Case: New India Assurance Company Limited Vs. Ranglal Punju Nikam and Others

( 2 ) THE present appeal being by Insurance Company, henceforth for the sake of convenience and brevity, we shall refer to the parties as claimant, owner and insurance Company. Present respondent No. 1 was the petitioner before the tribunal and he is the claimant/person injured in the accident in question. Present respondent No. 3 is the owner of the vehicle involved in the accident which was insured with the appellant Insurance Company. The accident in question took place on 19th August, 1997 at about 7. 30 p. m. The claimant is a Lawyer by profession. At the material time, he was travelling along with Shri K. D. Patil, Chairman of the Maharashtraagricultural and Rural Development Bank Limited and one Dinkar Dayaram patil to Aurangabad for the purpose of attending a case pertaining to the said bank in the High Court. Present respondent No. 2 was the driver of the vehicle. It is contended that the vehicle was driven in a rash and negligent manner by the driver, as a result of which it slipped away from the road, turned turtle and fell in a ditch. Petitioner suffered severe injuries including fracture of right side thigh bone. He was initially admitted in a hospital at Parola and then shifted to Jalgaon in the hospital of Dr. Pratap Jadhav and ultimately he was also required to take some treatment at J. J. Hospital, Bombay. On three occasions, he was subjected to surgical treatment. Even after treatment, he has suffered permanent disability. He is unable to bend his right leg which is now become marginally short. Petitioner was aged 50 years at the time of accident. He has been practising in the Courts at Parola, Dhule, Amalner and Jalgaon on Civil, Criminal, Revenue andsides. Due to prolonged treatment, his legal practice was adversely affected. He also could not pay attention to his agricultural land. Consequently, petitioner claimed compensation of Rs.. He had also expressed willingness to pay additional Court fee in the event, the Tribunal was pleased to award higher amount of compensation.( 3 ) OWNER and driver, in spite of service, did not file any written statement. The petition was mainly contested by the Insurance Company, which denied the claim of the claimant in toto for want of information and requested that the claimant be put to strict proof of all the allegations, without raising any specific defence.

Court's reasoning:
Since it is the claim ot the claimant that he could not attend the Court nearly for three and half years, taking monthly income of the Lawyer to be Rs. 7500/per month, the learned Member has calculated loss of income for 42 months as Rs.. We have not been able to find any convincing reasons in the argument of the learned Counsel for Insurance Company for causing reduction in this amount. We are also not inclined to disturb the amount of compensation of Rs. 1,00,000/granted by way of special damages. e. for suffering inconvenience, hardship, discomfort, mental stress and loss of amenities. This compensation is not calculable in terms of money and, therefore, we leave the amount of Rs. 1,00,000/undisturbed. ( 8 ) TAKING monthly income of the claimant to be Rs.his annual income is taken by the Tribunal to be Rs.. Since permanent disability suffered is 70%, the learned Member has calculated loss of future income at the rate of Rs. 63,000/per year (70% of Rs. 90,000/). Taking into consideration that the claimant was aged 50 years at the time of accident, the learned Member has taken multiplier of 11 from the IInd Schedule below section 163a of the Act and thus calculated the future loss of income to be Rs.. The learned counsel for the Insurance Company has taken serious exception to this. According to him, when an amount of Rs. 3,15,000/is already awarded by way of loss of income for three and half years, these three and half years ought to have been deducted from the multiplier. This is because the claimant is nearly about 55 years old after taking into consideration these three and half years from the date of accident. Eventually for age group 50 to 55 years, the multiplier is 11. Here, we must take into consideration that the multiplier provided by IInd schedule can be used as a guideline. The Court is not required to apply the multiplier in strictness in the applications under section 166. Consequently, while applying the multiplier in a petition under section 166, the Courts would be justified in taking a multiplier on lower side, because future income of future years is being paid to the claimant in lump sum in immediate future. We are also in agreement with the learned Counsel that once the petitioner is paid an amount by way of compensation towards loss of entire income of three and half years, the multiplier for the age group 50 to 55 years should not have been used. Multiplier for the age group 55 to 60 years is 8 and that should have been used. With the logic referred hereinabove, we should use multiplier lesser than 8, say 5 or 6. However, in this case, it cannot be ignored that the claimant is a practising lawyer and for practising Lawyer, there can be no age of retirement as in the case of serving people. Lawyers, practising even at the advance age and after crossing the age of 70 years, are not far and few and, therefore, we are not inclined to reduce the multiplier below 8. Taking the multiplier of 8, the amount of loss of future income would calculate Rs. 63,000 x 8. e. Rs.s narrated by claimant himself, he was travelling in the vehicle of the bank from Jalgaon to Aurangabad for the purpose of some Court work of the bank. Thus claimant was a gratuitous passenger in a private vehicle. Hence, by relying upon observations of the supreme Court in a recent judgment in the matter of United India Insurance company Ltd. Shimla vs. Tilak Singh and others, 2006 AIR SCW 1822, the bank is not liable to pay the compensation, if the policy is Act only policy. This is because, Act only policy under section 147 of the Act, as laid down by Honble apex Court, does not cover the risk of a gratuitous passenger in a private vehicle. By referring to copy of the policy atin the record of the Tribunal, he pointed out that insured has paid additional premium of Rs. 100/in order to cover the risk of passengers, to the tune of Rs. 50,000/and maximum of 4 passengers. To explain these details he has relied upon extract or(Indian motor Tariff) made available for ready reference and claimed that liability of insurance Company, under the policy, is Rs. 25,000/the reported matter, Insurance Company had undertaken "liability as the one under Chapter VII of Motor Vehicles Act 1939". It was held that the insurers liability for third party risks under the statutory policy would not be limited to Rs. 20,000/according to the relevant legal provision as it existed on the date on which the policy came into force but would be extended to Rs. 50,000/in accordance with the legal provision as it stood on the date of the accident, when the accident occurred during currency of the policy. ( 12 ) ADVOCATE Shri Chapalgaonkar has not disputed legal proposition that the legal provision applicable would be those as on the date of accident. He pointed out that section 147 of the Act deals with the requirements (statutory) of the policy and limits of liability. That is the provision relied upon by Counsel for owner as also claimant. As a result of amendment by Act 54 of 1994, brought into force with effect fromSection 147 has not undergone extensive amendment. In section 147 (1) (b) (i) words "injury to any person" are substituted by "injury to any person, including owner of the goods or his authorised representative carried in the vehicle". Thus portion underlined (in italics) is the only addition to the said section, as a result of which it is clarified that Act only policy would cover the risk of owner of the goods or his authorised agent travelling in a goods vehicle carrying his goods for hire would be covered. This has not brought any change in the position of a gratuitous passenger travelling in a private vehicle. And therefore, law, as laid down by the reported case of Tilak singh, would be applicable, even if that accident had occurred prior to the date of amendment. This argument is required to be upheld, because section 147 as it stood prior to 1994 amendment and as it stands after said amendment, as applicable to a gratuitous passenger in a private vehicle, has not undergone any change.(15 ) LEARNED Counsel for the owner and the claimant vehemently opposed consideration of such a proposition submitted by advocate for the insurance company, by contending that the same was neither pleaded nor pressed into service, before the Tribunal. It was not controverted that proposition denying the liability because victim was a gratuitous passenger, was not advanced before the tribunal. But learned Advocate for insurance company only pointed out that the judgment of the Supreme Court relied upon by him was delivered onand was not available to be relied upon prior to its reporting in April, 2006. Moreover this Court is dealing with the decision of the Tribunal as first Appeal court and therefore all questions of fact and law can be agitated by the parties and considered by this Court. Reliance on the judgment of the Apex Court is for the purpose of arriving at correct interpretation of section 147 of the Act and thus determine the extent of liability of the insurance company, in the light of the same. It requires no discussion on questions of fact, as claimant himself has deposed to be a passenger in the private vehicle without payment of any hire charges. A copy of the policy, if at all the same is required to be referred, was placed on record before the Tribunal atThus although proposition is raised for the first time before this Court, where owner bank has engaged lawyer of its choice to defend itself, it has neither caused any prejudice to owner nor there is denial of an opportunity to meet the same. The owner had its opportunity to demonstrate as to what is correct legal position about extent of liability of the insurance company as under the Act and the policy in question. We are, therefore, not inclined to uphold the contention of the lawyers of owner and the claimant that such a proposition cannot be considered, because it is raised for the first time in this first appeal. ( 16 ) REFERRING to policy atin the record of the Tribunal, it was pointed out by learned Counsel for the insurance company that a premium of Rs. 100/is paid by the insured underunder which Personal Accident benefits upon Rs. 50,000/for 4 passengers, including the driver, can be conferred upon the insured. The text ofis made available for ready reference (marked x ). Total liability of the insurance company towards passengers, due to payment of extra premium of Rs. 100/is Rs. 50,000/and as perpersonal accident benefits are 100% of it in case of death or loss of sight of both eyes, physical separation of two entire hands or two entire legs or loss of one hand + one leg or one eye + one hand or one leg. In case of total and irrecoverable loss of use of hand or foot without physical separation, liability extends to 50%. Although it is the case of claimant that he suffered fracture of leg, it is not a case of total separation but a case of total irrecoverable loss of use of a leg. The liability of insurance company, therefore, shall be 50% of rs.. e. Rs..