MAC.APP./506/2012 of ORIENTAL INSURANCE CO LTD Vs ALTAF HUSSAIN & ORS

IN THE HIGH COURT OF DELHI AT NEW DELHI

+ MAC. APP. 506/2012

Date of decision: 14[th] September, 2012

ORIENTAL INSURANCE COMPANY LTD........ Appellant Through: Mr. Abhishek Kumar, Adv. Mr. N.K.Singh, Adv. Through: Mr. Abhishek Kumar, Adv. Mr. N.K.Singh, Adv.

versus

ALTAF HUSSAIN & ORS. ..... Respondents Through Through

Ms. Nikita Sharma, Adv. for R-1 & R-2..

CORAM:

HON'BLE MR. JUSTICE G.P.MITTAL

G. P. MITTAL, J. (ORAL)

J U M N T

1.The Appellant Oriental Insurance Company Limited impugns judgment dated 27.02.2012 solely on the ground that compensation of `2,30,500/- awarded in favour of Respondents No.1 and 2 for the death of Harfuddin, bachelor, aged 20 years was excessive and exorbitant. dated 27.02.2012 solely on the ground that compensation of `2,30,500/- awarded in favour of Respondents No.1 and 2 for the death of Harfuddin, bachelor, aged 20 years was excessive and exorbitant.

2.During inquiry before the Claims Tribunal it was claimed that the deceased was working as welder and was getting salary of `5,500/- per month. In the absence of any evidence with regard to deceased’s employment and his salary, the Claims Tribunal took the minimum wages of semi-skilled worker, deducted 50% towards personal and living expenses, applied the multiplier of 9 to compute the loss of dependency as `1,70,500/-. It added further sum of ` 60,000/- towards non pecuniary damages to compute the overall compensation of `2,30,500/-. deceased was working as welder and was getting salary of `5,500/- per month. In the absence of any evidence with regard to deceased’s employment and his salary, the Claims Tribunal took the minimum wages of semi-skilled worker, deducted 50% towards personal and living expenses, applied the multiplier of 9 to compute the loss of dependency as `1,70,500/-. It added further sum of ` 60,000/- towards non pecuniary damages to compute the overall compensation of `2,30,500/-.

3.This accident took place on 09.11.1998 and payment of this meagre compensation of `2,30,500/- is being stalled to the parents who lost their young son, aged 20 years. Filing of the Appeal by the Insurance Company was shocking and, therefore, notice was issued to the General Manager of the Appellant Insurance Company to apprise the Court about the policy of the Insurance Company to file Appeals even in very meagre and moderate award of compensation. compensation of `2,30,500/- is being stalled to the parents who lost their young son, aged 20 years. Filing of the Appeal by the Insurance Company was shocking and, therefore, notice was issued to the General Manager of the Appellant Insurance Company to apprise the Court about the policy of the Insurance Company to file Appeals even in very meagre and moderate award of compensation.

4.Section 166 of the Motor Vehicles Act, 1988 (the Act) enjoins payment of just compensation. In General Manager, Kerala Road Transport Corporation, Trivandrum v. Susamma Thomas & Ors., (1994) 2 SCC 176, the Supreme Court held as under: - of just compensation. In General Manager, Kerala Road Transport Corporation, Trivandrum v. Susamma Thomas & Ors., (1994) 2 SCC 176, the Supreme Court held as under: -

“5……The determination of the quantum must answer what contemporary society "would deem to be fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing". The amount awarded must not be niggardly since the law values life and limb in free society in generous scales'. All this means that the sum awarded must be fair and reasonable by accepted legal standards.”contemporary society "would deem to be fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing". The amount awarded must not be niggardly since the law values life and limb in free society in generous scales'. All this means that the sum awarded must be fair and reasonable by accepted legal standards.”

5.It may be noticed that the learned Single Judge of this Court in National Insurance Company Limited v. Farzana & Ors., 2009 ACJ 2763 while relying on R.K. Malik v. Kiran Pal, 2009 (8) Scale 451; Manju Devi v. Musafir Paswan, VII (2005) SLT 257; Sobhagya Devi & Ors. v. Sukhvir Singh & Ors., II (2006) ACC 1997; and Syam Narayan Vs. Kitty Tours & Travels, 2006 ACJ 320, awarded compensation of `3,75,000/- for the death of minor. Insurance Company Limited v. Farzana & Ors., 2009 ACJ 2763 while relying on R.K. Malik v. Kiran Pal, 2009 (8) Scale 451; Manju Devi v. Musafir Paswan, VII (2005) SLT 257; Sobhagya Devi & Ors. v. Sukhvir Singh & Ors., II (2006) ACC 1997; and Syam Narayan Vs. Kitty Tours & Travels, 2006 ACJ 320, awarded compensation of `3,75,000/- for the death of minor.

6.Similarly, in later judgment passed by learned Single Judge of this Court in Ami Chand & Ors. v. Jai Prakash & Ors., 2011 IX AD(Delhi)Court in Ami Chand & Ors. v. Jai Prakash & Ors., 2011 IX AD(Delhi)

111 relying upon the judgments in R.K. Malik v. Kiran Pal (2009) 14 SCC 1 andLata Wadhwa v. State of Bihar (2001) 8 SCC 197 granted sum of `2,25,000/- towards loss of dependency, `75,000/- towards future prospects and `75,000/- towards non pecuniary damages.

The First Respondent’s testimony that the deceased was working as welder was not challenged in cross-examination. Thus, even if Claim Petition would have been filed under Section 163-A of the Motor Vehicles Act, 1988 (the Act), the Respondents No.1 and 2 would have been entitled to compensation of `3,44,484/- that is `3,39,484/- (2361/- x 12 x 2/3 x 18) towards loss of dependency in addition to sum of `4,500/- towards non-pecuniary damages on the basis of structured formula as given in the Second Schedule.

In the case of Oriental Insurance Company Limited v. Mamta Rani & Ors., MAC APP.629/2010, decided on 06.09.2012 this Court noticed the Supreme Court judgments in Nagappa v. Gurudayal Singh, (2003) 2 SCC 274; Ibrahim v. Raju, AIR 2012 SC 534; New India Assurance Co. Ltd. v. Gopali & Ors., Civil Appeal No.5179 of 2012 decided on 05.07.2012 and judgment of the learned Single Judge of this Court in National Insurance Co. Ltd. v. Komal & Ors., MANU/DE/2870/2012, and held that the Court can increase the compensation without filing any Cross Appeal or Cross Objections.

9.In Narinder Bishal & Anr. v. Rambir Singh & Ors., MAC APP. 1007-08/2006, decided by this Court on 20.02.2008, the learned Single Judge of this Court echoed his sentiments as under:-

“35. With the massive progress in urbanization and industrialization in the recent times, we have switched from fast to

faster vehicular traffic which has come as boon to many and as bane to some. There has been an acceleration in automobile traffic, which concomitantly has resulted in escalating statics of motor vehicular accidents culminating in to casualties of human lives. There has been an alarming increase in the road accidents. Accidents on Indian roads are perhaps the second highest in the world and about ninety six thousand people were killed in road accidents in the year 2005 itself. As per the recent data released by Delhi Police, total of 8270 accidents had occurred in the capital in the year 2006, in which about 2050 people were killed. The blue line buses are the major killers as far as Delhi is concerned. These killer blue line buses have played havoc on Delhi roads and every year many precious lives get sacrificed by these blue line buses who have unleashed kind of death drive putting in danger the lives of Delhities on the roads of the capital. Death of any person in family torments and shatters the entire family more particularly when it is death of sole bread winner. No amount of compensation can bring back the family to the same position. The victims of accident and their family members not only undergo the traumatized and harrowing experience of losing family member but also they are made to suffer greatest humiliation and embarrassment right from mortuary till the award of compensation. The apathy and insensitivity of various government and other agencies involved in the process instead of lending helping hand place all sorts of hindrances to make the life of victims and their families worst and miserable. It is great irony in this country that the insurance companies are prompt in settling the claims of the insured vehicles for its damage but create all sorts of obstructions and bottlenecks in settling the claims of victims of the accidents. The precious life of human being is of little concern in comparison to settlement of claim for the damaged motor vehicle in the estimation of these insurance companies. On reporting damage to vehicle, immediate steps are initiated by the insurance companies to appoint an investigator/surveyor and photographer etc., for assessing the damage caused to the vehicle and practically no time is lost to get the vehicle repaired and restore the same to original condition. The insurance companies have tied up arrangements with various car manufacturers and the leading auto workshops to help out the insured for immediate delivery of the vehicle after the same is met with an accident. Atrociously, no similar pains are taken by theseinsurance companies to compensate the victims of the accidents in the injury cases or to the dependent family members in fatal accident cases. The broad parameters for the grant of compensation are almost settled through various recent authoritative pronouncements of the Apex Court and of various state High Courts. In recent judgment of the Supreme Court, entitled V. Subbulakshmi & Ors. vs. S. Lakshmi & Anr. in Civil Appeal No. 990/2008 the Court has even gone to the extent of holding that in such like cases the compensation can be granted even by guess work. In this scenario, the Court is of the opinion that insurance companies should make serious endeavor to settle the compensation cases preferably at pre-litigation stage and if not at pre-litigation then at least at the earliest possible stage before the Claims Tribunals and in any case at the time of passing of the interim award at least in those cases where there is an admitted liability of the insurer to pay the compensation amount. The payment of compensation amount can be made tentatively to the claimants taking in view the broad legal principles settled by the Apex Court and High Courts. The realities of life cannot be overlooked. The victims of accident and their family members should not be made to wait for the compensation amount to reach after spending long years in courts, making them vulnerable to come under heavy debts for meeting day to day expenses of life. This exercise by the insurance companies will not only provide speedy justice to the victims and dependent family members of the victims of the road accidents but will also considerably help the insurance companies to save millions of rupees which gets paid by these companies due to the accumulation of interest amount on the compensation amount to be ultimately awarded by the Tribunal due to time consuming trials before MACT courts. Such payment of compensation at the early stage would also be of immense help to the victims of the accidents, especially, in those cases where the life of lone breadwinner is lost. This court hope and trust that all the insurance companies shall immediately take suitable steps in this direction so as to provide immediate succour to the dependent family members of the deceased or the victims of the accident in the same manner as they swung into action to settle the claims in respect of the damaged vehicles. The MACT Tribunals are also directed to ascertain from the insurance companies through their respective counsels at the first available opportunity as to whether the insurance companies are ready and willing to pay some

reasonable amount of compensation tentatively as per their own assessment in all those cases of admitted liability and then take on record the response given by the insurance companies to such query of the MACT court. In any event, life of human being is not cheaper than 'Nano' car. In any given case where concerned officials of these insurance companies do not initiate action in this direction, then suitable explanation may be called for by the high-ups of the same company or by its regulating authority i.e. Insurance Regulatory & Development Authority, as non payment of legitimate compensation amount at the initial stage will ultimately unnecessarily burden the company to pay interest amount for the entire trial period.”

10.It is very shocking that instead of offering reasonable amount of compensation to the parents of Harfuddin, who lost their son aged 20 years, the Insurance Company has successfully stalled the payment of even meagre compensation for almost fourteen years. compensation to the parents of Harfuddin, who lost their son aged 20 years, the Insurance Company has successfully stalled the payment of even meagre compensation for almost fourteen years.

11.For the reasons stated above, the compensation is enhanced from `2,30,500/- to ` 3,75,000/-. `2,30,500/- to ` 3,75,000/-.

12.The enhanced compensation of `1,44,500/- shall carry interest @ 7.5% per annum from the date of filing of the Petition till its payment. per annum from the date of filing of the Petition till its payment.

13.Appellant Insurance Company is directed to deposit the enhanced compensation along with proportionate interest with the Claims Tribunal within six weeks. compensation along with proportionate interest with the Claims Tribunal within six weeks.

14.The enhanced compensation shall be held in fixed deposit for period of three years in the name of the Respondents No.1 and 2 in equal proportion. three years in the name of the Respondents No.1 and 2 in equal proportion.

15.The statutory deposit of `25,000/- shall be refunded to the Appellant Insurance Company. Insurance Company.

16.The Appeal stands disposed of in above terms.

17.Pending Applications also stand disposed of.

SEPEMBER 14, 2012 vk

(G.P. MITTAL) JUDGE