The court clarified the liability of the insurance company under the Motor Vehicles Act, emphasizing the restricted liability in the absence of additional premium for unlimited liability.

K. KANNAN, J.

1. The appeal is for enhancement of claim for compensation as well as for casting liability on the insurance company for the amount determined and not merely restricted to Rs. 1,50,000. It was a case of death of a person who was working as SDO in the government department on a salary of Rs. 5,370. The claimants were the widow, mother and two children. The Tribunal applied a deduction of 1/3rd and applied a multiplier of 16 to assess the dependency at Rs. 6,72,000. It restricted the liability to Rs. 1,50,000 since the policy had been issued under the Motor Vehicles Act of 1939 and it was not shown that any additional premium had been paid for unlimited liability after the commencement of the Act of 1988. The Tribunal, therefore, allowed for enforcement of the award beyond Rs. 1,50,000 against the owner and driver. Counsel seeks for a reassessment of compensation in the light of the judgment of the Apex Court in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121. I will make a provision for 30 per cent increase and take the average income to be Rs. 6,981 and make a 74th deduction for personal expenses and take the contribution to the family at Rs. 5,235.75 per month. Annualizing the yield and applying a multiplier of 14, the loss of dependency would be Rs. 8,79,606. The multiplier adopted as 16 will have to be discarded as not in conformity with the law laid down above. Even while assessing the dependence, I will provide towards contribution to the family including the wife, although the counsel for the respondent insurance company would argue that the wife was herself earning as a lecturer in a college and, therefore, was not a dependant. It will be wrong and unwise to discard a spouse from the array of dependants by the only fact that such a person was also an earning member. A husband, by being an earning member during his lifetime, cannot cease to be dependent on a wife any more than a wife as an earning member can cease to be one. Cases of both spouses earning make possible a larger corpus to be available for a better standard of living. The dependence here is not for a bare earthly necessities. Dependency here, on the other hand, is to increase the sum of material happiness that a joint contribution to the family could bring.

2. There has to be a provision also for conventional heads of claim which I would add as Rs. 5,000 for the wife and Rs. 5,000 together for the then minor children. I will also add Rs. 2,500 for funeral expenses and Rs. 2,500 for loss to estate and make an additional amount of Rs. 15,000, aggregating Rs. 8,94,606, rounded off to Rs. 8,95,000 as the amount of compensation payable to the claimants.

3. In the manner of determining the liability, learned Tribunal has held that the policy had been issued under the Motor Vehicles Act of 1939 and the provision of unlimited liability as found in the printed form of the policy has not been ticked to make possible an inference that the insured had availed of the unlimited liability against the insurer by paying an additional premium. Under the scheme of the Motor Vehicles Act of 1939, the statutory liability for a truck for any one accident to a third party was only Rs. 1,50,000. The regime of unlimited liability for a third party came only through the 1988 Act and the Act was notified on 22.5.1989 to come into effect from 1.7.1989. In terms of the proviso to sub-section (2) of section 147 of the Motor Vehicles Act, a policy of insurance issued with any limited liability before the commencement of the Act would continue to be effective for a period of 4 months, after such commencement or till the date of the expiry of such policy whichever was earlier. Accident had taken place beyond a period of 4 months from the date when the Act (sic policy) came into force. The accident took place within a period of 4 months from the date the Act came into force on 29.9.1989. If no additional premium had been paid a