Motor Accident Compensation Can Be Enhanced Even Without Claimants' Cross-Appeal If Insurer Challenges Quantum: Allahabad High Court

The Allahabad High Court has held that where an Insurance Company appeals against an award of the Motor Accident Claims Tribunal, the compensation can be enhanced even though the claimants have filed no appeal or cross-objection.

It held that once the adequacy of the award is in question in the appeal, the Court is duty-bound to see whether what was awarded is 'just compensation' and to enhance it if it is deficient.

Section 168 of the Motor Vehicles Act, 1988 requires the Claims Tribunal to make an award determining the compensation which appears to it to be just. Order XLI Rule 33 of the Code of Civil Procedure, 1908 empowers the appellate court to pass any order which ought to have been passed, in favour of a respondent who has filed no appeal or objection.

Justice Prashant Kumar held,

“Since it is the statutory obligation of the Tribunal and also the Court to do complete justice to the parties and award 'just compensation', there is no restriction to enhance the compensation in appropriate case even in absence of any cross-appeal or an appeal seeking enhancement of compensation.”

On 16.11.2017, Sabhajeet Tadmali was walking home when a Scorpio dashed into him near Bariyawan crossing in Ambedkar Nagar. He died during treatment. His family claimed Rs. 49,70,000/- before the Motor Accident Claims Tribunal, Faizabad, stating that he was 50 years of age and a registered seller of 'tadi'.

The owner and the driver did not appear and were proceeded against ex parte. The Tribunal found the accident and the rash and negligent driving proved, held the driver licensed and the vehicle insured, and assessing the notional income at Rs. 5,000/- per month, awarded Rs. 7,20,000/- with simple interest at 7%. The Insurance Company appealed under Section 173 of the Act, challenging the quantum.

It was argued that the vehicle had been stolen and was not in the possession of the registered owner or the charge-sheeted driver, and the name of the driver in the case did not match the name in the extract of his driving licence. Further, it was urged that the Aadhaar card showed the deceased to be 51, which would alter the multiplier and future prospects.

For the claimants, it was submitted that nothing on record showed the vehicle to have been stolen, and that the family register maintained by the Secretary of the Village Panchayat recorded the year of birth as 1967. Reliance was placed on Saroj & Ors. v. IFFCO-TOKIO General Insurance Co. & Ors. for the proposition that an Aadhaar card is proof of identity and not of age.

Though they had filed no appeal, the claimants raised an oral cross-objection that the notional income was meagre, the deceased being an authorised licensee extracting 'tadi' from palm trees, and that the minimum wage for unskilled labour of Rs. 7,400.46/- per month notified on 04.01.2018 ought to have been adopted. They also contended that the conventional heads had not been escalated by 10% every three years as required by National Insurance Co. Ltd. vs. Pranay Sethi, and that consortium had gone to only one of the three claimants. The insurer opposed the objection on the ground that no appeal for enhancement had been filed.

Rejecting the plea of theft, the Court noted that the owner had lodged no First Information Report and nothing was on record to establish it. On the driver's name, it held the Tribunal's finding required no interference.

Further, the Court held that the age in the post-mortem report was not conclusive and that the family register, though proved, gave only the year of birth. It therefore presumed the deceased to have been above 50 and below 51. Noting that Sarla Verma v. DTC prescribes a multiplier of 13 for the age group of 46 to 50 years and 11 for 51 to 55, the Court observed,

“The above ratio clearly creates a lacuna, as to what will be the multiplier when the age is between 50 years to 51 years.”

Relying on Shashikala Vs. Gangalashmamma and its own decisions in Shubhankit Singh v. Jem Pack Enterprises and Smt. Sabbo v. Bharti Axa General Insurance Co. Ltd., it held that the completed age governs the multiplier, and upheld the multiplier of 13.

“In the absence of precise and exact age, it would be just and apt to take the lower age of 50 years as the completed age of the deceased. The object of the Motor Vehicles Act is intended to the “just compensation” to the victims and their dependents rather than to defeat legitimate claims on technicalities.”

Finding the income inadequate in view of the minimum wage notification, and the conventional heads contrary to Pranay Sethi, the Court held that it could not turn a blind eye to the claimants' objection when the grounds raised had sufficient merit.

The Act being a beneficial legislation, and neither it nor the Uttar Pradesh Motor Vehicles Rules, 1998 prescribing the procedure for appeals before the High Court, the Court applied Order XLI Rule 33 CPC. Relying on Mahant Dhangir v. Madan Mohan and on Surekha v. Santosh, where the Supreme Court set aside a refusal to enhance compensation for want of a cross-appeal, it held that there was no legal embargo against enhancement.

“The mere absence of an appeal or cross-objection on the part of the claimants cannot operate as a legal impediment to the Court determining and awarding just compensation in accordance with law.”

Recomputing, the Court took the income at Rs. 7,400.46/- per month, added 25% towards future prospects, deducted one-third towards personal and living expenses and applied the multiplier of 13, arriving at a loss of dependency of Rs. 9,62,065/-. Funeral expenses and loss of estate were raised to Rs. 18,150/- each. Holding, on New India Assurance Co. Ltd. v. Somwati, that loss of love and affection is not a head separate from consortium, it awarded consortium of Rs. 48,400/- to each of the three claimants, totalling Rs. 1,45,200/-.

The compensation was accordingly enhanced from Rs. 7,20,000/- to Rs. 11,43,565/- with interest at 7%, the Tribunal being directed to adjust any amount already paid. With that modification, the appeal was disposed of.