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Saturday, May 19, 2018

MACT ~ appeals - and the result that an Insurer faced !!!


As we travel on roads, we see hundreds of motor vehicles of various hues – and sadly there are accidents too .. .. .. Motor vehicle accidents are one of the major causes of death and injuries in India. By some statistics citing Ministry of Road & Transport, around 1.5 lakh people die every year in five lakh road accidents in the country.  The Motor Vehicles Act 1988 is to undergo changes as proposed in  the Motor Vehicle Amendment Bill 2016 in Lok Sabha.


Motor Vehicles Act provides for compensation to those victims of road accidents and insurance of vehicles against TP risks is compulsory. Motor Accident Claims Tribunals have been constituted and the procedure for claiming compensation has been made easy.  Petitions are filed by the victims or their legal heirs, and Court pass orders for compensation against the driver, Owner – paid by the Insurance Companies by virtue of contract of Insurance. 

There is provision for agitating the judgments by the aggrieved parties – the petitioners or the respondents can go on appeal to Higher courts.  Section 173 in The Motor Vehicles Act, 1988 deals with Appeals : -

(1)     Subject to the provisions of sub-section (2) any person aggrieved by an award of a Claims Tribunal may, within ninety days from the date of the award, prefer an appeal to the High Court: Provided that no appeal by the person who is required to pay any amount in terms of such award shall be entertained by the High Court unless he has deposited with it twenty-five thousand rupees or fifty per cent of the amount so awarded, whichever is less, in the manner directed by the High Court: Provided further that the High Court may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.

(2)     No appeal shall lie against any award of a Claims Tribunal if the amount in dispute in the appeal is less than ten thousand rupees.

There have been occasions when the Insurers feel that a substantial point of law has been overlooked, some conditions of non-compliance had not been properly dealt with or when they feel the award is much higher – the intention is either to have the liability negated or have the quantum reduced.  Here is an interesting case of a Private Insurer going on appeal – it was an   filed under Section 173 of the Motor Vehicles Act, against  an award given in July 2011 by MACt /   Fast Track Court No.II,   Tirunelveli.

The cause of action for the original petition was a fatal road accident, which is not disputed.  The Insurer filed appeal on the quantum and so did the legal heirs – appeal on quantum.  The learned counsel appearing for the appellant / Insurance Companysubmitted that as the deceased was a bachelor, the Tribunal, instead ofdeducting 50% of the income for personal expenses, has deduced only 1/3rd amount for personal expenses. The learned counsel appearing for the respondents 1 to 3 contended that the Tribunal has taken into account meagre salary of Rs.4,000/-,though the deceased was earning a sum of Rs.25,000/-.  He added that the Tribunal, instead of taking the age of the deceased, had erroneouslyfixed the age of the mother of the deceased and passed the award and that thefuture prospects have also not been added while calculating the loss ofincome.

It was observed that the claimants had stated the deceased to have been earning   a sum of Rs.25,000/- as a JCB Operator but Tribunal reckoned only Rs.4,000/- as monthly salary.  The accident occurred in 2010.  The court held that consideringthe age of the deceased and also considering the fact that the salary of theJCB operator definitely would have been more than the amount fixed by theTribunal, the appellate  Courtexpressed inclination to take Rs.6,500/- as notional income.  Asper Sarala Varma case, if 40% of the amount is added for future prospects,the monthly income of the deceased would come to Rs.9,100/- p.m..

The Court further held that the appellant Insurers were right in stating that the deceased being a bachelor, 50% of salary should be deducted for personal expenses and thus   income per month comes to Rs.4,550/- -  annual income comes to Rs.54,600/-.  Further, the law is well settled that though the deceased was a bachelor, the age of the mother should not be taken into account and that the age of the deceased alone should be taken into account.  As the deceased was aged 28 – the multiplier was taken as 18 – but as the Insurers vehemently disputed the age and claimants too had not produced clinching documentary evidence, multiplier of 27 was taken. 

Taking the annual income arrived above applied with Multiplier No.17, the loss of income comes to Rs.9,28,200/- (Rs.54,600/- x 17).  Further, instead of compensation awarded on the other heads, the appellate court expressed inclination to award a sum of Rs.70,000/- towards conventional heads. Thus, the totalcompensation amount was worked at  Rs.9,98,200/-.   (Rs.6,500/- + 40% x 50% x 17 +   Rs.70,000/-)

The Hon’ble  High Court, thus on appeal, enhanced the award amount Rs.4,60,000/- to Rs.9,98,000/- and held that the rate of interest of 7.5% fixed by the Tribunal is in order.  The Court directed the Insurers  to deposit the entire award amount, less the amountalready deposited, with accrued interests and costs, within a period of eightweeks from the date of receipt of  copy of this judgment.  There was no order on costs and thus the Insurers ended up paying more than what was decreed by the Tribunal.

With regards – S. Sampathkumar
18th May 2018.




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