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]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): V.K Jain (Presiding Member), J. allowed a revision petition filed by a farmer seeking enhancement of compensation provided for loss of his crops.

Petitioners herein were farmers who had bought seeds from the respondent society. The resultant crops were not up to the mark even though the petitioners had followed proper instructions and procedures and had taken due care and precautions required for the said crop. Aggrieved from the financial loss incurred, the petitioners approached the District Forum but their complaints were dismissed by the forum. Consequently, they approached the State Commission which allowed their appeals and directed the respondents to pay compensation to the petitioners. However, since the petitioners were not satisfied with the quantum of the compensation awarded to them by the State Commission, they approached the Commission by way of these revision petitions. The petitioners also submitted applications seeking condonation of delay in filing the revision petitions.

The Court condoned the delay considering the fact that the petitioners were poor farmers who were not awarded even the minimum price of the crop while assessing the compensation for the loss of the crop.

The Court, calculating the compensation for the loss of the crop at Rs 17,000 per quintal, awarded the petitioner, Vinod Kumar, Rs 3,40,000 and the petitioner, Vijay Kumar, Rs 1,02,000 in addition to compensation for the mental harassment and the cost of litigation awarded by the State Commission. The balance payment to the complainants was to be made within eight weeks from the date of the judgment, failing which it would carry interest at 9 per cent per annum from the date of institution of the complaint.[Vijay Kumar v. IFFCO, 2019 SCC OnLine NCDRC 78, decided on 17-05-2019]

Case BriefsHigh Courts

Uttaranchal High Court: Appeal against the order of Motor Accident Claim Tribunal was entertained by Alok Singh, J. where the petitioner sought enhancement of the claim awarded by the Tribunal.

The deceased along with another was on a scooter, the deceased was a pillion rider, on their way the scooter was hit by an ambassador car, both the boys were grievously hurt and eventually deceased succumbed to his injuries. The claim of the family of the deceased was granted partly and thereby the appellant felt aggrieved by the order.

M.K. Goyal, Advocate for the appellants had challenged the judgment of the Tribunal on the following counts: first, Tribunal had failed to consider the monthly income of deceased as Rs 14,500; second Tribunal had applied the wrong multiplier and third, Tribunal had awarded fewer amount towards funeral expenses and no amount awarded for loss of estate. All the proper documents which ascertained the income of the deceased were annexed.

The Court regarding the submission of the appellant held that, Tribunal had not erred in making an order as related to the ascertainment of the income of the deceased as the documents submitted were not reliable. But further in respect to the multiplier, it stated that, “since deceased was aged about 18 years, therefore, Tribunal has erred in applying the multiplier of 13. In view of law laid down by the Supreme Court in the case of National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, the multiplier should be of 18.”

The Court noticed that funeral charges granted by the Tribunal was Rs 5000, which was increased by the Court along with the compensation towards loss of estate. It further revalued the income of the deceased and applied the multiplier of 18 and calculated the compensation.[Satish Kumar Garg v. Sri Nar Bahadur, 2019 SCC OnLine Utt 500, decided on 14-06-2019]

Case Briefs

Jharkhand High Court: Anubha Rawat Choudhary, J. allowed an appeal made by an insurance company regarding their extent of liability towards a deceased as mentioned in the insurance policy.

An FIR was lodged by the owner of a vehicle wherein it was stated that a person (deceased) was authorized to drive his vehicle. In order to save a cow while driving, that person met with an accident and died. His legal representatives (the claimant) filed a claim application, but the insurance company denied its liability. Motor Accident Claims Tribunal (MACT) allowed the claimant’s application under Section 166 of Motor Vehicles Act, 1988 and held the insurance company liable to pay compensation of Rs. 11 lakhs with 6 per cent interest. Hence, this appeal.

Issue: Whether the deceased, who was authorized to drive the vehicle, by the owner of the vehicle, is covered under the insurance policy and if so, to what extent.

Learned counsel Ashutosh Anand, on behalf of the appellant submitted that the Tribunal did not consider the fact that the deceased was driving the vehicle with the permission of the owner so, he won’t be considered a 3rd party as he stepped into the shoes of the owner and thus claimant would be entitled to compensation only after proving that there was no rash driving or negligence on the part of the deceased.

Learned counsel  K. K. Singh, on behalf of the respondent submitted that the point raised by the appellant were raised for the first time and not mentioned in its written statement. It was further contended that the appellant did not make any plea about their extent of liability before the Tribunal and referred to a judgment of Supreme Court Ramchandra v. Regional Manager, United India Insurance Company Ltd., (2013) 12 SCC 84, in which it was rightly held that the appellant was estopped from raising the plea for the first time at the appellant stage.

The Court noted that there was no rash and negligent driving on the part of the deceased as per the police report. It was noted that the reason for the appellant’s denial of its liability to pay compensation, was that the deceased was neither a 3rd party nor a paid driver of the insured owner. It was opined that the liability of the appellant under the policy would be governed by the terms and conditions of the insurance policy. The insurance policy did not cover the list of any gratuitous passenger and no additional premium for such coverage was paid by the insured against the policy.

It relied on the judgment in United India Insurance Co. Ltd. v. Sidharat Raju, 2014 SCC OnLine P&H 3117 where it was held that the deceased steps into the shoes of the owner of the vehicle, and therefore the claimant cannot be said to a third party for the purposes of awarding compensation under the Act. Further reliance was placed on National Insurance Company Ltd. v. Ashalata Bhowmik, (2018) 9 SCC 801 where it was held that liability of an insurance company would be only to the extent of personal accident coverage under the contract of insurance.

In view of the aforesaid decisions, it was held that the extent of liability of the appellant could only be 2 lakhs with 6 percent interest from the date of filing the petition till the payment is made.[TATA AIG General Insurance Co. Ltd. v. Shakuntala Ganeriwal, 2019 SCC OnLine Jhar 642, decided on 25-04-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Dispute Redressal Commission (NCDRC): A Coram of R.K. Agrawal (President), J. and M. Shreesha (Member) allowed an appeal against the order of State Consumer Dispute Redressal Commission, Punjab that directed a doctor to compensate an aggrieved couple for the death of their three year old daughter caused by gross negligence.

Respondent herein was the father of a three-year-old girl who was diagnosed with blood cancer. The child was admitted to appellant-hospital where Dr Raman Arora (appellant 3 herein) prepared a written protocol of the treatment detailing that the patient was to be given four cycles of chemotherapy for which injections of Vincristine were to be given intravenously and injections of Methotrexate were to be administered intrathecally. Dr Vandana Bhambri and Dr Harjit Singh Kohli assisted him. The patient was given three cycles of chemotherapy, and then her bone marrow test was conducted which showed that her condition had improved. The requisite injections for the fourth cycle were handed over to Dr Harjit Singh Kohli in a sealed packet where it was clearly written that the medicine Vincristine was to be administered intravenously only. However, Dr Kohli administered the injection intrathecally, which led to the depletion in the health of the patient and ultimately she died. The aggrieved parents of child (respondents herein) filed a complaint before the State Consumer Dispute Redressal Commission which held that the doctors and hospital (vicariously) committed gross negligence. The present appeal was filed by the hospital and doctors challenging the said order.

Learned counsel for appellants Y. Rajagopala Rao, contended that the injection Vincristine was not administered on the given date, and the State Commission had erred in giving a finding that Vincristine was administered by an anesthetist i.e. Dr Kohli. Furthermore, he stated that the Histopathology report and the chemical examination report read together with the post-mortem report did not state that the death was due to Vincristine injection. Moreover, the State Commission had failed to consider the expert report which opined that the cause of death in the present case was Toxaemia of Acute Lymphoid Leukaemia, which is a natural cause in case of cancer patients. Also, he argued that Dr Raman Arora is not liable as he did not administer the medicine.

Learned counsel for respondents, Prashant Sareen, contended that the injection was given by Dr Kohli who had testified that he, along with the help of Dr Vandana, had administered the injection intrathecally and later on acquired the knowledge that such administration was fatal. Moreover, he accused Dr. Arora for being negligent as he did not even read the ordinary precautions for treatment.

The Commission relied on S.K. Jhunjhunwala v. Dhanwanti Kumari, (2019) 2 SCC 282, and applied the principle of Bolam Test that gives grounds to hold a professional liable for negligence; and ruled that the doctors were negligent in their conduct. It was held that that admittedly the entire standard protocol was given by Dr Raman Arora and the entire treatment was rendered under his care. Therefore, he was liable for any acts/ commission or omissions done by his team or the assistants who assisted him in rendering treatment to the patient.

The National Commission remarked that the State Commission had rightly relied on the expert opinion given by the Indian Medical Association, Ludhiana which held the doctors responsible for gross negligence.

Placing reliance on Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634, it was held that the hospital was vicariously liable for the negligent acts of its doctors.[Mohan Dai Oswal Cancer Treatment & Research Foundation v. Prashant Sareen, 2019 SCC OnLine NCDRC 75, decided on 24-05-2019]

Case BriefsHigh Courts

Karnataka High Court: H.T. Narendra Prasad, J. dismissed the appeal filed by an Insurance Company against the order passed by Motor Accident Claims Tribunal (MACT).

In the instant case, Jyothi and Nagaraj were traveling on a motorcycle and a lorry came in a rash and negligent manner and dashed against the motorcycle. As a result, Jyothi fell on the road and the lorry ran over her and she died while shifting her to the hospital. Hence, the parents of the deceased filed the claim petition before the Tribunal. The Tribunal granted compensation of Rs 6,96,000 with interest at 6 percent per annum. Being aggrieved by the same, the Insurance Company filed the present appeal.

The learned counsel for the petitioner, Lingaraj H S submitted that the Tribunal had erred in taking the multiplier based on the age of the deceased instead of based on the age of the mother. Further, the Tribunal was unjustified in adding 50 percent of the income of the deceased towards loss of future prospects while calculating the “loss of dependency”. Further, the compensation of Rs 25,000 each awarded to the claimants in the category of “loss of love and affection” was on the higher side. Therefore, the counsel for the petitioner prayed for allowing the appeal by reducing the compensation.

The learned counsel for the claimants, Nataraj Ballal relied on the law laid down by the Supreme Court in the case of National Insurance Co. Ltd v. Pranay Sethi, 2017 SCC OnLine SC 1270, in which it was held that in case the deceased was having a permanent job and was below the age of 40 years, an addition of 50 percent of the established income should be made. Further, as per the said decision, while calculating the “loss of dependency”, the age of the deceased had to be taken into consideration. Hence, the counsel for the claimants submitted that there was no error in the finding of the Tribunal. Therefore, he prayed for dismissal of the appeal.

The Court relied on the decision of Supreme Court in the case of Pranay Sethi, and held that multiplier had to be applied based on the age of the deceased and not based on the age of the mother of the deceased. Moreover, the Court also relied on the case of Magma General Insurance Co. Ltd v. Nanu Ram, 2018 SCC OnLine SC 1546 in which it was held that the claimants were entitled to compensation under the head “loss of love and affection”. Therefore, the Insurance Company has erred in taking the multiplier based on the age of deceased instead of based on the age of the mother and that the Tribunal was unjustified in adding 50 percent of the income of the deceased towards loss of future prospects while calculating the “loss of dependency”. Hence, the appeal could not be accepted and was unsustainable.

The appeal was dismissed accordingly.[Oriental Insurance Co. Ltd. v. Rathna, 2019 SCC OnLine Kar 566, decided on 29-05-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): V.K. Jain (Presiding Member), J. addressed a complaint concerning the manufacturing defect in a “Mercedes CDI-220” car and directed for a compensation of Rs 2 lakhs along with litigation costs.

The facts of the case are, that the complainant/respondent had purchased a Mercedes CDI-22 car worth Rs 37 lakhs. Within a few days of the purchase, the car started to have various issues in respect to its doors, sunroof, shockers, etc., and due to which it had to be to fixed several times.

Further, on facing the above-stated issues several times, the complainant got the vehicle inspected and the report for the same stated that “there seemed to be an inherent manufacturing defect in the vehicle which the manufacturer was unable to locate and rectify.”

Complainant approached the concerned District Forum by way of a consumer complaint seeking replacement of the car or in the alternative, refund of the amount he had paid for the purchase of the car along with compensation, etc.

In the order of the State Commission after a proper formation of the expert committee and on receiving its report, it was directed to the complainant to pay a sum of Rs 2 lakhs with Rs 22,000 litigation costs. Appellant not being satisfied with the same approached NCDRC by way of appeal.

The National Commission opined that it was fully justified in relying upon the expert report and the grant of Rs 2 lakhs as compensation cannot be said to be excessive or unreasonable by any standards considering that the vehicle in question was a Mercedes vehicle which was expected to run smoothly without giving much trouble to the owner who has spent Rs 37 lakhs for the purchase of the vehicle.

Thus on consideration of the facts and circumstances of the case, the appeal was dismissed. [Mercedes Benz (India) (P) Ltd. v. Prince Bansal, 2019 SCC OnLine NCDRC 76, Order dated 30-05-2019]

Case BriefsHigh Courts

Patna High Court: Chakradhari Sharan, J. dismissed an application seeking initiation of fresh acquisition proceeding under Section 11 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

A certain land was acquired under the Bihar Land Acquisition Act, 1894 in the year 1979 and award was prepared in favour of landowners. Petitioner herein, who was the grandson of a landowner, stated that since the Land Acquisition Officer had not prepared any award and had simply made a roll or index of compensation amount on Form-15, the same could not be treated as a valid award.

His case was that since the government had failed to make an award within two years of declaration under Section 6 of the Bihar Land Acquisition Act, the title over land remained with the owner and by virtue of Section 11-A of the said Act, entire acquisition proceeding stood lapsed. Whereas the respondent submitted that land owners were asked to receive the compensation amount, but they did not turn up to receive the same.

The Court noted that acquisition proceeding had started in the year 1978-79 and all land owners were paid the amount of compensation in 1979 itself on the basis of the award so prepared. The amount payable to the petitioner’s grandfather and his co-sharers was deposited by the Collector on 20-01-1981. In nearly three decades, no objection was ever raised against regularity or otherwise of the acquisition proceeding. Further, Section 18 of the Bihar Land Acquisition Act permits a person to make an application to the Collector, requiring him to refer the matter for the determination of the Court. Petitioner’s grandfather never approached the Collector under the said section seeking reference of the matter to Court. Most of the land owners had accepted the award.

It was observed that petitioner’s raising of grievance after almost 30 years, did not appear to be bona fide. His vague statements to the effect that landholders, being layman, could not raise any claim had no credence.

In view of the above-noted facts, the instant application was dismissed.[Alok Ranjan v. State of Bihar, 2019 SCC OnLine Pat 465, decided on 10-04-2019]