NATIONAL INSURANCE CO LTD Vs. SAROJINI

JUDGEMENT

(1.) TWO interesting points of law, both of far-reaching consequences have been agitated in this pair of appeals which concern the same unfortunate incident. On 30. 5. 1992, a Premier padmini car met with an accident in which the son and niece of the insured Narayana shetty died. Two separate claims were preferred before the M. A. C. T. , Belgaum and by order dated 6. 7. 1996, which is a common order in both the petitions a sum of Rs. 2,80,000 less Rs. 25,000 already received was awarded in respect of the death of the son and a sum of Rs. 1,02,400 less Rs. 25,000 already received was awarded in the case of the death of the girl anitha along with interest and costs. By the present two appeals, the insurance company has seriously contested the awards in respect of certain specified heads only. There is a common challenge in respect of both of them whereby the appellant contends that the amount of Rs. 1,00,000 which has been paid separately under a separate clause of the policy must be taken into account while quantifying the total compensation payable and as far as the second case is concerned, the appellant contends that the claimants who happen to be the two married sisters of the deceased girl are not entitled to any compensation under the head of dependency which is in fact the main head of the award. What is pointed out to the court is that the claimant mother died during the pendency of the proceedings before the Tribunal and her two daughters who happen to be the sisters of the deceased girl were brought on record and they prosecuted the litigation. It is relevant to point out that the appellant challenged the action at that very point of the litigation and the matter came up to this court because the contention raised was that the cause of action gets extinguished on the death of the claimant and that the two married sisters have no legal locus standi to either continue with the litigation or to style themselves as beneficiaries. This court negatived the contention and upheld the order of the Tribunal whereby the sisters had been brought on the record and they were permitted to prosecute the claim petitions. That issue is, therefore, concluded but it has been agitated in a different form, namely, that the appellant has seriously contested the award of any amount to the two sisters on the ground that they can never qualify as dependants on the facts of the present case. Essentially, therefore, the only two broad questions that fall for determination in this pair of appeals centre around the following two issues:

(2.) I need to straightaway point out that mr. Mahesh, learned counsel who represents the appellant submitted that he is placing heavy reliance on the observations of the Supreme Court in the decision in gobald Motor Service Ltd. v. R. M. K. Veluswami, 1958-65 ACJ 179 (SC ). Mr. Mahesh relies on the observations of the supreme Court wherein it has been very clearly laid down that where pecuniary advantage in whichever form, from whatever source comes to the applicant by reason of the death, that it will have to be taken into consideration. The court was dealing with the provisions of the Fatal accidents Act and laid down that a party cannot be permitted to recover twice over for the same loss. Learned counsel vehemently submitted that in the present case, the Tribunal has totally overlooked the fact that the amount of Rs. 1,00,000 was paid under the same policy and not a different policy, that it related to the same incident and not some other facts and he submitted that it was an amount that would merit consideration. He submitted that it was an amount that would accrue on the death taking place and that, therefore, while awarding compensation in respect of the death, the Tribunal could not under any circumstances refuse to adjust this amount against whatever claim was made. Learned counsel submitted that the underlying principle has been summarised by the Supreme Court while laying down the dictum that the compensation is in the form of reimbursement for the loss and that, therefore, a party cannot be allowed to virtually profit by recovering two sets of compensation in respect of the same loss. What is further emphasized is that on facts, it will be seen that it is the same insurance company that is paying twice over in respect of the same incident and he submitted that it is an obvious error which is so glaring that it calls for corrective action from this court.

(3.) LEARNED counsel who represents the respondents-claimants submitted that the basic premise of this argument is erroneous. In the first instance, he demonstrated to me that the scheme of the law under the Fatal Accidents Act is essentially dissimilar to the provisions under the Motor vehicles Act even though there are similarities in many other respects. Also the learned counsel has in the course of elaborate submissions made under this heading demonstrated to me that it would perhaps be a little unsafe to go back to principles of English law when the only aspect of the law that was needed to be examined is the broad principles of the law under the Law of Contract. I do concede after hearing the learned counsel, that there is considerable substance in this line of argument because the decisions in question relate to a different point of time and proceed on the basis of an entirely different set of principles from the ones with which we are now concerned, if one were to brush aside the intricacies of the various legal aspects that had been canvassed by the learned counsel to clear the cobwebs and come straight and simply down to the basic issue, Mr. Shankar is justified when he demonstrates to me that had the additional premium under the separate clause imt 5 not been paid then there would have been no question of any such controversy. Starting from this premise, what he demonstrates to me is that the quantification that has been done would then have been vulnerable. Learned counsel thereafter proceeds to point out that the additional premium that has been paid under IMT 5 is an optional amount and that for all intents and purposes it creates a separate contract or a sub-contract between the parties which is dehors the main contract. This is the main plank of the argument canvassed by him and what he submits is that if one were to view the case from this angle, then there can be no question of adjustment or deduction. The principle canvassed by Mr. Mahesh basically prohibits duplication of compensation in respect of the same contract of insurance and there can be no two opinions about the fact that the principle is well-founded. The issue in the present case does not involve the question of duplication of compensation but it involves two sets of compensation which are payable virtually under two different heads even if they are under the same policy. The reason why I have referred to the payment of a separate premium and the fact that this is optional is because in insurance parlance, this would come under the concept of 'additional cover'. The essence of the term additional cover pre-supposes the fact that this would be a cover that one would be entitled to irrespective of what the quantum of the basic cover is and if this is the clear intention of the parties and if this is the clear scheme of the contract then it would be wrong to contend that the payment of the amount of Rs. 1,00,000 under IMT 5 would constitute either a second payment or a duplication of the compensation. To my mind, when the payment of Rs. 1,00,000 was made under IMT 5, it was treated as a separate issue altogether because there was no question of determination of quantum as the terms specifically provide that it would be straightaway payable on the death occurring and the insurance company honoured this part of the contract. That being so, it would be wrong to contend that it must once again be taken into the head of computation when the Tribunal decided to compute the heads of compensation. I would go to the extent of holding that since it was under a separate clause and since it was under the head of additional cover then it was an amount that was payable to the insured or the person claiming as an amount which was required to be added on to whatever other compensation was received. What the Supreme court was dealing with in the case referred to supra was essentially a situation whereby a court erroneously duplicates the same compensation possibly even under different heads and thereby falls into the error of allowing a claimant to end up with two sets of compensation in respect of one head of loss. I do concede that a death has taken place in this case and that it is under the same insurance policy but the law does envisage a situation whereby there could be more than one claim under the same policy, the classic instance being the present one where the additional premium was paid for additional cover.