Holding

The insurer is not liable to indemnify the award because the driver lacked a valid licence for the vehicle, but the insurer may recover the amount from the owner.

Summary

A seven‑year‑old child died in a lorry accident on 20‑Nov‑1994. The Motor Accidents Claims Tribunal awarded Rs 51,500 compensation, which the Karnataka High Court enhanced to Rs 1,52,000 and directed the insurer, Oriental Insurance Co., to indemnify the award. The insurer appealed, contending that the driver was not licensed to operate a heavy goods vehicle at the time of the accident and therefore the insurer was not liable. The Supreme Court held that, following National Insurance Co. Ltd. v. Swaran Singh, the insurer is not liable to indemnify when the driver lacks the appropriate licence, but the insurer may recover the amount from the vehicle owner. Consequently, the quantum awarded by the Tribunal (Rs 51,500) was upheld and the claimants were allowed to withdraw the deposited amount with interest. The appeal was partly allowed.

Issues considered

Whether the insurer is liable to indemnify compensation when the driver was not authorized to drive the vehicle at the time of the accident.
How compensation for death of a child should be computed under the Motor Vehicles Act, 1988, considering factors such as age of parents.
Whether the insurer can recover the indemnified amount from the vehicle owner.

Legislation cited

Motor Vehicles Act, 1988s. 168

Subjects

Motor Vehicles Actinsurance liabilitydriver licencecompensation for death of childMotor Accident Claims Tribunaljust compensationrecovery from owner

Judgment

' .
A ORIENTAL INSURANCE CO. LTD.
v.
SYED IBRAHIM & ORS.

SEPTEMBER 17, 2007

B IDR.ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.)

Motor Vehicles Act, 1988:

Motor accident-Death of a child-Driver not holding licence to drive
C the vehicle which he was driving at the time of accident-Computation of
compensation-Liability ofowner-Held, in case where parents are claimants;
relevant factor would be age of parents-Other relevant factors °explained-
Award of Tribunal upheld-Insurer not liable to indemnify the award-
Jnsurer may recover the amount from the owner.
D In a claim petition under the Motor Vehicles Act, 1988, relating to an
accident by a lorry wherein a child of seven years of age lost his life, the
Tribunal awarded a sum of Rs. 51,500/- as compensation and directed the
insurer to indemnify the award. On appeal by the insurer and the cross-
objection by the parents of the deceased child for enhancement of the
E compensation, it was contended for the insurer that the person driving the
lorry was not authorized to drive the said vehicle as he was only licenced to
drive Light Motor Vehicles. The High Court, however, rejected the plea of the
insurer and enhanced the compensation to Rs. 1,52,000/-.

In the appeal filed by the insurer the appellant reiterating his stand that
F the driver was not authorized to drive the lorry, submi(ted that the quantum
fixed by the High Court was extremely high and without any basis.

Allowing the appeal in part, the Court

HELD:l.l. In cases of young children of tender age, in view of
G uncertainties abound, neither their income at the time of death nor the
prospects of the future increase in !heir income nor chances of advancement
of their career are capable of proper determination on estimated basis. There
are some aspects of human life which are capable of monetary measurement,
but the totality of human life is beyond the reach of monetary tape--measure.

H 1052
ORIENTALINSURANCECO.LTD.v.SYEDIBRAHIM[PASAYAT,J.] 1053

In cases, where parents are claimants, relevant factor would be age of parents. A
~- (Para 6 and 9] (1055-E, F; 1056-D)

State of Haryana and Anr. v. Jasbir Kaur and Ors., (2003) 7 SCC 484;
TajJVale Rly. v. Jenkins, (1913) AC 1 and Lata Wadhwa and Ors. v. State of
BiharandOrs., (2001) 8SCC197, referred to.
B
1.2. In view of the decision in Swaran Singh 's case, as the driver was
not holding a licence to drive the vehicle which caused the accident, the
appellant-insurer was not liable to indemnify the award. However, in view of
). decision in Kusum Rani's case, the insurer may recover the amount from the
owner. The quantum, as awarded by the Tribunal and deposited pursuant to
the order of this Court dated 29.4.2005, is maintained. The claimants shall c
be permitted to withdraw the amount so deposited along with accrued interest
(Para 2 and 101 (1054-B; 1056-F, G)

National Insurance Co. Ltd v. Swaran Singh, (2004) 1 SCR 180=(2004)
3 SCC 297 and National Insurance Co. Ltd v. Kusum Rai and Ors., (2006) 3
SCR 387 [2006) 4 SCC 250, relied on. D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4308 of2007.

From the Judgment and Order dated 18.1.2005 of the High Court of·
Kamataka at Bangalore in M.F.A. No. 2563 of2000 (MVC) and M.F.A. CROB
No. 25 of 2002.
E
M.K. Dua and Kishore Rawat for the Appellant.

K.K. Mani, R.S. Hegde, Chandra Prakash, Rahul Tyagi and P.P. Singh for
the Respondents.

The Judgment of the Court was delivered by F
...
_
DR. ARIJIT PASA YAT, J. l. Leave granted.

2. Challenge in these appeals is to the order passed by a learned Single
Judge of the Karnataka High Court. Appeal was preferred before the High
Court questioning correctness of the judgment and Award dated 18.01.2000 G
passed by the Motor Accidents Claims Tribunal, Shimoga (in short the
'Tribunal'). The owner of lorry bearing registration No. MY J-6666 had filed an
appeal questioning correctness of the order passed by the! Tribunal fixing the
liability on him to pay compensation awarded. A cross-objection was filed by
the complainants questioning the correctness of the compensation granted.
The claim petition related to an accident which occurred on 20.11.1994 when H
1054 SUPREME COURT REPORTS [2007] 9 S.C.R.

A a child aged seven years, who was the son of claimants, had lost his life. The
claimants had filed the cross objections for enhancement of the compensation.
Considering the materials on record, the Tribunal awarded a sum ofRs.51,500/
- as compensation. The High Court by the impugned order enhance.d the sum
to Rs. l ,52,000/-. The appellant (hereinafter referred to as the 'insurer') was
B directed to indemnify the award. Insurer's stand before the Tribunal and the
High Court was that the driver driving the lorry was not authorized to drive
the lorry because he was only licenced to drive a Light Motor Vehicle (in
short the 'LMV'). When the accident took place, i.e. on 20.l l.1994, the driver
was authorized to drive LMV. Subsequently, on 11.10.1996 at the time of
renewal of licence it was endorsed that he was authorized to drive Heavy
C Goods Vehicle (in short the 'HGV'). The High Court was of the view that the
owner is not expected to know as to what type of licence the driver possessed.
If the driver was authorized to drive one type of vehicle and was driving
another type of vehicle, it cannot be said that there was wilfil breach on the
part of insured. The insurer was required to prove that there was violation
of terms and conditions of the policy and wilful breach on the part of insured
D as he was holding the licence to drive any type of vehicle for which he was
not licenced. It was noted by the High Court that the owner of the vehicle
may not be knowing as to what was the nature of the licence held by the
driver. Accordingly, the quantum of compensation was enhanced and the
appellant was held to be liable to pay the entire compensation.
E
3. Learned counsel for the appellant-insurer submitted that the quantum,
as fixed, is extremely high and is without any basis. Further the insured was
the father of the driver and it is hard to believe that he did not know as to
what type of vehicle the driver was authorized to drive. Reliance is placed on
National Insurance Co. Ltd v. Swaran Singh, [2004] 3 SCC 297 to contend
F that on the facts established and proved appellant has no liability.
-"'---
4. Learned counsel for the respondents submitted that a very young
child lost his life and the insurance company should not take such technical
stand. ·

G 5. In State of Haryana and Anr. v. Jasbir Kaur and Ors., [2003] 7 SCC
484 it was held as under:

"7. It has to be kept in view that the Tribunal constituted under the
Act as provided in Section 168 is required to make an award determining
the amount of compensation which is to be in the real sense "damages"
H which in tum appears to it to be "just and reasonable". It has to be
ORIENTAL INSURANCE CO. LTD. v. SYED IBRAHIM [PASAYAT, J.] 105 5

borne in mind that compensation for loss of limbs or life can hardly A
be weighed in golden scales. But at the same time it has to be borne
in mind that the compensation is not expected to be a windfall for the
victim. Statutory provisions clearly indicate that the compensation
must be "just" and it cannot be a bonanza; not a source of profit; but
the same should not be a pittance. The courts and tribunals have a B
duty to weigh the various factors and quantify the amount of
compensation, which should be just. What would be 'just"
compensation is a vexed question. There can be no golden rule
applicable to all cases for measuring the value of human life or a limb.
Measure of damages cannot be arrived at by precise mathematical
calculations. It would depend upon the particular facts and C
circumstances, and attending peculiar or special features, if any. Every
method or mode adopted for assessing compensation has to be
considered in the background of 'just" compensation which is the
pivotal consideration. Though by use of the expression "which appears
to it to be just" a wide discretion is vested in the Tribunal, the
determination has to be rational, to be done by a judicious approach D
and not the outcome of whims, wild guesses and arbitrariness. The
expression 'just" denotes equitability, fairness and reasonableness,
and non-arbitrary. if it is not so it cannot be just. (See Helen C.
Rebello v. Maharashtra SRTC, [1999] I SCC 90.)

6. There are some aspects of human life which are capable of monetary E
measurement, but the totality of human life is like the beauty of sunrise or
the splendor of the stars, beyond the reach of monetary tape-measure. The
determination of damages for loss of human life is an extremely difficult task
and it becomes all the more oaffling when the deceased is a child and/or a
non-earning person. The future of a child is uncertain. Where the deceased F
was a child, he was earning nothing but had a prospect to earn. The question
of assessment of compensation, therefore, becomes stiffer. The figure of
compensation in such cases involves a good deal of guesswork. Jn cases,
where parents are claimants, relevant factor would be age of parents.

7. In case of the death of an infant, there may have been no actual G
pecuniary benefit derived by the parents during the child's life-time. But this
will not necessarily bar the parents' claim and prospective loss will find a valid
claim provided the parents establish that they had a reasonable expectation
of pecuniary benefit if the child had lived. This principle was laid down by
the House of Lords in the famous case of Taff Vale Rly. v. Jenkins, (l 913) AC H
1056 SUPREME COURT REPORTS [2007] 9 S.C.R.

A 1, and Lord Atkinson said thus:

"..... all that is necessary is that a reasonable expectation of pecuniary
benefit should be entertained by the person who sues. It is quite true
that the existence of this expectation is an inferenc_e of fact - there
.must be a basis of fact from which the inference can reasonably be
B drawn; but I wish to express my emphatic dissent from the proposition
that it is necessary that two of the facts without which the inference
cannot be drawn are, first that the deceased earned money in the past,
and, second, that he or she contributed to the support of the plaintiff.
These are, no doubt, pregnant pieces of evidence, but they are only

c pieces of evidence; and the necessary inference can I think, be drawn
from circumstances other than and different from them." (See· Lata
Wadhwa and Ors. v. State of Bihar and Ors., [2001] 8 SCC 197)

8. This Court in Lata Wadhwa's case (supra) while computing
compensation made distinction between deceased children falling within the
D age group of 5 to IO years and age group of 10 to 15 years.

9. In cases of young children of tender' age, in view of uncertainties
abound, neither their income at the time of death nor the prospects of the
future increase in their income nor chances of advancement of their career are
capable of proper determination on estimated basis, The reason is that at such
E an early age, the uncertainties in regard to their academic pursuits, achievements
in career and thereafter advancement in life are so many that nothing can be
assumed with reasonable certainty. Therefore, neither the income of the
deceased child is capable of assessment on estimated basis nor the financial
loss suffered by the parents is capable of mathematical computation.

F 10. In view of what has been stated in Swaran Singh's case (supra) we
are of the view that the appellant-insurer was not liable to indemnify the
award. However, at this juncture it would be relevant to take note of paragraphs
11 and 19 of Nationa{ Insurance Co. Ltd v. Kusum Rai and Ors., [2006] 4
SCC 250. The quantum, as awarded by the Tribunal and deposited pursuant
G to the order of this Court dated 29.4.2005, is maintained. The claimants shall
be permitted to withdraw the amount so deposited along with accrued interest.

11. The appeals are allowed to the aforesaid extent with no order as to
costs.

H RP. Appeal partly allowed.