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CASE TITLE – Jai Bahadur Subba and Others versus SBI General Insurance Company Ltd.

CASE NUMBER – MAC App. No.08 of 2023

DATED ON – 05. 06.2024

QUORUM – Justice Meenakshi Madan Rai

FACTS OF THE CASE

The facts in brief are that, the deceased an Assistant Sub-Inspector of Police (ASI) (Sikkim Armed Police), aged about fifty-two years, earning a monthly salary of ₹91,611/- (Rupees ninety one thousand, six hundred and eleven) only, was travelling from Hee Pechrek, West Sikkim to Pangthang, Gangtok, in the aforementioned vehicle, on 18-10-2021. At around 08.30 a.m., the vehicle met with an accident near “Akkar Bridge”, Naya Bazar, Soreng District, resulting in the death of the deceased, the owner/driver and injuries to other occupants. The Claimants/Appellants were denied the compensation amounting to ₹ 99,21,020/- , claimed by them on account of the death of the son of Claimant No.1, the husband of the Claimant No.2 and the father of the Claimants No.3, 4 and 5. The Learned Motor Accidents Claims Tribunal, Gangtok, Sikkim, (hereinafter, the “MACT”) vide its assailed Judgment, dated 17-07 2023, in MACT Case No.14 of 2022, Jai Bahadur Subba and Others vs. SBI General Insurance Company Limited, inter alia observed that the insurance policy of the vehicle in accident was an “Act Policy” and not a “Comprehensive Package Policy”. That, the Claimants/Appellants would be entitled to the extent of compensation in terms of the insurance coverage i.e., “personal accident cover for unnamed passenger” as stipulated in the policy, MAC App. No.08 of 2023 2 Jai Bahadur Subba and Others vs. SBI General Insurance Company Ltd. Exhibit 16 and accordingly granted compensation of ₹50,000/ only, augmenting the amount with litigation costs of ₹1, 00,000/- only.

ISSUES

Whether the claimants are entitled to the compensation claimed? If so, who is liable to pay the same?

STATUTES

Section 173 of the Motor Vehicles Act, 1988, prescribes the procedures to be followed when applying for appeals against decisions made by Claims Tribunals. It allows anyone unhappy with the award from a Claims Tribunal to file an appeal with the High Court within 90 days.

CONTENTION OF APPELLANTS

Learned Counsel for the Appellants contended that, the deceased was travelling in the Alto vehicle, bearing registration No.SK-02-P-2766, of the deceased driver, late Jai Man Limboo. That, the vehicle was duly insured with the Respondent-Insurance Company. He was a third party as the occupant of the vehicle in accident and therefore fully covered by the insurance policy and not a gratuitous passenger as stated by the Respondent. The Respondent was liable to pay the entire compensation claimed which was erroneously denied by the Learned MACT. Referring to Section 147 of the Motor Vehicles Act, 1988 (hereinafter, the “MV Act‟), it was contended that the said section does not distinguish between an “Act Policy” and a “Comprehensive Policy” and the liability to pay compensation is based on the statutory provision. It was urged by Learned Counsel that it has been observed therein that even in respect of an “Act only‟ policy the insurance company would be liable for the statutory amount as payable under Section 95 of the Motor Vehicles Act, 1939. That, accordingly the compensation ought to be computed in terms of the law laid down by the Supreme Court, towards this reliance was placed on National Insurance Company Limited vs. Pranay Sethi and other case laws. The appellants also contended that, in the same Sikkim High Court in Passi Lamu Sherpa and Another vs. Branch Manager, New India Assurance Co. Ltd, they had observed that the facts and circumstances of every motor accident cases is different and an umbrella view cannot be applied to all the matters, hence the Award of the Learned MACT be set aside and compensation be enhanced as prayed.

CONTENTIONS OF RESPONDENTS

The arguments raised by Learned Counsel for the Respondent was that in the first instance the policy was an “Act Policy” and the premium towards personal accident cover of unnamed passenger was paid amounting to ₹25/-(Rupees twenty five) only. The insurance cover thereby was limited to ₹50,000/ (Rupees fifty thousand) only, as reflected in Exhibit 16. As the deceased passenger was a gratuitous passenger in a private vehicle, he would be covered under the personal accident cover and no other claims made by the Appellants were maintainable. It was contended that there is a difference between a “Comprehensive Policy” and an “Act Policy” and the insurer will not be liable to pay compensation when a private vehicle meets with an accident and a gratuitous passenger dies as a consequence of the accident. That, the limits of liability is the maximum amount that the insurance company would be liable to pay for each individual claim made during the policy period and the Respondent cannot be made liable to pay any compensation exceeding the coverage under the limits of the liability as reflected in the insurance policy for which an additional premium is required to be deposited, hence the Appeal be dismissed.

COURT ANALYSIS AND JUDGEMENT

Upon considering the evidence in its entirety and the submissions canvassed, the Learned MACT, declined to grant compensation to the Claimants save as covered by the policy. The same question as settled for determination by the Learned MACT arises for determination by this Court. In this case after going through other judgements, it was seen by the Hon’ble High Court of Sikkim that the vehicle in which the deceased was travelling was a private vehicle. The insurance policy is a “Motor Act Only—Private Car” Policy and not a MAC App. No.08 of 2023 8 Jai Bahadur Subba and Others vs. SBI General Insurance Company Ltd. Comprehensive Policy. A meticulous perusal of Exhibit 16 revealed that “PA Cover (Personal Accident Cover)—Unnamed Passengers”, a sum insured was of ₹50,000/- only, for which a premium of ₹25/- only, had been deposited. No premium was paid to cover a gratuitous passenger which the deceased ASI indubitably was. In light of the above findings, the Hon’ble High Court found no reason whatsoever to interfere with the findings of the Learned MACT which was accordingly upheld. It was admitted before this Court by the parties that a sum of ₹ 1,50,000/- only, along with interest calculated at ₹ 18,123/- only, amounting to ₹ 1,68,123 only, was deposited by the Respondent Insurance Company and has been made over to and received by the Appellant/Claimants. The Appeal was then dismissed and disposed of.

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Judgement Reviewed by – Gnaneswarran Beemarao

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Title: DILIP KUMAR SAH versus PARSHOTAM ALIAS PURSHOTAM LAL (SINCE DECEASED) THROUGH LRS & ANR.

Date of decision:18thJuly, 2023

+ MAC.APP. 133/2021

CORAM: HON’BLE MR. JUSTICE NAVIN CHAWLA

Introduction

Delhi High Court set aside the order passed by the Motor Accidents Claims Tribunal and held that there was no contributory negligence on the part of appellant and granted him the benefits of permanent disability and also held that appellant cannot be saddled with contributory negligence merely on the basis of his cross-examination.

Facts of the case

In MACT case number 174/2017, captioned Sh.Dilip Kumar Sah v. Sh. Parshotam @ Purshotam Lal & Anr., the learned Motor Accidents Claims Tribunal issued an award on January 13, 2021, which is being challenged in this appeal.

The appellant’s two grounds for the limited challenge to the contested award are as follows:

a) Despite neither the owner of the at-fault vehicle nor the insurance company having submitted a written statement alleging any contributory negligence on the part of the appellant, the learned Tribunal has assigned the appellant 40% contributory negligence, reducing the compensation granted to the appellant;
b) Despite the fact that the appellant’s right lower limb was deemed to have a 41% permanent handicap, the appellant has not received any compensation for his future possibilities.

Analysis of the court

It is undisputed that neither the owner nor the insurance company provided the learned Tribunal with a written statement. The significance of pleadings cannot be understated, even if the learned Tribunal will only conduct an inquiry rather than a full-fledged trial as in a civil complaint. Therefore, the respondent did not blame the appellant for any contributory carelessness in their arguments. Only during the cross-examination of the appellant was the appellant prompted to describe how the accident occurred. The appellant vehemently refuted any allegation that he may have contributed to the catastrophe.

Reading the cross-examination of the appellant would reveal that he claimed to be riding a rickshaw across the main road from left to right. The same cannot, in my opinion, be regarded as contributory carelessness. Although the offending vehicle was being driven at a high speed and the driver was unable to control the vehicle or apply the brakes at the appropriate moment, the learned Tribunal, influenced by the foregoing, in the impugned Award assigned 40% of the negligence to the appellant.

The learned Tribunal manifestly erred in assuming that the appellant might be charged with contributory carelessness only on the basis of his cross-examination in the absence of any pleading assigning contributory fault to the appellant.

Therefore, the contested award is revoked to this degree.

On the subject of the appellant’s future prospects not being granted, reliance has once more been put on the appellant’s cross-examination, which has been reported above. Reading the cross-examination will reveal that the appellant was not questioned about whether the accident he sustained had any impact on his ability to earn money or do his job. According to his disability certificate, the appellant’s right lower limb has a 41% permanent impairment. The learned Tribunal determined that the appellant’s entire body had a 20% functional impairment. There is no argument against the erudite Tribunal’s conclusion.

In Pappu Deo Yadav (supra), the Supreme Court allowed for a 40% reduction in future possibilities. In my opinion, the appellant should be allowed that fair degree of loss of future chances under the circumstances of the current case as well. The appellant used to pedal the rickshaw by himself while conducting business at a weekly market selling clothing. The appellant is deemed entitled to compensation under the heading of loss of future prospect at the rate of 40% due to a permanent handicap to his lower limb. As a result, the impugned Award, to the extent that it denies the appellant compensation for the loss of future prospects, is set aside, and is modified granting such compensation.

The learned Tribunal is required to reassess the amount of compensation due to the appellant under the provisions of the contested award as amended by the current ruling. On August 20, 2023, the parties must appear before the knowledgeable Tribunal. The awarded amount, including the augmentation directed under the current judgement, along with interest thereon, shall be disbursed in favour of the appellant in line with the schedule set down by the learned Tribunal upon deposit of the re-determined/enhanced amount.

Written By – Shreyanshu Gupta

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Sikkim High Court upholds MACT orders; Denied insurance policy as the vehicle in accident had an “Act Policy” and not a “Comprehensive Package Policy”

Delhi High Court Set aside the order passed by the Motor Accidents Claims Tribunal and held that appellant cannot be saddled with contributory negligence merely on the basis of his cross-examination.