The High Court of Telangana has reiterated that compensation in motor vehicle accident death claims should include amount under conventional heads viz. loss of estate, loss of consortium, and funeral expenses.
The single-judge Bench of Justice G. Shri Devi has observed that the MACTs decision should be in line with the SC judgement in National Insurance Company Limited v. Pranay Sethi & Ors.
The appellant, in the present case has assailed the quantum of compensation awarded by the Motor Accidents Claim Tribunal contending among other things that the same didn't include conventional heads.
The claimants-petitioners (husband and children of the deceased) filed a petition under Section 166 of the Motor Vehicles Act claiming compensation of Rs. 4,50,000/- after the deceased, 41 yrs, died in an accident. The cause of accident was found to be rash and negligent driving of the vehicle driver. The family of the deceased mentioned his earning as Rs. 4,500/- per month being a maid servant.
The Tribunal awarded compensation of Rs. 2,80,000/- with proportionate costs and interest at 7.5% per annum from the date of petition till realisation, payable by the owner of the vehicle noting that the terms of insurance policy were violated.
In the appeal filed herein, the Learned Counsel for the appellants/claimants submitted that the Tribunal dismissed the claim against the 2nd respondent on the ground that the 1st respondent has violated the terms and conditions of the insurance policy by using the crime vehicle for hire purpose.
He further submitted that in case of violation of policy conditions including driver of the offending vehicle not having valid driving licence at the time of accident, gratuitous passenger etc., still the Insurer has to pay the compensation to the claimants at the first place and shall recover the same from the owner of the vehicle later.( Manuara Khatun & Ors. Vs. Rajesh Kr. Singh & Ors., 2017 Latest Caselaw 156 SC)
In his contention for enhancement of compensation, it was submitted that as per the principles laid down by the Apex Court in the recent decisions, the income of the housewife is to be taken at Rs.3,000/- per month and the claimants are also entitled to future prospects.
High Court Observation
At the outset, the Court observed that the Tribunal's order was not in line with the SC Ruling in National Insurance Company Limited v. Pranay Sethi & Ors.
"in National Insurance Company Limited Vs. Pranay Sethi and others2, the Apex Court held that “the reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively”. A perusal of the impugned order would show that the Tribunal did not award any amount under conventional heads."
Liability of Insurance Company for Gratuitous Passenger
Principle of 'pay and recover' prevails?
The Court stated that the witness under Section 161 Cr.P.C. stated that they hire the vehicle damaged. The Court drew analogy to decide whether Insuanrance Company are liable for compensation?
Read also : Can a Bank escape from Compensating the Client who lost Money as wrong Account number was supplied to him? SC says NO, Read Judgement
The Supreme Court in Rajendra Singh Vs. State of Uttar Pradesh, 2018 Latest Caselaw 766 SC has held that “the statements under Section 161 Cr.P.C. being wholly inadmissible in evidence, could not at all be taken into consideration.” Later, adding nuance to it, in N.Rama Krishna Reddy v. M.Santhakumari and another, the Court ruled:
“It is well settled that a statement made under Section 161 Cr.P.C. is not a substantive piece of evidence. However, in view of the proviso to Sub-section (1) of Section 162 Cr.P.C., the statement can be used for the limited purpose of contradicting the maker thereof in the manner set out in the said proviso.”
Further, in Manager, National Insurance Co. Ltd. Vs. Saju P. Paul and Another, 2013 Latest Caselaw 6 SC the Apex Court took note of entire previous case law on the subject mentioned and examined the question in the context of Section 147 of the M.V. Act. While allowing the appeal filed by the Insurance Company by reversing the judgment in Saju P.Paul v. National Insurance Co. Ltd.5 of the High Court, it was held on facts that since the victim was traveling in offending vehicle as “gratuitous passenger” and hence, the insurance company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy.
However, the Apex Court keeping in view the benevolent object of the Act and other relevant factors arising in the case, issued the directions against the Insurance Company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of “pay and recover”
The Court went onto note that it is not in dispute that the Innova Car was insured and Ex.B2-Insurance Policy clearly indicates that the accident has occurred during the policy period, it can be said that the deceased was travelled as a gratuitous passenger in the crime vehicle. It reffered to Anu Bhanvara v. Iffco Tokio General Insurance Company Limited, 2019 Latest Caselaw 695 SC, the Apex Court while dealing with the case of gratuitous passenger directed the insurer to pay the awarded sum to the claimant therein and recover the same from the insured in the same proceedings.
In view of the above, the Court noted that even though the liability of Insurance Company is exonerated, still the insurance company is liable to pay the compensation to the claimants at the first instance and then recover the same from the owner of the offending vehicle by invoking the principle “pay and recover.
Accordingly, allowing the appeal partially, it enhanced the compensation amount awarded by the Tribunal from Rs.2,80,000/- to Rs.3,50,000/-
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