THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
rd
DATED : 3 October, 2024
-----------------------------------------------------------------------------------------------------------------
SINGLE BENCH : HI MADAN RAI, JUDGE
THE HON‟BLE MRS. JUSTICE MEENAKS
-----------------------------------------------------------------------------------------------------------------
MAC App. No.01 of 2024
Appellant : The Manager, The New India Assurance
Company Limited
versus
Respondents : Krishna Bahadur Mukhia and Another
Appeal under Section 173 of the Motor Vehicles Act, 1988
---------------------------------------------------------------------------------------
Appearance
Mr. Dipayan Roy, Advocate for the Appellant.
Ms. Vidya Lama and Mr. Nima Tshering Sherpa, Advocates for the
Respondents.
---------------------------------------------------------------------------------------
JUDGMENT
Meenakshi Madan Rai, J.
1. The Learned Motor Accidents Claims Tribunal
(hereinafter,
the “MACT”), Gangtok, Sikkim, vide its Judgment
dated 24-05-2023, in MACT Case No.23 of 2021 (Krishna Bahadur
Mukhia and Another vs. Suresh Rai and Others), granted a sum of ₹
11,50,100/- (Rupees eleven lakhs, fifty thousand and one
hundred) only, to the Respondents (Claimants before the MACT),
with interest @ 10% per annum, from the date of filing the
application (i.e. 20-12-2021) till its full realization, on account of a
motor vehicle accident which occurred on 22-08-2021, between
09.00 a.m. to 11.50 a.m. at Vertical Bhir , Sudunglakha, East
“ ”
Sikkim.
(i) The Respondents case is that their mother, a fifty-eight
year old agriculturist, earning a monthly income of -
₹ 12,000/
(Rupees twelve thousand) only, was travelling from Rongli to
MAC App. No.01 of 2024 2
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
Rhenock in the said vehicle (Bolero), bearing registration no.SK-
01-PC-1884, when the vehicle careened off the road to about 300
feet below, on account of the driver (OP No.3 before the MACT), of
the vehicle speeding at the relevant time. That, due to her sudden
death, the Respondents faced a loss of family income and
11,900/- (Rupees eleven
accordingly sought compensation of ₹ 11,
lakhs, eleven thousand and nine hundred) only, from the
Respondents therein.
(ii) The Appellant-Insurance Company herein (OP No.2
before the MACT), contested the claim petition, denying its liability
by averring that no extra premium to cover gratuitous passenger
was deposited as apparent from the Insurance Policy Exhibit-8.
Thus, the owner of the vehicle (OP No.1 before the MACT) and OP
No.3, the driver of the vehicle were liable to pay the compensation.
The age and income and the relationship of the deceased to the
Respondents were also denied.
(iii) The OP No.3, the driver contested the claim petition on
grounds that his driving license was effective at the time of the
accident and the vehicle was not driven in a rash and negligent
manner thereby divesting him of any liability.
(iv) The OP No.1, the owner of the vehicle, denied his
liability claiming to have engaged OP No.3, a qualified driver and
the vehicle having been properly maintained and mechanically fit
at the time of accident besides being insured with the Appellant-
Insurance Company and the Insurance Policy which was a
Package Policy was subsisting at the time of accident.
“ ”
(v) On the basis of the pleadings of the parties, the
Learned MACT framed the following issues for determination;
MAC App. No.01 of 2024 3
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
(1) Whether all the documents of the vehicle bearing
registration no.SK-01-PC-1884 including the driving
licence of the driver were valid and effective at the
time of accident on 22.08.2021?
(2) Whether the petitioner/claimant is entitled to the
reliefs claimed?
(vi) In Issue no.1, the Learned MACT after examining all
documents on record observed and concluded that, all documents
of the vehicle including the driving license of the driver were valid
and effective at the time of accident.
(vii) In Issue no.2, it was found that the
Petitioners/Claimants were entitled to the reliefs claimed and the
liability was upon the OP No.2 (Appellant-Insurance Company).
That, in terms of the observations of the Supreme Court in
M.
, [ ], the
Mansoor vs. United India Insurance Co. Ltd.
2013 (12) SCALE 324
Petitioners/Claimants were also entitled to the amounts under the
The
heads “Love and Affection” and “Cost of Litigation”.
compensation was accordingly calculated and granted under the
following heads;
Sl. No. Head Amount in ₹
1 Loss of earning 9,93,600
2 Funeral expenses 16,500
3 Loss of estate 15,000
4 Love and affection 1,00,000
5 Cost of litigation 25,000
TOTAL ₹ 11,50,100
2. Dissatisfied with the Judgment of the Learned MACT
the Appellant-Insurance Company is before this Court. It is
contended by Learned Counsel for the Appellant that the deceased
at the relevant time was travelling as a passenger in the vehicle
and the Insurance Policy did not cover the liability of any
MAC App. No.01 of 2024 4
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
unauthorized person travelling as passenger. That, although on
the date of the accident, the third party coverage was subsisting,
the policy being Bundled Motor Policy for Private Car the
a “ ”
liability of the Appellant-Insurance Company was limited
to ₹
2,00,000/- (Rupees two lakhs) only, and not beyond. Hence, the
Judgment be set aside.
3. Learned Counsel for the Respondents argued that no
interference was required in the impugned Judgment as the policy
was a , which was a package
“Bundled Motor Policy for Private Car”
policy and nowhere is it mentioned therein that the liability of the
- (Rupees two
Insurance Company was limited to ₹ 2,00,000/
lakhs) only, as is evident from Exhibit-8 relied on by the
Respondents. That, an extra premium had been paid to cover all
occupants of the vehicle. The Appeal thereby deserves a dismissal.
4. Based on the averments of the parties and the rival
submissions advanced by Learned Counsel, the only question for
determination by this Court is; Whether the liability of the
Appellant towards the Respondents is limited to the payment of
₹
2,00,000/- (Rupees two lakhs) only.
(i) Exhibit-8 relied on by the Respondents is a policy
schedule cum certificate of insurance,
“Bundled Motor Policy for
. The policy is valid for the period 21-09-2019 to 20-
Private Car”
09-2022 and covers own damages and third party. The accident
occurred on 22-08-2021. It is averred in Paragraph 12 of the
Memo of Appeal by the Appellant that the policy
is a “package
The document reveals that, for own damages a premium
policy”. “ ”
has been deposited and an additional premium has been paid for
“ ”
third party. Ext-D2-3/DW-1 is also the same insurance policy but
MAC App. No.01 of 2024 5
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
s
is stated to be “enhanced cover ” and the insured declared value
was - (Rupees eight lakhs, forty four thousand, nine
₹ 8,44,902/
hundred and two) only. The document also details as follows;
“………………………………………………………………………………………………
ATTACHED TO AND FORMING PART OF POLICY
NO.51230231190900003907 Additional Premium: Rs.
3379.608
In consideration of payment of an additional premium by
the Insured, it is hereby agreed and declared that
notwithstanding anything to the contrary contained in the
Policy, the Company hereby undertakes to indemnify:
1. Depreciation on replacement of parts including tyres,
tubes, rubber/plastic for Partial Loss Claims.
2. Midterm inclusion of cover is not permitted.
3. Total Loss and Constructive Total Loss will be settled on
the basis of IDV.
Subject otherwise to the terms, exceptions, conditions and
limitation of this Policy.
Date of Issue: 20/07/2022
…………………………………………………………………………………….”
The vehicle vide this second document was also insured for
the period 21-09-2019 to 20-09-2022 as before.
5. In
National Insurance Company Limited vs. Balakrishnan
1
, the Supreme Court had an occasion to examine the
and Another
Comprehensive/Package
difference between “Act Policy” and “
and observed as follows;
Policy”
“24. It is extremely important to note here
that till 31-12-2006 the Tariff Advisory Committee
and, thereafter, from 1-1-2007 IRDA functioned as
the statutory regulatory authorities and they are
entitled to fix the tariff as well as the terms and
conditions of the policies issued by all insurance
companies. The High Court had issued notice to the
Tariff Advisory Committee and IRDA to explain the
factual position as regards the liability of the
insurance companies in respect of an occupant in a
private car under the “comprehensive/package
policy”. Before the High Court, the competent
authority of IRDA had stated that on 2-6-1986, the
Tariff Advisory Committee had issued instructions to
all the insurance companies to cover the pillion
riderof a scooter/motorcycle under the
“comprehensive policy” and the said position
continues to be in vogue till date. It had also
admitted that the “comprehensive policy” is
presently called a “package policy”. It is the
admitted position, as the decision would show, the
earlier Circulars dated 18-3-1978 and 2-6-1986
continue to be valid and effective and all insurance
companies are bound to pay the compensation in
1
(2013) 1 SCC 731
MAC App. No.01 of 2024 6
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
respect of the liability towards an occupant in a car
under the “comprehensive/package policy”
irrespective of the terms and conditions contained in
the policy. The competent authority of IRDA was
also examined before the High Court who stated
that the Circulars dated 18-3-1978 and 2-6-1986 of
the Tariff Advisory Committee were incorporated in
the Indian Motor Tariff effective from 1-7-2002 and
they continue to be operative and binding on the
insurance companies. …………………
………………………………………………………
26. In view of the aforesaid factual position,
there is no scintilla of doubt that a
“comprehensive/package policy” would cover the
liability of the insurer for payment of compensation
for the occupant in a car. There is no cavil that an
“Act policy” stands on a different footing from a
“comprehensive/package policy”. As the circulars
have made the position very clear and IRDA, which
is presently the statutory authority, has commanded
the insurance companies stating that a
“comprehensive/package policy” covers the liability,
there cannot be any dispute in that regard. We may
hasten to clarify that the earlier pronouncements
were rendered in respect of the “Act policy” which
admittedly cannot cover a third-party risk of an
occupant in a car. But, if the policy is a
“comprehensive/package policy”, the liability would
be covered. ……………………………..”
The above position clarifies that a Comprehensive/Package
Policy would cover the liability of the insurer for payment of
compensation for the occupant in a car, in other words, it covers a
third party risk of an occupant in a car.
6. Relevantly at this juncture, it is essential to notice that
an additional premium was paid by the owner of the vehicle (OP
“ ”
No.1 before the MACT) and the policy was a
“Bundled Motor Policy
(Exhibit-8). In the said circumstances, in view of
for Private Car”
the document relied on by the Appellant themselves, I am of the
considered view that the Respondents are entitled to the total
losses as calculated hereinbelow and the argument of Appellant
- (Rupees two lakhs) only,
that the liability is limited to ₹ 2,00,000/
fails to impress unsubstantiated as it is by documentary evidence.
MAC App. No.01 of 2024 7
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
7. Cost of litigation has not been granted in any of the
“ ”
Judgments of the Supreme Court viz;
National Insurance Company
2
,
Limited vs. Pranay Sethi and Others Sarla Verma (Smt) and Others vs.
3
and
Delhi Transport Corporation and Another Magma General
Insurance Company Limited vs. Nanu Ram alias Chuhru Ram and
4
. The ,000/- (Rupees twenty five
Others compensation of ₹ 25
thousand) only, granted by the Learned MACT under this head is
thereby disallowed and set aside. However, the amount computed
in terms of the decision in
under “Love and Affection” is allowed
(supra). Although,
Magma General Insurance Company Limited
(supra) also provides that
Magma General Insurance Company Limited
is to be granted on the death of a parent or
“Parental consortium”
parents but it specifies that parental consortium is granted to the
child upon the premature death
of a parent, for loss of “parental
aid, protection, affection, society, discipline, guidance and
Considering that the Respondents are both aged above
training”.
thirty years, they would surely not fall within the ambit of the
observation and therefore are not entitled to parental consortium.
8. In conclusion, the compensation which is found to be
which the Appellant is liable to pay the
“just compensation”
Respondents is re-computed as follows;
Annual income of the deceased ₹ 1,44,000.00
(₹ 12,000/- x 12)
Add 10% of ₹ 1,44,000/- as Future Prospects (+) ₹ 14,400.00
[in terms of Paragraph 58 of the Judgment of National Insurance ₹ 1,58,400.00
Company Limited vs. Pranay Sethi and Others : (2017) 16 SCC 680]
Less 1/3
rd
of ₹ 1,58,400/- (-) ₹ 52,800.00
[in terms of Paragraph 30 of the Judgment of Sarla Verma (Smt)
and Others vs. Delhi Transport Corporation and Another : (2009)
6 SCC 121 — deducted from the above amount as expenses that the
deceased would have incurred towards herself had she been alive]
Net yearly income ₹ 1,05,600.00
Multiplier to be adopted „9‟ ₹ 9,50,400.00
(₹ 1,05,600/- x 9)
2
(2017) 16 SCC 680
3
(2009) 6 SCC 121
4
(2018) 18 SCC 130
MAC App. No.01 of 2024 8
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
[The age of the deceased at the time of death was ’58’ and the
relevant multiplier in terms of Paragraph 42 as per Judgment of
Sarla Verma (supra) is „9‟]
Add Funeral Expenses (+) ₹ 16,500.00
[in terms of Paragraph 59.8 of the Judgment of Pranay Sethi (supra)
with enhancement @ 10% in every three years. Therefore, the figure
calculated is — ₹ 15,000 @ 10% = ₹ 1,500 + ₹ 15,000 = ₹ 16,500]
Add Loss of Estate (+) ₹ 16,500.00
[in terms of Paragraph 59.8 of the Judgment of Pranay Sethi (supra)
with enhancement @ 10% in every three years. Therefore, the figure
calculated is — ₹ 15,000 @ 10% = ₹ 1,500 + ₹ 15,000 = ₹ 16,500]
Add Love and Affection (+) ₹ 1,00,000.00
[@ ₹ 50,000/- each, in terms of Paragraph 19 of the Judgment
of Magma General Insurance Company Limited vs. Nanu Ram alias
Chuhru Ram and Others : (2018) 18 SCC 130]
Total = ₹ 10,83,400.00
(Rupees ten lakhs, eighty three thousand and four hundred) only.
9. The Respondents-Claimants are therefore entitled to
compensation 10,83,400/- (Rupees ten lakhs, eighty three
₹
thousand and four hundred) only, with simple interest @ 9% per
annum, on the above amount with effect from the date of filing of
the Claim Petition before the Learned MACT, i.e., 20-12-2021, till its
full realisation.
10. The Appellant-Insurance Company is directed to pay
the awarded compensation to the Respondents-Claimants No.1 and
2, within one month from today, with interest @ 9% per annum,
failing which, it shall pay simple interest @ 12% per annum from
the date of filing of the Claim Petition, till full realisation.
Amounts, if any, already paid by the Appellant-Insurance Company
to the Respondents-Claimants No.1 and 2, for the instant Claim
Petition, shall be duly deducted from the awarded compensation.
11. The awarded amount of compensation along with
interest as specified above, shall be divided equally amongst the
Claimants-Respondents No.1 and 2, being the sons of the
deceased.
12. The impugned Judgment is set aside.
13. Appeal disposed of accordingly.
MAC App. No.01 of 2024 9
The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another
14. No order as to costs.
15. Copy of this Judgment be sent to the Learned MACT for
information, along with its records.
( Meenakshi Madan Rai )
Judge
03-10-2024
Approved for reporting : Yes
sdl