NEW INDIA ASSURANCE CO LTD Vs. CHAND RANI

JUDGEMENT

(1.) Heard Mr. Eqbal, Counsel for the appellant, and Mr. S.N. Lal, Counsel for respondent Nos. 1 and 2, and with their consent this appeal is being disposed of at the stage of hearing under Order 41, Rule 11 of the Civil Procedure Code.

(2.) Claimants' son, Mahendra Singh, died on 4.8.1986 in an accident by bus BRV 7371 which was insured with the appellant insurance company. On the basis of the evidence on record, the Motor Accidents Claims Tribunal came to the conclusion that the deceased was travelling in the said bus which turned down and fell in a ditch and in the said accident he died. It was held that the driver of the bus did not apply reasonable care and caution to avoid the accident and, therefore, the accident took place on account of an act of negligence on his part. The victim was about 26 years old and he was earning Rs. 1,500/- per month. Deducting a sum of Rs. 500/- for personal expenses per month, remaining Rs. 1,000/- per month was being contributed by him to the family, being Rs. 12,000/- annually. Taking the span of life to be 70 years and adopting suitable multiplier of 44, the Tribunal calculated the total amount of compensation at Rs. 4,22,400/-. Since the claimants made a claim of Rs. 1,50,000/- only and that the compensation cannot be awarded more than what is claimed, the Tribunal held the same as the just compensation. The Tribunal further held that Exh. A, the original insurance policy, being a comprehensive policy and additional premium also having been paid the liability of the insurer was unlimited. The Tribunal granted interest at the rate of 15 per cent per annum from the date of claim application till the date of realisation. If the amount of compensation is not paid within two months from the date of the order, the claimants were to get penal interest at the rate of 18 per cent per annum.

(3.) It was submitted on behalf of the appellant insurance company that neither the insurance policy was a comprehensive one nor any additional premium for covering additional risk was paid and its statutory liability in respect of passenger was limited to the extent of Rs. 15,000/-only, and so the Tribunal committed an error in directing the insurance company to make payment of the entire amount and further committed another error in granting penal interest.