Holding

The Supreme Court dismissed the appeals, declining any further enhancement for driver costs or prospective income, upheld the presumption of unlimited insurer liability, and affirmed a reasonable interest rate of 9% per annum.

Issues considered

The appellant’s entitlement to compensation for future driver expenses despite no proof of car ownership.
The appellant’s entitlement to enhanced compensation for loss of prospective income in the legal profession.
The appropriate rate of interest on the awarded compensation and the discretion of the High Court.
The liability of the insurer when the insurance policy is not produced in evidence.

Legislation cited

Motor Vehicles Act, 1988s. 147(2), s. 166

Subjects

Motor Vehicles Actcompensationpermanent disabilityloss of incomeinsurer liabilityinterest ratedriver compensationlegal profession

Judgment

TEJINDER SINGH GUJRAL A
v.
INDERJIT SINGH AND ANR.

OCTOBER 19, 2006

[S.B. SINHA AND DAL VEER BHANDARI, JJ.] B

Motor Vehicles Act, 1988:

Section 166-Compensation-Enhancement of-Advocate met with
accident while riding a scooter-Suffered injuries-Award of compensation- C
Claim for enhancement on the ground that in fi1ture he might have to engage
a driver for his car-Held, Nol entitled as there is nothing to show that he
at any point of lime could afford a car-Nol entitled to enhancemelll on
account of loss of prospective income also as nothing to show that he would
not rise in his profession by reason of injuries suffered. D
Section 147(2)-Liability of insurer, when insurance policy not brought
on record-Held, presumption ·arises that liability of insurer is unlimited.

Appellant, a practising lawyer met with an accident while riding a
scooter. He filed claim petition for grant of compensation before MACT for E
Rs.I lac. Later, he filed amendment application raising claim to Rs. 5 lacs.
MACT awarded compensation of Rs.1.83 lacs and held that the liability of
insurance company is limited. He filed appeal before the High Court. Single
Judge of High Court enhanced the amount of compensation to Rs. 2.90 lacs
along with interest @ 12% per annum. Dissatisfied with the amount of
compensation, appellant filed second appeal on the ground that he had suffered F
permanent disability and therefore he is entitled to further compensation as
he may have to engage a driver to drive his car in future and also towards
loss of prospective income. Division Bench enhanced the amount of
compensation under the head of 'loss of income' only. Still not satisfied, he
filed these appeals. G
Dismissing the appeals, the Court

HELD: I. The Tribunal committed an error in opining that the insurance
policy was not required to be proved. The Single Judge of High Court rightly
599 H
600 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A held that the insurance policy having not brought on records, a presumption
would arise that the liability of the insurer was unlimited.1603-GI

2.1. Both the Sini:te Judge as also the Division Bench were more than
generous in awarding compensation to Appellant under different heads. The
Division Bench of the High Court had opined that Appellant might have to
B engage a driver and for the said purpose awarded compensation at the rate of
Rs. 700/- per month from the date of filing of claim petition till the award by
the Tribunal. Appellant now wants the amount of compensation to be enhanced
on that head. The same is declined for more than one reason. Appellant has
not proved that he had bought a car. He even on the date of accident was merely
C riding on a scooter. He has not brought on record any evidence to show that
even at that point of time he could afford a car. [604-D-FI

2.2. Appellant is in legal profession. He may have suffered some injuries
but the same would not mean that he would not be in a position to rise in his
profession only by reason thereof. Enhancement of compensation in this regard
D is also declined. 1605-D-FI

Devi Dayal Kansai and Ors. v. Raj Roop and Anr., 12000110 SCC 314,
relied on.

Lata IVadhwa and Ors. v. State of Bihar and Ors., [200118SCC197,
E referred to.

3.1. So far as the question of interest is concerned, it is true that the
same need not be claimed specifically. Interest is granted by way of
compensation but, the same must be a reasonable one. 1604-F-GI

F Abati Bezbaruah v. Dy. Director General, Geological Survey of India
and Anr., 12003[ 3 SCC 148, referred to.

3.2. Grant of interest is discretionary. The discretion exercised by the
High Court was not in any manner unreasonable. 1605-BI

G 4. The Single Judge has awarded interest at the rate of 12% per annum.
The rate of interest now granted is 9% per annum keeping in view the drastic
fall in the bank rate. The said direction of the High Court is not interfered
with. [605-FI

Krishna Gupta & Ors. v. Madan Lal & Ors., 96 (2002) DL T 829,
H
60 I

-
TE.llNDER SINGH GU.IRAL v. IND ER.I IT SINGH fS.B. SINHA . .I.]

approved. A
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4561 of2006.

- From the Judgment and final Order dated 8.1.2002 of the High Court of
Punjab and Haryana at Chandigarh in L.P.A. No. 928/1987.

With C.A. No. 4562 of2006.
B

Manrnohan, T.S. Gujral, Jasbir Singh Malik and S.K. Sabharwal for the
Appellant.

S.L. Gupta, Baldev Krishan Shanna, Sant Lal Nagar and Goodwill Indeevar C
for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J : Leave granted.

Appellant herein is a practicing lawyer. While riding on a scooter, he
D
met with an accident as a tempo which was allegedly being driven rashly and
negligently by Respondent No. I dashed therewith. He is said to have suffered
a permanent disability.

He filed an application under Section 166 of the Motor Vehicles Act, E
1988 praying for grant of compensation of Rs.1,00,000/-. An application for
amendment of the said claim petition was filed raising the amount of
compensation to Rs.5,00,000/- .

The Motor Accident Claims Tribunal by a judgment and award dated
15th March, 1986 awarded a sum of Rs. I,83,000/-, details whereof are as under: F
"(i) Damage on account of agony, shock
pain and suffering of the appellant Rs. 50,000.00
(ii) Damages on account of hospitalization
including medicines Rs. 20,000.00
G
(iii) Damages on account of loss of income Rs. 1,12,000.00
(iv) Damages on account of the damage
caused to the scooter Rs. 1,000.00

Total Rs. l,83,000.00"
H
602 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A The Tribunal as regards the purported plea of the Insurer that its
liability is limited, opined :

" ... A perusal shows that liability of the insurance company is limited
to the extent of Rs. 1,50,000/- Counsel for the claimant contended
before me that as the insurance policy has not been tendered the same
B in evidence, so, should be held that the liability of insurance company
is unlimited. It is no doubt true that the insurance policy has not been
tendered the policy in evidence. But as the insurance policy is only
on the file, I am of the view that this court taken note of it. So, it is
held that the liability of insurance company is only to the extent of
Rs. 1,50,000/- and interest on the same and rest of the amount will be
c paid by the respondent No. 1. The issue is decided accordingly."

An appeal thereagainst was filed by Appellant before the High Court.
A learned Single Judge of the High Court enhanced the amount of
compensation to Rs. 2,90,000/-. A direction was also issued upon Respondent
D to pay interest at the rate of 12% per annum on the amount of compensation
from the date of filing thereof till the date of realization. The learned Single
Judge also set aside the findings of the learned Tribunal to the effect that the
liability of the insurance company was limited to Rs. 1,50,000/-.

Still being not satisfied, an intra-court appeal was filed by Appellant
E herein. Before a Division Bench of the High Court, the question which was
raised on behalf of Appellant was as to whether he having suffered permanent
disability would be entitled to any further compensation as he may have to
engage a driver to drive his car in future. A contention as regards higher
amount of compensation was also raised towards purported loss of prospective
F income. The Division Bench by reason of the impugned judgment enhanced
only the amount of compensation under the head of 'loss of income' from Rs.
1, 12,000/- to Rs. 1,50,000/- relying on the decision of this Court in lata
Wadhwa and Ors. v. State of Bihar and Ors., (2001] 8 SCC 197.

Still not satisfied, Appellant is before us.
G Mr. Jasbir Singh Malik, learned counsel appearing on behalf of Appellant,
would inter alia submit that the High Court committed an error in denying
enhanced compensation to Appellant despite noticing the fact that he has
attained permanent disability and he would not be able to drive a vehicle
himself and, thus, will have to appoint a driver. It was urged that the High
H Court failed to consider the question of grant of enhanced compensation
- TEJINDER SINGH GU.IRAL v. INDERJIT SINGll [S.B. SINHA. J.]

without taking into consideration his prospective income. It was further A
submitted that although interest on an enhanced amount should have been
603

granted, the High Court erred in not doing so without assigning any sufficient
or cogent reason therefor.

Mr. S.L. Gupta, learned counsel appearing on behalf of the insurance
company would, on the other hand, submit that although the insurance policy B
was not proved, the same having brought on records, the liability of insurance
company must be held to be limited to Rs. 1,50,000/-. As Appellant on the
date of accident was riding on a two-wheeler and not a car, the question of
awarding compensation for not being able to drive a car does not arise. It was
submitted that as Appellant did not suffer any permanent disability and as C
the Tribunal as also the High Court had only granted general benefits, this
Court should not interfere with the impugned judgments. No claim of interest
having been made, it was urged, Appellant must be held to be not entitled
thereto.

It is not disputed that the vehicle in question was insured. The fact that D
an accident had taken place as also the fact that Appellant suffered injuries
is also not disputed. Appellant on 6.8.1984 was riding on a scooter. His
scooter dashed with a tempo bearing No. CHW 4257. He in his application
initially claimed only a sum of Rs. 1,00,000/- by way of compensation. He did
not claim any interest on the said amount.
E
He, as noticed herein before, filed an application for amendment of the
claim petition only at a much later stage. The learned Tribunal noticed the
extent of injuries suffered by him and also took into consideration the evidences
of doctors who had examined and treated him and awarded compensation
under different heads. In regard to his future loss of income, the Tribunal
F
noticed his income tax returns for the financial year prior to his meeting with
the accident as also the year in question. The annual loss to his private
practice was taken at Rs. 700/- per month.

The learned Tribunal, however, committed an error in opining that the
insurance policy was not required to be proved. The learned Single Judge of G
the High Court, in our opinion, rightly held that the insurance policy having
not brought on records, a presumption would arise that the liability of the
insurer was unlimited. The learned Single Judge adopted a rather liberal
approach. He took into consideration the entire evidence on records including
the extent of disability allegedly suffered by Appellant. It was opined:
H
604 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A ''. .. The appellant is lawyer by the profession. This profession needs
unhampered concentration for the full devotion to the cases he might
handle. When bodily pain and suffering subsist and there is even
danger of such pain resulting in attack of the engina it certainly
amounts to a great incapacity in performance of his professional
duties by the appellant. The agony and suffering on this account
B which last with his life is difficult to measure in terms of money but
I am decidedly of the view that damages to the tune of Rs. 50,000/-
as awarded by the learned Tribunal under this head are grossly
inadequate. Keeping in view all the facts and circumstances brought
on the record, I shall assess damages under this Head at Rs. 1,00,000."
.....
c It was held that he was also entitled to the services of his wife who in
turn would require some outside assistance and on that head awarded a sum
of Rs. 57,600/-. He fu11hennore awarded interest at the rate of 12% per annum.

The Division Bench, in our opinio_~, had also taken a somewhat liberal
D view in favour of Appellant than he deserved. The Division Bench of the
High Court opined that Appellant might have to engage a driver and for the
said purpose awarded compensation at the rate of Rs. 700/- per month from
the date of filing of claim petition till the award by the Tribunal. Appellant
now wants the amount of compensation to be enhanced on that head. We
decline to do so for more than one reason.
E
Appellant has not proved that he had bought a car. He even on the date
of accident was merely riding on a scooter. He has not brought on record any
evidence to show that even at that point of time he could afford a car. As
indicated hereinbefore, the learned Single Judge as also the Division Bench
F of the High Court was more than generous in enhancing the amount of
compensation.

So far as the question of interest is concerned, it is true that the same
need not be claimed specifically. Interest is granted by way of compensation
but, as has been held in Abati Bezbaruah v. Dy. Director General, Geological
G Survey of India and Anr., [2003] 3 SCC 148, the same must be a reasonable
one. In Abati Bezbaruah (supra), this Court directed payment of interest only
at the rate of 9% per annum, whereas the rate of interest awarded in favour
of the claimant was @ 12% per annum.

Lakshmanan, J. in his separate judgment, whereupon Mr. Malik has
H
TE.TINDER SINGH GUJRAL v. INDERJIT SINGH (S.B. SINHA. J. J 605
placed strong reliance, opined that the rate of interest must be just and A
reasonable depending upon the facts and circumstances of each case and
taking all relevant factors including inflation, change of economy, policy
being adopted by Reserve Bank of India from time to time, how long the case
is pending, permanent injuries suffered by the victim, enormity of suffering,
loss of future income, loss of enjoyment of life, etc. into consideration. Grant
of interest is discretionary. We do not find that the discretion exercised by B
the High Court was in any manner unreasonable.

Reliance has been placed by the learned counsel in Abati Bezbaruah
(supra) for the proposition of law that future prospect of income should also
be taken into consideration. We may notice that in that case multiplier of 15 C
was applied. The Tribunal had noticed that the income of the deceased was
assessed only at Rs.3,500/- per month and, thus, the loss of dependency
should have been enhanced to the tune of Rs. 2,000/- per month. This Court
instead of granting Rs. 42,000/- per year increased the same to Rs. 45,000/-
per year and the loss of dependency was, thus, calculated at Rs. 30,000/-
instead of Rs. 28,000/-. The claimant in that case was a salaried person. D
Appellant herein before us is in legal profession. He may have suffered
some injuries but the same would not mean that he would not be in a position
to rise in his profession only by reason thereof. We, therefore, decline to
enhance any amount of compensation in this behalf.
E
So far as the amount of interest is concerned, we may notice that in Devi
Dayal Kansai and Ors. v. Raj Roop and Anr., (2000] 10 SCC 314 this Court
merely opined that interest would have been directed to be granted on the
enhanced compensation but no law in absolute terms was laid down therefor.

The learned Single Judge has awarded interest at the rate of 12% per F
annum. The rate of interest now granted is 9% per annum keeping in view
the drastic fall in the bank rate. We, therefore, do not intend to interfere with
the said direction of the High Court.

Reliance placed by Mr. Malik on Lata Wadhwa (supra) is not apposite. G
Therein multiplier method for determining compensation was resorted to as
death occurred and injuries suffered by many persons in a devastating fire
resulted from negligence on the part of the Company. See Krishna Gupta &
Ors. v. Madan Lal & Ors., 96 (2002) DL T 829.

Furthermore, as noticed hereinbefore, both the learned Single Judge as H
606 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A also the Division Bench was more than generous in awarding compensation
to Appellant under different heads.

We, therefore, do not intend to interfere with the impugned judgments.
The appeals are dismissed accordingly. No costs.

D.G. Appeals dismissed.