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2022 Supreme(Bom) 65
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
V.G. Bisht, J.
Royal Sundaram Alliance Insurance - Appellant
Versus
Mrs. Vinaya Undaybabu Shah and Others – Respondents
First Appeal No.1142 of 2014 With Civil Application (Caf) No.3228 of 2014
Decided On : 07-03-2022
Advocate Appeared:
For the Appellant : Mr. Nikhil Mehta, learned counsel
For the Respondent:Mr. Sumit Khanna, learned counsel alongwith Ms Shweta Rathod and Mr. Pravin Bhoi, learned counsel alongwith Ms. Sneha Sanap, Advocate
The burden of proving breach of an insurance policy lies with the Insurance Company, and it must provide cogent evidence to establish the same. Additionally, tax-exempt income, such as the deceased's share of profit from a partnership, may still be considered as part of the deceased's income for calculating compensation.
Headnote:
Insurance Policy - Motor Accident Claims - Motor Vehicles Act, 1988 - Section 149 - Section 166 - Section 173 - Section 10(2A) - Section 40(b) - Compensation - Breach of Insurance Policy - Calculation of Income - Share of Profit from Partnership - Tax Exemption - Future Prospect - Multiplier - Loss of Future Income - Funeral Expense - Loss of Estate - Loss of Consortium
Fact of the Case:
The case involved a motor accident resulting in the death of the deceased, who was a partner in a business. The claimants, parents of the deceased, sought compensation for the loss. The Insurance Company contested the claim, alleging breach of the insurance policy and disputing the calculation of the deceased's income.
Finding of the Court:
The court found that the Insurance Company failed to prove the breach of the insurance policy, as it did not provide sufficient evidence. The court also upheld the Tribunal's decision to consider the deceased's share of profit from the partnership as part of his income, despite tax exemption. The court calculated the compensation based on the deceased's income, future prospect, and other factors, and directed the Insurance Company to pay the specified amount along with interest.
Issues: The issues involved breach of the insurance policy, calculation of the deceased's income, and the entitlement of the claimants to compensation.
Ratio Decidendi: The court emphasized that the burden of proving breach of the insurance policy lies with the Insurance Company, and it must provide cogent evidence to establish the same. Additionally, the court affirmed the inclusion of the deceased's share of profit from the partnership as part of his income for calculating compensation, despite tax exemption.
Final Decision: The appeal was dismissed, and the cross-objection was allowed. The Insurance Company was directed to pay the specified compensation amount along with interest.
JUDGMENT :
V. G. Bisht, J.
1. Heard learned counsel for the parties.
2. Rule. Rule made returnable forthwith. By consent of the learned counsel for the parties, appeal is taken up for final hearing.
3. This Appeal and Cross Objection arises from the judgment and order of the learned Member, Motor Accidents Claims Tribunal, Pune passed in M.A.C.P. No.247/2004 on 13.06.2014.
4. The brief facts of the case are that the applicants are parents of deceased Shreyans Udaybabu Shah. The deceased was required to attend urgent supervision on his working site at Dharchula, State of Uttaranchal. He was at Delhi at such time. The deceased requested his friend Tejwir Singh of New Delhi to provide a car with Chauffeur, who accordingly arranged a Tata Indica car bearing registration No. DL 5 CB 5279.
5. On 23.02.2013 at about 4.30 a.m. at Gram Talli Gwadi, Ban-Kot Town road, the driver of the car i.e. opponent No.1 in a negligent manner took a wrong turn on left side instead of taking turn to the right side to Pithoragarh. Because of that the car got turtled and opponent driver thrown out the car but deceased remained inside. Owing to the impact, deceased sustained serious injuries and succumbed to those injuries. Accordingly offence was registered.
6. According to the applicant-parents at the time of death of the deceased, the deceased was 27 years old and was looking after the business of Electrical Engineering and joined as a partner in claimant No.2 with the firm M/s. Mahati Electricals and his last average monthly income was Rs.1 Lac. They accordingly, claimed total sum of Rs.1,85,32,854/- on all permissible heads.
7. On appreciation of material before it, the tribunal partly allowed the claim with proportionate costs and awarded compensation of Rs.1,17,14,000/- alongwith costs and proportionate interests at the rate of 9% per annum on Rs.1,16,64,000/- from the date of application till realization. There against the appellant-Insurance Company has preferred the present appeal and the respondents by way of cross-objection sought enhancement of the compensation.
8. Mr. Mehta, learned counsel for the Insurance Company, at the outset assailed the impugned award on the ground that the learned Member failed to appreciate that the insured vehicle has been used for hire and reward at the time of accident and thus, there was breach of Insurance Policy. Learned counsel then invited my attention to the various grounds viz. (h) (i)(k)(l)(m)(n)(p) and (q). I have carefully perused these grounds. Learned counsel also canvassed before me that since the deceased was partner of the applicant No.2 and the fact that the applicant No.2 was driving income from the business of partnership company, the compensation ought to have been allowed only to the extent of loss of managerial skills (of deceased) and nothing else. For all these reasons learned counsel sought exoneration and in the alternate submitted that at least the learned Member could have directed to pay the compensation first and recover from the owner and driver of the vehicle.
9. Mr. Sumit Khanna, learned counsel for the respondent Nos. 1 and 2, on the other hand, vehemently opposed the submissions of learned counsel for the appellant and would submit that since the Insurance Company is coming out with a case of breach of contract, the burden of proof was on it to establish the same by adducing cogent and convincing evidence. According to learned counsel, no such evidence is forth coming, Supporting the impugned order, learned counsel also assailed the submission of learned counsel for the appellant that applicants were only entitled to loss of managerial skills and nothing more. In this regard learned counsel placed reliance in National Insurance Company Limited Vs. Birender, (2020) 11 SCC 356.
10. Coming to the cross-objection learned counsel submits that learned Member while calculating/determining th
