1. M.A.C.M.A.No.3934 of 2014 is preferred by the insurance company, HDFC ERGO General Insurance Company Limited, questioning the order
and decree, dated 19.09.2011 made in O.P.No.485 of 20010 on the file of the Motor Accidents Claims Tribunal-cum-III Additional District Judge
(Fast Track Court), Mahabubnagar at Gadwal (for short, the Tribunal). Challenging the very same order and decree, the claimants filed cross-
objections seeking enhancement of compensation.
For the sake of convenience, hereinafter the parties are referred to as per their array before the Tribunal.
The claimants filed a petition under Section 166 of the Motor Vehicles Act claiming compensation of Rs.5,00,000/- for the death of the deceased,
Kurva Chinna Ramudu, aged about 32 years, who died in a motor vehicle accident that occurred on 12.08.2009. It is stated that on the fateful day,
while the deceased was proceeding towards Jillamgeri of Karnataka State on a motorcycle, at about 6:00 p.m., when he reached the limits of Baligera
Village, bus bearing No. AP 27Y 0102, owned by respondent No. 2, insured with respondent No. 3 and hired with respondent No. 1, being driven by
its driver in a rash and negligent manner, dashed the motorcycle of the deceased. As a result, the deceased fell down and died on the spot. According
to the claimants, the deceased was getting an income of Rs.1,00,000/- per annum by doing agriculture apart from Rs.200/- per day from dairy
business. Therefore, they laid a claim for Rs.5.00 lakhs against the respondents.
Before the Tribunal, while the respondent Nos. 1 & 2 remained ex parte, respondent No. 3, insurance company, opposed the claim petition. After
considering the oral and documentary evidence on record, the tribunal came to the conclusion that the accident was occurred due to the rash and
negligent driving of the offending bus by its driver and awarded total compensation of Rs.4,04,000/- with interest @ 7.5% per annum to be paid by the
respondent Nos. 2 and 3 jointly and severally. Aggrieved by the said order, the insurance company filed the appeal and seeking enhancement of
compensation, the claimants filed the cross-objections.
Heard both sides and perused the material available on record.
The only contention raised by the learned Standing Counsel for the appellant, insurance company, is that before the tribunal, by producing Exs.B.1 to
B.4, apart from examining R.W.1, the insurance Company has adequately established the fact that the cheque, Ex.B. 1, issued by the owner of the
offending bus, towards insurance premium, was dishonoured due to insufficient funds and returned unpaid by the bank through the cheque return
memo, Ex.B. 2, that as the contract of insurance became void ab initio, the insurance company has issued the policy cancellation letter, Ex.B. 3, and
therefore, the insurance company is not on risk in respect of insurance policy, Ex.A.7, as there is no contract between the insurance company and the
offending bus. It is contended that the cheque issued by the owner of the offending bus, towards premium, was on 30.03.2009 and due to it dishonour
on 07.04.2009, the insurance company cancelled the policy on 12.05.2009 and whereas the accident was occurred on 12.08.2009 and therefore, in the
absence of valid subsisting contract between the insurance company and the owner of the offending bus, no liability can be fastened upon the
insurance company for payment of compensation.
On the other hand, the learned counsel for the claimants, cross-objectors, has contended that inasmuch as the insurance company has not challenged
Ex.A.7, policy, and has not cross-examined P.W.1 to the effect that Ex.A.7 is not the copy of the insurance policy and as the cancellation of the
policy under Ex.B.3 pertains to different engine and chassis number, the tribunal, after analyzing the evidence brought on record, has rightly rejected
the claim of the insurance company as to the cancellation of Ex.A.7 policy and the said findings needs no interference by this Court.
As regards the quantum of compensation awarded by the tribunal, it is contended by the learned counsel for the claimants that as the dependants of
the deceased are five in number, as per the decision of the Apex Court in Smt. Sarla Varma v. Delhi Transport Corporation (2009) 6 SCC 121, the
deduction towards personal expenses of the deceased should be 1/4th, but the tribunal has erroneously deducted 1/3rd towards personal expenses. It is
further contended that though the deceased was owning Ac.10.00 guntas of land, as seen from Ex.A.8, and getting an income of Rs.1,00,000/- per
annum, apart from Rs.200/- per day by doing milk business, yet the tribunal has fixed the meagre monthly income of Rs.3,000/- and therefore, the
learned counsel seeks enhancement of the compensation awarded by the tribunal. Even the amount of Rs.20,000/-awarded by the tribunal under
conventional heads needs enhancement.
Considering the contention of the insurance company about its liability on the ground that the policy stood cancelled by the time of the accident, basing
on Exs.B. 1 to B.4, the tribunal has extensively dealt with the issue at para No. 18, which reads as under:-
“18. In the present case Ex.A7 is copy of policy is marked through the evidence of PW.1. The respondent No.3 has not challenged Ex.A7 and the
respondent No.3 has not cross examined PW.1 stating that Ex.A7 is not the copy of the insurance policy. Hence it is held that Ex.A7 is the copy of
the insurance policy of the crime vehicle. The respondent No.3 has not filed copy of Insurance policy to show that Ex.A7 is not the copy of insurance
policy of the crime vehicle. Admittedly the registration number of the vehicle is not mentioned in Ex.A7 for the reason that the vehicle is new one and
identity of the vehicle can be ascertained with engine and chassis numbers mentioned in Ex.A7. In Ex.A7 Registration mark and number of the
vehicle is mentioned as “Newâ€. Engine number and chassis number are mentioned as “LXE 1059672 and KXE 670987†respectively. Since
the respondent No.3 has not challenged Ex.A7 and as the respondent No.3 has not filed any copy of insurance policy to prove that originally Ex.A7
was not issued by the respondent No.3, the court relied on Ex.A7 and comes to a conclusion that the engine and chassis number of the crime vehicle
are “{LXE 105972†and “KXE 670897â€. As seen from Ex.B1 returned cheque it was issued for two cover notes that is VCO 1614098, UCO
1614099. Ex.B3 is cancellation endorsement of policy. The court perused Ex.B3. As seen from Ex.B3 it is very clear that the policy was cancelled in
respect of vehicle bearing engine No.23689 and chassis number 65892 but not the policy issued under Ex.A7. The court comes to this conclusion as
engine and chassis numbers mentioned in Ex.B3 cancellation endorsement and in Ex.B4 certificate of posting receipt are different with that of engine
number and chassis number mentioned in Ex.A7 copy of policy. Therefore, from Ex.B3 and Ex.B4 it cannot be said that Ex.A7 policy was cancelled
and the owner was duly informed about the cancellation of Ex.A7 policy. If at all the respondent No.3 cancelled Ex.A7 policy and duly intimated the
same to the owner of the vehicle, the policy endorsement Ex.B3 and certificate of posting receipt Ex.B4 must contain the engine and chasis number
as mentioned in Ex.A7. But the Ex.B3 and B4 contain different engine and chassis numbers. There is no explanation to this from the side of the
respondent No.3. Further the respondent No.3 has not pleaded in the counter that the policy issued to the crime vehicle was duly cancelled and the
same was informed to the respondent No.3. In view of the difference in engine number and chassis number mentioned in Ex.B3 and B4 with that of
engine number and chassis number mentioned in Ex.A7 copy of policy, from the evidence of RW.1 and from Ex.B1 to B4 it cannot be said that the
respondent No.3 cancelled the Ex.A7 policy for non realization of premium amount and the respondent No.3 failed to establish that Ex.A7 policy was
cancelled and the same was duly informed to the owner. Hence the contention of the respondent No.3 that the respondent No.3 is not liable to pay the
compensation amount payable to the petitioners is not accepted……â€
Thus, on scrutiny of the evidence, more particularly, considering Ex.B. 3, which reflects that the policy was cancelled in respect of vehicle bearing
engine No. 23689 and chassis number 65892, but not in relation to the policy issued under Ex.A.7, the tribunal came to the conclusion that the
insurance company failed to establish that Ex.A.7, policy, was cancelled and rightly rejected the contention that the insurance company is not liable to
pay the compensation. The said findings of the tribunal, which are on proper appreciation of evidence brought on record, needs no interference by this
Court. Hence, the appeal filed by the insurance company is liable to be dismissed.
Coming to the cross-objections, although the claimants claimed that the deceased used to earn a sum of Rs.1,00,000/-per annum by doing agriculture,
except filing copy of pahani, Ex.A.8, showing that the deceased was owning agricultural land, no income proof was filed. Even the claimants failed to
establish that the deceased used to earn a sum of Rs.200/- per day by doing milk business. However, the income of the deceased assessed by the
tribunal at Rs.3,000/- per month, in the opinion of this Court, is meagre and needs enhancement. Considering the prevailing rate of minimum wages at
the relevant point of time, this Court is inclined to fix the monthly income of the deceased at Rs.4,000/- per month. Inasmuch as the deceased was
self-employed and aged about 32 years, as per the decision of the Apex Court in National Insurance Company Limited v. Pranay Sethi 2017(6) 170
(SC), 40% to the established income of the deceased needs to be added towards future prospects. By adding 40% to the income of the deceased, the
future monthly income of the deceased comes to Rs.5,600/-(Rs.4,000/- plus Rs.1,600/- being 40% thereof). Inasmuch as the dependants are five in
number, the tribunal ought to have deducted 1/4th towards personal expenses of the deceased but not 1/3rd. Therefore, by deducting 1/4th from
Rs.5,600/-, the net monthly contribution to the family comes to Rs.4,200/-which works out to Rs.50,400/- per annum. Since the deceased was 32 years
at the time of the accident, the appropriate multiplier is ‘16’. By applying the multiplier ‘16’, the loss of dependency comes to
Rs.8,06,400/-. That apart, as per the decision of the Apex Court in Pranay Sethi (supra), the claimants are entitled to Rs.77,000/- under the
conventional heads, but not Rs.20,000/- as was awarded by the tribunal. Thus, in all, the claimants are entitled for the total compensation of
Rs.8,83,400/-.
In the result, while dismissing the M.A.C.M.A. No.3934 of 2014 filed by the insurance company, the cross-objections filed by the claimants are
allowed enhancing the compensation from Rs.4,04,000/- to Rs.8,83,400/-. The enhanced compensation shall carry interest at 7.5% per annum till the
date of realization. Time to deposit the amount is two months. However, the claimants are directed to pay deficit court fee on the enhanced
compensation amount. There shall be no order as to costs.
Miscellaneous petitions, if any, pending shall stand closed.