A claimant with an income exceeding Rs. 40,000 per annum can file a claim petition under section 163A of the Motor Vehicles Act, 1988, and receive compensation in accordance with the structured formula provided in the Second Schedule, regardless of the actual income.

JUDGEMENT

1. The appellant-Insurance company has challenged award dated 31.05.2013 passed by the Motor Accidents Claims Tribunal, Ramban (hereinafter referred to as the 'Tribunal') whereby the respondents-claimants have been held entitled to an amount of Rs. 5,00,000/- as compensation on account of death of one Mohd. Rafiq Malik who is stated to have died on 01.02.2011 as a result of motor vehicular accident involving vehicle bearing No. JK 03/4413.

2. It has been contended by the appellant-Insurance Company that the income of the deceased was pleaded and proved to be more than Rs. 40,000/- per annum, therefore, it was not open to the Tribunal to scale it down to Rs. 40,000/- per annum so as to bring the claim petition within the parameters of Section 163-A of Motor Vehicles Act, 1988 (hereinafter referred to as the 'Act of 1988'). It has also been contended that, while calculating the compensation, the Tribunal has made deduction and applied multiplier as per the ratio laid down by the Supreme Court in the case of Sarla Verma and others v. Delhi Transport Corporation and another, (2009) 6 SCC 121, whereas, in the case of a claim petition under section 163-A of the Act of 1988, the compensation has to be assessed strictly in accordance with the Second Schedule to the said Act. It has further been contended that a cheque relating to the premium of policy of insurance was dishonored and, as such, the policy of insurance issued by the appellant-Insurance Company in favour of the insured in respect of the vehicle in question stood automatically cancelled. Accordingly, the vehicle in question was not covered under any policy of insurance at the time of the accident. Thus, according to the appellant-Insurance Company, it could not have been saddled with liability to satisfy the award.

3. I have heard learned counsel appearing for the appellant-Insurance Company and learned counsel appearing for the respondents-claimants and perused the record of the case.

4. It appears that on 01.02.2011, a vehicle bearing No. JK03/4413, that was being driven by deceased Mohd. Rafiq Malik, suffered an accident which resulted in serious injuries to the deceased driver leading to his death. The respondents-claimants, who happen to be the wife, sons and daughter of the deceased, filed a claim petition under section 163-A of the Act of 1988 before the Tribunal. In the claim petition, it was claimed that the age of the deceased at the time of his death was 35 years, he was driver by profession and that his monthly income was Rs. 20,000/- per month. The compensation was claimed by the respondents-claimants in terms of the Second Schedule to the Act of 1988.

5. The appellants-Insurance Company filed its objections to the claim petition in which it was contended that the vehicle in question was being driven in violation of the terms and conditions of the policy of insurance at the time of the accident, inasmuch as, its driver was not holding a valid driving licence. It was also contended that the vehicle in question was being driven without a valid and effective route permit and fitness certificate and that the driver of the vehicle in question was driving the same in a rash and negligent manner. It was further contended that five gratuitous passengers were also travelling in the vehicle in question at the relevant time. The appellant-Insurance, however, admitted that the vehicle in question was covered by a policy of insurance having its validity from 20.05.2010 to 19.05.2011. The reply filed by the appellant-insurance company has been signed by its authorized officer as well as by its counsel before the Tribunal.

6. The Tribunal, on the basis of pleadings of the parties, framed the following issues:

(i) Whether the deceased Mohd. Rafiq Malik died as a result of injuries received in a vehicular accident on 01.02.2011 at Zanchoos on Banihal Neel Road involving