Case BriefsHigh Courts

Karnataka High Court: Ashok S. Kinagi J., allowed the appeal and applied the pay and recover principle fastening the liability on the owner to pay the compensation.

The facts of the case are such that the claimant was sitting in the backside of the auto-rickshaw, the driver was driving rashly and negligently without following traffic rules and regulations and dashed the same to a motorcycle which was going in front of auto-rickshaw because of which the auto turned turtle and the claimant sustained grievous injuries in the said accident. Thus, a claim petition was filed before the Tribunal for compensation which was thereby granted by holding that the respondents are jointly and severally liable to pay it. Being aggrieved by the same, the present appeal was filed.

Counsel for the appellants submitted that the tribunal has committed an error in fastening the liability on the insurer as the vehicle was plying outside the permitted limit and hence the insurance is not liable to pay compensation.

Counsel for the respondents supported the impugned judgment and award.

The Court relied on judgment Shamanna and Divisional Manager, Oriental Insurance Co. Ltd., 2018 ACJ 2163 and observed that when there is a breach of policy conditions and the policy is in force as on the date of the accident, it is for the insurance company to pay the compensation amount and recover the same from the owner.

The Court thus held that the permit disclosed that offending vehicle was permitted to ply within 16 km from Savdatti but in fact, the accident has occurred outside the limit of Savadatti i.e., outside of 16 km from the permit limit. It was further observed that on the date of the accident the insurance policy was in force but at the time of the accident, the vehicle did not have permit at the accident spot. Thus there is a clear violation of policy conditions.

In view of the above, the appeal was allowed in part directing the insurer to pay the compensation amount and recover the same from the owner.[Divisional Manager v. Riyaz Ahmed, M.F.A. No. 100275/2015 (MV), decided on 06-02-2020]

Arunima Bose, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Vishwanath (Presiding Member), held that since the Insurance Company itself insured the complainant’s vehicle and the vehicle had been stolen during the currency of the Policy and the Police were informed immediately, the Insurance Company could not repudiate the claim.

The instant revision petition was filed under Section 21(b) of the Consumer Protection Act, 1986 against the Order passed by Rajasthan State Consumer Disputes Redressal Commission.

Facts of the case

Respondent obtained an Insurance Policy from the petitioner for his Car being temporary registration for a sum of Rs 6,17,800.

In the night of 28-07-2011, Complainant’s car was stolen from Geeta Guest House, Jodhpur. Police could not trace the vehicle and submitted a negative final report. Complainant submitted an insurance claim with the Opposite Party/Insurance Company. Petitioner/Opposite Party repudiated the claim, on the ground that intimation of theft of the vehicle was given to the Insurance Company with delay, which was in violation of the Policy condition and though temporary registration of the vehicle expired on 19-07-2011, the Complainant did not get the vehicle permanently registered. Thirdly, the Complainant left the vehicle unattended outside the guesthouse, in violation of the Policy condition.

District Forum dismissed the complaint stating “as at the time of the theft the vehicle is not registered, there was no deficiency in service on the part of the Opposite Party”.

Against the order of the District Forum, the Complainant preferred an Appeal before the State Commission and State Commission set aside the order of the District Forum while allowing the appeal.

Aggrieved by the State Commission’s Order, Opposite Party/Insurance Company preferred the present Revision Petition.

Analysis and Decision

Core issue for the adjudication was in regard to the registration of the vehicle after expiry of temporary registration.

Since the Petitioner/Insurance Company had received the insurance premium and there was no violation of any specific condition in the Insurance Policy, the Insurance Company was liable to indemnify the insured for the loss suffered by the insured.

Though plying a vehicle on road without registration is a violation of provisions of Motor Vehicle Act, the Competent Authority to take action against a non-registered vehicle is the Police and other Government authorities. Insurance Company after accepting the premium, cannot escape from its liability and repudiate the claim on this technical ground.

Commission in view of the instant matter stated that:

The temporary registration of the vehicle expired on 19-07-2011 and the car got stolen on 28-07-2011, mere 9 days later. The Motor Vehicle Act does provide for registration of vehicle after its expiry on payment of certain fee.

Commission held that when the Insurance Company itself insured the complainant’s vehicle and the vehicle had been stolen during the currency of the Policy and the Police was informed immediately, the Insurance Company cannot repudiate the claim of the Complainant on a technical ground.

In view of the above-discussion, State Commission’s Order was justified and the same did not suffer from any illegality, therefore revision petition was dismissed. [United India Insurance Co. Ltd. v. Sushil Kumar Godara, 2020 SCC OnLine NCDRC 494, decided on 11-12-2020]

Advocates for the parties:

For the petitioner: Ms Suman Bagga, Advocate

For the Respondent: NEMO

Case BriefsHigh Courts

Chattisgarh High Court: A Division Bench of P. R. Ramchandra Menon and Parth Prateem Sahu JJ., allowed the appeal partly and modified the impugned award.

The facts of the case are such that on 04-07-2012, claimant while returning with his friend form Masturi to his village Tikari on Tata Magic (hereinafter referred to as ‘offending vehicle’), met with an accident and turned turtle wherein the claimant and other passengers suffered grievous injuries. An application was filed under Section 166 of the Motor Vehicles Act, 1988 i.e M.V. Act seeking compensation and Rs 6, 50,000 was granted vide award dated 06-01-2014 passed by the 6th Additional Motor Accident Claims Tribunal, Bilaspur, Chhattisgarh i.e. MACT. Aggrieved by the same, instant appeal was filed by the insurance company/ appellants under Section 173 challenging the impugned award.

Counsel for the appellants submitted that that on the date of accident, there was no valid and effective driving licence with driver of the offending vehicle, there was no valid permit, fitness and registration and thereby there was breach of conditions of insurance policy, hence, the Insurance Company is not liable to indemnity the injured. It was also submitted that MACT while deciding the issue with regard to breach of conditions of insurance policy has only taken into consideration the issue of driving licence and decided the issue but did not consider the ground of permit raised by appellant/Insurance Company specifically, though recorded in the impugned award.

Counsel for the respondents submitted that MACT after taking into consideration the entire pleading and evidence placed on record, has passed just and proper award, which does not call for any interference.

During investigations, permit was not produced and the owner of the offending vehicle did not present himself as witness before court though filed reply to the claim petition. It was further found on examination of other witnesses that insurance policy was issued for the offending vehicle and the vehicle was insured as ‘Passenger Carrying Commercial Vehicle’, for which, permit is necessary.

Section 66 (1) of the M.V. Act provides for the necessity for permits, which reads as under for easy reference:

“66. Necessity for permits.-(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used:

Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage:

Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods carriage either when carrying passengers or not:

Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.”

The Court observed that from perusal of aforementioned provisions of Section 166 of the M.V. Act, the requirement of permit has been made mandatory for use of the vehicle as ‘Transport Vehicle’ in any public place for carrying passengers or goods.

The Court thus held that MACT erred in not considering that non-applicants 1 and 2 i.e. driver and owner of the offending vehicle failed to produce permit of the offending vehicle and in absence of it, there will be breach of conditions of insurance policy.

In view of above, appellant/Insurance Company is exonerated from its liability to satisfy the amount of compensation and the liability to satisfy the amount of compensation shall be upon non-applicants No.1 and 2 i.e. driver and owner of the offending vehicle. The Court further directed the insurance company to pay the amount as the insurance of the vehicle is not denied, it is insured as ‘Passenger Carrying Vehicle’ and later the insurance company must recover the same amount from the owner and driver of the offending vehicle.

In view of the above, appeal allowed partly and disposed off.[Oriental Insurance Company Ltd. v. Sudhir Kumar, 2020 SCC OnLine Chh 835, decided on 23-09-2020]

Arunima Bose, Editorial Assistant has put this story together

Case BriefsSupreme Court

Supreme Court:  The 3-judge bench of SA Bobde, CJ and A.S. Bopanna and V. Ramasubramanian*, JJ has reiterated that the Courts should not thwart any investigation unless no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on.

Referring to the decision in State of Haryana v. Bhajan Lal, (1992) Supp. (1) SCC 335, the Court said,

“(…) the power of quashing should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. While examining a complaint, the quashing of which is sought, the Court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or in the complaint.”

In S.M. Datta v. State of Gujarat, (2001) 7 SCC 659 the Court cautioned that criminal proceedings ought not to be scuttled at the initial stage.

“Quashing of a complaint should rather be an exception and a rarity than an ordinary rule.  (…) if a perusal of the first information report leads to disclosure of an offence even broadly, law courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities and one ought not to tread over the other sphere.”

FIR against Skoda Auto Volkswagen over alleged use of cheat devices

Skoda Auto Volkswagen India Private Limited is engaged in the business of manufacture, import and sale of passenger vehicles in India. The 3rd Respondent in the case lodged an FIR, alleging that he had bought 7 Audi Brand cars from the authorised dealers of the manufacturing Companies and knowing fully well that their vehicles have been installed with cheat devices, the manufacturer had prepared wrong records and documents.

The Petitioner moved Allahabad High Court seeking quashing of the FIR alleging that the FIR is based entirely upon the order of the NGT, which is the subject matter of two civil appeals before the Supreme Court.

Allahabad High Court rejected the prayer for quashing of the FIR. However, the High Court protected the officers of the petitioner against arrest till the submission of the Report under Section 173(2) Cr.P.C. subject however to the condition that they shall cooperate in the investigation.

Not satisfied with a mere protection against arrest and the refusal of the Allahabad High Court to quash the FIR, the petitioner argued before the Supreme Court:

  1. That the Police cannot investigate an issue, the substratum of which is sub judice before this Court in the civil appeals arising out of the order of the NGT; and
  2. That the High Court failed to take note of the long delay on the part of the 3rd Respondent in lodging the complaint and
  3. That the VAHAN Portal of the Government shows the purchase of only 3 vehicles as against the claim of the 3rd Respondent to have purchased 7 vehicles.

Why the Supreme Court refused to quash FIR

On Issue 1

Should pendency of the Civil Appeals and the interim order passed by Supreme Court be taken as a deterrent for anyone else to lodge a police complaint and seek an investigation?

Two original applications came to be filed before the NGT in the year 2015, alleging that the manufacturers of the vehicles in question were employing deceit devices. This coincided with the issue of notice by the Automotive Research Association of India to the manufacturers. The   applicants before the NGT did not seek any relief for themselves, as purchasers of vehicles. The reliefs sought by the applicants before the NGT were broad and general. Hence,

“ (…) the order of the NGT, passed on the applications filed by certain individuals not claiming as purchasers of vehicles, cannot   be   taken   as   an   impediment   for   an   individual   who purchased cars from the manufacturers, to lodge a complaint, if he has actually suffered on account of any representation made by the manufacturers.”

Further, the interim order passed by the Supreme Court not to take any coercive steps has to be understood only in the context of the aforesaid directions of the NGT which became the subject matter of the Civil Appeals.

Can police investigate into the same set of allegations which form the subject matter of proceedings pending adjudication before Supreme Court?

The question whether such devices are installed in the cars purchased by the 3rd respondent herein and the question whether there was any representation in this regard to the petitioner, are all questions of fact, peculiar and particular to the 3rd respondent herein. NGT had no occasion to examine the cars purchased by the 3rd respondent herein.

The Court said,

“At this stage no one can presume whether the defence of the manufacturer to the police complaint will be purely on a question of fact or purely on a question of law or on mixed questions of fact and law.”

  • If the petitioner takes a defence that no such devices were installed in the cars purchased by the 3rd respondent or that there was no (mis)representation in this regard, it will be a pure question of fact, which cannot be gone into in a quash petition.
  • If the petitioner takes a defence that the installation of such devices, though true, does not violate any law, then it will be a pure question of law.

The Court said that the action initiated by the Automotive Research Association of India in November 2015 and the proceedings that went on before the National Green Tribunal from the year 2015 to the year 2019, have to be seen in the light of the Dieselgate Scandal[1]. All of them were part of the global outrage that actually concerned the damage caused to the environment by the emissions from the cars allegedly fitted with manipulative devices.

The proceedings before the NGT were not intended to address issues relating to individuals, such as

(i) whether any emissions manipulation software, called in common parlance as ‘defeat devices’ were installed in the vehicles purchased by certain individuals; and

(ii) whether any representation was made to the purchasers of the cars in which such devices had been installed, about the emission efficiency level of the cars

Hence, the Court rejected the contention that the substratum of the police complaint is something that is already the subject matter of adjudication before this Court in the appeals arising out of the order of the NGT. It held that the High Court has been fair to the petitioner, by granting protection against arrest till the filing of the report under section 173(2) of the Code.

On Issue 2

Mere delay in lodging the complaint, cannot by itself be a ground to quash the FIR. The law is too well settled on this aspect to warrant any reference to precedents.

On Issue 3

The Court did not go into the third issue as it is a question of fact which has to be established only in the course of investigation/trial.

[Skoda Auto Volkswagen India Private Limited v. State of Uttar Pradesh, 2020 SCC OnLine SC 958, decided on 26.11.2020]

*Justice V. Ramasubramanian has penned this judgment 

For Petitioner: Senior Advocate Dr. Abhishek Manu Singhvi

For 3rd Respondent: Senior Advocate Maninder Singh

[1] In September-2015, allegations of installation of manipulation devices by car manufacturers emerged from the US Environmental Protection Agency triggering investigations in several European Union States. After claims were lodged and legal action initiated, the German Federal Motor Transport Authority appears to have given permission in June-2016 for the recall of about 2 million vehicles across Europe. In the light of these developments, one of the manufacturers entered into an agreement with the US Environmental Protection Agency in December-2016 giving certain options to the customers. These and the subsequent developments, which attained notoriety as the diesel-gate 18 scandal, led to the German Federal Court of Justice (Bundesgerichtshof-BGH) giving a ruling on May 25, 2020 in favour of the car owners for damages.
Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Surya Prakash Kesarwani and Dr Yogendra Kumar Srivastava, JJ., while addressing the matter with regard to the assignment of the registration number of a motor vehicle made an observation that:

Reservation of registration numbers considered attractive is only as an exception to the general procedure of assignment of registration numbers falling in serial order after the last registration mark assigned, and the same is to be made as per the procedure prescribed under sub-rule (2) of Rule 51-A.

The instant petition was filed seeking for a direction to respondent 2 to provide Registration No. U.P. 85BQ-0001 of LMV to the petitioner and extend the period of two weeks for getting the stated registration number.

Petitioner’s Counsel, Ghanshyam Dwivedi submitted that the petitioner had applied for getting a V.I.P number of the vehicle by depositing Rs 1,00,000 as a fee, however, he wasn’t able to purchase the vehicle.

Since petitioner now wanted to purchase the vehicle, therefore he sought a direction to grant two weeks time to purchase the vehicle and accordingly the V.I.P number may be allotted.

Standing Counsel, Girish Chandra Vishwakarma submitted that in view of the provisions of clauses (v) and (vi) of sub-rule (2) of Rule 51-A of the U.P. Motor Vehicles Rules, 1981, neither registration number can be allotted nor reservation fee can be refunded to him.

Analysis and Decision

Section 41 of the Motor Vehicles Act, 1988 provides the manner in which registration is to be made.

As per Section 41(6), the registering authority is to assign to the vehicle, for display thereon, a distinguishing mark, referred to as the registration mark, consisting of one of the groups of such of those letters and followed by such letters and figures as are allotted to the State by the Central Government from time to time by notification in the Official Gazette, and displayed and shown on the motor vehicle in such form and in such manner as may be provided by the Central Government.

Rule 51-A of the Uttar Pradesh Motor Vehicle Rules, 1998 relates to the allotment of registration marks.

Sub-Rule (1) of Rule 51-A of the above-stated rules provides that the assignment of registration mark to motor vehicles shall be as per the Central Government’s notification issued under Section 41(6) of the Act, 1988.

As per the procedure under sub-rule (2), on receipt of an application in the prescribed format under the Central Motor Vehicles Rules, the Registering Authority shall assign a registration number which falls in serial order after the last registration mark assigned subject to the provision for reservation of any registration number as considered necessary to be assigned to the vehicles of Government, as provided under clause (i) of sub-rule (2), or to reserve registration numbers considered attractive as per the procedure provided under sub-rule (2).

Bench stated that in the instant case, although the reservation of the registration number was obtained by depositing the prescribed fee but the vehicle was not purchased so far.

Since, the petitioner failed to produce the vehicle within 30 days as prescribed with an application namely Form-20 of the Central Motor Vehicles Rules, 1983, the registration number shall be cancelled, the same number hence can be allotted to any other person.

The registration fee deposited also cannot be refunded in view of the bar contained in clause (v) of Rule 51-A (2).

Assignment of Registration Number

Court observed that the assignment of registration numbers as per the statutory provisions are to be made in serial order after the last registration mark assigned, the reservation of registration numbers can be made only as are considered necessary to be assigned to the vehicles of the Government, or in case of registration number considered attractive, the reservation may be made for any person who submits an application and makes the payment as per the procedure prescribed.

The conditions prescribed in respect of reservation of registration numbers, as are considered attractive, include a clear stipulation under clause (vi) of sub-rule (2) that the reservation of registration number shall be cancelled if the vehicle is not produced within thirty days from the date of reserving the registration number and the number so cancelled can be allotted to any other person by Registering Authority who makes an application along with the fees prescribed.

Petitioner’s application for reservation of a V.I.P number is therefore subject to the conditions provided with regard to the same under sub-rule (2) of Rule 51-A of the Rules, 1998, hence no relief was granted to the petitioner.[Rajesh Gaur v. State of U.P.,   2020 SCC OnLine All 1315, decided on 15-10-2020]

Case BriefsHigh Courts

Karnataka High Court: Hemant Chandangoudar J., dismissed the appeal and upheld the impugned award and judgment regarding compensation.

The facts of the case are such that the claimants have sustained accidental injuries on 30-03-2010 due to rash and negligent driving of the Toofan Jeep, and thereby filed claim petitions under Section 166 of Motor Vehicle Act to award just and proper compensation. The Tribunal awarded compensation by judgment and award dated 27-04-2013. Aggrieved by the same the instant appeals have been filed by the Insurance Company challenging the impugned judgment and award.

Counsel for the Insurance Company submitted that the Tribunal has committed an error in fastening liability on the insurance company as the vehicle was insured for private purpose whereas during the accident it was plyed on hire and hence was in violation of the comprehensive policy and against the provisions of Section 149 (2) of MV Act.

The Court relied on judgment titled United India Assurance Co. Ltd. v. Kalawathi, ILR 2001 KAR 2328 and observed that

“That apart we do not find any rationale for the insurer as a ‘State’ to discriminate between the paid inmate and the gratuitous inmate when the vehicle is a private vehicle plyed on hire, the owner may be liable for the penal and fiscal consequences under the Motor Vehicle Act for payment of penalty and taxes applicable to the commercial vehicles. But from the standpoint of the insurer, it makes no difference whether the inmate is a paid passenger or gratuitous passenger. When the policy issued is a comprehensive policy covering risk of inmates of private vehicle, the insurer cannot avoid liability on the ground that the inmate is a paid passenger. In that view, we hold that the terms in the policy, which discriminates the liability of the insurer for the paid inmate and gratuitous inmate is discriminatory and illegal.”

The Court held that no discrimination would be made between the paid inmate and gratuitous inmate when the vehicle is covered with a comprehensive policy. If the vehicle is a private vehicle, plyed on hire, the owner may be liable for the penal and fiscal consequences under the provisions of MV Act for payment of penalty and taxes but the insurer cannot avoid liability. Hence, fastening of liability on the Insurance Company to pay compensation cannot be found fault with.

In view of the above, appeals were dismissed.[United India Insurance Co. Ltd. v. Basavaraj, 2020 SCC OnLine Kar 1652, decided on 02-11-2020]

Arunima Bose, Editorial Assistant has put this story together

Case BriefsSupreme Court

Supreme Court: When a practicing advocate, had suffered in nasty accident at the young age of 18 years, in which his entire left leg was crushed, approached the Court with the plea seeking reform in the Motor Vehicle Accident Claims system, the bench of Dr. AK Sikri and SA Nazeer, JJ asked the Government to consider the feasibility of enacting Indian Mediation Act to take care of various aspects of mediation in general.

The Court also issued the following directions:

  1. The Government may examine the feasibility of setting up Motor Accidents Mediation Authority (MAMA) by making necessary amendments in the Motor Vehicles Act.
  2. In the interregnum, NALSA is directed to set up Motor Accident Mediation Cell which can function independently under the aegis of NALSA or can be handed over to MCPC. Such a project should be prepared within a period of two months and it should start functioning immediately thereafter at various levels as suggested in this judgment. We reiterate the directions contained in order dated November 6, 2017 in Jai Prakash case for implementation of the latest Modified Claims Tribunal Agreed Procedure. For ensuring such implementation, NALSA is directed to take up the same in coordination and cooperation with various High Courts. MACAD Scheme shall be implemented by all Claim Tribunals on All India basis. Banks, Members of Indian Banks Assocation, who had taken decision to implement MACAD Scheme would do the same on All India basis.
  3. The Government should look into the feasibility of framing necessary schemes and for the availability of annuity certificates. This exercise may be done within the period of six months and decision be taken thereupon.
  4. There should be programmes from time to time, in all State Judicial Academies, to sensitizing the Presiding Officers of the Claims Tribunals, Senior Police Officers of the State Police as well as Insurance Company for the implementation of the said Procedure.

The appellant had prayed for:

  • On-road safety and grant of adequate compensation to the victims without any delay. For ensuring expeditious settlement of claims, resort to alternate means which may include innovative measures.
  • Taking adequate steps including adopting innovative measures, to ensure fast track disposal of cases by MACTs.
  • Ensuring receipt of compensation in the safe hands of victims and/or kiths and kins of victims, that too over a sustained period.

[MR Krishna Murthi v. New India Assurance Co. Ltd., 2019 SCC OnLine SC 315, decided on 05.03.2019]

Case BriefsSupreme Court

Supreme Court: In reference relating to the computation of compensation under Sections 163-A and 166 of the Motor Vehicles Act, 1988 (MV Act) and the methodology for computation of future prospects, giving a unanimous decision, the 5-judge bench of Dipak Misra, CJ and Dr. AK Sikri, AM Khanwilkar, Dr. DY Chandrachud and Ashok Bhushan, JJ held that the determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. The bench said:

“To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust.”

Stating that this concept is to be applied to salaried employees and self-employed persons, both, the Court explained that the purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. Regarding self-employed persons it was said:

“To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time.”

The Court, hence, laid down the following guidelines for computation of compensation:

  • While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.
  • In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.
  • The age of the deceased should be the basis for applying the multiplier.
  • Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.
  • The decision in Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, is to be relied upon for determination of the multiplicand, the deduction for personal and living expenses, and the selection of multiplier. [National Insurance Company Limited v. Pranay Sethi, 2017 SCC OnLine SC 1270, decided on 31.10.2017]


Case BriefsForeign Courts

High Court of Australia: In the instant case, the respondent sustained serious spinal injuries which rendered her paraplegic, when she was thrown from the back seat of a car being driven by the appellant who was drunk at the time of the accident. The issue for determination was whether the respondent was contributorily negligent  for choosing to travel in the car driven by the appellant when she ought to have known that he was intoxicated and, secondly, for failing to engage her seatbelt.

The trial Judge rejected the contention of the respondent that the appellant’s erratic driving had prevented her from fastening her seatbelt and held that failure to wear a seatbelt constitutes contributory negligence under Section 49 of the Civil Liability Act 1936. The Judge further held that the exception in Section 47(2)(b) of the Act applies in the present case as the respondent could not reasonably be expected to have avoided the risk of riding with the appellant in the circumstances. On appeal, a majority of the Full Court of the Supreme Court of South Australia dismissed the appellant’s appeal on the Section 47(2)(b) issue, and allowed the respondent’s cross-appeal on the issue of Section 49 and held that her failure to fasten her seatbelt was a result of her direct and natural response to the appellant’s erratic driving.

The appellant appealed to the High Court on both issues. A bench of French CJ, Kiefel, Bell, Keane And Gordon JJ unanimously dismissed the appeal on the Section 47(2)(b) issue and held that the respondent, who suffered major injuries as a result of a motor vehicle accident, was not contributorily negligent under Section 47 of the Civil Liability Act 1936 for travelling in a car driven by an intoxicated driver, as according to the facts of the case, she could not reasonably be expected to have avoided the risk of travelling with the appellant. However, the Court allowed the appeal and affirmed the trial judge’s finding that the appellant’s driving did not prevent the respondent from fastening her seatbelt and accordingly held that the respondent was contributorily negligent under Section 49 of the Act for failing to wear the seatbelt. [Alex Allen v. Danielle Louise Chadwick, decided on 9-12-2015]

Supreme Court

Supreme Court:  While dealing with the never ending dissension regarding the compensation to be granted in Motor Vehicle Accident cases, a three Judge Bench comprising of Anil R. Dave, Madan B. Lokur and Kurian Joseph,  JJ., held that the correct multiplier to be used shall be with reference to the age of the deceased and not that of the dependents as there is certainty with regard to the age of the deceased but as far as that of dependants is concerned, there will always be room for dispute as to whether the age of the eldest or youngest or even the average, etc., is to be taken. Also, in case of a self-employed bachelor, 50% deduction shall be made towards personal and living expenses.

The present case evolved from the decision of the Motor Vehicles Claim Tribunal and the subsequent appeal in the High Court regarding the award granted for the loss of dependency wherein the claimants are the parents of the deceased, a self-employed bachelor aged 30 years.

The Court with regards to the deduction towards personal and living expenses, fixed it at 50% in cases of bachelors as they would be expected to spend more on themselves unless there is evidence of the dependents. With regards to the multiplier used, the bench altered it from 13 to 17 as the age of the deceased is to be considered while determining the multiplier and the deceased was between 26 to 30 years.  Munna Lal Jain v. Vipin Kumar Sharma2015 SCC OnLine SC 505, decided on 15.05.2015



Foreign LegislationLegislation UpdatesStatutes/Bills/Ordinances

Motor Vehicle (Amendment) Act, 2015 received the assent of the President on 19-03-2015. The objective of the Act is to further amend the provisions of the Motor Vehicle Act, 1988 and replace the Motor Vehicles (Amendment) Ordinance, 2015. The Act provides for following amendments in the Motor Vehicle Act, 1988:

  • Insertion of a new Section 2A, which brings e-carts and e-rickshaws under the ambit of Motor Vehicle Act, and provides that the provisions of the Act shall apply to e-carts and e-rickshaws as well. The Section further defines “e-cart or e-rickshaw” as ‘a special purpose battery powered vehicle of power not exceeding 4000 watts, having three wheels for carrying goods or passengers, as the case may be, for hire or reward, manufactured, constructed or adapted, equipped and maintained in accordance with such specifications, as may be prescribed in this behalf’.
  • Amendment in Section 7 so as provide that the restrictions on the granting of learner’s licenses for certain vehicle shall not be applicable on e-cart or e-rickshaw.
  • Amendment in Section 9 so as to provide that notwithstanding anything contained in this section for grant of driving licence, the driving licence to drive e-cart or e-rickshaw shall be issued in such manner and subject to such conditions, as may be prescribed in the Act.
  • Amendment in Section 27 in order to empower the Central Government to make rules with respect to specifications relating to e-carts and e-rickshaws, as well as the manner and conditions subject to which the driving licence for e-carts and e-rickshaws may be issued.

-Ministry of Law and Justice.