FAO No. 79 of 1990 & Cross Objections No. 30-CII of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 79 of 1990 and Cross Objection No. 30-CII of 2006 Decided on : 17-12-2008 Krishan Lal and another ....Appellants VERSUS Naresh Rani and others ....Respondents CORAM:- HON'BLE MR. JUSTICE MAHESH GROVER Present:- Mr. Deepak Suri, Advocate for the appellants. Mr. Jagdish Manchanda, Advocate for the claimants/Cross Objectors. Mr. Inderjit Sharma, Advocate for the Insurance Company. MAHESH GROVER, J This order will dispose of appeal no. FAO No. 79 of 1990 and cross objections no. 30-CII of 2006. This appeal is directed against the award of the Motor Accident Claims Tribunal, Kurukshetra dated 25.7.1989. The appellants herein are the owners of the vehicle which was involved in the accident. The only question that has been raised in the present appeal is that in the absence of the policy being produced and proved by the Insurance Company during the course of proceedings before the Tribunal, whether the liability of the insurance company can be held to be limited to the statutory liability or not. FAO No. 79 of 1990 & Cross Objections No. 30-CII of 2006 2 It was contended by the learned counsel for the appellants that the insurance company-respondent no. 5 did not produce the insurance policy on record and the defence taken up in the written statement is as under:- “Para 2:- That no policy has been issued insuring the vehicle in question. The answering respondent has tried to locate the policy particulars in its office but has failed. However, if the owner or the Driver furnishes the policy, then the answering respondent reserves its right to file the amended written statement. Para 10:- That the answering respondent reserves the right to take all the pleas available to it u/ss 95, 96, 103(a), 110(2)(c ) of the Motor Vehicle Act. However, the liability of the answering respondent is limited one, if any i.e. Upto Rs.1,50,000/- in all, in case of truck.” Reliance was placed on cases titled as 'M/s Malwa Bus Service (P) Ltd. Moga, District Faridkot, through its Managing Director and another versus Amrit Kaur and another' 1987 PLR (1) 618, 'Shri Ajit Singh versus Sham Lal and others' 1984 PLR 314 and 'Smt. Sudha Bahri and another versus Sarvjit Singh and others' 1986(1) PLR 244 Learned counsel appearing for the insurance company could not refute this fact that the insurance policy was not produced on record. After hearing learned counsel for the parties, I am of the considered opinion that the contention raised by the learned counsel for the appellant is correct. Insurance policy is a contract between the insurer and the insured which governs the rights of the parties. In the eventuality of an FAO No. 79 of 1990 & Cross Objections No. 30-CII of 2006 3 accident claim there are certain statutory defences which are available to the insurance company which they can avail only if there is a valid existing contract between the insured and the insurer. That apart these statutory defences are also available to the insurance company only if the insurance policy is proved in accordance with law before the Tribunal under the proceedings pursuant to a claim petition. The insurer cannot derive any advantage of a policy which is not proved in accordance with law. Therefore, drawing strength from the observations in the aforesaid judgments, I am of the considered opinion that the appeal deserves to be allowed and the finding of the Tribunal limiting the liability of the Insurance Company to the extent of Rs.1,50,000/- is set aside and it is held that the insurance company shall be liable to satisfy the entire amount of compensation. In so far as the cross objections are concerned, the deceased was said to be running a firm dealing in business of selling and purchasing chemicals. The account books for the year 1987-88 were produced indicating the income of the deceased from the business as Rs.44,262.75 Paisa per month. The Tribunal inferred that the brother of the deceased was also partner in the business and deducted the income by 50% to mean that Rs. 22,000/- would be the individual income of the deceased, out of which Rs. 12,000/- was assessed as dependency while taking Rs.10,000/- for the personal expenses and multiplier of 16 was applied to arrive at a figure of Rs.1,92,000/-. After hearing learned counsel for the cross-objector, I am of the considered opinion that the amount awarded is inadequate and the award of the Tribunal deserves to be modified. There is no conclusive evidence to FAO No. 79 of 1990 & Cross Objections No. 30-CII of 2006 4 suggest that the deceased was having a partnership firm. But at the same time accounts of 1987-88 which are being produced also do not inspire confidence for the reason that the Accountant who appeared in support of the account statement PW3 Prem Kumar who was maintaining the accounts on behalf of the firm stated that prior thereto he had not seen any ledger being maintained by the firm. He has also stated that the firm was assessed to income tax but no such income tax return was produced. Apparently, this account statement was fabricated and much reliance cannot be placed on it. Therefore, it has to be discarded. But this leaves the Court with no option but to travel in the realm of conjectures as there is no conclusive proof of income of the deceased. However, it is proved that the deceased was engaged in the business of selling and purchasing chemicals, therefore, it would not be an exaggeration if the income of the deceased is taken to be Rs.2000/- per month i.e. Rs.24000/- per annum. 1/3rd of this amount is deducted on account of personal expenses as he is survived by his widow, daughter and mother. Dependency in this manner comes to Rs. 16000/- per annum. Considering the age of the deceased as 28 years, multiplier of 18 would be just and appropriate and also in consonance with the Schedule to the Motor Vehicles Act which is the guiding factor. In this manner, compensation comes to Rs. 2,88,000/-. An amount of Rs.20,000/- is awarded on account of funeral expenses and loss of consortium etc. Therefore, the total compensation comes to Rs. 3,08,000/-. The enhanced amount of compensation shall be paid alongwith interest at the rate of 9 % per annum from the date of filing of petition till the date of its realisation. The liability to pay the amount shall be the same as has been FAO No. 79 of 1990 & Cross Objections No. 30-CII of 2006 5 determined above in this order by this Court. The appeal and the cross objections stand allowed in the aforesaid terms and the award of the Tribunal is modified accordingly. December 17 , 2008 (Mahesh Grover) rekha Judge