FAO No.623 of 1990 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH X Obj. No.51-CII of 1991 and FAO No.623 of 1990 Date of Decision.07.12.2010 Prem Kumari widow of Sh. Megh Chand son of Chhoga Ram and another ......Appellants Versus Rattan Kumar son of Sh. Hem Raj resident of Ganesha Basti, Bathinda (Pb) and others ......Respondents 2. X Obj No.52-CII of 1991 and FAO No.624 of 1990 Prem Kumari widow of Sh. Megh Chand son of Chhoga Ram resident of village Thirjwala, Tehsil Muktsar, Distt. Faridkot (Punjab). .....Appellant Versus Rattan Kumar son of Sh. Hem Raj resident of Ganesha Basti, Bathinda (Pb) and others 3. FAO No.579 of 1990 Prem Kumari widow of Sh. Megh Chand son of Chhoga Ram and others ......Appellants Versus Rattan Kumar son of Sh. Hem Raj resident of Ganesha Basti, Bathinda (Pb) and others ......Respondents Present: Mr. Sanjiv Gupta, Advocate for the appellants. Mr. Sanjiv Pabbi, Advocate for the insurance company. CORAM:HON'BLE MR. JUSTICE K. KANNAN 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? FAO No.623 of 1990 -2- -.- K. KANNAN J.(ORAL) 1. These three cases arise out of the same accident. FAO No.623 of 1990 is for claim for compensation of death of a five year old boy where the claimants are the mother and sister. The Tribunal had awarded Rs.20,000/- as compensation. The mother was herself a claimant in case which is subject matter of appeal in FAO No.624 of 1990. The claimant had injury in hand and nose and the doctor, who gave evidence with reference to MLR recorded the fact that the claimant had one grievous injury and three other injuries. The Tribunal had awarded Rs.2,000/-. FAO No.579 of 1990 is for death of the claimant's husband, who while driving the scooter had died. He was a Pharmacist in a Government establishment and he was earning Rs.2073/- per month. The Tribunal had awarded Rs.2,11,200/- as amount payable but made a partial abatement of 40% by attributing negligence to the deceased. 2. The insurance company has itself filed a cross appeal and contended that the policy did not come into effect since the amount paid by way of cheque towards premium was not realized and the cheque had bounced prior to the accident and a notice of dishonour had been issued on the same day on 19.04.1989. Cash was subsequently paid but at that time, they had not known that the accident had taken place. The policy of insurance was, therefore, repudiated and a notice was sent on 17.08.1989. The insurance company would, therefore, plead that there was no liability on the part of the insurance company to satisfy the claim. FAO No.623 of 1990 -3- 3. As regards the compensation for death of a minor, the accident had taken place in the year 1989 and the Tribunal had provided for Rs.20,000/- where even the amount under no fault liability could have paid Rs.25,000/-. The issue of determination of compensation for a child, which does not yet contribute to the family can fall only in the realm of the conjecture and there have been recent decisions which have suggested compensation for death of the child at Rs.2 lacs and make provision for some special damages for Rs.75,000/-. The cases relating to death of minor children have been dealt in various decisions of Hon'ble Supreme Corut in Lata Wadhwa Vs. State of Bihar 2001(8) SCC 197, M.S. Aggarwal Vs. Deep Chand Sood 2001(8) SCC 151 and Priya Vasant Kalgutkar Vs. Murad Shaikh and others 2009(15) SCC 54. It may not be possible to import the compensation which is now being awarded to a case which was decided in 1989 and I would provide for a flat amount of Rs.2 lacs as compensation payable and the amount already received shall be duly credited in such an amount. If the liability is discharged by the respondents within a period of six weeks, full satisfaction will have to be recorded and the person entitled to the said sum shall be only the mother and the claim by the sister of the child cannot survive for consideration. 4. FAO No.623 of 1990 is allowed on the above terms. If the amount is not paid as directed, it will also carry interest @7.5% from the date of this order till the date of payment. 5. FAO No.624 of 1999 relates to claim for injury for the claimant. The Tribunal has awarded Rs.2,000/-. She had one FAO No.623 of 1990 -4- grievous injury and three simple injuries and I would take Rs.5,000/- as the amount payable for grievous injury and for each one of the simple injury, I will award Rs.1,000/- and in all, Rs.8,000/- will be the amount payable to the claimant for injuries and the excess amount will attract interest @6% from the date of petition till date of payment. 6. FAO No.624 of 1990 is allowed to the above extent. 7. As regards the claim for compensation for death of the husband of the petitioner, the compensation which was arrived at underwent an abatement of claim, in view of the fact that the Tribunal found that the scooterist contributed to the accident. The accident had taken place when the deceased was travelling with the child that died in the accident and two other persons sitting as pillion riders namely the wife and his mother. The accident was said to have taken place when the deceased was overtaking a bus when a maruti van coming from the opposite direction dashed against the scooterist. The place of impact of the accident was on the right side of the road and the Tribunal, therefore, found that there was definitely an element of contributory negligence on the part of the deceased scooterist. The Tribunal was rejecting at the same time the evidence given by the driver of the maruti car that the scooterist alone was responsible for the accident. The Tribunal placed a higher element of negligence on the part of the maruti van and apportioned the liability as 60:40 between the driver of the maruti van and the deceased scooterist. I will not find any fault in the manner of apportionment and I will retain the same. FAO No.623 of 1990 -5- 8. As regards the quantum of compensation, the modification that I would subject the order would be in terms of the decision of the Hon'ble Supreme Court in Sarla Verma Vs. DTC 2009(6) SCC 121. I will provide for a 50% increase in salary and take his income at Rs.3110/-. I will make a deduction of 1/4th and take the contribution to the family at Rs.2332/-. I will provide for a multiplier of 16 and determine the compensation payable at Rs.4,47,744/-. I will add Rs.5,000/- towards loss of consortium and provide for another Rs.2500/- towards loss of love and affection for minor child. I will also provide for the loss to estate at Rs.5,000/- and another Rs.2000/- towards funeral expenses. In all, the amount that will become payable would be Rs.4,62,244/-. Having regard to the fact that I have retained the issue of contributory negligence as found by the Tribunal, this would mean an abatement to the extent of 40% and the amount that the claimants would be entitled, would be Rs.2,77,346/-. The increased amount over what has been awarded by the Tribunal shall attract interest @6% from the date of the petition till the date of payment. The additional amount shall be distributed in such fashion that the parents together will take a 1/3rd share and the remaining 2/3rd shall be taken by the widow and the daughter equally. 9. Having regard to the amount as determined for the death of the child as well as for the injury are nominal, I would take the compensation which I have determined as representing the 60%, which the respective claimants are entitled to and therefore, will not subject the same to any abatement. 10. The residual issue that will still fall for consideration will be FAO No.623 of 1990 -6- the liability of the insurance company which pleaded that the cheque which had been paid through the financier of the owner was issued on 29.03.1989 and the policy originally issued was made to cover the risk from 29.03.1989 to 28.03.1990. The cheque was reported to have been dishonoured on 29.04.1989 and on the same day, notice of dishonour is said to have been issued to the financier. The Tribunal found that there had been no cancellation of the policy on the same day but on the other hand, the insurance company had collected the cash representing the premium that remained unpaid and a fresh policy had been taken. Therefore, nothing was brought on record to show that the insurance company had at any time revoked the policy on being served with notice of dishonour. 11. The issue of the liability of the insurance company in a case where the cheque bounced have come through several types of situations. The statutory requirement under Section 64VB of the Insurance Act is that the insurance company cannot underwrite or undertake the risk without receipt of premium. Consequently, if the premium remained unpaid under normal circumstances, the insurance company cannot be compelled to underwrite a policy and undertake the risk involved in the accident. If the cheque that represents the amount covered under the premium bounces, the options to the insurer in such cases would be to treat the policy as subsisting to recover the premium or it could take steps for revocation of the policy. If the policy had been revoked for non-payment of premium and due notice has been issued for such revocation to the insured, then the assumption of risk for an accident that had taken place FAO No.623 of 1990 -7- subsequent to the revocation of the policy does not arise. However, if the cancellation is not effected and it is made only subsequent to the accident itself, the insurance company would still be liable to pay. This issue has been dealt with by the Hon'ble Supreme Court in National Insurance Company Limited Vs. Abhay Singh Partap Singh Waghela (2008) 9 SCC 133 that has dealt with a situation of a dishonour of a cheque and the cancellation of a policy after the accident. The Court said that the insurance company shall still be liable under the circumstances. I would, therefore, hold that for all the three claims arising out of the accident, the insurance company will become liable and the plea of exclusion of laibility urged in the cross objections are rejected. 12. Appeal in FAO No.579 of 1990 is allowed and the cross objections 51-52-CII of 1991 are dismissed. (K. KANNAN) JUDGE December 07, 2010 Pankaj*