An insurance company is liable to pay compensation to a third party who has suffered injuries in an accident, even if the insurance policy was obtained by misrepresentation or fraud, unless the insurance company can prove that the policy was procured by means of fraudulent misrepresentation as to matters material to the risk.

R.D. Shukla, J.

1. The appeal is directed against the judgment and Award dated 22-5-1989 of the Member, Motor Accident Claims Tribunal, Indore passed in Claim Case No. 72/87 whereby the claimant appellants have been awarded a compensation of Rs. 90,000/- for the death of Balwant Singh in a motor accident on 26-3-1983 at about 10 A.M. Balwantsingh was dashed by Motor-truck No. MPN 5323, owned by respondent No. 1 and driven by respondent No. 2 and died nearly 3-4 hours after the accident. Rajani, daughter of claimant No. 1 also died.

2. Claimants who are the heirs of Balwantsingh filed the claim petition for an award of Rs. 1,00,000/-. A separate petition for compensation on account of the death of Rajani was also filed. Respondents disputed the claim including the fact of rash and negligent driving. Respondent No. 3 further disputed its liability on the ground that the insurance was obtained by fraud.

3. Learned Tribunal found the accident having occurred due to rash and negligent driving of the vehicle by driver respondent No. 2 who was a licence-holder and awarded Rs. 90,000/- as compensation, after applying a multiplier of 15 and taking the age of deceased to be 38 years. However, respondent No. 3 Insurance Co., was exonerated from the liability of payment of compensation as the transfer of Insurance Policy was obtained by concealing the fact of accident. Hence this appeal by claimants for enhancement of compensation and for fixation of liability of payment on respondent No. 3 as well.

4. The contention of learned counsel for appellants is that after ascertaining the dependency and applying multiplier the deduction of 1/6th amount is wrong.

5. The second contention of learned counsel for appellants is that since the Insurance Policy is transferred in the name of respondent No. 1 and as the date starts from the previous night the Insurance Co. would be liable.

6. No-body appears for respondents Nos. 1 and 2. Shri M. L. Dhupar learned counsel for respondent No. 3 submitted that as there was concealment of material fact that transfer of certificate of insurance under section 103-A of Motor Vehicles Act, 1939, itself was invalid and, therefore, Insurance Co., has rightly been held not liable to make payments.

7. The first point that arises in the case is as to whether the amount of compensation is just and proper. We have perused the impugned judgment and evidence on record. Learned Tribunal in para 14 of its judgment has accepted the age of the deceased to be 37-38 years and dependency of family as Rs. 600/- per month. After applying multiplier of 15, learned Tribunal has made a deduction of 1/6th of the amount. The age of the deceased has not been disputed and, therefore, this court accepts the age to be 38 years.

Similarly, the pay and allowances of deceased to the extent of Rs. 985.80 Paise per month has also not been disputed and, therefore, this Court accepts that finding also.

8. Normally 1/3rd deduction is made for the personal expenditure. In this case, learned Tribunal has determined the dependency of the family to Rs. 600/- per month. In fact this ought to have been determined to nearly Rs. 650/- per month or at least Rs. 7,500/- per year.

9. Learned Tribunal has adopted a multiplier of 15 but looking to the age of the deceased as he was aged about 38 years the maximum multiplier of 13 ought to have been applied. Reference may be had to a case reported in 1994 MPLJ 520, General Manager, Kerala State Road Transport Corporation v. Susamma Thomas.

If a multiplier of 13 is applied an amount of compensation with Rs. 7,500/- per year as dependency would come to Rs. 97,500/-.

10. Learned Tribunal has awarded no amount for the loss of consortium and loss of love and affection. An additional amount of Rs. 5,000/- to Shyamabai and Rs. 8,000/- (Rs. 2,000/- each to other claimants) ought to have been awarded. Thus, the amount if calculated with this formula comes to Rs. 97,500/- + Rs. 5,000/- + Rs. 8,000/- = Rs. 1,10,500/-. However, the