* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ F.A.O. No.12 of 1991 & C.M. Appl. No.5043 of 2004
% 31.05.2010
KAMLA KUMARI THROUGH L.R.‟S ...... Appellant
Through: None.
Versus
DROPATI DEVI & ORS. ......Respondents
Through: Mr. Navneet Goyal & Mr. Varun Kumar,
Advocates.
WITH
F.A.O. No.17 of 1991 & C.M. Appl. Nos.284 of 2001, 12071 of 2004
DAROPATI DEVI & ORS. ...... Appellants
Through: Mr. Navneet Goyal & Mr. Varun Kumar,
Advocates.
Versus
GULTAR CHAND & ORS. ......Respondents
Through: None.
Reserved on: 12th April, 2010
Pronounced on: 31st May, 2010
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
1. These two appeals have been preferred against the award dated 17th August, 1990
whereby the learned Tribunal awarded a sum of Rs.90,000/- as compensation to the
claimants along with interest of 10 per cent per annum. The claimants, Smt. Daropati
Devi & others, have assailed the award alleging that the compensation granted was
inadequate, whereas the owner of the vehicle Smt. Kamla Kumari (through LRs) has
F.A.O. Nos.12 & 17/1991 Page No.1 of 7
assailed the award on the ground that the Tribunal wrongly held that the liability of the
insurance company was limited only to the extent of Rs.50,000/- and rest of the
compensation was payable by the owner. The owner also raised an issue that there was
no negligence on the part of the driver. The bus was running on a DTC route under a
contract, therefore, DTC was liable for damages and learned Tribunal did not appreciate
the evidence properly and did not take into consideration the entire evidence on record.
2. The insurance company had contested both the appeals on the issue of liability of
the insurance company being limited to the extent of Rs.50,000/-.
3. I shall deal with the issue of liability to the insurance company first. This court in
F.A.O. No. 257 of 1991 titled Neeta Trehan & Ors. Vs. Gopal Krishan & Ors., decided on
17th May, 2010, had considered the issue of liability and observed as under :-
“14. The issue arises whether this insurance cover obtained by
the insured was limited to a liability of Rs.1,50,000/- being the
minimum liability for which a vehicle was required to be insured
by the owner or this premium covered wider liability. Counsel for
the appellants has drawn my attention to the judgment in Veena
Pruthi’s case (supra) given by the Division Bench of this court
where the Division Bench of this court held that if the premium
was Rs.125/-, the liability would be limited to Rs.1,50,000/- and
not unlimited. On the same logic it is stated that if the premium
was Rs.240/- for class A(2) vehicle, the liability of insurance
company would be limited to Rs.1,50,000/-.
15. Where obtaining of an insurance cover is made mandatory
by statute, the contract is to be interpreted in the light of statutory
provisions. In case of motor vehicles, obtaining of an insurance
cover by the owners of vehicles is a statutory requirement. Thus,
an insurance policy has to be interpreted keeping in view the
statutory provisions and the rules of tariff as framed by the
Advisory Board. Under the tariff rules, two separate tariffs are
provided for ‘Act Only Liability’ and for ‘Public Risk’. It cannot
be said that the Advisory Board provided tariff for ‘Act Only
Liability’ as a superfluous phenomenon. The Advisory Board was
having in mind that where the owner wants to take an insurance
policy covering the minimum liability under Section 95 of the Act,
then the premium should be different. If the owner wants widerF.A.O. Nos.12 & 17/1991 Page No.2 of 7
liability then the premium should be different and that is the
reason that for ‘Act Only Liability’, a premium of Rs.200/- was
provided and for ‘Public Risk’, a premium of Rs.240/- was
provided. Public risk is a wider term and takes into account the
entire risk faced by the owner for bringing vehicle on road. If
there had been no compulsion under the Act to obtain an insurance
policy, the only insurance cover which owner could have obtained
from an insurance company for covering public risk would have
been this that he would pay Rs.240/- and get the public risk
covered. If the Act would have not prescribed any limit, the public
risk would naturally have been unlimited. The Act prescribed that
every owner of vehicle should get insurance cover covering a
minimum amount. Beyond that, the Act did not provide anything.
It is under these circumstances that the Tariff Advisory Committee
prescribed separate premium for ‘Act Only Policy’ and separate
premium for a ‘Public Risk Policy’. I, therefore, consider that the
‘Public Risk’ premium would cover unlimited amount of risk and
would not cover a limited amount of risk.
……………………………..
18. There is another aspect to be kept in mind. When an owner
approaches insurance agent for insurance, he is told what would
be the tariff payable by him and on payment of tariff, an insurance
certificate or cover note is issued. The contract of insurance, thus,
stands concluded on receipt of tariff/premium in terms of the tariff
schedule as laid down by Advisory Board. Insurance policy is
subsequently mailed to owner by insurance company. If insurance
company unilaterally inserts a clause in the policy which is
contrary to tariff regulations, such a clause is not binding. All
insurance policies are in the shape of one standard performa used
for different kinds of coverage. If while sending insurance policy
to owner the company official does not score off non-applicable
clauses or inserts a limited liability clause which is contrary to the
tariff charged from owner, such a clause is not binding.”
4. I consider that in order to fix the liability of insurance company, the Tribunal
should have seen the premium charged by the insurance company and the tariff rules
prevalent at that time to find out whether the premium charged was for the „Act Only
Liability‟ or it was for covering „Public Risk‟. If the premium had been charged for „Act
Only Liability‟, the liability of insurance company would be limited to Rs.50,000/-. It was
obligatory on the owner of vehicle to obtain a minimum insurance cover as prescribed
under the Act by paying the premium as prescribed by the Advisory Board in the tariff
F.A.O. Nos.12 & 17/1991 Page No.3 of 7
rules. If the insurance company has charged a premium for „Act Only Liability‟, the rest
of the damages were liable to be paid by the owner himself. In the present case, there is
no dispute that the bus was insured and a premium of Rs.111/- was paid by the owner of
the bus towards „Third Party Risk‟. This fact is admitted by the insurance company even
in reply to this appeal. The tariff rules prevalent at that time for Class B (1) passenger
service vehicles are as under :-
CLASS “B (1)” : PUBLIC PASSENGER SERVICE VEHICLES-
(EXCLUDING PASSENGER RISK)
(Endorsement No.26 must be used except in the case of Liability to
the Public Risks and “Act Only” Liability Policies)Maximum Licensed Comprehensive Liability “Act
Passenger Carrying to the Only”
Capacity Public Liability
Risks
(a) SINGLE DECK
1. Not exceeding 18 .. .. Rs.276 + ½ % Rs.78/- Rs.65/-
on I.E.V.
2. 19 to 24 inclusive .. .. Rs.301 + ½ % Rs.82/- Rs.69/-
on I.E.V.
3. 25 to 30 inclusive .. .. Rs.351 + ½ % Rs.97/- Rs.74/-
on I.E.V.
4. 31 to 36 inclusive .. .. Rs.401 + ½ % Rs.106/- Rs.79/-
on I.E.V.
5. Exceeding 36 .. .. Rs.426 + ½ % Rs.111/- Rs.84/-
on I.E.V.
(b) DOUBLE DECK
1. Not exceeding 60 .. .. Rs.426 plus 1 Rs.111/- Rs.84/-
per cent on
I.E.V.
2. Exceeding 60 Rs.526 plus 1 Rs.135/- Rs.103/-
per cent on
I.E.V.
5. It is apparent from the above tariff rates as prescribed under India Motor Tariffs
Rules by Advisory Board that the „Act Only Liability‟ was covered if premium of Rs.84/-
was paid. In the present case, the premium of Rs.84/- was not paid by the owner but the
premium paid by the owner was Rs.111/- which covered „Liability to the Public Risks‟
F.A.O. Nos.12 & 17/1991 Page No.4 of 7
and no limits of this liability have been provided. I, therefore, consider that the Tribunal
wrongly came to conclusion that the liability of the insurance company was limited to
Rs.50,000/-. I consider that the liability of insurance company was unlimited in this case.
6. As far as quantum of compensation is concerned, the Tribunal awarded a
compensation of Rs.90,000/- taking into account the salary of the deceased as Rs.350/-
per month and observing that contribution being made by the deceased towards the family
must be around Rs.300/- per month. The Tribunal used a multiplier of 25 looking that the
age of deceased was 31 years and awarded above compensation. Counsel for the
appellant/claimants have relied upon Sarla Varma & Ors. vs. Delhi Transport
Corporation & Anr.; (2009) 6 SCC 121 to seek enhanced compensation and have also
submitted that the salary of the deceased was wrongly taken as Rs.350/- whereas evidence
adduced on record shows that the salary of the deceased was around Rs.450/- per month.
7. I have perused the evidence led before the trial court. The evidence shows that the
deceased was initially working with M/s. Frick India Ltd. and his services with M/s. Frick
India Ltd. were terminated in April, 1982 as he had started absenting. The deceased had
joined M/s. Frick India Ltd. in the year 1977 @ Rs.325 per month. It was testified by the
official of M/s. Frick India Ltd. that the deceased was getting bonus of 15 per cent and
Contributory Provident Fund on the pay. His salary in the month of October-November,
1982 would have been Rs.348.84 besides other benefits. It is under these circumstances
that the Tribunal had considered salary of the deceased as Rs.350 per month. However,
this same witness stated that salary of the deceased had he been working in the company
in September, 1982 would have been Rs.455/-. This seems to have been calculated after
adding bonus and other benefits. Since the deceased has left M/s. Frick India Ltd. in
April, 1982, the Tribunal considered the last drawn salary of the deceased as the basis of
F.A.O. Nos.12 & 17/1991 Page No.5 of 7
computing compensation. It is on record that the deceased had left M/s. Frick India Ltd.
and started his own contract work. The deceased would not have left M/s. Frick India
Ltd. unless he had better prospects and was having better earnings by working
independently. I, therefore, consider the Tribunal should have considered future
prospects of the deceased. Since the deceased was only 31 years old, 50 per cent future
prospects as per Sarla Varma’s case (supra) would be just and proper. I also consider that
the income of the deceased in September should have been considered as Rs.400/- as his
income in April, 1982 was around Rs.400/- (Rs.350/- + 15 per cent of Rs.350/-). The
deceased left behind a large family, namely, a widow, five children and parents. Thus,
the deduction to be made from the income of the deceased would be 1/5th. The deceased
would have, therefore, been contributing towards maintenance of his family Rs.480/-
(400+200=600 x 4/5). Since the age of the deceased was 31 years, I consider a multiplier
of 18 would have been the appropriate multiplier. Thus, the total compensation payable
to the claimants would be Rs.1,03,680/- (480 x 12 x 18). The Tribunal has also not
awarded anything to the claimants towards non-pecuniary benefits. I consider that the
Tribunal ought to have awarded Rs.3,000/- towards funeral expenses, Rs.5,000/- each
towards loss of estate and loss of consortium. Since the Tribunal left behind five young
tender age children, I consider that they were entitled to be a suitable compensation for
loss of love and affection. So, I award Rs.10,000/- towards loss of love and affection to
the claimants who were sons and daughters of the deceased. I, therefore, consider that the
claimants were entitled to Rs.1,26,680/-. The award of the Tribunal is accordingly
modified and claimants are held entitled to this compensation. The Tribunal has awarded
interest @ 10 per cent per annum from the date of filing of the petition, that is,
5th January, 1983 till realization. On the enhanced amount, the claimants shall be entitled
to recover interest @ 7.5 per cent per annum.
F.A.O. Nos.12 & 17/1991 Page No.6 of 7
8. The plea raised by the owner that DTC should have been held liable to pay
compensation is not tenable. The owner has failed to prove a contract between itself and
DTC showing that DTC had taken up the responsibility of paying damages. As far as
issue of negligence is concerned, the learned Tribunal appreciated the evidence properly
and came to a right conclusion that it was the driver of the bus who was responsible for
the accident.
9. The liability of the insurance company is held to be unlimited. The award stands
modified in terms of paragraph 7 above. The insurance company is held liable to make
the payment of entire award amount. The insurance company seems to have paid only
Rs.50,000/-. Rest of the amount shall be deposited by the insurance company within
eight weeks from the date of the judgment with the Tribunal and the Tribunal shall
disburse the same amongst the claimants in the same ratio in which it has ordered earlier
in the award.
10. Both the appeals are disposed of in terms of the above order.
SHIV NARAYAN DHINGRA J.
MAY 31, 2010
‘AA’
F.A.O. Nos.12 & 17/1991 Page No.7 of 7