Highlights of Supreme Court on MACT

I (2009) ACC 1 (SC)

United India Insurance Co. Ltd. —Appellant

versus

Santro Devi & Ors. —Respondents

(i) Insurance — Provisions of compulsory insurance have been framed to advance social object — It is part of social justice doctrine — When certificate of insurance is issued in law, Insurance Company is bound to reimburse owner — Insurance Company must fulfil statutory requirements of formation of valid contract but in case of third party risk, question to be considered from different angle.

(ii) Distinction — Statutory contract of insurance and contract of insurance simplicitor.

(iii) Motor Vechicles Act, 1988 — Sections 145(d), 147(3), 145(b), 146, 147, 149(2), 155, 157 — Insurance — Liability of Insurance Company — Once valid contract is entered into, only because of mistake or otherwise, name of original owner has not been mentioned in certificate of registration and/or documents of hypothecation of vehicle with the bank had still been continuing in his name — It cannot be said contract itself has become void — Unless it was shown that in obtaining said contract fraud had been practised — In present case, deceased was owner of truck hypothecated to bank — Renewal of contract of insurance used to be done by bank — Owner died in 1991 and said vehicle was insured with appellant — Despite death of owner no step was taken either by bank or his LRs to get registration of vehicle transferred — Insurance policy continued to be renewed in name of deceased owner — Truck met with accident resulting in death of driver — Workmen’s Commissioner awarded compensation of Rs. 1,42,465 — Appeal against by Insurance Company unsustainable — Apart from raising general and vague plea of fraud no particulars thereof had been disclosed — No witness examined on behalf of appellant — Section 146 provides for statutory insurance — In case where owner of motor vehicle has expired, although there does not exist any statutory interdict for person in possession of vehicle to ply same on road, but there being statutory injunction that same cannot be plied unless policy of insurance is obtained, contract of insurance would be enforceable — Section 155 of M.V. Act not applicable — Insurance Company had been accepting premium from widow of deceased, contract by necessary implication had come into being — Doctrine of “acceptance sub silentio” applicable — Appellant liable to pay compensation — No infirmity in impugned judgment.

I (2009) ACC 29 (SC)

SYED BASHEER AHAMED & ORS. —Appellants

versus

MOHD. JAMEEL & ANR. —Respondents

(i) Motor Vehicles Act, 1988 — Sections 163A, 166 and 168 — Compensation — Determination — Loss of dependency — Reducing monthly income of deceased from Rs. 7,000 to Rs. 4,000 justified — Yearly income of deceased was not more than Rs. 40,000 — Tribunal not justified in adopting monthly income of deceased at Rs. 7,000 p.m. to work out loss of dependency — For arriving at just compensation, it is necessary to ascertain net income of deceased available for support of himself and his dependents at the time of his death and amount he was accustomed to spend upon himself — This exercise to be done on basis of the data, brought on record by claimant, which involves element of estimate or partly by conjecture — Figure arrived at by deducting from net income of deceased such part of income as he was spending upon himself, provides a datum, to convert it into lump sum by capitalising appropriate multiplier — On basis of Income Tax Return, yearly income of deceased was not more than Rs. 40,000 — Tribunal not justified in adopting monthly income of deceased at Rs. 7,000 p.m. to work out loss of dependency — As regards future prospects of deceased, except for copies of account of deceased in books of account of his client, no other reliable evidence brought on record to show future plans of deceased regarding expansion of diversification of his business — To meet ends of justice income of deceased taken as Rs. 5,500 p.m. or Rs. 66,000 p.a. — Deduction for personal expenses to be taken half, if he was bachelor and 1/3rd if he was married — Loss of dependency determined as Rs. 33,000 p.a. — Multiplier of 14 applied — Total loss of dependency arrived at Rs. 4,62,000 — Adding Rs. 20,000 awarded under other heads, quantum of compensation determined at Rs. 4,82,000 — Interest to be awarded @ 6% p.a. from date of filing claim petition till date of actual payment.

(ii) Motor Vehicles Act, 1988 — Section 168 — Expression “which appears to be just” vests wide discretion in Tribunal in matter of determination of compensation — Amount of compensation determined to be payable to claimant(s) has to be fair and reasonable by accepted legal standards.

(iii) Motor Vehicles Act, 1988 — Sections 163A and 168 — Compensation — Computation of — No uniform rule or formula for measuring value of human life — Though special provision for assessment of compensation on structured formula basis for purpose of claim petition under Section 163A of Act inserted in Act w.e.f. 14.11.1994, but no such formula laid down for determination of compensation in claim petition under Section 166 of Act, though there is no bar in taking said schedule as guiding factor while determining just compensation by applying multiplier method.

(iv) Evidence — Burden of proof — Earnings of deceased — Onus lies on claimants to prove this fact by leading cogent and reliable evidence before Tribunal — Bare assertion in claim petition in that behalf not sufficient to discharge that onus.

I (2009) ACC 40 (SC)

Mantoo Sarkar —Appellant

versus

Oriental Insurance Co. Ltd. & ANR. —Respondents

(i) Motor Vehicles Act, 1988 — Section 166(2) — Constitution of India, 1950 — Article 142 — Territorial Jurisdiction — Claims Tribunal — Determination — Appellant travelling in bus belonging to MPRTC, which met with an accident in town of Faridpur in District of U.P. — Appellant working as skilled migrant seasonal agricultural labourer at Nainital, one of the Branch Office — Having regard to provision of Section 166(2) of Motor Vehicles Act Insurance Company having branch office at Nainital had territorial jurisdiction to determine claim petition — Residence of claimant also determines jurisdiction of Tribunal — Appellant working in Nainital District and residing there during period of accident — Fact that he was resident of Nainital in State of Uttaranchal neither denied nor disputed — High Court unfortunately in its judgment did not assign sufficient or cogent reason as to why Tribunal committed any illegality in holding that it had territorial jurisdiction to entertain claim petition — No prejudice was caused to appellant by claim petition being tried by MACT at Nainital — Justness or otherwise of amount not disputed — Factual finding that driver of truck was driving truck rashly and negligently — In case of this nature, this Court may even exercise extraordinary jurisdiction under Article 142 of Constitution — Impugned judgment unsustainable and set aside.

(ii) Motor Vehicles Act, 1988 — Sections 166(2) and 169 — Civil Procedure Code, 1908 — Section 21(1) — Jurisdiction of Tribunal — Ingredients laid down in Section 166(2) of Act — Tribunal may follow summary procedure in terms of Section 169 of Act — Provisions of CPC under Act has limited application but in terms of rules ‘save and except’ any specific provision made in that behalf, provisions of CPC would apply — Having regard to provisions of Section 21(1) of Act, ordinarily Appellate Court shall not entertain appeal on ground of lack of territorial jurisdiction on part of Court below unless he has been prejudiced thereby.

(iii) Motor Vehicles Act, 1988 — Section 170 — Compensation — Quantum — Liability of Insurance Company arises for purpose of reimbursement of amount of compensation payable by owner of vehicle insured — Only in exceptional cases and as provided for under Section 170 of Act, Insurance Company can defend claim petition.

(iv) Legal Maxim “coram non juris” — Decision rendered without jurisdiction would be coram non juris.

(v) Civil Procedure Code, 1908 — Section 21(1) — Jurisdiction of Court — Tribunal is a Court subordinate to High Court — Appeal against Tribunal lies before High Court — High Court while exercising its appellate power, would follow provisions contained in CPC or akin thereto — In view of Section 21(1) of CPC, it was obligatory on part of Appellate Court to pose unto itself question, viz., whether first respondent has been able to show sufferance of any prejudice and then only to entertain appeal.

(vi) Distinction between jurisdiction with regard to subject matter of suit and that of territorial and pecuniary jurisdiction — Discussed.

(vii) Constitution of India, 1950 — Article 142 — Extraordinary jurisdiction under Article 142 of Constitution, whether shall be exercised or not would depend upon fact of each matter.

I (2009) ACC 52 (SC)

NATIONAL INSURANCE CO. LTD. —Appellant

versus

KAUSHALAYA DEVI & ORS. —Respondents

(i) Motor Vehicles Act, 1988 — Section 147(1) — Liability of Insurer — Goods vehicle — Gratuitous passenger — Deceased a vegetable vendor travelling in truck for collecting empty vegetable boxes met with accident due to rash and negligent driving of truck — Deceased was not travelling as owner of goods but for purpose of collecting empty boxes — Deceased was travelling for purpose other than for which he entitled to travel in public carriage — Insurer not liable to pay.

(ii) Motor Vehicles Act, 1988 — Section 149(2)(a)(ii) — Driving Licence — Breach of policy conditions — Liability of insurer — Tribunal held that truck driver liable for rash and negligent driving and insurer liable as not for proving fact that driver not having valid licence — High Court held that driver having licence of LMV and owner not checked or verified licence for HMV — Owner not even stepped into witness box to say anything in this regard — High Court rightly held that insurer not liable to pay compensation.

I (2009) ACC 60 (SC)

Kamla Chaturvedi —Appellant

versus

National Insurance Co. & Ors. —Respondents

Workmen’s Compensation — Interest — Payment — Liability of Insurance Company — Accident arose on account of vehicular accident — Provisions of Motor Vehicles Act applicable — No exception as was in case of New India Assurance Company stipulated in policy of insurance — Insurance Company liable to pay compensation — Interest would be payable from date of adjudication of claim.

I (2009) ACC 72 (SC)

KRISHNA FOOD & BAKING INDUSTRY P. LTD.—Appellant

versus

NEW INDIA ASSURANCE CO. LTD. & ANR. —Respondents

(i) Consumer Protection Act, 1986 — Section 23 — Insurance — Wheat Policy — Units set on fire by terrorists — Claim repudiated by Insurance Company — Contention, units remained closed for 20 months, there were no stock worth due to pilferage — No evidence produced in support of contention — Consumer complaint filed — “Pilferage theory” not believed by National Commission — Loss assessed by Surveyor awarded — Civil appeal filed — Regarding pilferage, except ipse dixit on part of insurer, no material produced in support — No reduction could be allowed on that count — Complainant held entitled to claimed amount.

(ii) Consumer Protection Act, 1986 — Section 23 — Insurance — Raw material policy — Units set on fire by terrorists — Claim repudiated by Insurance Company — Contention, stock not fit for human consumption — Consumer complaint filed — Loss assessed by Surveyor awarded by National Commission — Civil appeal filed — Complainants could not operate units due to militant activities — No fault can be found against complainant for suspending operation of units — Complainant cannot suffer due to non-production in units — National Commission not right in reducing claimed amount on ground that certain stock, raw material unfit for human consumption — Production not stopped due to intentional and deliberate act on part of insurer — Order of National Commission unjustified — Requires interference in appeal — Claimants held entitled to policy amount.

(iii) Consumer Protection Act, 1986 — Section 23 — Insurance — Plant Policy— Units set on fire by terrorists — Building, plant, machinery, electricity fittings covered under policy of 53 lakh — Rs. 31,373 offered by Insurance Company on ground that substantial damage not caused to building, plant, machinery, electricity fittings — Consumer complaint filed — National Commission held, complainants entitled to Rs. 31,373 with interest — Civil appeal filed — Claimants held entitled to compensation of Rs. 25,81,600 under policy.

(iv) Consumer Protection Act, 1986 — Section 23 — Insurance Act, 1938 — Section 38 — Transfer of Property Act, 1882 — Sections 130, 135 — Insurance — Assignment and transfer of policies — Insurance policies assigned in favour of Bank — Assignment amounts to transfer of actionable claim in favour of Bank — As soon as decree passed in favour of complainants, bank entitled to said amount — Not necessary for Bank to become plaintiff by filing suit and obtain decree in its favour — Bank entitled to amount directly from Insurance Company — National Commission not right in rejecting claim of Bank — Appeals filed by Bank allowed.

I (2009) ACC 93 (SC)

Deokar Exports Pvt. Ltd. —Appellant

versus

New India Assurance Company Ltd. —Respondent

(i) Insurance Act, 1938 — Section 64VB(1) & (2)— Insurance — Fire accident — No insurance cover exists on date of accident — Claim rejected — Insurer cannot assume risk unless premium received — Complainant wanted insurance cover to be continued for period 12.3.1988 to 12.9.1989 — Premium for one year paid on 26.8.1988 — As per bar contained in Section 64VB, Insurance Act, 1938, insurer could not accept request to grant insurance cover with retrospective effect, from date prior to receipt of premium — Policy sent to MSFC — Complainant and MSFC aware about period of policy, no protest, objection regarding wrong period of policy raised — No premium paid for further renewal of policy beyond 25.8.1989 — Insurer cannot be held liable for loss sustained in fire accident.

(ii) Insurance — Contract based on offer and acceptance — Proposal made by complainant accepted by insurer with modification — Complainant could have refused to accept counter proposal, could have accepted counter proposal or could have made counter proposal to counter proposal of insurer — Complainant did not have choice of prepounding concluded contract with modification, neither proposed nor accepted — In contract of insurance rights and obligation strictly governed by policy of insurance — No exception/relaxation can be made on ground of equity.

I (2009) ACC 137 (SC)

H.P. State Forest Company Ltd. —Appellant

versus

United India Insurance Co. Ltd. —Respondent

(i) Contract Act, 1872 — Section 28 — Agreement — Validity — Agreement in restraint of legal proceedings or to curtail limitation — Void — Agreements which do not seek to curtail time for enforcement of right, but provide for forfeiture/waiver of right itself, if no action commenced within stipulated period, not void — Curtailment of limitation period not permissible, but extinction of right itself unless exercised within specific time, permissible.

(ii) Limitation Act, 1963 — Section 44 — Limitation — Time barred — Insurance claim repudiated in 1988 — Limitation period of 3 years deemed to have commenced from date of repudiation — Complaint filed in 1994, barred by limitation.

(iii) Insurance — Settlement of claim — Insured timber washed away due to flood — Claim repudiated — Contention, policy issued for 8 months, period of one year mentioned in policy due to typographical mistake — On date of flood no insurance policy in existence — Insurer not liable under policy.

(iv) Insurance — Limitation — Claim if not pressed within 12 months from date of loss, Insurance Company cease to be liable — No claim/arbitration proceedings made during prescribed period — Insurer not liable under policy — No relief entitled.

I (2009) ACC 270 (SC)

Union of India —Petitioners

versus

Prabhakaran Vijaya Kumar & Ors. —Respondents

Appeal (Civil) 6898 of 2002—Decided on 5.5.2008

(i) Interpretation of Statutes — If words used in beneficial or welfare statute are capable of two constructions, one which is more in consonance with object of Act and for benefit of person for whom Act was made should be preferred.

(ii) Interpretation of Statutes — Beneficial or welfare statutes should be given liberal and not literal or strict interpretation.

(iii) Railways Act, 1989 — Sections 2(29), 123(c), 123(c)(2), 124A, 124A Proviso, Clauses (a) to (e) — Untoward Incident — Compensation — Liability of Railways — Expression “accidental falling of passenger from train carrying passengers” includes accident when bona fide passenger i.e. passenger travelling with valid ticket or pass in trying to enter into railway train and falls down during process — Purposive and not literal, interpretation should be given to expression — In present case passenger fell on railway track and was run over by train — Eye-witness stated that deceased fell down from train when train was moving — Statement of Station Master that deceased attempted to board train and fell down from running train — Contention, that there was no fault of Railways and there was contributory negligence of deceased — Legally it will not make any difference whether deceased was actually inside train or was trying to get into train when she fell down — Accident not covered by proviso to Section 124A — This section lays down strict liability or no fault liability in case of railway accident — Deceased died due to accidental falling from train and is covered within definition of `untoward incident’ — Railway liable for payment of compensation.

(iv) Strict Liability — Theory, discussed.

I (2009) ACC 297 (SC)

ORIENTAL INSURANCE CO. LTD. —Appellant

versus

RAJNI DEVI & ORS. —Respondents

Civil Appeal No. 2892 of 2008—Decided on 22.4.2008

Motor Vehicles Act, 1988 — Section 163A — Maintainability of claim Petition by Owner — Owner and passenger riding on motorcycle — Accident resulting in death of both persons — No third party involvement — Identity of driver at the time of accident not known — Owner had paid extra premium for personal insurance — Tribunal, holding that the only factor relevant would be merely the use of vehicle, awarded compensation — Supreme Court held that a plain reading of Section 163A shows that it is not applicable to cases where owner of vehicle himself is involved — Owner himself being liable, not entitled to relief — Further held that in view of extra premium paid for personal insurance, liability of insurer limited to Rs. 1 lakh — Appeal allowed.