Oivision Bendl IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR MISC. APPEAL FC1 N0. ^ S 7. /2011 MISC. APPEAL UNDER SECTION 173 OF THE MOTOR VEHICLES ACT, 1988 ^ APPELLANT INSURER ^ \\ ^ • \^?-';:"$<^ ^^:s-:^ ^---'^^ RESPONDENTS CLAIMANTS DRIVER 3, ^" OWNER -Reliance General Insurance Company Limited through its Legal Manager, Reliance General Insurance Company Limited, 301- 302 Corporate House 169 RNT Marg opposite Jhabua Tower, Indore (M.P.) ^ * VERSUS Smt. Karuna Shukla, Wd/o Late Kishore Kumar Shukla, aged about 50 years, occupation - House wife Ku. Shiv^ni Shukla, D/o Late Kishore Kumar Shukla, aged about 26 years, Occupation - Student Both R/o A-7, Vishal Nagar, Telibandha / Raipur, Tahsil & District - Raipur (C.G.) Sharat C'handra Shukla, S/o Late K.K. Shukla, aged about 22 years, Occupation - Driver, R/o A-7, Vishal Nagar, Telibandha Raipur, Tahsil & District - Raipur (C.G.) Manohar Lal Dewangan S/o H.D. Dewarigan, aged and occupation - not known to the appellant- Company, R/o Deobhog Road Gariyaband, House No. 1025, Tahsil & District - Raipur (C.G.) APPEAL VALUED AT RS. 22,16,628/- COURT FEE Rs. 15^ ^f^ HI6H COURT OF CHHATTISeARH AT BIL^SPUR bIVISION B6NCH HON'BLE Mft. I.M.QU&&USI & HON'BLE MR. 6UUtM MINHAJUDOBM, JJ. Amxllant Rejawmctents M.A. fcl No.687^011 Raliance Sencrd Insuronce Company Ltd. Vs Smt. Klanjna Shidda A ol+icrs ProiBcnts Mr. Saurabh Sharma, Advooate f®rthe<ypelkmt. Mr. Siivendu Pandya, Advocate fpp 1h<B responchuits. 11 ORDERfOnri) (?rh Jurw. 2011) I.M. Ouddust. J; 1. 1-teard on I.A. No.l, an dppUcation for condoncrt'ion of detoy, as 1he instant oppeal ha< been preferred with a fllelay of 61 days. 2- For the reasons assjgned in the flpplicatjon far condonation of detay, it is atlowwKl and -riie delay in preferrmg the instant dppecl is oondoned. 3. With the consent of the parl'ies. the matter is bemg heard firaally. 4. By way of this appeal under Section 173 of the Motor V^icte* Aet, 1988 (for ^iort the Act, 1988'), •rtw oppelkint-Insurance Conywiy has chalter^ed ihe award dated 18.11.2010 passed by teamed 1st Addittonal Motor Accident Claims Tribunal, Raipur (for short %e Claims Tribunal') in Ctaiin CaaB No.115/09. 5. The <ypellant had not onty challenged liability'part' of the impuyied cwar'd but also questioned the quantum fixed by the Ckrims Tribunal cuid in this regcrd permission under Section 170 of the Act has been gnmted to 1+ie cppelkint. 6. Facts of the case, in brief. are that on 15.08.2009 Kishore Kumar Shvkta (sin^t deceased) aleng with his family members was 9®ingtowards Oantcwada from Rajpur in a Maruti Car bearing registration number C604-H8-1489. A-t about 5.30 a.m. near Bonjarin fihcrt- the said cer has nnet wjth an accident as a result of wrfiich said (Cishore l&jniar sustdned grievous injuries. He was taken to Ramkrishna Care Ho^tital, Raipur for treatment wtew he died on 18.8.2009 whjl®unde^oing treatment. Reporf of the acddent was lodged in ii vy Police Station fieedham. The claimcxnts, who ere wdow & diitdren of^the deceased, have ftled a claim opplication before the Claims Tribunat saekir^ compensation to the tune ef Rs.37,25,000/- for the ciccidaitat dealti of the deceased on the ground that The dec<a«sdwas Ifie sole camu'^ member in the family and they were dependent on his eamjngs. 7, On the pleadin9S of the parties, the Clafans Tribunal has framed as many as five isaies and after considerin9 material availabte on reeord altowed ctaim cyptication of the claimants, awarded a compensation of Rs.22,1^,628/- and fostened Ikibilit/ on the appeltont herein to pay compensation. 8. Leamed counsel for the ap(»ltant-InajranceCompany contended that though the vehicle, which is a private car, WOGS insured under a pad<a9e policy (comprehensive policy) but the dececsed borpowwd-rtie car from theowner and therefore the claim cpplication was not maintdnabte in view of the judgment of 1he Hon'ble Apex Court in the matter of NirN^imma & arwliier Vs. Unit^ India Insuronce Company Limil^d reported in (2009) 13 SCC 710. He furl-her contended thot the amount awarded by the Claiins Tribunai is too excessive in the facts of case and liable to be reduced. He has furt-her submitt-ed that- in absence of any provision regarding penal interest in the Act, 1988, the Claims Tribunal has committed a mistake in directing that tf the amount awarcted is not paid wiliain time, interest @ 9% Aali be poyabte. 9. Qn the other hand, leamed counsel for the respondents supported the impu9nedawai^l. tO.We have heard leamed counsel for thc parl'ies and perused -rtie recerds of the Clalms Tribunal as also the findin9S 9iven in the impu9ned award. II. The judgment in -rtie maUer of Nin9amma (siyra) is in reaapect of Section 163-A of the Act, 1988 but in itie present case the daim flpplt€ation was filed under Section 166 of the Act, 1988 and th®deceotscd was not driving the motor vehicle. Even otherwise, in the mdrtters of pctckoge policy there is a Circukxr of the Insuronce Regulatory and Devebpment Authority dated 16.11.2009 'm which eartier drcukxrs issued by the Tariff Advisory Gommittee dated 18.3.1978 ond 2.6.1986 were clarified md operative part of the Circukxr Oated 16.11.2009 is quoted hcreta belows- ^s^ // -'L.: i \.^y h^ I ^' "The above cjrculars make it chMr that the insurance liabiljly in re^>ect of occupant (s) carried in a priwte car and pitlion ricfer carried on two-wheeler is covered under the Standard A^otor Package Policy. TTierefore, this circutar is bindin9 upon the insuronc® companies for the reawn tiiat the deceQseci was Gertajniy an occupeait &f the prlvate car and in the oferessid circuSar it has bcen clarified that the occupant in a privateccy is covered under the comprehensive insurance poiicy. All fieneral Insurersare advtsed to adhere to the dforementioned circubrs and any non-compiionce of the same woukl fce vieKyed seriously by the Authority.11 Further, the Rc9ulatory Authority vid< drcular dort-ed 6.11.2008 has mondated that inajrers are not permined to abridge the scepe of stanckird covers available under the erstwhile tariffs beyond the optiend permttted in the erstwhite tariffs. 22.In the matter of &®«pal6irishbhai Soni and othars Vs. Unitad India Insurunc< Co. Ltd.. Baroda reported in (2004) 8 SCC 388 the Hon'ble Supreme Court ^hite holding 1+iat the ckxim petttion under Section 163-A of the Act is not maintainable in respect of the t»rroweref two wheelers from the owner directed the Tribunals to procecd to determintt their claim applications under Section 166 of the Act, 1988 in accordkince with taw. Further it was stated that the order ^iall not be trcated ad precedent. 23.In view of the dboye, since the deceased was one af the occupants of the pnvate car and the insurer has issued comprehen^^ policy i^ Standard Motor Package Policy, his risk was covered under the policy and as aich Ikxbility to pay compensation comes upon the appellant-Insunance Company. Therefore, we are of the opinion that the Claims Tribunal has rightly imposed Ikxbility on the cppellant In^irance Company to pay the compenaoition and in this regard contention of the leamed counsel for cppellant is not sustajnable. 24(With regard to quontum part is concemed, to aur mind the method adopted by the CtaJms Tribunal to assess loss of dependency is not correct and liie same needs to be reassessed. It is evjdent from the record thcxt monthly gross satary of Ihe deceased, who wois an incwne-tax payee, wcs Ks.28,OOCV- i.e. Ks.3,36,000/- p.a. To ossess the loss of income we propose te first deduct Rs.24jDOQ/- approximately, towards jnc«me tax from the annual income of the deceased ond thereafter l/3rd deduction towards personal ond Iwing expenditure of the deceased ond ^ius, the totod toss of incem®would come to Ks.2,08,000/- (3,36,000-24000 x 1/3). If we apply multjplier of 11 to this amount, as the deceased was Sl years of age at the time of accidtent and accordin9 to Sarla Vwna (Smt.) and othws Vs. D<IU Tninsport Corporation A anothcr report-ed in (2009) 6 SCC 121 multiplier of li would be applicable, the Joss of dependency would com®to Rs.22,88,000/? (2,08,000x 11). Whereas, the Claims Trfeunal has awar-decl compensation to Ifi®tune of Rs.22,16,628/-, which is on the lower side, tence, w intwferenee is required. IS.The above amount of compensation has been fixed by this Coirt wthout considering future of inconw Le. incremerrt" etc., as in the matter of K*ft« Madhusudan & athcrs Vs. /rttinlnlslrativc OffictrA aiwthcr r^ort'ed in ^ (2011) 4 SGC 689 the Hon'bte Apex Court hashetd the* in Sarla Vcrma (supra) judgment the Cburt ha» held that there shodd ba no addttion to income for future prospect-s where age of 1+ie deceased is more than SO yeors. The Hon'ble Cburt- called it rute of thumb and it was developed soos to awid uncert-aintits iR the outcomes of litigGtion. However/the Bench held thet a dq)artlure can be made jn rare and exceptlonal cases involving special circumstfflices. 16.However, we feel that penal interest inyoaed by the Ctaims Trtbunal @ 9% p.a is not proper and the same deserves to be set aside b tight of the law kxid down by the Hon'ble Supreme Court in Ihe matter of NeKoiwl Iwsianinca Company Ltd. Vs. Keshw BaheKlur and othws reperted in (2004) 2 SCC 370 wherein 1ft®Hon'bte Supreme Courl- has held that tljrectiwi in the award for retro^iective enhancemwit of mterest for defauh- in payment of the compensation togel+ier with interest payable the;reon virlually flanount^ to imposition of penalty which is not statutority envisaged aid pnBScribed. 17. In the result, the impugned awwcl, so far oa it rela'tes to penal interast, is hereby set aside and it is drected that the ctaii|HMits shaK be eBtitted for only simple hiterest @ 6% p.a on the awaRdted cmount from the date of fiUng / of appfication titl actual poyment is made. Rest of Ihe conditior» of the impugned award shall remain intnct. No order as to cost. t8. Tlie appeal is aHowed in part to the extent indieated above. C.C as per rutes. ftoshan/- Sd/- I.M.Quddusi Judge Sd/- G. Minhajuddin Judge