IN THB HIGH COURT OF AT BILASPVR Misc. Appeal (0 No. /200 .^ AppeUattt Owner J)river ^•".•c ^''..^'" ^ .^-A ^r^'' ^ 1 Jai Singh, aged about 53 years S/o Samaru By Caste Marar, 2^ Esulal, aged about 32 years, S/o Jai Singh, Both R/o Village Bhanupratappur, Distt. Kanker Versus Respondeiit 1. Smt. Ghasnin Bai, aged about 40 CJiaimant d? years, W/o Late Kanglaram 2. Virendra Kuniar aged about 21 years, \'.^^^!v V" °X.^ ^ s/o Late Kanglaram /^{^J^A\-^ Both R/o Village Vinayakpur Thana and .'y''v Tahsil Bhanupratappur, Distt. Kanker ?.'"\>v The New India Insurance Company Ud.,Parakh Bhavan, Station Road, Durg APPEAL UNDBR U/S 173 (21 Of MOTOR VBHICLE ACT ^ HIGH COURT OF CHHATTISGARH AT BILASPUR M.A.CNo. 768 of 2008 APPELLANTS RESPONDENTS Jai Singh & another VERSUS Smt. Ghasnin Bai & others (APPEAL UNDER SECTION 173 (2) OF THE MOTOR VEHICLES ACT) (SB: Hon'ble Mr. N.K. Aaarwal, J.) Present : Shri Parag Kotecha, Advocate for the appellants. None for respondent No. 1 & 2 though served. Shri Sourabh Sharma, Advocate for respondent No.3. ORAL ORDER (Passedon 06.09.2011) 1. This is owner & drivers' appeal against the award dated 29.03.2007 passed by llnd Additional Motor Accident Claims Tribunal (FTC), Uttar Bastar Kanker (for short 'the Tribunal') in claim case No. 127/06. 2. As against Rs. 4,30,000/- claimed by unfortunate mother and major brother of deceased Hero Bai aged about 14 years by filing application before the Tribunal under Section 166 of the Motor Vehicles Act, 1988 (for short 'MV Act') claiming compensation for the death of deceased in the motor accident on 22.05.2006, the Tribunal awarded total sum of Rs. 1,70,000/- along with interest @ 6 percent per annum, if award is satisfied within a period of two months, and in default along with interest @ 9 percent per annum in favour of respondents/ claimants holding the appellants liable for payment of compensation exonerating the insurance company. •^^•'.?;;-^ y i, i i%;ia%i 1 "'%... ^ *" ./ J ..^^••"' The Tribunal, on a ctose scrutiny of the evidence led, held : the accident had occurred due to rash and negligent driving of driver of Tractor bearing registration No. CG-05-A/01437 and trolley No. CG-05-A/01438; Hero Bai, who was sitting in the Trolley, died on account of injuries sustained in the said accident; since labourer were not covered under the policy issued, exonerated the insurance company from its liability to pay compensation to the claimants; assessed and awarded aforesaid amount of compensation in favour of claimants against the appellants. Shri Parag Kotecha, learned counsel appearing for the appellants assailed the above award on two counts, firstly; the insurance company has wrongly been exonerated from its liability to pay compensation and secondly; the amount awarded is shockingly on higher side which deserves to be suitably reduced. On the other hand, Shri Sourabh Sharma, learned counsel appearing for respondent No. 3/The New India Insurance Company Ltd. would submit : as per policy of insurance (Ex. D/1), the risk of labourer is not covered, insurance company is not statutorily liable to cover such risk of labour sitting in the trolley, and therefore, the Tribunal has rightly exonerated the insurance company from its liability to pay compensation to the claimants. c> ^^•:^1 8. 1 have heard the counsel appearing for the parties, perused the order impugned as well as records ofthe Tribunal. Indisputably, the deceased Hero Bai was sitting in the Tractor Trolley as labourer. A bare perusal of policy would reveal the insurance company has covered the risk of third party, owner- cum-driver to the extent of two Lakhs and one employee by charging premium of Rs. 25/-. As per statement of Ashish Kumar Bhote (NAW-3/1), Assistant Clerk, The New India Insurance Co. Ltd. Branch, Bhilai, insurance policy issued (Ex. D/1) covers the risk of third party, owner-cum-driver and one paid driver. He further deposed : the policy has not been issued covering risk of labourer sitting in the trolley. The appellants, in their own wisdom, did not examine any person as their witness. The law is well settled, as per Section 147 of MV Act, the insurance company is not statutorily required to cover risk of labourer sitting in the tractor trolley. However, such risk can be covered by the insurance company by entering into special contract with the owner and by charging extra premium therefor. Undisputedly, no such premium has been charged by the insurance company. Insurance policy (Ex. D/1) covers risk of only one employee and certainly that employee would be driver. Q 9. In view of above, in the opinion of this court, the Tribunal has rightly exonerated the insurance company from its liability to pay compensation. 10. So far as second ground is concerned, the Tribunal has assessed the notional income of the deceased at Rs. 1 5,000/- per annum; after deducting usual 1/3rd of it towards personal expenses of the deceased, assessed claimants annual dependency at Rs. 10,000/-, applied multiplier of 15 and awarded Rs. 1,50,000/- as compensation towards loss of dependency, the Tribunal further awarded Rs. 20,000/- on other heads, and thus awarded a total sum of Rs. 1,70,000/- to the claimants. 11. It is settted law that multiplier has to be selected by taking into consideration the age of deceased or the claimants whichever is higher. In the instant case, looking to the age of deceased, appropriate multiplier would be 14. By multiplying the amount of dependency assessed by the Tribunal (i.e. 10,000/-) by multiplier of 14, the compensation towards loss of dependency would be Rs. 1,40,000/-. By adding Rs. 10,000/- on other heads (5000/- each for funeral expenses and loss of estate), total amount of compensation works out to Rs. 1,50,000/-. Therefore, the Tribunal has erred in awarding Rs. 1,70,000/- as compensation instead of Rs. 1 ,50,000/-. 12 . Further, the award of penal interest @ 9 percent per annum on the amount of compensation awarded by the Tribunal in case amount of compensation is not deposited within a period of two months', is also contrary to the provisions and law laid down by the SupremeCourt. 13. The Supreme Court in case of National Insurance Co. Ltd. v. Keshav Bahadur and others has observed in para 13 as under: "13. Though Section 110-CC ofthe Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110-CC of the Act or Section 171 of the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal." ' 2004 (2)SCC 370 B .^ff"^..' /c^\ ®^:^r^3:^"~:. ^ "-...:.^.-.;-,:.^ ;. f 14. In view of the above, it is crystal clear that the Tribunal has wrongly awarded the penal interest. The same deserves to be and is hereby set aside. 15. For the reasons mentioned hereinabove, the appeal is allowed in part. The amount of compensation awarded by the Tribunal i.e. Rs. 1,70,000/- is reduced to Rs. 1,50,000/-. The amount of compensation i.e. Rs. 1,50,000/- shall carry flat rate of interest i.e. 6 percent per annum from the date of application till its actual payment. 16. No order asto costs. Sd/- N. K. Agarwal Judge Sahu