Hari Nath Tilhari, J.
1. These appeals arise out of common judgment and award delivered by Motor Accidents Claims Tribunal No. 10, Bangalore City, in M.V.C. Case No. 1222 of 1986. The Tribunal by award dated 9.8.88, has assessed the compensation in total to be Rs. 4,47,000 and awarded it to the extent of Rs. 3,50,250 with interest at 9 per cent per annum. The Tribunal opined that accident in question did take place on account of no doubt, negligence of the driver of the vehicle TVS 50 bearing registration No. AAQ 920, but there was contributory negligence of the deceased to the extent of 25 per cent in the causing of or in the taking place of accident and as such, it held that petitioners-claimants are entitled to a total sum of Rs. 3,50,250, as compensation from the respondents before, with reference to 75 per cent negligence of rider/driver of vehicle and as such awarded the same with interest at the rate of 9 per cent per annum on the said amount.
M.F.A. No. 203 of 1989, has been filed by the insurer, while appeal M.F.A. No. 2597 of 1988, has been filed by D.V. Chandrashekar the rider of the vehicle and insurer and the appeal bearing M.F.A. No. 716 of 1989, has been filed by the owner of the vehicle and the claimants-petitioners have filed cross-appeal/cross-objections in appeal M.F.A. No. 2597 of 1988. That as all these appeals and cross-appeal do arise from the common judgment and award and arise out of one and same motor vehicle accident these are disposed of herewith by the one and the common judgment.
2. The facts of the case in nutshell are that on 13.8.1986, at about 5.25 p.m., Dr. N.D. Kamble, who was working as the Head of the Social Services Management Unit in the Institute of Social and Economic Change, Bangalore, was crossing the road near Vasanta Vihar from south to north.
According to claimants' case, at that time, the vehicle TVS 50 bearing registration No. AAQ 920, driven by respondent No. 2, in the claim petition, i.e., D.V. Chandrashekar, it was drizzling when he was riding the vehicle and it came and dashed against Dr. N.D. Kamble aforesaid. That as a result thereof Dr. Kamble fell down on the road and sustained head injuries. He was shifted to Victoria Hospital, but he was declared dead and the matter was reported to the Chickpet Police Station and investigations were taken. According to the claimants' case, Dr. N.D. Kamble was a highly qualified person having got many degrees to his credit. He was awarded three doctorate degrees by three different universities for his research papers on Economics, Political Science and Anthropology. He was also the Master of Arts and Graduate in Law. At the time of accident he was working as the Head of Social Services Management Unit in the Institute for Social and Economic Change, Bangalore and his gross salary was Rs. 4,359.65 per month. He was also a visiting Professor to various universities in India and abroad and according to claimants, he was getting average income of Rs. 6,000 to Rs. 8,000 per month. According to claimants, Dr. Kamble was contributing his entire salary to the family and on account of sudden death of Dr. Kamble, the family suffered loss, to a greater extent including, of consortium and of fatherly guidance and affection to his children. The case of the claimants has been that the deceased was only bread-earner and was free from bad habits. At the time of accident, he was aged about 45 years. According to petitioners' case, the petitioner No. 1 spent a sum of Rs. 10,000 towards funeral and other ceremonies. The claimants claimed compensation in total to the tune of Rs. 8,10,000, under various heads.
3. Notices were issued by the Claims Tribunal to the respondents and they appeared and filed their separate written statements:
That it was admitted that respondent No. 2 (before the Tribunal) D.V. Chandra-shekar was driving the vehicle TVS 50, at the time of accident and that N.K. Dutta, present respondent No. 4 (i.e., respondent No. 1 before the Tribunal) has been owner of vehicle TVS 50 and with respondent No. 3 (before the Tribunal), i.e., Oriental Insurance Co. Ltd. the present appellant in M.F.A. No. 203 of 1989, i.e., appellant No. 2 in M.F.A. No. 2597 of 1988, the vehicle TVS 50 was insured and covered by the insurance policy on the date of accident.
The respondents denied their liability for accident as well as to pay compensation and pleaded in defence that: (a) The death of Dr. N.D. Kamble was not by their motor vehicle nor did accident causing death of Dr. N.D. Kamble take place on account of vehicle TVS 50. (b) There was no connection or proximity between the death of Dr. Kamble and driving TVS 50, by respondent No. 2 on K.G. Road, (c) There was no pedestrian crossing near Neo Mysore Cafe on K.G. Road where the deceased attempted to cross the road. It was further alleged that accident which caused death of Dr. Kamble was only on account of own negligence of Dr. Kamble himself, as he was in confused state of mind and fell on the road. Insurance company also took the plea that insurance company is not liable to pay compensation as the respondent No. 2, the driver or rider had no valid driving licence. It was also alleged that claim for the dependency has been grossly exaggerated and the claimants are not entitled to get that amount. The respondent No. 1, that is the owner of the vehicle, also took the plea to the effect that respondent No. 2 before the Tribunal had taken away the vehicle without knowledge and information of respondent No. 1, the owner of the vehicle and the inmates of the house. That according to case of respondent No. 1, who is appellant in appeal M.F.A. No. 716 of 1989, the respondent No. 2 D.V. Chandrashekar was holding a valid driving licence and he was not disqualified under the provisions of Motor Vehicles Act from driving the motor vehicle and, therefore, respondent No. 3 insurance company which is present appellant in the appeal, i.e., M.F.A. No. 203 of 1989, is and has been liable to pay the compensation. It was further pleaded that respondent No. 2 was the practising Chartered Accountant and held a permanent driving licence from 1.9.86. The vehicle in question driven by respondent No. 2 could not and did not hit the deceased.
4. On the basis of the pleadings of the parties, the Tribunal framed the following issues:
(1) Do petitioners prove that they are the legal representatives of deceased Dr. N.D. Kamble?
(2) Do they further prove that N.D. Kamble died in a motor accident that took place on 13.8.1986 at 5.35 p.m. on K.G. Road, Bangalore near Vasantha Vihar Hotel as a result of rash and negligent driving of TVS 50 bearing registration No. AAQ 920?
(3) Do respondents prove that the act of deceased in trying to cross K.G. Road is itself rash and negligent and, therefore, he is responsible for the accident?
(4) Whether the petitioners are entitled for compensation? If so, to what amount and from whom?
(5) What order?
The Tribunal on the examination of the evidence led by the parties, held that the claimants were the near relations and heirs of Dr. Kamble, as pleaded. It further found that the accident had taken place, no doubt on account of the negligence of respondent No. 2, the rider or the driver of the vehicle, but there was 25 per cent contributory negligence of the deceased as well and accident was the result of negligence of respondent No. 2 and the contributory negligence of the deceased. The Tribunal after examination of the other evidence assessed the compensation of Rs. 4,47,000, but on account of the alleged contributory negligence, it opined that as there has been 25 per cent contributory negligence of the deceased, the claimants would be entitled only to 75 per cent of Rs. 4,47,000, that is according to the Tribunal the claimants are entitled to a sum of Rs. 3,50,250, jointly with interest at the rate of 9 per cent per annum. The Tribunal further directed that the sum of Rs. 1,00,000 to be deposited in the names of petitioner Nos. 2 and 3, in the fixed deposit in the nationalised bank in Bangalore City, till they attain the majority and the balance of Rs. 2,50,250, with costs and interest to be paid to claim- ant No. 1, that is Ullasini N. Kamble, the widow of Dr. Kamble.
5. Feeling aggrieved from the judgment and award of the Tribunal, the insurance company has preferred appeal, i.e., M.F.A. No. 203 of 1989 and the rider of the vehicle, namely, D.V. Chandrashekar respondent No. 2 in M.V.C. No. 1222 of 1986 filed appeal M.F.A. No. 2597 of 1988, in which insurance company has been im-pleaded as a party.
6. Appeal, i.e., M.F.A. No. 716 of 1989, has been preferred by the owner.
We have heard Mr. S.P. Shankar, learned counsel for the appellant insurance company in M.F.A. No. 203 of 1989, i.e., the insurance company's appeal, we have heard Mr. Anant Mandagi as well, who is counsel for D.V. Chandrashekar, the rider/driver of vehicle, respondent No. 5 in the appeal filed by the insurance company, namely, M.F.A. No. 203 of 1989, as well as appellant No. 1 in M.F.A. No. 2597 of 1988 and Mr. Balakrishna Sastry, learned counsel for the owner and Mr. Jaya-kumar S. Patil, counsel for the claimants-respondents in all these appeals, who have filed the cross-appeal/cross-objection in M.F.A. No. 2597 of 1988.
7. On behalf of the claimants, Mr. Jayakumar Patil contended that award of compensation in total, to the tune of Rs. 3,50,250, is based on wrong criteria adopted by the Tribunal as well as is the result of incorrect finding on the question of cause of accident. Learned counsel contended that the finding recorded by the Tribunal, that cause for accident has not been the sole negligence of the rider or driver of the vehicle in question and the finding of the Tribunal that there was contributory negligence of the deceased to the extent of 25 per cent is based on no evidence, instead it is based on conjectures, surmises and illegal assumptions, as if the Tribunal has tried to act as a witness or on its own presumed knowledge. Learned counsel contended that there is no evidence to prove that there was any contributory negligence of the deceased. Mr. Patil further submitted that in making the assessment of compensation, the Tribunal has acted illegally, when it determined the question of multiplicand as well as when it applied the multiplier of 12. Learned counsel contended that in order to determine the multiplicand, the chances of promotion and increment should have also been taken and should have been considered in terms of money in the light of the law laid down by the Supreme Court in the case of General Manager, Kerala State Road Trans. Corporation v. Susamma Thomas , as well as in the case of Sarla Dixit v. Balwant Yadav . Mr. Patil, learned counsel contended that just and proper compensation to be awarded would have been higher than the one awarded by Tribunal. Mr. Patil further contended that the deduction of 25 per cent from the total sum of compensation could not have been made on the basis of finding that there was contributory negligence, as the said finding regarding contributory negligence suffers from error of law and facts and is erroneous.
These contentions raised on behalf of the claimants, who have filed cross-appeal or cross-objections have been hotly contested by the owner-insured, the driver and the insurer. In addition to contesting the claims of the claimants-respondents the appeals filed by insured and insurer have also been argued very strenuously by Mr. S.P. Shankar, counsel for the insurance company and by Mr. Anant Mandagi, on behalf of the owner of the vehicle.
8. Mr. S.P. Shankar, learned counsel for the insurer, i.e., the insurance company appellant urges that there is no dispute about the fact that D.V. Chandrashekar, the driver or the rider of vehicle, who was driving the vehicle in question, was the holder of learner's licence which cannot be taken to be a valid driving licence. Learned counsel contended that the perusal of policy per se reveals that insurance company has not taken the liability to pay compensation for the accidents caused on account of the vehicle being driven by a person holding only learner's licence, which had been clearly excluded as per terms of policy, therefore, the company is not liable to pay any compensation, as vehicle was driven on the date of accident by a person not holding a driving licence; and entire liability is of the owner and driver of the vehicle to pay compensation. Mr. Shankar, on behalf of the insurance company placed reliance on the decision of their Lordships of the Apex Court in the case of New India Assurance Co. Ltd. v. Mandar Madhav Tambe , Mr. Shankar also made
reference to the Full Bench decision of this court in the case of United India Insurance Co. Ltd. v. Sharada Adyanathaya . Mr. S.P. Shankar, learned counsel for the insurance company appellant further made reference to some other cases as well. Contesting these contentions raised by Mr. S.P. Shankar on behalf of the insurance company, Mr. Anant Mandagi (with reference to his appeal and the contentions of Mr. S.P. Shankar), the learned counsel for insured/owner contended that no defence is available to the insurance company beyond the provisions of Section 96 (2) (a) and (b) of Motor Vehicles Act, 1939. Mr. Anant Mandagi contended that in the present case, the defence which at the most could be pleaded is one specified under Section 96 (2) (b) (ii) and to plead that the driver of the vehicle was holding learner's licence and was not covered by policy is not a defence open to insurer, i.e., insurance company. Mr. Mandagi contended that under Section 96 (2) (b) of Motor Vehicles Act, 1939, which is analogous to Section 149(2)(a) of the Motor Vehicles Act, 1988, the insurance company can defend its case by alleging and proving that the insured has committed 'breach' of any of the conditions, as mentioned in Section 96 (2) (b) of the Act. The learned counsel contended that Chandrashekar, the driver was holder of a learner's licence, then at the most his position was that of or similar to that of persons not holding any driving licence. Mr. Anant Mandagi contended that the defence available could be the breach committed by the insured of the conditions of the insurance policy within Section 96 (2) (b) of the Act of 1939 or Section 149(2)(a) of the Act of 1988. Merely because the vehicle is or was being driven by an unlicensed person or by a driver holding the learner's licence cannot be said to be the breach of condition, particularly in context of the facts and circumstances of the case specially, when it is established from the evidence on record, that the owner of the vehicle was not in India, but was in England and vehicle was lying at his home at Bangalore and he had never consented the vehicle to be driven by an unlicensed person or by a person, who is holding a learner's licence. Learned counsel contended that in order to prove the 'breach', it must be established that breach has been the result of full knowledge, consent of the owner, i.e., insured and it was the wilful breach. Learned counsel contended it could not be the breach, because owner of the vehicle was out of station and in England. Learned counsel further contended that as such, insurance company cannot escape its liability, merely on account of fact that on the date of accident vehicle involved in the accident was driven by a holder of learner's licence or by one holding no driving licence.
9. On behalf of the claimants in these appeals, Mr. Jayakumar S. Patil, learned counsel contended that the claimants' bread-earner, that is, Dr. Kamble, has died in the accident and claimants should be awarded compensation and compensation in the real sense, that it must be reasonable and it may be realisable and in that context, no technicality should be allowed to operate to make the grant of compensation futile or nugatory. The contention has been to the effect that insurance company cannot escape the liability, until it is proved and shown that the insured has committed the breach of condition. Learned counsel contended that there has been no breach of the conditions of the policy, so insurance company cannot escape its liability, Mr. Jayakumar S. Patil, on this aspect of the matter, placed reliance on the decision of their Lordships of the Apex Court in case Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC), as well as, on the decision of the Apex Court in the case of Sohan Lal Passi v. P. Sesh Reddy . Mr. Patil further made
reference to another decision of the Supreme Court in the case, namely, United India Insurance Co. Ltd. v. Gian Chand . Mr. Jayakumar S. Patil contended that interest awarded at the rate of 9 per cent only and same is on lower side and it should have been awarded at the rate of 12 per cent per annum and urged for grant of interest at the rate of 12 per cent per annum.
10. We have applied our mind to the contentions raised by the learned counsel for the parties, the following are the questions which are required to be considered in the context of arguments raised by the learned counsel for the parties:
(1) Whether the Tribunal has acted according to law in holding that there was contributory negligence to the extent of 25 per cent of the deceased or, that the accident was result of negligence solely of the driver of the vehicle TVS 50 No. AAQ 920, in question?
(2) Whether the Tribunal has acted according to law in determining the multiplicand and in applying the multiplier of 12?
(3) Whether the insurance company is not liable to pay the compensation awarded and it is the liability of the owner of the vehicle to pay the said compensation?
(4) Whether interest awarded at the rate of 9 per cent is unsatisfactory and whether claimants are entitled to interest at the rate of 12 per cent per annum?
As regards the first question as to: Whether accident had taken place on account of sole negligence of the driver/rider of the vehicle or on account of contributory negligence of the deceased as well. The evidence on record, no doubt as found by the Tribunal also, shows and establishes that there was negligence on the part of the driver of the vehicle, as per finding recorded on issue No. 2, that there was negligence on the part of the driver/rider of the vehicle in question and it cannot be disputed, the only dispute is: Whether there was contributory negligence of the deceased, we do not find any evidence directly on the point nor the Tribunal has made reference to any evidence available, it only proceeded to record the finding, as it is not common, as pleaded by Mr. S.K.V. Chala-pathy, that urchins and other pedestrians take risks of crossing the road, though it is strictly prohibited in K.G. Road, we are well aware that traffic police have fixed obstruction rope in the centre of the road they also put up railings on either side of the footpath. In spite of these precautions taken by the Corporation authorities and the traffic police, people like Dr. Kamble make attempts to cross the road, wherever it is possible. Such type of general presumptions could not be raised, the real question arises is whether Dr. Kamble was moving in a confused mind, as alleged by the owner had to be proved by the owner or by insurance company, who took the plea. There is no presumption under law that citizens commit breach of the rules and rules of the road. The presumption is otherwise, that people follow the law and the exception has to be proved beyond reasonable doubt that they commit breach or anyone has committed breach thereof. The finding as to contributory negligence, as such in our opinion, is based on conjectures and surmises and on the basis of assumptions not warranted by law.
11. In Gujarat State Road Transport Corporation v. Ramanbhai Prabhatbhai 1987 ACJ 561 (SC), their Lordships of the Supreme Court in para 9, have been pleased to observe:
When the Fatal Accidents Act, 1855 was enacted there were no motor vehicles on the roads in India. Today, thanks to the modern civilization, thousands of motor vehicles are put on the road and the largest number of injuries and deaths are taking place on the roads on account of the motor vehicle accidents. In view of the fast and constantly increasing volume of traffic, the motor vehicles upon the roads may be regarded to some extent as coming within the principle of liability defined in Rylands v. Fletcher (1868) LR 3 HL
330. From the point of view of the pedestrian the roads of this country have been rendered by the use of the motor vehicles highly dangerous. 'Hit and run' cases where the drivers of the motor vehicles who have caused the accidents are not known, are increasing in number. Where a pedestrian without negligence on his part is injured or killed by a motorist whether negligently or not, he or his legal representatives, as the case may be, should be entitled to recover damages if the principle of social justice should have any meaning at all. In order to meet to some extent the responsibility of the society to the deaths and injuries caused in road accidents there has been a continuous agitation throughout the world to make the liability for damages arising out of motor vehicle accidents as a liability without fault.
Whether there has been negligence of the pedestrian or not, it is for the party, who alleges that the accident was caused because of negligence or contributory negligence of the deceased, to prove it by cogent evidence, we mean to say that burden was on the owner or on the insurance company to have established by cogent evidence the alleged negligence or contributory negligence of the deceased and it cannot be presumed that Dr. Kamble tried to take the risk or that Kamble tried to make attempts to cross the road in an uncareful manner or tried to violate the rules of the road. The assumption and the finding recorded by the Tribunal that Dr. N.D. Kamble was not careful in preferring the place to cross the road, we find ourselves unable to agree with the finding of the trial court, further, it is mentioned that F.I.R. was filed by one Ashwathaiah, the Traffic Police Constable, who was at Bank Circle, a few hundred feet away from the place of accident. He has not been examined, who could have deposed about the situation. In absence of any evidence to the effect that Dr. Kamble tried to ignore or tried to cross the road from the place strictly prohibited. The finding recorded by the Tribunal, as such, is erroneous on fact and in law and is set aside and it is hereby found and held that. the accident in question did take place only on account of negligence of the driver or we may say, D.V. Chandrashekar, who was riding the TVS 50, registration No. AAQ 920 and the accident has been the result of rash and negligent driving of the above-mentioned vehicle by Mr. D.V. Chandrashekar, respondent No. 2, before the Tribunal, that is, appellant in appeal M.F.A. No. 2597 of 1988 (that is, respondent No. 4 in appeal M.F.A. No. 716 of 1989, or say respondent No. 5, in appeal M.F.A. No. 203 of 1989).
12. The second question to be considered is, as mentioned earlier: Whether the Tribunal committed error of fact or law in assessing the compensation and acted in breach of principles of law laid down by the Supreme Court in the matter of determination of multiplier and multiplicand.
In the present case, the Tribunal assessed the compensation taking Rs. 3,000, as the monthly dependency and annual loss of dependency, which is assessed to be Rs. 36,000 as the multiplicand, to which it applied multiplier of 12 and it assessed the loss of dependency to be Rs. 4,32,000.
I find from the perusal of the judgment, that the Tribunal has taken the monthly salary of the deceased as it was on the date of accident, it has to be taken note of that in view of the evidence on record, salary of the deceased has been enhanced due to by way of or by Pay Commission Report to be the sum of Rs. 7,500 per month, as per, UP/UGC Scales. The Tribunal has taken the view that Dr. Kamble's salary of july, 1986, was Rs. 4,359.65 and out of that the total deductions amounted to Rs. 1,148.60 and home paid salary was Rs. 3,211. Had Dr. Kamble been alive, he would have been entitled to the salary of Rs. 7,500 as revised under the pay scale revision and if revision of the salary had been from the back date, it would have been Rs. 7,500 per month on the date of accident. If he would not have died due to accident in question and he would have been alive, he would have had also a career for almost 13 years to 16 years more in the service and would have got increments and promotions.
13. In the case of General Manager, Kerala State Road Trans. Corporation v. Susa-mma Thomas as well as in the case of Sarla Dixit v. Balwant Yadav , the formula
pronounced by their Lordships of the Supreme Court to assess or bring out the multiplicand, is that future prospects of advancement of life and career have to be assessed in terms of money. In Susamma's case (supra) in para 13, their Lordships observed as under:
In the present case the deceased was 39 years of age. His income was Rs. 1,032 per month. Of course, the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand. While the choice of the multiplier is determined by two factors, namely, the rate of interest appropriate to a stable economy and the age of the deceased or of the claimant whichever is higher, the ascertainment of the multiplicand is a more difficult exercise. Indeed, many factors have to be put into the scales to evaluate the contingencies of the future. All contingencies of the future need not necessarily be baneful. The deceased person in this case had a more or less stable job. It will not be inappropriate to take a reasonably liberal view of the prospects of the future and in estimating the gross income it will be unreasonable to estimate the loss of dependency on the present actual income of Rs. 1,032 per month.
In the case of Sarla Dixit (supra) their Lordships followed Susamma's case and laid down at pp. 587-88, as under:
So far as the adoption of the proper multiplier is concerned, it was observed that the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand. While the chance (sic. choice) of the multiplier is determined by two factors, namely, the rate of interest appropriate to a stable economy and the age of the deceased or of the claimant, whichever is higher, the ascertainment of the multiplicand is a more difficult exercise. Indeed, many factors have to be put into the scales to evaluate the contingencies of the future. All contingencies of the future need not necessarily be baneful. Applying these principles to the facts of the case before this court in the aforesaid case it was observed that the deceased in that case was of 39 years of age. His income was Rs. 1,032 per month. He was more or less on a stable job and considering the prospects of advancement in future career the proper higher estimate of monthly income of Rs. 2,000 as gross income to be taken as average gross future income of the deceased and deducting at least 1/3rd therefrom by way of personal living expenses, had he survived, the loss of dependency could thus be capitalised by adopting the multiplicand of Rs. 1,400 per month or Rs. 17,000 per year and that figure could be capitalised by adopting multiplier of 12 which was appropriate to the age of deceased being 39 and to that amount was added the conventional figure of Rs. 15,000 by way of loss of consortium and loss to estate. Adopting the same scientific yardstick as laid down in the aforesaid judgment, the computation of compensation in the present case can almost be subjected to a well settled mathematical formula. Deceased in the present case, as seen above, was earning gross salary of Rs. 1,543 per month. Rounding it up to figure of Rs. 1,500 and keeping in view all the future prospects which the deceased had in stable military service in the light of the brilliant academic record and performance in the military service spread over 7 years and also keeping in view the other imponderables like accidental death while discharging military duties and the hazards of military service, it will not be unreasonable to predicate that his gross monthly income would have shot up to at least double than what he was earning at the time of his death, i.e., up to Rs. 3,000 per month had he survived in life and had successfully completed his future military career till the time of superannuation. The average gross future monthly income would be arrived at by adding the actual gross income at the time of death, namely, Rs. 1,500 per month to the maximum which he would have otherwise got had he not died a premature death, i.e., Rs. 3,000 per month and dividing that figure by two. Thus, the average gross monthly income spread over his entire future career, had it been available, would work out to Rs. 4,500 divided by 2, i.e., Rs. 2,200. Rs. 2,200 per month would have been the gross monthly average income available to the family of the deceased had he survived as a breadwinner. From that gross monthly income at least 1/3rd will have to be deducted by way of his personal expenses and other liabilities like payment of income tax, etc.
Keeping this principle in view, it would be proper to predict that his course of future career with increments, his monthly income would have been double of the present one, as was on the date of accident in the light of revised salary. The formula is that present day salary as has been on the date of accident, as a result of Pay Commission, it would have been Rs. 7,500 per month in accordance with the principles laid down in Susamma Thomas and Sarla Dixit cases referred above, the formula to be arrived for determining the multiplicand would be the present salary, as on the date of occurrence or accident, double of that amount, for future career and future prospects to bring out gross average income would be present income added to his future income to figure as would be reached and that is divided by 2. That Rs. 7,500, i.e., present income on the date of accident plus to Rs. 15,000 brings the figure of Rs. 22,500 and this Rs. 22,500 is divided by 2 comes to Rs. 11,250 p.m. on average reduced by 1/3rd, that is, personal expenses, etc. Thus Rs. 11,250 minus Rs. 3,750 and thus multiplicand comes to Rs. 7,500 per month, multiplied by 12 months is equal to Rs. 90,000 per annum.
14. In this case, as the age of the deceased was 45 years and the occurrence is of 1985, the proper multiplier to be applied is not 12. The proper multiplier would be '10' or '11'.
We are of the view that it would not be unjustified if we apply multiplier of 10 to this case. Thus, if sum of Rs. 90,000 multiplied by 10 brings the loss of dependency it comes to Rs. 9,00,000 (Rupees nine lakh) as such in our opinion, the claimants would have been entitled to a sum of Rs. 9,00,000 towards the loss of dependency. The Tribunal has further awarded a sum of Rs. 6,000 towards the loss of consortium to the petitioner No. 1, a sum of Rs. 6,000 towards loss of expectation of life and Rs. 3,000 towards funeral and other expenses. The award of this amount has not been challenged by the claimants. Thus taken together the just compensation would come to Rs. 9,15,000 and in round figures it is awarded as Rs. 9,00,000 (Rs. nine lakh only). It has been contended that the claimants have made the claim for Rs. 8,00,000 only. Under law, the claimants cannot be deprived of just compensation, even if it exceeds the amount of compensation claimed by them in the claim petition. Law imposes a liability on the Tribunals and courts to assess and award just compensation. The claimants themselves assessed it a lesser figure no doubt but, we find the just compensation to be awarded would be Rs. 9,00,000, i.e. (Rupees nine lakh) in total. In this view of the matter, in our opinion, the claimants would be entitled to just compensation, namely, Rs. 9,00,000 in entirety.
15. The learned counsel for claimants-respondents, as mentioned earlier, submitted that interest awarded at 9 per cent is lesser and it should be awarded at the rate of 12 per cent. In our view, the interest that is awarded, at the rate of 9 per cent cannot be said to be on the lower side.
There is no doubt that in some cases earlier, their Lordships of the Supreme Court have awarded interest at the rate of 12 per cent per annum. If the principles of law as laid down in Interest Act, 1978, are applied the claimants may be entitled to interest at the current rate of interest, namely, highest rate of interest which would have been payable by the nationalised banks or scheduled banks on long term fixed deposits. Earlier the bank rate of interest was, no doubt, higher than 9 per cent per annum, but now, the banks have reduced the interest on the long fixed deposits to something, as 9.5 per cent per annum or to 9 per cent and, therefore, in our view, interest awarded by the Tribunal at 9 per cent cannot be said to be unjustified or on the lower side, when we so opine, we find support for our view from the recent decision of their Lordships of the Apex Court in the case of Kaushnuma Begum v. New India Assurance Co. Ltd., , wherein their
Lordships have observed as under:
(23) Now, we have to fix up the rate of interest. Section 171 of the Motor Vehicles Act empowers the Tribunal to direct that 'in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf. Earlier, 12 per cent was found to be the reasonable rate of simple interest. With a change in economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9 per cent on fixed deposits for one year. We, therefore, direct that the compensation amount as fixed hereinbefore shall bear interest at the rate of 9 per cent per annum from the date of the claim made by the appellants.
As such, the second question relating to rate of interest is answered and it is held, that claimants, who have filed the cross-objections in the appeal filed by the owner or rider and insurer are entitled to compensation to the tune of Rs. 9,00,000 with 9 per cent interest from the date of application to the date of payment and there is no question of enhancing the rate of interest from 9 per cent to 12 per cent.
16. The third question which remains to be discussed and answered is, who is liable to pay the amount of compensation to the claimants along with the interest? Whether insurer-appellant who has filed appeal M.F.A. No. 203 of 1989 and M.F.A. No. 2597 of 1988 is not liable to pay the said amount, as claimed by the insurer and its counsel.
17. Mr. S.P. Shankar, the learned counsel for the appellant, as mentioned earlier submitted that as per terms of insurance, there is no insurer's liability to pay the compensation amount and it is for the owner to pay the same. Learned counsel for the insurance company-insurer Mr. S.P. Shankar contends, that a perusal of the insurance policy per se indicates and shows, that company has made it clear as, insurance policy per se shows that company will not be liable for accidents caused by a driver, who has no driving licence, or who has only got a learner's licence. Mr. Shankar submitted that learner's licence is not a valid driving licence and as insurance policy clearly reveals and states in terms "other than holder of learner's licence", he submitted that, on the date of accident the rider of the vehicle was holder of a learner's licence and was not holding a driving licence. Learned counsel submitted that respondent No. 2, before the Tribunal, namely, D.V. Chandrashekar, has also filed the appeal has been the holder of learner's licence, therefore, the insurance company was not liable to pay the compensation, as D.V. Chandrashekar was not duly licensed person. In this connection, Mr. Shankar, made a reference to the decision of the Supreme Court in New India Assurance Co. Ltd. v. Mandar Madhav Tambe , their Lordships made a reference to the provisions of the Motor Vehicles Act, Section 2(5-A) and Section 3, as well as Section 96 (2) (b) (ii) and no doubt their Lordships laid it down as under:
(13) From the aforesaid it is clear that what was obtained by respondent No. 3 from the authorities under the Act was not a licence within the meaning of Section 2 (5-A) of the said Act. He had obtained a learner's licence which allowed him to be on the road subject to his fulfilling the conditions contained therein. One of the important conditions was that if he was driving a motor vehicle then there must be besides him in the vehicle, as an instructor, a person duly licensed to drive the vehicle and sitting in such a position as to be able readily to stop the vehicle. It is clear from this that two learners by themselves cannot be in one car which is being driven by one of them. If the learner having a learner's licence under the rules is to drive a car then he must have sitting beside him a person who is duly licensed. This clearly shows that a driving licence as defined in the Act is different from a learner's licence issued under Rule 96. In other words, a person would be regarded as being duly licensed only if he has obtained a licence under Chapter II of the Motor Vehicles Act and a person who has obtained a temporary licence which enables him to learn driving cannot be regarded as having been duly licensed. The decision of the single Judge of the Himachal Pradesh High Court in United India Insurance Company's case 1985 ACJ 481 (HP), to the extent to which he has taken a contrary view must be held to have been incorrectly decided.
(14) Apart from the fact that a learner having such a licence would not be regarded as duly licensed, the aforesaid clause in the insurance policy makes it abundantly clear that the insurance company, in the event of an accident, would be liable only if the vehicle was being driven by a person holding a valid driving licence or a permanent driving licence 'other than a learner's licence'. This clause specifically provides that even if respondent No. 3 had held a current learner's licence at the time of the accident, the appellant would not be liable. In the present case it is clear that the respondent No. 3 did not have a permanent driving licence before the date of the accident and he had held only a learner's licence and it lapsed nearly two years before the accident. The High Court observed that the Act did not contemplate a 'permanent driving licence' because driving licence is valid only for a certain period after which it has to be renewed. This may be so, but the use of the words 'permanent driving licence' in the insurance policy was to emphasise that a temporary or a learner's licence holder would not be covered by the insurance policy. The intention and meaning of the policy clearly is that the person driving the vehicle at the time of the accident must be one who holds a 'driving licence' within the meaning of Section 2 (5-A) of the Act. This being so, we are unable to agree with the conclusions of the High Court that the appellant was liable to pay the amount which had been awarded in favour of respondent No. 1.
No doubt, this decision in New India Assurance Co. Ltd. v. Mandar Madhav Tambe (supra), very clearly lays down the principle, which supports the contention raised by Mr. S.P. Shankar, learned counsel for the appellant insurance company, that a learner's licence could not have covered the appellant nor it could be contemplated or be deemed or be considered to be a permanent licence nor the person driving under the learner's licence can be deemed or considered to be having a valid driving licence or a permanent driving licence, but the question here is not whether D.V. Chandrashekar was a person driving the vehicle with a driving licence when he was having only a learner's licence and there cannot be any dispute, as regards the provision of law, that a person holding learner's licence cannot be deemed to be driving under a driving licence or permanent driving licence that at the most if, a driver of a vehicle has only a learner's licence and is driving the vehicle in the circumstances, otherwise than covered by Rule 19 of the Motor Vehicles Act, 1988, or otherwise than covered under learner's licence referred in the Act of 1988 and otherwise than in the circumstances, it is permissible for him to drive, such a person if he is driving a vehicle with a learner's licence will be deemed and considered to be driving the vehicle without any driving licence. The insurance policy indicates that insurance company has taken liability to pay compensation for vehicle being driven by a person holding driving licence or permanent driving licence.
18. Section 96 of the Motor Vehicles Act, 1939, which is almost analogous to Section 149 of the Act of 1988, clearly indicates and specifies the defences available to the insurer. Section 96 of the Motor Vehicles Act provides that in proceedings for compensation, the insurer will be entitled to defend the action on the grounds specified in clauses (a) and (b) of Section 96 (2) and not otherwise. The question is of interpretation of clause (b), it will be appropriate to quote Section 96 (1), (2) and (3) and Section 96 (6) of Motor Vehicles Act, 1939:
96 (1): If, after a certificate of insurance has been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of Sub-section (1) of Section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest of judgments.
(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceeding is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely-
(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105, or
(b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached, where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(c) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular.
xxx xxx xxx
(3) Where a certificate of insurance has been issued under Sub-section (4) of Section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of Sub-section (1) of Section 95, be of no effect:
Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.
xxx xxx xxx
(6) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (2-A) has been given shall be entitled to avoid his liability to any such judgment as is referred to in Sub-section (1) or Sub-section (2-A) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.
We are concerned here with clause (b) of Sub-section (2) of Section 96 and the ground provided under Sub-section (2) and not otherwise, that there has been a breach of specified condition in the policy being one of the following conditions and Sub-clause (ii) to Section 96 (2) (b) reads:
A condition excluding driving by a named person or persons or by any person, who is not duly licensed or by any person, who has been disqualified for holding or obtaining a driving licence during the period of disqualification.
19. In the present case, the insurance company has to establish that there has been breach of the condition, namely, the condition excluding driving vehicle insured by a named person or persons or by any person, who is not duly licensed. Mere driving of the vehicle by a person not duly licensed or by a person excluded from driving by itself is not sufficient to exonerate the insurance company from the liability, what has to be established by the insurance company, is that there has been a breach of the specified condition, the question is what is the meaning of 'breach', this expression has been considered by their Lordships of the Supreme Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC), as well as in the case of Sohan Lal Passi v. P. Sesh Reddy . That their Lordships of the Supreme Court in the case of Sohan Lal Passi referred to above laid it down as under:
The expression 'breach' occurring in Section 96 (2) (b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under Sub-section (1) of Section 96.
Their Lordships further lay it down in the same decision of Sohan Lal Passi's case at p. 1053, as follows:
While interpreting the contract of insurance, the Tribunals and courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to be a judgment-debtor in respect of the liability in view of Sub-section (1) of Section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accidents Claims Tribunal for realisation of such amount by sale of properties of the owner of the vehicle. The procedure and result of the execution of the decree is well-known.
Their Lordships at p. 1054 quoted with approval the following passage from their earlier decision in Kashiram Yadav v. Oriental Fire & Genl. Ins. Co. Ltd. 1989 ACJ 1078 (SC), which reads:
We may also state that without the knowledge of the insured, if by driver's acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured. The insurer in such a case cannot take the defence of a breach of the condition in the certificate of insurance. We are in respectful agreement with the view expressed in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC).
20. In United India Insurance Co. Ltd. v. Gian Chand , their Lordships in paras 8 and 9 at page 1067, dealt with such a situation and observed as follows:
(8) In order to resolve this controversy between the parties, it must be observed at the outset that the aforesaid decisions clearly indicate two distinct lines of cases. The first line of cases consists of fact situations wherein the insured are alleged to have committed breach of the condition of insurance policy, which required them not to permit the vehicle to be driven by an unlicensed driver. Such a breach is held to be a valid defence for the insurance company to get exonerated from meeting the claims of third parties who suffer on account of vehicular accidents which may injure them personally or which may deprive them of their breadwinner on account of such accidents caused by the insured vehicles. The other line of cases deals with the insured-owners of offending motor vehicles that cause such accidents wherein the insured owners of the vehicles do not themselves commit breach of any such condition and hand over the vehicles for driving to licensed drivers who on their own and without permission, express or implied, of the insured hand over vehicles or act in such a way that the vehicles get available to unlicensed drivers for being driven by the latter and which get involved in vehicular accidents by the driving of such unlicensed drivers. In such cases the insurance company cannot get benefit of the exclusionary clause and will remain liable to meet the claims of third parties for accidental injuries, whether fatal or otherwise. The decisions of this court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC) and in Sohan Lal Passi v. P. Sesh Reddy ,
represent this second line of cases while the decisions of this court in New India Assurance Co. Ltd. v. Mandar Madhav Tambe and in Kashiram Yadav v. Oriental Fire & Genl.
Ins. Co. Ltd. 1989 ACJ 1078 (SC), represent the first line of cases.
(9) In the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC), a Bench of two learned Judges of this court speaking through Thakkar, J. held that when the insured had handed over vehicle to be driven by licensed driver and even if the licensed driver on his own and because of his negligence had allowed an unlicensed cleaner to drive the vehicle it could not be said that there was any breach committed by the insured, so as to attract the exclusion clause in favour of the insurance company as contemplated under Section 96 (2) (b) of the Motor Vehicles Act, 1939.
It may further be observed that the provisions of Chapter VII of the Act and relating to insurance and the liability, the provisions have to be construed in such a manner, as to subserve the object of enactment.
21. In the case of New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani 1958-65 ACJ 559 (SC), it is laid down:
Chapter VIII of the Act, it appears from the heading, makes provision for insurance of the vehicle against third party risks, that is to say, its provisions ensure that third parties who suffer on account of the user of the motor vehicle would be able to get damages for injuries suffered and that their ability to get the damages will not be dependent on the financial condition of the driver of the vehicle whose user led to the causing of the injuries. The provisions have to be construed in such a manner as to ensure this object of the enactment.
Further in para 16, their Lordships dealt with Sections 95 (1) and 96 (2) and its effect and observed as under:
(16) Sub-section (5) of Section 95 makes the insurer liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. If the policy covers the insured for his liability to third parties, the insurer is bound to indemnify the person or classes of persons specified in the policy. The same is the effect of Sub-section (1) of Section 96 which provides that the insurer is bound to pay to the person entitled to the benefit of a decree he obtains in respect of any liability covered by the terms of the policy against any person insured by the policy irrespective of the fact whether the insurer was entitled to avoid or cancel or might have avoided or cancelled the policy. This means that once the insurer has issued a certificate of insurance in accordance with Sub-section (4) of Section 95 he has to satisfy any decree which a person receiving injuries from the use of the vehicle insured obtains against any person insured by the policy. He is, however, liable to satisfy the decree only when he has been served with a notice under Sub-section (2) of Section 96 about the proceedings in which the judgment was delivered. It is for this reason that a notice under Sub-section (2) of Section 96 was issued to the company and it is on account of the consequential liability in case the plaintiffs' claim is decreed against Pessumal that the appellant challenged the correctness of the allegation that Pessumal was a person insured under the policy issued by it in respect of the Chevrolet car.
Their Lordships of the Supreme Court, thus laid down the principles in the above cases, that:
Insurance company is liable for payment of the amount to satisfy the decree passed against the insured, except in cases where it establishes its defence within the framework of Section 96 (2) (a) or (2) (b) and, therefore, the burden was on insurance company to have established the breach of the conditions as referred in Sub-section (2) (b) particularly within the framework of Section 96 (2) (b) (ii). So essential thing to be established was breach of the condition by the insured in the sense as interpreted by their Lordships of the Supreme Court.
22. In view of the above principles of law, as laid down in above Supreme Court cases in the context of the facts of the present case, which are to the effect that the owner of the vehicle was far off in England in any event at the time when the accident occurred and when the vehicle was being driven by the person not duly licensed, namely, D.V. Chandrashekar who was only a holder of a learner's licence which was not a valid driving licence. The owner insured who had also valid licence did not know that nor it has been established that he consented to its being driven by D.V. Chandrashekar, a person not holding a driving licence or a permanent driving licence and who was only holding a learner's licence. When there was no question of any consent being given nor there was any knowledge even to the owner appellant as he was in England thousands of miles away from his home his vehicle was kept at home in India, he cannot be deemed and considered to have committed or wilfully committed or knowingly committed any breach of terms or conditions of the policy nor he can be taken to have allowed such a person to drive his vehicle.
That in the case relied by Mr. S.P. Shankar, learned counsel for the appellant insurer, namely, in the case New India Assurance Co. Ltd. v. Mandar Madhav Tambe and in the case of United India Insurance Co. Ltd. v. Sharada Adyanathaya , attention of the courts appears not to have been invited to provisions of Section 96 (2) (b) and 96 (2) (c) of Motor Vehicles Act, 1939 nor to the provisions of Section 149(2)(a) of Motor Vehicles Act, 1988 and scope of defence available to insurers, namely 'breach' of specified conditions of policy being one of the conditions given, as being conditions mentioned in the section and the decision of their Lordships of Supreme Court in the cases Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC); Kashiram Yadav v. Oriental Fire & Genl. Ins. Co. Ltd. 1989 ACJ 1078 (SC) and to the Supreme Court's decision in Sohan Lal Passi v. P. Sesh Reddy . That, in view of above, the decisions relied by appellant's counsel in M.F.A. No. 203 of 1989, are not on the point of Section 96 (2) (b) of the Act of 1939 and further may not operate as binding precedent so far as the question relates to question as to if insured owner committed 'breach of condition' under Section 96 (2) (b) of the Act of 1939 or under Section 149(2)(a)(ii) of the Act of 1988.
Thus considered, on the principles laid down in the above cases, the owner-appellant cannot be deemed to have committed or wilfully committed any breach of condition referred in Sub-section (2) (b) (ii) of Section 96 of the Motor Vehicles Act and as insurance company has not placed any evidence to the contrary, in our opinion, the insurance company cannot get exonerated from the liability fastened under the decree and the decree passed appears to be correct. Thus considered, the award of the Tribunal has to be modified and the cross-appeal filed by the claimants has to be allowed. The finding of the Tribunal, as regards the liability of the insurance company has to be affirmed when it held, that insurance company is liable to pay the compensation. Thus, M.F.A. No. 203 of 1989, filed by Oriental Insurance Co. Ltd. has to be dismissed and is hereby dismissed.
23. Owner's appeal, namely, M.F.A. No. 716 of 1989 and the appeal M.F.A. No. 2597 of 1988, filed by D.V. Chandra-shekar, the rider or driver of the vehicle with insurer also have to be dismissed, the cross-objections or cross-appeal filed by the claimants-respondents deserve to be allowed and the award of the Tribunal has to be modified, as: The cross-objections filed by the claimants-respondents succeed and are allowed, M.F.A. Nos. 203 and 716 of 1989 and M.F.A. No. 2597 of 1988, are hereby dismissed.
24. The claimants-respondents are held entitled to and are awarded a total sum of Rs. 9,00,000 as compensation with interest, as awarded by the Tribunal at 9 per cent per annum from the date of application to the date of payment.
Out of the amount of compensation under award and the interest which has accrued uptil now, 30 per cent of that amount shall be paid proportionately to the claimants, that is widow, son and daughter of the deceased. The remainder 70 per cent of the total amount including interest accruing up to date shall be invested in interest-earning securities run by the nationalised bank in the name of the claimants in proportion of their respective shares equally for a period of 5 years and each of them will be entitled to withdraw the interest earned in every three months. The parties to bear the costs of the appeals or cross-appeals respectively.