JUDGMENT
R.P. Vyas, J.
1. Since both the aforesaid appeals arise out of the same judgment and relate to the same incident, they are, therefore, decided by this common judgment.
2. The fact giving rise to the instant appeals are that Ghewar Chand, Madan Lal, Kishan Lal, Ashok Kumar and Pawan Kumar were going from Jodhpur to Balotra (Pachpadra) on 31.10.1980 in a bus belonging to Rajasthan State Road Transport Corporation. When the bus reached at village Dhawa, a strike call was given by the Corporation employees and, therefore, the bus did not proceed ahead from Dhawa and left the passengers at Dhawa Bus Stand.
3. A jeep bearing registration No. RJT 340, owned by Pukh Raj, was coming from Jodhpur and was going towards Jasol, stopped at the bus stand, Dhawa. A request was made to the owner of the jeep Pukh Raj to give them lift as they will not be able to get some other conveyance. They requested him to leave them at Pachpadra and Balotra respectively. Pukh Raj agreed and allowed them to sit in the jeep. After taking these five or six passengers, the jeep proceeded from Dhawa to Pachpadra and Balotra respectively. After the jeep ran about a kilometre, it was stopped by the driver to check the condition of the engine as the engine was recently repaired. Pukh Raj (owner of the jeep) and Pratap (driver of the jeep) came out from the jeep and after checking the engine, went to answer the call of nature, while the other persons remained sitting in the jeep.
4. At about 9.30 p.m., a truck bearing the registration No. RRK 8435, which was being driven by Gurdayal Singh alias Daali rashly and negligently came from Jodhpur side and hit the jeep, as a result of which the jeep overturned and Ghewar Chand, Madan Lal and Bhanwar Lal came beneath the jeep. Ghewar Chand, aged 40 years and Madan Lal, aged about 15 years both died on the spot, while Bhanwar Lal was taken to Balotra Hospital, where he was declared dead. Kishan Lal, Ashok Kumar and Pa-wan Kumar also received grievous injuries in this accident. The truck driver did not stop the truck after the accident and ran away from the place of accident.
5. Legal representatives of the deceased Bhanwar Lal did not file any claim petition, whereas the legal representatives of Ghewar Chand, his widow Champa Devi and others filed Claim Petition No. 27 of 1982 for grant of compensation in the sum of Rs. 8,85,000. The parents of deceased Madan Lal, viz., Sayra Devi and Amrit Lal filed Claim Petition No. 28 of 1982 for the award of compensation amounting to Rs. 2,00,000.
6. During the pendency of the claim petition, Amrit Lal (the father of deceased Madan Lal) died and, therefore, his legal representatives were taken on record.
7. Ashok Kumar, who received injuries in the accident, also filed Claim Petition No. 29 of 1982 for the award of Rs. 50,000 as compensation.
8. The claimants and the defendants led their respective evidence before the Judge, Motor Accidents Claims Tribunal, Balotra.
9. The learned Judge, after hearing the submissions of learned Counsel for the parties and examining the documents as well as the evidence led by both of them, passed the award dated 17.5.1988 and awarded a sum of Rs. 6,40,000 as compensation with interest at the rate of 12 per cent per annum to the claimants–Champa Devi and others; Rs. 2,15,000 as compensation with interest at the rate of 12 per cent per annum from the date of filing the claim petition to the claimants-Sayra Devi and others and Rs. 42,000 as compensation along with interest at the rate of 12 per cent per annum from the date of filing the petition were awarded to the claimant–Ashok Kumar. We are not concerned in these appeals with the last award.
10. The insurance company and owner of the vehicle as the transport company under whose control the truck in question was being driven, filed separate appeals. Out of the 9 appeals, 3 appeals of Milap Transport Co. were rejected as barred by time, award against it became final. The remaining 6 appeals were heard together. The learned single Judge partly allowed the appeals by reducing the amount of compensation in all the three cases.
11. In D.B. Civil Special Appeal (Civil) No. 11 of 1997 arising out of S.B. Civil Misc. Appeal No. 192 of 1988 qua Claim Petition No. 27 of 1982 by Champa Devi and others, legal representatives of the deceased Ghewar Chand award was reduced from Rs. 6,40,000 to Rs. 1,83,000 only. Likewise, in D.B. Civil Special Appeal (Civil) No. 4 of 1997 arising out of S.B. Civil Misc. Appeal No. 114 of 1988 qua Claim Petition No. 28 of 1982 by appellant, Sayra Devi, who is the mother of the deceased Madan Lal, was awarded a sum of Rs. 2,15,000 as compensation, but the learned single Judge reduced the amount of compensation to a sum of Rs. 50,000 only.
12. Being aggrieved by the judgment dated 22.2.1996, the instant appeals have been preferred before this court.
13. About claim of Sayra Devi, mother of deceased Madan Lal, it is submitted by the learned Counsel for appellants that the learned single Judge was in error in holding that mother of the deceased Madan Lal is entitled to receive a sum of Rs. 50,000 only as compensation, on account of shock and mental agony suffered by her due to death of her son. Appellant led evidence to show that deceased Madan Lal was earning Rs. 25,000 per year. Out of Rs. 25,000, the deceased was spending Rs. 15,000 on his family including his mother. But the learned Judge ignored this aspect of the matter by holding that it is only an expectation, which might or might not have been fulfilled. Apart from that Sayra Devi was aged about 45 years and Tribunal held that for 20 years, Madan Lal would have given Rs. 10,000 per year to his family members.
14. It is further submitted by the learned Counsel for the appellants that deceased Madan Lal would have earned at least Rs. 25,000 when he would have attained the age of 25 years. His mother would have at least received the monetary help to the extent of Rs. 10,000 to Rs. 15,000 per year. But, the learned single Judge did not allow any amount on this head. According to the learned Counsel for the appellants, since the parents had lost their son of 17 years in the accident, so Rs. 50,000 awarded by the learned single Judge is insufficient and inadequate. The learned Counsel submitted that the learned Judge did not take into consideration the future prospects and the high rise in price index.
15. It is also submitted by the learned Counsel for the appellants that the learned single Judge has not looked into the case in proper perspective and has committed error in holding that insurance company is only liable to the extent of Rs. 50,000 as, according to the learned single Judge, its liability is limited.
16. About claim of Champa Devi and others, legal representatives of deceased Ghewar Chand, it is also contended by the learned Counsel for the appellants that the learned single Judge has seriously erred in reducing the award of compensation by taking current income of the deceased to be even less than his last return of income in not considering future prospects of the deceased who was only 40 years of age at the time of death and in adopting multiplier of 12 only with no basis, by ignoring that his legal representatives were not only his aged parents, but included his young widow and children.
17. It is also contended by the learned Counsel for the appellants that the learned single Judge has fixed Rs. 5,000 as loss of consortium as against Rs. 2,00,000, awarded by learned Tribunal. Learned Counsel submits that, in fact, the deceased left 4 minor children and a widowed mother and wife. All the appellants were dependent on the income of the deceased and the deceased was spending a very petty amount on his personal expenditure. Learned Counsel submits that the learned Tribunal was justified in holding that the deceased used to spend Rs. 25,000 per year on his family and the appellants are entitled to get compensation by applying the multiplier of 25. Learned Counsel submits that the deceased Ghewar Chand was an income taxpayer. His assessment orders (Exhs. 29 to 33) show that he was paying income tax on his income which was disclosed as Rs. 31,310 for 1980-81. Apart from that he was also an agent of L.I.C. and had derived income from commission also. According to the learned Counsel, the Tribunal found the income of the deceased as Rs. 30,000 per year, whereas, on the contrary to record, learned single Judge has wrongly calculated the claim by holding that the deceased was only earning Rs. 22,000 per year and when 1/3rd amount is deducted from his income, dependency comes to Rs. 15,000 only.
18. According to the learned Counsel for the appellants, Claims Tribunal was justified in awarding Rs. 2,000 to each of the dependants of the deceased on account of mental agony and shock, etc., whereas the learned single Judge, has completely ignored this fact without any basis. It may be mentioned that on account of untimely and sudden death of their only earning member, the appellants have suffered a great shock.
19. It is argued by the learned Counsel for the appellants that the learned single Judge has erred in holding that insurance company is only liable to satisfy the claim up to statutory limit. According to learned Counsel for the appellants, while hearing an appeal against the award, the learned single Judge has acted illegally and erroneously in interfering with the quantum of compensation. It is also argued by the learned Counsel for the appellants that the learned single Judge has not considered the future prospects of the deceased. Learned single Judge has also not considered the compensation under the heads of consortium and love and affection. In this connection, the learned Counsel for the appellants has relied on 2004 WLC (UC) 789, 2004 WLC (UC) 791, 2005 (8) RDD 3025, 2005 (10) RDD 4577 and 2005 WLC (UC) 798.
20. It is also argued by the learned Counsel for the appellants that as per Sub-section (2) of Section 149 of the Motor Vehicles Act, 1988 [Section 96 (2) of the Act, 1939], the insurance company is entitled to defend the action on the grounds enumerated in the aforesaid Sub-section and no other ground is available to it.
21. Section 149(2) reads as under:
149(2). …an insurer…shall be entitled to…defend the action on any of the following grounds, namely-
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d)without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular.
22. According to the learned Counsel for the appellants, the learned single Judge dismissed the appeals filed by the owner-insured and the two appeals filed by the insurance company were partly allowed and the award amounts were reduced in the appeals filed by the insurance company, whereas as per the judgment passed in the case of National Insurance Co. Ltd. v. Nicolletta Rohtagi , the appeals filed by the insurance company are not maintainable. Thus, both the grounds were not available under Section 149(2) of Motor Vehicles Act, 1988 or Section 96(2) of the Motor Vehicles Act, 1939.
23. Learned Counsel for the appellants pointed out that the column of limits of liability in the insurance policy (C 80/2), under Section II-I(i) was blank and under Section II-I(i), the claim for property was mentioned Rs. 50,000. Thus, according to the learned Counsel for the appellants, it is clear that the third party risk was unlimited and for property damage, there was a limited liability of Rs. 50,000.
24. Learned Counsel for the appellants also pointed out that as per India Motor Tariffs issued by the Tariff Advisory Committee (General Insurance), the premium of truck having the carriage capacity of 9 tonnes was as follows:
Town Mofussil
(Rs.) (Rs.)
Premium up to 5 tonnes 761 911
Rs. 150 for additional
4 tonnes 600 600
Liability of public risk 97 125
------- -----
1,458 1,636
------- -----
25. In this context, the learned Counsel for the appellants submits that as per the Tariff, the premium of town rate was lesser than the mofussil area, because mofussil rates were charged all over India, whereas town rates were charged for all over India only under Section II-I(i) and for other sections, only town geographical area was covered. As per the policy exhibited, the geographical area shown under Section II-I(i) was India and under all other sections, a rubber stamp was affixed and geographical area of ‘Bhatinda’ was shown. According to the learned Counsel, it is clear that the basic premium, including the liability of public risk was only Rs. 1,458, where the insurance company has charged Rs. 1,511. Thus, the insurance company has charged the extra premium of Rs. 53. In this way, the liability of the insurance company towards third party is unlimited. In support of his contention, he has relied on the case of National Insurance Co. Ltd. v. Laxmi .
26. Apart from that, there is an avoidance Clause in the policy (below Schedule III), which reads as under:
Avoidance of certain terms and rights of recovery: Nothing in this policy or any endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act, 1939 (Section 96). But the insured shall repay to the company all sums paid by the company which the company would not have been liable to pay, but for the said provision.
27. Thus, the learned Counsel for the appellants strenuously submits that in view of the above, for the sake of argument, if it is assumed that the liability of the insurance company is limited to the extent of Rs. 50,000, then also, it is clear from the policy that insurance company has to pay to the claimants the entire amount awarded by the Claims Tribunal and, thereafter, it can recover the excess amount from the insured. In support of his contention, he has placed reliance on the case of Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu , in which their Lordships of the Apex Court considered the Clause in the policy and held that under the insurance policy, the limit of company’s liability is only up to Rs. 50,000, but looking to the avoidance clause, the insurance company was held liable to pay the entire award amount to the claimants and it was held by their Lordships of the Supreme Court that the insurer can recover the excess amount from the insured by executing this award. Apart from that, in National Insurance Co. Ltd. v. Swaran Singh , it was held that the insurance company is liable to make the entire award to the claimants and then they may recover beyond their liability from the insured. In National Insurance Co. Ltd. v. Baljit Kaur and Oriental Insurance Co. Ltd. v. Naiijappan , again, their Lordships of the Supreme Court held that in limited liability, insurance company is liable to the claimants for the entire award amount, but entitled to recover the amount from the insured without filing a suit and insurance company may initiate proceedings before the executing court. A Division Bench of Gujarat High Court in Oriental Fire & Genl. Ins. Co. Ltd. v. Firdos Pervez Mysorewala , considered the judgment of Constitutional Bench of Hon’ble Apex Court given in New India Assurance Co. Ltd. v. C.M. Jaya and held that the Constitutional Bench had no occasion to consider the avoidance Clause in the insurance policy which is considered in the case of Amrit Lal Sood v. Kaushalya Devi Thapar and Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu . Applying the principles laid down in the above referred two decisions of Hon’ble Apex Court to the facts and circumstances of the present case and more particularly, the terms and conditions stipulated in insurance policy, the court was of the opinion that though the liability of the insurance company is limited to the extent of Rs. 50,000 only, the insurance company is liable to pay the entire amount of award to the claimants and upon making such payment, the insurance company can recover the excess amount from the insured by executing the award against the insured to the extent of such excess amount as per Section 96(4) of the Motor Vehicles Act, 1939. Thus, Gujarat High Court, after considering all the judgments available on the subject, held that in case of limited liability, the insurance company shall make payment of entire amount of award and after making such payment, the insurance company is entitled to recover the excess amount from the insured. Learned Counsel for the appellants pointed out that Rajasthan High Court in Ram Lal v. Hasti Mal 2006 ACJ 84 (Rajasthan), after considering the five-Judge Bench decision given in C.M. Jaya’s case (supra) and all other judgments, held that in the case of limited liability, the insurance company will satisfy the award to the claimants and can recover the excess amount from the insured by execution. There is no reason for depriving the claimant from the benefit of insurance coverage only because of the wrong which was not committed by him. Once there is a valid contract of insurance, the insurer cannot avoid its liability to pay compensation to third party. If view is taken otherwise, then without there being any fault of the beneficiary and because of fault of insured, the beneficiary will be deprived from his valuable right because of none of his fault. The view that the insurer shall have initial liability to pay the compensation to claimant even in case where insurer proved his defence to avoid his liability, it will not only be just and proper, but it will subserve the purpose of the Act.
28. In reply, it is submitted by learned Counsel for the respondents that the judgment of the learned single Judge is based on sound reasonings and it does not require any interference by this court. The compensation awarded by the learned Tribunal is highly excessive looking to the facts and circumstances of this case.
29. It is further submitted by the learned Counsel for the respondents that as per Section 95 of the Motor Vehicles Act, the liability of the insurance company is limited to the extent of Rs. 50,000 and the learned Tribunal has committed an error in holding the insurance company to indemnify the whole of the claims. It is submitted by learned Counsel that neither the driver of the truck, nor any other eyewitness of the occurrence has been produced in this case and from the evidence of Pratap, the driver of the jeep, it is established that it was only on account of rash and negligent driving of the truck by its driver Gurdayal Singh that the accident took place, which resulted in the death of three persons, viz., Ghewar Chand, Madan Lal and Bhanwar Lal and caused injuries to Ashok Kumar, etc.
30. It is also submitted by the learned Counsel for the respondents that the insurance company is liable to the extent of its statutory liability in each claim.
31. According to the learned Counsel for the respondents, the statutory liability of the insurance company under Section 95(2) of the Act, at the relevant time, was Rs. 50,000. Owner of the vehicle did not pay any extra premium to cover the unlimited liability. Apart from that, the cover note of the insurance company shows that the insurance company accepted the liability to the tune of Rs. 50,000 only. Not only that, but also, no specific agreement was arrived at between the owner and the insurance company to cover unlimited liability. Thus, in the absence of any contract to the contrary, the liability of insurance company to indemnify the claim is limited to the extent of Rs. 50,000 only. In this view of the matter, the learned Counsel pointed out that the liability of the insurance company has rightly been limited to the extent of Rs. 50,000 along with interest at the rate of 12 per cent per annum by the learned single Judge.
32. It is contended by learned Counsel for National Insurance Co. Ltd., respondent that the vehicle bearing registration No. RRK 8435 was insured with National Insurance Co. Ltd. and is, admittedly, a goods vehicle and the accident took place on 31.10.1980, therefore, the rights and liabilities of the parties are required to be decided on the basis of Motor Vehicles Act, 1939, as it stood on the date of accident. Apart from that Section 95(2)(a) provides that where the vehicle is a goods vehicle, the policy of insurance shall cover liability incurred in respect of any one accident up to the limit of Rs. 50,000 in all. The relevant provision, as it stood on the date of the accident, reads as under:
95 (2). Subject to the proviso to Sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely-
(a) where the vehicle is a goods vehicle, a limit of fifty thousand rupees in all including the liabilities, if any, arising under the Workmen’s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to employees (other than the driver), not exceeding six in number, being carried in the vehicle.
33. In support of his aforesaid submissions, learned Counsel for the respondent National Insurance Co. Ltd. has relied on the case of National Insurance Co. Ltd. v. Jugal Kishore 1988 ACJ 270 (SC), in which it was observed that even though it is not permissible to use a vehicle, unless it is covered at least under an ‘Act only’ policy, it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured a higher premium than for an ‘Act only’ policy is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under Sub-section (2) of Section 95 of the Act. For this purpose, a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf. Likewise, if risk of any other nature for instance, with regard to the driver or the passengers, etc., in excess of statutory liability, if any is sought to be covered it has to be clearly specified in the policy and separate premium paid therefor.
34. Learned Counsel for the respondent National Insurance Co. Ltd., while pointing out that in case 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, has relied on the five-Judge Bench judgment delivered in the case of New India Assurance Co. Ltd. v. C.M. Jaya . In that case, the Larger Bench held that the liability of the insurer is limited, as indicated in Section 95 of the Act, but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But, in the absence of any such Clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability.
35. Learned Counsel for the respondent National Insurance Co. Ltd. also relied on the case of National Insurance Co. Ltd. v. Keshav Bahadur , in which it was held by their Lordships of the Supreme Court that the liability of the insurer is limited as indicated in Section 95 of the Act. But it is open to the insured to make payment of additional higher premium and for the insurer to accept higher risk covered in respect of third party also. But, in the absence of any such Clause in the insurance policy and proof of payment of additional premium, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. It was also held that even if a vehicle is the subject-matter of comprehensive insurance unless a higher premium is paid on that score, limits of the liability with regard to third party risk do not become unlimited or higher beyond the statutory liability fixed. For this purpose, a specific agreement has to be arrived at between the insured and the insurer and separate premium has to be paid in respect of additional amount of liability undertaken by the insurer in that regard.
36. Thus, while relying on the case of National Insurance Co. Ltd. v. Bommithi Subbhayamma , the learned Counsel for respondent National Insurance Co. Ltd. submitted that claimants can recover the awarded compensation from the owner of the vehicle and the insurance company is not liable to make the entire payment to the claimants.
37. Lastly, learned Counsel for the respondent National Insurance Co. Ltd. has relied on the case of National Insurance Co. Ltd. v. Prembai Patel , in which it was held by their Lordships of the Apex Court that the insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy whereunder the entire liability in respect of the death of or bodily injury to any such employee as is described in Sub-clauses (a), or (b), or (c) of proviso (i) to Section 147(1)(b) may be fastened upon the insurance company and the insurance company may become liable to satisfy the entire award. However, for this purpose, the owner must take a policy of that particular kind for which he may be required to pay additional premium and the policy must clearly show that the liability of the insurance company in case of death of or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen’s Compensation Act.
38. Learned Counsel for the respondent National Insurance Co. Ltd., by way of written arguments, submitted that the insurance company has preferred the appeal on the ground that the liability of the insurance company is limited to the extent of Rs. 50,000 only as per Section 95 of the Act of 1939. Owner had preferred separate appeals challenging quantum. Therefore, it is not correct to say that the insurance company has preferred the appeal challenging the quantum. The question of quantum was liable to be considered in owner’s appeal. Hence appeals by insurance company were not incompetent which were confined to limit of its liability.
39. With respect to tariff premium, it is submitted by learned Counsel for the respondent National Insurance Co. Ltd. that tariff premium amounting to Rs. 911 + 1/2 per cent insured estimated value (I.E.V.) was payable up to 5 tonnes and Rs. 150 were payable for each additional tonne. According to the learned Counsel for the respondents, the said vehicle was insured against the carrying capacity of 9 tonnes, therefore, the company has charged Rs. 911 + Rs. 150×4 = Rs. 1,511. He submits that the insurance company has not charged any additional premium in order to undertake the higher liability than the statutory limit of Rs. 50,000. It is also submitted by the learned Counsel for respondent National Insurance Co. Ltd. that if it is presumed that the insurance company has charged Rs. 1,511 against the premium of Rs. 1,458, then too, this excess amount (Rs. 53) cannot be adjusted so as to cover the unlimited liability, because the acceptance of any amount cannot be adjusted, as no specific agreement had been arrived at between the insurer and the insured by accepting the additional premium. Thus, according to the learned Counsel for National Insurance Co. Ltd., the liability of the insurance company is limited to the extent as provided under Section 95(2)(a) of the Act, 1939. Apart from that, since the appellants have neither raised such questions before the learned single Judge, nor before Claims Tribunal, therefore, now, for the first time, they (the appellants) are not entitled to raise these questions before this court.
40. With regard to the case National Insurance Co. Ltd. v. Laxmi , relied on by appellants, it is submitted by the learned Counsel for the respondents that this authority is not applicable to the facts and circumstances of the instant case as, in that case, in paras 9 and 21, it was categorically held that the insurance company has charged additional premium towards public risk and its liability towards the third party is unlimited, whereas, in the present case, according to the learned Counsel for the respondents, no such additional premium was charged by the company to undertake the higher liability than the statutory limit of Rs. 50,000.
41. We have heard the learned Counsel for both parties and perused the respective authorities relied upon by them.
42. It is admitted position that the jeep in question was parked by the driver at left side and that too on kacha road by leaving 12 ft road for incoming and outgoing vehicles. It is also admitted fact that truck No. RRK 8435 was being driven by the driver, Gurdayal Singh alias Daali rashly and negligently, which hit the jeep, causing instantaneous death of two persons, namely, Ghewar Chand and Madan Lal, while the third one–Bhanwar Lal died on the way, taking him to Balotra. Apart from that, Kishan Lal, Ashok Kumar and Pawan Kumar sustained serious injuries. It is also admitted position that after hitting the jeep, the truck driver ran away from the place of occurrence along with the truck. Thus, looking to the facts and circumstances of the case, learned Tribunal has awarded a claim of Rs. 6,40,000 in favour of Champa Devi with effect from 13.5.1981, i.e., the date of filing the claim application along with interest at the rate of 12 per cent per annum. On account of the comprehensive policy, insurance company has been held liable in each case to indemnify the entire amount to the owner of vehicle in question. The claimed amount has been disbursed like that Champa Devi would be entitled to get Rs. 3,00,000 and the remaining claimants would be entitled to get the amount in equal. That amount would be paid to each claimant, in addition to the amount awarded for loss of consortium. Sayra Devi would be entitled to get the award of Rs. 2,15,000 along with interest at the rate of 12 per cent per annum w.e.f. 13.5.1981. On account of being comprehensive policy, insurance company has been held liable by learned Tribunal to indemnify the amount awarded to the owner of the vehicle. Sayra Devi would be entitled to get the amount of Rs. 5,000 as loss of consortium and the other claimants would be entitled to get Rs. 2,000 in the same head. The claim of Ashok Kumar was also allowed by the Tribunal and non-claimants were held responsible jointly and severally to pay a sum of Rs. 42,000 along with interest at the rate of 12 per cent per annum w.e.f. 13.5.1981.
43. So far as D.B. Civil Special Appeal No. 4 of 1997 Sayra Devi v. National Insurance Co. Ltd. is concerned, it may be noticed that the principal reason for reducing the compensation awarded by the Tribunal was that father of the deceased had died during the pendency of proceedings and, therefore, no compensation was awardable qua father or his legal representatives. Hence to that extent, amount of compensation was reduced. We are of the opinion that this approach of the learned single Judge is erroneous. Merely because claimant died during the pendency of the application, his survivors do not lose the right to pursue and claim the compensation as on the date of application. This is supported by provision for allowing interest from the date of application. Further, whether the claimant is one or more does not affect the total sum to be awarded as compensation. The compensation in the circumstances remains one sum to be distributed amongst all the claimants, if there are more than one. The question of apportionment is not relevant, while considering what compensation is to be awarded.
44. It may be pointed out that the claimants claimed an amount of Rs. 2,00,000 in the Claim Petition No. 28 of 1982 Sayra Devi v. Gurdayal Singh, filed before the Claims Tribunal. According to claimants deceased Madan Lal was a good, brilliant and talented student, studying in class IX. The normal age in their family is 70 to 75 years and after attaining the majority and completing the education, the deceased would have served the family at least for a period of 20 years. The claimants claimed before Claims Tribunal Rs. 1,00,000 on account of loss of dependency from the business and Rs. 1,00,000 on account of shock and mental agony suffered by them, Madan Lal was inducted in the cloth business and was said to be earning Rs. 25,000 per year from the business and would have given Rs. 10,000 per year to the family for 20 years. His mother and father sustained shock and mental agony due to the death of Madan Lal. It was also stated that due to the shock of Madan Lal, his father died on 18.9.1981. Thus, the Tribunal awarded a sum of Rs. 2,00,000 to Sayra Devi, wife of Amrit Lal and the remaining applicants–Kantilal, Shantilal, Rajendra, Prafulla d/o Amrit Lal, Santosh were awarded Rs. 2,000 each along with Rs. 5,000 to Sayra Devi, according to the decision of High Court of Rajasthan in Gavantkaur’s case. Thus, a total sum of Rs. 2,15,000 along with 12 per cent interest from the date of filing the claim petition till the date of realisation was awarded by the Claims Tribunal.
45. Apparently, the Tribunal has also erred in awarding compensation at a sum larger than claimed and application of 20 as multiplier was also highly excessive. To such extent, the award of Rs. 2,15,000 was excessive, but reduction of such amount to Rs. 50,000 only is also too inadequate.
46. In appeal, the learned single Judge reduced the amount from Rs. 2,15,000 to Rs. 50,000 in respect of Sayra Devi and held that since Amrit Lal died during the pendency of the claim petition, his legal representatives are not entitled for any compensation. However, an amount of Rs. 50,000 on all counts will be sufficient to justify the claim of the claimant Sayra Devi. The learned single Judge also held that the amount of Rs. 2,15,000 awarded by the trial court is highly excessive which deserves to be reduced from Rs. 2,15,000 to Rs. 50,000 along with interest at the rate of 12 per cent from the date of filing of the claim petition. The learned single Judge further also observed in his judgment that it is only Sayra Devi, the mother of the deceased, Madan Lal, who will be entitled for this amount of compensation and interest and as the statutory liability of the insurance company to indemnify the claim, at the relevant time, was Rs. 50,000 along with interest, therefore, the insurance company along with the other respondents, will be jointly and severally liable to make payment of this amount of compensation along with the interest.
47. Deceased was a bright boy of 17 years with bright prospect. Had the accident taken place post-amendment in Motor Vehicles Act by inserting Schedule, the assumed income could have been assessed in the absence of any income to be Rs. 15,000 per annum and the formula compensation would have been about Rs. 2,75,000. In the present case, the deceased was already inducted in the business and was earning about Rs. 25,000 per annum. Even if it is taken to be exaggerated, we may safely confine it to Rs. 15,000 per annum looking to the period when accident took place, the amount of shock and agony suffered by the parents losing their only son.
48. Thus, an award of Rs. 1,70,000 along with 12 per cent interest from the date of filing claim petition till realisation of the amount, would have been just and fair determination. Reduction of amount to Rs. 50,000 by the learned single Judge was not justified. In this view of the matter, the quantum of compensation (Rs. 50,000) awarded by the learned single Judge is enhanced to Rs. 1,70,000.
49. With regard to D.B. Civil Special Appeal No. 11 of 1997 Champa Devi v. National Insurance Co. Ltd., it is pertinent to observe here that the deceased Ghewar Chand was a trader, industrialist and the main partner in the firm as well as an insurance agent for the last 20 years at Balotra. As per his return of income submitted in 1981, his annual income was over Rs. 31,000. The accident took place in 1981. Thus, in these circumstances, the amount of Rs. 25,000 as loss of income to claimant as determined by the M.A.C.T. cannot be said to be excessive so as to warrant interference in that finding. However, multiplier of 25 years’ applied to the said income appears to be excessive. Looking to longevity of life of his parents and adverse expectancy of life, a multiplier of 16 appears to be justified. Hence, an amount of Rs. 4,00,000 is a just amount of compensation on account of loss of income. Rs. 30,000 is considered as a just and fair amount on account of shock suffered, mental agony and for the loss of consortium, love and affection and expenses in relation to funeral rituals and customary rites.
50. Thus in our opinion, an award of Rs. 4,30,000 would have been just and fair determination. Reduction of compensation awarded to legal heirs of Ghewar Chand to an amount less than this by learned single Judge was not justified. Hence, quantum of compensation awarded by the learned single Judge is enhanced to Rs. 4,30,000 which restricts the reduction in amount of compensation awarded by the M.A.C.T. to the aforesaid sum.
51. With regard to the limits of liability of insurance company under Sections 95 (2) and 96(4) of Motor Vehicles Act, 1939 [Section 149(5) of the Motor Vehicles Act, 1988], we are inclined to accept the contention of the insurance company that no additional amount was paid to insurance company as premium to undertake unlimited liability to indemnify the insured against third party risk.
52. In view of the facts and circumstances of the case and in the light of the aforesaid authorities discussed in earlier stage of this judgment, we may observe that under the insurance policy, the limit of company’s liability in respect of any one claim or series of claims arising out of one event is Rs. 50,000 only. But, the avoidance Clause of the policy provides that nothing in this policy shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of Section 96 of the Motor Vehicles Act, 1939. However, the insured shall repay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions of the Act. The above Clause does not enable the insurance company to resist or avoid the claim made by the claimant. The Clause will arise for consideration only in a dispute between insurer and the insured. The question whether under the said clause, the insurer can claim repayment from the insured is left open. As per avoidance Clause in the insurance policy, the insurance company was liable to indemnify the whole extent of liability towards the claimant notwithstanding the limit of liability of the insurance.
53. The Act contemplates the possibility of the policy of insurance undertaking liability to third parties providing such a contract between insurer and the insured, that is, the person who effected the policy, as would make the company entitled to recover the whole or part of the amount it has paid to the third party from the insured. The insurer thus acts as security for the third party with respect to its realising damages for the injuries suffered, but vis-a-vis the insured, the company does not undertake that liability or undertake it to a limited extent. It is in view of such a possibility that various conditions are laid down in the policy. Such conditions, however, are effective only between the insured and the company and have to be ignored when considering the liability of the insurance company to third parties.
54. We may also observe that in the absence of payment of additional premium as well as specific agreement executed between insured and insurer, liability of the insurance company is limited to the extent of Rs. 50,000 only, but looking to the facts and circumstances of the instant case, particularly the avoidance Clause in the policy itself, the insurance company is liable to pay the entire amount of the award to the claimants. However, the insurance company can recover the excess amount from the insured by executing the award against the insured to the extent of the excess amount paid by the insurance company. It is amply clear from the avoidance Clause as well as the terms and conditions stipulated in the policy that the insurance company has to pay to the claimants the entire amount and, thereafter, it can recover the excess amount from the insured by execution. There is no reason for depriving the claimants from the benefit of insurance coverage only because of the wrong which was not committed by him. Once there is a valid contract of insurance, the insurer cannot avoid its liability to pay compensation to the third party.
55. It is pertinent to observe that the contract between the insured and the company may not provide for all the liabilities which the company has to undertake vis-a-vis the third parties, but in view of the avoidance Clause and the provisions of the Act, once the company has undertaken liability to third parties incurred by the persons specified in the policy, the third parties’ right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy.
56. Looking to the facts and circumstances of the case and more particularly, the terms and conditions stipulated in the insurance policy as well as the avoidance clause, we are of opinion that though the liability of the insurance company is limited to the extent of Rs. 50,000 only in respect of each claim, but the insurance company is liable to pay the entire amount of award to the claimants as mentioned above and upon making such payment, the insurance company can recover the excess amount from the insured by executing the award against the insured to the extent of such excess amount. Thus, despite the liability of insurance company being limited, it (the insurance company) shall make payment of the entire amount of award and after making such payment, the insurance company can recover the excess amount from the insured by execution.
57. Consequently, both the appeals are partly allowed. The judgment of the learned single Judge dated 22.2.1996 as well as the award dated 17.5.1988 passed by the Judge, Motor Accidents Claims Tribunal, Balotra stand modified as indicated above.