Bajaj Allianz General Insurance Company Limited v. Mary (W/o Simon Philipose) and Ponnappan Nair

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **TUESDAY, THE 18TH DAY OF FEBRUARY 2020 / 29TH MAGHA, 1941** ## **MACA.No.78 OF 2020(B)** **AGAINST THE AWARD IN OP 686/2017 DATED 07-09-2019 OF MOTOR ACCIDENT CLAIMS TRIBUNAL MUVATTUPUZHA** ## **APPELLANT/S:** **BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT GE PLAZA, AIRPORT ROD, YERWADA, PIN-411006, REPRESENTED BY ITS MANAGER-LEGAL, LINTO FRANCIS, AGED 34 YEARS, S/O.V.T.FRANCIS, 3RD FLOOR, COASTAL CHAMBERS, OPP.MERCY ESTATE, M.G.ROAD, RAVIPURAM, COCHIN PIN-682015, RESIDING AT CASA SELESTINA, VALIYAPRAMBIL HOUSE, PFRA NO.87, POOZHITHODHU FERRY ROAD, SOUTH CHITOOR.P.O, COCHIN, PIN-682027** ## **BY ADV. SRI.THOMAS M.JACOB** ## **RESPONDENT/S:** **1 MARY AGED 56 YEARS W/O.SIMON, PHILIPOSE, RESIDING A KANDOTH MARIKKUDIYIL HOUSE, ENANALLOOR.P.O., KAKKATTOOR KARA, VARAPPETTY VILLAGE, KOTHAMANGALAM TALUK, ERNAKULAM DISTRICT, PIN-686673 2 PONNAPPAN NAIR AGE NOT KNWON, S/O.PADMANABHA NAIR, RESIDING AT PAKKATHUPUTHENPURA HOUSE, NEAR THAIKAVU, SOUTH MARADY.P.O, MUVATTUPUZHA, ERNAKULAM DISTRICT, PIN-686673** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 18.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** MACA No.78 of 2020 2 ## **JUDGMENT** The appellant is the 2[nd] respondent insurer in O.P.(MV) No.686 of 2017 on the file of the Motor Accidents Claims Tribunal, Moovattupuzha, a claim petition filed under Section 166 of the Motor Vehicles Act, 1988 by the 1[st] respondent/claimant claiming compensation on account of the injuries sustained by her in a motor accident, which occurred on 05.04.2017, while she was walking along the side of a public road. At the place of accident she was knocked down by a car bearing registration No.KL-17/H-5881, owned and driven by the 2[nd] respondent and insured with the appellant. In the accident she sustained injuries. Alleging that the accident occurred due to the rash and negligent driving of car by the 2[nd] respondent, claim petition was filed before the Tribunal claiming a total compensation of Rs.10,00,000/- under various heads. 2. Before the Tribunal the owner-cum-driver of car remained absent and he was set ex parte. The appellant insurer filed written statement admitting insurance coverage of the car involved in the accident; however denying negligence alleged against its driver. The insurer contended that the accident MACA No.78 of 2020 3 occurred due to the negligence on the part of the claimant in crossing the road, without care and caution. The insurer contended further that, at the time of accident, the 2[nd] respondent driver was not holding a valid and effective driving license (since the validity of the licence expired on 06.02.2017, which was not renewed as on 05.04.2017, the date of accident) and as such, there is violation of the conditions of policy, and that, the compensation claimed under various heads are on the higher side. 3. Before the Tribunal the claim petition was tried along with the connected matter. Exts.A1 to A16 were marked on the side of the claimants. Exts.B1 to B3 were marked on the side of the appellant insurer. The document marked as Ext.C1 is a disability certificate issued by the Medical Board at the General Hospital, Ernakulam, assessing the permanent disability of the claimant, on account of the injuries sustained in the accident. 4. After considering the pleadings and materials on record, the Tribunal arrived at a conclusion that the accident occurred due to the rash and negligent driving of car by its driver. Since insurance coverage of the said vehicle was not in MACA No.78 of 2020 4 dispute, the appellant insurer was held liable to indemnify the insured. The Tribunal found that, as on the date of accident, the 2[nd] respondent was not holding a valid and effective driving license and as such, there is violation of the conditions of Ext.B1 policy. Therefore, the appellant insurer is permitted to proceed against the 2[nd] respondent, to recover the amount of compensation paid to the claimant. Under various heads the Tribunal awarded a total compensation of Rs.5,68,300/- together with interest at the rate of 7% per annum from 08.08.2017 till realisation, with proportionate cost and the appellant insurer was directed to satisfy the award. 5. The appellant insurer is before this Court in this appeal, by contending that the Tribunal ought to have exonerated the insurer based on the finding that, as on the date of accident, the 2[nd] respondent was not holding a valid driving licence. The insurer would also contend that the compensation awarded by the Tribunal towards pain and suffering is on the higher side. 6. In **National Insurance Co. Ltd. v. Swaran Singh [(2004) 3 SCC 297]** , the Apex Court examined the liability of MACA No.78 of 2020 5 the insurer in cases of breach of policy conditions due to disqualification of the driver or invalid driving licence of the driver. The Apex Court held that, even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defenses available to the insurer under sub-section (2) of Section 149 of the Act. Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of sub-section (2) of Section 149 read with sub-section (7), as interpreted above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of MACA No.78 of 2020 6 the Tribunal. The summary of findings at paragraph 110 of the judgment of the Apex Court read thus; “(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said Act. (iii) The breach of policy condition, e.g., disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time. MACA No.78 of 2020 7 (iv) Insurance companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish "breach" on the part of the owner of the vehicle: the burden of proof wherefore would be on them. (v) The Court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insurer under Section 149(2) of the Act. (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree. MACA No.78 of 2020 8 (ix) The Claims Tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued MACA No.78 of 2020 9 by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub- section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal. (xi) The provisions contained in sub-section (4) with the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular Court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims," 7. In view of the law laid down by the Apex Court in **Swaran Singh** , in the impugned award, the Tribunal was justified in directing the appellant insurer to satisfy the award, since there was violation of the conditions of policy, with liberty to the insurer to proceed against the 2[nd] respondent insured for recovering the compensation and other amounts which the insurer has been compelled to pay to the 1[st] respondent/ claimant, under the award. Therefore, the appellant insurer is MACA No.78 of 2020 10 not entitled to exoneration from the liability to pay compensation. The contention to that effect raised by the appellant insurer can only be rejected as untenable. 8. In **State of Haryana v. Jasbir Kaur [(2003) 7 SCC 484]** the Apex Court held that the Tribunal under Section 168 of the Motor Vehicles Act, 1988 is required to make an award determining the amount of compensation which is to be in the real sense 'damages' which in turn appears to it to be 'just and reasonable'. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be 'just' and it cannot be a bonanza; not a source of profit; but the same should not be a pittance. 9. In **National Insurance Company Ltd. v. Pranay Sethi [(2017) 16 SCC 680]** a Constitution Bench of the Apex Court held that, Section 168 of the Motor Vehicles Act, 1988 deals with the concept of 'just compensation' and the same has to be determined on the foundation of fairness, reasonableness MACA No.78 of 2020 11 and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of 'just compensation' has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability. 10. In the instant case, the compensation awarded by the Tribunal under various heads reads thus; ||Head of claim|Amount<br>claimed<br>(in Rs.)|Amount<br>allowed<br>(in Rs.)|| |---|---|---|---|---| |1|Loss of earning for 6<br>months|60,000/-|27,000/-|| |2|Partial loss of earning for<br>3 months|30,000/-|--|| |3|Transportation<br>to<br>hospital and back|10,000/-|3,000/-|| |4|Extra Nourishment|30,000/-|5,000/-|| |5|Damage to clothing and<br>articles|10,000/-|1,000/-|| |6|Hospital expensed and<br>treatment charges|1,50,000/-|1,43,744/-|| |7|Bystanders expenses|25,000/-|6,300/-|| |8|Expenses for future<br>treatment|1,00,000/-|30,000/-|| |9|Pain and sufferings|3,00,000/-|50,000/-|| |10|Compensation<br>for<br>permanent disability|2,00,000/-|2,72,160/-|| |11|Loss of earning power|1,00,000/-|--|| MACA No.78 of 2020 12 |12|Loss of convenience and<br>amentities in life|2,00,000/-|30,000/-|| |---|---|---|---|---| ||Total claim<br>Limited to|12,15,000/-<br>10,00,000/-|5,68,204/-|| 10. The appellant insurer would contend that the Tribunal took the monthly income as Rs.9,000/-, even in the absence of proof. The Tribunal accepted the assessment of 28% permanent disability in Ext.C1 disability certificate, without examining the doctors who were the members of the Medical Board at the General Hospital, Ernakulam. Further, the compensation of Rs.50,000/- awarded by the Tribunal towards pain and suffering is on the higher side. 11. The accident occurred on 05.04.2017. At the time of accident, the claimant was aged 54 years. She claimed monthly income of Rs.10,000/- as an Animator in Kottayam Social Service Society, Thellakom. The document marked as Ext.A12 is the salary certificate dated 05.05.2017 issued from Kottayam Social Service Society, certifying that, at the time of accident, the claimant was working as an Animator in that Society, earning a monthly income of Rs.10,000/-. Ext.A13 is another certificate dated 06.03.2019 issued from Kottayam Social Service Society, certifying that the claimant discontinued that MACA No.78 of 2020 13 job, due to the accident, which occurred on 05.04.2017. Exts.A12 and A13 were marked subject to proof and the claimant has not taken steps to prove those documents by examining the employer concerned. In the absence of proof, the Tribunal took the monthly income of the claimant, notionally, as Rs.9,000/-, for the purpose of assessing compensation under various heads. 12. In **Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited [(2011) 13 SCC 236]** the Apex Court reckoned the monthly income of a coolie (manual labourer), who met with a road accident in the year 2004, at the age of 35 years, notionally as Rs.4,500/-. The Apex Court held that, the claimant who was working as a coolie cannot be expected to produce any documentary evidence to substantiate his claim. In the absence of any other evidence contrary to the claim made by the claimant, in the facts of the said case, the Tribunal should have accepted the claim of the claimant. The Apex Court made it clear that, in all cases and in all circumstances, the Tribunal need not accept the claim of the claimant, in the absence of supporting material. It depends on MACA No.78 of 2020 14 the facts of each case. In a given case, if the claim made is so exorbitant or if the claim made is contrary to ground realities, the Tribunal may not accept the claim and may proceed to determine the possible income by resorting to some guess work, which may include the ground realities prevailing at the relevant point of time. ## 13. In **Syed Sadiq v. Divisional Manager, United India** **Insurance Co. Ltd. [(2014) 2 SCC 735]** , taking note of the earlier decision in **Ramachandrappa's case (supra)** , the Apex Court reckoned the monthly income of a vegetable vendor, who met with a road accident in the year 2008, at the age of 24 years, notionally as Rs.6,500/-. In the said decision, the Apex Court held that, a labourer in an unorganised sector doing his own business cannot be expected to produce documents to prove his monthly income. Therefore, there was no reason for the Tribunal and the High Court to ask for evidence to prove his monthly income. Going by the state of economy prevailing at that time and the rising prices in agricultural products, the Apex Court accepted his case that a vegetable vendor is reasonably capable of earning Rs.6,500/- per month. MACA No.78 of 2020 15 14. Considering the economic conditions prevailing at the time of accident, i.e., during the year 2017, and taking note of the fixation of notional monthly income by the Apex Court in **Ramachandrappa** and **Syed Sadiq** , the monthly income of a manual labourer or a labourer in an unorganised sector doing his own business as vegetable vendor, fruit vendor, etc., who met with a motor accident in the year 2017, could be reasonably taken as Rs.11,000/-. Therefore, the monthly income of the claimant, claimed as Rs.10,000/- in the claim petition, is not on the higher side, which could have been accepted by the Tribunal even in the absence of any proof. Therefore, there is absolutely no merit in the contention of the appellant insurer that the notional monthly income of Rs.9,000/- taken by the Tribunal is on the higher side. 15. The document marked as Ext.A6 is the wound certificate issued from Nirmala Medical Centre, Muvattupuzha. The document marked as Ext.A7 is the discharge summary; and Ext.A8 is a medical certificate. As per medical records, in the accident, the claimant sustained bicondylar fracture upper tibia; fracture lower end left radius; lacerated wound on the head; MACA No.78 of 2020 16 injury on the chin; and tenderness on the back. She had undergone inpatient treatment for a period of 21 days. Ext.A9 series of medical bills are for a sum of Rs.1,43,744/-. 16. The document marked as Ext.C1 is the disability certificate issued by the Medical Board at the General Hospital, Ernakulam, in which the permanent disability of the appellant, on account of the injuries sustained in the accident, is assessed as 28%. The Tribunal accepted the assessment of permanent disability in Ext.C1, for the purpose of awarding compensation under the head permanent disability, by taking loss of future earning power as 28%. When the disability certificate is one issued by the Medical Board, in the absence of any vitiating circumstances pointed out in the assessment of disability, shaking the very foundation of the assessment made by the Medical Board, the Tribunal can assess loss of future earning capacity of the claimant, based on that assessment, even without examining the doctors concerned. Therefore, there is absolutely no merit in the contention of the appellant insurer that the Tribunal went wrong in accepting the assessment of disability Ext.C1, without examining the doctors concerned. MACA No.78 of 2020 17 17. Another contention raised by the appellant insurer is that, the compensation of Rs.50,000/- awarded by the Tribunal towards pain and suffering is on the higher side. In the accident, the claimant sustained bicondylar fracture upper tibia; fracture lower end left radius; lacerated wound on the head; injury on the chin; and tenderness on the back. She had undergone inpatient treatment for a period of 21 days. Considering the nature of injuries sustained and the treatment the claimant had undergone, the compensation granted by the Tribunal is slightly on the higher side. However, as already noticed, considering the economic conditions prevailing at the time of accident, i.e., during the year 2017, and taking note of the fixation of notional monthly income by the Apex Court in **Ramachandrappa** and **Syed Sadiq** , the Tribunal could have taken the notional monthly income of the claimant as Rs.10,000/-, as claimed in the claim petition, even in the absence of any proof, for the purpose of awarding compensation under the head permanent disability. Since the claimant was aged 54 years, the proper multiplier to be applied is 11, as against the multiplier of 9 taken by the Tribunal. If the compensation awarded by the Tribunal under the head permanent disability is re-calculated, taking Rs.10,000/- as MACA No.78 of 2020 18 the notional monthly income of the claimant; applying the multiplier of 11; and loss of future earning capacity as 28%, the claimant will be entitled for payment of a higher compensation under that head. In that view of the matter, it cannot be contended that the compensation awarded by the Tribunal towards pain and suffering is on the higher side. In the result, this appeal fails and the same is accordingly dismissed. No order as to costs. Registry shall communicate a copy of this judgment to the 1[st] respondent/claimant and also to the Tribunal. Sd/- **ANIL K. NARENDRAN, JUDGE** KAS