1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO.94 OF 2005 WITH MISCELLANEOUS CIVIL APPLICATION NO.128 OF 2011 1. Shri Eknath Shantaram Kunkolienkar, son of Shantaram Kunkolienkar, aged sixty three years, married, businessman and his wife. 2. Smt. Sudha Eknath Kunkolienkar, aged fifty eight years, housewife, both above residents of house no.51, Fonculem, Sanvordem, taluka Sanguem Goa. …. Appellants V/s. 1. Anthony Fernandes, son of Santan Fernandes, major in age, driver and owner of truck bearing registration number GA-02-U-7307, resident of house no.423, Math waddi, Collem, taluka Sanguem Goa. 2. The New India Assurance Company Ltd. insurer of truck bearing registration number GA-02-U-7307, Ponda Goa. …. Respondents Mr. S.S. Kakodkar, Advocate for the Appellants. Mr. E. Afonso, Advocate for Respondent No.2. CORAM : F.M. REIS, J. DATE : 11th FEBRUARY, 2011 JUDGMENT : The above appeal challenges the judgment and award dated 2 25/11/2004, passed by the Motor Accident Claims Tribunal at Margao in Claim Petition No.95/2002. 2. The claimants, who are appellants herein filed the Claim Petition on the ground that they are entitled for a compensation under Section 166 of the Motor Vehicles Act, 1988, in view of the death of their son Shivdatta Eknath Kunkolienkar due to a motor vehicle accident which took place on 12/11/2001 between 13.30 hours and 13.45 hours at the place known as Mus or Musher in Panchwadi on the road between Shiroda to Sanvordem. 3. It is the contention of the appellants that the said deceased was 17 years old and his monthly income was Rs.3,000/- per month, since he was writing accounts book on part time basis and, as such, put up a claim of Rs.4,75,000/- from the respondents. It is further their case that the said deceased was proceeding from Ponda towards his residence at Fonculem, Sanvordem on a motorcycle bearing no.GA-02-Q-0533 along with one person by name Suraj, who was the pillion rider and after he reached the place known as Mus or Musher at Panchwadi, the deceased Shivdatta stopped his motorcycle on the extreme left side of the road and at the same time the truck bearing no.GA-02-U-7307 3 driven in a rash and negligent manner came from the opposite direction and hit the motorcycle and both the rider as well as the pillion sustained serious injuries and died. 4. The respondents nos.1 & 2 filed their written statements, whereby the respondent no.1 denied the aspect regarding the income as well as the business activities of the deceased. They claimed that the motorcycle rider was not on the extreme side of the road and according to him the motorcyclist was responsible for the accident. The respondent no.2 filed the written statement and claimed that the truck was not insured with the respondent no.2 at the relevant time and, hence, the said respondent was not concerned for any liability against third party to indemnify the respondent no.1. It is further their case that the cheque was issued by the respondent no.1 on 18/10/2001 towards the payment of the premium and after accepting the said cheque subject to realisation of the amount, the policy was issued dated 18/10/2001. The cheque was presented and the same was returned as the funds were insufficient. It is further their case that the said cheque was handed over to respondent no.1 with a memo dated 31/10/2001 and a letter was issued on 1/11/2001 to the respondent no.1 informing him that the cheque had been returned unpaid and, therefore, the policy 4 issued by them stood cancelled. It is further the case of respondent no.2 that the respondent no.1 thereafter obtained a new policy against the vehicle only from the date of the payment i.e. 20/11/2001 and, as such, as on the date of the accident, according to respondent no.2 there was no valid policy which would indemnify the respondent. 5. The Tribunal after framing the issues and recording of evidence has by the impugned judgment partly allowed the claim petition and awarded a sum of Rs.2,02,000/- including the no fault liability to be paid by respondent no.1 together with interest at the rate of 6% per annum. The Claim Petition against respondent no.2 came to be rejected. Being aggrieved by the said judgment, the appellants/claimants have filed the present appeal. 6. Shri S.S. Kakodkar, the learned Counsel appearing for the appellants has assailed the impugned judgment and submitted that the Tribunal had erroneously come to the conclusion that the respondent no.2 was not liable to pay the amount of compensation awarded. The learned Counsel further pointed out that under the provisions of Section 149 of the Motor Vehicles Act, even assuming that the insurance policy was cancelled, the Insurance 5 Company was liable to pay compensation to the appellants. The learned Counsel further submitted that merely because the cheque towards the payment of the premium came to be dishonoured, that does not by itself exonerate the Insurance Company from paying the amount of compensation payable to the appellants, who are third parties. The learned Counsel further submitted that as per the provisions of the Motor Vehicles Act, there is a statutory obligation on the part of the owner to ensure that the vehicle is insured and, as such, the question of exonerating the Insurance Company from effecting the payment of compensation would not arise. The learned Counsel further submitted that the Tribunal has erroneously appreciated the evidence on record and came to the conclusion that the Insurance Company is not liable to pay the amounts to the appellants. In support of his contention, the learned Counsel relied upon the judgment of the Apex Court reported in 2006 (3) TAC 822 in the case of Oriental Insurance Company Ltd. V/s. Yogendra Bhalchandra Patil & Anr. 7. On the other hand, Shri E. Afonso, the learned Counsel appearing for respondent no.2 has supported the impugned judgment. He pointed out that once the cheque issued towards the payment of claim came to be dishonoured, there was no insurance 6 policy subsisting as on the date of the accident. The learned Counsel further pointed out that the insurance policy was not enforced as on the date of the accident and, in any event, there was no subsisting policy as on the date of the accident in favour of the respondent no.1 which could indemnify him from paying any such compensation to the appellants. The learned Counsel further submitted that the policy came to be canceled pursuant to the letter addressed to the owner/respondent no.1 at Exhibit 45 dated 1/11/2001. The learned Counsel further submitted that there is no obligation on the part of the Insurance Company to inform the transport authority with regard to any such decision about the cancellation of the policy on account of dishonour of the cheque. The learned Counsel further pointed out that there is no policy subsisting as on the date of the accident and, consequently, the question of directing the payment of compensation by the Insurance Company would not arise. The learned Counsel further submitted that provisions of Section 149 of the Motor Vehicles Act would not be applicable to the facts of the present case as according to him there is no insurance policy issued in favour of the owner. He, as such, pointed out that there is no merit in the above appeal and the same deserves to be rejected. The learned Counsel further submitted that the compensation awarded by the 7 Tribunal is not in accordance with well settled principles of awarding compensation as reported by the Apex Court in the judgment reported in 2009 (6) SCC 121 in the case of Smt. Sarla Verma V/s. Delhi Transport Corporation & Anr. 8. Having heard the learned Counsel and on perusal of the record, the following points for determination arise in the present appeal: POINTS FOR DETERMINATION : (i) Whether the Insurance Company is liable to pay the amount to the appellants. (ii) Whether the amount of compensation as assessed by the Tribunal is in accordance with law. 9. Before proceeding to consider the points for determination, it would be appropriate to consider the above application filed by the respondents being Miscellaneous Civil Application No.128/2011. By the said application, the respondent no.2, the Insurance Company is seeking leave of this Court that they be allowed to challenge the findings of rashness and negligence as well as the quantum of the compensation as awarded by the Tribunal under the provisions of the Motor Vehicles Act, 1988. 8 10. It is an admitted fact that no such leave under the provisions of Section 170 of the Motor Vehicles Act was sought by the respondent no.2 before the Tribunal. Once no such leave was obtained, the question of seeking such leave at this stage of the appeal before the appellate Court would not arise. Even after filing of the above appeal, the respondent no.2 has not filed any cross- objections after seeking necessary leave to challenge any such findings before this Court. It would be very late for the respondent no.2 at this stage to file an application under Section 170 of the Motor Vehicles Act to seek such leave when the matter is taken up for final hearing. Considering the scheme of the Motor Vehicles Act, I find that such application is not maintainable before this Court. Hence, the said application stands dismissed. 11. The next contention to be considered is whether the Insurance Company/the respondent no.2, herein is liable to effect the payment of the compensation to the appellants. The Apex Court in the judgment reported in 1998 (1) TAC 615 in the case of Oriental Insurance Co. Ltd. V/s. Inderjit Kaur & Others has held at paras 6,7,8 & 10, thus: “6. Chapter 11 of the Motor Vehicles Act, 1988, provides for the insurance of motor vehicles 9 against third party risks. Section 146 thereunder states that no person shall use or cause or allow any other person to use a motor vehicle in a public place unless there is in force in relation to the use of the vehicle a policy of insurance that complies with the requirements of the Chapter. Section 147 sets out the requirements of policies and the limits of liability. A policy of insurance, by reason of this provision, must be a policy which is issued by a person who is an authorised insurer. Sub-section 5 reads thus : “(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.” Section 149 refers to the duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. Sub- section (1) thereof reads thus : “(1) If, after a certificate of insurance has been issued under sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under 10 Clause (b) of sub-section (1) of Section 147 ( being a liability covered by the terms of the policy) [ or under the provisions of Section 163-A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment- debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.” 7. We have, therefore, this position. Despite the bar created by Section 64-VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefor. By reason of the provisions of Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement ( upon 11 which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honourned. 8. The policy of insurance that the appellant issued was a representation upon which the authorities and third parties were entitled to act. The appellant was not absolved of its obligations to third parties under the policy because it did not receive the premium. Its remedies in this behalf lay against the insured. 10. It must also be noted that it was the appellant itself who was responsible for its predicament. It has issued the policy of insurance upon receipt only of a cheque towards the premium in contravention of the provisions of Section 64-VB of the Insurance Act. The public interest that a policy of insurance serves must, clearly, prevail over the interest of the appellant. We are of view, in the circumstances, that the observations in the case of United India Insurance Company Ltd. V/s Ayeb Mohammed do not lay down good law. The appeal is dismissed. The respondents not having appeared, there shall be no order as to costs.” 12 12. The Full Bench of Kerala High Court in the judgment reported in 2006(2) ALL MR (JOURNAL) 1 in the case of The Oriental Insurance Company Ltd. V/s. A.B. Sivankuty & Ors. has held at para 20 thus: “20. Neither from the three member Bench : decision of the Apex Court in Inderjit Kaur's case nor from the provisions of Sections 147(5) and 149(1) of the Motor Vehicles Act, 1988 do we get any support to hold the view that the liability to pay compensation for injuries sustained to third parties ceases to exist after the cancellation of the policy. The situation is not akin to that of an owner of a vehicle not having taken any insurance at all for the vehicle as on the date of the accident, as is observed by the Division Bench of this Court in New India Assurance Co. Ltd. V/s. Raghu (2001) 3 Ker LT 515. We therefore hold that the decision of the Division Bench of this Court in New India Assurance Co. Ltd. V/s Raghu (2001) 3 Ker LT 515 does not lay down the correct law. The position is that the liability of the Insurance Company in damages for third party risks continues for the entire period covered by the policy in spite of the cheque issued towards payment of premium was dishonourned and consequently policy was cancelled by the Insurance 13 Company. The remedy of the Insurance Company lies against the “insured” to have the amount paid by them by way of compensation for third party risks to be got reimbursed. The reference is answered as above. The registry shall appropriately place the file before the Referring Bench along with the answer on the Reference for further appropriate action in the matter.” 13. In the present case, there is no dispute that the insurance policy was issued on 18/10/2001. It is claimed by the respondent no.2 that the said policy was cancelled pursuant to a letter dated 1/11/2001. The said letter is stated to have been sent by registered A/D and the fact that the letter was dispatched has been established by the respondent no.2 by examining the Officials of the Insurance Company. The fact as to when the said letter came to be received by the respondent no.1 has not been established, but however, the said statements of the Officials of the Insurance Company have not been challenged by the respondent no.1. The fact remains that no intimation about any such cancellation was given by the respondent no.2 to the registration authorities. As such, even assuming that the insurance policy came to be cancelled by the respondent no.2, 14 nevertheless in view of the provision of Section 149 of the Motor Vehicles Act, which specifically provides that notwithstanding the fact that the Insurance Company may be entitled to issue the policy or cancel the same, nevertheless the Insurance Company would be liable to pay the compensation to the third parties. The Apex Court in the said judgment of Oriental Insurance Co. Ltd. V/s. Inderjit Kaur & Others (supra) has come to the conclusion that even assuming that the cheque towards the payment of premium came to be dishonoured does not exonerate the Insurance Company to effect the payment of the compensation to the third parties. 14. Shri Afonso, the learned Counsel appearing for respondent no.2 has fairly stated that in all the judgments relied upon by him the Insurance Company was directed to pay the compensation even in cases where the cheques towards the payment of the premium came to be dishonoured and permitted to recover such amount from the owners. This Court in the judgment reported in 2010 (4) Bom.C.R. 325 in the case of United India Insurance Co. Ltd. V/s. Sindhubai Kondiram Darwante & Ors. has also held that the Tribunal as well as the Appellate Court has jurisdiction to direct the payment of such an amount by the Insurance Company reserving the right of the Insurance Company to recover any such amount 15 from the owner. I see no reason not to follow the same procedure in the facts and circumstances of the case. As such, in the interest of justice as the accident resulted in the death of the son of the appellants, the Insurance Company/respondent no.2 is directed to effect the payment of compensation by reserving right of the Insurance Company to recover the said amount from the owner in accordance with law. The point for determination is answered accordingly. 15. With regard to the question of payment of compensation, the Tribunal has fixed the income of the deceased at Rs.3,000/- per month. Shri Kakodkar, the learned Counsel appearing for the appellants has submitted that the deceased was an engineering student and had a bright future and, as such, the amount fixed by the Tribunal is inadequate. 16. On perusal of the material on record, I find that the appellants have failed to lead any evidence to establish the future income/prospects of such engineering student. There is no basis or material on record for the Court to ascertain or assess the amount of any compensation on that count as submitted by Shri Kakodkar, the learned Counsel appearing for the appellants. 16 17. In the absence of such material, no interference is called for in fixing the monthly income of the deceased to the extent of Rs.3,000/- per month. As far as the age of the dependents is concerned, there is no dispute that the father of the deceased was 60 years. Considering the said judgment of the Apex Court in Sarla Verma (supra), the multiplier applicable in the present case is 9. Considering the income of Rs.3,000/-, the amount works out to Rs.3,24,000/-. After deduction of 50% on account of personal expenses, in accordance with the said judgment of the Apex Court, the amount works out to Rs.1,62,000/-. The appellants would also be entitled to funeral expenses of Rs.2,000/- and loss of estate to the tune of Rs.2,500/-. The total amount, as such, works out to Rs.1,66,500/-. Besides the said amount, the appellants would be entitled to interest at the rate of 7.5% per annum from the date of filing of the Claim Petition up to actual payment. The second point for determination is answered accordingly. 18. In view of the above, I pass the following order: O R D E R (i) The appeal is partly allowed. (ii) The impugned judgment and award is modified and the amount of compensation is fixed at the rate of Rs.1,66,500/- together with interest at the 17 rate of 7.5% per annum from the date of the filing of the Claim Petition up to actual payment. (iii) The amount received under Section 140 of the Motor Vehicles Act shall stand deducted from the said amount. (iv) The respondent no.2 is directed to make the said payment to the appellants and recover the same from the respondent no.1, in accordance with law. (v) Miscellaneous Civil Application No.128/2011 stands disposed of for the reasons stated herein above. (vi) The appeal stands disposed of accordingly with no order as to costs. F.M. REIS, J. NH/-