FAO No. 863 of 1992 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 1) FAO No. 863 of 1992 and Cross-Objection No.57-CII of 1994 New India Assurance Company Ltd. ....Appellant Versus Paramjit Singh & Ors. ...Respondents 2) FAO No. 864 of 1992 and Cross-Objection No.71-CII of 1992 New India Assurance Company Ltd. ....Appellant Versus Smt. Kulwant Kaur & Ors. ...Respondents 3) FAO No. 906 of 1992 and Cross-Objection No.74-CII of 1992 New India Assurance Company Ltd. ....Appellant Versus Smt. Surinder Kaur & Ors. ...Respondents Date of Decision : 4.9.2008 CORAM : HON'BLE MR.JUSTICE MAHESH GROVER .... Present : Mr.Deepak Suri, Advocate for the appellant in all the appeals. Mr. C.B.Goel, Advocate with Mr.Nitin Jain and Ms.Stuti Kohli, Advocates FAO No. 863 of 1992 -2- for respondents/cross-objectors. ... MAHESH GROVER, J. This order will dispose of the aforesaid three appeals and the cross-objections. The appeals have been preferred by the insurance company which has been saddled with the liability to satisfy the award. The cross-objections have been preferred by the claimants who have prayed for enhanced compensation. An accident is said to have occurred on 31.10.1990 involving the vehicle in question, which is a truck, in which two deaths took place and the third person received injuries. The Tribunal awarded a sum of Rs.1,34,400/- to the claimants on account of the death of Gurvinder Singh and Gurpreet Singh each and a sum of Rs.53,200/- on account of injuries suffered by Paramjit Singh in the accident. The liability to satisfy the award was fastened upon the insurance company which is in appeal assailing the findings of the Tribunal and contesting its liability. The liability was initially fastened upon the insurance company as the policy was found to be in order. In appeal, this Court vide its order dated 2.8.1996 sought a report from the Tribunal on a limited question as to whether the insurance policy pertaining to the vehicle in question had been taken out on 31.10.1990 to cover the vehicle or not. The report was sought on a specific issue which was identified as 3-B and reads as under : “3-B Whether truck No.HYX-1611 was insured with New India Assurance Co. under policy No.462616 FAO No. 863 of 1992 -3- CHX/89 on 31.10.90 in the morning of 31.10.90 and the insurance co. had already received the amount of insurance much prior to the time of accident ? OPR-1 A” The aforesaid report was necessitated because of the contentious stand of the appellant which contended that no premium had been received from the insured and, therefore, there was no valid insurance. Pursuant to the order dated 2.8.1996 passed by this Court, the report dated 15.11.97 was received from the Tribunal vide which after permitting the parties to adduce evidence on the aforesaid issue, the Tribunal reported as below :- “8. I have carefully considered the above arguments of the learned counsel for the respondent no.2. It is pertinent to note that respondent no.1-A insured specifically pleaded in his written statement that said truck was insured with the New India Insurance Company in the morning of 31.10.90. It was also pleaded that the Insurance company had received the amount of insurance much prior to the time of accident. The New India Assurance Company in its written statement pleaded that the owner/driver of vehicle number HYX- 1611 played fraud and wrongly induced the Development officer of the Company a 2.30 P.M. That his truck was quite fit for insurance. The Development Officer in good faith believed him and he issued a cover note of truck No.HYX-1611 and handed over the same to FAO No. 863 of 1992 -4- him. It was also pleaded that after taking the cover note the said driver/owner of the truck told that he had no money with him for payment of premium and he would bring the money in the evening. 9. It is well settled that a fraud is to be proved like a criminal charge. Suspicion how-so-ever strong cannot take the place of proof. In the instant case, the Insurance Company has failed to prove it by leading any cogent evidence that the payment of premium of truck No.HYX 1611 was not made to it on 30.10.90 when the cover note Ex.R1/1 was issued. The pleadings of the insurance company are not specific as to who played fraud upon the Development Officer. It is pleaded that owner/driver of the vehicle No.HYX 1611 played fraud upon the Development Officer. As per deposition of RW5 Navtej Singh, Development Officer he knew Harvinder Singh since a long time. If this deposition of RW5 Navtej Singh is believed then it is not understandable that why it was not specifically pleaded by the Insurance Company that Harvinder Singh respondent no.1 had played fraud upon the Development Officer. It is also pertinent to note that RW5 Navtej Singh admitted that a vehicle is insured after inspection of the same. RW4 D.K.Nanda, Development Officer also admitted that a vehicle is insured after its due inspection by the officials of the company. It is significant to note that the Assurance FAO No. 863 of 1992 -5- company examined RW3 Shamsher Chand, RW4 D.K.Nanda, RW5 Navtej Singh and RW6 R.K.Mehta to prove that they came ti know of the accident of the truck in question after the issuance of cover note. However, the testimony of RW6 R.K.Mehta, Branch Manager shows that the cover note was initialled by him on 5.11.90 though it was collected in the evening of 31.10.90 itself. RW6 R.K.Mehta deposed that he did not deal with the urgent matters at his residence and 1.11.90 to 4.11.90 were holidays. He did not send any intimation in writing to the Head office of the company about the alleged fraud. He did not try to contact the local police for registration of a case. In his cross-examination he deposed that the officials told him every thing orally relating the alleged fraud on 31.10.90 but no writing was given to him. Had Harvinder Singh played any fraud upon the Development Officer, the officers of the company would have intimated the matter to the police and the Head Office. But, this course was not adopted. It has come in evidence that a vehicle is insured after due inspection. Therefore, I am unable to hold that a fraud was played by Harvinder Singh upon Navtej Singh, Development Officer and truck Number HYX-1611 was insured after the accident. 10. As regards the question of payment of premium is concerned, no doubt the testimony of RW6 R.K.Mehta, FAO No. 863 of 1992 -6- branch Manager shows that no receipt regarding payment was issued on 31.10.90 nor the premium was entered in RA-16 register. However, this fact in itself does not establish that the premium was not paid by the insured. RW6 R.K.Mehta admitted that at the time of issuance of cover note, no separate receipt is issued by the Development Officer and that amount received is mentioned in the cover note itself. RW5 Navtej Singh, Development Officer admitted that a cover note is not issued without premium. He also admitted that he was competent to issue a cover note and to receive premium. Thus, the statement of RW5 Navtej Singh that he issued the cover note and handed over the same to Harvinder Singh without accepting the premium is not worthy of credence. At any rate, it was for Navtej Singh, Development Officer firstly to ensure that he had inspected the truck then to accept the premium and to issue a cover note. In the instant case since the cover note was issued by him, therefore, it would be deemed that he accepted the premium even though no receipt was issued. Even if it is assumed for the sake of arguments that RW5 Navtej Singh belied the representation of Harvinder Singh and he assured him that he would bring the money before the office closes nevertheless it was a personal matter between Navtej Singh and Harvinder Singh. Once he had issued the cover note, truck FAO No. 863 of 1992 -7- No.HYX-1611 would be deemed to have been insured w.e.f. 31.10.90 Since the time of commencement of insurance is not mentioned, therefore, the period of insurance commenced from the mid night of 30/31.10.90.” The appellant has also filed objections to the report. It was contended by the learned counsel for the appellant that there was no valid insurance and that it has been proved categorically that the premium was not deposited with the appellant and as a result it cannot be said that the contract between the insurer and the insured stood completed so as to cover the liability of the vehicle in the event of accident. On the other hand, learned counsel for the respondents/cross-objectors made an elaborate reference to the report to contend that the matter has now been conclusively established that there was a valid insurance policy and hence the appellant cannot escape the liability to satisfy the award. I have heard the learned counsel for the parties and have perused the award. RW5 Navtej Singh has stated that cover note is issued after acceptance of premium. He has also testified that the cover note is issued only after verification/inspection of the vehicle. The testimony of PW5 Navtej Singh to this effect was also fortified by other officials of the insurance company so much so that RW6 R.K.Mehta, who was the Branch Manager, is said to have initialled the cover note on 5.11.1990, 5 days after the accident. In this FAO No. 863 of 1992 -8- eventuality it is hard to digest that the insured would have played a fraud upon the appellant. Even if it is accepted for a moment that no premium was received by the appellant, yet the evidence on record establishes that the appellant cannot escape the liability as it is the agent, manager and the worthy employees of the appellant who were not careful enough at the time of issuance of cover note. Rather the same was endorsed much after the accident itself. No attempt seemingly was made either to take any remedial step or to rectify the error if it could be attributed to inadvertence. In this view of the matter, the report of the Motor Accident Claims Tribunal dated 15.11.1997 deserves to be accepted and the objections of the appellant to the same being without any merit deserve to be rejected. Accordingly, it is held that the offending vehicle stood insured on the date when the accident occurred and that the appellant having issued the valid insurance policy cannot escape the liability to satisfy the award. Now the next question that is to be determined is with regard to the cross-objections which have been preferred by the claimants. Cross-Objections No.71-CII of 1992 have been preferred by the claimants in the case of death of Gurvinder Singh. The deceased was aged 21 years. He was said to be engaged in dairy business and was having an income of Rs.2,000/- per month as claimed by the claimants, who are the parents, sister and three minor brothers of the deceased. The Tribunal, however, assessed the income FAO No. 863 of 1992 -9- at Rs.1,000/- per month and fixed the dependency at Rs.700/- per month and applied a multiplier of 16 to arrive at a figure of Rs.1,34,400/-. The claim was awarded only to the mother alone. Rest of the claimants were not held entitled to any compensation. Learned counsel for the cross-objectors contended that there is cogent evidence in the shape of testimony of PW6 Gurcharan Singh who has stated that the deceased had undergone some training for carrying out dairy operations and had also been in the business for the last two years. In the claim petition the income pleaded was Rs.2,000/- per month. Even if some discount is to be made regarding the factum of the income being exaggerated, yet it can be safe to infer that he would have certainly been earning more than a labourer as has been assessed by the Tribunal. By a rough estimate it would be safe to accept the income of the deceased as Rs.1,800/- per month. Since the deceased had a large family, it would be expected that he would be contributing a substantial part of his income towards his family to supplement the income of his father. It would be, therefore, safe to assess the dependency at Rs.1,500/- per month or Rs.18,000/- per annum. The multiplier of 16 which has been adopted is not correct as the deceased, who was unmarried, would have got married and the contribution to the family would naturally have dropped. In the given set of circumstances a multiplier of 12 would be just and adequate and in this manner the compensation works out to Rs.2,16,000/-. The Tribunal has not awarded anything on account of funeral expenses and loss of love and affection. On this count, in the considered opinion of this Court an amount of Rs.20,000/- would be FAO No. 863 of 1992 -10- just and adequate. The cross-objector in this case would therefore be entitled to a total compensation of Rs.2,36,000/- on account of the death of Gurvinder Singh. Cross-Objections No.74-CII of 1992 filed in F.A.O.No.906 of 1992 are on behalf of the respondents No.1 to 3 who are claimants in the case of deceased Gurpreet Singh. The deceased was a student of 10th class and was the only son of his parents. He was 16 years of age. A compensation of Rs.1,34,400/- has been awarded to the claimants. The apex court in Manju Devi and others v. Musafir Paswan and another, 2005 ACJ 99 has awarded a sum of Rs.2,25,000/- in the case of a child who was not earning anything by taking a notional income of Rs.15,000/- per annum. The accident in that case had occurred in 1998 but in the present case the accident had taken place in 1990. Even if some discount is to be made on account of notional income, it would be safe to accept that the deceased would have contributed at least Rs.10,000/- per annum towards the family income. A multiplier of 15 was applied by the apex court in the case of a child of 13 years. Therefore, it would be safe to adopt a multiplier of 17 in the present case. The total amount of compensation in this manner works out to Rs.1,70,000/-. No amount has been awarded by the Tribunal on account of funeral expenses and loss of love and affection. On this count, in the considered opinion of this Court an amount of Rs.20,000/- would be just and adequate. The cross-objectors/claimants in this case would FAO No. 863 of 1992 -11- therefore be entitled to a total compensation of Rs.1,90,000/- on account of the death of Gurpreet Singh. The third cross-objections bearing No.57-CII of 1994 have been filed on behalf of respondent Paramjit Singh, who had received injuries in the accident in question. The Tribunal awarded a compensation of Rs.53,200/- on account of 10% disability which he had suffered. According to the testimony of PW1 Dr.K.G.Gupta, the following injuries were sustained by him in the said accident :- “1) Multiple abrasions over face. 2) Abrasions upper eye lid left side. 3) Abrasions and swelling over eye lid left side. 4) Abrasions and contusions angle of jaw left side. 5) Abrasions neck left side with contusions. 6) Opened wound 2” long on lower 2/3rd left leg with bone tibia exposed out. 7) Swelling left side with fracture lower 2/3rd femur.” It has come in evidence that the claimant/cross-objector had suffered fracture of femur of left leg for which suturing was done and traction was applied by pinning tibia. He also received hospital treatment on payment basis. The Tribunal while assessing the compensation awarded the different amounts under the following heads :- 1. The claimant who suffered 10% disability his total loss of income in terms of money can be assessed as Rs.100/- P.M. A suitable multiplier of 16 is adopted to award him FAO No. 863 of 1992 -12- compensation for the disability which comes to Rs.19,200/- 2. Medical treatment Rs.20,000/- 3. Pains & sufferings Rs. 7,000/- 4. Conveyance Rs. 2,000/- 5. Rich diet Rs. 5,000/- I have considered this aspect of the matter. There is evidence on record to show that the cross-objector had suffered 10% disability on account of the aforesaid injuries. Therefore, the amount of Rs.19,200/- on account of 10% disability is on the lower side. In the opinion of this Court the ends of justice would squarely be met if the amount under the heads 'disability' and “pains and sufferings' is enhanced to Rs.40,000/-. The rest of the amounts have been correctly assessed. The claimant/cross-objector would therefore now be entitled to a compensation of Rs.74,000/-. The enhanced compensation shall be paid to the claimants/cross-objectors (in all the three the appeals) along with interest @ 9% per annum from the date of filing of the respective petitions till the date of realisation. The liability to pay the aforesaid amount shall be that of the appellant-insurance company. All the three appeals and cross-objections are disposed of accordingly and the award of the Tribunal is modified to the extent stated above. 4.9.2008 (MAHESH GROVER) dss JUDGE