IN THE HIGH COURT OF JHARKHAND AT RANCHI
GAUTAM KUMAR CHOUDHARY, J.
The Divisional Manager, Oriental Insurance Company Ltd. - Appellant
Vs.
Phaguni Devi Wife Of Late Turi Munda - Respondent
Misc. Appeal No.256 of 2015
Decided On : 24-02-2025
(A) Motor Vehicles Act, 1988 - Sections 147 and 166 - Compensation for death in accident - Award of Rs.9,00,000/- in favor of claimants - Liability fixed on Insurance Company. The Insurance Company contested the validity of the driver's license and the computation of compensation. The Tribunal computed the final compensation at Rs.6,88,800/- based on established legal principles regarding income and deductions. (Paras 2-8)
(B) Insurance Policy - Breach of policy due to unverified driving license - The court held that the vehicle owner is not liable to verify the genuineness of the driving license. (Paras 6)
Facts of the case:
The appeal arose from a compensation case where the driver was alleged to have a fake driving license. The Tribunal awarded compensation based on the deceased's income and number of dependents.
Findings of Court:
The court upheld the Tribunal's findings on monthly income and calculated the total compensation as Rs.6,88,800/- with interest.
Issues: The primary issues included the validity of the driving license and the appropriate calculation of compensation.
Ratio Decidendi: The court affirmed that the vehicle owner is not responsible for verifying the genuineness of the driving license, and the compensation calculation adhered to the Supreme Court's guidelines.
Result: Appeal allowed; compensation fixed at Rs.6,88,800/- with interest.
JUDGMENT :
GAUTAM KUMAR CHOUDHARY, J.
The Insurance Company is in appeal against the judgment of award of compensation in Compensation Case No.103/2010 whereby and whereunder the compensation of Rs.9,00,000/- has been awarded in favour of the claimants and the liability has been fixed on the Insurance Company to pay compensation amount.
2. It is argued by the learned counsel on behalf of Insurance Company that admittedly the driver of offending vehicle was Md. Sarde Alam. The Insurance Company adduced into evidence Exhibit A which was a report submitted by Sanjay Prasad Sahu (Surveyor of Insurance Company), who on the basis of the report of D.T.O., Lohardaga stated that driving license no.1268 of 2002 in the name of Md. Sarde Alam, was not issued by D.T.O., Lohardaga therefore, once original driving license was proved to be fake, the subsequent driving license bearing no.843 of 2002 issued by D.T.O., Jamshedpur cannot be deemed to be effective and valid driving license. Further, the learned Tribunal while computing compensation amount under the head of future prospect has taken 50% which should be 40% as per the ratio laid down by the Apex Court in the case of National Insurance Company Ltd. vs. Pranay Sethi , reported in (2017) 16 SCC 680 . Although, the deceased was survived by eight children, but there is no provision for more than 1/5th deduction as per the settled law. Under the conventional had also, a total of Rs.2,25,000/- has been awarded which is also not inconsonance with the law laid down by the Apex Court. Further, interest of 9% and penal interest of 12% is not permissible.
3. Learned counsel on behalf of claimants defended the impugned award. It is submitted that award under conventional head has been made on the basis of the ratio laid down by the Apex Court in the case of Jiju Kuruvila & Ors. Vs. Kunjujamma Mohan & Ors., (2013) 9 SCC 166
4. It is vehemently argued on behalf of the claimants that learned Tribunal has computed the monthly income by taking Rs.3000/- which should be Rs.7000/-.
5. Having considered the submissions advanced on behalf of both sides, in view of finding of fact on the issue of monthly income by the learned Tribunal and the reasons given for the same, I do not find any reason to interfere with it so far the income of Rs 3000/- is concerned.
6. Plea of Insurance Company that there was breach of Insurance policy for the vehicle was driven by a person having no driving license, cannot be acceded to. Exhibit A 1 is a document adduced into evidence on behalf of Insurance Company, states that driving license bearing no.843 of 2002 was validly issued in the name of driver, Md. Sarde Alam by D.T.O., Jamshedpur. Even if it is assumed that original driving license was not validly issued, this Court is of the view that owner of vehicle cannot be saddled with liability to verify genuineness of the driving license from the initial issuing authority. [See National Insurance Co. Ltd. vs. Swaran Singh & Ors., (2004) 3 SCC 297 ].
7. So far as computation of compensation amount is concerned, in order to bring uniformity, Hon’ble Supreme Court by full Bench decision in Pranay Sethi case (supra) has specifically laid down the law which is binding. In view of the law settled by the Apex Court, the final compensation amount, by taking Rs.3000/- as monthly income and 36 years age at the time of his death, 1/5th as living expense of the deceased and 40% under future head, the final compensation amount will work out as under: -
| Annual Income = Rs.3000/- X 12 | Rs.36,000/- |
| Future Prospect Rs.36,000/- X 40% | Rs.14,400/- |
| After adding annual income and future prospect | Rs.36,000 + Rs.14,400 =Rs.50,400/- |
| Deduction (1/5th as total nos. of dependants are 8) | Rs.50,400 X 1/5 =Rs.10,080/- |
| After deduction | Rs.50,400 - Rs.10,080 = Rs.40,320/- |
| Multiplier of 15 taking the age of the deceased to be 36 as per post-mortem report | Rs. 6,04,800/- |
| Conventional Head | Rs.84,000/- |
| Total Compensation | Rs. 6,04,800 +Rs.84,000 =Rs.6,88,800/- |
8. The Tribunal shall disb
National Insurance Company Ltd. vs. Pranay Sethi
The vehicle owner is not liable to verify the genuineness of a driver's license, and compensation must be computed following established legal principles.
Age is between 26-30 years, then multiplier of 17 should be applied.
A driver licensed for light motor vehicles can operate light transport vehicles, establishing insurance liability in motor accident claims.
The owner of a vehicle cannot be held liable for a driver's forged license unless collusion is proven, and conventional compensation must align with established legal ratios.
Accident – Licence - Liability of insurance company – When liable - Claimants are entitled to revised compensation in amount of amount along with interest @ 7.5 per annum from date of filing of claim....
The court recalculated the compensation amount based on the deceased's actual salary and future prospects, and set aside the direction to pay and recover from the driver and owner of the vehicle, cit....
The main legal point established is the entitlement of the sole legal heir to represent the estate and receive compensation under the Motor Vehicles Act, and the liability of the insurance company to....
The insurer is primarily liable to pay compensation to accident victims, with the right to recover from the vehicle owner, reinforcing the social welfare purpose of the Motor Vehicles Act.
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