F.A.O.NO. 225 OF 2006 and F.A.O.No. 1130 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O.NO. 225 OF 2006 Date of decision:8th September, 2010 Smt. Sarita and others .......Appellants Versus Ishwar Singh and others ........Respondents F.A.O.No. 1130 of 2006 New India Assurance Company Limited .......Appellant Versus Smt. Sarita and others ......Respondents BEFORE: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. Vivek Singal, Advocate, for the appellant. Mr. Sukhdeep Parmar, Advocate, for respondent Nos. 1 to 4. None for respondent No. 5. Mr. Deepinder Ahlawat, Advocate, for respondent No. 6. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes/No 2. To be referred to the Reporters or not?Yes/No 3. Whether the judgment should be reported in the Digest? Yes/No K.Kannan, J.(Oral) 1. The Insurance Company is on appeal on the ground of liability, stating that at the relevant time when the accident took place the vehicle had not been registered and was being plied F.A.O.NO. 225 OF 2006 and F.A.O.No. 1130 of 2006 2 without a permit as taxi cab. The Tribunal found that the vehicle had been purchased on 20.12.2004 and the insurance had been taken on the same day. The Registration of the vehicle was delayed and the owner was plying the vehicle with the temporary registration. Without a permanent registration there was no scope for obtaining a permit to use it as a transport vehicle and consequently, permit had not been issued till after the registration was made on 25.04.2005. The accident had taken place on 23.04.2005. The Insurance Company would therefore, contend that there had been a breach of the terms of the policy and therefore, the insurer would not be liable. 2. Learned counsel appearing for the owner would contend that there was no deliberate breach of the terms of the policy and that he had applied for temporary registration and the registration was made on 25.04.2005. He could obtain the permit on 25.04.2005. All these only show that the owner was plying the vehicle for hire even without a permit on the date when the accident had taken place. To a contention that there was no deliberate breach on his part, we have only to see the requirement of permit. It is set out under Section 66 of the Motor Vehicles Act(hereinafter referred to as the 'Act'). The Act stipulates also under Section 192-A that if a vehicle were to be plied without a permit he would make render himself liable for the offence in terms of the said provision. The issue of deliberate breach must be considered in the context of the nature of the breach and if the owner has done an act which was F.A.O.NO. 225 OF 2006 and F.A.O.No. 1130 of 2006 3 impermissible, I would uphold the contention of the insurer that the insured had committed an actionable violation of terms of policy. 3. The right of insurer to make a plea that the vehicle did not have a permit for a purpose for which it was being used, answers only one part of the issue namely of its liability to indemnify the insured. As far as the claimant is concerned, if there was a valid policy then the right of enforcement of the claim shall be available even against the insurer and liability of the insurer shall be made to make the payment and recover the same in terms of 149(4) proviso and 149(5) of the Act. These provisions have been considered by the Hon'ble Supreme Court in New India Assurance Co., Shimla v. Kamla,(2001) 4 SCC 342: and as well as in National Insurance Co v Swaran Singh (2004) 3 SCC 297. I would therefore, accept the contention of the insurer only in so far as the liability to indemnify is concerned and make insurer liable is to satisfy the claim made in the petition. 4. The deceased was a Constable in Delhi Police at the time of the accident and was drawing a salary of Rs. 10,237/-. He was aged 32 years and the claimants were widow, two minor children and father. If Rs. 1,237/- is deducted as the tax payable, the gross salary minus tax would be Rs. 9,000/-. I will provide for an increase of 50% for prospect of future increase and take the average salary for his span of life to be Rs. 13,500/-. I will provide for 1/4th deduction, take the monthly F.A.O.NO. 225 OF 2006 and F.A.O.No. 1130 of 2006 4 contribution to the family at Rs. 10,125/-. The appropriate multiplier would have been 16 as per the decision of the Hon'ble Supreme Court in Sarla Verma Vs. Delhi Transport Corporation and another (2009) 6 SCC 121 but making a provision for the fact that the choice of multiplier must be such as would yield return in stable economy, an amount which shall be the normal income and also make provision for a gradual reduction that will completely wipe away the corpus. I will therefore, take the multiplier to be 15. I would add Rs. 10,000/- as loss of consortium for the wife and add Rs. 5,000/- for each of the minor children. I would add further sum of Rs. 7,500/- towards loss of estate and funeral expenses. The amount would aggregate to Rs. 18,50,000/-. The Tribunal had already awarded compensation of Rs. 9,25,000/- and the amount in excess shall also attract interest at 6% per annum from the date of the petition till the date of payment. 5. The Tribunal had awarded Rs. 1,00,000/- as compensation to the father-claimant, the remaining amount shall not be apportioned in the manner of the Tribunal but equally amongst the widow and the children. Having regard to the fact that the accident took place in the year 2005 and five years have elapsed. I would direct that 1/3rd of the amount shall be paid immediately to the widow and the remaining 2/3rd shall be deposited for a term of 10 years and this amount shall be split in 10 equal moieties and first moiety should be invested for one year and the second moiety for two years and so on till the tenth F.A.O.NO. 225 OF 2006 and F.A.O.No. 1130 of 2006 5 moiety shall be invested for 10 years. The amounts with interest accrued on the deposits for a year and so on will be paid to the widow on the dates of their maturity. As regards the minor children, all the amounts should be kept in deposits till they attain age of their respective majority and the interest accumulations shall be paid to the widow as a guardian of the minor children for their maintenance. On attaining the respective dates of majority the children will be entitled to the 50% of the amount and the remaining amount shall be deposited for a period of 5 years, each batch of deposits in similar fashion with amounts split into five equal shares. The amounts shall be paid to the minors on the respective dates of the maturity of claims. 6. The liability of the insurer to make the payment is affirmed. It shall be with a right of recovery from the insured. The appeal of the insurance company is allowed on the above terms and the appeal by the claimants is allowed to the above extent. [K.KANNAN] JUDGE 8th September, 2010 Shivani Kaushik