old at the time of the accident. She had 35 years' service before her. The Supreme Court applied a multiplier of 20. While considering the question of a lump sum payment, the Supreme Court held on page 1191:

Allowance must be made for the uncertainties and the total figure scaled down accordingly. The deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow. Thus the amount assessed has to be reduced taking into account these imponderable factors. Some element of conjecture is inevitable in assessing damages.

In the next para the Supreme Court held as below:

A method of assessing damages usually followed in England, as appears from Malett v. McMonagle (1970) AC 166 (supra) is to calculate the net pecuniary loss upon an annual basis and to 'arrive at the total award by multiplying the figure assessed as the amount of the annual 'dependency' by a number of 'year's purchase', (p. 178) that is, the number of years the benefit was expected to last, taking into consideration the imponderable factors in fixing either the multiplier or the multiplicand.

In the case of Lachchman Singh v. Gurmit Kaur , F. B. it was held on p. 58.

In view of the judgments of the English Courts, and the Supreme Court, as discussed in the earlier part of this judgment, the most 'just and reasonable' view appears to be that the total amount of damages should be arrived at by multiplying the annual dependency by a suitable multiplier.

The legal position was summed up in para 27 p. 59 as below:

(1) The compensation to be assessed is the pecuniary loss caused to the dependents by the death of the person concerned, and no compensation is to be assessed on any extraneous consideration like love, affection, mental agony or any such similar consideration. Solatium is alien to the concept of compensation;

(2) For the purpose of calculating the just compensation, annual dependency of the dependents should be determined in terms of the annual loss accruing to them due to the abrupt termination of life. For this purpose, annual earning of the deceased at the time of the accident and the amount out of which he was spending for the maintenance of the dependents will be the determining factor. This basic figure will then be multiplied by a suitable multiplier;

(3) The suitable multiplier, as referred to in 2 love, shall be determined as held in Sudhakar's case (AIR 1977 S C. 1189) (supra), decided by the Supreme Court as well as in Mallet's case (1969 ACC CJ 312) HL (supra), by taking into consideration the number of years of the dependency of the various dependents, the number of years by which the life of the deceased was cut short and the various imponderable factors such like early natural death of the deceased, his becoming incapable of supporting the dependents due to illness or any other natural handicap or calamity, the prospects of the remarriage of the widow, the coming up of age the defendants and their developing their independent sources of income as well as the pecuniary benefits which might accrue to the defendants on account of the death of the person concerned. Such benefits, however, should not include the amount of the insurance policy of the deceased to which the dependents may become entitled on account of its maturity as a result of the death.

(4) The method adopted in certain decisions of this Court of multiplying the amount of the annual loss to the dependents with the number of years by which the life has been cut short without anything else cannot be sustained and all those decisions in which this view has been taken are hereby overruled;

(5) The compensation cannot be assessed on the basis of the so-called interest theory as the same provides the dependents with capital as well as the amount of annual loss earned by way of interest and it also suffers from a number of other defects, as have been discussed in this judgment, and

(6) Consideration of ever growing inflation and the decrease in the money value are also not relevant for the purpose of assessment of compensation.

15. In the above case the deceased was about 23 years old. Life expectancy was fixed at 60 years. The life was cut short by 37 years. However, keeping into consideration the imponderables and the uncertainties of life, the multiplier of 16 was applied.

16. In the case of Bishan Devi and Anr. v. Sirbaksh Singh 1979 A.C.J. 496, the multiplier of 12 was suggested by the Supreme Court. The deceased was a Patwari drawing Rs. 109.50 paise per mensem. He used to give Rs. 100/- per mensem to his family. A sum of Rs. 24,000/- was awarded as compensation and Rs. 2500/- was awarded as costs of all the courts.

17. In the case of State of Punjab v. Har Bhajan Lal Kochar and Ors. 1980 A.C.J. 437, various persons were involved in the accident. It was observed on p. 442 para 22 that in the case of a deceased who was hale and hearty and was round about 33 years of age at the time of his death it would be sage to take the multiplier ranging from 15 to 18 years provided there were no other compelling circumstances for adopting a multiplier which was lower or higher. Reliance was placed on the earlier decision in H. P. Road Transport Corporation v. Jai Ram and Ors. 1980 A.C.J.1.

17. In the case of U.P.S.R.T. Corporation v. Raja Ram 1981 A.L.J. 955, the deceased was 34 years old and a multiplier of 15 years applied.

18. No reduction could be allowed for the insurance money paid to the claimants on a policy for Rs. 35,000/- after the death of Sri Santosh Behari Mittal. Reliance may be placed on cases of Bhagat Singh Sohan Singh v. Smt. Om Sharma and Ors. , Full Bench and Smt. Krishna Sehgal and Ors. v. U.P. State Road Transport Corporation and Ors. A.I.R. 1983 Allahabad 159.

19. Sri S.K. Vidyarthi submitted that oral evidence shows that the income of Sri Mittal was not less than Rs. 2000/-. P. W. 1 Ram Kumar was the senior clerk of Sri Mittal for 2 or 3 years. He stated that Sri Mittal used to earn Rs. 2500/- or Rs. 3000/. p.m. Later on the stated that Sri Mittal earned Rs. 4000/- per mensem and had a telephone. In his cross-examination he first of all stated that Sri Mittal kept an account of his income. In the next breath, he stated that Sri Mittal had no register and he noted the receipts on file covers. P. W. 7 Sri Nath Patel was the junior clerk of Sri Mittal He stated that an account of the income of Sri Mittal was maintained by the senior clerk. It was the senior clerk who used to receive the money from clients. He could not say if Sri Mittal paid Income Tax. P. W. 6 Ramesh Behari Mittal, elder brother of Sri Mittal also deposed that Sri Mittal used to earn more than Rs. 3000/- per mensem and he advised him to pay Income Tax. He himself is in service and he could have reliable knowledge about the income of Sri Mittal. From the statements of the two clerks, it becomes highly probable that account of income was maintained by Sri Mittal. The same has not been produced. Claimant No. 1 Smt. Raj Kumari Mittal, the widow of Sri Mittal, has not entered the witness box. She was the best person to depose as to how much money her husband used to give her every month or how much money he used to deposit in the Bank. The pass book of the Bank Account of Sri Mittal has not been produced. The claimants have suppressed the available evidence and their version that Sri Mittal used to earn Rs. 2500/- or Rs. 3000/- per mensem cannot be accepted.

20. Sri S.K. Vidyarthi placed reliance on Ex. 14, the certificate of Sri N.C. Upadhyay, Advocate and Vice President, Allahabad High Court Bar Association regarding the income of Sri Mittal being Rs. 3000/- per mensem but be could not point out any provision of the Evidence Act under which the certificate could be admissible. The dispensing with of formal proof meant that it could he presumed that the certificate was given by Sri Upadhyay It could not, however, raise a presumption regarding the correctness of the contents of the certificate. Sri Upadhyay was not examined to prove the contents of the certificate.

21. Sri S.K. Vidyarthi contended that other documentary evidence on the records shows that the income of the deceased was at least Rs. 2000/- per mensem. We are unable to accept this for reasons which follow. Firstly the deceased never paid any Income Tax. Secondly, the Ledger Book Ex 18 does not give the income of the deceased in various cases conducted by him Thirdly, in some of the entries in the Ledger Book the entries have been made under the following sub-head:

DEBIT CREDIT BALANCE

The entries do not show as to what was the income of the deceased. The amount shown under the head 'debit' obviously included both the fees as well as the expenses. It is not clear as to what was the fees and what was the amount of expenses. Fourthly, some File Covers have been produced in which deposits have been noted. In only some fees has been noted In the rest the amount credited has been noted. Lastly, it cannot be said that the Ledger Book was regularly maintained as required under the rules The account of income has been in fact with held. Only such an account could have been admissible under Section 34 of the Evidence Act.

22. The future prospects of a lawyer are very uncertain. Every one who done a black coat, gown and a band docs not become a top lawyer. The claimants have withheld available evidence regarding the income of Sri Mittal at the time of his death. We are unable to accept the submission of Sri S.K. Vidyarthi that we should hold that the future prospects of Sri Mittal were very bright and that he would have been earning Rs. 10,00/- per mensem in 5 years or Rs. 25,000/- per mensem in 10 years. We cannot record any finding on surmises or conjectures. We hold that there is no reliable evidence in this regard.

23. Taking into consideration the circumstances of this case we hold that the Tribunal rightly accepted Rs. 1000/- as the monthly income of SRI MITTAL.

24. The deceased was 31 years old at the time of the accident P. W. 1 Sri Ramesh Behari Mittal stated that his brother was very healthy. The annual dependency of the family was Rs. 8400/-. In the circumstances of the case we think a multiplier of 18 to be adequate and proper and the compensation payable would come to Rs. 1,51,200/-.

The Tribunal has awarded the following amounts also as compensation:

(a) Rs. 30,000

For loss of conjugal rights and comforts suffered byclaimant No. 1 Smt. Raj KumariMittal.

(b) Rs. 20,000

For mental torture and agony caused to Smt. Raj KumariMittal and

(c) Rs. 28,000/-

For loss of fatherly love, affection and care caused toclaimants Nos. 2 and 3, the minor sons of the deceased.

25. We are of the opinion that there was no legal basis for awarding these amounts as compensation to the claimants. Where a lump sum payment is made, award of compensation under these separate heads is not permissible. We may refer to the case of Lachchman Singh v. Surmit Kaur (supra).

26. The Tribunal awarded a sum of Rs. 2000/- for medical treatment. This amount has been rightly awarded.

27. We, therefore, hold that the total amount of compensation payable to the claimants comes to Rs. 1,53,200/-, The Tribunal awarded a sum of Rs. 2,10,500/- as compensation. We consider the amount somewhat on the higher side and deem it proper to fix it at Rs. 1,53,200/.

28. In the absence of any precedent of this Court, we are unable to place reliance on some decisions of Punjab and Haryana High Court and Delhi High Court in the cases of National Insurance Co. Ltd. v. Sarla R. Gupta 1980 A.C.J. 40 and Jugul Kishore v. Rai Singh 1980 A.C.H. 503 in which interest at higher rate than 6% was awarded. We are of the opinion that under Section 110-CC of the Motor Vehicles Act, interest may be normally awarded at 6% per annum. Where the Tribunal finds that the contesting opposite party has been guilty of dilatory tactics in the disposal of the petition, a higher rate of interest may be considered. We find no merit in the contention of Sri S.K. Vidyarthi that the Tribunal should have awarded interest at the rate of 12% per annum. The claimants are entitled to interest on the amount of compensation at the rate of 6% per annum from the date of petition till the date of final payment.

29. Sri S.N. Verma, learned Counsel for appellant in F. A. F. O. No. 425 of 1980, submitted that the Tribunal erred in fixing any liability on the Divisional Manager, Life Insurance Corporation of India, Varanasi. Sri B.S. Ahuja was an Asstt. Branch Manager, Life Insurance Corporation of India, Gyanpur. The Divisional Manager advanced money for the purchase of car by Sri B.S. Ahuja and the parties entered into a hire purchase agreement vide Ex. A-1.

Section 2(19) of the Motor Vehicles Act provides:

'Owner' means where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, the person in possession of the vehicle under that agreement.

30. Sections 22 and 94(1) of the Motor Vehicles Act provide for the necessity for registration and insurance against third party risk. Section 31-A of the Act deals with special provisions regarding motor vehicles subject to hire purchase agreement. Sub-clause (2) provides as below:

(2) When the ownership of any motor vehicle registered under this Chapter is transferred and the transferee enters into a hire --purchase agreement with any person, the registering authority shall, on receipt of an application for the parties to that agreement make an entry as to the existence of such hire--purchase agreement in the certificate of registration.

31. The car was registered in the name of Divisional Manager and under the terms of the agreement the registration was to be transferred in favour of Sri B.S. Ahuja on payment of the last instalment.

32. Under the general law, the Division Manager was the owner of the vehicle. For the purposes of Motor Vehicles Act, however, Sri B.S. Ahuja was the owner. The definition of 'owner' in Section 2(19) of the Act was given with reference to two cases only: (i) where the person in possession of a vehicle is a minor and (ii) where the vehicle is subject to hire purchase agreement. It is obvious that the legislature in its wisdom confined the ownership of a vehicle under a hire purchase agreement to the person in possession of the vehicle under the agreement. It has done away with the duality of ownership under a hire purchase agreement. In this case the Divisional Manager was the owner under the general law while Sri B.S. Ahuja was the owner for all practical purposes as he was in possession. According to the definition of 'owner' referred to above, the Divisional Manager shall be deemed to have been excluded from the ownership and Sri B.S. Ahuja alone shall be deemed to be the owner for the purposes of the Motor Vehicles Act.

33. There is no question of any vicarious liability of the Divisional Manager. He was not the owner of the vehicle for the purposes of the Act. Sri B.S. Ahuja was not using the car of the Life Insurance Corporation of India in his official capacity. He was using the car under a hire purchase agreement and was the owner of the car for the purposes of the Act. The case of Sita Ram v. Santanu Parsad : [1966]3SCR527 is not applicable to the facts of this case. The Tribunal erred in applying the principle of vicarious liability.

34. We find that the Attention of the Tribunal was not drawn to the definition in Section 2(19) of the Motor Vehicles Act. We hold that the Divisional Manager was not the owner of the vehicle for the purposes of the Motor Vehicles Act and was consequently not liable to pay compensation under Section 110-B of the Act. The liability has been confined to the owner, the insurer and the driver of the vehicle. Sri B.S. Ahuja was the owner, Oriental Fire and General Insurance Co. Ltd. was the insurer. Sri R.K. Ahuja was the driver. The Tribunal erred in holding the Divisional Manager, Life Insurance Corporation of India liable to pay compensation.

35. Sri A.B. Saran, learned Counsel for appellant in F.A.F.O. No. 685 of 1980 submitted that if Divisional Manager, Life Insurance Corporation of India was not liable, Oriental Fire and General Insurance Co. Ltd. could also not be liable. He placed reliance on the case of Abdul Ghafoor v. New India Assurance Co. Ltd. 1981 A.C.J. 340.

36. We may quote a relevant extract from the Insurance Policy Ex. A-2.

The Insured Name Divisional Manager

Address L.I.C. of India, Varanasi,

(in use of Shri B.S. Ahuja).

37. In para 18 of the written statement of Oriental Fire and General Insurance Co. Ltd., it was admitted that the car was in possession of Sri B.S. Ahuja subject to hire purchase agreement.

38. Thus the Insurance Company knew that the car was in possession of Sri B.S. Ahuja under a hire purchase agreement and it was due to this that the words 'in use of Shri B.S. Ahuja' were also put down opposite the name and address of the insured. The Insurance Company should have known that under Section 2(19) of the Motor Vehicles Act, Sri B.S. Ahuja was the owner of the car and it accepted the insurance of the car in use of Sri B.S. Ahuja.

39. Para 5 (b) of the agreement Ex. A-1 provided that Sri B.S. Ahuja would keep the car insured in the name of the Corporation...at his own expense and pay the premiums from time to time and continue such insurance until the said motor car shall be transferred to him as his exclusive property.

40. Para 1 of Section II--Liability to Third Parties of the policy Ext. A-2 provides as below:

1. The company will indemnify the Insured in the event of accident caused by or arising out of the use of the Motor car against all sums including claimant's costs and expenses which the Insured shall become legally liable to pay in respect of

(a) death for bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the cause of the employment of such person by the Insured;

(b) ...

41. In view of the description of the insured the liability of Sri B.S. Ahuja to pay the premium, the knowledge of the Insurance Company that Sri B.S. Ahuja was in possession of the car under hire purchase agreement and para 1 of Section II--Liability to Third Parties quoted above, we have no difficulty in holding that Sri B.S. Ahuja was co-insured along with the Divisional Manager. Sri B.S. Ahuja was co-insured the owner under Section 2(19) of the Act and was liable to pay compensation under Section 110-B of the Act. As he was also a co-insured the Insurance Company cannot claim exemption on the ground that one of the insured was not liable. The Insurance Company cannot avoid liability as the other insured person is liable and there is a covenant to indemnify the other insured person in the event of accident caused by the use of the motor car.

42. Sri A.B. Saran next submitted that Sri B.S. Ahuja was entitled to use the car solely for the business of the Corporation. He referred to Para 4 (d) of agreement Ex. A-1. Para 17 of the written statement filed by Divisional Manager shows that he denied knowledge about the alleged accident. The plea raised by Sri A.B. Saran was not taken by the Divisional Manager to whom the plea was open in terms of the agreement. Under Section 96(2)(b) of the Motor Vehicles Act, the Insurance Company could defend the action on the breach of a specified condition of the policy. The pleas which can be raised by the Insurance Company have been limited to those given in Section 96(2) of the Act. In the policy Ex. A-2 it was provided:

Limitation as to use 'Use only for social, domestic and pleasure purposes and for the insured's business.

In view of this specific provision, the Insurance Company cannot have any grievance regarding breach of condition in para 4 (1) of the agreement Ex. A-l. There was no breach of the aforesaid condition of the policy and we are unable to accept the submission of Sri A.B. Saran.

43. Sri A.B. Saran lastly submitted that there was a breach of a condition of the policy regarding 'driver' and as such the Insurance Company is not liable.

The relevant provision is as below:

Driver: any of the following. (a) any person provided that the person driving holds a license to drive the Motor Car or has held and is not disqualified from holding or maintaining such a licence.

44. The plea raised in para 27 of the written statement of the Insurance Company was that as Sri R.K. Ahuja had no valid licence, the answering opposite party is not liable to pay any compensation under the Insurance policy. The contents of this para were verified by the Manager, Oriental Fire and General Insurance Co. Ltd. to the best of his knowledge and belief. The Manager has not entered the witness box to prove as to how and from where he acquired knowledge of the above fact. No question was put to D. W. 1 Sri B.S. Ahuja that his brother Sri R.K. Ahuja had no driving licence.

45. In New India Assurance Co. Ltd. v. Sushila Devi Sharma 1981 A.C.J. 119, Shanti Bai v. Principal, Govind Ram Sakseria Technological Institute 1972 A.C.J. 354, Pesumal v. New Asiatic Insurance Ca. : AIR1964Bom121 and Bhairon v. Nand Ram 1980 A.C.J. 513 it has been held that under Section 96(2) of the Act, it is the duty of the Insurance Company to plead and prove the breach of a condition of the policy. A mere averment in written statement is hardly of any avail. The non-production of Sri R.K. Ahuja will not make any difference. We may refer to the case of National Insurance Co. Ltd. v. Bachi Bai and Ors. 1979 A.C.J. 83. The Insurance Company has failed to prove the plea and as such it cannot escape liability. The Tribunal erred in assuming that Sri R.K. Ahuja had no driving licence. It did not take into consideration the principle of burden of proof incorporated in Section 96(2) of the Motor Vehicles Act. We hold that the Insurance Company has failed to prove that Sri R.K. Ahuja had no driving licence or that there was any breach of any condition of the policy and the Insurance Company, is liable to indemnify the owner Sri B.S. Ahuja for third party risk.

46. The Tribunal erred in limiting the liability of the Insurance Company to Rs. 50,000/-. Section 95(2) provides as below:

(2) Subject to the proviso to Sub-section (1) a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely--

(a) ...

(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment--

(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;

(ii) in respect of passengers--

1. a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers;

2. a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

3. a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and

4. Subject to the limits aforesaid ten thousand rupees for each individual passenger where the vehicle is a motor car, and five thousand rupees for each individual passenger in any other case;

(c) save as provided in Clauses (d), where the vehicle is a vehicle of any other class, the amount of liability incurred;

(d) irrespective of the class of the vehicle a limit of rupees two thousand in all in respect of damages to any property of a third party.

47. Ambassador Car U.P.F. 6720 was not a vehicle registered to carry passengers. Sub-clause (b) was not applicable. Sub-clause (d) relates to damage to any property of a third party. Sub-clause (c) was applicable and the liability of the Insurance Company would extend to the amount of liability incurred i. e. a sum of Rs. 1,53,200/- and not to Rs. 50,000/- only.

48. Sri S.N. Varma stated before the court that a sum of Rs. 10,0000/-was deposited by Divisional Manager, Life Insurance Corporation of India and was withdrawn by claimants and suitable order may be passed to recompense the Divisional Manager.

49. F. A. F. No. 811 of 1982 is dismissed. F. A. F. O. No. 425 is allowed and the petition is dismissed against Divisional Manager, Life Insurance Corporation of India, Varanasi with costs on parties. F. A. F. O. Nos. 430 of 1980 and 685 of 1980 are partly allowed. The award made by the Tribunal is modified. The claimants are awarded a sum of Rs. 1,53,200/- with interest at 6% per annum from the date of petition till the date of payment and costs. The award is made against opposite parties numbers 2 to 4 with the direction that opposite party number 2 Oriental Fire and General Insurance Co. Ltd. will completely indemnify opposite party number 4--Sri B.S. Ahuja, the owner of the car and will deposit the entire amount in Court within three months. On the amount being deposited, opposite party number 1 will be permitted to withdraw the sum of Rs. 1,00,000/- and the claimants, will be entitled to withdraw the balance. In case of execution of decree, the same direction will be followed. The costs of this Court shall be easy.


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