All HC | What’s the purpose of keeping money in FD where claimant is unable to see colour of compensation?: HC directs Tribunal to disburse entire claim amount to claimant’s account

Allahabad High Court: The Division Bench of Dr Kaushal Jayendra Thaker and Ajit Singh, JJ., allowed the appeal of the claimants in a motor vehicle accident claim while dismissing the appeal of the insurance company.

Claimants and Insurance Company on being aggrieved by the award and decree passed by Motor Accident Claims Tribunal, filed the present appeal.

Claimants were the legal heirs namely widow and parents of the deceased who died in the vehicular accident.

Deceased was earning Rs 25,00,000 and claimants claimed a sum of Rs 3,40,50,000.

Respondent’s truck was being driven by Afzal Sekh and was insured with National Insurance Company Limited who had been saddled with the liability to make good the amount of compensation.

Due to the truck rash and negligent driving the motorcycle of the deceased was dashed by the truck.

Insurance Company challenged the award on the grounds that the deceased was a contributor to the accident having taken place, that income considered by the Tribunal was on the higher side and the same would not have been made the basis of compensation.

Claimants felt aggrieved as the tribunal did not consider the amount for future loss of income and did not even grant proper interest. Tribunal also erred in directing 2/3rd of the compensation to be paid to the parents and 1/3rd to the widow.

What is Negligence?

Negligence means failure to exercise care towards others which a reasonable and prudent person would in a circumstance or taking action which such a reasonable person would not. Negligence can be both intentional or accidental which is normally accidental.

More particularly, it connotes reckless driving and the injured must always prove that the either side is negligent. If the injury rather death is caused by something owned or controlled by the negligent party then he is directly liable otherwise the principle of “res ipsa loquitur” meaning thereby “the things speak for itself” would apply.

Contributory Negligence

It means that a person who either contributes or author of the accident would be liable for his contribution to the accident having taken place.

In the present set of facts and circumstances, Bench while referring to the recent decision of the Supreme Court in Md. Siddiqui v. National Insurance Co. Ltd (2020) 3 SCC 57 would come to the aid of the claimants as there was no colossal connection of the deceased having contributed to the accident.

What is Liability?

Liability of the Insurance Company.

While considering the issue of breach of policy condition under Section 149 of the Act Bench relied to elaborately sift the documentary evidence on record and whether the owner had taken proper care and caution to see that the driver was authorised to drive the vehicle or not.

High Court opined that the Insurance Company’s contention that the driver was not holding valid and effective driving licence could not be accepted.

While considering the case of the Insurance Company, can it be said that the driver did not have valid driving licence? This question has to be answered in favour of the claimants and owner.

Owner of the vehicle was satisfied, and it was proved that he had taken all care and caution that vehicle was being driven by a person who was authorised to drive the same which was even apparent from the fact that the owner had gone to the extent of producing evidence so as to bring home the fact that there was no breach of policy condition.

Hence, it was held that no breach of policy conditions was committed.

Compensation

It was submitted that the tribunal did not grant the proper amount under the head of non-pecuniary damages to the widow who became a widow at the age of 24 and who was not re-married.

Even the Insurance Company felt aggrieved and challenged the compensation.

Supreme Court held that in the case of motor accident compensation, guess work is inevitable.

Compensation payable to the appellants in view of the decision of the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi, (2017) 16 SCC 680

With respect to the issue of rate of interest, it should be 7.5% in view of the Supreme Court decision in National Insurance Co. Ltd. v. Mannat Johat, 2019 (2) T.A.C 705 (S.C.)

Disbursement and Tax at Source

Claimants Counsel Ram Singh submitted that several years elapsed, parents are at the fag end of their lives, therefore, on additional deposit being made, this Court may not direct deposit of said amounts in fixed deposits and though this Court had time and gain directed the Insurance Companies not to deduct TDS, the same was being deducted.

Bench relied on the Supreme Court decision in A.V. Padma v. R. Venugopal, (2012) 3 SCC 378.

Further, Court stated that people even rustic villagers’ have bank account which had to be compulsorily linked with Aadhar, therefore, what is the purpose of keeping money in fixed deposits in banks where a person, who suffered injuries or lost his kith and kin, was not able to see the colour of compensation.

“..time is now ripe for setting fresh guidelines as far as the disbursements are concerned.”

Court expressed that the guidelines in General Manager, Kerala, SRTC, Trivandrum v. Susamma Thomas, (1994) 2 SCC 176, are being blindly followed causing more trouble these days to the claimants as the Tribunals are overburdened with the matters for each time if they require some money, they have to move the tribunal where matters would remain pending and the tribunal on its free will, as if money belonged to them, would reject the applications for disbursements, which is happening in most of the cases.

The parties for their money have to come to court more particularly up to High Court, which is a reason for our pain.

In High Court’s opinion, Tribunal may release the money with certain stipulations and that guidelines have to be followed but not rigidly followed as precedents.

Further, it was added that while sitting in Single Bench of this Court, Dr Justice Kaushal Jayendra Thaker held that the Insurance Company should not deduct any amount under T.D.S in the case of Sudesna v. Hari Singh, F.A.F.O. No.23 of 2001, decided on 26.11.2020, which should be strictly adhered to.

Hence, appeals by claimants were partly allowed and the appeal preferred by the Insurance Company was dismissed.

Respondents shall jointly and severally liable to pay the additional amount with an interest at the rate of 7.5%

Court directed that on deposit of amount, Tribunal shall disburse the entire amount by way of account payee cheque or by way of RTGS to the account of the claimants. [National Insurance Co. Ltd. v. Anuradha Kejriwal, 2021 SCC OnLine All 269, decided on 13-04-2021]


Advocates before the Court:

Counsel for Appellant: Kuldip Shanker Amist, Manoj Nigam

Counsel for Respondent: Manoj Nigam, Amit Kumar Sinha, Deepali Srivastava Sinha, Mata Pher, Ram Singh

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