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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF AUGUST, 2021
PRESENT
THE HON’BLE MRS. JUSTICE S. SUJATHA AND
THE HON’BLE MR. JUSTICE RAVI V. HOSMANI
M.F.A.No.4211/2019 (MV) C/W M.F.A.CROB.No.133/2019 (MV)
IN M.F.A.No.4211/2019
BETWEEN:
THE CLAIM MANAGER SHRIRAM GENERAL INSURANCE COMPANY LIMITED, NO.54/4, III FLOOR, S.V.ARCADE, BILEKAHALLI MAIN ROAD, IIMB POST, BENGALURU - 560 076 BY IT’S CLAIM MANAGER.
...APPELLANT
[BY SRI. O. MAHESH, ADVOCATE (VIDEO CONFERENCE)]
AND:
SMT. LATHA B J AGED 32 YEARS W/O LATE GIRISH S.R.
KUM.VISHRUTHA S.G. AGED ABOUT 7 YEARS D/O LATE GIRISH S.R. MINOR, BY HER NATURAL GUARDIAN MOTHER 1ST RESPONDENT AS NEXT FRIEND SMT.LATHA B.J.
2 BOTH ARE RESIDING AT C/O JOHAPPA B.K, KUSHALANAGAR - SOMAWARPET ROAD, GUMMANKOLLI VILLAGE, MULLUSOGE POST, KUSHALNAGAR HOBLI, SOMAWARPET TALUK - 571 236.
SMT.CHANDRAMMA AGE 54 YEAR W/O RAJASETTY S.B
SRI.RAJASETTY S.B AGED ABOUT 63 YEAR S/O LATE BASAVASETTY
BOTH ARE RESIDING AT SEEGURU VILLAGE, BHARSE POST, RAVANDUR HOBLI, PERIYAPATANA TALUK - 571 107.
SRI.NAGANNA AGED 39 YEARS S/O. SWAMY, REISIDING AT NO.64/A, BEERIHUNDI VILLAGE, BAGESHA MALLAHALLI, JAYAPURA HOBLI, MYSURU TALUK - 570 001. ...RESPONDENTS
(BY SMT. SUMA KEDILAYA, ADVOCATE FOR SRI. V. PADMANABHA KEDILAYA, ADVOCATE FOR R1 & R2 (VC) R2 IS MINOR REPRESENTED BY R1 R3 TO R5 ARE SERVED]
THIS MFA IS FILED UNDER SECTION 173(1) OF MOTOR VEHICLES ACT AGAINST THE JUDGMENT AND AWARD DATED: 19.01.2019 PASSED IN MVC NO.240/2015 ON THE FILE OF THE PRINICIPAL DISTRICT JUDGE AND MACT, KODAGU, MADIKERI, AWARDING COMPENSATION OF RS.58,79,696/- WITH INTEREST @ 9% P.A., FROM THE DATE OF PETITION TILL REALISATION OF ENTIRE AMOUNT.
3 IN M.F.A.CROB.No.133/2019
BETWEEN:
SMT. LATHA B.J. W/O. LATE GIRISH S.R. AGED ABOUT 32 YEARS
KUM. VISHRUTHA S.G. D/O. LATE GIRISH S.R. AGED ABOUT 7 YEARS
SINCE MINOR, REPRESENTED BY HER MOTHER 1ST CROSS OBJECTOR
BOTH ARE RESIDENTS OF C/O JOHAPPA B K KUSHALNAGAR-SOMWARPET ROAD GUMMANKOLLI VILLAGE MULLUSOGE POST KUSHALNAGAR HOBLI SOMWARPET TALUK-571 234.
...CROSS OBJECTORS
[BY SMT. SUMA KEDILAYA, ADVOCATE FOR SRI. PADMANABHA KEDILAYA V., ADVCOATE(VIDEO CONFERENCE)]
AND:
SRI. NAGANNA S/O SWAMY AGED ABOUT 39 YEARS R/AT NO.64/A BEERIHUNDI VILLAGE BAGESHA MALLAHALLI JAYAPURA HOBLI MYSURU TALUK.
SHRI RAM GENERAL INSURANCE CO.LTD. NO.5/4, III FLOOR
4 S.V. ARCADE BILIKALLALLI MAIN ROAD II M B POST BENGALURU - 560 076.
SMT. CHANDRAMMA W/O. RAJASETTY S.B. AGED ABOUT 54 YEARS
SRI. RAJASETTY S.B. S/O. LATE BASAVASETTY AGED ABOUT 63 YEARS R3 AND R4 ARE RESIDING AT SEEGURU VILLAGE BHARSE POST RAVANDUR HOBLI PERIYAPATNA TALUK-571 108.
...RESPONDENTS
[BY SRI. O. MAHESH, ADVOCATE FOR R2 (VIDEO CONFERENCE) VIDE ORDER DATED 15.12.2020, NOTICE TO R1, R3 AND R4 IS DISPENSED WITH]
THIS MFA CROB. IS FILED UNDER ORDER 41 RULE 22 OF CPC READ WITH SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 19.01.2019, PASSED IN MVC NO.240/2015, ON THE FILE OF THE PRINCIPAL DISTRICT AND SESSIONS JUDGE AND MACT, KODAGU,MADIKERI, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.
THESE MFA AND MFA CROB. COMING ON FOR ADMISSION THIS DAY, RAVI V. HOSMANI J., DELIVERED THE FOLLOWING:
J U D G M E N T
Challenging the judgment and award dated 19.01.2019 passed in MVC No.240/2015 passed by the Principal District and Sessions Judge and MACT, Kodagu, Madikeri (hereinafter referred to as ‘Tribunal’), the insurance company has filed this
5 appeal under Section 173 of the Motor Vehicles Act (‘M.V.Act’ for short).
Brief facts as stated are that on 02.06.2015 at about 7:30 p.m. Girish was riding his motorcycle bearing registration No. KA-45-Q-0576 at Periyaptna - Kushalnagara road. When he was in front of Dasharath’s house, a lorry bearing registration No. KA-50-0239 came in a rash and negligent manner and dashed against the motorcycle and fled away from the accident spot without stopping. Due to the severe injuries sustained in the accident, Girish died on the spot. Alleging loss of dependency due to his untimely death, his wife, daughter and parents filed claim petition against the owner and insurer of the lorry, under Section 166 of Motor Vehicles Act (‘M.V. Act for short) claiming compensation of Rs.75,50,000/-.
Upon service of summons, respondent No.1 owner filed objection denying the claim petition averments. The age, occupation, income of deceased and dependency of claimants on deceased was also denied. It was also alleged that accident occurred on account of own negligence of deceased.
6 4. Respondent No.2 insurer filed similar objections. It however, admitted issuance of insurance policy and its validity on date of accident, but contended that there was violation of terms and conditions of policy. It also contended that insurer was not liable to pay compensation as there was violation of Section 134(c) and 158(6) of M.V.Act.
Based on pleadings tribunal framed following issues: 1. Whether the petitioners/LRs, prove that, on 02/06/2015 at 7.30 p.m., near the house of Dasharatha at Mallinathapura village, deceased S.R. Girish was succumbed to injuries as a result of accident, caused due to rash and negligent driving by the driver of the Lorry bearing Reg.No.KA-50-0329?
Whether the petitioners/LRs prove that, they are entitled for compensation as prayed, if so, to what extent and from whom?
What order or award?
In support of claim petition, claimant no.4 and claimant no.1 were examined as PWs-1 and 2. Two more witnesses were examined as PWs-3 and 4 & Exs.P.1 to P.24 were marked. On behalf of respondents, an officer of insurer was examined as RW-1 and Exs. R1 to R5 were got marked.
7 7. Thereafter on consideration, tribunal answered issue no.1 in the affirmative; issue no.2 partly in affirmative and issue no.3 by allowing claim petition in part by awarding a compensation of Rs.58,29,696/- with 9% interest from respondent no.2 - insurer. Aggrieved by the said award, insurer has preferred MFA No.4211/2019 on the ground of false implication of insured vehicle and also on quantum. In the said appeal, claimants have filed MFA.CROB No.133/2019 seeking for enhancement of compensation.
Sri O. Mahesh, learned counsel for appellant/insurer submitted that award passed by tribunal was contrary to material on record. It was firstly contended that claim petition filed without impleading driver of offending vehicle as a party, was not maintainable in view of decision of the Hon’ble Supreme Court in the case of Machindranath Kernath Kasar Vs. D.S. Mylarappa and Others reported in (2008) 13 SCC 198. It was further contended that as deceased was not wearing helmet, there was contribution to gravity of accident leading to his death. Referring to contents of Ex.P.5 - Motor Vehicle Inspector’s report wherein no visible damages to insured vehicle were found, it was contended that there was false implication of insured vehicle for
8 the purpose of claim petition. It was contended that admission by PW-3 during cross-examination that he does not know the lorry number, indicated that he was not an eyewitness, was examined only to substantiate a false claim. It was further submitted that in the complaint-Ex.P.2 given by father of deceased at 11:30 p.m. there is no mention of registration number of offending vehicle, while Ex.P.3-charge sheet describes offending vehicle was a sand filled lorry. Learned counsel sought to draw our attention to lapses and material deviations in investigation conducted by police. It was submitted that Ex.P.5 - Motor Vehicles Inspector’s report indicates that police requisition to RTO for MV inspector’s inspection of vehicle was received at 10:45 a.m. on 18.08.2015 and inspection was conducted on same day at 4:30 p.m. with unusual speed and efficiency! This is even while, there was no explanation as to when and how identity of offending vehicle was discovered and from where the offending vehicle was secured. It was also asserted that a specific contention regarding false involvement of insured vehicle was raised by the insurer.
On quantum of compensation, it was submitted that dependents of deceased were provided with appointment on
9 compassionate basis. They also received a sum of Rs.8,00,000/- from KGID. However, these benefits were not accounted for while computing the compensation. There was no deduction of appropriate amount towards income tax, and personal expenses and addition of 50% towards future prospects was not justified. Even award of rate of interest at 9% was exorbitant and called for reduction. On above grounds learned counsel sought for allowing insurer’s appeal and for dismissal of cross objection.
On the other hand, Smt. Suma Kedilaya, advocate appearing for Sri. Padmanabha Kedilaya, learned counsel for claimants/cross-objectors, submitted that insurer had not challenged the charge sheet filed by police against driver of insured vehicle. And though insurer had filed complaint to Superintendent of Police for reinvestigation, they had not pursued the same, after realizing genuineness of claimant’s case. It was further contended that police after independent investigation filed charge sheet against driver of insured vehicle and as trial before Claims Tribunal was summary in nature, strict rules of evidence did not apply and police investigation records duly probabilised case of claimants.
10 11. In so far as claim for enhancement, it was contended that deceased was working as a Lecturer in Government P.U. College and earning Rs.35,000/- per month. However, tribunal considered it at Rs.32,268/-. It was further submitted that award of compensation under conventional heads was not in terms of the decision of Hon’ble Supreme Court in National Insurance Co. Ltd. -v- Pranay Sethi and Others, reported in AIR 2017 SC 5157, as no compensation was granted to claimants No.2 to 4. On the above grounds learned counsel sought for allowing cross objections and for dismissal of insurer’s appeal.
Heard learned counsel for parties, perused impugned judgment and award and the record.
From the above, occurrence of accident on 02.06.2015 and death of Girish in the said accident are not in dispute. The tribunal held that accident occurred due to rash and negligent driving of insured lorry by its driver. Insurer is in appeal challenging said finding and contending false implication of insured vehicle. In so far as quantum of compensation, the appeal is on the ground of failure to account for benefits received by claimants from the employer and rate of interest. The
11 claimants filed cross objections for enhancement of compensation, insofar as, monthly income of deceased and for enhancement under conventional heads. Therefore, the dependency of the claimants on the deceased is not in dispute. Thus, the points that arise for our consideration in the appeal and cross-objection are as follows: 1. Whether the assessment of compensation calls for modification as sought for?
Whether rate of interest awarded by the tribunal at 9% requires to be reduced?
Whether finding of the tribunal that death of Sri. Girish was on account of an accident that occurred on 02.06.2015 at 7:30 p.m. caused due to rash and negligent driving of the insured lorry by its driver is sustainable?
Point No.1
Insofar as quantum of compensation there is no dispute regarding the fact that deceased was working as a lecturer in a Government PU College. The claimants have produced service certificate, 3 pay certificates and letter issued by the Principal of the College as per Ex.P.9 and P.11. The service book, attendance register and salary certificate are also produced as Ex.P.22 to P.24. On a perusal of the salary certificate at Ex.P.24, it is seen that the gross salary for the
12 month of May, 2015 was Rs.32,468/-. No amount is deducted towards income tax. But a sum of Rs.200/- is deducted towards Professional Tax. It would also be relevant to mention that a sum of Rs.3,000/- is shown to be deducted towards KGID; Rs.4,506/ towards LIC and Rs.180/- towards GIS. From the contents of Ex.P.11 and P.24-salary certificate, it is clear that the claimant had paid separate premium towards KGID, LIC and GIS. Therefore, the benefits received due to death of S.R. Girisha is by virtue of separate subscription. As per the decision in Sebastian Lakra and others Vs. National Insurance Co., Ltd., & Others reported in AIR 2018 SC 5034 also National Insurance Co., Ltd., Vs. Indira Srivastava & Others reported in AIR 2008 SC 845, benefits received by dependents of deceased, such as, pension, LIC and appointment on compassionate ground etc., cannot be deducted from the compensation.. Therefore, the insurer’s challenge to the award on the said count is liable to be rejected.
As per the last drawn salary of the deceased, the annual income would be Rs.3,89,616/-. For the year 2015-16, income upto Rs.3,00,000/- was exempted. The amount in excess on Rs.3,00,000/- upto Rs.5,00,000/- was chargeable to Income
13 tax at 10% i.e., Rs.8,961 would be the annual Income Tax payable [Rs.3,89,616 - Rs.3,00,000 =Rs.89,616 x 10%]. The same would be Rs.747/- per month. Apart from the said sum Rs.200/- would have to be deducted towards Professional Tax. Therefore, net income, after deduction of income tax and professional tax, would be Rs.32,468 – Rs.947 = Rs.31,521/-.
The deceased was 32 years of age, working as a lecturer in Government P.U. College i.e., he was in a secured employment. Further the claimants are wife, daughter and parents of the deceased i.e., four dependents. As per the decision in Pranay Sethi’s case (supra) multiplier applicable would be ‘16’, addition of future prospects would be 50% and deduction towards personal expenses will have to be at 1/4th. Therefore the loss of dependency would be: Rs.31521 x 1.5 x 0.75 x 12 x 16 = Rs.68,08,536/-
Apart from the above, tribunal awarded Rs.40,000/- towards loss of consortium. Rs.15,000/- towards funeral expenses, Rs.15,000/- towards loss of estate. As per the decision of Hon’ble Supreme Court in Pranay Sethi, (supra) reiterated in New India Assurance Company Ltd., Vs. Somwati and
14 Others, reported in (2020) 9 SCC 644, since claimants are wife, daughter and parents, each of them would be entitled to award of compensation towards loss of consortium. Claimant No.1 would be entitled to Rs.40,000/- towards loss of spousal consortium, claimant No.2 would be entitled to Rs.40,000/- towards filial consortium and claimants No.3 and 4-parents would be entitled to compensation towards loss of parental consortium of Rs.40,000/- each. In addition they would also be entitled to a sum of Rs.15,000/- towards funeral expenses and Rs.15,000/- towards loss of estate. As more than three years have lapsed since rendering of decision in Pranay Sethi’s case (supra), 10% has to be added to award under conventional heads i.e., Rs.1,90,000 + Rs.19,000(10%) = Rs.2,09,000/-.
Thus, claimants would be entitled to total reassessed compensation of: Loss of dependency Rs.68,08,536 Consortium Rs.2,09,000 Total Rs.7,01,7536
An error is committed by the tribunal while computing the compensation where it deducted income tax on the entire income without noticing the fact that income upto Rs.3,00,000/- was
15 exempt from income tax. Therefore the assessment of compensation by the tribunal being capricious suffers from material irregularity and against the well settled principles of law. Hence, the same is liable to be interfered with. Point No.1 answered partly in the affirmative as above.
Point No.2
The tribunal while passing impugned award has granted interest at the rate of 9% per annum. The only reason stated therefor is increase in the rate of interest on term deposits by nationalized banks. However, the rate of interest has since reduced, therefore, award of interest at 9% would not be justified. Further this Court is consistently awarding interest at 6% per annum in the accident claim cases, rate of interest is liable to be reduced from 9% to 6%. Point No.2 is answered in the negative as above.
Point No.3:
In order to establish that the accident was caused on account of rash and negligent driving by driver of insured vehicle, claimants no.4 and 2 were examined as PWs-1 and 2 respectively. However, neither of them was eye-witness to the
16 accident. But they also examined Ganesh as PW-3, who claimed to be an eyewitness. PW-3 deposed that on 02.06.2015 at 7:30 p.m., when he was walking by the side of Periyapattana-Kunigal road, a sand filled lorry coming from Kushalnagara while attempting to overtake another lorry dashed against motorcycle coming from opposite direction and fled away without stopping.
In cross-examination it was elicited that offending lorry was of red colour and witness saw the accident from a distance of 50 mtrs. But it was also admitted that he does not know registration number of lorry. Surprisingly, PW-3 mentioned the registration number twice, in his examination-in-chief. In support of oral evidence claimants also produced copy of FIR, complaint, charge sheet, spot mahazar, Motor Vehicle Inspector’s report, inquest panchanama and postmortem report, marked as Exs.P.1 to P7 respectively. In Ex.P.2 - complaint given by claimant No.4 on 02.06.2015 at 10:30 p.m., it is stated that accident was caused by sand filled lorry which did not stop after accident. It’s registration number was not mentioned. Based on said complaint FIR - Ex.P.1 is registered. Ex.P.3 is the charge sheet filed against Jayanth Kumar - driver of lorry bearing registration No. KA-50-0339. Ex.P.5 is M.V. Inspector’s report,
17 wherein it is stated that no visible damages were found on the lorry.
In rebuttal, insurer examined its Law officer as RW-1. During his cross-examination it is elicited that insurer had filed complaint before the Superintendent of Police, Mysore for reinvestigation in the matter, as it suspected false implication of insured vehicle for the purposes of the claim. It is also elicited that no efforts were made by insurer to contact the owner and driver of insured vehicle or the eyewitness to enquire about the accident. From the contents of charge sheet and evidence of PW- 3, it can be held that accident occurred on account of head-on collision between a lorry and motorcycle. As per version of PW-3, offending lorry was trying to overtake another sand filled lorry, in great speed and in the process dashed against motorcycle of deceased. But no damages were found on insured lorry by the MV Inspector as stated in Ex.P.5 report. Despite mentioning registration number of lorry, twice in examination-in-chief, PW-3 admits, he does not know registration number of lorry. Thus, for the purpose of identification of offending lorry, his evidence is unreliable.
18 22. The Insurer has taken a clear stand regarding false implication of insured vehicle. There is no evidence to substantiate the basis for filing of charge sheet against driver of insured lorry. Neither the spot mahazar nor the spot sketch are helpful for revealing identity of offending vehicle. The claimants have not examined the investigating officer. They have also not examined driver of insured vehicle. As per decision of Hon’ble Apex Court in Machindranath Kernath Kasar’s case (supra) driver of offending vehicle should be examined, at least as a witness, in order to assign tortuous liability against owner of insured vehicle. The finding of the tribunal on issue no.1 is based upon abject reliance upon police investigation records, which do not inspire confidence. It is settled law that the findings of criminal investigation or criminal trial do not bind the motor vehicle accident claims tribunal and it is free to arrive at its own conclusion based on evidence placed before it. There is no proper appreciation of evidence on record. Therefore, the finding of tribunal is liable to be set-aside and the matter is remanded to the tribunal for re-consideration.
Hence the following order:
19 ORDER i] Both the appeals are allowed in part. The impugned order dated 19.01.2019 passed in MVC No.240/2015 on the file of the Principal District Judge and MACT at Kodagu, Madikeri [‘Tribunal’ for short] is set aside. ii] The matters are remanded to the Tribunal for re-consideration keeping open all the rights and contentions of the parties. iii] The parties are at liberty to tender fresh/additional evidence, if any. iv] The Tribunal shall re-consider the matter and pass appropriate orders in accordance with law in an expedite manner. v] Since the parties are represented by their learned counsel, the parties are directed to appear before the Tribunal on 06.09.2021 without waiting for any notice and shall take further orders. vi] The amount in deposit shall be transferred to the Tribunal. After such transfer, the same
20 shall be invested in an interest bearing fixed deposit till the disposal of the matter. vi] The Registry shall transfer the original records to the jurisdictional Tribunal forthwith.
Sd/- JUDGE
Sd/- JUDGE
BVK