IN THE HIGH COURT OF KERALA AT ERNAKULAM
MFA.No. 1301 of 2000()
1. NATIONAL INSURANCE CO. LTD.
... Petitioner
Vs
1. MOHAN.M.S.
... Respondent
For Petitioner :SRI.RAJAN P.KALIYATH
For Respondent :SRI.MATHEW JOHN (K)
The Hon'ble MR. Justice K.PADMANABHAN NAIR
Dated :27/03/2008
O R D E R
"C.R."
K. PADMANABHAN NAIR ,J.
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M.F.A.No.1301 of 2000
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Dated, this the 27th day of March, 2008
JUDGMENT
The second respondent insurer in O.P.(MV) No.1123/1995 on the Motor
Accidents Claims Tribunal, Pala is the appellant. Insurer has filed this appeal
challenging an award passed by the Tribunal by which it had awarded an amount
of Rs.33,718/- as compensation to the first respondent/claimant for the damages
sustained to his motor car bearing registration No.KL-5/A 3183. A collision took
place between the car owned by the first respondent and a jeep bearing
registration No.KEK 1933. On 16.2.1993 the car was proceeding towards south
through Pala-Ponkunnam road. According to the first respondent the jeep
bearing registration No.KEK 1933 was parked on the eastern side of the road.
The driver of the jeep abruptly started it and turned to the west in a rash or
negligent manner which caused a collision of car with the jeep. The first
respondent filed the Original Petition initially claiming an amount of Rs.8,545/- as
compensation alleging that car sustained substantial damages due to the negligence
of the driver of the jeep.
MFA No.1301/2000 2
2. The second respondent/owner of the jeep filed a written statement
contending that the petition was not maintainable. It was contended that the first
respondent received an amount of Rs.42,032/-as full and final settlement for the
damages sustained to his car from the third respondent who was the insurer of car.
Since the first respondent was compensated by his own insurer he is not entitled
to get any compensation again from the owner of the jeep. The averment that the
accident occurred due to the negligence of the second respondent driver was
denied. It was contended that the accident occurred due to the negligence of the
first respondent himself. It was also contended that jeep was covered with a valid
policy of insurance issued by the appellant . The second respondent was holding a
valid driving licence and in case the claimant is entitled to get any compensation
the appellant is liable to pay the same.
3. The appellant/second respondent/insurer of jeep filed a written
statement contending that the petition was not maintainable. It was contended
that since the first respondent was compensated by his own insurer he was not
entitled to get any compensation again for the very same damage from the owner
of the offending vehicle. It was also contended that accident occurred due to the
negligence of the claimant himself.
4. Third respondent/insurer of the car filed a written statement
MFA No.1301/2000 3
contending that petition was not maintainable against it. It was admitted that the
car was covered with a valid policy of insurance issued by it. Claim made by the
insured was paid by it and hence it was not liable to pay any additional
compensation.
5. The first respondent gave evidence as PW1. Exts.A1 to A7 proved
and marked. On the side of respondents Ext.B1 copy of insurance policy in
respect of jeep was marked.
6. In the Original Petition the petitioner calculated the damages
sustained to the car on account of the accident at Rs.50,577/-. But initially the
claim was limited to Rs.8,545/-. It was admitted that the vehicle was covered with
a policy of insurance issued by the third respondent and the third respondent had
paid an amount of Rs.42,032/- as repair charges for the damages sustained to the
vehicle. It was further averred that hence respondent No. 2 and appellant were
jointly and severally liable to pay compensation of Rs.8,545/-. Subsequently
petitioner filed I.A.No.562/1999 by which the compensation claimed was
enhanced to Rs.50,577/-. The averment in the Original Petition that the first
respondent had received Rs.42,032/- from his insurer was deleted. To the
amended Original Petition the appellant filed additional written statement
contending that the third respondent paid an amount of Rs.42,032/- to the first
MFA No.1301/2000 4
respondent as full and final settlement for the alleged damages caused to the motor
car and hence he was not entitled to get any compensation again from the
appellant. It was further contended that the first respondent was claiming amounts
which had already received to make undue advantage.
7. Tribunal found that the accident occurred due to the negligence of
the driver of the jeep and the petitioner had spent an amount of Rs.50,577/- for
the repair of the vehicle. The Tribunal after deducting the depreciation value
passed an award in favour of the first respondent allowing him to recover an
amount of Rs.33,718/- from the second respondent and appellant. The appellant/
insurer of jeep was directed to pay the compensation. Challenging that award the
second respondent who is the insurer of jeep has filed this appeal.
8. The only point arising for consideration is whether the first
respondent/petitioner is entitled to claim compensation for the damages sustained
to his vehicle from his insurer as well as the owner and insurer of the offending
vehicle. Learned counsel appearing for the appellant has strenuously argued
before me that the attempt of the first respondent is to make undue gain and double
enrichment on account of the damages sustained to his vehicle. It is argued that
the first respondent who is a Law Graduate had admitted that he had signed and
issued the receipt to his insurer after fully understanding the content of the same.
MFA No.1301/2000 5
It is argued that first respondent had received an amount of Rs.42,032/- as full and
final settlement from his insurer and hence he is not entitled to maintain another
action claiming the same damages. It is argued that there is difference between
pecuniary damages and non-pecuniary damages. It is argued that in a case of
personal injury claim the Tribunal is awarding compensation but in the case of
pecuniary damages it is being capable of being calculated in terms of money. It is
also argued that the car as such got a value which can be ascertained. The value of
the spare parts of the car can also be ascertained. It is argued that compensation on
account of the damages to the property is pecuniary damages and the same can be
quantified accurately. It is argued that a person who sustained damages to the
property received that amount from his insurer in full and final settlement cannot
be allowed to claim value of that article again from tortfeasor. It is argued that the
insurer who reimbursed the value along with claimant may file a claim for
compensation. It is argued that if there is proper subrogation the insurer alone may
maintain a claim against the tortfeasor.
9. Learned counsel for respondents has argued that the claim for
compensation is founded on common law of tort and it is not open to tortfeasor to
raise a contention that since the person who sustained damages had received
compensation from another source is not entitled to get compensation from
tortfeasor. It is argued that in a case of this nature the only question arising for
MFA No.1301/2000 6
consideration is whether the first respondent/petitioner sustained damages on
account of tort committed by the second respondent, owner of jeep. If it is found
that he sustained damages, he is entitled to recover the same irrespective of the fact
that his insurer reimbursed him the amount he had incurred for repairs of the car.
10. There are certain admitted or proved facts. First
respondent/claimant was the owner of a motor car bearing registration No.KL-5/A
3183 insured with the third respondent. On 16.2.1993 a collision took place
between that car and jeep bearing registration No.KEK 1933. The motor car
sustained damages. According to the first respondent the accident occurred solely
due to the negligence of the driver of the jeep and he sustained damages to the tune
of Rs.50,577/-. In the Original Petition it was admitted that the vehicle of the first
respondent was covered with a valid policy of insurance issued by the third
respondent and he lodged a claim for damages with his insurer and third
respondent paid an amount of Rs.42,032/- towards cost of repairs. Originally his
stand was that the actual damages sustained to the vehicle was much more than
that and hence he is entitled to that much amount also, i,e., Rs.50,577 – 42,032 =
8,545/-. Subsequently he changed his stand and contended that he is entitled to
get Rs.50,577/- as compensation from the second respondent as well as the
appellant. The only question arising for consideration is whether the first
respondent/claimant can be allowed to recover Rs.42,032/- from the owner of the
MFA No.1301/2000 7
jeep who is the primary tortfeasor in view of the fact that he received that amount
from the third respondent, his insurer.
11. The Tribunal had relied on a decision of the Delhi High Court in
Dr. A.C.Mehra v. Behari Lal (1998 ACJ 379) and held that the amount paid by
the Insurance Company of the claimant is not deductible from the compensation
awarded against the tortfeasor on the ground that such an amount was paid under a
separate contract between claimant and his insurer. It was also held that the
tortfeasor cannot take advantage of the claimant’s contract with a third party. In
Dr.A.C.Mehra’s case (supra) the learned Judge had extracted two paragraphs in
Chapter 10 from the book ‘Quantum of Damages’ by Kemp & Kemp (1986 Edn.).
A reading of the passages extracted in the decision shows that the learned author
was considering non-pecuniary damages. The learned Single Judge took a view
that there is no distinction so far as the law relating to injury is concerned. I find
it very difficult to agree with such a proposition. Whether the principles applicable
to personal injury claims can be applied as such to claims for damages to property
which is a pecuniary damage was not considered in Dr.A.C.Mehra’s case (supra).
The learned Single Judge had relied on a Division Bench decision of the Allahabad
High Court in Union of India v. Deoria Sugar Mills Ltd. (1980 ACJ 140). In
Deoria Sugar Mills’s case (supra) the plaintiff received part of compensation from
his insurer. He claimed that amount again. It was held that the plaintiff was
MFA No.1301/2000 8
entitled to get damages including the amount paid by his insurer. But it was
further held that the consignor will receive the compensation for damages as a
trustee for his insurer. After allowing the claim the court held as follows:
“………..Of course from out of a sum of
Rs.37,860/- which the plaintiff would receive from the
Union of India, a sum of Rs.33,135/- would be held by
him as a trustee for the insurance company which had
insured the machinery involved in the suit…..”
(emphasis supplied).The court had elaborately descend the law on the point. In para 9 of the judgment
a passage from ‘Marine Insurance (British Shipping Laws), Vol.10, written by
Arnold was extracted. It reads as follows:
“…………It is entirely foreign to the spirit of
contracts of indemnity that a person damnified should
recover his loss more than once; it is, therefore, clear
that if he had already recovered from a third party, there
can be no liability under the contracts of indemnity; on
the other hand, if he has not previously recovered from
such third party, but has the right to do so, there is no
reason why such third party should be allowed to allege
that his liability has been satisfied or reduced by a
payment made by a stranger to him, under a contract
with which he has nothing to do. The third party
remains liable to the person indemnified just as if there
had been no contract of indemnity. But the person
indemnified can only take the sum recovered from the
third party as trustee for the indemnifier, and similarly,
if he has not himself received any sum to which he is
entitled he is bound to afford the latter all facilities for
doing so.” (emphasis supplied)After considering various authorities it was held as follows:
“A perusal of the aforesaid authorities shows that
MFA No.1301/2000 9
the position of the insurance company in the
circumstances was, that of an indemnifier. The railway
company continues to be primarily liable for the
damages sustained by the plaintiff and it not being a
party to the contract of indemnity, cannot be absolved
of its liability to pay the damages to consignor merely
because the consignor had already recovered the money
from the insurance company, under a contract of
insurance. In such a case the consignor will receive the
compensation for damage suffered by him in trust for
the insurance company. After the consignor receives
the amount from the railway company, he will have to
make it over to the insurance company to the extent to
which it had already indemnified him. This is how the
consignor is prevented from being doubly compensated
in respect of the loss suffered by him i.e. once by
receiving the compensation from the insurance
company and again receiving the same directly from the
railway company.”(emphasis supplied)This material aspect was not considered by the learned Single Judge in
Dr.A.C.Mehra’s case (supra). So the principle laid down in Dr.A.C.Mehra’s case
(supra) cannot be relied upon as an authority to hold that a person who sustained
pecuniary damage can claim that amount from the tortfeasor as well his insurer.
12. In Union of India v. Sri Sarada Mills (AIR 1973 SC 281) it was
held that –
“…….the cause of action of the Mill against the
Railway Administration did not perish on giving the
letter of subrogation. The Mill was competent to
institute and maintain the suit against the Railway
Administration. The Mill could be answerable and
accountable to the insurance company for the moneysMFA No.1301/2000 10
recovered in the suit to the extent the insurance
company paid the respondent mill.” (emphasis
supplied)The Apex Court also held as follows:
“It is equally indisputable that an insurance
company is entitled to subrogation in accordance with
the provisions of Section 79 of the Marine Insurance
Act, 1963. Subrogation does not allow the subrogee or
the underwriter to sue in its own name. In the present
case, the insurance company has not enforced its claim
by virtue of subrogation.”
xxxxxxxxxxxx
“The respondent mill will give a valid discharge
to the Railway Administration in respect of loss and
damages. This decree will be a bar to the institution of
any suit by the insurance company in respect of the
subject matter of the suit. The respondent mill is
answerable and accountable to the insurance company
for the moneys recovered in the suit to the extent the
insurance company paid the respondent mill.”(emphasis
supplied)It was further held that the letter of subrogation did not divest the mill of its cause
of action against the Railway Administration for loss and damages.
13. So the position is clear. The insured is entitled to maintain an action
against the tortfeasor even if he had received compensation from his insurer. But
he cannot appropriate that amount which he had received from the company and he
will hold that amount as trustee of the insurer and he is answerable and
accountable to the insurance company to that extent.
MFA No.1301/2000 11
14. In this case the claim is not for damages for personal injury. It is a
pecuniary loss.
15. In Jai Bhagwan v. Laxman Singh (1994 ACJ 983) a Three Judge
Bench of the Apex Court had considered the difference between damages for
personal injuries and pecuniary loss. It was held as follows:
“In Clerk and Lindsell on Torts (16th Edn.),
referring to damages for personal injuries, it is stated:
“In all but a few exceptional
cases the victim of personal injury suffers two distinct
kinds of damage which may be classed respectively as
pecuniary and non-pecuniary. By pecuniary damage
is meant that which is susceptible of direct translation
into money terms and includes such matters as loss of
earnings, actual and prospective, and out-of-pocket
expenses, while non-pecuniary damage includes such
immeasurable elements as pain and suffering and loss
of amenity or enjoyment of life. In respect of the
former, it is submitted, the court should and usually
does seek to achieve restitutio in integrum in the sense
described above, while for the latter it seeks to award
‘fair compensation’. This distinction between
pecuniary and non-pecuniary damage by no means
corresponds to the traditional pleading distinction
between ‘special’ and ‘general’ damages, for while the
former is necessarily concerned solely with pecuniary
losses–notably accrued loss of earnings and out-of-
pocket expenses–the latter comprises not only non-
pecuniary losses but also prospective loss of earnings
and other future pecuniary damage.”
In Nazeema v. George Kuriakose (1991(2) KLJ 232) another Division Bench of
MFA No.1301/2000 12
this Court took a view that insurance money, provident fund, gratuity and pensions
payable to the dependents upon the death of a deceased are not deductible from
the amount of compensation payable. It was further held that these benefits are not
received by them by reason of the death though it was payable or receivable at the
death of the deceased. It was also held that the value of the accelerated benefit of
these are also not deductible. In New India Assurance Co. Ltd. v. C.S.Ouseph
and others (1993 ACJ 203) a Division Bench of this Court held that the injured
claimant cannot claim medical expenses which he had incurred if he had already
received the same by way of reimbursement.
16. In Seetha Lakshmi Krishnan v. Gian Prakash (1993 ACJ 206) a
learned Single Judge of Delhi High Court held that the amounts received by the
injured under life insurance policy, pension, gratuity, etc. are not to be deducted.
In Helen C. Rebello v. Maharashtra S.R.T.C. ((1999) 1 SCC 90) the Apex
Court had held that provident fund, family pension, cash balance, shares, fixed
deposits, etc. cannot be termed as pecuniary advantages and the same cannot be
deducted while fixing the quantum. In Geethakumari v. Rubber Board (1994
(1) KLT 674) a Division Bench of this Court held that salary of a dependent who
was given employment on compassionate grounds on the death of a person who
was injured in a motor accident cannot be deducted from the compensation
payable on account of his death. It will not amount to a pecuniary damage.
MFA No.1301/2000 13
17. But the facts of the above stated cases show that all those cases arose
from personal injury claims which are non-pecuniary damages. So the principles
laid down in those decisions can have no application to a case for recovery of
pecuniary damages.
18. In Jacob Joseph v. Devassy (2005 (2) KLT 259) an elephant died in
a motor vehicle accident. The elephant as well as the vehicle were insured by the
same insurance company. The owner of the elephant received compensation from
his insurer and executed a letter of subrogation in favour of the insurer. A
Division Bench of this Court held that since the elephant and offending vehicle
were insured with the same insurer the owner of the elephant is not entitled to
claim compensation from the owner of the vehicle on the ground that the owner of
the vehicle is to be indemnified by the same insurer who paid the compensation to
the owner of the elephant and obtained a letter of subrogation.
19. In this case the damage sustained to the property could be calculated
accurately. In New India Assurance Co. Ltd. v. T.M.Chayapathi (IV (2005)
ACC 61) a learned Single Judge of the Andhra Pradesh High Court had held as
follows:
“So, respondent who received
MFA No.1301/2000 14
compensation from the insurer of his van for the
damage caused to it in the same accident, cannot
recover the same amount from owner or insurer of the
offending vehicle also. It should be kept in view that
principles for computing damages to the victims in a
motor accident are different from the principles
for computing damages to a property damaged in an
accident, obviously because limbs of a human being,
which are fractured in an accident, cannot be replaced,
an even if operated they may not gain the normal
shape, and human life, if lost, cannot be brought back.
But damaged property can be replaced, if not easily,
with some difficulty. Obviously for that reason some
decisions laid down that ex gratia received from other
sources cannot be taken into consideration for arriving
at the damages payable to a victim or his legal
representatives in a motor accident. In cases of death
of a victim in a motor accident decisions held that
since the victim would have had the benefit of the life
insurance policy even if he survived up to the age upto
which it was taken, the policy amounts received from
the Life Insurance Corporation cannot be taken into
consideration for computing the damages payable to
the legal representatives of the deceased victim. In
case of insurance of a motor vehicle question of
insurer paying any amount to the insured, if no risk
takes place, does not arise. So the principles
governing computation of damage to victim in an
accident cannot be applied to damage for property in
an accident”.
20. In this case what is claimed is not fair compensation but the
compensation on account of the pecuniary damages sustained. In fact, originally
the first respondent/claimant wanted only the difference between the amount paid
by his insurer and the amount alleged to have been spent by him. Third
respondent, insurer of the first respondent had filed a written statement contending
MFA No.1301/2000 15
that the first respondent received the amount by executing a receipt admitting that
he received the amount in full and final settlement. It is very pertinent to note that
third respondent is not making any claim for the amount paid by it. The third
respondent paid an amount of Rs.42,032/- to the first respondent. The Tribunal
found that the first respondent is entitled to get only an amount of Rs.33,718/- as
compensation on account of the damages sustained to his vehicle. There is no
challenge against the quantum. Even if the first respondent receives the amount
awarded he has to handover the same to the third respondent.
21. As I have already stated, if the insurer after obtaining a letter of
subrogation from the first respondent had filed an Original Petition or it had also
joined in filing the Original Petition it would have been entitled to that amount.
Even assuming that first respondent is entitled to receive the amount he can only
receive the same in trust. But the insurer has not made any claim over the
amount though it is made a party to this proceedings. So the first respondent
cannot be allowed to make any double benefit. So he is not entitled to get any
compensation in this proceedings. The appeal is only to be allowed.
In the result, appeal is allowed. The award passed by the Tribunal in O.P.
(MV) No.1123/1995 is hereby set aside and Original Petition is dismissed.
MFA No.1301/2000 16
C.M.P.No.7577/2000 in M.F.A.No.1301/2000 will stand dismissed.
K. PADMANABHAN NAIR,
JUDGE.
cks
MFA No.1301/2000 17
K.PADMANABHAN NAIR, J.
M.F.A.No.1301 of 2000
JUDGMENT
27th March, 2008.