Bail Application
Case BriefsHigh Courts

Himachal Pradesh High Court: Sandeep Sharma, J., allowed an appeal which questioned the legality of the Order passed by the Motor Accident Claims Tribunal, H.P. where they dismissed the application of the appellants stating that it was not maintainable as they had failed to demonstrate that the income of the deceased Kishan Singh was not less than the maximum limit of Rs 40,000 per annum.

The issue placed before the Tribunal was, “Whether the petitioners (successors-in-interest of deceased who was employed by the respondent) were entitled to claim compensation in the sum of Rs 15,00,000 along with interest from the respondents jointly and/or severally on account of the death of the deceased in the accident in question as alleged?” The Tribunal held that since the income of the deceased was exceeding the maximum limit of Rs 40,000 per annum which is a maximum limit to maintain a petition under Section 163-A of MV Act, the petition so filed by the petitioners in view of the ration was not maintainable.

The appellants argued that de hors the fact as to whether the income of the deceased is Rs 40,000 or more per annum, once the claim petition has been filed by the claimant, maybe under Section 163-A of the Motor Vehicles Act, the same has to be decided by the Tribunal on merit and the claim petition cannot be thrown out on flimsy grounds of income.

Division Bench of Himachal Pradesh High Court in Oriental Insurance Co. Ltd. v. Sihnu Ram, 2016 SCC OnLine HP 2224 held that once the jurisdiction of the Claims Tribunal has been invoked and during trial evidence has come to the effect that the accident was outcome of rash and negligent act and income of the victim was more than Rs 40,000, the petition under Section 163-A of the Motor Vehicles Act cannot be dismissed. They further held that the mandate of Section 163-A of the Motor Vehicles Act is to provide compensation ‘On Structured formula Basis’ and was not an interim measure. Once it is granted, the victims cannot file a claim petition under Section 166 of the MV Act for grant of enhanced compensation. But, in case the Claims Tribunal comes to the conclusion that the income of the victim is more than Rs 40,000 per annum, it is not supposed to dismiss the claim petition. If the claim petition is dismissed on this ground then the aim, purpose and object of Sections 158(6), 163-A and 166(4) of the Motor Vehicles Act would be defeated.

The High Court concurred with the decision and allowed the appeal of the appellants. They quashed and set aside the award passed by the Motor Accident Claims Tribunal and remanded the matter back to them directing them to decide the claim petition afresh on merit, on the basis of evidence on record, after affording the parties reasonable opportunity(s) to put forth their respective contentions. [Neema v. Sohan Singh, 2019 SCC OnLine HP 1805, decided on 31-10-2019]

Legislation UpdatesNotifications

Guidelines on Compensation of Whole Time Directors/ Chief Executive Officers/ Material Risk Takers and Control Function staff

The compensation practices, especially of large financial institutions, were one of the important factors which contributed to the global financial crisis in 2008. Employees were often rewarded for increasing short-term profit without adequate recognition of the risks and long-term consequences that their activities posed to the organisations. These perverse incentives amplified excessive risk taking that severely threatened the global financial system. The compensation issue has, therefore, been at the centre stage of regulatory reforms.

2. In the wake of financial crisis, in order to address the issues in a coordinated manner across jurisdictions, the Financial Stability Forum (later the Financial Stability Board i.e. FSB) brought out a set of Principles (FSF Principles for Sound Compensation Practices, dated April 02, 2009) and Implementation Standards (FSB Principles for Sound Compensation Practices – Implementation Standards, dated September 25, 2009) on sound compensation practices. The Principles are intended to reduce incentives towards excessive risk taking that may arise from the structure of compensation schemes. The Principles call for effective governance of compensation, alignment of compensation with prudent risk taking, effective supervisory oversight and stakeholder engagement. The Principles have been endorsed by the G-20 countries and the Basel Committee on Banking Supervision (BCBS). The Implementation Standards are specific norms, prioritizing the areas that should be addressed by firms and supervisors to achieve effective global implementation of the Principles.

3. The BCBS published in May 2011 the final report on ‘Range of Methodologies for Risk and Performance Alignment of Remuneration’. The main objectives of the report are (a) to present certain remuneration practices and methodologies that support sound incentives; and (b) the elements influencing the effectiveness of risk alignment that should be considered by banks when developing their methodologies as well as by supervisors, when reviewing and assessing banks’ practices. In July 2011, the BCBS in consultation with the FSB has also published Pillar 3 disclosure requirements for remuneration.

4. Taking into account the stipulations in these documents, Reserve Bank had issued the Guidelines on compensation vide Circular DBOD No.BC.72/29.67.001/2011-12 dated January 13, 2012, applicable to Whole Time Directors / Chief Executive Officers / Risk Takers and Control Function Staff, etc. for implementation by private sector and foreign banks from the financial year 2012-13.

5. These Guidelines have since been reviewed based on experience gained and evolving international best practices. The objective has also been to better align these Guidelines with FSB Principles and Implementation Standards for Sound Compensation Practices and the Supplementary Guidance issued by FSB in March 2018 on the use of compensation tools to address misconduct risk. Consequently, a Discussion Paper on the proposed Guidelines was published on the RBI website and comments were invited from banks and other interested parties by March 31, 2019.

6. The final Guidelines, taking into consideration the responses received, are given in the Annex.

7. These Guidelines will be applicable for pay cycles beginning from/after April 01, 2020. All applications for approval of appointment/re-appointment or approval of remuneration/revision in remuneration of Whole Time Directors (WTDs)/ Chief Executive Officers (CEOs) shall be submitted with full details as prescribed in Appendix 1.

8. Private sector banks, foreign banks operating under the Wholly Owned Subsidiary mode (WOS), and foreign banks operating in India under the branch mode are required to obtain regulatory approval for grant of remuneration (i.e. compensation) to WTDs/ CEOs in terms of Section 35B of the Banking Regulation Act, 1949 (B.R. Act, 1949). The approval process will involve, inter alia, an assessment of whether the bank’s compensation policies and practices are in accordance with the Guidelines set out in the Annex, and the BCBS Methodologies detailed in Appendix 2.

9. In view of above, the instructions issued vide the circular DBOD No.BC.72/29.67.001/2011-12 dated January 13, 2012 stand superseded with effect from April 01, 2020.


Reserve Bank of India

[Press Release dt. 04-11-2019]

Case BriefsHigh Courts

Jharkhand High Court: Deepak Roshan, J., modified the sentence of the trial court to the extent in lieu of compensation which should be paid to the victim-wife.

In the pertinent case, the petitioner moved to this Court against the judgment passed by the Additional Sessions Judge-I, whereby the appeal preferred by the petitioners was dismissed and the judgment of conviction and order of sentence whereby the petitioners were found guilty for offence punishable under Section 498-A of Penal Code, 1860 and they were convicted and sentenced to undergo RI for 18 months and fine of Rs 1000 each has been affirmed.

The counsel for the petitioners, J.P. Pandey, submitted that there are contradictions in prosecution witnesses and the allegations made in the FIR does not corroborate with the evidence of the informant hence, the petitioners deserve to be acquitted. Further, the petitioners have remained in custody for about one month as such some leniency may be granted by this Court.

The Court held that it cannot interfere with the findings of the courts below due to the limited scope of the revisional jurisdiction, therefore, the conviction against the petitioners are confirmed. With respect to the sentence, the Court observed that the incident is of the year 2004 and 15 years have elapsed and the petitioners have suffered the rigors of litigation for the last 15 years and also remained in custody for 36 days. The court was of the view that it may not be proper for this Court to send the accused persons back to prison and found that it is expedient in the interest of justice that the sentence should be modified in lieu of compensation which should be paid to the victim-wife. Hence, the Court modified the impugned order to the extent that the petitioners are sentenced to undergo for the period already undergone subject to the payment of fine of Rs 5000 each failing which they shall serve the rest of the sentence as directed by the trial court. [Santosh Mandal v. State of Jharkhand, 2019 SCC OnLine Jhar 1453, decided on 18-10-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: Dr Ravi Ranjan, J. allowed the appeal filed by legal heirs of a person who died in a ‘railway untoward accident’, under Section 16 of the Railway Claims Tribunal Act, 1987.

The claimants herein were the sons of the deceased person who died in an accident during his railway journey. The claimants filed a case seeking compensation from the railway authority. However, the case was dismissed by the Railway Claims Tribunal on the ground that the deceased was not a bona fide passenger as no journey ticket was found with the dead body. Also, the train was a reserved one with no general class compartments and the deceased had no reservation. So the accident would not be included under the ‘railway untoward incident’. Aggrieved thereby, this appeal was preferred by the claimants.

The Court relied on Union of India v. Rina Devi, (2019) 3 SCC 572 where it was held that the mere absence of ticket cannot be proof that the deceased was not a passenger. Further, placing reliance on the judgment in Union of India v. Rani Devi, 2016 SCC OnLine Pat 777 the Court held that the fact the claimant was not traveling in the assigned class, does not deprive the claimants of the compensation. It was opined that the fact that the deceased was in the precinct of the railway is presumed proof that he had a valid ticket.

Hence, the appeal was allowed granting just and proper compensation. [Rakesh Kumar v. Union of India, 2019 SCC OnLine P&H 2083, decided on 20-08-2019]

Case BriefsHigh Courts

Allahabad High Court: Rajnish Kumar, J. while allowing the instant appeal ordered for enhanced compensation to the appellant/claimant.

In the instant case, the appellant/claimant filed a claim petition after his son died in a motor accident.

The Motor Accident Claims Tribunal/Additional District Judge allowed the above claim petition and awarded Rs 55,000 as compensation along with interest at the rate of 8% per annum, out of which Rs 27,500 for the appellant/claimant and Rs 27,500 to his wife, i.e., the mother of the deceased.

Aggrieved by the compensation, this instant first appeal was filed.

Counsel for the appellant, M. Saeed submitted that the deceased was young and studied in Class VIII l. He was a bright student. There are six dependants in the family. If he would have been alive, he would have earned a lot and helped the appellant in maintaining all. But, the Tribunal wrongly and illegally assessed the notional income of the deceased as Rs 15,000 which should have been higher in view of Kishan Gopal v. Lala, (2014) 1 SCC 244. He further submitted that the multiplier of 5 should have been applied to the age of the father, instead, it should be applied to the age of the deceased. Lesser amount was awarded towards conventional heads, namely loss of estate, loss of consortium and loss of funeral expenses, which are also liable to be enhanced.

He also relied on the judgment of the Supreme Court i.e., Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65 by which a multiplier of 15 is liable to be applied in the present case.

Counsel for the respondent, R.C. Sharma submitted that the deceased was aged about 14 years, as such, he was minor at the time of death. Therefore, the notional income of Rs 15,000 has rightly been assessed and the multiplier has rightly been applied to the age of the father. Moreover, relied on two cases i.e., Khalil Ahmad v. Jitendra Bhushen Pandey, F.A.F.O. No.377 of 2001 and Om Prakash Verma v. Krishna Goel, F.A.F.O. No.285 of 2009 and submitted that the appellant is entitled only for a fixed compensation of Rs 1,50,000.

After analyzing the facts and submissions of the parties, the Court observed that the notional income of Rs 15,000 was assessed by the Tribunal as no evidence was adduced as to the income of the deceased. The case of Kishan Gopal was not applicable to the facts and circumstances of the present case because in that case the deceased was assisting the appellants in their agricultural occupation. While citing two judgments of the Supreme Court – National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, in paragraph 59.7 and Royal Sundaram Alliance Insurance Co. Ltd. v. Mandala Yadagiri Goud, (2019) 5 SCC 554, the Court came to a conclusion that the multiplier should be applied on the age of the deceased.

But, observed one factor that in the case of Sarla Verma v. DTC, (2009) 6 SCC 121, the multiplier was provided from the age of 15. The Supreme Court in Reshma Kumar held that in cases where the age of the deceased is up to 15 years, irrespective of Section 166 or Section 163-A under which the claim for compensation has been made, a multiplier of 15 should be followed.

In view of the above, this Court held that a multiplier of 15 should be applied in the present case in place of 5. Furthermore, the court held that the appellants are entitled to Rs 15,000, Rs 40,000 and Rs 15,000 under the conventional heads in view of National Insurance Company in place of Rs 2000 and Rs 3,000. [Gaya Prasad v. K. Trivedi, 2019 SCC OnLine All 3670, decided on 01-10-2019]

Case BriefsHigh Courts

Patna High Court: S. Kumar, J. dismissed the appeal filed by the insurance company on the grounds that the parties were liable severally as well as jointly. Although the company had the right to recover such compensation paid from the other party involved in the accident for which insurance was being claimed.

A miscellaneous appeal was filed under Section 173 of Motor Vehicle Act by the appellant against the Judgment and Award passed by the 1st Additional District Judge-cum-Motor Accident Claim Tribunal, Saran at Chapra in Claim Case No. 22 of 2002, by which the learned Claims Tribunal directed the appellant to pay a sum of Rs 3,50,000 to the claimant with interest @ 6 % per annum from the date of claim case till its realization.

The claimant was the husband of one Parwati Devi who died in a motor accident while travelling on a Commander Jeep which collided with another Commander Jeep on 19-09-2001 at about 10:00 PM The deceased was seriously injured and while she was being taken to hospital she succumbed to the injuries. An FIR was instituted under Sections 279, 338 and 304-A of the Penal Code against the drivers of both the vehicles and after investigation the police found the case to be true against drivers of both vehicles.

The appellant had appeared and had filed their written statement in which they denied the claim of claimants. The tribunal, after having examined the material brought on as evidence, held that the deceased died due to rash and negligent driving by the drivers of both vehicles and there was composite negligence on part of both the drivers. The Tribunal had further held that it was a case of composite negligence and the claimant was entitled to claim the compensation amount from either the owner or the insurer of the vehicle and had directed the appellant who was the insurer, to pay compensation.

High Court did not find any error or infirmity in the order passed by the tribunal and as such present appeal was dismissed as a liability to pay the compensation was joint and as well as several. However, since there was a specific finding of the tribunal that there was composite negligence on part of drivers of both the vehicles as such the appellant was entitled to recover 50% of the compensation amount paid to the claimant from the owner /insurer of the other offending vehicle.

In view of the above noted facts, the instant appeal was dismissed with the directions that the insurance company had to pay the balance claim amount with interest @ 6% from the date of presentation of claim till its realization within one month from the receipt of a copy of order passed by the court with a right of recovery of 50% of the compensation amount so paid from the owner /insurer of the other offending vehicle.[New India Assurance Co. Ltd v. Kanchan Bhagat, 2019 SCC OnLine Pat 1737, decided on 02-09-2019]

Bail Application
Case BriefsHigh Courts

Himachal Pradesh High Court: Tarlok Singh Chauhan, J. partly allowed the appeal of filed by an employer challenging the compensation granted to a deceased employee’s wife under the Employees Compensation Act, 1923 on the ground that before passing a penalty order against the employer, a reasonable opportunity must have been given to him to justify himself.

Appellant herein was the employer of the respondent’s husband (deceased employee) who was employed as a driver by the appellant and died in an accident. Respondent’s wife filed a petition against the appellant seeking payment of compensation along with interest and penalty against the appellant and other respondents towards their joint and severe liability under the Employees Compensation Act, 1923. The appellant in his reply denied the salary as claimed and requested the recovery of the insurance amount. However, the Employee’s Compensation Commissioner-II awarded the respondent with compensation and interest along with a penalty. Aggrieved by this award, the appellant filed the present appeal.

Navlesh Verma learned counsel for the appellant, contended that there was no employer-employee relationship between the appellant and the deceased employee; and secondly that no show-cause notice was issued on the appellant-employer before passing an adverse award against him.

The Court held that the records proved that there was a relationship of employer and employee between the appellant and the deceased.

With respect to the second contention, it was held that as per the judgment in Ved Prakash Garg v. Premi Devi, (1997) 8 SCC 1 penalty under Section 4-A(3)(b) of the Act can only be imposed when the employer is given a prior notice and an opportunity to defend himself against the same which was certainly not given to the appellant herein.

Hence, the court allowed the appeal and set aside the penalty imposed on the appellant. [Amandeep Singh v. Shaheena Parveen, 2019 SCC OnLine HP 1416, decided on 30-08-2019]

Case BriefsHigh Courts

Delhi High Court: Najmi Waziri, J. dismissed an appeal filed by the insurer against the award of compensation made by the Motor Accident Claims Tribunal, and also rejected insurer’s claim to recover the amount so awarded from the owner of the offending vehicle.

The insurer, represented by Hetu Arora Sethi, Advocate impugned the award of compensation on the ground, inter alia, that the deceased (a minor) was not holding a valid driving license at the time of the accident and was liable for contributory negligence.

Perusing the record and noting the arguments on the issue, dealt with by the Tribunal, the High Court observed: “Non-possession of the driving license by itself would not be a reason for not granting the award of compensation, if it is proven that the accident was on account of rash and negligent driving of the offending vehicle.” The High Court was of the opinion that the rashness and negligence of the offending vehicle had been duly established in terms of the facts and reasoning of the impugned order.

Relying on Sudhir Kumar v. Surinder Singh, (2008) 12 SCC 436, the Court reached the conclusion that the rationale of the impugned order could not be faulted because the negligence of the offending vehicle was evidently much larger than that of the deceased motorcyclist. The offending vehicle was imprudently being driven, i.e. in a rash and negligent manner, as stated by the eyewitness — the pillion rider. Accordingly, the argument regarding apportionment of liability too was rejected.

The insurer lastly contended that the right of recovery was not granted to them although the driver was not holding a valid driving license for the insured vehicle which was a goods-carrier/ transport vehicle; the driver possessed a license only for a Light Motor Vehicle and motorcycle. It was noted that this issue has been referred to a 3-Judge Bench by the Supreme Court in Bajaj Allianz General Insurance Co. Ltd. v. Rambha Devi, 2018 SCC OnLine SC 3325. However, the High Court held that till the disposal of the said matter, the issue is governed by Mukund Dewangan v. Oriental Insurance Co. Ltd., (2017) 14 SCC 663, which held that “there is no requirement to obtain separate endorsement to drive transport vehicle, and if a driver is holding license to drive light motor vehicle, he can drive transport vehicle of such class without any endorsement to that effect.”

Resultantly, the appeal was dismissed.[National Insurance Co. Ltd. v. Sushila, 2019 SCC OnLine Del 10045, decided on 21-08-2019]

Case BriefsHigh Courts

Rajasthan High Court: Sandeep Mehta, J. dismissed an appeal from the Insurance company seeking exoneration of a lower court order.

In the present case, two appeals arose challenging the lower court judgment-cum-award. The parties have challenged the amount awarded by the trial court, primarily disputing over the salary amount earned by the deceased driver. Due to contradictions in the statements of the claimants, the insurance company and the employer of the deceased, the trial court had considered the income being Rs 2000 per month and accordingly had calculated the compensation amount under Section 163A of the Motor Vehicles Act, 1988. The claimants being one of the appellants filed for enhancement of the compensation amount awarded and the Insurance Company, being the other appellants was seeking exoneration of the award.

The counsel representing the insurance company, D.K. Gaur, claimed exoneration on two grounds, that the deceased driver was not having a valid driving license to drive a light motor vehicle and he was driving in a rash and negligent manner.

The Court upon perusal of facts, circumstances, and records dismissed the appeal of the claimants stating the award passed by the trial court is not on the lower end and is absolutely justified. The Court also dismissed the contentions of the insurance company stating that the controversy relating to the deceased not having the valid license was decided as no longer res Integra by Mukund Dewangan v. Oriental Insurance Company Ltd. (2017) 14 SCC 663 and stated that in United India Insurance Co. Ltd. v. Sunil Kumar, (2014) 1 SCC 680, it was decided that regarding negligence of the owner it is “to be decided by the structured formula and the adjudication thereunder is required to be made without requirement of any proof of negligence of the driver/owner of the vehicle involved in the accident”. Thus, the Court decided both the appeals are to be dismissed and the award passed by the trial court was justified.[Maniram v. Jenudeen, 2019 SCC OnLine Raj 2809, decided on 09-09-2019]

Case BriefsHigh Courts

Rajasthan High Court: Sandeep Mehta, J. rejected an appeal filed by the National Insurance Company challenging the order passed by the Motor Accident Claims Tribunal, Jaitaran on 11-01-2008.

The claim application was filed by the claimants Amra Ram and Kamla, where they were awarded a compensation to the tune of Rs 2,25,000 for the death of their son Rajuram, who died in an accident on 07-12-2003 while he was driving his motorcycle driven and collided with a Utility Jeep which was insured with the appellant Insurance Company. The plea which was raised by the appellant was that the driver of the insured vehicle was having a licence authorizing him to drive a light motor vehicle only and as the jeep was a light commercial vehicle, the same was being used in contravention of the policy conditions and as such, the Insurance Company was wrongly held liable to satisfy the award.

The Court held that the claims raised by the Insurance Company in this appeal were not res-integra in view of the law laid down by the Supreme Court in the case of Mukund Dewangan v. Oriental Insurance Company Ltd. (2017) 14 SCC 663 wherein, it has held that, “A transport vehicle and omnibus, the gross vehicle weight of either of which does not exceed 7500 kg would be a light motor vehicle and holder of a driving licence to drive a light motor vehicle as provided in section 10(2)(d) is competent to drive a transport vehicle or omnibus, the gross vehicle weight of which does not exceed 7500 kg.” Therefore, no separate endorsement on the licence is required to drive a transport vehicle of light motor vehicle class. A licence issued under Section 10(2)(d) continues to be valid after Amendment Act 54 of 1994. The Court finally rejected this appeal.[National Insurance Company Ltd. v. Amra Ram, 2019 SCC OnLine Raj 2810, decided on 09-09-2019]

Bail Application
Case BriefsHigh Courts

Himachal Pradesh High Court: An appeal was contemplated by Vivek Singh Thakur, J. arising out of a civil suit where the appellant was sued for recovery of damages amounted to Rs 10 lakh on account of the death of a child due to negligence. The appellant hence challenged the judgments in the instant appeal.

Factual matrix of the case was that a decree was passed in favor of the respondent in the original civil suit, where it was held that the girl who was a trainee at Co-operative Management Course went to Chamba to study Chamera Project and was standing near a tunnel, officials of appellant had opened the gates of water all of a sudden without any warning only by blowing siren, due to the sudden water outburst the girl washed away in the water and died. The respondent had contended that due to the negligent act of the appellant the girl died and they were liable to compensate. The respondent had argued that the appellant had failed to warn the visitors and also allowed the students to visit a site which was located in danger zone.

Appeal was filed on the ground that for want of sufficient material on record, learned District Judge had committed a mistake by holding that accident had taken place on account of sheer negligent act on the part of officials of the appellant as respondent had failed to place on record any permission to visit Dam area and deceased daughter of plaintiff was herself negligent for entering in the prohibited area despite warnings published on signboards affixed on the spot and adequate steps had already been taken by the appellant to warn the intruders from going in the Dam area and area was duly fenced. Further that in case it is found that there was some negligence on the part of the appellant, then, the amount of compensation was liable to be reduced as it had been determined on the higher side without any sufficient material on record and thus it is contended that impugned judgment suffers infirmity, illegality, irregularity and perversity.

The respondent in the instant appeal is the mother of the girl who also contested that she was dependent on the income of the girl for her day to day expenditure. It was submitted that the monthly income of the girl was Rs 8500 before the incident from a different source and after the completion of the course she was to get Rs 12000 as her monthly salary.

On the contrary, the appellant had submitted that the claim of the respondent was not maintainable and the story narrated was wrong. It was alleged that silt was collected in the dam area the same was to be flushed out and gates of flushing tunnels were required to be opened and flushing gates were opened after incorporating entries in the logbook by the officials concerned and as per practice as and when gates were required to be opened, Supervising Officer deputes subordinate employees for opening the gates from the control panels after informing Security Guard, who was deputed at the flushing outlet at Bakani around the clock and on receiving information siren is blown thrice by Security Guard and thereafter employees go back to control panels and open the gates. It was further claimed that for the orders, notified by the District Magistrate, gates can be opened at any time without notice and people have been cautioned not to go in the river even at the time when there is no flow of water and further that girls washed away in incident, who were warned and sent back by the Security Guard, had possibly sneaked into the place and went into the river and despite blowing of siren they did not come out and unfortunately were washed away in the water of flushing tunnels and these girls were trespassers in the area in question. It is canvassed that these girls were grown up and were able to understand the perils involved.

The trial court had already decided the matter in favor of the respondents and a total sum of Rs 7 lakhs was imposed upon the appellant.

In the instant appeal, the appellant had placed witness who had testified that the girl was not having the said permission to visit the dam area but Court held that the photographs showing the particular fenced area was not the area of the incident. The Court noted that there was wire fencing and warning boards on the spot and hence it substantiated the plea of the appellant that adequate steps by fencing and boards were taken to prevent the incidents. It was further noted that the girl was not having any permission to visit the area. Court observed that the gates were opened by the orders of the Chief Engineer but there was no documentary evidence and the order alleged was verbally communicated.

The Court thus further observed that the fencing was completed after the accident; it was held that, “It is evident that there is no force in the contentions raised by the appellant that there was no negligence on their part.” Hence, the appeal was dismissed and the quantum of compensation was increased. [NHPC v. Rukmani Devi, 2019 SCC OnLine HP 1469, decided on 06-09-2019]

Case BriefsHigh Courts

Bombay High Court: Vibha Kankanwadi, J. partly modified the award granted by Motor Accident Claims Tribunal on being challenged.

The trail of events in the case is as follows:

Original claimants filed the claim petition for getting compensation on account of the death of their son—Krushna Murlidhar Kabra. Deceased along with his friend were on a motorcycle and were dashed by Mahindra Bolero Vehicle which had come in a rash and negligent manner and dashed from the backside due to which both the riders on the motorcycle received severe injuries.

Further, Respondent 1 was the owner of the Bolero Vehicle which was insured with Respondent 2 on the date of the accident.

It was contended that the deceased was 22 years old and attaining a degree in M.Com. He was also doing some private job with a monthly salary of Rs 18,000 per month. He was also involved in share purchasing and selling out of which he used to earn Rs 3000 per month and in total his income for the month was estimated to be Rs 21,000 per month. On the basis of the said amount, compensation claimed was of Rs 55,00,000.

Taking into consideration the evidence placed, the Motor Accident Claims Tribunal had held that claimants had proved that Krushna died in the said accident due to rashness and negligence if the driver of the offending vehicle. Insurance Company had also failed to prove breach of terms of policy and therefore, both the respondents were held liable to pay compensation to the claimants.

Advocate, V.N. Upadhye represented the appellant. Advocate P.R. Katneshwarkar, holding for Advocate L.B. Pallod, appeared for Respondents 1 and 2.

The appellant submitted that he is challenging the Judgment & Award on the point of quantum. He submitted that, excessive compensation was awarded when, in fact, the law requires just compensation. Tribunal’s basis for granting award and calculating the same based on an imaginary figure ended in granting bonanza to the claimants.

High Court stated that, “What remains after discarding the oral evidence in respect of point of income adduced by the claimants is, the only guess work that has been done by the learned Tribunal.”

Courts are required to take a note of the fact of unemployment prevailing in the society. Highly qualified persons are unable to get job and if at all they are able to get, then they are required to be satisfied with a lesser salary.

Due to the above-stated circumstances, merely on the count that deceased was a brilliant student, his monthly salary cannot be assessed to Rs 20,000 per month, but it was reasonable to derive that he could have fetched a job with a salary of Rs 10,000 per month with the qualifications he seemed to have attained.

Tribunal included the future prospectus in the amount as stated above of Rs 20,000, but on placing reliance on the decision of National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, the type of calculation as stated was not expected. High Court modified the same and did the calculations based on taking into consideration his income at Rs 10,000 per month.

The fact that the deceased was a bachelor and in view of the decision in Sarla Verma v. DTC, (2009) 6 SCC 121, 50% is required to be deducted towards personal expenditure.

Thus, the claimants were entitled to get compensation of Rs 15,82,000. Accordingly, the Court gave the following order:

  • Judgment and award passed by the Member of the Motor Accident Claims Tribunal is hereby set aside and modified.
  • Rest of the award is kept as it is. [Reliance General Insurance Co. Ltd. v. Murlidhar, 2019 SCC OnLine Bom 1548, decided on 13-08-2019]
Case BriefsHigh Courts

Punjab and Haryana High Court: Ritu Bahri, J. allowed the petition and modified the award according to the prevalent rate in accordance with the decision by the Supreme Court.

An appeal was made by the Claimant-Appellants to seek the enhancement of compensation awarded by Motor Accident Claim Tribunal on the account of the death of Ashok Kumar in a motor accident. 

The facts of the case were that the Ashok Kumar had died in a road accident by the car being driven by its driver rashly and negligently and at high speed and struck Ashok Kumar while he was returning with his brother, due to which he fell down and sustained serious injuries on his body. Soon he died. The claimant-appellant thus filed a claim petition before the tribunal. The tribunal passed an order where the compensation was awarded along with the interest at 7.5% per annum. Feeling dissatisfied with the impugned award, the present appeal was preferred.

The court opined that to meet the ends of justice the compensation had to be assessed keeping in view the minimum wages prevalent in Haryana as passed by Hon’ble Supreme Court in Magma General Insurance Co. Ltd. v. Nanu Ram, Civil Appeal No. 9581 of 2018. Thus, the amount was modified with the interest at 9% per annum. [Usha v. Rajesh Arora, 2019 SCC OnLine P&H 1415, decided on 13-08-2019]

Case BriefsHigh Courts

Uttaranchal High Court: Sudhanshu Dhulia, J. remanded a matter pertaining to the Motor Accident Claims Tribunal and directed them to decide on the matter expeditiously. 

The appeal was filed as the appellant as she was aggrieved by the order passed by the Motor Accident Claims Tribunal. The appellant’s husband, Bhupesh Chandra Singh, was a Junior Engineer in Uttarakhand Jal Vidyut Nigam Limited. On 13-09-2015, while he was going on an official vehicle from “Daakpatthar” to “Koti Icchadi Dam”, he met with an accident as the vehicle fell into a deep “Khadda”. Consequently, he sustained injuries and died on the same day. On account of his death, the appellant filed a petition claiming a compensation of Rupees Eighty Lakh Twenty Thousand. The Tribunal dismissed their petition. 

The insurance Company argued that the deceased was covered under the Workmen’s Compensation Act and was insured with the New India Assurance Company, through which the claimant had already received a compensation of Rupees Seven Lakh Two Thousand One Hundred Seven and the claim petition was barred by Section 167 of the Motor Vehicles Act, 1988. This argument is not valid as the deceased was not a workman and was not covered under the Workmen’s Compensation Act, 1923.

The appellants argued that the vehicle in question was covered under the Comprehensive Policy. To this, the insurance company contested that in the comprehensive policy, the liability is only limited and what amount of compensation has to be given will depend upon the terms and conditions of the policy.

The status of a Comprehensive Policy, has been elaborated in the Supreme Court’s case of National Insurance Co. Ltd. v. Balakrishnan, (2013) 1 SCC 731, where it was held that there is no doubt that a comprehensive policy covers the liability of the insurer for payment of compensation for the occupant in a car. 

Relying on this judgment, the Court set aside the order of the Tribunal  remanded the matter back to the Motor Accident Claims Tribunal, and directed them to hear and decide on the matter expeditiously.[Preeti Khetwal v. Uttarakhand Jal Vidyut Nigam Ltd., 2019 SCC OnLine Utt 760, decided on 06-08-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Appellate Tribunal (SAT): Justice Tarun Agarwala (Presiding Officer), Dr C.K.G. Nair (Member), and Justice M.T. Joshi (Judicial Member) allowed an appeal challenging an order by SEBI.

The appellants, who are husband and wife, challenged the order of the Whole Time Member (‘WTM’) of SEBI. They invested Rs 18,25,041 in buying the shares of VCL in 2002. They argued that the said order violates the directions given by this Tribunal by order as well as the mandate given to SEBI by the SEBI Act, 1992 in protecting the investors. Vital Communications Limited (‘VCL’) and other companies were directed to disgorge the unlawful gain of Rs 4,55,91,232 with interest for violation of various provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (‘PFUTP Regulations, 1995’) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (‘PFUTP Regulations, 2003’). 

The tribunal by an earlier order had directed SEBI to look into the complaint of the appellants for alleged misleading and fraudulent advertisements issued by VCL, along with an investigation. In case SEBI finds VCL guilty of playing fraud on the investors, it may consider directing the concerned entity or VCL to refund the actual amount spent by the Appellants on purchasing the shares in question and with appropriate interest and as per law.

The appellants contended the following:

  • The WTM of SEBI passed a disgorgement order against the Company and the connected entities, when they were directed to refund the amount spent by the appellants on purchasing the shares of VCL with appropriate interest as per law. 
  • SEBI is in breach of not following the directions of the Tribunal, apart from not fulfilling its mandate of protecting the investors as they have been pursuing this matter since 2002 at a very high personal cost. 
  • Based on these reasons, they must be compensated accordingly.

The respondent submitted the following:

  • Tribunal’s order dated was modified by another order. While the first order stated that SEBI may consider compensating the appellants, the second-order of this Tribunal modified it by stating that such considerations must be in accordance with the law. 
  • It is virtually impossible for SEBI to provide for restitution to a large number of investors who have invested in the secondary market and incurred losses and giving compensation on a selective basis would be discriminatory as there may be a large number of affected investors and restitution to investors as a class is a complex task beyond the capacity of SEBI.

The Tribunal held that the appellants highlighted the violations made by VCL and other entities owing to their efforts since 2002 and that SEBI is not a helpless entity as it claims to be in its order. The Tribunal also made clear that direction contained in the amended order was that if violation by the VCL was proved, the appellants’ claim may be considered as per law. They directed VCL and other entities to pay a sum of Rs 4.5 crore (approximately) along with interest holding that the basic idea behind disgorgement is restitution. [Ram Kishori Gupta v. Securities & Exchange Board of India, 2019 SCC OnLine SAT 149, decided on 02-08-2019]

Case BriefsHigh Courts

Uttaranchal High Court: Sudhanshu Dhulia, J., allowed the appeal filed by the appellants against the award passed by the Motor Accident Claims Tribunal, Rudrapur in MACT Case No. 153 of 2013, whereby compensation of Rs 3,00,000 was awarded to the claimants.

The facts of the case are that, Roshni, the daughter of the appellant, aged 12 years, died in an accident on a motorcycle. The appellant filed a claim petition and a compensation of Rs 6,00,000 was claimed on account of the death of Roshni. The MACT, keeping in view the age of the deceased Roshni as 12 years, fixed her annual notional income as Rs 20,000 as per Section 163-A of the Motor Vehicles Act, 1988. The learned Tribunal thereafter applied a multiplier of 15 and calculated the amount of compensation to the tune of Rs 3,00,000. Aggrieved by the amount of the compensation, the appellants have filed the appeal before this Court.

In the instant case, the Court observed that pursuant to the amendment made in the year 1994 to the Act and after the various decisions of the Supreme Court from time to time, the annual notional income of a person who is a non-earning member has increased from Rs 15,000 to Rs 30,000, which has to be considered by the Tribunal under the facts and circumstances of each case. Further, relying upon the precedents of Kishan Gopal v. Lala, (2014) 1 SCC 244 and Lata Wadhwa v. State of Bihar, (2001) 8 SCC 197, the Court held that the notional income of the girl child Roshni shall be fixed at the rate of Rs 30,000 per annum, which is appropriate. On this amount applying the multiplier of 15, the amount of compensation comes to Rs 4,50,000 with interest.[Parwati Devi v. Paramjeet Singh, 2019 SCC OnLine Utt 672, decided on 03-07-2019]

Case BriefsHigh Courts

Karnataka High Court: K. Somashekar, J. modified the order of the Motor Accidents Claims Tribunal (MACT) by enhancing the compensation awarded to the petitioners.

On 20-02-2008, the deceased Narasaiah after being hit by a car was taken to the hospital where he succumbed to his injuries. Due to the untimely death of the deceased, the petitioners, his wife and two children, suffered mental shock, pain, agony and suffering and lost financial assistance too. Therefore, the petitioners sought compensation.

The Motor Accidents Claims Tribunal (MACT) awarded compensation of Rs 1,90,000 with interest at 6% p.a. The petitioners were not satisfied with the aforesaid award and thus this petition for enhanced compensation.

Counsel for the petitioner, Bhushani Kumar contended that the compensation awarded is very low considering the family’s condition. It was further contended that the MACT failed to consider the income of the deceased by opining that the age of the deceased was 65 years whereas he was 50 years. Moreover, no compensation was awarded for loss of love and affection and towards transportation of deceased’s body.

Counsel for the respondent – Insurance Company, K. Suresh contended that the accident occurred due to the contributory negligence of the deceased also. Therefore, the insurer is not liable to indemnify. It further contended that the award for compensation is just and proper.

The Court observed that it would be appropriate to hold the multiplier of ‘9’ as the deceased falls under the age group of 56-60 years as per the case of  Sarla Verma v. DTC, (2009) 6 SCC 121. Taking the Supreme Court’s view in National Insurance Co. Ltd. v. Pranay Sethi, 2017 SCC OnLine SC 1270, 10% of the deceased’s income ought to have been added towards future prospects, which was not done by the MACT. But, the MACT was right in deducting 1/3rd of his income towards personal expenses. Therefore, the compensation under the head ‘loss of dependency’ comes to Rs 3,56,400. It was further observed that the compensation under the conventional head as per Pranay Sethi case should not exceed Rs 70, 000. But, the MACT awarded Rs 40,000, which is to be enhanced to Rs 70,000.

In addition to this, the Supreme Court in Magma General Insurance Co. Ltd. v. Nanu Ram, 2018 SCC OnLine SC 1546 held that “Parental consortium is granted on the premature death of the parent, loss of parental aid, protection, affection…”. In the instant case, the children of the deceased have lost the passion of their father. Therefore, an additional sum of Rs. 40,000 each should be awarded.[Laxmamma v. Raju P., 2019 SCC OnLine Kar 882, decided on 19-07-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: Kuldip Singh, J. modified the claim allowed by the Tribunal on the ground that the deceased was maintaining her family.

An appeal was filed by the claimant against the award made by Motor Accident Claims Tribunal, Karnal.

Facts of the case were that car accident took place which was driven by Jagdish Lal Ahuja i.e. Claimant 1 at very moderate speed. When they reached downside the railway overbridge a jeep being driven by Respondent 1 came at a very fast speed in a rash and negligent manner from the opposite side. Respondent 1 could not control the Jeep and hit the motorcycle of one Sandep Kumar and then Trax Jeep lost the control and hit the car. Deceased received multiple injuries. She succumbed to the injuries at Civil Hospital, Karnal. It was claimed that the deceased was earning Rs 16,000 to Rs 20,000 per month. Because of the death of the deceased, the claimants were deprived of the income of the deceased. In the reply, the respondent denied the fact that the accident took place due to the negligence of the jeep driver. The insurance company also denied the claim. The Tribunal held that the accident took place due to rash and negligent driving of the driver of the jeep but the Tribunal relied upon the income tax return for the year 2002-2003 and applied the multiplier of 8 and ordered the compensation amount accordingly. Thus aggrieved by the order of compensation an appeal was preferred by the claimant.

High Court opined that the Tribunal erred in discarding the income tax return for the year 2002-2003 only on the ground that it was filed after the death of the deceased. The Tribunal did not appreciate that the income tax authorities did not accept this return to be correct. The court also opined that as deceased was about 55 years old at the time of the accident, the multiplier of nine was to be applied. On the question that the dependents were eligible for the compensation, reliance was placed upon the case of Gujarat SRTC v. Ramanbhai Prabhatbhai, 1987 AIR (SC) 1690, in which various observations were made to press that the claimants being legal heir are entitled to compensations. It was further opined that as it cannot be assumed that unit is still running and as there was a loss of management on account of the death of the deceased who was looking after the entire affair and was supporting the family the multiplier of 9  should be applied. Thus the claim of Rs 11,95,000 was ordered to be payable along with the interest at 7.5 percent.[Jagdish Lal v. Ram Chander, 2019 SCC OnLine P&H 1175, decided on 11-07-2019]

Case BriefsHigh Courts

Rajasthan High Court: P.K. Lohra J., in an appeal under Section 173 of the Motor Vehicles Act, 1988 upheld the decision of the impugned judgment and directed the insurer to first pay the compensation amount to the claimants and then recover from the insured.

In the present case, the appellants being Megma HDI General Insurance Company Limited had appealed before the High Court challenging the judgment and award passed by the Motor Accident Claims Tribunal, Jodhpur. The Tribunal had absolved the appellants herein from the liability to pay compensation to the claimants and the onus was on the owner of the vehicle. However, it had directed the appellants to pay the compensation to the claimants first and thereafter claim the amount from the owner of the vehicle, the insured.

Challenging this above order, the counsel representing the appellants, Dhanpat Choudhary, placed reliance on the Supreme Court judgment National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 and submitted that the tribunal erred in ordering the appellants to first pay the compensation to the claimants and thereafter recover it from the insured party.

The High Court, after perusal of the Tribunal’s order, referred to the Supreme Court judgments in Pappu v. Vinod Kumar Lamba, (2018) 3 SCC 208 and Amrit Paul Singh v. Tata AIG General Insurance Co. Ltd., (2018) 7 SCC 558 wherein it was held that in case of any loss to the third party, the insurer is first required to pay compensation to the claimants and then recover the same from insured. It stated that the Tribunal had absolved the appellants from the duty due to the insured party not complying with the insurance policy but in order to mitigate the hardship of the claimants, the Tribunal directed the appellants to recover the compensation amount from the insured after paying the same to the claimants. The appeal was dismissed.[Megma Hdi General Ins. Co. Ltd. v. Likhama Ram, 2019 SCC OnLine Raj 1292, decided on 05-07-2019]

Case BriefsHigh Courts

Rajasthan High Court: P.K. Lohra, J. allowed an appeal for enhancement of the compensation amount awarded by the Motor Accident Claims Tribunal, Bikaner.

In the instant case, the husband of the appellant wife, aged about 38 years, was driving to Bikaner from Delhi in his car when he was hit by a truck, driven at a high speed and rashly. The severity of the accident caused the husband to expire on spot. The appellants claimed compensation. The Tribunal decided the accident to have happened due to the negligence of the truck driver and there was no negligence on the part of the deceased. The Tribunal had made one-third deduction as his personal expenses from the salary and thereafter, compensation for loss of dependency, and non-conventional damages worked out total amount of compensation to Rs 4,19,000.

The Counsel representing the appellant, Gurvinder Singh, challenged the order contending that the tribunal did not consider the income tax return of the deceased and income of business profits while calculating the compensation amount. He also put forth, the tribunal erred in not taking into consideration the number of dependents (which was four in number) instead it considered three. Lastly, the learned counsel contended that the interest should have been awarded at 9% per annum.

The Counsel representing the respondents, Mukul Singhvi, defended the impugned judgment of the tribunal and stated that the court was correct in calculating the interest at 6% per annum.

The High Court upon examination of the evidences produced before the Court, decided to enhance the compensation amount. It reassessed the income of the deceased and took into consideration the number of dependents of the family, hence deducted one-fourth under the head “Loss of Dependency”. The High Court placed reliance on the Supreme Court Judgment in Sarla Verma v. DTC, (2009) 6 SCC 121, wherein it was held that the number of dependents shall be taken into consideration while calculating one’s deduction of personal expenses. However, while calculating the future prospects of the deceased it allowed a 40% increase on the same owing to difficulty in calculating one’s future prospects and by placing reliance on the decision of the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi, (2017) 16 SCC 680 wherein it was decided to make the quantum of compensation just and reasonable. The court also awarded unprecedented damages under the head “loss of consortium”, which relates to the right of spouse to the company care, help, etc. It thereafter went on to enhance the amount awarded towards the children of the deceased and for the funeral expenses as well. The Court, therefore, reassessed and enhanced the compensation amount partly to what the Tribunal had declared, and it also directed the rate of interest to be at 9% per anum in accordance with the Reserve Bank of India Guidelines.[Arti v. Teja Ram, 2019 SCC OnLine Raj 1168 decided on 02-04-2019]