JOSPHINE JAMES Vs UNITED INDIA INSURANCE CO.LTD.
Bench: G.S. SINGHVI,V. GOPALA GOWDA
Case number: C.A. No.-005985-005985 / 2013
Diary number: 13343 / 2012
Advocates: MANJEET CHAWLA Vs
DEBASIS MISRA
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NON- REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5985 OF 2013
JOSPHINE JAMES ... APPELLANT VS.
UNITED INDIA INSURANCE CO. LTD. & ANR. .. RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
This civil appeal is directed against the
judgment and award dated 13.01.2012 passed by the
High Court of Delhi in MAC Appeal No. 433 of 2005 by
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allowing the appeal of the respondent herein and
reducing the compensation awarded by the Motor
Accidents Claims Tribunal (in short ‘the Tribunal’)
in suit No. 778 of 2003 urging various facts and
legal contentions.
2. The appellant widow is the mother of the
deceased who filed claim petition before the Tribunal
claiming compensation on account of the death of her
son who was aged about 21 years, in a car accident
which occurred on 12.06.1998. The car (bearing
registration No. DL 2C F 3431), which he was driving
from Jaipur to Delhi, was hit by a truck (bearing
registration No. RJ 14 G 7596), which was owned by
respondent No.2. and insured with respondent No.1.
3. The claim petition was filed by the appellant
before the Tribunal claiming compensation from the
respondent for the death of her son caused by the
accident. The claim was contested by the respondents.
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Five witnesses were examined including the appellant
herein who produced documentary evidence in
justification of her claim. The Tribunal accepted
the claim of the appellant and awarded compensation
of Rs. 9,00,000/- towards the loss of dependency of
the appellant which was determined by the Tribunal by
applying the multiplier of 15 to the multiplicand
which was arrived at by taking two-third of the
monthly salary of the deceased and multiplying the
amount by 12 months. Under the conventional heads,
the Tribunal also awarded Rs.15,000/- towards funeral
expenses and Rs. 50,000/- towards loss of filial
affection of the mother. It has further awarded Rs.
3,42,000/- in lump sum towards repair of the
appellant’s car which met with the accident. In
total, a sum of Rs. 13,07,000/- was awarded by the
Tribunal as compensation for the death of her son and
the damage caused to her car which met with a
roadside accident, with an interest at the rate of 6%
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C.A.No.5985 of 2013
per annum from the date of filing the petition till
the date of actual payment.
4. The said judgment and award of the Tribunal was
challenged by the Insurance Company without obtaining
permission from the Tribunal under Section 170 (b) of
the Motor Vehicle Act, 1988 (in short ‘the M.V. Act’)
urging various legal contentions questioning the
correctness of the quantum of compensation awarded in
favour of the appellant.
5. The learned Judge of the High Court in the
appeal filed under Section 173 of the M.V. Act, 1988,
by the Insurance Company, reduced the compensation
from Rs. 9,00,000/- to Rs. 6,75,000/- which was
arrived at by the following calculation: (Rs. 3750 x
12 x 15) while affirming the rest of the award. The
main objection of the appellant was the
maintainability of the appeal by the Insurance
Company on the ground that it is not open to the
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C.A.No.5985 of 2013
Insurance Company to challenge the quantum of
compensation awarded by the Tribunal in favour of the
appellant. The High Court, by placing reliance upon
the judgment of this Court in the case of United
India Insurance Co. vs. Bhushan Sachdeva & Ors1, has
held that the words ‘failed to contest’ in Section
170 (b) of the MV Act must mean failed to file an
appeal since appeal is a continuation of the original
proceedings. The court also noted that the insured
has not filed an appeal and therefore, permitted the
Insurance Company to file an appeal for reduction of
quantum of compensation as awarded by the Tribunal in
favour of the appellant. On the basis of such
statement, the compensation awarded by the Tribunal
was reduced by allowing the appeal.
6. Aggrieved by the order of the learned Single Judge
of the Delhi High Court, the appellant filed Review
Petition No. 80 of 2007 in which she has raised the
1 (2002) 2 SCC 265
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C.A.No.5985 of 2013
objection on the maintainability of the appeal filed
by the Insurance Company for reduction of the quantum
of compensation awarded by the Tribunal. The learned
counsel for the appellant contended that it is not
open for the Insurance Company to challenge the
quantum of compensation awarded by the Tribunal
unless it files an application under Section 170(b)
of the M.V. Act before the Tribunal for obtaining
permission to contest the case on merits. Otherwise,
the Insurance Company has only limited right to
appeal as per Section 149 (2) of the M.V. Act. The
Insurance Company has placed reliance upon the
judgment of this Court in the case of Bhushan
Sachdeva (supra) decided by two Judge Bench on 18.1.2002. The same came to be over-ruled by a three
Judge Bench of this Court in the case of National
Insurance Company vs. Nicolletta Rohtagi2.
Therefore, it is contended by the appellant in the
review petition that the judgment passed by the High
2 (2002) 7 SCC 456
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C.A.No.5985 of 2013
Court in the appeal of the Insurance Company is
contrary to the law laid down by this Court in the
Nicolletta Rohtagi’s case referred to supra.
7. The learned Judge of the High Court, accepting
the legal contentions urged by the appellant, allowed
the review petition. But, the learned Judge of the
High Court had erroneously reduced the overall
compensation from Rs.13,07,000/- awarded by the
Tribunal to an amount of Rs. 8,12,000/- by reducing
the amount under loss of dependency.
8. Aggrieved by the impugned judgment and award
passed by the High Court in MAC Appeal no. 433/2005
and the review petition, the present appeal is filed
by the appellant urging certain grounds and assailing
the impugned judgment in allowing the appeal of the
Insurance Company without following the law laid down
by this Court in Nicolletta Rohtagi’s case (supra)
and instead, placing reliance upon the Bhushan
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C.A.No.5985 of 2013
Sachdeva’s case (supra). Nicolletta Rohtagi’s case
was exhaustively discussed by a three judge bench in
the case of United India Insurance Company Vs. Shila
Datta3. Though the Court has expressed its
reservations against the correctness of the legal
position in Nicolletta Rohtagi decision on various
aspects, the same has been referred to higher bench
and has not been overruled as yet. Hence, the ratio
of Nicolletta Rohtagi’s case will be still applicable
in the present case. The appellant claimed that
interference by the High Court with the quantum of
compensation awarded by the Tribunal in favour of
appellant and considerably reducing the same by
modifying the judgment of the Tribunal is vitiated in
law. Therefore, the impugned judgments and awards
are liable to be set aside.
9. It is further urged by the learned counsel on
behalf of the appellant that the learned Judge of the
3 (2011) 10 SCC 509
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C.A.No.5985 of 2013
High Court committed serious error in reducing the
quantum of compensation and not considering the
future prospects of the deceased. He further
contended that the learned Judge of the High Court
has erred in not awarding interest at the rate of 9%
per annum as awarded by this Court in Municipal
Council of Delhi Vs. Association of Victims of Uphaar
Tragedy4 which was decided on 13.10.2011 whereas the
review petition for recalling its judgment was
decided on 13.2.2012, but on the other hand, has
further reduced the compensation.
10. Another ground of assailing the impugned judgment
by the appellant is that the learned Judge of the
High Court has ignored the second Schedule to the
M.V. Act in view of the decision of this Court in the
case of Baby Radhika Gupta Vs. Oriental Insurance Co. Ltd5. by reducing the compensation from Rs. 6,75,000/- to 4,20,000/-, under the non-pecuniary
4 (2011) 4 SCC 481 5 (2009) 17 SCC 627
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C.A.No.5985 of 2013
damages without taking into consideration the fact
that the appellant’s age was 41 years at the time
when her son met with the accident. The multiplier of
15 taken by the Tribunal is legal and valid by
following the decision of this Court in the case of
Kerala State Road Transport Corporation Vs. Susamma
Thomas6. Hence, the learned counsel for the
appellant has prayed for allowing this appeal and
restoring the judgment and award of the Tribunal
wherein it has awarded Rs.9,65,000/- under non-
pecuniary damages towards the loss of dependency and
also under the conventional heads.
11. The learned counsel for the respondent
Insurance Company sought to justify the impugned
judgment and award passed by the High Court
contending that the appellate court in exercise of
its jurisdiction has appreciated the pleadings and
evidence on record and reduced the compensation by
6 ( 1994 ) 2 SCC 176
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C.A.No.5985 of 2013
passing the impugned judgment. Therefore, the same
does not call for interference by this Court in
exercise of its jurisdiction. Hence, they requested
for dismissal of appeal.
12. We have carefully examined the factual rival
contentions and perused the record. With a view to
find out whether the impugned judgment and award
warrant interference by this Court in exercise of its
jurisdiction, the said point which calls for our
consideration is answered in favour of the appellant
for the following reasons:
13. It is an undisputed fact that the son of the
appellant died in a motor vehicle accident on
12.6.1998, who was the sole earning member of the
family. The respondent driver and insurer were
initially impleaded as parties but notice could not
be served to the driver despite repeated efforts.
The driver was therefore later on deleted from the
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C.A.No.5985 of 2013
array of parties on the basis of the decisions of
various High Courts including Delhi High Court
wherein it was held that non-impleadment of driver of
the offending vehicle is not fatal to the proceedings
in view of the fact that the liability of the owner
and the insurer of the offending vehicle is joint and
several. The insured was placed ex-parte since he
remained absent despite the service of notice upon
him in the proceeding whereas the Insurance Company
filed written statement wherein it has admitted that
on the date of accident the offending truck stood
duly insured with it and the insured was respondent
No. 2 in the proceedings before the Tribunal.
14. The Tribunal has answered the compensation issue
on the basis of pleadings and evidence available on
record and held that the son of the appellant died in
a motor vehicle accident on 12.6.1998 on account of
rash and negligent driving of the offending truck.
Accordingly, the first issue was answered by it by
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recording reasons. Issue Nos. 2 and 3 framed by the
Tribunal are whether the appellant is entitled to any
compensation and if yes, then what should be the
amount and who will pay the same. Both of these
issues are answered in favour of the appellant. On an
appraisal of the oral and documentary evidence
particularly, considering the evidence of PW-2 and
PW-5 the co-worker and employer of the deceased, the
Tribunal placed reliance upon the salary certificate
issued by the employer for assessing the monthly
income of the deceased. The Tribunal, being a fact
finding authority, on the basis of proper
appreciation of pleadings and legal evidence on
record, has recorded the finding on issue No. 2 and
held that the appellant is entitled to compensation
of Rs.9,65,000/- by accepting the evidence of the
appellant regarding monthly income of the deceased at
Rs. 5,000/-which was being earned by the deceased and
was sent to his mother- the appellant and her three
daughters for their maintenance. The same was not
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challenged. The loss of dependency determined at
Rs.9,00,000/- by taking multiplier of 15, is in
conformity with the judgment of this Court in the
case of Baby Radhika Gupta (supra).
15. Further, the Tribunal, by applying the
principle laid down in the case Susamma Thomas (supra), has awarded Rs.15,000/- towards funeral
expenses and Rs.50,000/- for loss of love and
affection. Under the heading of pecuniary damages, a
sum of Rs. 3,42,000/- is awarded towards the damage
caused to the car of the appellant in the accident.
In total, a sum of Rs. 13,07,000/- is awarded as
compensation in favour of the appellant.
16. The Insurance Company has challenged the
correctness of the judgment of the Tribunal before
the High Court by filing an appeal. The same was
partly allowed vide judgment dated 8.1.2007 by
reducing the monthly contribution given by the
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C.A.No.5985 of 2013
deceased son to his mother at Rs.3750/- for her
maintenance holding that the mother would not be
entitled to more than 50% of the income of the
deceased. The sisters of the deceased did not join
the appellant as claimants. Hence, the High Court
held that no compensation could be awarded to them.
Therefore, the High Court awarded a compensation of
Rs. 6,75,000/- by applying a multiplier of 15 to the
multiplicand.
17. The said order was reviewed by the High Court
at the instance of the appellant in view of the
aforesaid decision on the question of maintainability
of the appeal of the Insurance Company. The High
Court, in the review petition, has further reduced
the compensation to Rs. 4,20,000/- from Rs.
6,75,000/- which was earlier awarded by it. This
approach is contrary to the facts and law laid down
by this Court. The High Court, in reducing the
quantum of compensation under the heading of loss of
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C.A.No.5985 of 2013
dependency of the appellant, was required to follow
the decision rendered by three judge Bench of this
Court in Nicolletta Rohtagi case (supra)and earlier
decisions wherein this Court after interpreting
Section 170 (b) of the M. V. Act, has rightly held
that in the absence of permission obtained by the
Insurance Company from the Tribunal to avail the
defence of the insured, it is not permitted to
contest the case on merits. The aforesaid legal
principle is applicable to the fact situation in view
of the three judge bench decision referred to supra
though the correctness of the aforesaid decision is
referred to larger bench. This important aspect of
the matter has been overlooked by the High Court
while passing the impugned judgment and the said
approach is contrary to law laid down by this Court.
18. In view of the aforesaid reasons, the Insurance
Company is not entitled to file appeal questioning
the quantum of compensation awarded in favour of the
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appellant for the reasons stated supra. In the
absence of the same, the Insurance Company had only
limited defence to contest in the proceedings as
provided under Section 149 (2) of the M.V. Act.
Therefore, the impugned judgment passed by the High
Court on 13.1.2012 reducing the compensation to
4,20,000/- under the heading of loss of dependency by
deducting 50% from the monthly income of the deceased
of Rs. 5,000/- and applying 14 multiplier, is
factually and legally incorrect. The High Court has
erroneously arrived at this amount by applying the
principle of law laid down in Sarla Verma v. Delhi
Transport Corporation7 instead of applying the
principle laid down in Baby Radhika Gupta’s case
(supra) regarding the multiplier applied to the fact
situation and also contrary to the law applicable
regarding the maintainability of appeal of the
Insurance Company on the question of quantum of
compensation in the absence of permission to be
7 (2009) 6 SCC 121
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obtained by it from the Tribunal under Section 170
(b) of the M.V. Act. In view of the aforesaid reason,
the High Court should not have allowed the appeal of
the Insurance Company as it has got limited defence
as provided under section 149(2) of the M.V. Act.
Therefore, the impugned judgment and award is
vitiated in law and hence, is liable to be set aside
by allowing the appeal of the appellant.
19. Further, the award of interest at the rate of
6% per annum on the compensation as has been awarded
both by the Tribunal and the High Court is also bad
in law for the reason that in the case of Association
of Victims of Uphaar Tragedy (supra), this Court has
awarded interest at the rate of 9% per annum on the
compensation awarded in favour of the appellant.
There is no justification for them in not applying
the ratio of the abovementioned case to the fact
situation of the present case. We therefore, grant
interest at the rate of 9% per annum on the
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compensation amount awarded by the Tribunal as the
Insurance Company has been contesting the case
without any justifiable reason. Further, the
Insurance Company has deprived the appellant of the
benefit of her legitimate claim of getting the
compensation and she was made to approach the court
for determination of the claim even after passing of
the award by the Tribunal since the same was
contested by the Insurance Company by filing appeal
by urging wholly untenable grounds which are not
maintainable in law. Accordingly, we allow the appeal
by setting aside the impugned judgment and award of
the High Court and restore the compensation awarded
by the Tribunal of Rs. 13,07,000/- both under the
heads of pecuniary and non-pecuniary damages and the
said amount carries 9% interest per annum from the
date of filing of the application till the date of
payment of the amount. We direct the Insurance
Company to deposit 50% of the awarded amount with
proportionate interest in any of the nationalized
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Banks of the choice of the appellant for a period of
3 years. During the said period, if she wants to
withdraw a portion or entire deposited amount for her
personal or any other expenses, then she is at
liberty to file application before the Tribunal which
may be considered by it and pass appropriate order in
this regard. If the amount of compensation has not
yet been paid by the Insurance Company to the
appellant, the same shall be paid within six weeks by
obtaining demand draft in favour of the appellant.
…………………………………………………………J [G.S. SINGHVI]
…………………………………………………………J. [V. GOPALA GOWDA]
New Delhi, August 14, 2013
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