IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No. 449 of 2009 a/w FAO Nos. 524, 525 and 526 of 2009 Reserved on: 12.9.2011 Date of decision: 15.10.2011. 1. FAO No. 449 of 2009 United India Insurance Company Ltd. …Appellant. Versus Virender Kumar & Ors. …Respondents. 2. FAO No. 524 of 2009 a/w Cross Objection No. 255 of 2010 United India Insurance Company Ltd. …Appellant. Versus Durga Dass & Ors. …Respondents. 3. FAO No. 525 of 2009 a/w Cross Objection No. 169 of 2010 United India Insurance Company Ltd. …Appellant. Versus Ravi Singh & Ors. …Respondents. 4. FAO No. 526 of 2009 a/w Cross Objection No. 145 of 2010 United India Insurance Company Ltd. …Appellant. Versus Brinda Devi & Ors. …Respondents. Coram: The Hon’ble Mr. Justice Deepak Gupta, J. Whether approved for reporting? Yes 2 For the Appellant(s): Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. Manoj Thakur, for respondent No.1 in FAO No. 449 of 2009. Mr. J.L. Bhardwaj, Advocate, for respondent No.3 in FAO No. 449 of 2009. Mr. G.R. Palsra, Advocate, for respondent No.1 in FAO Nos. 524 and 525 of 2009 & for respondents No. 1 and 2 in FAO No. 526 of 2009. None for respondents No. 2 and 3 in FAO No. 524 of 2009. Mr. Varun Rana, Advocate, for respondent No.4. Ms. Shalini, Advocate vice counsel for respondent No.5. None for respondents No. 3 and 4 in FAO No. 526 of 2009. None for respondent No.3 in FAO No. 525 of 2009. _____________________________________________________ Deepak Gupta, J 1. These four appeals are being disposed of by a common judgment since one of the main issues involved in all the cases is the same. 2. The bus involved in all the accident is HP-19B- 6015. This bus was owned by M/s Himachal Highways and was being driven by Shri Shyam Lal under a contract entered into between M/s Himachal Highways and Himachal Road Transport Corporation. The bus had been leased out to the HRTC. On the basis of agreement executed between the 3 Himachal Highway and HRTC, the bus in question was being plied by the HRTC and the main issue raised by the Insurance Company is that since the vehicle was not under the control of the owner but under the control of the HRTC, it is the HRTC alone which is liable to pay the compensation and not the Insurance Company. 3. The agreement in question has been exhibited in these cases and as per this agreement, the HRTC had agreed to take private buses on lease to operate the same on the routes held by the HRTC. The HRTC agreed to pay a fixed sum per kilometer for plying the buses. The conditions relevant for the decision of these cases were that the buses were to run under the control and supervision of the HRTC and the staff of the HRTC could check the buses. The second party was to provide new buses for this purpose and the expenditure on account of diesel, oils, lubricants tyres-tubes, spare parts and repairs was to be borne by the second party i.e. M/s Himachal Highways. The Second party was also required to cover its buses under comprehensive Insurance Policy and renew the same from time to time. The second party was also to provide the other spare parts, proper Registration Certificate, Pollution Checking Certificates etc. There was a specific condition in the agreement that the Second party M/s Himachal Highways would bear all the liabilities arising out of the claims under the Motor Vehicles 4 Act. The driver of the bus was to be provided by the second party though the drivers were to undergo training in the training school of the HRTC. Thus, it is apparent that the entire operational costs were to be borne by the second party who was to be compensated on payment of per kilometer charges by the HRTC. 4. Shri Ashwani K. Sharma, learned counsel for the Insurance Company, urges that since as per the terms of the agreement, the entire control was that of the HRTC. It is only the HRTC which is responsible to pay the amount of compensation and there is violation of the terms of the policy and hence the Insurance Company is not liable. This matter is in fact no longer res integra. The Apex Court in Uttar Pradesh State Road Transport Corporation vs. Kulsum and others, (2011)8 SCC 142 was dealing with a similar question, wherein also the insured vehicle belonged to a private individual and was plying under the agreement with the Road Transport Corporation on the basis of route permit on a route, for which the permit had been granted by the Corporation. The Apex Court, after dealing with various provisions of the Motor Vehicles Act and the earlier authorities, held as follows:- 23. A critical examination thereof would show that the appellant and the owner had specifically agreed that the vehicle will be insured and a driver would be provided by owner of the 5 vehicle but overall control, not only on the vehicle but also on the driver, would be that of the Corporation. Thus, the vehicle was given on hire by the owner of the vehicle together with its existing and running insurance policy. In view of the aforesaid terms and conditions, the Insurance Company cannot escape its liability to pay the amount of compensation. 24. There is no denial of the fact by the insurance company that at the relevant point of time the vehicle in question was insured with it and the policy was very much in force and in existence. It is also not the case of the insurance company that the driver of the vehicle was not holding a valid driving licence to drive the vehicle. The Tribunal has also held that the driver had a valid driving licence at the time of accident. It has also not been contended by it that there has been violation of the terms and conditions of the policy or that the driver was not entitled to drive the said vehicle. 29. In the instant case, the driver was employed by Ajay Vishen, the owner of the bus but evidently through Clause 4.4. of the Agreement, reproduced hereinabove, driver was supposed to drive the bus under the instructions of conductor who was appointed by the Corporation. The said driver was also bound by all orders of the Corporation. Thus, it can safely be inferred that effective control and command of the bus was that of the appellant. 30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the 6 specific period. If the Corporation had become the owner even for the specific period and the vehicle having been insured at the instance of original owner, it will be deemed that the vehicle was transferred along with the Insurance Policy in existence to the Corporation and thus Insurance Company would not be able to escape its liability to pay the amount of compensation. 31. The liability to pay compensation is based on a statutory provision. Compulsory Insurance of the vehicle is meant for the benefit of the Third Parties. The liability of the owner to have compulsory insurance is only in regard to Third Party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate Insurance Policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice. 38. In the light of the foregoing discussions, the appeal filed by Insurance Company fails, wherein it has been directed that the amount would first be paid by the Company, with right to it to recover the same from owner of the vehicle. This we hold so, as the liability of the Insurance Company is exclusive and absolute. 39. Thus, looking to the matter from every angle, we are of the considered opinion that Insurance Company cannot escape its liability of payment of compensation to third parties or 7 claimants. Admittedly, owner of the vehicle has not violated any of the terms and conditions of the policy or provisions of the Act. The owner had taken the insurance so as to meet such type of liability which may arise on account of use of the vehicle. Therefore, the Insurance Company, even in the present case, cannot escape its liability to pay the compensation. 5. I would, however, like to make it clear that the learned Tribunal was not justified in holding that the HRTC was not at all liable to pay the compensation. Once the HRTC had taken the control of the vehicle in terms of the agreement, the two parties to the agreement could not take away the rights of the third parties. Therefore, the HRTC would also be jointly and severally liable alongwith original owner and driver to pay compensation but since the vehicle was insured and there is no violation of the policy the Insurance Company must satisfy the award to indemnify the owner. 6. There may be cases where there is violation of the policy. One may give an example of a bus being driven by a driver not having a valid driving. In such cases even if the Insurance Company is exonerated the Road Transport Corporation alongwith the owner and driver of the bus has to be held liable jointly and severally to pay compensation. The main issue having been decided I shall now take up the individual appeals. 8 FAO No. 449 of 2009 7. In this case the claimant Virender Kumar suffered injuries in the accident and the learned Tribunal has awarded a sum of Rs. 31,58,000/- to the claimant under the following heads:- i) Medical expenses including the expenses of the future treatment, if any. Rs.1,00,000/- ii) Transportation expenses Rs.20,000/- (iii) Attendants expenses Rs.25,000/- iv) Special diet & nutrition Rs.25,000/- (v) Pain and suffering Rs.1,00,000/- vi) Loss of amenities of life Rs.2,00,000/- vii) Actual loss of income & Estimated future loss of Income Rs.26,88,000/- Total Rs.31,58,000/-. 8. As per the claim petition, the monthly income of the injured was Rs.27,000/- per month and he was carrying on business of Automobile spare parts under the name and style of Durga Automobiles, Chamakaripul, Tehsil Arki, District Solan and he had also engaged 2-3 labourers to do agricultural work on his land and he used to supervise this labour in the morning and the evening. The right leg of the petitioner has been amputated and the left leg and foot was also injured. The evidence on record reveals that he had filed income tax returns Ext.PW-1/A and Ext.PW-1/B for the assessment year 2005-2006 and 2006-2007. The first return 9 was filed on 14th October, 2005 and the second return on 18th July, 2006. The accident in question took place on 22nd April, 2006 which means that the second return was filed after the accident had taken place. In the first return, the income from business and profession was shown to be Rs.79,990/- and the agriculture income was shown to Rs.1,30,000/- and therefore, the total income from agriculture as well as business was Rs.2,09,990/- or say Rs.2,10,000/-. The second return was filed after the accident. In this income from business and profession was shown as Rs.98,750/- and the agriculture income was shown as Rs.1,40,000/-, meaning thereby that the income has been shown to be Rs.2,38,750/-. 9. There is no serious objection to the amounts granted to the petitioner under the heads of Medical expenses, transportation expenses, attendants expenses, special diet & nutrition, pain and suffering, loss of amenities etc. The main challenge is to the estimated future loss of income. The disability certificate in respect of the petitioner has been proved on record as Ext.PW-6/C and his disability has been assessed at 80% in relation to the right lower limb. The learned Tribunal took the income of the claimant at Rs.2,10,000/- per month and assessed the loss of income at 80% i.e. 1,68,000/- per annum and applied a multiplier of 16, awarded total compensation of Rs.26,88,000/- under this head. 10 10. This Court has time and again observed that there can be no mechanical formula that the loss of disability is equal to the loss of income. This can vary from case to case. For example if the claimant is a workman and suffers amputation of his leg, the loss of income may be even 100%. On the other hand, if the claimant is an employee working as a clerk doing a desk job, the amputation of his leg may not lead to any loss of income. No doubt, the injured has to be compensated for the injuries caused to him but the Tribunals are required to assess the loss of income by taking into consideration the nature of injury, the nature of job/profession of the injured, the impact which the injury will have on the earning capacity etc. 11. Another disturbing factor is that as observed above, the disability certificate shows that the disability is 80% in respect of the right lower limb. The learned Tribunal without any application of mind has worked out the compensation by assuming that the 80% disability is in relation to the entire body and has led to 80% loss of income. He has not even taken into consideration the statement of the doctor examined by the petitioner Dr. Lokinder Sharma Orthopedic Surgeon, DDU, Shimla was examined as PW-7. He was one of the members of the Board which issued the disability certificate. According to him, the right leg of the petitioner was amputated and the left light of the petitioner 11 had a crush injury on the left foot. The doctor had not clearly stated as to what work the petitioner can do and what he cannot do. 12. The petitioner was running a shop and as per his own averments he was supervising the agriculture operations. No doubt his income will be affected, but it cannot be affected by 80%. A shopkeeper having an amputated leg can still sit in the shop and do his business. He cannot run around and cannot easily go to make purchases etc., but he can sit in the shop and manage the shop. The petitioner himself in his claim petition had clearly stated that he was only supervising the agriculture operations and had not stated that he was himself doing the agriculture operations. He can still supervise the agriculture operations though he cannot move around so freely. Keeping all these factors into consideration and taking the income of the petitioner both from agriculture and business at Rs.20,000/- per month, it would not be unreasonable to assess the loss of income due to lack of supervision at 40% i.e. Rs.8,000/- per month or Rs.96,000/- per annum. The claimant was 32 years of age and as per the judgment of the Supreme Court in Sarla Verma and others vs. Delhi Transport Corporation and another, (2009) 6 SCC 121, the appropriate multiplier would be 16. His loss of income works out to Rs.15,36,000/-. Therefore, the petitioner is entitled to total compensation of Rs.20,06,000/- and the 12 award of the learned Tribunal is accordingly modified and the compensation awarded to the claimant reduced from Rs.31,58,000/- to Rs.20,06,000/-. Normally interest is not awarded for the amount awarded as future loss. Therefore, interest at a lower rate is awarded on the entire amount. It is, therefore, ordered that the claimant shall be entitled to interest on the awarded amount. However, it shall carry interest at the rate of 4.5% per annum from the date of filing of the petition till the amount is deposited/paid. FAO No. 524 of 2009 a/w Cross Objection No. 255 of 2010 13. The claimant in this case suffered injuries and has been awarded a total compensation of Rs.19,000/-. The same is reasonable and calls for no interference. The appeal and cross objections are dismissed. FAO No. 525 of 2009 a/w Cross Objection No. 169 of 2010 14. The claimant suffered fracture of the spine. He was admitted in the hospital for about one month and suffered permanent disability. He has been awarded Rs.3,00,000/- as compensation, which appears to be reasonable and calls for no interference. The appeal and cross objections are dismissed. FAO No. 526 of 2009 a/w Cross Objection No. 145 of 2010 15. The claimants are the parents of the deceased Ashok Kumar, who was bachelor. The deceased was aged 26 years. He was working as Medical Representative and his 13 income has been taken at Rs.5,000/- per month. The dependency is worked out to Rs.2,500/-per month or Rs.30,000/- per annum which is reasonable. The multiplier of 11 applied is also reasonable. Therefore, the compensation awarded by the learned Tribunal calls for no interference. Hence this appeal and cross objections are also dismissed. 16. In view of above discussion, FAO No. 449 of 2009 is partly allowed and the compensation awarded by the Tribunal is reduced as indicated hereinabove. The other appeals i.e. FAO Nos. 524, 525 and 526 of 2009 and cross objections are dismissed. No costs. October 15, 2011 (Deepak Gupta) (vt) Judge