26
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO.No.56/1989
Date of Decision: 3rd August, 2009
%
UNITED INDIA ASSU. CO. LTD. ..... Appellant
Through : Mr. Udit Kumar Chaturvedi,
Adv. for Mr. A.K. De, Adv.
versus
PRABHA GULATI & ORS. ..... Respondents
Through : Mr. V.P. Choudhary, Sr. Adv.
with Mr. Nitinjya Choudhary
and Ms. Sushma, Advs.
CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA
1. Whether Reporters of Local papers may YES
be allowed to see the Judgment?
2. To be referred to the Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
JUDGMENT (Oral)
1. The appellant has challenged the award of the learned
Tribunal whereby compensation of Rs.1,92,000/- has been
awarded to claimants/respondents No. 1 to 5.
2. The accident dated 22nd December, 1982 resulted in
the death of Rajesh Kumar Gulati. The deceased was
survived by his widow, one minor son aged 6 years, one
minor daughter aged 3 years and parents who filed the claim
petition before the learned Tribunal.
FAO.No.56/1989 Page 1 of 13
3. The deceased was aged 34 years at the time of the
accident and was carrying on the business of sale and
purchase of motor vehicles on commission basis under the
name and style of M/s Satya Sai Finance Company earning
Rs.2,500/- per month. The learned Tribunal took the income
of the deceased to be Rs.1,200/- per month and deducted
Rs.400/- per month towards the personal expenses of the
deceased and took the dependency of the claimants to be
Rs.800/- per month. The learned Tribunal applied the
multiplier of 20 to compute the loss of dependency to be
Rs.1,92,000/-. No compensation has been awarded towards
loss of love and affection, loss of consortium, loss of estate
and funeral expenses.
4. The appellant has challenged the impugned award on
the sole ground that the liability of the appellant is limited to
Rs.50,000/- only. Claimants/respondents No.1 to 5 have filed
the cross-objections seeking enhancement of the award
amount.
5. The learned counsel for the appellant submits that the
liability of the appellant under the Insurance policy is limited
to Rs.50,000/- only and, therefore, the impugned award be
set aside in so far as the learned Tribunal has imposed the
entire liability of the award amount on the appellant.
6. The owner of the offending vehicle bearing No.DLY-
1373 appeared in the witness box as R3W1 and deposed that
he purchased the offending vehicle in 1989 and at the time
FAO.No.56/1989 Page 2 of 13
of the purchase, cover note – Ex.RW1/1 and the certificate of
Insurance – Ex.RW1/2 were issued to him.
7. The appellant produced one witness, RW2 who deposed
that the offending vehicle was insured with the appellant
vide policy No.40400/24/1/01857. The witness further
deposed that as per the cover note, Rs.1,090/- was received
as premium from the owner. The break-up of the premium of
Rs.1,090/- was given by the witness. The witness deposed
that the Insurance Company had not covered extra risk
against the third party under the policy. The typed copy of
the Insurance policy was produced by the appellant which
was marked as Mark „C‟. The carbon copy of the certificate
of Insurance was marked as Mark „D‟ and the cover note was
marked as Mark „E‟. The proposal form was marked as
Mark „F‟.
8. The learned Tribunal held the liability of the appellant
to be unlimited because the Insurance policy issued by the
appellant was not proved in accordance with law. The
carbon copy of the Insurance policy was neither produced
nor proved by the appellant. The true copy of the policy was
placed on record but was not proved. The relevant findings
of the learned Tribunal in this regard are reproduced
hereunder: –
“I have heard both the parties and perused the
statement of the witnesses as well RW-2
Assistant Divisional Manager from the Insurance
Company and the documents brought by him. In
the present case the factum of insurance is
FAO.No.56/1989 Page 3 of 13
admitted. The only plea to be decided is
whether the liability is limited or unlimited. The
proposal from which has been placed on record
was alleged to have produced from the
company. It is admitted by the witness that
there is nothing on record to show that it was
accepted. This proposal form has not been put
to the owner to get it admitted whether this was
the cover asked for by him and it was properly
signed by him specially when the owner himself
has appeared in the witness box. Secondly the
policy has not been proved. Only true copy of
the policy has been placed on record without
explaining about the carbon copy which is
generally retained by the insurance company.
There is nothing on record to show that whether
this was the true copy, whether any officer
verified and tallied it with the original, whether
this was the only cover issued by the company.
In these circumstance, no reliance can be placed
on this certificate. So far as the certificate of
insurance or cover note is concerned, it is not
mentioned whether this cover was for unlimited
liability or liability was limited. This only shows
that the vehicle was insured w.e.f. 19-11-82. So
far as the factum of payment of premium is
concerned, the only document is the cover note
explaining this fact that the total premium paid
was Rs.1,090/-. Moreover, it is alleged that the
endorsement was cancelled but it is alleged that
the endorsement was cancelled but is has not
been proved by which letter it was cancelled and
whether the original policy was ever issued.
Since the factum of insurance is admitted and
the terms regarding the limitation of the policy
has not been established on record by the
insurance company, I hold the liability was
unlimited.”
9. The law with respect to the mode and manner of
proving the Insurance policy is well settled. The Insurance
company is required to produce the carbon copy of the
Insurance policy and to prove the same by examining the
witness who has either signed the same or who identifies the
signatures of the author or who has seen the author signing
FAO.No.56/1989 Page 4 of 13
and writing. In the present case, the carbon copy of the
Insurance policy was not produced. A typed copy of the
Insurance policy was produced but it was not proved. There
is no evidence on record as to who prepared the typed copy
of the policy and from which document it was prepared and
whether it was compared with the original or not. No witness
was produced who could identify the typed copy of the
policy. In fact, Mark „C‟ has not even been signed by any
person. The policy has not been exhibited in the evidence
recorded before the learned Tribunal.
10. The learned counsel for claimants/respondents No.1 to
5 refers to and relies upon the following judgments:-
(i) Om Wati Vs. Mohd. Din, 2002 ACJ 868.
In this case, the learned Tribunal held the liability of the
Insurance Company to be limited to Rs.50,000/- which was
challenged before this Court. This Court set aside the
findings of the learned Tribunal and held the liability of the
Insurance Company to be unlimited. The order of the
learned Single Judge of this Court was challenged before the
Division Bench. The Division Bench of this Court held the
liability of the Insurance Company to be unlimited holding
that the Insurance Company had failed to substantiate and
prove its plea of limited liability. The Division Bench of this
Court upheld the findings of the learned Single Judge of this
Court. It was held as under: –
“Even though strict principles of Evidence Act are
FAO.No.56/1989 Page 5 of 13
not applicable but at the same time one cannot
lose sight of the fact that the document on which
the Insurance Company wants the Court to rely
must be either original or photo-copy or at least
office copy. Mark-A is prepared on a totally
different form. Therefore, it cannot be called true
copy of the original or of office copy. In the
absence of the original or the office copy, no
reliance can be placed on this attested copy of
the insurance policy. It has not been explained
as to from which document Mark-A was
compared. In the absence of any explanation, to
my mind, Mark-A must have been prepared from
imagination. R.K. Khanna, RW-1, has not
explained as to from where and when this
attested copy was prepared, because the original
was not in company’s possession and the office
copy stood destroyed. Therefore, in the absence
of the original as well as of the office copy, how
could he prepare Mark-A and attest it unless he
was doing it from his imagination. The owner of
the truck has categorically stated that the
vehicle was fully insured and the entire liability
of the third party was that of the Insurance
Company in the event of the accident. If the
liability was limited or was „Act only‟ policy then
nothing prevented the Insurance Company from
calling the original or produce the office copy. No
record has been produced to show that office
copy has been destroyed nor the premium
receipt book and the proposal cost application
had been produced. RW-1 could not deny the
suggestion that these records were available in
the office at Asaf Ali Road. This shows that the
Insurance Company withheld the best evidence
from the Court deliberately. Had the original or
the office copy of the policy and other record
been produced, it would have belied the plea of
limited liability. The premium for covering
Section 95 risk policy at the relevant time was
Rs. 84 and for third party liability Rs. 295 per
year as per motor tariff. The premium receipt
register if produced could have clinched the
whole issue. It was a very relevant record to
prove whether extra premium was paid to cover
unlimited liability as alleged by the owner of the
truck. In the absence of the original policy or the
office copy and the premium receipt book, to my
mind, the Tribunal fell in grave error in relying on
Mark-A and coming to the conclusion that the
liability of insurance company was limited.”
FAO.No.56/1989 Page 6 of 13
(ii) Tejinder Singh Gujral Vs. Inderjit Singh, 2007 ACJ
37.
The Hon‟ble Supreme Court upheld the findings of this
Court that the Insurance policy having not been brought on
record, a presumption would arise that the liability of the
insurer was unlimited. Para 13 in this regard of the said
judgment is reproduced hereunder :-
“13. The learned Tribunal, however, committed
an error in opining that the insurance policy was
not required to be proved. Learned Single Judge
of the High Court, in our opinion, rightly held that
the insurance policy having not brought on
record, a presumption would arise that the
liability of the insurer was unlimited.
(iii) Subhadara Kumari Vs. Lallu Ram, 1995 ACJ 935.
In this case, the carbon copy maintained by the
Insurance officer was destroyed and a copy prepared on the
basis of the carbon copy was produced before this Court.
Since neither the original policy nor the carbon copy was
produced, this Court set aside the finding of limited liability
of Rs.50,000/- and held the liability of the Insurance company
to be unlimited. Para 6 in this regard of the said judgment is
reproduced hereunder:-
“6. The Tribunal has dealt with the first point in
favour of respondent No. 6 merely on the ground
that the statute provides the liability of
respondent No. 6 to pay compensation to the
extent of Rs. 5,000/- in respect of death of a
passenger. The policy in respect of the offending
FAO.No.56/1989 Page 7 of 13
bus has not been proved. The evidence of RW 6,
Shri R. P. Sawhney, Senior Assistant, New India
Assurance Co. Ltd., clearly indicates that the bus
was insured with effect from 9.11.1971 to
8.11.1972. The original policy was issued to
respondent No. 5. The said witness further states
that the carbon copy maintained by the office
has been destroyed because all records are
destroyed after 3 years. The copy which was
produced before the Tribunal was prepared on
the basis of the carbon copy of the letter dated
21.9.1973 issued to counsel, Mr. S. R. Sarna on
that date. Therefore, it is clear that the said
respondent could neither produce the original
policy nor the carbon copy was available. The
learned Judge was right in attaching no
significance to the said copy of the policy which
was prepared in the above circumstances. In this
background it was wrong to hold that the liability
of the company was only to the extent of Rs.
5,000/- when no such plea can be held to be
established on the basis of evidence on record.
There is force in the contention of learned
counsel for the appellants. The same is,
accordingly, upheld.”
(iv) Krishna Gupta Vs. Madan Lal, 2003 ACJ 933.
In this case also the liability of the Insurance Company
was held to be unlimited by the Division Bench of this Court
on the ground that the original policy was not produced or
proved. Para 25 in this regard of the said judgment is
reproduced hereunder:-
“25. Submissions of the learned counsel for the
insurance company to the effect that its liability
was limited, cannot be accepted for more than
one reason which are: (a) no such plea had ever
been taken; (b) in view of the fact that a joint
written statement was filed together with owner
and driver of the truck, such a plea could not
have been raised; (c) the insurance policy,
whether the original or the photocopy, had not
been produced or proved. What was brought on
record was merely a proforma of the insurance
policy which was not and could not have been
FAO.No.56/1989 Page 8 of 13
termed as a contract of insurance; (d) the
respondent insurance company being a State
within the meaning of Article 12 of the
Constitution of India, was under a moral
obligation to produce all the records before the
court including the contract of insurance and
non-production thereof would give rise to drawal
of an adverse inference.”
11. Following the aforesaid judgments, the findings of the
learned Tribunal are upheld and the liability of the appellant
is held to be unlimited as neither the original nor the carbon
copy of the Insurance policy was produced. A typed copy of
the Insurance policy was produced but even that document
was not proved in accordance with law.
12. The findings of the learned Tribunal are, therefore,
upheld and the appeal is dismissed.
Cross Objections No.1406/1989
1. The claimants/respondents No.1 to 5 have filed the
cross-objections for enhancement of the award amount.
2. The widow of the deceased appeared in the witness box
as PW – 9 and deposed that the deceased was engaged in
sale and purchase of motor vehicles on commission basis.
She further deposed that the deceased started a finance
company about one year before his death and the deceased
used to give her Rs.2,500/- per month for household
expenses. PW – 9 further deposed that the deceased had
provided all the facilities such as telephone, T.V., fridge,
cooler, conveyance and the income of the deceased would
have increased by Rs.5,000/- per month in future.
FAO.No.56/1989 Page 9 of 13
3. PW – 4 carried on the business of scooter repair and
sale and purchase of motor vehicles at 18, Masjid Road,
Bhogal, Jangpura and he deposed that he knew the deceased
for the last 15 years. PW-4 deposed that the deceased was
dealing in sale and purchase of motor vehicles at 19, Masjid
Road, Jangpura and in his estimation, the deceased was
earning Rs.2,000/- to Rs.2,500/- per month.
4. PW-1 deposed that the deceased had T.V., Refrigerator
and scooter and as per his standard of living, the deceased
must have the income of Rs.2,500/- to Rs.3,000/- per month.
5. The learned Tribunal assessed the income of the
deceased for the purposes of computation of compensation
as Rs.1,200/- per month considering that the deceased was
not paying Income Tax. The learned Senior Counsel for
claimants/respondents No.1 to 5 submits that the Income
Tax limit during the year 1982-83 was Rs.60,000/- per annum
and, therefore, even applying the yardstick of Income Tax
limit, the income of the deceased should be taken to be at
least Rs.2,500/- per month.
6. Considering the evidence on record that the deceased
was carrying on the business of sale and purchase of motor
vehicles and had a shop in Jangpura which is a very
prominent market and further the evidence of the widow of
the deceased who appeared as PW-9 and deposed that the
deceased had all the amenities of life and was maintaining a
good standard of living and the father of the deceased was in
FAO.No.56/1989 Page 10 of 13
bed for the last three years and was entirely dependent upon
him and further that the deceased belonged to a respectable
family and the mother of the deceased was president of Arya
Samaj Women Branch, the income of the deceased for the
purposes of computation of compensation is taken to be
Rs.1,800/- per month instead of Rs.1,200/- per month.
7. The deceased left behind five dependents, namely,
widow, two minor children and parents and, therefore, the
appropriate deduction towards the personal expenses of the
deceased is 1/4th instead of 1/3rd. Taking the income of the
deceased to be Rs.1,800/- per month, deducting 1/4th
towards personal expenses of the deceased and applying the
multiplier of 16, the loss of dependency is computed to be
Rs.2,59,200/- (Rs.1,800 x 3/4 x 12 x 16).
8. The learned Tribunal has not awarded any
compensation towards loss of consortium, loss of love and
affection, loss of estate and funeral expenses. The Courts
are now awarding Rs.10,000/- under the aforesaid heads.
However, considering that the accident took place in the year
1982, Rs.5,000/- is awarded towards loss of consortium,
Rs.5,000/- towards loss of love and affection, Rs.5,000/-
towards loss of estate and Rs.2,500/- towards funeral
expenses. The total compensation to the
claimants/respondents is computed to be Rs.2,76,700/-
(Rs.2,59,200 + Rs.5,000 + Rs.5,000 + Rs.5,000 + Rs.2,500).
9. The learned Tribunal has not awarded any interest on
FAO.No.56/1989 Page 11 of 13
the award amount on the ground that claimants/respondents
No.1 to 5 took two years and three months to complete the
evidence. This cannot be a ground to deny the interest to
the claimants. It is well settled that the compensation
becomes due and payable immediately upon the accident
and the claimants are entitled to the interest on the award
amount because the Insurance company has retained the
amount due to the claimants and has also earned interest by
way of investment on the said amount and also on the
ground that the claimants have been deprived of their
amount when it became due. For the delay caused by the
claimants/respondents, lower rate of interest can be provided
to them but to deny the interest altogether is unjust, unfair
and unreasonable. The rate of interest in the year 1992 was
to the tune of 12% per annum. However, the interest of
justice will be served by awarding 7% interest to the
claimants.
10. The cross-objections are allowed and the award amount
is enhanced from Rs.1,92,000/- to Rs.2,76,700/- along with
interest @7% from the date of filing of the petition till
realization.
11. The appellant is directed to deposit the enhanced
award amount along with interest thereon with the Registrar
General of this Court within 30 days.
12. Claimants/respondents No.4 and 5 have expired during
the pendency of the appeal and their rights have devolved
FAO.No.56/1989 Page 12 of 13
upon claimants/respondents No.1 to 3 who are already on
record. The shares of claimants/respondents No.1 to 3 in the
award amount shall be equal. Upon the award amount being
deposited, the Registrar General of this Court is directed to
release a sum of Rs.50,000/- to each of the three
claimants/respondents No.1 to 3 and the remaining amount
be kept in fixed deposit for a period of five years on which
periodical interest be paid to them but no loan, advance or
withdrawal be permitted without the permission of this Court.
13. The learned counsel for the claimants submits that the
original award amount was deposited by the appellant with
this Court and the same was released to the claimants
against the surety bond dated 5th September, 1994 marked
as Mark „A1‟. Since the appeal has been dismissed, the
surety bond given by the claimants is discharged. The
Registrar General is directed to release the surety bond to
claimants/respondents No.1 to 3 through counsel within two
weeks.
14. Copy of this order be given „Dasti‟ to learned counsel
for the parties under the signature of Court Master.
J.R. MIDHA, J
AUGUST 03, 2009
aj
FAO.No.56/1989 Page 13 of 13
