The Commissioner of Income Tax vs. Sri S. Nanda Gopal Reddy,

1 M.A. No. 264 of 2013

IN THE HIGH COURT OF JHARKHAND AT RANCHI

M.A. No.264 of 2013

------ New India Assurance Co. Ltd. Dhanbad, through its Divisional Manager, B.P. Agrwala Building, P.O. & P.S. Dhansar, Town & Dist. Dhanbad

.... .... …. Appellant

Versus 1. Manabendra Mahto son of late Baul Mahato 2. Anita Mahato daughter of Manabendra Mahto 3. Prodyut Mahato son of Manabendra Mahto All residing at Kadavita, Debipur (Debipur) P.O. Kalayanshwari, P.S. Kulti, Dist. Burdwan (West Bengal) (Respondent nos. 2 & 3 are minors hence are being represented through their father respondent no.1 as natural guardian and next friend) 4. Bishnu Transport, In-charge Ashok Kumar Khanna having its office and residing at Saraspahari, P.O. & P.S. Chirkunda, Dist. Dhanbad (Defendant No.1)

.... .... .... Respondents

------ For the Appellants

: Mr. Alok Lal, Advocate

: Mr. Santosh Kumar, Advocate

For the Respondents

: Mr. Prashant Kr. Rahul, Advocate

: Ms. Leena Mukherjee, Advocate

P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

------

By the Court:- 1.

Heard the parties. 2.

This miscellaneous appeal is directed against the judgment and award dated 28.05.2013 passed by the District Judge-cum-Motor Accident Claims Tribunal Judge-VII, Dhanbad in Title (M.V.) Suit No.193 of 2010 by which the learned Tribunal has awarded a compensation of Rs.23,42,650/- to the claimants under Section 166 of Motor Vehicle Act. 3.

The brief facts of the case is that on 03.02.2010 while the deceased Tapti Mahto was going on a motorcycle on the

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pillion of Dhiren Mahto, the offending truck being rashly and negligently driven dashed the motorcycle as a result of which, the deceased fell down and was ran over by the truck crushing the head of the deceased. It is stated that the deceased was running a hotel in the name and style of ‘Netaji Hindu Hotel’ and earning Rs.1,83,182.50/- per annum as per the income tax return and she was of 38 years old. 4.

The defendant no.1-owner of the offending vehicle pleaded that since the offending vehicle was insured by the appellant- New India Assurance Co. Ltd. hence, the appellant is liable to pay the compensation amount. The owner also pleaded that the driver of the motorcycle was also responsible for the accident. Hence, it is the case of composite negligence. 5.

The defendant no.2- appellant- New India Assurance Co. Ltd. besides challenging the maintainability of the petition on various technical grounds also pleaded that the driver of the motorcycle also did not have a valid and effecting driving licence and the driver of the offending vehicle was not having a valid driving licence. The insurance company also pleaded that the deceased was not having any income from hotel and her husband in order to evade income tax, opened an account in her name. 6.

On the basis of the rival pleadings of the parties, the learned Tribunal framed the following seven issues:-

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(I) Whether the suit is maintainable in its present form? (II) Whether there is any cause of action in the present suit? (III) Whether the accident took place due to rash and negligent driving of truck bearing registration No.JH-10K-8381 by its driver? (IV) Whether the driver of truck bearing registration No.JH-10K-8381 had valid and effective driving licence at the date and time of the accident? (V) Whether the offending vehicle had a valid permit at the date and time of the accident? (VI) What amount of compensation the claimants are entitled for and from whom? (VII) What other relief or reliefs the claimants are entitled for? 7.

The learned Tribunal first took up issue nos. (I), (II) and (III) together and after considering the evidence in the record i.e. the three witnesses examined by the claimants as well as the eight documents which have been marked as Ext. 1 to 8, the learned Tribunal came to the conclusion that the accident took place due to rash and negligent driving of the driver of the offending truck and the claimants being the husband and sons of the deceased are entitled to receive the compensation amount. Thereafter, the learned Tribunal took up issue nos. (IV) and (V) together. The learned Tribunal

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considered that since the insurance company took the plea that the driver of the offending vehicle was not having a valid and effective driving licence, therefore, the onus is upon it to prove the same and in the absence of the same, it can be presumed that the driver of the offending vehicle was having a valid and effective driving licence and decided the issue nos. (IV) and (V) in the affirmative. Thereafter, the learned Tribunal took up issue nos. (VI) and (VII) together and considered the earnings of the deceased as Rs.1,83,182.50/- on the basis of her income tax return as well as other connected documents and assessed the annual income of the deceased after deducting of tax as Rs.1,79,050/-. The learned Tribunal also considered the oral testimony of P.W.1- who stated that his aunt Tapti Mahto was the owner of Netaji Hindu Hotel situated at NH-2 Bypass near Devipur and the deceased was earning Rs.20,000/- per month from the hotel business and the hotel is still being run by his uncle who owns another hotel. Earlier the uncle of P.W.1 was not looking after the hotel run by the deceased and now the husband of the deceased is looking after the two hotels. The learned Tribunal also considered the testimony of P.W.2 who is the husband of the deceased who has also stated that the deceased was earning Rs.20,000/- per month from her hotel but as the P.W.2 was unable to look business of the hotel after the death of his wife, so, the hotel is at the verge of closure. The Tribunal also

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considered the oral testimony of P.W.3- Laxman Das who was a waiter in the hotel of the deceased- Tapti Mahto and he stated that Netaji Hindu Hotel was having good business before the death of the deceased and the deceased was earning Rs.20,000/- per month and after her death, the business got affected and it has come down considerably. The learned Tribunal assessed the age of the deceased to be 37 years and applied 30% towards future prospects upon the income of the deceased Rs.1,79,050/-, deducted 1/3rd annual income and applied the multiplier 15 and awarded the amount of Rs.23,42,650/-. 8.

Mr. Alok Lal, learned counsel for the appellant assisted by Mr. Santosh Kumar submits that since the insurance company took the plea that the driver is not having a valid and effective driving licence, so, it was incumbent upon the owner of the offending vehicle to produce the driving licence of the driver in question but having not done so, the learned Tribunal has committed an error for not absolving the insurance company of the liability to pay the compensation amount. In this respect, the learned counsel for the appellant relied upon the judgment of Hon’ble Supreme Court of India in the case of Pappu v. Vinod Kumar Lamba reported (2018) 3 SCC 208, paragraph no.11 and 12 of which reads as under:- “11. The question is: whether the fact that the offending vehicle bearing No. DIL 5955 was duly insured by Respondent 2 insurance company would

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per se make the insurance company liable? 12. This Court in National Insurance Co. Ltd. [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] has noticed the defences available to the insurance company under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. The insurance company is entitled to take a defence that the offending vehicle was driven by an unauthorised person or the person driving the vehicle did not have a valid driving licence. The onus would shift on the insurance company only after the owner of the offending vehicle pleads and proves the basic facts within his knowledge that the driver of the offending vehicle was authorised by him to drive the vehicle and was having a valid driving licence at the relevant time.” (Emphasis supplied)

It is further submitted by Mr. Santosh Kumar that similarly, the owner of the vehicle also did not produce the permit of the vehicle. Hence, the learned Tribunal ought to have held that the offending vehicle was not having a valid permit to drive the vehicle which in turn amount to violation of the terms and conditions of the insurance policy. Hence, it is submitted that the Tribunal has also committed an error for not absolving the insurance company of the liability to pay the compensation amount. In this respect, Mr. Santosh Kumar relies upon the judgment of Hon’ble Supreme Court of India in the case of Amrit Paul and another v. TATA AIG General Insurance Co. Ltd and others reported in (2018) 7 SCC 558, paragraph nos.11 and 12 of which reads as under :- “11. A distinction has to be made between “route permit” and “permit” in the context of Section 149 of the Act. Section 149(2) provides the grounds that can

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be taken as defence by the insurer. It enables the insurer to defend on the ground that there has been breach of a specific condition of the policy, namely, (i) a condition that excludes 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 motorcycle. That apart, it also entitles the insurer to raise the issue pertaining to a condition that excludes 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 that excludes liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion. A further defence that can be availed of by the insurer is that the policy is void on the ground that it has been obtained by non-disclosure of the material fact or by representation of act which is false in the material particular. 12. On a perusal of the written statement filed by the owner and the driver, it is evident that the factum of accident having been caused by the vehicle in question had been denied. That apart, there is also a denial of liability that relates to the manner in which the accident had occurred as alleged in the claim petition. It was the specific assertion of the insurer before the Tribunal that the vehicle was running in contravention of the provisions of the Act, for it did not possess a route permit. The Tribunal, on the basis of the materials brought on record to the effect that the route permit was issued on 27-2-2013 and the accident occurred on 19-2-2013, returned a finding that the vehicle in question did not have the permit. As stated earlier, the High Court has affirmed the same.” (Emphasis supplied)

10.

Hence, it is submitted that the insurance company be absolved of the liability to pay the compensation amount. 11.

Relying upon the judgment of Hon’ble Supreme Court

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of India in the case of New India Assurance Co. Ltd. v. Yogesh Devi and others reported in (2012) 3 SCC 613, paragraph no.8 and 13 of which reads as under :- “8. This Court in Jasbir Kaur case [(2003) 7 SCC 484 : 2003 SCC (Cri) 1671] held that the Tribunal is required to make a just and reasonable award determining the compensation to be paid to the dependants of the victim of a fatal motor vehicle accident. Explaining the concept of just and reasonable award in the context of a motor vehicle accident claim, this Court held as follows: (SCC p. 487, para 7) “7. It has to be kept in view that the tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which is to be in the real sense ‘damages’ which in turn appears to it to be ‘just and reasonable’. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be ‘just’ and it cannot be a bonanza; nor a source of profit; but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be ‘just’ compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of ‘just’ compensation which is the pivotal consideration. Though by use of the expression ‘which appears to it to be just’ a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious

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approach and not the outcome of whims, wild guesses and arbitrariness. The expression ‘just’ denotes equitability, fairness and reasonableness, and non-arbitrary. If it is not so it cannot be just. (See Helen C. Rebello v. Maharashtra SRTC [(1999) 1 SCC 90 : 1999 SCC (Cri) 197 : AIR 1998 SC 3191] .)”

It is submitted by Mr. Santosh Kumar that the hotel business of the deceased is still running. So the learned Tribunal certainly erred by assessing her income to be the entire amount of Rs.1,79,050/- and further adding the future prospects on that amount. Hence, it is submitted that the quantum of compensation be reduced. 12.

Learned counsel for the respondents-claimant nos.1 to

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3 on the other hand defended the impugned judgment and award and submitted that the learned Tribunal ought to have applied the future prospects at the rate of 40% in view of the principle of law settled in the case of National Insurance Company Limited v. Pranay Sethi reported in (2017) 16 SCC 680 and ought to have awarded Rs.70,000/- under the conventional head but having not done so, the quantum of compensation amount awarded by the learned Tribunal is on the lower side. Hence, the same ought not to be interfered. 13.

In view of the rival submissions made at the Bar, the following points for consideration crop up in this appeal :- (i) “Whether the learned Tribunal has committed an error by presuming that the driver of the offending vehicle was having a valid and effective driving licence even though it is the specific case of the appellant-insurance company that the driver of the offending truck was not having a valid and effective driving licence and permit and no driving licence of the driver of the truck and permit was produced by the owner of the vehicle being the respondent no.4 of this appeal who was defendant no.1 before the learned Tribunal below? (ii) Whether the quantum of compensation is assessed on the higher side?” 14.

So far as the first substantial question of law is concerned as has been held by the Hon’ble Supreme Court

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of India in the case of Pappu v. Vinod Kumar Lamba (supra), it is a settled principle of law as has also been held in the case of National Insurance Co. Ltd. v. Swaran Sing reported in (2004) 3 SCC 297 that when the insurance company takes a defence that the offending vehicle was driven by an unauthorised person or the person driving the vehicle did not have a valid driving licence, the onus would shift on the insurance company only after the owner of the offending vehicle pleads and proves the basic facts within his knowledge that the driver of the offending vehicle was authorised by him to drive the vehicle and was having a valid driving licence at the relevant time. In the present case, the defendant no.1-owner of the vehicle has not entered the witness box nor produce any licence of the driver of the vehicle; even he has not disclosed the name of the person who was driving the offending vehicle. Similarly, the owner of the vehicle has not produced the permit of the vehicle. Under such circumstances, this Court has no hesitation in holding that in view of the settled principle of law in the case of Pappu v. Vinod Kumar Lamba (supra), learned Tribunal erred to presume that the driver of the offending vehicle was having a driving licence. For similar reasons, as no permit was placed by the owner of the vehicle, the learned Tribunal has erred by not answering the issue nos. (IV) and (V) in the negative by holding that the driver of the offending truck was not

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having valid and effective licence at the time of accident and that the offending vehicle had not a valid permit at the time of accident. 15.

It is a settled principle of law that use of a vehicle in a public place without a permit is a fundamental statutory infraction and amounts to violation of the terms and condition of the insurance policy as has been held in the case of of Amrit Paul Singh vs. TATA AIG General Insurance Co. Ltd reported in AIR 2018 SC 2662, paragraph no.23 of which reads as under:- “23. In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit. The exceptions that have been carved out under Section 66 of the Act, needless to emphasise, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore,SC2670 the principles laid down in Swaran Singh (AIR 2004 SC 1531) (supra) and Lakhmi Chand (AIR 2016 SC 315) (supra) in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of the "Tripitaka", that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said

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directions are in consonance with the principles stated in Swaran Singh (supra) and other cases pertaining to pay and recover principle.” (Emphasis supplied)

16.

Under such circumstances, this Court holds that as the owner of the vehicle has failed to establish that the driver of the offending truck was having valid and effective driving licence on the date and time of accident and the owner of the vehicle has also failed to establish that the offending vehicle was having a valid permit at the time of accident and thus, as the insured vehicle was run in a public place in violation of the terms and condition and valid driving licence of the driver concerned, the same amounts to violation of the terms and condition of the insurance policy. Hence, in the considered opinion of this Court, the insurance company be absolved of the liability to pay the compensation and the compensation amount is to be paid by the owner of the vehicle but keeping in view the fact that there is no dispute regarding vehicle being insured by the appellant-insurance company in view of the principle of law settled in the case of Manuara Khatun & Ors. v. Rajesh Kr. Singh & Ors., reported in (2017) 4 SCC 796, para- 22 of which reads as under:- “22. Accordingly, the appeals succeed and are allowed. Impugned order is modified to the extent that Respondent 3 United India Insurance Co. Ltd. is accordingly directed to pay the awarded sum to the appellants (claimants). Thereafter Respondent 3 United India Insurance Co. Ltd. would be entitled to recover the entire paid awarded sum from the owner (insured) of the offending vehicle (Tata Sumo) Respondent 1 in these very proceedings by filing execution application against the insured.”

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This is a fit case where the appellant- New India Assurance Company Limited be directed to pay the compensation amount to the claimants and recover the same from the owner of the vehicle. The first point for determination is answered accordingly. 17.

So far as the second point for determination is concerned, the facts of the case are different from the facts of the case of New India Assurance Co. Ltd. v. Yogesh Devi and others (supra) as in that case, there was no evidence in the record that the deceased has any particular income from the three buses owned by him but in this case, the personal income tax return of the deceased has been filed and undisputedly, she was earning Rs.1,79,050/- after deducting the tax amount annually. The evidence that has come through the P.Ws.2 and 3 goes to show that the deceased was running the hotel and earning the money out of her own personal skill and consequent upon the death of the deceased, the hotel business run by the deceased has almost come to the verge of being closure, apparently in the absence of the personal skill which it used to get when the deceased was alive. The Hon’ble Supreme Court of India in the case of Kalpanaraj and Ors. vs. Tamil Nadu State Transport Corporation reported in (2015) 2 SCC 764, observed that it is correct to determine the monthly income of the deceased on the basis of income tax return and to the same effect is the judgment of Hon’ble Supreme Court of India in the case of

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Amrit Bhanu Shali and Ors. vs. National Insurance Company Limited and Ors. reported in (2012) 11 SCC 738 and under such circumstances, this Court is of the considered view that the ratio of the judgment in the case of New India Assurance Co. Ltd. v. Yogesh Devi and others (supra) is not applicable in the facts of this case and the amount of compensation arrived at by the learned Tribunal need not be interfered with. The second point for determination is answered accordingly. 18.

In view of the discussions made above, the impugned judgment and award is modified by directing the appellant insurance company to pay the compensation amount awarded by the Tribunal in Title (M.V.) Suit No.193 of 2010 to the respective claimants within three month from the date of this judgment, less the amount if any already paid and the appellant-New India Assurance Company Limited is given the right to recover the said compensation amount from the owner of the vehicle being respondent no.4-defendant no.1. 19.

In the result, this appeal is allowed in part. 20.

The impugned judgment and award dated 28.05.2013 passed by the District Judge-cum-Motor Accident Claims Tribunal Judge-VII, Dhanbad in Title (M.V.) Suit No.193 of 2010 is modified to the aforesaid extent only. 21.

No order as to costs. 22.

The Registrar General of this Court is directed to transmit Rs.25,000/- being the statutory amount if any,

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deposited by the appellant in connection with M.A. No.264 of 2013 to the concerned Tribunal forthwith. 23.

Let a copy of this Judgment along with the Lower Court Record be sent back to the learned court below forthwith.

(Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 19th December, 2022 AFR/ Sonu-Gunjan/-