MANGLA RAM versus THE ORIENTAL INSURANCE CO. LTD. & ORS.

[2018] 5 S.C.R. 287

MANGLA RAM

THE ORIENTAL INSURANCE CO. LTD. & ORS.

(Civil Appeal Nos. 2499-2500 of 2018)

APRIL 06, 2018

[DIPAK MISRA, CJI AND A. M. KHANWILKAR, J.]

Motor Vehicles Act, 1988: s.166 – Compensation –Contributory negligence – Claimant’s case was that on fatefulday while he was driving motorcycle, he was hit by jeep driven byrespondent no.2 resulting in serious injuries and ultimatelyamputation of right leg above the knee – Claim petition – Tribunaldid not accept the evidence of witnesses produced by claimant,however opined on the basis of police investigation report that theaccident was caused by jeep in question – Tribunal also noted thesite plan and concluded that the claimant was driving on the wrongside of the road and contributed to accident and accordinglyawarded compensation – High Court set aside the award passed byTribunal noting that no finding regarding negligence of driver ofoffending jeep was recorded by Tribunal rather it found that theclaimant was negligent while riding his motorcycle and that statementof claimant that bumper of jeep had hit the rear of his motorcyclewas contradicted by the investigating report which recorded that itdid not bear out that jeep was involved in an accident – Instantappeal filed by the claimant – Held: High Court committed manifesterror in reversing holistic view of Tribunal in reference to thestatement of witnesses forming part of charge sheet, FIR, jeepseizure report – Indeed, the High Court was impressed by theMechanical Investigation Report which stated that only scratchmark on the mudguard of the left tyre of the vehicle had been noted– On that basis, High Court observed that the same was incontradiction to the case of claimant – This conclusion was basedon surmises and conjectures and also in disregard of the relevantfact that the vehicle was seized by the police after investigation,only after one month from the date of the accident and the possibilityof the same having been repaired in the meantime could not beruled out – Further, the fact that the offending jeep was driven

Arashly and negligently by respondent No.2 when it collided with themotorcycle of the claimant leading to the accident could be discernedfrom the evidence of witnesses and the contents of the charge-sheetfiled by the police, naming respondent No.2 – The key of negligenceon the part of the driver of the offending jeep as set up by theclaimants was required to be decided by the Tribunal on theBtouchstone of preponderance of probability and certainly not bystandard of proof beyond reasonable doubt – Further the findingthat motor cycle was found one foot wrong side on the middle of theroad cannot be basis to assume that appellant was driving on thewrong side of road at the relevant time – Thus, finding of TribunalCthat claimant contributed to occurrence of accident by drivingmotorcycle on wrong side of road was wrong and cannot besustained.Motor Vehicles Act, 1988: s.166 – Quantum of compensation– The Tribunal noted the claim of the claimant-appellant that heDwas getting Rs.1500/- per month towards his salary and Rs.600/-per month towards food allowance from employer – The fact thatthe claimant had possessed heavy transport motor vehicle drivinglicence has not been doubted – The driving licence on record beingvalid for limited period, cannot be the basis to belie the claim ofthe claimant duly supported by employer, that the claimant wasEemployed by him on his new truck – Besides the said income, theclaimant claimed to have earning of Rs.1000/- per month fromfarming fields – The Tribunal, however, pegged the loss of monthlyincome to the claimant at Rs.520/- per month while computing thecompensation amount on the finding that there was no convincingFevidence about complete non-employability of the claimant – Further,no provision was made by the Tribunal towards future prospects –The Tribunal, therefore, should have computed the loss of incomeon that basis – Additionally, the claimant because of amputation ofhis right leg would be forced to permanently use prosthetic leg duringhis life time – No provision was made by the Tribunal in that regardG– On these heads, the claimant is certainly entitled for enhancedcompensation – Taking the loss of monthly income due to permanentdisability of 40%, the appellant is held entitled to Rs.2,25,792/-plus 40% future prospects – Besides, the amount quantified by theTribunal towards the heads for medical treatment after the accident,

motorcycle repair, mental and physical problem the appellant isadditionally held entitled to medical expenses for procurement of aprosthetic leg, quantified at Rs.25,000/- .

Motor Vehicles Act, 1988: s.166 – Liability of insurer to paythe compensation amount – Insurance company denied liability onthe ground that no payment was received by the company towardsthe insurance premium as the cover note purportedly taken for thejeep in question was obtained from the then Development Officer,who was later on sacked by Insurance Company and, therefore,same was fraudulent – Held: Insurance company has been able toshow that no insurance policy was issued in respect of the offendingjeep – However, the claim of the driver and the owner of theoffending jeep to the extent that they possessed cover note issuedby the then Development Officer of the Insurance Company isaccepted coupled with the fact that the Cover Note was issued bythe then Development Officer at point of time when he was stillworking with Insurance Company – It must follow that the thenDevelopment Officer was acting on behalf of the InsuranceCompany, even though stricto sensu the Insurance Company maynot be liable to pay any compensation as no insurance policy wasissued in respect of the offending vehicle, much less valid insurancepolicy – Therefore, to do substantial justice, principle of “pay andrecover” is invoked – Doctrines/Principles – Principle of “pay andrecover”.

Allowing the appeals, the Court

HELD: 1. The Tribunal did not accept the version of PW-1,PW-2 and PW-4 about the involvement of Jeep No.RST-4701,but did not discard their version in toto. The evidence of thesewitnesses to the extent they have consistently stated that whenthe appellant was riding on his motorcycle at the relevant time, agreen jeep coming at high speed hit the motorcycle from backside, as result of which the appellant fell down and sufferedsevere injuries was not doubted. Besides mentioning thedescription of the offending vehicle as “jeep” they have alsospoken about its colour (green) and that it was displaying theCongress Party flags and banners on the side of the jeep. In otherwords, their version limited to having noted the jeep number,

Awas not accepted. Besides, the Tribunal relied upon the evidenceof respondent No.2 (DW-1) and DW-2 who had stated that thejeep was deployed in the election campaign of Sarpanch and thusdenied the involvement of the vehicle in the accident in question.Nevertheless, the Tribunal then adverted to the FIR and thecharge-sheet filed in respect of the accident naming respondentBNo.2 as accused. The Tribunal placed reliance upon the copy ofchallan copy of FIR Site Map, Jeep Seizure Report, X-Ray andInjury Report to opine that these police records gathered duringthe investigation of the crime not only confirmed that an accidenthad occurred but also indicated the involvement of the offendingCJeep which was driven by respondent No.2 at the relevant time.The Tribunal went on to conclude that there was no reason todisagree with the opinion of the Investigating Agency in thatbehalf. On the basis of the entirety of the evidence, the Tribunalhad held that Jeep which was driven by respondent No.2 at the

relevant time was involved in the accident in question, causingDsevere injuries to the appellant. The reasons which weighedwith the High Court for reversing the finding of fact recorded bythe Tribunal upon holistic analysis of the entire evidence, aboutthe involvement of Jeep in the accident, cannot be countenanced.Jeep was driven rashly and negligently by respondent No.2 whenEit collided with the motorcycle of the appellant leading to theaccident. This can be discerned from the evidence of witnessesand the contents of the charge-sheet filed by the police, namingrespondent No.2. Considering the entirety of the pleadings,evidence and circumstances on record and in particular the findingrecorded by the Tribunal on the factum of negligence of theFrespondent No.2, the driver of the offending jeep, the High Courtcommitted manifest error in taking contrary view which is anerror apparent on the face of record and manifestly wrong. [Paras14, 20, 21] [300-E-H; 307-B-C, F-H; 308-A-B]

Dulcina Fernandes and Ors. v. Joaquim Xavier CruzGand Anr. (2013) 10 SCC 646 : [2013] 10 SCR 480;United India Insurance Co. Ltd. v. Shila Datta (2011)10 SCC 509 : [2011] 14 SCR 763 – relied on.

Minu Mehta & Anr. v. Balakrishna RamachandraNayan & Anr. (1977) 2 SCC 441 : [1977] 2 SCR 886;H

Oriental Insurance Co. Ltd. v. Meena Variyal (2007) 5SCC 428 : [2007] 4 SCR 641; Surender Kumar Arora& Anr. v. Dr. Manoj Bisla & Ors. (2012) 4 SCC 552 –held inapplicable.

Kaushnuma Begum & Ors. v. The New India AssuranceCo. Ltd. and Ors. (2001) 2 SCC 9 : [2001] 1 SCR 8;Charan Lal Sahu v. Union of India (1990) 1 SCC 613 :[1989] 2 Suppl. SCR 597; Union Carbide Corpn. v.Union of India (1991) 4 SCC 584 : [1991] 1 Suppl.SCR 251; Gujarat SRTC v. Ramanbhai Prabhatbhai(1987) 3 SCC 234 : [1987] 3 SCR 404 – referred to.

Rylands v. Fletcher (1861-73) All ER Rep 1 – referredto.

2. There is substance in the criticism of the appellant thatthe spot where the motor vehicle was found lying after the accidentcannot be the basis to assume that it was driven in or around thatspot at the relevant time. It can be safely inferred that after theaccident of this nature in which the appellant suffered severeinjuries necessitating amputation of his right leg above the kneelevel, the motorcycle would be pushed forward after the collisionand being hit by high speeding jeep. Neither the Tribunal northe High Court has found that the spot noted in the site map, onefoot wrong side on the middle of the road was the spot where theaccident actually occurred. However, the finding is that as perthe site map, the motorcycle was found lying at that spot. Thatcannot be the basis to assume that the appellant was driving themotorcycle on the wrong side of the road at the relevant time.Further, the respondents did not produce any contra evidence toindicate that the motorcycle was being driven on the wrong sideof the road at the time when the offending vehicle dashed it. Thus,there is no evidence to answer the issue of contributorynegligence against the appellant. [Paras 23, 24] [311-A-E, F-G]

3. The appellant because of amputation of his right leg wouldbe forced to permanently use prosthetic leg during his life time.No provision has been made by the Tribunal in that regard. Onthese heads, the appellant is certainly entitled for enhancedcompensation. [Para 25] [312-C-D]

A4. Respondents no.2 and 3 had relied on Cover Note whichaccording to Insurance Company was fraudulently obtained fromthe then Development Officer, who was later on sacked byInsurance Company. The possibility of misuse of some covernotes lying with him could not be ruled out. Insurance Companyhas been able to show that no payment was received by theBcompany towards the insurance premium nor any insurance policyhad been issued in respect of the offending vehicle (jeep).Pertinently, the Cover Note has been issued by the thenDevelopment Officer at point of time when he was still workingwith Insurance Company. But for the Cover Note issued by theCDevelopment Officer of respondent No.1 Insurance Company ata point of time when he was still working with respondent No.1,to do substantial justice, the principle of “pay and recover” isinvoked. [Para 26] [312-D-H; 313-A-C]

National Insurance Co. Ltd. v. Swaran Singh & Ors.(2004) 3 SCC 297 : [2004] 1 SCR 180; NationalInsurance Co. Ltd. v. Pranay Sethi & Ors. AIR 2017SC 5157 – relied on.

New India Assurance Co. Ltd. v. Rula & Ors (2000) 3SCC 195 : [2000] 2 SCR 148 – held inapplicable.

Kaushnuma Begum & Ors. v. The New India AssuranceCo. Ltd. and Ors. (2001) 2 SCC 9 : [2001] 1 SCR 8;Dulcina Fernandes and Ors. v. Joaquim Xavier Cruzand Anr. (2013) 10 SCC 646 : [2013] 10 SCR 480;Bimla Devi and Ors. v. Himachal Road TransportCorporation and Ors. (2009) 13 SCC 530 : [2009] 6SCR 362; Ravi Kapur v. State of Rajasthan (2012) 9SCC 284 : [2012] 10 SCR 229; National Insurance Co.Ltd. v. Pranay Sethi & Ors. AIR 2017 SC 5157; KishanGopal & Anr. v. Lala & Ors. (2014) 1 SCC 244 : [2013]10 SCR 793; Harbans Lal v. Harvinder Pal 2015 SCCOnLine P & 9926; New India Assurance Co. Ltd. v.Pazhaniammal & Ors. 2011 SCC OnLine Ker 1881;United India Insurance Co. Ltd. v. Deepak Goel 2014SCC OnLine Del 362; Manisha v. Umakant MarotraoKolhe 2015 SCC OnLine Bom 4613; Mahawati Devi

CO. LTD. & ORS.

v. Branch Manager 2017 SCC OnLine Pat 1145; NewIndia Assurance Co. Ltd. v. Rula & Ors (2000) 3 SCC195 : [2000] 2 SCR 148; Oriental Insurance Co. Ltd. v.Meena Variyal (2007) 5 SCC 428 : [2007] 4 SCR 641;Minu Mehta & Anr. v. Balakrishna RamachandraNayan & Anr (1977) 2 SCC 441 : [1977] 2 SCR 886;Surender Kumar Arora & Anr. v. Dr. Manoj Bisla &Ors. (2012) 4 SCC 552; N. K. V. Bros. (P) Ltd. v.M. Karumai Ammal and Ors. (1980) 3 SCC 457 : [1980]3 SCR 101; Charan Lal Sahu v. Union of India (1990)1 SCC 613 : [1989] 2 Suppl. SCR 597; Union CarbideCorpn. v. Union of India (1991) 4 SCC 584 : [1991] 1Suppl. SCR 251; Gujarat SRTC v. RamanbhaiPrabhatbhai (1987) 3 SCC 234 : [1987] 3 SCR 404;National Insurance Co. Ltd. v. Swaran Singh & Ors.(2004) 3 SCC 297 : [2004] 1 SCR 180 – referred to .

Rylands v. Fletcher (1861-73) All ER Rep 1 – referredto.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2499-B2500 of 2018.

From the Judgment and Order dated 05.01.2017 of the High Courtof Judicature for Rajasthan at Jodhpur in S. B. Civil Miscellaneous AppealNo. 290 of 2001 connected with S. B. Civil Miscellaneous Appeal No.273of 2001

Rishabh Sancheti, Ms. Padma Priya, Ms. Parijata Bhardwaj,P. V. Saravana Raja, Dhruv Sharma, Jaiwant Patankar, Advs. for theAppellant.K. K. Bhat, Ajay Pal, Ms. Aishwarya Bhati, Jaideep Singh, T. M.Patra, Advs. for the Respondents.

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J. 1. In the present appeals, theappellant/claimant has challenged the judgment dated 5[th] January, 2017passed by the High Court of Judicature for Rajasthan, Jodhpur Bench,in SB Civil Miscellaneous Appeal Nos.273 of 2001 and 290 of 2001,Ewhich set aside the award of the Motor Accident Claims Tribunal [‘theTribunal’] granting compensation to the appellant at the instance ofrespondent Nos.2 and 3 (driver and owner of the offending vehicle,respectively) as also negatived the appellant’s prayer for enhancementof the compensation amount.F[[th]]

2. The appellant alleges that on or about 10[[th]] February, 1990,while he was riding his motorcycle, bearing No. RJ-19-6636, he was hitby jeep No. RST-4701, owned by respondent No.3 and purportedly beingdriven by respondent No.2 at the time, resulting in serious injuries andultimately, amputation of his right leg above the knee. The appellantsubsequently filed an application before the Tribunal, Jodhpur, seekingcompensation against the respondents, including the respondent No.1insurance company. He claimed 40% permanent disability and 100%functional disability, contending that his primary livelihood of driving heavytransport vehicles (HTVs) had been curtailed on account of hisamputation, and sought compensation to the tune of Rs. 11,17,000/-.

Respondent Nos.2 and 3 denied the accident and the involvement of thejeep in question. The respondent No.1 insurance company argued thatthe cover note purportedly taken for the jeep in question was fraudulent.The cover note had been given unauthorisedly by its then DevelopmentOfficer, no premium had been deposited with the company and no policyhad been issued in that regard. Thus, the jeep was not validly insured.

3. In its judgment dated 22[nd] November, 2000, the Tribunaldiscussed the evidence on record in detail. PW2 (Chainaram) and PW4(Thanaram), who had taken the appellant to the hospital after the accident,deposed that after the accident, the jeep which caused the accidentstopped ahead and they noted the jeep number in the backlight and further,they heard the driver’s name being called out by the passengers in thejeep. The Tribunal, however, found that their version of having noted thejeep number and heard the driver’s name seemed to be unnatural. TheTribunal also discarded the version of the appellant (PW1) about thedetails of the vehicle as being not reliable. The Tribunal then noted theevidence of the defence witnesses, that the jeep in question was nowherenear the area of the accident. The Tribunal, however, opined that theaccident had been caused by the jeep in question, based on theinvestigation report filed by the police mentioning that when they seizedthe jeep after one month of the accident, the jeep bore scratch on themudguard of the tyre on the upper footboard on the left side. The Tribunalalso relied on the charge sheet (Exh.1) filed by the police, wherein it hasbeen stated that the accident was caused by the jeep in question on thebasis of statements made by the appellant and other witnesses (Roopram,Thanaram and Pratap Singh). The Tribunal held that there was no reasonto disagree with the conclusion of the police. In short, the Tribunaldisbelieved the evidence of the appellant’s witnesses, regarding thecommission of accident by the jeep in question, as unreliable butnevertheless relied upon the investigation report as also the charge sheetfiled by the police in that regard which was supported by two otherwitnesses who did not depose before the Tribunal.

4. The Tribunal then referred to the site map of the accident(Exh.2), to conclude that the appellant was riding his motorcycle onefoot on wrong side from the middle of the road and hence, had contributedto the accident by being negligent. The Tribunal also accepted the pleaof the respondent No.1 insurance company that the cover note as regardthe offending jeep was fraudulent. The Tribunal accepted the evidence

Aof witness DW4, the branch manager of the respondent No.1 insurancecompany, that the company did not receive any premium under the relevantcover note and had not issued any insurance policy in that regard. DW 4had deposed that the cover note was not deposited with the company.Further, the concerned development officer, whose signature was onthe cover note, had been removed from the respondent No.1 insuranceBcompany but had in his possession certain cover notes, including therelevant cover note. DW 4 stated that no insurance policy was issued onthe basis of the said cover note. The Tribunal then found that it waspossible that the Development Officer had backdated the cover noteand had not deposited the money for issuing policy with the company.CThe Tribunal thus held that the vehicle was not insured by the companyand, therefore, the company was not liable.

5. Based on the aforesaid observations, the Tribunal took intoaccount the injuries caused to the appellant and calculated compensationof Rs. 1,27,000/- but, owing to the purported negligence of the appellant,Dreduced the amount by half and finally awarded sum of Rs. 63,500/- tothe appellant payable by the respondent Nos. 2 and 3 jointly.

6. The appellant filed an appeal (SB Civil Misc. Appeal No.273 of2001) for enhancement whereas respondent Nos. 2 and 3 (driver andowner of the jeep, respectively) challenged the Tribunal’s award (byEway of SB Civil Misc. Appeal No.290 of 2001), before the High Courtof Rajasthan, Jodhpur Bench. In its judgment dated 5[th] January, 2017,the High Court concluded that the Tribunal’s findings were incorrect,unconvincing and not supported by evidence. Further, the Tribunal’sreasoning, that it did not believe the oral evidence of the parties but hadnevertheless answered the issue in favour of the claimant solely on theFbasis of the police report, on the ground that there was no reason not tobelieve the conclusion arrived at by the police, was flawed and incorrect.The High Court noted that the Tribunal was not convinced about theinvolvement of the vehicle, despite which it held that involvement wasproved. Furthermore, no finding regarding negligence of the driver ofGthe jeep had been recorded by the Tribunal rather it found that theappellant was negligent while riding his motorcycle. The High Courttook the view that mere filing of charge-sheet, without any finding ofconviction, was insufficient to prove negligence by respondent Nos. 2and 3. Additionally, the High Court also held that the statement of the

appellant, wherein he claimed that the bumper of the jeep had hit therear of his motorcycle, was contradicted by the investigation report ofthe jeep which recorded that it did not bear out that the jeep had beeninvolved in an accident. The High Court, therefore, was pleased to setaside the Tribunal’s award and allowed the appeal filed by the driver andowner of the jeep (respondent Nos. 2 and 3 respectively) while dismissingthe appeal filed by the appellant.

7. We have heard Mr. Rishabh Sancheti, learned counsel appearingfor the appellant. He contends that the evidence on record clearly indicatesthat the accident was caused due to the rash and negligent driving ofJeep No. RST-4701 by respondent No.2, which fact has been establishedby the eye-witnesses. The respondent No.2 failed to adduce any cogentevidence in his defence. He also contends that the vehicle in questionwas seized by the police but there was strong possibility that it hadbeen repaired in the interregnum creating discrepancy between theaccounts of the witnesses who were present at the time of the accidentand the actual condition of the vehicle at the time of seizure. Further, theTribunal’s reliance on the site map to infer that the appellant was ridinghis motorcycle on the wrong side of the road is erroneous as the sitemap merely reflected the position of the motorcycle after the accidentand not at the time of the accident. The High Court, contends the learnedcounsel, erroneously decided the matter on the principle of ‘beyondreasonable doubt’ whereas proceedings under the Motor Vehicles Actwere required to be decided on the basis of preponderance of probabilitiesand thus, the degree of proof required was much less. Additionally, theproceedings under the Motor Vehicles Act were not adversarial and inthat regard, the evidence on record was sufficient to reach at theconclusion that respondent No.2’s negligence led to the accident andthat the appellant was entitled to full compensation. Finally, the appellantsuffered 40% permanent disability and 100% functional disability and onthat basis, the Tribunal erred by not granting higher compensation to theappellant. He also contends that the courts below erred in absolving therespondent No.1 insurance company from its liability. The following caseswere cited by the learned counsel in support of the submissions:Kaushnuma Begum & Ors. vs. The New India Assurance Co. Ltd.and Ors.[1], Dulcina Fernandes and Ors. vs. Joaquim Xavier Cruzand Anr.[2], Bimla Devi and Ors. vs. Himachal Road Transport

1(2001) 2 SCC 9

2(2013) 10 SCC 646

ACorporation and Ors.[3], Ravi Kapur v State of Rajasthan[4], NationalInsurance Co. Ltd. v Pranay Sethi & Ors.[5], Kishan Gopal & Anr. vLala & Ors.[6], Harbans Lal v Harvinder Pal[7], New India AssuranceCo. Ltd. v Pazhaniammal & Ors.[8], United India Insurance Co. Ltd.v Deepak Goel[9], Manisha v Umakant Marotrao Kolhe[10 ]andMahawati Devi v Branch Manager[11].B

8. We have also heard Ms. Aishwarya Bhati, learned counsel forrespondent Nos.2 and 3 [in SLP (Civil) No. 28141 of 2017 and respondentNos.1 and 2 in SLP (Civil) No.28142 of 2017] the driver and owner,respectively, of the offending jeep and Mr. K.K. Bhat, learned counselappearing for respondent No.1 Insurance Company. They contend thatCthe appellant did not have valid driving licence at the time of the accidentand was negligently driving on the wrong side of the road. Even thedriving licence produced by the appellant was for different class ofvehicles and not for motorcycle, which he was riding at the time of theaccident. Further, the Tribunal sans examination of the witnesses whoseDstatement were recorded by the police in furtherance of the FIR filed inrelation to the subject accident could not have based its conclusion merelydue to filing of charge sheet in that regard and without any informationas to any conviction. Mere filing of the charge sheet by the police is notenough. That is not legal evidence, much less sufficient to record afinding of fact that either that the jeep in question was involved in theEaccident or that respondent No.2 was negligently driving the said vehicle.The High Court has also categorically opined that no finding on the factumof negligence on the part of respondent No.2 driver of the jeep has beenrecorded by the Tribunal; and that the selfsame police report indicatesthat the jeep was not involved in the accident in question.

9. On the issue of whether the jeep was validly insured, Ms. Bhaticontends that the respondent No.3 owner took insurance for the jeepand even paid premium for the same and hence, any objection taken by

3 (2009) 13 SCC 5304 (2012) 9 SCC 284G5 AIR 2017 SC 51576 (2014) 1 SCC 2447 2015 SCC OnLine P& 9926

8 2011 SCC OnLine Ker 1881

9 2014 SCC OnLine Del 36210 2015 SCC OnLine Bom 4613H11 2017 SCC OnLine Pat 1145

the respondent No.3 insurance company that such insurance wasfraudulently obtained, is untenable. Reliance is placed on the decision inNew India Assurance Co. Ltd. Vs. Rula & Ors[12], to buttress thissubmission. Mr. Bhat, however, argues that the jeep was not insuredand that the official of the company who had issued the cover note hadfraudulently issued the same. It is possible that the said official hadbackdated certain cover notes, for which he had been expelled from thecompany. The evidence in that regard is conclusive and there is findingby the Tribunal on that count. Mr. Bhat relies upon the decisions inOriental Insurance Co. Ltd. v Meena Variyal[13], Minu Mehta &Anr. v Balakrishna Ramachandra Nayan & Anr.[14]and SurenderKumar Arora & Anr. v Dr. Manoj Bisla & Ors.[15].10. The moot question which arises for our consideration in theseappeals is about the justness of the decision of the High Court in reversingthe finding of fact recorded by the Tribunal on the factum of involvementof Jeep No.RST-4701 in the accident occurred on 10[th] February, 1990at about 8.00-8.30 P.M. and also on the factum of negligence of thedriver of the jeep causing the accident in question. On the first aspect,the High Court has noted that the Tribunal having discarded the oralevidence adduced by the appellant (claimant) could not have based itsfinding merely on the basis of the FIR and the charge-sheet filed againstthe driver of the offending vehicle and also because the mechanicalinvestigation report (Exh.5) merely indicated that on the left side of theoffending vehicle scratch mark was noticed on the mudguard of theleft tyre which contradicted the statement of the claimant and the PoliceInvestigation Report much less showing involvement of the vehicle inthe accident. As regards the second aspect on the factum of negligence,the High Court noted that the Tribunal did not record any finding aboutthe negligence of the driver of the jeep and the site map (Exh. 2) wouldindicate that the appellant/claimant himself was negligent in driving themotorcycle in the middle of the road.

11. As the judgment of the High Court has been assailed in theappeal filed by the appellant (claimant) for enhancement of compensation,including the finding of the Tribunal in discarding the evidence of PW-1,PW-2 and PW-4 on the factum of involvement of the offending vehicle

12 (2000) 3 SCC 195

13 (2007) 5 SCC 428

14 (1977) 2 SCC 441

15 (2012) 4 SCC 552

Ain the accident and also on the factum of the said vehicle being drivenrashly and negligently by the driver (respondent No.2), we have beencalled upon to examine even the correctness of the approach of theTribunal. We are conscious of the fact that in an appeal under Article136 of the Constitution, ordinarily this Court will not engage itself in re-appreciation of the evidence as such but can certainly examine theBevidence on record to consider the challenge to the findings recorded byTribunal or the High Court, being perverse or replete with error apparenton the face of the record and being manifestly wrong.

12. From the evidence which has come on record, the findingrecorded by the Tribunal that the appellant while riding his motorcycleCon 10[th] February, 1990 between 8.00 P.M. and 8.30 P.M., met with anaccident when jeep being driven rashly and negligently, struck hismotorcycle resulting in falling down and suffering severe injuries on hisright leg, which was required to be amputated from above the knee levelat MGH Hospital, seems to us to be possible view. That position isDestablished from the oral evidence of PWs-1, 2 and 4 and the chargesheet and its accompanying documents filed by the police. Even theHigh Court has broadly agreed with this finding recorded by the Tribunal.

13. The debatable issue is about the factum of involvement ofJeep No.RST-4701 allegedly driven by respondent No.2 and whether itEwas driven rashly and negligently as result of which the accidentoccurred.

14. Indeed, the Tribunal did not accept the version of PW-1, PW-2 and PW-4 about the involvement of Jeep No.RST-4701, but has notdiscarded their version in toto. The evidence of these witnesses to theFextent they have consistently stated that when the appellant was ridingon his motorcycle bearing No.RJ 19-6636 at the relevant time, going toBasni from Panwara Phanta and when he reached near Siviya Nada, agreen jeep coming at high speed from Salawas side, hit the motorcyclefrom back side, as result of which the appellant fell down and sufferedsevere injuries including to his right leg which was eventually amputatedGfrom above the knee level, has not been doubted. Pertinently, besidesmentioning the description of the offending vehicle as “jeep” they havealso spoken about its colour (green) and that it was displaying theCongress Party flags and banners on the side of the jeep. In other words,their version limited to having noted the jeep number, has not been

accepted. Besides, the Tribunal relied upon the evidence of respondentNo.2 Chail Singh (DW-1) and Bhanwar Singh (DW-2) who had statedthat the jeep was deployed in the election campaign of Sarpanch ofSomdar Village on the Salawas Road and thus denied the involvementof the vehicle in the accident in question. Nevertheless, the Tribunalthen adverted to the FIR and the charge-sheet filed in respect of theaccident naming respondent No.2 as accused. The Tribunal placedreliance upon the copy of challan (Exh.1), copy of FIR (Exh.32), SiteMap (Exhs.3 & 4), Jeep Seizure Report (Exh.5), X-Ray (Exh.6) andInjury Report (Exh.7), to opine that these police records gathered duringthe investigation of the crime not only confirmed that an accident hadoccurred but also indicated the involvement of the offending JeepNo.RST-4701, which was driven by respondent No.2 at the relevanttime. The Tribunal went on to conclude that there was no reason todisagree with the opinion of the Investigating Agency in that behalf. Thecharge-sheet was accompanied by the statements of the appellant andthe witnesses Rooparam, Thanaram and Pratap Singh. On the basis ofthe entirety of the evidence, the Tribunal had held that Jeep No.RST-4701 which was driven by respondent No.2 at the relevant time wasinvolved in the accident in question, causing severe injuries to theappellant.

15. The High Court, however, reversed this finding of fact renderedby the Tribunal essentially on two counts: First, that the Tribunal havingdiscarded the oral evidence about the involvement of Jeep No.RST-4701 in the accident in question, allegedly driven by respondent No.2,could not and ought not to have recorded the finding on the relevantissue against respondent Nos.2 & 3 merely by relying on the documentsforming part of the police charge sheet. Second, the jeep seizure report(Exh. 5) indicated that only scratch on the mudguard of the left tyre ofthe vehicle was noticed, which contradicted the claim of the appellantabout the involvement of the vehicle.

16. The question is: whether this approach of the High Court canbe sustained in law? While dealing with similar situation, this Court inBimla Devi (supra) noted the defence of the driver and conductor ofthe bus which inter alia was to cast doubt on the police record indicatingthat the person standing at the rear side of the bus, suffered head injurywhen the bus was being reversed without blowing any horn. This Courtobserved that while dealing with the claim petition in terms of Section

A166 of the Motor Vehicles Act, 1988, the Tribunal stricto sensu is notbound by the pleadings of the parties, its function is to determine theamount of fair compensation. In paragraphs 11-15, the Court observedthus:

“11. While dealing with claim petition in terms of SectionB166 of the Motor Vehicles Act, 1988, tribunal stricto sensuis not bound by the pleadings of the parties; its functionbeing to determine the amount of fair compensation in theevent an accident has taken place by reason of negligenceof that driver of motor vehicle. It is true that occurrenceof an accident having regard to the provisions contained inCSection 166 of the Act is sine qua non for entertaining aclaim petition but that would not mean that despite evidenceto the effect that death of the claimant’s predecessor hadtaken place by reason of an accident caused by motorvehicle, the same would be ignored only on the basis of aDpost-mortem report vis-à-vis the averments made in claimpetition.

12. The deceased was constable. Death took place near policestation. The post-mortem report clearly suggests that the deceaseddied of brain injury. The place of accident is not far from theEpolice station. It is, therefore, difficult to believe the story of thedriver of the bus that he slept in the bus and in the morning founda dead body wrapped in blanket. If the death of the constablehad taken place earlier, it is wholly unlikely that his dead body in asmall town like Dharampur would remain undetected throughoutthe night particularly when it was lying at bus-stand and near aFpolice station. In such an event, the court can presume that thepolice officers themselves should have taken possession of thedead body.

13. The learned Tribunal, in our opinion, has rightlyproceeded on the basis that apparently there was absolutelyno reason to falsely implicate Respondents 2 and 3. Theclaimant was not at the place of occurrence. She, therefore, mightnot be aware of the details as to how the accident took place butthe fact that the first information report had been lodged in relationto an accident could not have been ignored.

14. Some discrepancies in the evidence of the claimant’s witnessesmight have occurred but the core question before the Tribunaland consequently before the High Court was as to whether thebus in question was involved in the accident or not. For the purposeof determining the said issue, the Court was required to apply theprinciple underlying the burden of proof in terms of the provisionsof Section 106 of the Evidence Act, 1872 as to whether deadbody wrapped in blanket had been found at the spot at such anearly hour, which was required to be proved by Respondents 2and 3.

15. In situation of this nature, the Tribunal has rightlytaken holistic view of the matter. It was necessary to beborne in mind that strict proof of an accident caused by aparticular bus in particular manner may not be possibleto be done by the claimants. The claimants were merely toestablish their case on the touchstone of preponderance ofprobability. The standard of proof beyond reasonable doubtcould not have been applied. For the said purpose, the HighCourt should have taken into consideration the respectivestories set forth by both the parties.”

(emphasis supplied)

17. The Court restated the legal position that the claimants weremerely to establish their case on the touchstone of preponderance ofprobability and standard of proof beyond reasonable doubt cannot beapplied by the Tribunal while dealing with the motor accident cases.Even in that case, the view taken by the High Court to reverse similarfindings, recorded by the Tribunal was set aside. Following the enunciationin Bimla Devi’s case (supra), this Court in Parmeswari (supra) notedthat when filing of the complaint was not disputed, the decision of theTribunal ought not to have been reversed by the High Court on the groundthat nobody came from the office of the SSP to prove the complaint.The Court appreciated the testimony of the eye-witnesses in paragraphs12 & 13 and observed thus:

“12. The other ground on which the High Court dismissed thecase was by way of disbelieving the testimony of Umed Singh,PW 1. Such disbelief of the High Court is totally conjectural. UmedSingh is not related to the appellant but as good citizen, Umed

ASingh extended his help to the appellant by helping her to reachthe doctor’s chamber in order to ensure that an injured womangets medical treatment. The evidence of Umed Singh cannot bedisbelieved just because he did not file complaint himself. Weare constrained to repeat our observation that the total approachof the High Court, unfortunately, was not sensitised enough toBappreciate the plight of the victim.

13. The other so-called reason in the High Court’s order was thatas the claim petition was filed after four months of the accident,the same is “a device to grab money from the insurance company”.This finding in the absence of any material is certainly perverse.CThe High Court appears to be not cognizant of the principle thatin road accident claim, the strict principles of proof in criminalcase are not attracted…….”

18. It will be useful to advert to the dictum in N. K. V. Bros. (P)Ltd. Vs. M. Karumai Ammal and Ors.[16], wherein it was contended byDthe vehicle owner that the criminal case in relation to the accident hadended in acquittal and for which reason the claim under the Motor VehiclesAct ought to be rejected. This Court negatived the said argument byobserving that the nature of proof required to establish culpable rashness,punishable under the IPC, is more stringent than negligence sufficientEunder the law of tort to create liability. The observation made in paragraph3 of the judgment would throw some light as to what should be theapproach of the Tribunal in motor accident cases. The same reads thus:

“3. Road accidents are one of the top killers in our country, speciallywhen truck and bus drivers operate nocturnally. This proverbialFrecklessness often persuades the courts, as has been observedby us earlier in other cases, to draw an initial presumption in severalcases based on the doctrine of res ipsa loquitur. Accidents Tribunalsmust take special care to see that innocent victims do not sufferand drivers and owners do not escape liability merely because ofsome doubt here or some obscurity there. Save in plain cases,Gculpability must be inferred from the circumstances where it isfairly reasonable. The court should not succumb to niceties,technicalities and mystic maybes. We are emphasizing this aspectbecause we are often distressed by transport operators getting

16 (1980) 3 SCC 457H

away with it thanks to judicial laxity, despite the fact that they donot exercise sufficient disciplinary control over the drivers in thematter of careful driving. The heavy economic impact of culpabledriving of public transport must bring owner and driver to theirresponsibility to their neighbour. Indeed, the State must seriouslyconsider no-fault liability by legislation. second aspect whichpains us is the inadequacy of the compensation or undue parsimonypractised by tribunals. We must remember that judicial tribunalsare State organs and Article 41 of the Constitution lays thejurisprudential foundation for State relief against accidentaldisablement of citizens. There is no justification for niggardlinessin compensation. third factor which is harrowing is the enormousdelay in disposal of accident cases resulting in compensation, evenif awarded, being postponed by several years. The States mustappoint sufficient number of tribunals and the High Courts shouldinsist upon quick disposals so that the trauma and tragedy alreadysustained may not be magnified by the injustice of delayed justice.Many States are unjustly indifferent in this regard.”

19. In Dulcina Fernandes (supra), this Court examined similarsituation where the evidence of claimant’s eye-witness was discardedby the Tribunal and that the respondent in that case was acquitted in thecriminal case concerning the accident. This Court, however, opined thatit cannot be overlooked that upon investigation of the case registeredagainst the respondent, prima facie, materials showing negligence werefound to put him on trial. The Court restated the settled principle that theevidence of the claimants ought to be examined by the Tribunal on thetouchstone of preponderance of probability and certainly the standard ofproof beyond reasonable doubt could not have been applied as noted inBimla Devi (supra). In paragraphs 8 & 9, of the reported decision, thedictum in United India Insurance Co. Ltd. Vs. Shila Datta[17], hasbeen adverted to as under:

“8. In United India Insurance Co. Ltd. v. Shila Datta whileconsidering the nature of claim petition under the Motor VehiclesAct, 1988 three-Judge Bench of this Court has culled out certainpropositions of which Propositions (ii), (v) and (vi) would berelevant to the facts of the present case and, therefore, may beextracted hereinbelow: (SCC p. 518, para 10)17 (2011) 10 SCC 509

CDE

‘10. (ii) The rules of the pleadings do not strictly apply as theclaimant is required to make an application in form prescribedunder the Act. In fact, there is no pleading where theproceedings are suo motu initiated by the Tribunal.

(v) Though the Tribunal adjudicates on claim and determinesthe compensation, it does not do so as in an adversarial litigation.

(vi) The Tribunal is required to follow such summary procedureas it thinks fit. It may choose one or more persons possessingspecial knowledge of and matters relevant to inquiry, to assistit in holding the enquiry.’

9. The following further observation available in para 10 of theReport would require specific note: (Shila Datta case, SCC p.519)

‘10. … We have referred to the aforesaid provisions to showthat an award by the Tribunal cannot be seen as an adversarialadjudication between the litigating parties to dispute, but astatutory determination of compensation on the occurrence ofan accident, after due enquiry, in accordance with the statute.’ ”

In paragraph 10 of the reported decision [Dulcina Fernandes and Ors.(supra)], the Court opined that non-examination of witness per se cannotbe treated as fatal to the claim set up before the Tribunal. In other words,the approach of the Tribunal should be holistic analysis of the entirepleadings and evidence by applying the principles of preponderance ofFprobability.

20. In the above conspectus, the appellant is justified in contendingthat the High Court committed manifest error in reversing the holisticview of the Tribunal in reference to the statements of witnesses formingpart of the charge-sheet, FIR, Jeep Seizure Report in particular, to holdthat Jeep No.RST-4701 driven by respondent No.2 was involved in theaccident in question. Indeed, the High Court was impressed by theMechanical Investigation Report (Exh. 5) which stated that only scratchmark on the mudguard of the left tyre of the vehicle had been noted. Onthat basis, it proceeded to observe that the same was in contradiction tothe claim of the appellant (claimant), ruling out the possibility of

involvement of the vehicle in the accident. This conclusion is based onsurmises and conjectures and also in disregard of the relevant fact thatthe vehicle was seized by the police after investigation, only after onemonth from the date of the accident and the possibility of the samehaving been repaired in the meantime could not be ruled out. In otherwords, the reasons which weighed with the High Court for reversing thefinding of fact recorded by the Tribunal upon holistic analysis of theentire evidence, about the involvement of Jeep No.RST-4701 in theaccident, cannot be countenanced. For, those reasons do not affect theother overwhelming circumstances and evidence which has come onrecord and commended to the Tribunal about the involvement of thesubject jeep in the accident in question. This being the main edifice, forwhich the High Court allowed the appeal preferred by respondent Nos.2& 3, it must necessarily follow that the finding of fact recorded by theTribunal on the factum of involvement of Jeep No. RST-4701 in theaccident in question will have to be restored for reasons noted hitherto.

21. Another reason which weighed with the High Court to interferein the First Appeal filed by respondent Nos.2 & 3, was absence of findingby the Tribunal about the factum of negligence of the driver of the subjectjeep. Factually, this view is untenable. Our understanding of the analysisdone by the Tribunal is to hold that Jeep No. RST-4701 was drivenrashly and negligently by respondent No.2 when it collided with themotorcycle of the appellant leading to the accident. This can be discernedfrom the evidence of witnesses and the contents of the charge-sheetfiled by the police, naming respondent No.2. This Court in recentdecision in Dulcina Fernandes (supra), noted that the key of negligenceon the part of the driver of the offending vehicle as set up by the claimantswas required to be decided by the Tribunal on the touchstone ofpreponderance of probability and certainly not by standard of proof beyondreasonable doubt. Suffice it to observe that the exposition in the judgmentsalready adverted to by us, filing of charge-sheet against respondent No.2prima facie points towards his complicity in driving the vehicle negligentlyand rashly. Further, even when the accused were to be acquitted in thecriminal case, this Court opined that the same may be of no effect on theassessment of the liability required in respect of motor accident casesby the Tribunal. Reliance placed upon the decisions in Minu Mehta(supra) and Meena Variyal (supra), by the respondents, in our opinion,is of no avail. The dictum in these cases is on the matter in issue in the

Aconcerned case. Similarly, even the dictum in the case of SurenderKumar Arora (supra) will be of no avail. In the present case, consideringthe entirety of the pleadings, evidence and circumstances on record andin particular the finding recorded by the Tribunal on the factum ofnegligence of the respondent No.2, the driver of the offending jeep, theHigh Court committed manifest error in taking contrary view which, inBour opinion, is an error apparent on the face of record and manifestlywrong.

22. In Kaushnuma Begum (supra), whilst dealing with anapplication under Section 163A of the Motor Vehicles Act, 1988, thisCourt expounded that negligence is only one of the species forCcompensation in respect of the accident arising out of the use of motorvehicles. There are other premises for such cause of action. Afterobserving this, the Court adverted to the principle expounded in RylandsVs. Fletcher[18]. It may be useful to reproduce paragraphs 12-14 whichread thus:

D“12. Even if there is no negligence on the part of the driver orowner of the motor vehicle, but accident happens while the vehiclewas in use, should not the owner be made liable for damages tothe person who suffered on account of such accident? Thisquestion depends upon how far the rule in Rylands v. FletcherEcan apply in motor accident cases. The said rule is summarisedby Blackburn, J., thus:

‘[T]he true rule of law is that the person who, for his ownpurposes, brings on his land, and collects and keeps thereanything likely to do mischief if it escapes, must keep it in atFhis peril, and, if he does not do so, he is prima facie answerablefor all the damage which is the natural consequence of itsescape. He can excuse himself by showing that the escapewas owing to the plaintiff’s default, or, perhaps, that the escapewas the consequence of vis major, or the act of God; but, asnothing of this sort exists here, it is unnecessary to inquireGwhat excuse would be sufficient.’

13. The House of Lords considered it and upheld the ratio withthe following dictum:

18 (1861-73) All ER Rep 1H

‘We think that the true rule of law is that the person who, forhis own purposes, brings on his land, and collects and keepsthere anything likely to do mischief if it escapes, must keep itin at his peril, and, if he does not do so, he is prima facieanswerable for all the damage which is the natural consequenceof its escape. He can excuse himself by showing that theescape was owing to the plaintiff’s default, or, perhaps, thatthe escape was the consequence of vis major, or the act ofGod; but, as nothing of this sort exists here, it is unnecessary toinquire what excuse would be sufficient.’

14. The above rule eventually gained approval in large numberof decisions rendered by courts in England and abroad. Winfieldon Tort has brought out even chapter on the “Rule in Rylandsv. Fletcher”. At p. 543 of the 15th Edn. of the celebrated workthe learned author has pointed out that

‘over the years Rylands v. Fletcher has been applied to aremarkable variety of things: fire, gas, explosions, electricity,oil, noxious fumes, colliery spoil, rusty wire from decayedfence, vibrations, poisonous vegetation’.

He has elaborated seven defences recognised in common lawagainst action brought on the strength of the rule in Rylands v.Fletcher. They are:

(1) Consent of the plaintiff i.e. volenti non fit injuria.

(2) Common benefit i.e. where the source of the danger ismaintained for the common benefit of the plaintiff and thedefendant, the defendant is not liable for its escape.

(3) Act of stranger i.e. if the escape was caused by theunforeseeable act of stranger, the rule does not apply.

(4) Exercise of statutory authority i.e. the rule will standexcluded either when the act was done under statutory dutyor when statute provides otherwise.

(5) Act of God or vis major i.e. circumstances which no humanforesight can provide against and of which human prudence isnot bound to recognise the possibility.

A(6) Default of the plaintiff i.e. if the damage is caused solelyby the act or default of the plaintiff himself, the rule will notapply.

(7) Remoteness of consequences i.e. the rule cannot be appliedad infinitum, because even according to the formulation of therule made by Blackburn, J., the defendant is answerable onlyfor all the damage ‘which is the natural consequence of its

escape’.”

And again, the Court, after adverting to the decisions in Charan LalSahu Vs. Union of India[19], Union Carbide Corpn. Vs. Union of India[20]Cand Gujarat SRTC Vs. Ramanbhai Prabhatbhai [21], in paragraphs 19& 20, observed thus:

“19. Like any other common law principle, which is acceptable toour jurisprudence, the rule in Rylands v. Fletcher can be followedat least until any other new principle which excels the former canDbe evolved, or until legislation provides differently. Hence, we aredisposed to adopt the rule in claims for compensation made inrespect of motor accidents.

20. ‘No fault liability’ envisaged in Section 140 of the MV Act isdistinguishable from the rule of strict liability. In the former, theEcompensation amount is fixed and is payable even if any one ofthe exceptions to the rule can be applied. It is statutory liabilitycreated without which the claimant should not get any amountunder that count. Compensation on account of accident arisingfrom the use of motor vehicles can be claimed under the commonlaw even without the aid of statute. The provisions of the MVFAct permit that compensation paid under “no fault liability” canbe deducted from the final amount awarded by the Tribunal.Therefore, these two are resting on two different premises. Weare, therefore, of the opinion that even apart from Section 140 ofthe MV Act, victim in an accident which occurred while using aGmotor vehicle, is entitled to get compensation from Tribunal unlessany one of the exceptions would apply. The Tribunal and the HighCourt have, therefore, gone into error in divesting the claimantsof the compensation payable to them.”

19 (1990) 1 SCC 61320 (1991) 4 SCC 584H21 (1987) 3 SCC 234

23. Be that as it may, the next question is whether the Tribunalwas justified in concluding that the appellant was also negligent and hadcontributed equally, which finding rests only on the site map (Exh. 2)indicating the spot where the motorcycle was lying after the accident?We find substance in the criticism of the appellant that the spot wherethe motor vehicle was found lying after the accident cannot be the basisto assume that it was driven in or around that spot at the relevant time.It can be safely inferred that after the accident of this nature in whichthe appellant suffered severe injuries necessitating amputation of hisright leg above the knee level, the motorcycle would be pushed forwardafter the collision and being hit by high speeding jeep. Neither theTribunal nor the High Court has found that the spot noted in the site map,one foot wrong side on the middle of the road was the spot where theaccident actually occurred. However, the finding is that as per the sitemap, the motorcycle was found lying at that spot. That cannot be thebasis to assume that the appellant was driving the motorcycle on thewrong side of the road at the relevant time. Further, the respondents didnot produce any contra evidence to indicate that the motorcycle wasbeing driven on the wrong side of the road at the time when the offendingvehicle dashed it. In this view of the matter, the finding of the Tribunalthat the appellant contributed to the occurrence of the accident by drivingthe motorcycle on the wrong side of the road, is manifestly wrong andcannot be sustained. The High Court has not expressed any opinion onthis issue, having already answered the issue about the non-involvementof the offending vehicle in favour of respondent Nos.2 & 3.

24. In other words, we are inclined to hold that there is no tittle ofevidence about the motorcycle being driven negligently by the appellantat the time of accident. The respondents did not produce any suchevidence. That fact, therefore, cannot be assumed. Resultantly, theargument of the respondents that the appellant did not possess validmotorcycle driving licence at the time of accident, will be of nosignificance. Thus, we hold that there is no legal evidence to answer theissue of contributory negligence against the appellant.

25. The next question is about the quantum of compensationamount to be paid to the appellant. The Tribunal noted the claim of theappellant that he was getting Rs.1500/- per month towards his salaryand Rs.600/- per month towards food allowance from Bhanwar Lal.The fact that the appellant had possessed heavy transport motor vehicle

Adriving licence has not been doubted. The driving licence on record beingvalid for limited period, cannot be the basis to belie the claim of theappellant duly supported by Bhanwar Lal, that the appellant was employedby him on his new truck. Besides the said income, the appellant claimedto have earning of Rs.1000/- per month from farming fields. In otherwords, we find that the Tribunal has not analysed this evidence in properBperspective. The Tribunal, however, pegged the loss of monthly incometo the appellant at Rs.520/- per month while computing the compensationamount on the finding that there was no convincing evidence aboutcomplete non-employability of the appellant. Further, no provision hasbeen made by the Tribunal towards future prospects. The Tribunal,Ctherefore, should have computed the loss of income on that basis.Additionally, the appellant because of amputation of his right leg wouldbe forced to permanently use prosthetic leg during his life time. Noprovision has been made by the Tribunal in that regard. On these heads,the appellant is certainly entitled for enhanced compensation.D26. The next question is about the liability of insurer to pay thecompensation amount. The Tribunal has absolved the insurance companyon the finding that no premium was received by the insurance companynor any insurance policy was ever issued by the insurance company inrelation to the offending vehicle. The respondents no.2 and 3 had reliedon Cover Note which according to respondent No.1 – InsuranceECompany was fraudulently obtained from the then Development Officer,who was later on sacked by respondent No.1 Insurance Company. Thepossibility of misuse of some cover notes lying with him could not beruled out. The respondent Nos.2 & 3 have relied on the decision of thisCourt in Rula (supra). That decision will be of no avail to respondentFNos.2 & 3. In that case, the Court found that the insurance policy wasalready issued after accepting the cheque; whereas in the present case,the respondent No.1 Insurance Company has been able to show that nopayment was received by the company towards the insurance premiumnor any insurance policy had been issued in respect of the offending

vehicle (jeep). However, the claim of respondent Nos.2 & 3 to the extentGthat they possessed cover note issued by the then Development Officerof the Oriental Insurance Company (respondent No.1) will have to beaccepted coupled with the fact that there is no positive evidence to indicatethat the said Cover Note is ante dated. Pertinently, the Cover Note hasbeen issued by the then Development Officer at point of time when he

was still working with respondent No.1 Insurance Company. It mustfollow that the then Development Officer was acting on behalf of theInsurance Company, even though stricto sensu the respondent No.1Insurance Company may not be liable to pay any compensation as noinsurance policy has been issued in respect of the offending vehicle,much less valid insurance policy. But for the Cover Note issued by theDevelopment Officer of respondent No.1 Insurance Company at pointof time when he was still working with respondent No.1, to do substantialjustice, we may invoke the principle of “pay and recover”, as has beenenunciated by this Court in the case of National Insurance Co. Ltd.Vs. Swaran Singh & Ors.[22]

27. Reverting to the calculation of compensation amount, takingthe loss of monthly income due to permanent disability of 40%, theappellant will be entitled to Rs.2,25,792/- [Rs.840 per month (i.e. 40 %of Rs.2,100/-) + 40% future prospects [as per Pranay Sethi (supra)] x12 x 16, i.e. (840 + 336) x 12 x 16. We uphold the amounts quantified bythe Tribunal towards the heads for medical treatment after the accident,motorcycle repair, mental and physical problem, as it is. However, theappellant, in our opinion, is additionally entitled to medical expenses forprocurement of prosthetic leg, which is quantified at Rs.25,000/-(Rupees twenty five thousand only). In summation, the appellant wouldbe entitled to the following compensation:

(Rupees Two Lakh Seventy Seven Thousand Seven Hundred NinetyTwo only)

28. The appellant would also be entitled to interest on the totalamount of compensation at the rate of 9% per annum from the date ofthfiling of the claim application i.e. 11 June, 1990 till the date of realization.22 (2004) 3 SCC 297 (para 110)

AThe respondents will be entitled for adjustment of amount already paidto the appellant, if any.

29. The appeals are allowed in the above terms with costs.

Devika GujralB

Appeals allowed.