Safiya Malik

The High Court of Jammu and Kashmir and Ladakh Single Bench of Justice Sanjay Dhar has dismissed an insurer’s appeal against a Motor Accidents Claims Tribunal award while simultaneously enhancing the compensation payable to the claimants. The Court held that the deceased, though son of the owner of the tractor, qualified as a third party under the Motor Vehicles Act. Importantly, the Court invoked Order 41 Rule 33 of the Code of Civil Procedure to grant higher compensation despite the claimants not having filed a cross-appeal. The insurer was directed to deposit the enhanced amount for release to the claimants.

The proceedings stemmed from a road accident on 27 February 2006 when Mohd. Hanif, aged 23 years, died after a tractor bearing registration No. JK02AE-3818 overturned at Nallah Chohi, Tehsil Bishnah. He was working as a labourer engaged for loading and unloading the tractor at the time of the accident. His mother and brother instituted a claim petition before the Motor Accidents Claims Tribunal, Jammu, seeking Rs. 23,00,000/- in compensation.

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The Tribunal, after recording evidence from the claimants and the insurer, found that the accident was caused by rash and negligent driving. It held that the insurer’s objections relating to the driver’s licence, the deceased’s status as a gratuitous passenger, and non-joinder of the driver were unsubstantiated. The Tribunal assessed compensation at Rs. 3,93,000/-, applying a multiplier of 14 based on the mother’s age.

The insurer appealed, contending that the deceased, being the son of the owner, did not constitute a third party under the Motor Vehicles Act and that the Tribunal had erred by not impleading the driver. It further argued that no liability could be fastened on the insurer in such circumstances.

Justice Dhar recorded that “the deceased was engaged as a labourer for loading and unloading of the offending tractor and was travelling in that capacity in the offending tractor at the relevant time.”

On the principal issue of third-party status, the Court observed: “Any person other than insurer and insured qualifies to be a ‘third party’ to a contract of insurance. The deceased in the present case was neither the first party nor the second party to the contract of insurance executed between the appellant-Insurance Company and the respondent No. 3, therefore, the deceased was a third party to the contract of insurance.”

Regarding non-joinder of the driver, the Court stated: “Driver of the offending vehicle may be a proper party but if the driver is not impleaded as a party to the claim petition, the award passed in the claim petition does not vitiate. A claim petition is not a civil suit and, therefore, it is not necessary for a claimant to implead any person as a party opponent.”

Turning to compensation, the Court relied on the principle of “just compensation” under Section 168 of the Motor Vehicles Act. It quoted the Supreme Court’s decisions to affirm that appellate courts possess wide powers under Order 41 Rule 33 CPC. The Court observed: “An appeal filed under Section 173 of the Motor Vehicles Act has to be governed by the normal procedure prescribed for deciding the appeals… provisions contained in Order 41 Rule 33 of the Code of Civil Procedure empower the appellate court to pass any order, which may include such other relief to the respondents as the case may require.”

The Court concluded that the Tribunal erred in applying a multiplier based on the mother’s age rather than that of the deceased. “The multiplier had to be chosen with reference to the age of the deceased, who was aged 23 years at the time of his death. Thus, the appropriate multiplier… would have been 18 and not 14.”

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While dismissing the insurer’s appeal, the Court modified the Tribunal’s award. It held: “When we apply the multiplier of 18, the loss of dependency to the claimants would come to Rs. 27,000/- x 18 = Rs. 4,86,000/-. Besides this, the claimants… would also be entitled to Rs. 15,000/- on account of funeral expenses, Rs. 15,000/- on account of loss of estate and Rs. 40,000/- on account of loss of filial consortium to claimant-mother. Thus, the compensation to which the respondents No. 1 and 2 would be entitled to is… Rs. 5,56,000/-.”

The Court directed that the insurer “shall deposit the balance amount in the Registry of this Court and the amount, on its receipt, shall be released in favour of the claimants.” The rate of interest and other conditions specified in the Tribunal’s award were left unchanged.

Advocates Representing the Parties

For the Appellant: Mr. Baldev Singh, Advocate.
For the Respondents: Mr. Suneel Malhotra, Advocate.

Case Title: Bajaj Allianz General Insurance Co. Ltd. v. Noor Begum and Ors.
Case Number: MA No. 616/2010, IA No. 162/2012
Bench: Justice Sanjay Dhar