IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Cross Objection No.6-CII of 2002 in/and FAO No.1275 of 2001 (O&M) Date of decision:28 .06.2010 New India Assurance Company Limited ....Appellant versus Kulwant Singh and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Ms.Aneet, Advocate, for the appellant. Mr. Rakesh Nagpal, Advocate, for respondents 1 to 7. ---- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. (Oral) 1. The Insurance Company is on appeal against the award passed by the Motor Accident Claims Tribunal, Sirsa, where on a claim by the appellant arising out of the death of the husband and mother of the petitioner respectively, the Tribunal had awarded Rs.1,20,000/- with interest at 12%. The husband, who was travelling in the same vehicle who met with the accident, had filed an independent application in Claim Petition No.168 of 1998 for injury sustained by him. The admitted case of the claimants were that they had hired the vehicle to go from village Ahmedpur to village Chhana (Punjab) and the accident had taken place Cross Objection No.6-CII of 2002 in/and FAO No.1275 of 2001 (O&M) - 2 - in the transit. The defence by the Insurance Company was that the vehicle was insured only as a private vehicle which was not to be used for hire or reward or organized racing and speed testing and the insurance policy cover is available only for purposes other than those mentioned above. The policy of the Insurance Company was also filed in Court as Ex.R-2. 2. The Tribunal assessed the compensation of Rs.1,50,000/- taking the evidence placed by the claimants that the deceased was augmented the resources for the family by working as a tailor. The Tribunal assessed their monthly dependency to be Rs.600/- and adopted a multiplier of 16 to provide for a compensation of Rs.1,20,000/- with interest. 3. The claimants have also preferred a cross appeal seeking for enhancement of the claim by urging that when there was a clear evidence that the deceased was being working as a tailor and was earning statutory income of Rs.15,000/- and annual income should have been at lease taken. 4. It is not in dispute that there was a valid insurance for the vehicle at the time. The contention however is that it was put to commercial use which was excluded by the terms of the policy. Section 149(2)(A)(i)(a) enables an Insurance Company to defend the action on the ground that the use of the vehicle for hire or reward had been specifically excluded. On an admitted premise that the vehicle had been used for a commercial purpose, there had been a breach of the condition of the policy and, therefore, the Insurance Company was not liable. Cross Objection No.6-CII of 2002 in/and FAO No.1275 of 2001 (O&M) - 3 - 5. The issue of nature of liability in such a situation where there had been violation of terms and conditions of policy has been dealt with by the Hon'ble Supreme Court in New India Assurance Company Versus Kamla-(2001) 4 SCC 342 that where there had been violation of terms and conditions of policy, the Insurance Company was still to be liable. The Hon'ble Supreme Court in referring the provision of Section 149(4) the proviso and Section 149(5) has held the said provision would enable the insurer to recover the amount which it has perforce to pay under the terms of the policy. The award of compensation against the Insurance Company without making provision for right of recovery against the insured is, therefore, not tenable in law. There has been admittedly a breach of condition of the terms of the policy and, therefore, the Insurance Company is entitled to recover the same after making the payment to the claimants. 6. The extent of liability is still a matter for contention since the claimants have filed a cross appeal on the quantum of compensation. There is evidence to the effect that the deceased was working as a tailor and was earning an income. The deceased had six children to support. Applying the decision of the Hon'ble Supreme Court in UP Road Transport Corporation Versus Tarlok Chandra-(1996) 4 SCC 362, each one of the minor children shall be treated as one unit and each one of the adults shall be taken as two units. So taken, the total number of units will be 10 and the personal expenditure for the deceased herself must be taken as 2/10 which is 1/5. The contribution to the family must be taken Cross Objection No.6-CII of 2002 in/and FAO No.1275 of 2001 (O&M) - 4 - as 4/5 of the income which if estimated on a statutory minimum of Rs.15,000/-, the contribution of the family would have been Rs.12,000/-. She was aged 30 years at the time and the appropriate multiplier would be 18 instead of 16 adopted by the Tribunal. All were minor children and they had definitely lost their love and affection and for each one of them Rs.5,000/- must have been provided for. The loss of consortium to the husband shall be taken as Rs.10,000/-. In all, therefore the total amount of compensation that would be worked out is Rs.2,16,000 + 30,000 for loss love and affection Rs.10,000/-, for loss of consortium to the husband and Rs.4,800/- as had been awarded as funeral expenses. The provision for loss of an estate may also be provided at Rs.2,500/-. The total amount that will become payable is Rs.2,63,300/- which is rounded as Rs.2,64,000/-. The Tribunal had already awarded Rs.1,20,000/- and consequently the Insurance Company shall now become liable to pay Rs.1,44,000/- in excess with interest at 7.5% per annum from the date of petition till the date of payment. The Insurance Company shall have right of recovery of the same against the owner of the vehicle. 7. Out of the award which was passed hereunder, the entire amount shall be taken equally between all the petitioners and in so far as the minor children are concerned, the same shall be held in appropriate bank deposit interest alone shall be paid directly with the bank once in three months. The principal could be withdrawn only after the children attaining majority respectively. As regards the share of the husband Cross Objection No.6-CII of 2002 in/and FAO No.1275 of 2001 (O&M) - 5 - since several number of years have passed since the time of accident, he may be entitled to his share the amount without any requirement having to keep the said share to deposit. The appeal and the cross appeal are disposed of on the above terms but there shall be however no directions as to costs. (K.KANNAN) JUDGE 28.06.2010 sanjeev