JUDGMENT
S.T. Kharche, J.
1. This appeal arises out of the common judgment dated 13.9.1990 passed by the Chairman, Motor Accident Claims Tribunal, Nagpur, in Claim Petition No. 95 of 1988 filed by the widow and minor daughter of the deceased and Claim Petition No. 166 of 1988 filed by the mother of the deceased Prabhakar under Section 110-A of the Motor Vehicles Act, 1939 (for short the Act) claiming compensation on the ground of inadequate compensation awarded by the Tribunal to the widow and minor daughter of the deceased.
2. Brief facts are as under :
Prabhakar died in an accident arising out of the use of motor vehicle, i.e. the Truck bearing registration No. MWY 4648. The accident occurred on 2.1.1988 at about 3.30 p.m. near Jai Santoshl Traders, New Subhedar Layout, Nagpur. The deceased was proceeding on his bicycle and when he reached near the spot of incident the truck involved in the accident gave violent dash to him causing his instantaneous death on the spot. The first information report of the accident was lodged by Manish (A.W. 1) at police station Sakkardara on the basis of which Crime No. 1 of 1988 under Section 304A of Indian Penal Code was registered against the driver of the truck. Police visited the spot of incident and drew spot panchanama. They forwarded the dead body to the Government Medical College and Hospital, Nagpur. for post-mortem examination. The Reader is Forensic medicines, Govt. Medical College, Nagpur, conducted the post-mortem and opined that the probable cause of death was intracranial haemorrhage caused due to head injury.
3. Appellant No. 1 is the wife and appellant No. 2 is the minor daughter of the deceased, whereas respondent No. 1 is the owner of the motor vehicle involved in the accident and the said motor vehicle was being driven by respondent No. 2 in a rash or negligent manner on the relevant date and time and the said motor vehicle has also been duly insured with respondent No. 3.
4. The appellants had examined four witnesses in support of their contentions whereas on behalf of respondent No. 3 Insurance Company one witness, Mr. C.S. Thool, who was working as Assistant Administrative Officer in the office of respondent No. 3 has been examined. The Tribunal on considering the evidence adduced on record in both the claim petitions, by his common judgment awarded compensation of Rs. 90,000/- with interest at 12% per annum, inclusive of the claim of no fault liability. This award has been challenged in this appeal by the claimants on the ground that inadequate compensation is awarded to them by the Tribunal.
5. The learned Counsel for the appellant contended that the age of the deceased was 65 years at the time of his death and he was earning Rs. 750-per month as he was employed in Omega Company. Though the salary certificate has not been placed on record, the earning of the deceased must not have been less than Rs. 750/- per month in view of the provisions of Minimum Wages Act. He contended that the Tribunal has committed an error in making the assessment of the loss of dependency to the extent of Rs. 300/- only. He further contended that having regard to the age of the deceased and age of dependents the Tribunal ought to have considered the multiplier and ought to have granted compensation to the tune of Rs. three lacs in both the claim petitions. In support of his contentions, he relied on the landmark judgment of Supreme Court in the case of General Manager Kerala State Road Transport Corporation v. Susamma Thomas, 1994 A.C.J. 1 and also the other decision in the case of Smt. Sarla Dixit and Anr. v. Balwant Yadav and Ors., and Anr. decision in Smt. Supe Devi and Ors. v. M/s. National Insurance Co. Ltd. and Anr., J.T. 2002 (Supp. 1) SC 451.
6. The learned Counsel further contended that the liability of the Insurance Company would not be limited to the extent of Rs. 1,50,000/ because the insurance policy taken by the insured/owner of the motor vehicle, was a comprehensive Insurance policy and moreover the original insurance policy was not produced on record. He also contended that though the liability of Insurance Company is limited to certain extent, still the Insurance Company would be liable to pay to the claimants the entire amount over and above the liability covered under the policy. In support of this contention, he relied on the decision in Oriental Insurance Co. v. Cheruvakkava .
7. The learned Counsel for Insurance Company/respondent No. 3 contended that the Tribunal was not justified in applying the multiplier of 25 in view of the law laid down by the Supreme Court in the case of U.P. State Road Transport Corporation v. Trilok Chandra, .
8. He contended that the interest awarded on the compensation should not have been at 12% per annum and the award of interest at 9% per annum would have been just and reasonable. In support of this contention, be relied on the decision of Supreme Court in the case of Kushnuma Begum v. New India Assurance Co. Ltd. .
9. He contended that the claim petitions have been filed under the provisions of Motor Vehicles Act, 1939 and, therefore, in absence of the Insurance Company not taking any higher liability by accepting a higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95(2) of the Act and would not be liable to pay the entire amount of compensation. Therefore, the liability of the Insurance Company in no case exceeds Rs. 1,50,000/-. In support of this contention, he relied on the decision of Supreme Court in New India Assurance Co. Ltd. v. C.M. Jaya and Ors. .
10. I have carefully considered the contentions canvassed by the learned Counsel for the parties. It is not disputed that the deceased Prabhakar died as a-result of accident arising out of the use of motor vehicle, i.e. the truck, which is owned by respondent No. 1. It is also not disputed that the said truck was being driven in a rash and negligent manner on the relevant date and time and the Tribunal has recorded the findings on the basis of the evidence adduced before it and answered these Issues in affirmative.
11. It may be useful to refer the decision of the Supreme Court in the case of General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, cited supra, wherein it has been held as under :
It is necessary to reiterate that the multiplier method is logically sound and legally well established…. It must be borne in mind that the multiplier method is the accepted method of ensuring a ‘just’ compensation which will make for uniformity and certainty of the award. It refers to the principle of computing compensation by the English Courts under which the multiplier granted never exceeded 16. This is a case in which multiplier of 12 was applied.
12. In S. Chandra and Ors. v. Pallavan Transport Corporation, the Apex Court observed that, “… it cannot be disputed that the life expectancy in India even in the year 1979 was not less than 65 years. We, therefore, hold that the appellant will be entitled to the multiplier of 20”. Similarly, in the case of Sneha Dutta (Smt.) and Anr. v. Himachal Road Transport Corporation, the Apex Court recorded multiplier 12 to be just and proper.
13. It may also be useful to refer the decision of Supreme Court in U.P. State Road Transport Corporation v. Trilok Chandra and Ors., cited supra, wherein it has been observed that, “we must at once point out that the calculation of compensation and the amount worked out in the schedule suffer from several defects. For example, in Item No. 1 for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicand is shown to be Rs. 3,000/-. The total should be Rs. 3,000/- x 15 = Rs. 45,000/- but the same is worked out at Rs. 60,000/-. Similarly, in the second item the multiplier is 16 and the annual income is Rs, 9,000/-; the total should have been Rs. 1,44,000/- but is shown to be Rs. 1,71,000/-. To put it briefly, the Table abounds in such mistakes. Neither the Tribunals nor the Courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of multiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose to emphasise is that the multiplier cannot exceed 19 years’ purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16. We thought it necessary to state the correct legal position as Courts and Tribunals are using higher multiplier as in the present case where the Tribunal used the multiplier of 24 which the High Court raised to 34, thereby showing lack of awareness of the background of the multiplier system in Davies’ case.
14. In view of this settled position of law, it is quite obvious that the Tribunal was not justified in adopting the multiplier of 25. Admittedly, the age of the deceased was 25 years and he died leaving behind him the widow of the age of 20 years, minor daughter of 1 1/2 years and mother Zingabai of the age of 60 years. Having regard to the age and number of dependents and the age of the deceased, in no case the multiplier would exceed 18 years purchase factor and, therefore, the amount of compensation will have to be assessed by adopting the multiplier of 18 years purchase factor.
15. That takes this Court to consider as to what was the income of the deceased at the time of the accident. In that context, the Tribunal recorded finding that though the deceased was said to be an employee of Omega Company, the salary certificate was not placed on record. Besides, the evidence of the widow would show that the salary drawn by her husband was to the extent of Rs. 750/-, whereas the mother of the deceased (Zingabai) clearly admitted in cross-examination (her evidence was recorded in Claim Petition No. 166/88) in unequivocal terms that her son deceased Prabhakar was getting salary of Rs. 500/- per month and not more and he was contributing amount of Rs. 300/- per month only for the maintenance of his family members. In such circumstances, the Tribunal was perfectly justified in assessing the loss of dependency at the rate of Rs. 300/- per month because it is not unusual to deduct 1/3rd on account of personal living expenses. In such a situation, the claimants would have been entitled to receive compensation which could be assessed after adopting the multiplier of 18 years purchase factor. Therefore, we can take about Rs. 300/- per month or Rs. 3,600/- per year as the loss of dependency and if capitalised on a multiplier of 18 years purchase factor, the compensation would work out to Rs. 64,800/. (300 x 12 = 3600 x 18 = 64,800). The Tribunal did not award compensation on account of consortium, mental agony, sufferings, loss to the estate, funeral expenses etc. This Court is of the considered view that the claimants would be entitled to receive compensation in the conventional sum of Rs. 15,000/- on account of loss consortium, mental agony and suffering, and Rs. 5,000/- towards funeral expenses and in addition Rs. 15,000/- on account of loss to the estate, making total amount of compensation payable to the tune of Rs. 99,800/- which would be just, fair and reasonable compensation and in that view of the matter the judgment of the Tribunal needs to be modified.
16. The learned Counsel for the Insurance Company contended that the interest awarded by the Tribunal at the rate of 12% per annum is on the higher side and deserves to be reduced to 9% per annum in view of the decision of Supreme Court in Kaushnuma Begum and Ors. v. New India Assurance Co. Ltd., cited supra. This contention appears to be well founded because the Supreme Court observed as under :
23. Now, we have to fix up the rate of interest. Section 171 of the M.V. Act empowers the Tribunal to direct that ‘in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf.’ Earlier, 12 per cent was found to be the reasonable rate of simple interest. With a change in economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9 per cent on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9 per cent per annum from the date of the claim made by the appellants. The amount of Rs. 50,000/- paid by the Insurance Company under Section 140 shall be deducted from the principal amount as on the date of its payment and interest shall be recalculated on the balance amount of the principal sum from such date.
17. Having regard to these observations of the Supreme Court and in view of the fact that the nationalised banks were granting interest at 9 per cent per annum on fixed deposits in the year 1988, the grant of interest at 19% per annum would be just, fair and reasonable and to that extent the award passed by the Tribunal needs to be modified.
18. The learned Counsel for the Insurance Company contended that the liability of respondent No. 3 would not exceed more than Rs. 1,50,000/-because no higher premium has been paid by the insured for covering third party risk. It is not in dispute that the motor vehicle involved in the accident was duly insured with respondent No. 3 for the period 11.2.1987 to 2.1.1988 covering the date of the accident. The respondent No. 3 had examined the Assistant Administrative Officer Mr. C.S. Thool (N.A.W. 1). It has been brought on record that though the policy issued to the insured was comprehensive policy, the premium charged was only Rs. 346/- for covering the risk of third party. His evidence would further reveal that by accepting the aforesaid premium of Rs. 346/-, the Insurance Company indemnified the third party interest to the extent of Rs, 1,50,000/- only. If the owner of the truck would have paid additional sum of Rs. 150/- at the inception then the policy would have covered unlimited risk so far as the third party risk is concerned. Nothing favourable to the claimants or owner of motor vehicle has been brought on record in the cross-examination of this witness and, therefore, the liability of the Insurance Company is limited to the extent of Rs. 1,50,000/- only. Thus the contention of the learned Counsel for the Insurance Company appears to be well founded and supported by the evidence on record.
19. Sofar as the liability of Insurance Company on the basis of terms and conditions mentioned in insurance policy is concerned, it is not disputed that the accident occurred on 2.1.1988 and the claimants had instituted the claim petition under Section 110A of the Motor Vehicles Act, 1939 and, therefore, the observations of the Supreme Court in the case of New India Assurance Co. Ltd. v. C.M. Jaya. cited supra, would be relevant and applicable to the facts and circumstances of the present case. The Supreme Court observed as under :
16. It is not in dispute from the admitted copy of the insurance policy produced before the Court that the liability of the appellant is limited to Rs. 50,000 in regard to the claim in question. The relevant clause in the policy relating to limits of liability reads :
Limits of liability.- Limits of the amount of the Company’s liability under Section II(1)(i) in respect of any one accident Rs. 50,000.
Limit of the amount of the Company’s liability under Section II(1)(i) in respect of any claim or series of claims arising out of one event Rs. 50,000. It is also not the case that any additional or higher premium was paid to cover unlimited or higher liability than the statutory liability fixed as found in the term of the policy extracted above. In the light of the law stated above, it necessarily follows that the liability of the appellant is limited to Rs. 50,000, as was rightly held by the Tribunal. The High Court committed an error in taking the contrary view that the liability of the appellant was unlimited merely on the ground that the insured had taken a comprehensive policy. In Shanti Bai case this Court has clearly expressed the opinion that a comprehensive policy issued on the basis of the estimated value of the vehicle does not automatically result in covering the liability with regard to the third-party risk for an amount higher than the statutory limit in absence of specific agreement and payment of separate premium to cover third-party risk for an amount higher than the statutory limit. This position is accepted in Amrit Lal Sood case the Court found an express term in the policy for covering wider risk and to meet the higher liability unlike in the case of Shanti Bai. Therefore, the High Court was not right in holding that the liability of the appellant-Insurance Company was unlimited merely on the ground that the vehicle in question, i.e. the truck, was covered by a comprehensive insurance policy.
17. In the circumstances, we hold that the liability of the appellant-Insurance Company is limited to Rs. 50,000, as held by the Tribunal. In the view we have taken, it is unnecessary to go into the question relating to either maintainability of cross-objections before the High Court against the appellant alone or as to the enhancement of compensation when the owner and driver have not filed appeal against the impugned judgment.
20. In the present case, the liability of Insurance Company would be limited to the extent of Rs. 1,50,000/- as per Section 95(2)(a) of the Act and since the owner of the motor vehicle/respondent No. 1 did not challenge the said findings by filing cross objections or appeal, it follows that the owner of the motor vehicle would be liable to pay remaining amount of compensation with interest in excess of Rs. 1,50,000/-.
21. In the result, the appeal is partly allowed. The impugned award passed by the Tribunal is modified and the claimant/appellant is held to be entitled to receive the compensation of Rs, 99,800/- with interest at the rate of 9% per annum from the date of petition till realisation which should be paid to her after deducting the amount already paid, jointly and severally by respondent Nos. 1 and 3 with costs and also to the extent of limiting the liability of the Insurance Company to Rs. 1,50,000/- making it clear that it does not affect in any manner the liability of respondent Nos. 1 and 2 and that the respondent No. 3 Insurance Company would be entitled to recover the excess amount paid by the insured respondent No. 2.