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Mere smell of the alcohol in the breath Would not lead to a conclusive presumption of contributory negligence, Delhi High court

CASE TITTLE:RELIANCE GENERAL INSURANCE CO LTD V.HAWA SINGH & ANR

CASE NO:MAC.APP. 107/2016

ORDER ON:08 May 2024

QUORUM: J. DHARMESH SHARMA

FACTS OF THE CASE:

The present appeal is prefered  by the appellant/insurance company , Under Section 173 of the Motor Vehicles Act, 1988, challenging the judgment-cum-award dated 23.11.2015

The brief facts of the case is that the claimant/ respondent 1 sustained injuries on 07.11.2011, wherein his motorcycle was hit by a Santro car(‘offending vehicle’) driven by respondent No.2/Anil Kumar, who is the driver-cum-owner Of the offending vehicle.While the case came before the  Presiding Officer, Motor Accident Claims Tribunal, on 23.11.2015 passed a judgment-cum-award directing, A sum of Rs.7,64,654/- as compensation to The claimant with interest @ 9% per annum from the Date of filing of the petition till realisation.

LEGAL PROVISIONS:

Section 173 of the Motor Vehicles Act, 1988:talks about appeals which states that no appeal by the person who is required to pay any amount in terms of such award shall be entertained by the High Court unless he has deposited with it twenty-five thousand rupees or fifty per cent.

CONTENTIONS OF APPELLEANT:

Learned counsel for the appellant/insurance company Vehemently urged that while the factum of the accident is not in Dispute as also the fact that the two vehicles were indeed involved in The accident, however, it was vehemently submitted that the Respondent No.1/claimant-injured was guilty of negligence since when He was examined in Sanjay Gandhi Memorial Hospital and MLC, was recorded by the doctor Attending to him that he smelled of alcohol in his breath. Having consideration to the submissions advanced by The learned counsel for the rival parties and on perusal of the Trial Court Record (TCR), plea raised by the Appellant/insurance company cannot be sustained in law.

COURTS ANALYSIS AND JUDGEMENT:

The court considered that observation made by  motor accident claims tribunal wherein the respondents claims that the accident was claimed by the fault of the petitioner under influence of liquor  but respondents failed to lead the evidence of the same, herefore court also observed that the procecution witness in cross-examination, denied that he had consumed liquor before the accident. However,  it is borne out from the medical records MLC of respondent No.1/claimant injured that the smell of alcohol was present and it was also recorded that The patient was conscious and well-oriented.therefore the court considered that the  blood sample of the Respondent No.1/claimant-injured was taken so as to test how much Alcohol was present in his blood. Further, there was no challenge in The cross-examination to his testimony that it was the driver of the Offending vehicle who was responsible for causing the accident. Hence the court opined that Mere smell of the alcohol in the breath Would not lead to a conclusive presumption that the respondent No.1/claimant was guilty of contributory negligence.

Therefore, the  court opines that, issue that requires modification is the award of compensation towards the interest rate. The claim Petition was decided within three years of its filing and the Court,in Umpteen number of cases, has taken a consistent view that the interest Rate should ordinarily be 7.5% unless and until exceptional Circumstances are shown.therefore the court refered,

The Oriental Insurance Co. Ltd. V. Sohan Lal

National Insurance Co. Ltd. v. Mannat Johal

Accordingly, the court reduced the intrest rate  from 9% to 7.5%, which shall be payable to the claimant from the date of filing of the petition till realization. In view of the foregoing discussion, the court  hereby dismissed the present appeal. It is pertinent to mention here that the Court vide order dated 02.02.2016, had directed the appellant/insurance company to deposit the entire amount of compensation with accrued interest with the learned Tribunal within four weeks from the day upon which 60% of the amount of compensation was directed to be released to the respondent No.1/claimant. Hence, the balance amount of Compensation be released to the respondent No.1/claimant forthwith With interest. Further, the court held that since the present appeal is failing on merits, the Statutory amount of Rs.25,000/- deposited by the appellant/insurance Company shall stand forfeited to the State. The court disposed of the  present appeal accordingly.

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Judgement Reviewed by:Sowmya.R

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NIACL Triumphs: Supreme Court Validates Insurance Claim Rejection in Tata Steel Case

Case Title – New India Assurance Company Ltd. Vs. M/s. Tata Steel Ltd. 2024 INSC 356

Case Number – SLP (C) No. 10001 of 2009, C.A. No. 5242-5243 of 2009

Dated on – 30th April, 2024

Quorum – Justice K. V. Viswanathan

FACTS OF THE CASE

In the case of New India Assurance Company Ltd. Vs. M/s. Tata Steel Ltd. 2024 INSC 356, the insured had an insurance policy with the New India Assurance Company Limited (NIACL) covering their complete machinery of the mill, paying a premium of Rupees 62,09,655/-. On the 12th of December,1998, the 20 Hi Cold Rolling Mill was destroyed by a fire causing them a claimed loss of Rupees 35.08 Crores. NIACL was informed instantly, and surveyors were appointed. On dated 29th January,1999, a claim of Rupees 35.08 Crores was filed, based on the replacement quotations. On dated 24th March, 1999, NIACL transferred Rupees 4,92,80,905/. Rupees 29.60 crores were spent by the insured on a new 6 Hi Cold Rolling Mill to restart the operations. The insured agreed to accept an amount of Rupees 20.9 crores as a final settlement to avoid any detains. The NIACL further did not release the remaining balance resulting in the institution of a consumer complaint Case No. 233 of 2000 on the dated 30th May, 2000. NIACL appointed surveyors instantly post the fire and made interim payments on the basis of their reports. The final Joint Surveyors’ Report assessed the losses at Rupees 19.55 Crores and Rupees 13.51 crores for replacement and depreciation respectively on dated 11th December,2001. NIACL claimed that the insured informed them about the new 6 Hi Cold Mill on dated 27th March, 2002 which was in contrast to the claim for the reestablishment of the 20 Hi Cold Rolling Mill. The Claim was duly settled by the NIACL at Rupees 7.88 Crores, citing that the replacement mill was of lesser capacity.

CONTENTIONS OF THE APPELLANT

  1. The Appellant, through their counsel, in the said case contented that the subsistence of the reestablishment value clause in the insurance policy, which stated that the method of the indemnity should be the cost of replacing or reestablishing the damaged property with a property of the same type, but not superior or more comprehensive than the insured property when new and that this clause compels the insured to reestablish the damaged property within 12 months or within an extended period, or else, the clause stands futile.
  2. The Appellant, through their counsel, in the said case contented that the insured failed to take requisite steps for the reestablishment despite abundant opportunities provided by the NIACL and that the delay on the part of the insured in providing necessary information and taking action for the purpose of reestablishment. They contended that the delay on the part of the insured in providing requisite information and taking actions related to reestablishment. Further, the damaged property’s repair was delayed.
  3. The Appellant, through their counsel, in the said case contented that the National Consumer Disputes Redressal Commission (NCDRC) faultily neglected their affidavit vindicating the calculation of depreciation at 60% and that there were no standard guidelines for depreciation calculation and that their conduct, including seeking a revised calculation from the surveyors, was apt as per the situation.

CONTENTIONS OF THE RESPONDENT

  1. The Respondent, through their counsel, in the said case contented that existence of the reestablishment value clause in the policy document issued by the NIACL, asserting it was never received by them and that the Clause 9 of the policy conditions, which pertains to reestablishment, should be read in combination with any such clause.
  2. The Respondent, through their counsel, in the said case contented that the clause 9 of the policy applies when reestablished or repair is not possible, as assessed by the surveyor and cited the judgment in the Oswal Plastic Industries.
  3. The Respondent, through their counsel, in the said case contented that the depreciation should be calculated either on the sum insured or on the cost of a new locally sourced 20 Hi Cold Rolling Machine and that the NIACL failed to provide competent reasons for directing apart from the recommendation of the surveyors for 32% depreciation and that the doctrine of contra proferentem should be applied in their favour. 

LEGAL PROVISIONS

  1. Section 64 UM (2) of the Insurance Act, 1938 prescribes that the surveyors and loss assessors must follow the code of conduct for their duties, responsibilities, and other professional requirements as specified by the regulations made under the Act.
  2. Regulation 9(3) of the Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interest) Regulations, 2002 prescribes that if an insurer receives an incomplete survey report, they must ask the surveyor to provide an additional report on specific issues. The insurer must also notify the insured about the delay that may occur in the claim assessment if the insured doesn’t provide all the required information or doesn’t cooperate with the surveyor.

ISSUES 

  1. The main issue of the case revolved around whether the claim of Tata Steel for the loss incurred due to the circumstance of the fire incident covered under the insurance policy with NIACL?
  2. Whether the NIACL rightfully rejected the claim on the basis of the exclusion and conditions of the policy?

COURT ANALYSIS AND JUDGMENT

The court in the case of New India Assurance Company Ltd. Vs. M/s. Tata Steel Ltd. 2024 INSC 356, scrutinized the terms and conditions of the insurance policy between the Appellant and the Respondent to determine the coverage for the loss incurred. The court inspected the specified provisions, exclusions, and conditions of the insurance policy to ascertain if the Respondents’ claim came under the ambit of coverage. The court took into consideration any evidence or documentations provided by both the parties concerning the terms and conditions of the insurance policy. The court discovered that the claim of the Tata Steel comes within the ambit of policy exclusion or conditions, upholding the rejection of the claim of NIACL. The judgment of the court provided a conclusive resolution to the dispute between the parties regarding the insurance coverage for the loss from the fire incident.

The court thus in this case, allowed the appeal of the NIACL and set aside the order of the NCDRC. The court observed that the claim was rightly settled by the NIACL letter dated 3rd January,2003 which determined the loss amount payable at Rupees 7.88 crores after applying 60% depreciation. The court dismissed the appeal instituted by the Insured-Respondent.

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Judgement Reviewed by – Sruti Sikha Maharana

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Just Because Death Under Employment Was Not Because Of Accident It Doesn’t Exempt One From Compensating The Deceased: High Court Of Kerala

Citation: MFA (ECC) No.136 of 2018

Decided On: 28TH DAY OF OCTOBER 2023

Coram: HONOURABLE MR.JUSTICE P.G. AJITHKUMAR

Introduction:

This appeal is an appeal under Section 30 of the Employees Compensation Act, 1923. The appellants through the appeal assail the order of Employees Compensation Commissioner. The appellants are the widow and daughter of Sri.Vasu who died on 01.02.2006 due to an accident.

Facts:

The deceased husband of the appellant was driving taxi car bearing Registration No.KEH 9783 along the Swaraj Round, Thrissur on the said date. At about 12.15 p.m he felt chest pain and collapsed resulting in the car dashing against an electric post. He was rushed to the Aswini hospital, Thissur, but he succumbed to the injuries. The doctor who examined him informed that Sri.Vasu died due to heart attack.

The appellants filed a claim petition before the Employees Compensation Commissioner under the Employees Compensation Act claiming compensation from the 1st respondent, who is the owner of the vehicle and the 2nd respondent, the insurer. The 1st respondent did not chose to contest the matter. The 2nd respondent resisted the claim on several grounds. It was contended that the 1st respondent was not the owner having transferred the vehicle in favour of Sri.Vasu as early as on 17.03.2004. The further contention of the 2nd respondent was that the death was due to heart attack and not on account of an accident arising out of and in the course of the employment.

The appellant failed to discharge their initial burden that the death of Sri.Vasu was the result of an accident and in the course of his employment. In the light of that finding, other issues were not answered and the application was dismissed.

Court’s Analysis and Judgement:

The Apex Court in Param Pal Singh v. National Insurance Co. Ltd and another [2013 ACJ 526] considered a similar question. In the above case, it has come out that the deceased was driving cars for about 40 years. He was aged 60 years at the time of death. A person involved in the avocation of driving for such a long period suffered a heart attack while he was driving the car. The heart attack he suffered while driving had resulted in the accident of his car hitting an electric post. The proximate reason for the death may be heart attack. But, had he not suffered a heart attack, such an accident would not have happened. The view taken by the Apex court is that the employer was liable to compensate even if the deceased was not actually driving the truck. When in the course of his driving, he felt discomfort and later, in the hospital, he died due to heart disease, he being a driver for long years subjected to its stress and strain, the death would amount an accident arising out of and in the course of his employment.

Accordingly, the order of the Employees Compensation Commissioner, Thrissur, dated 25.01.2018 in E.C.C No.405 of 2016 is set aside by holding that the appellants are entitled to claim compensation on account of the death of Sri.Vasu in the accident occurred on 01.02.2006

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Written by- Sushant Kumar Sharma

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Madras High Court Orders Insurance Company to recover Compensation from Insurer.

TITLE: TATA AIG General Insurance Co Ltd  Vs. Saravanan.

Decided On: August 30, 2023.

Civil Miscellaneous Appeal No.626  and C.M.P. No. 4479 of 2022.

CORAM:  Hon’ble Mr. Justice Sunder Mohan.

Facts:

The deceased Subasakthi was a driver by profession and was driving TATA Ace Vehicle. While he was driving since the cows ran across the road, to avoid hit against them, he turned the vehicle towards left side, the vehicle turned turtle and resulted in the accident. He was initially admitted at Nagapattinam Government Hospital. Subsequently, he was referred to Thiruvarur Medical College Hospital, where he was declared as brought dead. Hence the respondents 1 and 2 filed claim petition claiming compensation against the appellant and the 3rd respondent the appellant/Insurance Company filed counter statement denying all the averments made by the respondents 1 and 2 in the claim petition and stated that the accident had not occurred due to the rash and negligent driving of the 3rd respondent’s vehicle.

Legal Analysis and Decision:

The deceased was the tort-feaser. The evidence adduced before the Tribunal and the fact that the respondents 1 and 2 filed a claim petition under Section 163-A of Motor Vehicles Act confirms the said fact. The Tribunal however, strangely fixed 20% contributory negligence on the deceased after holding that he was the tort-feaser and held that the 3rd respondent and the appellant were liable pay to 80 % of the compensation amount. This finding is without any basis and logic. As stated earlier, as seen from the evidence, the deceased had driven the offending vehicle (TATA Ace Van) in a rash and negligent manner and two persons who travelled in a two wheeler belonging to a third party involved in the accident died.

The fact is that the respondents 1 and 2 were unable to produce driving license of the deceased. The 3rd respondent/employer also could not produce the driving license. On the other hand, the 3rd respondent in his counter statement before the Tribunal had stated that the deceased had misled him and stated that he had valid driving license. Therefore, the finding of the Tribunal that the deceased did not have valid driving license cannot be faulted.

This Court is of the view that the Civil Miscellaneous Appeal deserves to be partly allowed and the compensation awarded by the Tribunal is reduced from 10,57,261/- to Rs.9,01,000/- together with interest rate at 7.5 per annum (excluding the default period if any) from the date of petition till the date the deposit. The appellant is directed to deposit the compensation amount, now determined by this Court within a period of four (4) weeks from the date of receipt of a copy of this Judgment, at the first instance and recover the same from the third respondent.

Conclusion:

The Court Concluded that Since the Deceased died in an accident and the respondents are entitle to claim the compensation from the appellant insurance company and recover the same from the insurer 3rd respondent.

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JUDGEMENT REVIEWED BY JANGAM SHASHIDHAR.

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Bombay HC: Occupant rather than an owner of the insured car entitled to compensation

Bombay HC: Occupant rather than an owner of the insured car entitled to compensation

Title: Bharti W/o Sunil Dhat and Ors. v. Navnath Dagdu Dhat and Ors.

Decided on: 28th AUGUST, 2023.

+ FIRST APPEAL NO.749 OF 2020

CORAM: S. G. CHAPALGAONKAR, J

Facts of the Case:

The appellants, original claimants, were aggrieved by the judgment and award issued on 19.09.2019 by the Motor Accident Claims Tribunal, Beed. They had filed a claim seeking compensation under Section 166 of the Motor Vehicle Act for the accidental death of Sunil Navnath Dhat. The accident occurred when the deceased was a passenger in a car driven by respondent no. 2, which collided with a roadside tree. The claimants contended that the accident was due to the negligence of the driver. They further claimed that the deceased was an engineering graduate and a government contractor with substantial income.

Issues:

Whether the deceased, as a passenger in the car owned by his father, can be considered an owner for the purpose of claiming compensation?

Whether the insurer is liable to pay compensation for the death of the deceased?

Contentions:

The appellants asserted that the car involved in the accident was insured under a private car package policy. This type of policy covers not only liability to third parties but also extends coverage to occupants of the insured vehicle. According to the claimants, the Tribunal wrongly concluded that the deceased, being a passenger in the car owned by his father, should be considered an owner for the purpose of compensation claims.

 The appellants emphasized that the deceased was an engineering graduate and a government contractor with multiple construction projects. They argued that he had a significant income and was the primary breadwinner for the family. This supported their claim for compensation. The claimants contended that the deceased’s status as an occupant of the insured car should entitle them to claim compensation, regardless of his family relationship with the car owner.

The respondent no.3-insurer, represented by Mr. Kadethankar, argued that since the car was owned by the father of the deceased, the deceased should be treated as having stepped into the shoes of the owner. This meant that the deceased was not a third party and could not claim compensation under Section 166 of the Motor Vehicle Act. The insurer emphasized that the private car package policy had specific terms and conditions, including a premium that covered occupants’ risks up to a certain limit (Rs. 1,00,000 each). They maintained that their liability was confined to the terms of the contract, and any expansion of this liability would be contrary to the agreement.

Decision:

The Bombay High Court deliberated on the matter and made the following key points:

  • Circulars issued by Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA) mandating insurance coverage for occupants of private cars under package policies.
  • The car in question was insured under a package policy, and thus the insurer was liable for the occupant’s death.
  • The deceased’s status as an occupant rather than an owner of the insured car, despite being a family member, entitles the claimants to compensation.

The Bombay High Court allowed the appeal, quashed the previous judgment and award, and ruled that the respondents were jointly and severally liable to pay compensation to the claimants for the accidental death of the deceased. The compensation amount was determined based on various factors, including income, future prospects, and deductions, and the court ordered the insurer to pay the specified compensation along with interest.

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Written by- Aparna Gupta, University Law College & Dept. of Studies in Law

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