HIGH COURT OF HIMACHAL PRADESH AT SHIMLA FAO No.626 of 2008, FAO No.32 of 2009 & CMPMO No.368 of 2008. Reserved on: 21.3.2011 Decided on: 4.5.2011 FAO No.626 of 2008: Kusum Dod and others ………Appellants. Versus Balveer Singh and others ………Respondents. FAO No.32 of 2009: Balveer Singh …..Appellant Versus Kusum Dod and others. ….Respondents. CMPMO No.368 of 2008: Oriental Insurance Company ……Appellant. Versus Kusum Dod and others ….Respondents. Coram: The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? For the appellants: Mr.Harish Dod, Advocate in FAO No.626 of 2008 Mr.N.K. Thakur, Advocate, in FAO No.32 of 2009 Mr.G.C. Gupta, Senior Advocate, with Mr.Ashish Jamalta, Advocate, for the petitioner in CMPMO No.368 of 2008. For the respondents: Mr.G.C. Gupta, Senior Advocate, with Mr.Ashish Jamalta, Advocate, for respondent No.3 in FAO No.626 of 2008. Mr.Harish Dod, Advocate, for respondents No.1 to 5 in FAO No.32 of 2009. Mr.G.C. Gupta, Senior Advocate, with Mr.Ashish Jamalta, Advocate, for respondent No.7 in FAO No.32 of 2008. Mr.Harish Dod, Advocate, for respondents No.1 to 5 in CMPMO No.368 of 2008. Mr.N.K. Thakur, for respondent No.6 in CMPMO No.368 of 2008. Mr.R.K. Gautam, Senior Advocate, with Mr.Mehar Chand, Advocate, for respondent No.7 in CMPMO No.368 of 2008. Whether reporters of Local papers may be allowed to see the judgment? V.K. Ahuja, J.: This judgment shall dispose of the appeal filed by the appellant/claimants under Section 173 of the Motor Vehicles Act against the award dated 6.8.2008 passed by the Learned Motor Accident Claims Tribunal (III), Shimla, praying for enhancement of the amount of compensation. This judgment shall also dispose of the appeal filed by the owner of the vehicle Balveer Singh against the award of the learned Tribunal allowing the claim petition filed by the claimants and directing the Insurance Company to deposit the amount in the first instance and thereafter recover the same form the owner Balveer Singh as well as the driver of the vehicle, namely, Tula Ram. This judgment shall also dispose of a petition filed under Article 227 of the Constitution of India by the Insurance Company against the award dated 6.8.2008 passed by the learned Tribunal directing it to deposit the amount of compensation and then recover it from respondents No.1 and 2. 2. Briefly stated, the facts of the case are that a claim petition was filed by the claimant/petitioners Kusum Dod etc. alleging that Yash Pal Dod, husband of petitioner No.1, father of petitioners No.2 and 3 and son of petitioners No.4 and 5, was traveling in a vehicle No.HR-58-7187 alongwith his apple boxes on 16.9.2005. The truck, when it reached at Atal (UP) on Tiuni-Atal- Nerwa road, met with an accident. It was alleged that the Truck was being driven in a rash or negligent manner by its driver, respondent No.2 and it met with an accident resulting in the death of the Yash Pal Dod. It was alleged that the deceased was of the age of 49 years and was working in Health Department and was getting a salary of Rs.12,919/- per month. It was further alleged that the deceased was earning a sum of Rs.30,000/- per annum from the orchard. The petitioners claim that they were fully dependant upon the deceased and as such they claimed compensation to the tune of Rs.15.00 lacs. 3. In reply by respondents No.1 and 2 i.e. the owner and driver, it was pleaded that the truck had been parked on the road side and since the danga fell down suddenly, the accident took place. It was also pleaded that the accident had not taken place due to rash or negligent driving on the part of respondent No.2. It was also pleaded that the truck in question was fully insured with respondent No.3 i.e. the Oriental Insurance Company and as such the compensation has to be paid by them. 4. In reply by respondent No.3, Oriental Insurance Company, it was pleaded that the truck was being plied in contravention of the terms and conditions of the insurance policy. The deceased was traveling in it as an unauthorized passenger. Respondent No.2 was not having a valid and effective driving licence and as such respondent No.3 is not liable. 5. On the pleadings of the parties, the following issues were settled by the learned Tribunal: “1. Whether Yash Pal Singh Dod died in the accident of Tata Truck No.HP- 58-7187 on 16.9.2005 because it was being driven in rash and negligent manner by respondent No.2?OPP 2. Whether at the time of accident, respondent No.2 was driving the truck in question in violation of the terms and conditions of Insurance Policy and respondent No.2 was not possessing valid and effective driving licence? OPR-3 3. Whether the deceased was traveling in the truck in question as an unauthorized passenger, if so, to what effect? OPR-2 4. Whether the petition has been filed in collusion with respondent No.1, if so to what effect? OPR 5. To what amount of compensation and from whom the petitioners are entitled to receive? OPP 6. Relief.” 6. Parties led their evidence and the learned Tribunal vide its impugned award held that the accident had taken place due to the rash or negligent driving of respondent No.2. It was also held that respondent No.2 was not possessing a valid and effective driving licence and the deceased was not an unauthorized passenger and accordingly, the claim petition was allowed to the extent of Rs.10.00 lacs alongwith interest at the rate of 7.5% per annum. It was also directed that the Insurance Company will deposit the amount in the first instance and thereafter will be entitled to recover the same from respondents No.1 and 2 jointly and severally. 7. I have heard the learned counsel for the parties and have gone through the record of the case. 8. The first point to be considered is in regard to the findings recorded under Issue No.1 vide which it was held by the learned Tribunal that the accident had taken place due to rash or negligent driving of the vehicle of respondent No.2. 9. To substantiate this issue, the petitioners had examined PW- 1 Smt.Kusum Sood, petitioner No.1, who is not an eye witness and, therefore, her statement is not material on this point. The petitioners had also tendered in evidence a copy of the FIR Ext.PW-1/A. A copy of the report was also tendered in evidence as Ext.P-1, perusal of which shows that it was recorded therein, on the basis of the report by the Patwari, which was obtained as per practice, that the accident had taken place and the truck had fallen 200 meters in deep gorge. It was also alleged that the driver of the truck was Tula Ram. A perusal of Ext.PW-4/A clearly shows that there is no mention of the fact that the danga had fallen or that the truck was standing as pleaded by respondents No.1 and 2. However, in the copy of the report Ext.P-1, it has also been mentioned that due to falling of the wall, the accident had taken place. The report Ext.P-1 is of 16.9.2005, which was taken as per the practice prevalent there, whereas in the subsequent report of the same day also recorded on the version of the Patwari, this fact has also been alleged that the wall had fallen resulting in the accident. 10. To rebut this evidence, respondent No.2 driver of the truck has stepped into the witness box as RW-4, who stated that the accident took place due to excessive rain and falling of the danga. He also stated that the road was blocked due to rain fall and the vehicle was standing on the road side and due to excessive rain during the night, the danga gave way and the accident took place. A perusal of the reply filed by this respondent alongwith the reply filed by the owner shows that there was no mention in the reply, as per para No.8, that on the day of accident, any rain fall had taken place or that due to excessive rain during night the danga gave way. The only allegations made were that the accident took place due to natural calamity as the danga gave way and the truck parked on the road fell into a deep Khud. The petitioners had not specifically pleaded about the rain fall or as to when he parked the truck and as to when this accident took place so that it could be inferred as to what extent his statement could be relied upon. The learned Tribunal had relied upon the statement of the driver and had concluded that the accident took place due to the rash or negligent driving of respondent No.2. 11. In case, a plea is specifically taken by the driver that the accident had taken place due to natural calamity or reasons beyond the control of the driver or that the vehicle was parked at the time of the accident, it is for him to prove these allegations in which the respondents had failed. To my mind, the statement of respondent No.2 as RW-4 does not substantiate these allegations that the accident had taken place due to natural calamity. No report of the Investigation Officer in this regard conducted on the basis of the FIR has been placed or proved on record. The doctrine of res ipsa loquitur also applies in such circumstances and also applying the said doctrine and considering evidence placed on record, it has been rightly concluded by the learned Tribunal that the accident had taken place due to rash or negligent driving of respondent No.2. The findings recorded under issue No.1 in this regard are liable to be affirmed. 12. The next question which arises for consideration is as to whether the learned Tribunal had not granted the compensation in accordance with the claim put up by the petitioners and the evidence led by them. 13. Three grounds taken by the petitioners in their appeal are – firstly, that the income has not been assessed properly and the deductions have been made wrongly; secondly, that the appropriate multiplier has not been applied keeping in view the age of the deceased and the dependant parents and; thirdly, that the interest awarded at the rate of 7.5% was less, which should have been awarded at the rate of 9%. I will take all these points one by one. 14. Coming to the first point, the income of the deceased had been proved on record from the statement of PW-1 Kusum Dod, petitioner No.1, and his salary income proved from the statement of Karnail Singh, Clerk, as Rs.12,919/-. The petitioner had also alleged that the deceased was also earning Rs.30,000/- per year, though in the evidence it was stated that he was earning Rs.40,000/- per year, besides getting salary. No details of the land owned by the deceased have been placed on record including the details of the income in any previous years on the basis of the apples sent to other places. The learned Tribunal had also observed that the revenue papers regarding orchard owned by the deceased have not been filed in evidence. The learned Tribunal had taken the contribution of the deceased towards his family as Rs.8,000/- per month. 15. In view of the fact that the petitioners have not led evidence in regard to the ownership of the orchard the deceased was owning, his salary income i.e. Rs.12,919/- or say Rs.13,000/- per month had to be taken into account. The deceased must be spending 1/3rd upon himself and, therefore, loss to the family can be said to be to the extent of Rs.8,666/- per month. The annual loss to the family can be said to be Rs.8,666 x 12 = Rs.1,03,992/-. 16. Coming to the next question as to the multiplier to be applied, it has not been disputed that the age of the deceased was 49 years at the time of his death. The learned Tribunal has referred to the judgment of the Apex Court in New India Assurance Company versus Kalpana and others 1(2007) ACC 356 (SC), in which case the age of the deceased was 35 years and the Apex Court had applied the multiplier of 13. Accordingly, the learned Tribunal concluded that keeping in view the age of the deceased as 49 years, the appropriate multiplier was of 10. 17. I may refer to the decision of the Apex Court in General Manager, Kerala State Road Transport Corporation, Trivandrum vs. Susamma Thomas and others, (1994) 2 Supreme Court Cases 176, wherein the age of the deceased was 39 years and the multiplier of 12 was applied. Copy of the said judgment was circulated to all the courts per directions of the Apex Court, for information. Therefore, the multiplier of 10 applied by the learned Tribunal cannot be said to be inappropriate. Thus, applying the multiplier of 10 to the annual income, the petitioners are held entitled to compensation to the extent of Rs.10,39,920/-. 18. Coming to the question in regard to the interest, the learned Tribunal had awarded interest at the rate of 7.5% from the date of petition till the amount is deposited with the Tribunal. No reference has been made to the latest decision of the Apex Court in this regard. 19. I may make a reference to the decision of the Apex Court in Kaushnuma Begum (Smt.) and others versus New India Assurance Company Ltd. and others, (2001) 2 Supreme Court Cases 9, wherein the interest awarded had been reduced from 12% to 9%. No other decision was cited in this regard. Therefore, the petitioners can be said to be entitled to interest at the rate of 9% from the date of petition till the date of deposit. 20. The petition filed by the petitioner/claimants stands allowed accordingly as above. 21. Coming to the appeal filed by the owner of the vehicle, the learned counsel for the owner/respondent No.1 had submitted that in case the license had been renewed by the Licensing Authority, it cures the initial defect even if the initial driving licence was found to be not valid one. To substantiate his above point, the learned counsel for the appellant/owner has relied upon the following decisions. 22. The decision in United India Insurance Co. Ltd. versus Lehru and other, (2003) 3 Supreme Court Cases 338, wherein it was observed in para 17 as under: “Thus under sub-section (1) the insurance company must pay to the person entitled to the benefit of the decree, notwithstanding that it has become “entitled to avoid or cancel or may have avoided or cancelled the policy”. The words “subject to the provisions of this section” mean that the insurance company can get out of the liability only on grounds set out in Section 149. Sub-section (7), which has been relied on, does not state anything more or give any higher right to the insurance company. On the contrary, the wording of sub-section(7), viz. “no insurer to whom the notice referred to in sub-section(2) or sub-section(3) has been given shall be entitled to avoid his liability” indicates that the legislature wanted to clearly indicate that insurance companies must pay unless they are absolved of liability on a ground specified in sub- section(2). This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to sub-section (4) is very illustrative. It shows that the insurance company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the insurance company to pay is further emphasized by sub-section (5). This also shows that the insurance company must first pay, then it can recover. If Section 149 is read as a whole it is clear that sub-section (7) is not giving any additional right to the insurance company. On the contrary it is emphasizing that the insurance company cannot avoid liability except on the limited grounds set out in sub-section (2).” It was further observed in the aforesaid decision by the Apex Court that where prior to hiring the driver, the owner satisfied himself that the driver had a licence and was driving competently, it was held that there would be no breach of Section 149(2)(a)(ii) and the insurer would not be absolved of liability. It is further observed that if ultimately the licence is found to be fake, the insurer would continue to be liable unless he proves that the owner/insured was aware of the fact and had still permitted that person to drive. Even in such a case, the insurer would remain liable to the innocent third party but may be able to recover the amount from the insured. 23. In Prem Kumari and others versus Prahlad Dev and others, (2008) 3 Supreme Court Cases 193, it was held that the owner of the offending vehicle was brother of the driver, who did not have a valid/effective licence on the date of accident. The Apex Court did not disturb the concurrent findings of the Tribunal and the High Court exonerating the Insurance Company. The appellant/claimants were held entitled to recover the amount from the owner/driver of the vehicle. However, considering that the appellants were minor children and the widow of the deceased, the insurer was directed to recover the initial amount of Rs.50,000/- paid to the appellants in the manner directed in Nanjappan case, (2004) 13 SCC 244. The observations made in paras 7 to 9 are relevant and are reproduced below: “Mere absence of fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. Even in the case that the licence was fake, the insurance company would continue to remain liable unless it proves that the owner was aware or noticed that the licence was fake and still permitted him to drive. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.” 24. The learned counsel for the Insurance Company submits that renewal of a licence granted to drive a motor vehicle which was originally found to be forged would not make the said licence valid. Reliance was placed upon the decision in United India Insurance Co. Ltd. versus Davinder Singh (2007) 8 Supreme Court Cases 698, wherein it was held that once the licence is found to be fake, the renewal cannot take away the effect of fake licence and that the insurer is not liable to indemnify the loss. 25. Reliance was also placed on the decision in New India Assurance Company Limited versus Roshanben Rahemansha Fakir and another, (2008) 8 Supreme Court Cases 253. From the perusal of the said decision, it is clear that the insurer was held to be not liable, but in exercise of jurisdiction under Article 142 of the Constitution of India, the Apex Court directed the insurer to satisfy the award in favour of the claimants and to recover the same from the owner. 26. A reference may be made to the decision of this Court in National Insurance Company vs. Maghi Rani and Others Latest HLJ 2009 (HP) 532, wherein a learned Single Judge of this Court, following the decision of the Apex Court in National Insurance Company Ltd. vs. Baljit Kaur and others (2004) 2 SCC 1, had directed that the Insurance Company should satisfy the award and thereafter can recover the amount from the insurer. The Insurance Company challenged the judgment of this Court before the Apex Court. It was held in case National Insurance Co. Ltd. v. Kaushalya Devi and others, AIR 2008 Supreme Court 2252, that no such directions could be issued to the Insurance Company to deposit the amount in question. Accordingly, it follows from this decision that the directions were given in exercise of the powers vested in the Supreme Court and those powers could not have been exercised by the High Court. Therefore, the decision of this Court was set aside. The decision in Deddappa and others vs. Brach Manager, National Insurance Co. Ltd., (2008) 2 Supreme Court Cases 595, also shows that the Supreme Court had exercised its jurisdiction under Article 142 of the Constitution, which power is not vested in the High Court. 27. Reliance was also placed on the decision in National Insurance Co.Ltd. versus Laxmi Narain Dhut, 2007(2) S.L.J. (S.C.) 1357, in which the following observations have been made in paras 38 and 40, which are reproduced below: “38. The inevitable conclusion therefore is that the decision in Swaran Singh’s case (supra) has no application to own damage cases. The effect of fake license has to be considered in the light of what has been stated by this Court in New India Assurance Co., Shimla vs. Kamla and Ors. (2001(4) SCC 342). Once the license is a fake one the renewal cannot take away the effect of fake license. It was observed in Kamla’s case (supra) as follows: “12. As a point of law we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. Section 15 of the Act only empowers any Licensing Authority to “renew a driving licence issued under the provisions of this Act with effect from the date of its expiry”. No licensing Authority has the power to renew a fake licence and, therefore, a renewal if at all made cannot transform a fake licence as genuine. Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine.” 40. In view of the above analysis the following situations emerge: 1. The decision in Swaran Singh’s case (supra) has no application to cases other than third party risks. 2. Where originally the license was a fake one, renewal cannot cure the inherent fatality. 3. In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured. 4. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.” 28. It was also observed in paras 9 to 11 of the aforesaid judgment as under: “In Swaran Singh case, (2004) 3 SCC 297, it was held that any condition in the policy whereby the right of the third party is taken away would be void. Thereafter the principles were culled out in the following terms: The insurance company is required to prove the breach of the condition of the contract of insurance by cogent evidence. In the event the insurance company fails to prove that there has been breach of conditions of the policy on the part of the insured, the insurance company cannot be absolved of its liability. This Court did not lay down a degree of proof, but held that the parties alleging the breach must be held to have succeeded in establishing the breach of the condition of the contract of insurance, on the part of the insurance company by discharging its burden of proof. The Tribunal, must arrive at a finding on the basis of the materials available on the records. It was further held, inter alia, that Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third- party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.