IN THE HIGILCOURT OF CHHATTISGARH. BILASPUR C. (" MISC. APPEAL (Cl No. 2-©^-43009 S3ST1 BS?S".' MISCELLANEOUS APPEAL UNDER SECTION 173 OF THE MOTOR VEHICLE ACT APPELLANTS OWNERS ...<?^^"^ l'~\ .lYk^' ^1*'1 .&"' /;ft-w .<ssa ^I.V RESPONDENTS 1. M/s. Primenet Global Limited through its Manager Vinod Kumar Gupta, Choubey Colony, Raipur, presently at/through Manager Prakash Industries Limited, Champa, P.S. Champa, District Janjgir-Champa. 2. Pravesh Kumar Chaturvedi, aged about 48 years, s/o Gokul Prasad, Manager (Traffic), Primenet Global Limited Champa. VERSUS 1. Nepali Rana, aged about 23 years, S, son of Dfaaram, Occupation Driver, resident of Pali, P.S. Ratanpur, District Sambalpur, presently residing at /through the Manager Prakash Industries Limited, Champa, P.S. Champa, District Janjgir-Champa (C.G.).... Driver fe- 2. Branch Manager, National Insurance Company Limited, Branch No.l, Navin Bazar, Phool Chowk, G.K. Road, Raipur (C.G.).... Insurer. (^ 3. Madan Lal Agrawal son of Gouri Shankar Agrawal, aged about 53 years, resident of Sakti, Ward No. 9, Tahsil Sakti, District Janjgir- Champa (C.G.) ......Claimant (^4. Smt. Nirmala Devi, aged about 46 years, wife of Madan Lal Agrawal, resident of Sakti, Ward No.9, TahsU Sakti, District- Janjgir-Champa, Chhattisgarh...... .Claimant CLAIWLIN APPEAL VALUED AT RS. 25.05,567/- •r <r HIG& CQURT_OFCHHATTISGARH^B!LAj CORAM: Hon'bleShri I. M. fli, Hon'ble Shri G. Minliajuddin, JJ. APPELLANT RESPONDENTS M._^.JOJ?o^l5Ql_of2!007 Branch Manager, National Insurance Company Limited Versus Mst. Brihaspati Dewangan 6s others Shri Dashrath Gupta, Advocate for the appellant. Shri R. S. Patel, Advocate for the respondents No. 1 to 4. Shri Sanjay K. Agarwal with Shri Sourabh Sharma, Advocates for the respondents No. 5, 6 8s 7. APPELLANT M. A^(C) Np. 430 pf 2009 National Insurance Company Limited. Versus RESPONDENTS Madanlal & others Shri Dashrath Gupta, Advocate for the appellant. Shri Ratnesh Kumar Agarwal, Advocate for the respondents No. 1 85 2. Shri Sanjay K. Agarwal with Shri Sourabh Sharma, Advocates for the respondents No. 4 & 5. None for the respondent No. 3. AND M. A. (Cl No. 282 of 2009 APPELLANTS M/s Primenet Global Limited &. another Versus RESPONDENTS Nepali Rana and others. Shrt' Sanjay K. Agarwal with Shri Sourabh Sharma, Advocates for the appellants. Shri Dashrath Gupta, Advocate for the respondent No.2. Shri Ratnesh Kumar Agarwal, Advocate for the respondents No. 3 and 4. ORDER (Passed on this 21st day ofJune, 2011) Per I. M. Quddusi, J. 1. The aforementioned three appeals (M. A. (C) Nos. 1501/2007, 430/2009 and 282/2009) are being decided by this common order as s' •y .f'-f.. they arise from the one and the saine accident occurred on 27.10.2006 by the Dumper, bearing registration No. C.G. 04-J/0830. The facts in brief are that on 27.10.2006 at about 11.30 a.m. in the premises of Prakash Industries Limited, Champa, due to rash and negligent driving of Nepali Rana/driver, the vehicle - Dumper, bearin; registration No. C.G. 04-J/0830 hit the motorcycle, bearing registration No. C.G. 11 -BA/4328. As a result of this accident both the riders (Ravi Kumar and Bhuneshwar Devangan) of the inotorcycle died on the spot. The parent of deceased Ravi Kumar filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 for award of a total compensation of Rs. 39,01,856/- under various heads. Learned Additional Motor Accident Claims Tribunal, Sakti by award dated 24.12.2008, passed in Claim Case No. 79/2007 (Madanlal & another Vs. Nepali Rana & others) (M. A. (C) No. 282/20094 and 430/2009) awarded a sum of Rs. 25,05,567/- as total compensation, along with interest @ 6% per annum, directing the Insurgince Company/Non- applicant No.3 to pay and recover from the driver and owner i.e. Non- applicants No. l and 2. Further, in default of payment of amount of compensation within two n-ionths penal interest @ 9% per annum has been imposed. The legal heirs of deceased Bhuneshwar Dewangan filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 for award of a total compensation of Rs. 62,51,500/- under various heads. Learned Principal Motor Accident Claims Tribuoal, Janjgir Champa by award dated 10.8.2007, passed in CIaim Case No. 12/2005 (Mst. Brihaspati Dewangan SE others Vs. Nepali Rana 8s others) (M. A. (C) No. 1501/2007) awarded a total sum of Rs. 16,29,264/- as !f IB I.'^Rfe^, si8ik ~^ &/ -^ % dKft, g 7, 8. 9. compensation, along with interest @ 9% per annum, holding the non-applicants No.l to 4 as jointly and severally liable to pay the amount of compensadon. We have heard learned counsel appearing for the parties and perused the lower Court records. The M. A. (C) Nos. 1501/2007 has been filed by the Insurance Company against the impugned award on the ground of liability as well as quantum and M. A.(C) No. 430/2009 has been filed by the Insurance Company against the impugned award, challenging the direction to the Insurance Company to pay and recover. The M.A.(C) No. 282/2009 has been filed by the owner in so far as the Tribunal has fixed the liability to pay upon it. Leamed counsel for the Insurance Company has subinitted that the Driver of the offending vehicle was not having an effective and valid driving licence on the date of the accident which has been approved by the Claims Tribunal, Sakd in Claim Case No. 79/2007 but the Claims Tribunal, Janjgir Champa in Claim Case No. 12/2006 has held that this fact could not be proved by the Insurance Company and therefore has awarded the compensation, fixing the liability on the Insurance Company. However, the other Claims Tribunal in Claim Case No. 79/2007 has held that the driver of the offending vehicle was not having a valid and effective driving licence on the date of the •accident and thus exonerated the Insurance Company but directed it to pay and recover. The Insurance Company was granted permission under Section 170 of the Motor Vehicles Act therefore the quantum part of the award have /••• also been challenged. ^ •',• •SiHs^^^. riffr'v.: s- i'cs^w s :';£~ ^ '.s. 10, In both the claini cases the Manager of the owner corapany appeared in the witness box and stated that before appointing the driver of the offending vehicle nainely Nepali Rana they had taken his driving test first and seen the driving licence also and after satisfying with his driving, Nepali Rana (driver) was given. employment. We have also perused the photocopy of fhe driving licence No. N/9025/04/RA., issued on 25.5.2005 for L.M.V. only from 25.5.2004 to 24.5.2020 and for H.M.V. only from 25.5.2005 to 23.5.2008. The address of the driver has been mentioned as Ratanpur, District Sambalpur (Orissa). 11. After the accident when the company got the knowledge about fake licence it lodged P.I.R. against the driver which also shows the bona fides of the company. In the case of National Insurance Vs. Swarn Singh & others1 the principles laid down in Insurance Co. Ltd. v. Lehru2 that the insurer is to establish willful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for fhe owners to be absolved from any liability whatsoever. In para 92 of the decision in Swarn Singh (supra) Hon'ble Supreme Court held as under : "92. "Where the driver's licence is found to be fake. 92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case the matter has been considered in some detail. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the pyrpose of ^ ' (2004) 3 SCC 297 2 (2003)3.3cc 338 ,.\ "s its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some detail with this aspect of the matter a little later." 12. Summary of the findings given in clause (iii) in para 110 of the decision in Swarn Singh (supra) is also relevant which is quoted below : "(iii) The breach of policy condition e. g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been coininitted by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the rel.evant time, are not in theinselves defences available to the. insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time." 13. In the case of Lal Chand Vs. Oriental Insurance l.3 the principles laid down in the cases of Lehru and Swarn Siagh (supra) have been followed.- Paragraphs 8, 9, and 11 of the judgment are relevant, which are quoted below : "8. We have perused the pleadings and the orders passed by the Tribunal and also of the High Court and the annexures Gled along with the appeal. This Court in United India Insurance Co. Ud. v. Lehru in SCC para 20 has observed that where the owner has satisfied himself that the driver has a licence and is drivin; competently there would be no breach of Section l49(2)(a)(ii). He will, therefore, have to check whether the driver has a driving licence and if the driver produces a driving licence, which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent (2006)7SC'C318 authority or not. The owner would then take test of the driver, and if he finds fhat the driver is competent to drive the vehicle, he v/ill hire the driver. 9., In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was corapetent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner having satisfied himself that the driver had a licence and was driving competently, there would be n.o breach of Section 149(2)(a)(ii) and the Insurance Company would not then be absolved of its liability. 10. Another decision rendered by a three-Judge Bench of this Court in National Insurance Co. Ltd. v. Swarn Singh can also be usefully referi-ed to in fhe present context. This Court in para 110 of this judgment gave the summary of their findings to the various issues as raised in those petitions. We are concemed only with sub-para (iii) of para 110. The said sub-para (iii) reads thus: (SCC p.341) "(iii) The breach of policy condition e. g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification ofthe driver for driving at fhe relevant time, are not in themselves defences available to fhe insurer against either the. insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regardin^ use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant tiine." 11. As observed in the above paragraph, the insurer, namely, the Insurance Company, has to prove that the insured, namely, the owner of the vehicle, was guilty of negligence and failed to exercise ^. % .^y ^'" S &...,^£S&s, I 'v:: v^f^:^s^&^ Wt ^' ^' Y ~^e/ "**n^.w»'"' 8 reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly Ucensed driver or one who was not disqualified to drive at the relevant point of time." 14. In view of the above ratio laid down by Hon'ble Apex Court in the cases of Lahru, Swarn Singh and Lal Chand (supra) and the statement of the Manager of the company in evidence that the driving licence was produced by the driver which was taken care of and his driving test was taken before giving him appointment, go to show that the owner had taken precaution before giving employment to the driver and was satisfied that the driver was having a valid driving licence and was perfect in driving and then the employment was given. Therefore, there is no scope for the insurer to raise the plea that there was breach of the conditions of the insurance policy that the driver was not having a valid and effective driving licence. More so, when the insurer i.e. the Insurance Company had not produced any evidence of the concerned Licencing Authority, which issued the licence. 15. Now we come to the quantum part. In Claim Petition No. 12/2006 - M.A.(C) No. 1501/2007, deceased Bhuvneshwer was a Civil Engineer in Prakash Industries Ltd. Champa and according to the pay slip , available on record he was getting Rs. 11092/- p.m. He was aged about 36 years at the time of accident. According to the decision in Sarla Verina (Sint) and others Vs. Delhi Transport Corporation and another4 the multiplier of 15 would be applicable. However, Hon'ble Apex Court in K. R. Madhusudhan and others Vs. Adniinlstrative Officer and another5, following the decision in Sarla Verina (supra) observed that while assessing the loss of dependency 4(2009)'6SCC 121 5 (2011)48cc 689 -H ', 'i'c— SSBSS^^; ~^ ~^..,.,--' ..f' IK 16. the future prospects of the income should have been seen for making assessment of compensation. Therefore, if considering the age of the deceased at the time of death, his salary and future prospects of income, his income is calculated Rs. 15,OOQ/- per month. After deducting l/3rd for his personal and living expenses the remainder comes to Rs. 10,000/- per month and Rs. 1,20,000/- per annum and on multiplying by 15, following the decision in Sarla Verma (supra), the total loss of dependency comes to Rs. 18,00,OOO/- but the Tribunal has not assessed the future prospects of income and the loss of dependency has been assessed as Rs. 14,19,264/-. Under the conventional heads Rs. 5000/- each is granted towards loss of consortium and loss of love and affection (total Rs. 20,000/-j Rs. 5000/- for funeral expenses and Rs. 10,000/- for loss of estate, the total of which comes to Rs. 35,000/-. After adding this amount with the loss of dependency, the total compensation would come to Rs. 18,35,000/-.Therefore, thetotalcompensationofRs. 16,29,264/- awarded by the Tribunal is at a lower side. Since no cross objection has been filed by the claimants, the quantum fixed by the Tribunal is not liable to be interfered with. However, we are of the opinion that the rate of interest i.e. 9% per Mnnum, awarded by the Tribunal is on higher side, as it should have been according to the rate of interest prevalent in the nationalized banks at the time of date of accident. Therefore, that part of the award is set aside. In our opinion the claimants are entitled to get simple interest at the rate of 7.5% per annum from the date of filing of the claim petition till its payment is made. The claimants No. 2, 3 and 4 ( Ku. Kriti, Ku. Shweta and Ku. Shaili) are minor, Rs. 5,00,000/- each (total Rs. 15,00,OOO/-) shall be deposited in fheir name for a fixed t 18 .^. term of 12 years in any nationalized bank under the guardianship of their niother and rest of the amount along with interest shall be ps.id to the claimant No. 1 widow in cash. 17. In the result M.A.(C) No. 1501/2007 is allowed in part to the extent indicated hereinabove. 18. With regard to the M.A.(C) No. 430/2009, the deceased Ravi Kumar Agarwal was a income taxpayer. In the year 2005 his annual income was shown as Rs. 2,87,488/-. He was aged about 26 years and was a bachelor, therefore, the average age of the parents/claimants would be considered as laid down in Saria Vernia (supra) which is 56+46/2=49.5 i.e. 50 years. The deceased was a B-grade contractor. After deducting the income tax i.e. Rs. 52,788/- from the total annual income, the annual income comes to Rs. 2,34,700/- and on deductinj 50% towards personal and living expenses of the deceased the loss of dependency comes to Rs. 1,17,350/-. Applying the multiplier of 13 the total loss of dependency comes to Rs. 15,25,550/-. In addition to that, since the parents have lost their young son of 25 years, therefore, Rs. 10,000/- each should be awarded towards loss of love and affection (Rs. 20,000/-), Rs. 10,000/- for loss of estate and Rs. 10,000/- for funeral expenses, the total of which comes to Rs. 40,000/-. Thus we are of the considered opinion that instead of Rs. 25,05,567/- the claimants are entitled to a total compensation of Rs. 15,65,550/- and we reduce the award accordingly. 19. Since we have already awarded interest at the rate of 7.5% per annum in M.A.(C) No. 1501/2007, therefore in the instant case, we held that instead of 6% p.a. the claimants are entitled to get simple interest @ 7.5% p.a. However, the penal interest imposed by the Tribunal is sef.aside. Since we have held that the driver was having a valid and •V Thakur 10 effective driving licence at the time of accident and there was no lapse on the part of the owner, the insurance company is liable to pay the amount of coinpensation and thus, we exonerate the appellants froin any liability for payinent of amount of coinpensation. 20. In view of the foregoing M.A.(C) No. 430/2009 is allowed in part to the above extent. 21. In view of the observations made in M.A.(C) No. 1501/2007 and M.A.(C) No. 430/2009, fbdng the liability on the insurance corapany to pay the amount of compensation, the M.A.jC) No. 282/2009 is allowed. 22. In the facts situation, there shall be no order as to costs in above three appeals. SA'- I.M.Quddusi Judge •Tf'