Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 4 December, 2012
+ MAC.APP. 575/2012
M/S. THE UNITED INDIA INSURANCE COMPANY LTD... Appellant
Through: Mr. D.D. Singh, Adv. with
Mr. Navdeep Singh, Adv..
versus
SH. SURAJ BHAN & ORS. ..... Respondents
Through: Mr. Kundan Lal, Adv. for R-1 to R-5.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
J U D G M E N T
G. P. MITTAL, J. (ORAL)
1. The Appeal is for reduction of compensation of ` 7,72,584/- awarded by
the Motor Accident Claims Tribunal (the Claims Tribunal) in favour of
the Respondents No.1 to 5 for the death of Narender Kumar who died in a
motor vehicle accident which occurred on 14.08.2010.
2. The finding on negligence is not challenged by the Appellant Insurance
Company; thus the same has attained finality.
3. During inquiry before the Claims Tribunal it was claimed that the
deceased was working as a videographer and also pursuing further studies
and was a student of B.Com (First year). In order to prove deceased’s
income PW-1 Santosh Devi deposed that the deceased Narender Kumar
was having an income of ` 7500/- per month. No cogent evidence was
MAC. APP. 575/2012 Page 1 of 16
produced with regard to deceased’s income. However, no suggestion was
given to PW-1 that the deceased was not working as a videographer. The
Claims Tribunal, therefore, took the minimum wages of a skilled worker,
deducted 50% towards personal and living expenses, as the deceased was
a bachelor and no evidence was led that except his mother anybody else
was dependent on him. The Claims Tribunal applied the multiplier of 18
as per the age of the deceased to compute the loss of dependency as
`
6,96,384/-. The compensation awarded is tabulated hereunder:-
Sl.No. Compensation under various heads Awarded by the
Claims Tribunal
1. Loss of Dependency ` 6,96,384/-
2. Loss of Love and Affection ` 25,000/-
`
3. Funeral Expenses 10,000/-
4. Loss to Estate ` 10,000/-
5. Cost of Treatment ` 31,200/-
Total ` 7,72,584/-
4. The following contentions are raised on behalf of the Appellant Insurance
Company:-
(i) The multiplier has to be as per the age of the deceased or the
Claimant whichever is higher. In the instant case, the age of the
mother of the deceased was 47 years. The appropriate multiplier at
this age was 13, the Claims Tribunal erred in applying the
multiplier of 18.
MAC. APP. 575/2012 Page 2 of 16
(ii) The Appellant successfully proved the breach of the terms and
conditions of the policy. It was, therefore, liable to be exonerated.
The Claims Tribunal erred in making the Appellant liable to pay
the compensation in the first instance with a right to recover the
same from the driver and the owner.
5. On the other hand, learned counsel for the Respondents No.1 to 5 (the
Claimants) supports the judgment and urges that the compensation
awarded is just and reasonable. Rather, the Claims Tribunal ought to
`
have accepted the deceased’s income as 7500/- per month and should
have made an addition of 30% towards inflation.
INCOME OF THE DECEASED
6. In order to prove the deceased’s income, the Respondents (the Claimants)
filed Affidavit of Santosh Devi as Ex.PW-1/A. She testified that her son
Narender Singh was working as a videographer and was pursuing
Graduation by Correspondence. She testified that her son was earning
` 7500/- per month. In cross-examination, a suggestion was given to her
that the deceased was earning ` 7500/- per month. She admitted that she
did not have any documentary evidence with regard to deceased
employment or income. It was, however, not suggested to her that the
deceased was not working as a videographer.
7. In the circumstances, the Claims Tribunal rightly declined to believe the
deceased’s income to be ` 7500/- per month and computed the loss of
dependency on the minimum wages of a skilled worker, that is, ` 6448/-
per month.
MAC. APP. 575/2012 Page 3 of 16
8. This Court in Rakhi v. Satish Kumar & Ors. (MAC. APP. 390/2011)
decided on 16.07.2012, referred to the reports of the Supreme Court in
General Manager, Kerala State Road Transport Corporation,
Trivandrum v. Susamma Thomas (Mrs.) and Ors. (1994) 2 SCC 176 ,
Sarla Dixit v. Balwant Yadav, (1996) 3 SCC 179, Bijoy Kumar Dugar v.
Bidya Dhar Dutta & Ors, (2006) 3 SCC 242, Sarla Verma & Ors. v.
Delhi Transport Corporation & Anr, (2009) 6 SCC 121 and Santosh Devi
v. National Insurance Company Ltd. & Ors., 2012 (4) SCALE 559 and
held that even in the absence of any evidence with regard to future
prospects Santosh Devi provides for an increase of 30% towards inflation
in the victims income in case of self employed persons and persons
having fixed income. Relevant portion of Santosh Devi is extracted
hereunder:
“14…..In our view, it will be naive to say that the wages or total
emoluments/income of a person who is self-employed or who is
employed on a fixed salary without provision for annual increment,
etc., would remain the same throughout his life. The rise in the cost
of living affects everyone across the board. It does not make any
distinction between rich and poor. As a matter of fact, the effect of
rise in prices which directly impacts the cost of living is minimal
on the rich and maximum on those who are self- employed or who
get fixed income/emoluments. They are the worst affected people.
Therefore, they put extra efforts to generate additional income
necessary for sustaining their families. The salaries of those
employed under the Central and State Governments and their
agencies/instrumentalities have been revised from time to time to
provide a cushion against the rising prices and provisions have
been made for providing security to the families of the deceased
employees. The salaries of those employed in private sectors have
also increased manifold. Till about two decades ago, nobody could
have imagined that salary of Class IV employee of the Government
MAC. APP. 575/2012 Page 4 of 16
would be in five figures and total emoluments of those in higher
echelons of service will cross the figure of rupees one lac.
Although, the wages/income of those employed in unorganized
sectors has not registered a corresponding increase and has not
kept pace with the increase in the salaries of the Government
employees and those employed in private sectors but it cannot be
denied that there has been incremental enhancement in the income
of those who are self-employed and even those engaged on daily
basis, monthly basis or even seasonal basis. We can take judicial
notice of the fact that with a view to meet the challenges posed by
high cost of living, the persons falling in the latter category
periodically increase the cost of their labour. In this context, it
may be useful to give an example of a tailor who earns his
livelihood by stitching cloths. If the cost of living increases and the
prices of essentials go up, it is but natural for him to increase the
cost of his labour. So will be the cases of ordinary skilled and
unskilled labour, like, barber, blacksmith, cobbler, mason etc.
Therefore, we do not think that while making the observations in
the last three lines of paragraph 24 of Sarla Verma’s judgment, the
Court had intended to lay down an absolute rule that there will be
no addition in the income of a person who is self-employed or who
is paid fixed wages. Rather, it would be reasonable to say that a
person who is self-employed or is engaged on fixed wages will also
get 30 per cent increase in his total income over a period of time
and if he / she becomes victim of accident then the same formula
deserves to be applied for calculating the amount of
compensation.”
9. Thus, in the absence of any evidence with regard to the future prospects,
the Claimants were entitled to an addition of 30% on account of inflation.
MULTIPLIER
10. This Court in Vijay Laxmi & Ors. v. Binod Kumar Yadav & Ors., MAC
APP.1148/2011 decided on 03.01.2012 noticed the Supreme Court
judgments in U.P. State Road Transport Corporation & Ors. v. Trilok
MAC. APP. 575/2012 Page 5 of 16
Chandra & Ors., (1996) 4 SCC 362; G.M., Kerala SRTC v. Susamma
Thomas, (1994) 2 SCC 176; New India Assurance Company Ltd. v.
Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1; National Insurance
Company Ltd. v. Shyam Singh & Ors., (2011) 7 SCC 65, decided on
04.07.2011 and Manam Saraswathi Sampoorna Kalavathi & Ors., v. The
Manager, APSRTC, Tadepalligudem A.P. & Anr., (2010) 5 SCC 785, and
held that the multiplier has to be as per the age of the deceased or that of
the Claimant/Claimants whichever is higher. Paras 4 to 9 of the report
are extracted hereunder:-
“4. As far as the selection of multiplier is concerned, the law is
settled that the choice of multiplier is determined by the age of the
deceased or that of the claimants whichever is higher. There is a
three Judges Bench judgment of the Supreme Court in U.P. State
Road Transport Corporation & Ors. v. Trilok Chandra & Ors.,
(1996) 4 SCC 362, where the Supreme Court relied on G.M.,
Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176 and
reiterated that the choice of the multiplier is determined by the age
of the deceased or that of the claimants whichever is more. Para
12 of the report is extracted hereunder:-
“12. For concluding the analysis it is necessary now to
refer to the judgment of this Court in the case of General
Manager, Kerala State Road Transport, v. Susamma
Thomas: (1994) 2 SCC 176. In that case this Court culled
out the basic principles governing the assessment of
compensation emerging from the legal authorities cited
above and reiterated that the multiplier method is the sound
method of assessing compensation. The Court observed:
“The multiplier method involves the
ascertainment of the loss of dependency or the
multiplicand having regard to the
circumstances of the case and capitalizing the
multiplicand by an appropriate multiplier. The
choice of the multiplier is determined by the
age of the deceased (or that of the claimants,
MAC. APP. 575/2012 Page 6 of 16
whichever is higher) and by the calculation as
to what capital sum, if invested at a rate of
interest appropriate to a stable economy, would
yield the multiplicand by way of annual
interest. In ascertaining this, regard should
also be had to the fact that ultimately the
capital sum should also be consumed-up over
the period for which the dependency is expected
to last.
The principle was explained and illustrated by a
mathematical example:
“The multiplier represents the number of Years'
purchase on which the loss of dependency is
capitalised. Take for instance a case where
annual loss of dependency is Rs. 10,000. If a
sum of Rs.1,00,000 is invested at 10% annual
interest, the interest will take care of the
dependency, perpetually. The multiplier in this
case works out to 10. If the rate of interest is
5% per annum and not 10% then the multiplier
needed to capitalise the loss of the annual
dependency at Rs.10,000 would be 20. Then the
multiplier i.e., the number of Years' purchase of
20 will yield the annual dependency
perpetually. Then allowance to scale down the
multiplier would have to be made taking into
account the uncertainties of the future, the
allowances for immediate lump sum payment,
the period over which the dependency is to last
being shorter and the capital feed also to be
spent away over the period of dependency is to
last etc. Usually in English Courts the operative
multiplier rarely exceeds 16 as maximum. This
will come down accordingly as the age of the
deceased person (or that of the dependents,
whichever is higher) goes up.”
5. There is another three Judges’ decision of the Supreme Court in
New India Assurance Company Ltd. v. Shanti Pathak (Smt.) &
MAC. APP. 575/2012 Page 7 of 16
Ors., (2007) 10 SCC 1, where in the case of the death of a
bachelor, who was aged only 25 years, the multiplier of 5 was
applied according to the age of the mother of the deceased, who
was about 65 years at the time of the accident. Para 6 of the
report is extracted hereunder:-
“6. Considering the income that was taken, the foundation
for working out the compensation cannot be faulted. The
monthly contribution was fixed at Rs.3,500/-. In the normal
course we would have remitted the matter to the High Court
for consideration on the materials placed before it. But
considering the fact that the matter is pending since long, it
would be appropriate to take the multiplier of 5 considering
the fact that the mother of the deceased is about 65 years at
the time of the accident and age of the father is more than 65
years. Taking into account the monthly contribution at
Rs.3,500/- as held by the Tribunal and the High Court, the
entitlement of the claim would be Rs.2,10,000/-. The same
shall bear interest @ 7.5% p.a. from the date of the
application for compensation. Payment already made shall
be adjusted from the amount due.”
6. Learned counsel for the Appellant referred to Sarla Verma
(supra 1) in support of the proposition that age of the deceased is
to be taken into consideration for selection of the multiplier. As an
example the multiplier taken in various cases such as in Susamma
Thomas (supra), U.P. SRTC v. Trilok Chandara, (1996) 4 SCC 362
as clarified in New India Assurance Co. Ltd. v. Charlie, (2005) 10
SCC 720 and the multiplier as mentioned in Second Schedule to
the Motor Vehicles Act were compared and it was held that the
multiplier as per Column No.4 in the said table was appropriate
for application. Sarla Verma (supra) related to the death of one
Rajinder Prakash who had left behind his widow, three minor
children apart from his parents and the grandfather. Obviously,
the age of the deceased was taken into consideration for the
purpose of selection of the multiplier as the deceased left behind a
widow younger to him, apart from three minor children. It was not
laid down as a proposition of law that irrespective of the age of the
claimants, the age of the deceased is to be taken into consideration
for selection of the multiplier for calculation of the loss of
dependency. It is true that in Mohd. Ameeruddin (supra 2) and
MAC. APP. 575/2012 Page 8 of 16
P.S. Somanathan (supra 3) and National Insurance Company Ltd.
v. Azad Singh (supra 5), the Hon’ble Supreme Court applied the
multiplier according to the age of the deceased, yet in view of
Trilok Chandra (supra) and Shanti Pathak (supra) decided by the
three Judges of the Supreme Court, the judgment in Mohd.
Ameeruddin (supra 2), P.S. Somanathan (supra 3) and Azad Singh
(supra 5) cannot be taken as a precedent for selection of the
multiplier.
7. In the latest judgment of the Supreme Court in National
Insurance Company Ltd. v. Shyam Singh & Ors., (2011) 7 SCC 65,
decided on 04.07.2011, the Supreme Court referred to Ramesh
Singh & Anr. v. Satbir Singh & Anr., (2008) 2 SCC 667 and held
that the multiplier as per the age of the deceased or the claimant
whichever is higher would be applicable. Para 9 and 10 of the
report are apposite:-
“9. This Court in the case of Ramesh Singh & Anr. v.
Satbir Singh & Anr., (2008) 2 SCC 667, after referring to
the earlier judgments of this Court, in detail, dealt with the
law with regard to determination of the multiplier in a
similar situation as in the present case. The said findings of
this Court are as under:-
“6. We have given anxious consideration to
these contentions and are of the opinion that
the same are devoid of any merits. Considering
the law laid down in New India Assurance Co.
Ltd. v. Charlie, AIR 2005 SC 2157, it is clear
that the choice of multiplier is determined by
the age of the deceased or claimants whichever
is higher. Admittedly, the age of the father was
55 years. The question of mother's age never
cropped up because that was not the contention
raised even before the Trial Court or before us.
Taking the age to be 55 years, in our opinion,
the courts below have not committed any
illegality in applying the multiplier of 8 since
th
the father was running 56 year of his life.”
10. In our view, the dictum laid down in Ramesh Singh
(supra) is applicable to the present case on all fours.
MAC. APP. 575/2012 Page 9 of 16
Accordingly, we hold that the Tribunal had rightfully
applied the multiplier of 8 by taking the average of the
parents of the deceased who were 55 and 56 years.”
8. Similarly in Manam Saraswathi Sampoorna Kalavathi & Ors.,
v. The Manager, APSRTC, Tadepalligudem A.P. & Anr., (2010) 5
SCC 785, decided on 26.03.2010, the multiplier of 13 was applied
in case of death of a young bachelor where the mother was 47
years of age.”
9. Thus, there is no escape from the conclusion that the multiplier
has to be selected as per the age of the deceased or that of the
claimants whichever is higher.”
11. The loss of dependency thus comes to ` 6,53,827/- (3224/- + 30% x 12 x
13) as against a sum of ` 6,96,384/- awarded by the Claims Tribunal.
12. The compensation awarded is re-computed as under:-
Sl.No. Compensation under
Awarded by
Awarded by
various heads
the Claims
this Court
Tribunal
1. Loss of Dependency ` 6,96,384/- ` 6,53,827/-
2. Loss of Love and Affection ` 25,000/- ` 25,000/-
` `
3. Funeral Expenses 10,000/- 10,000/-
4. Loss to Estate ` 10,000/- ` 10,000/-
5. Cost of Treatment ` 31,200/- ` 31,200/-
` `
Total 7,72,584/- 7,30,027/-
LIABILITY
13. The issue of liability was dealt with by the Claims Tribunal in Paras 70 to
72 of the impugned judgment which are extracted hereunder:-
MAC. APP. 575/2012 Page 10 of 16
“70. The driving license of the driver was for Motorcycle and LMV
Private. The offending vehicle was Milk Tanker which is a
Commercial Vehicle. As such, there is a violation of conditions of
policy. Insurance company has proved statutory defence available
to it under Section 149 (2) of M.V. Act, 1988.
71. Inspite of serving a notice under Order 12 Rule 8 of CPC the
insurer and driver failed to produce driving license in favour of
respondent no. 1 to drive the category of offending vehicles.
72. However, present petitioners being third parties the liability to
pay the compensation would still be of respondent no. 3, the
insurance company who will be entitled to recover the decreetal
amount from the driver/insurer jointly and severally.”
14. The owner and the driver have not preferred any Appeal against grant of
recovery rights. However, the Appellant’s plea is that since the breach of
the terms and conditions of the policy was established, the Appellant was
not at all liable to pay the compensation.
15. The issue of satisfying the third party liability in case of breach of the
terms of insurance policy is settled by three Judge Bench report in Sohan
Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21. As per Section 149(2) of
the Motor Vehicles Act (the Act), an insurer is entitled to defend the
action on the grounds as mentioned under Section 149(2)(a)(i)(ii) of the
Act. Thus, the onus is on the insurer to prove that there is breach of the
condition of the policy. It is well settled that the breach must be
conscious and willful. Even if a conscious breach on the part of the
insured is established, still the insurer has a statutory liability to pay the
compensation to the third party and will simply have the right to recover
the same from the insured/tortfeasor either in the same proceedings or by
independent proceedings as the case may be, as ordered by the Claims
Tribunal or the Court. The question of statutory liability to pay the
MAC. APP. 575/2012 Page 11 of 16
compensation was discussed in detail by a two Judge Bench of the
Supreme Court in Skandia Insurance Company Limited v. Kokilaben
Chandravadan, (1987) 2 SCC 654 where it was held that exclusion
clause in the contract of Insurance must be read down being in conflict
with the main statutory provision enacted for protection of victim of
accidents. It was laid down that the victim would be entitled to recover
the compensation from the insurer irrespective of the breach of the
condition of policy. The three Judge Bench of the Supreme Court in
Sohan Lal Passi analyzed the corresponding provisions under the Motor
Vehicles Act, 1939 and the Motor Vehicles Act, 1988 and approved the
decision in Skandia . In New India Assurance Co., Shimla v. Kamla and
Ors., (2001) 4 SCC 342 , the Supreme Court referred to the decision of the
two Judge Bench in Skandia , the three Judge Bench decision in Sohan
Lal Passi and held that the insurer who has been made liable to pay the
compensation to third parties on account of issuance of certificate of
insurance, shall be entitled to recover the same if there was any breach of
the policy condition on account of the vehicle being driven without a
valid driving licence. The relevant portion of the report is extracted
hereunder :
“21. A reading of the proviso to sub-section (4) as well as the
language employed in sub-section (5) would indicate that they are
intended to safeguard the interest of an insurer who otherwise has
no liability to pay any amount to the insured but for the provisions
contained in Chapter XI of the Act. This means, the insurer has to
pay to the third parties only on account of the fact that a policy of
insurance has been issued in respect of the vehicle, but the insurer
is entitled to recover any such sum from the insured if the insurer
were not otherwise liable to pay such sum to the insured by virtue
of the conditions of the contract of insurance indicated by the
policy.
MAC. APP. 575/2012 Page 12 of 16
22. To repeat, the effect of the above provisions is this: when a
valid insurance policy has been issued in respect of a vehicle as
evidenced by a certificate of insurance the burden is on the insurer
to pay to the third parties, whether or not there has been any
breach or violation of the policy conditions. But the amount so
paid by the insurer to third parties can be allowed to be recovered
from the insured if as per the policy conditions the insurer had no
liability to pay such sum to the insured.
23. It is advantageous to refer to a two-Judge Bench of this Court
in Skandia Insurance Company Limited v. Kokilaben
Chandravadan, (1987) 2 SCC 654. Though the said decision
related to the corresponding provisions of the predecessor Act
(Motor Vehicles Act, 1939) the observations made in the judgment
are quite germane now as the corresponding provisions are
materially the same as in the Act. Learned Judge pointed out that
the insistence of the legislature that a motor vehicle can be used in
a public place only if that vehicle is covered by a policy of
insurance is not for the purpose of promoting the business of the
insurance company but to protect the members of the community
who become suffers on account of accidents arising from the use of
motor vehicles. It is pointed out in the decision that such
protection would have remained only a paper protection if the
compensation awarded by the courts were not recoverable by the
victims (or dependants of the victims) of the accident. This is the
raison d’etre for the legislature making it prohibitory for motor
vehicles being used in public places without covering third-party
risks by a policy of insurance.
24. The principle laid down in the said decision has been followed
by a three-Judge Bench of this Court with approval in Sohan Lal
Passi v. P. Sesh Reddy, (1996) 5 SCC 21.
25. The position can be summed up thus:
The insurer and the insured are bound by the conditions
enumerated in the policy and the insurer is not liable to the insured
if there is violation of any policy condition. But the insurer who is
made statutorily liable to pay compensation to third parties on
account of the certificate of insurance issued shall be entitled to
recover from the insured the amount paid to the third parties, if
MAC. APP. 575/2012 Page 13 of 16
there was any breach of policy conditions on account of the vehicle
being driven without a valid driving licence………”
16. Again in United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3
SCC 338 , in para 18 of the report the Supreme Court referred to the
decision in Skandia, Sohan Lal Passi and Kamla and held that even
where it is proved that there was a conscious or willful breach as
provided under Section 149(2)(a) (ii) of the Motor Vehicle Act, the
Insurance Company would still remain liable to the innocent third party
but may recover the compensation paid from the insured. The relevant
portion of the report is extracted hereunder:
“18. Now let us consider Section 149(2). Reliance has been
placed on Section 149(2)(a)(ii). As seen, in order to avoid liability
under this provision it must be shown that there is a “breach”. As
held in Skandia and Sohan Lal Passi cases the breach must be on
the part of the insured. We are in full agreement with that. To
hold otherwise would lead to absurd results. Just to take an
example, suppose a vehicle is stolen. Whilst it is being driven by
the thief there is an accident. The thief is caught and it is
ascertained that he had no licence. Can the insurance company
disown liability? The answer has to be an emphatic “No”. To
hold otherwise would be to negate the very purpose of compulsory
insurance……….”
xxxx xxxx xxxx xxxx xxxx
xxxx xxxx xxxx xxxx xxxx
20. ……….If it ultimately turns out that the licence was fake, the
insurance company would continue to remain liable unless they
prove that the owner/insured was aware or had noticed that the
licence was fake and still permitted that person to drive. More
importantly, even in such a case the insurance company would
remain liable to the innocent third party, but it may be able to
recover from the insured. This is the law which has been laid
MAC. APP. 575/2012 Page 14 of 16
down in Skandia, Sohan Lal Passi and Kamla cases. We are in full
agreement with the views expressed therein and see no reason to
take a different view.”
17. The three Judge Bench of the Supreme Court in National Insurance
Company Limited v. Swaran Singh & Ors., (2004) 3 SCC 297 again
emphasized that the liability of the insurer to satisfy the decree passed in
favour of the third party was statutory. It approved the decision in Sohan
Lal Passi, Kamla and Lehru . Paras 73 and 105 of the report are
extracted hereunder:
“73. The liability of the insurer is a statutory one. The liability of
the insurer to satisfy the decree passed in favour of a third party is
also statutory.
xxxx xxxx xxxx xxxx xxxx
xxxx xxxx xxxx xxxx xxxx
105. Apart from the reasons stated hereinbefore, the doctrine of
stare decisis persuades us not to deviate from the said principle.”
18. This Court in Oriental Insurance Company Limited v. Rakesh Kumar and
Others, 2012 ACJ 1268 and other Appeals decided by a common
judgment dated 29.02.2012, noticed some divergence of opinion in
National Insurance Company Limited v. Kusum Rai & Ors., (2006) 4
SCC 250, National Insurance Company Limited v. Vidhyadhar
Mahariwala & Ors., (2008) 12 SCC 701; Ishwar Chandra & Ors. v. The
Oriental Insurance Company Limited & Ors., (2007) 10 SCC 650 and
Premkumari & Ors. v. Prahalad Dev & Ors., (2008) 3 SCC 193 and held
that in view of the three Judge Bench decision in Sohan Lal Passi(supra)
MAC. APP. 575/2012 Page 15 of 16
and Swaran Singh , the liability of the Insurance Company vis-à-vis the
third party is statutory. If the Insurance Company successfully proves the
conscious breach of the terms of the policy, then it would be entitled to
recovery rights against the owner or driver, as the case may be.
19. Thus, the Appellant Insurance Company cannot avoid its statutory
liability to satisfy the award vis-a-viz the third party. The Claims
Tribunal rightly made the Appellant Insurance Company liable to pay the
compensation with the right to recover the same from the owner and the
driver.
20. In view of the above discussion, the Appeal is allowed to the extent that
the compensation amount is reduced from ` 7,72,584/- to ` 7,30,027/-
which shall carry interest @ 9% per annum as awarded by the Claims
Tribunal.
21. The excess compensation of ` 42,557/- along with proportionate interest
and the interest accrued, if any, during the pendency of the Appeal shall
be refunded to the Appellant Insurance Company.
22. The compensation awarded shall be disbursed/held in fixed deposit in
favour of the Claimants in terms of the order passed by the Claims
Tribunal.
`
23. The statutory deposit of 25,000/- be refunded to the Appellant Insurance
Company.
24. Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
DECEMBER 04, 2012/ vk
MAC. APP. 575/2012 Page 16 of 16