The Calcutta High Court has enhanced the compensation payable to the parents of a five-and-a-half-year-old girl who died in a road accident in 2014 from ₹3.49 lakh to ₹5 lakh, holding that the amended Second Schedule to the Motor Vehicles Act, which prescribed ₹5 lakh as compensation for death, applied to the pending claim.

Justice Md. Shabbar Rashidi was hearing an appeal filed by Soma Das and Gour Gopal Das challenging the August 16, 2018 award of the Motor Accident Claims Tribunal, VIIth Bench, City Civil Court, Calcutta in MAC Case No. 317 of 2014.

The victim, Shinjini Das alias Srinjini Das, aged about five years and six months, was travelling as a pillion rider on a motorcycle on her way to school on August 19, 2014, when a truck bearing registration no. WB-23C-2832 allegedly dashed into the motorcycle from behind. She fell from the motorcycle and was run over by the truck. She was taken to a nearby hospital but was declared brought dead.

The Tribunal had found that the accident occurred due to the fault of the truck driver and that there was no contributory negligence on the part of the child's father, who was riding the motorcycle. It awarded ₹3,49,500 to the parents under Section 163A of the Motor Vehicles Act.

Before the High Court, the claimants argued that the Tribunal had failed to apply the amended Second Schedule to the Motor Vehicles Act, which prescribed ₹5 lakh as compensation in case of death. They also contended that the insurance company should not have been completely exonerated and that the principle of "pay and recover" ought to have been applied.

The Court noted that the Ministry of Road Transport and Highways had substituted the Second Schedule through a notification dated May 22, 2018. The amended Schedule provided that compensation payable in case of death under Section 163A would be ₹5 lakh.

Justice Rashidi relied upon the Calcutta High Court Division Bench judgment in Urmila Halder v. New India Assurance Co. Ltd., which had held that the amended Second Schedule applied to claim petitions and appeals pending after May 22, 2018, even where the accident had occurred before the amendment.

The Division Bench in Urmila Halder had held that the new Schedule could be applied to pending claims because the Second Schedule constituted procedural law and the amendment changed the methodology for determining compensation rather than creating a new liability.

The High Court also noted that the Supreme Court had subsequently affirmed the Urmila Halder decision in The New India Assurance Co. Ltd. v. Urmila Halder, observing that beneficial legislation should ordinarily pass its benefit to claimants in the absence of a specific bar.

Applying the principles laid down in Urmila Halder, the Court held:

“The claimants are entitled to get the minimum compensation provided in Second Schedule of the Act of 1988 to the tune of Rs. 5,00,000/-.”

The Court accordingly enhanced the compensation from ₹3,49,500 to ₹5 lakh.

The enhanced amount was directed to carry 6% annual interest from the date of filing of the claim application until realization.

Insurance Company Directed To Pay, With Liberty To Recover

On the question of the insurer's liability, the Court considered the contention that the truck driver and registered owner was holding a fake driving licence, thereby constituting a breach of the insurance policy.

Justice Rashidi relied on the Supreme Court's recent decision in Reliance General Insurance Company Ltd. v. Om Prakash & Ors., where the Supreme Court had applied the principle of "pay and recover" in a case involving breach relating to the driver's licence.

The High Court therefore directed the insurance company to deposit the compensation along with interest before the Registrar General within six weeks of communication of the judgment.

The Registrar General was directed to disburse the amount to the two claimants in equal shares, as directed by the Tribunal.

At the same time, the Court clarified that the insurance company would be at liberty to take steps in accordance with law, thereby preserving its right to recover the amount in terms of the applicable principle.

Case No: FMA 1132 of 2021

Case: Soma Das And Another Vs. The Manager, Magma HDI General Insurance Company Limited And Another