Case Note & Summary
The appeal arose from an award by the Motor Accident Claims Tribunal in a claim petition filed by a pillion rider who sustained grievous injuries in a road accident on 24.06.2006. The claimant, then a minor, was on his way to an SSLC examination when a goods auto collided with the motorcycle on which he was riding. He suffered a comminuted fracture of the right femur and other injuries, underwent multiple surgeries, and was hospitalized for 113 days, resulting in permanent disability of 22.33% to the whole body and shortening of his right leg. The Tribunal originally awarded compensation of Rs. 19,25,124/- on 03.04.2017 after the earlier award was set aside and remanded by the High Court in 2015. However, the Tribunal dismissed the claim against the insurance company on the ground that the driver of the offending auto had a licence for autorickshaw but not for a goods autorickshaw. The claimant appealed seeking enhancement of compensation and fastening of liability on the insurer. The insurance company contested the appeal. The main legal issues were whether the insurer could avoid liability based on the driver’s licence category, and whether the interest awarded at 6% should be enhanced due to long delay. The High Court applied the Supreme Court’s decision in Mukund Dewangan v. Oriental Insurance Co. Ltd., which holds that a licence for a transport vehicle of a particular class covers all vehicles of that class, and hence the insurer cannot escape liability. Consequently, the liability was fastened on the insurer. On interest, the Court noted that the accident happened in 2006 and the final award came only in 2017 after prolonged litigation, causing a delay of almost 20 years. Relying on precedents that permit enhancement of interest to 9% in cases of long pendency for just compensation, the Court enhanced the interest rate to 9% per annum on the compensation amount (excluding future medical expenses). The appeal was allowed in part, and the impugned award was modified accordingly.
Headnote
A) Motor Vehicles - Liability of Insurer - Driving Licence Category - Mukund Dewangan Principle - Motor Vehicles Act, 1988, Sections 2(10), 3, 149 - The Tribunal exonerated the insurer on the ground that the driver had a licence for autorickshaw but not for goods autorickshaw. Following Mukund Dewangan, the Court held that a licence for autorickshaw covers goods autorickshaw of that class, and the insurer cannot avoid liability. Held, the insurance company is liable to pay the compensation awarded. (Paras 11-12). B) Motor Vehicles - Compensation - Enhancement of Interest for Delay - Judicial Discretion - Motor Vehicles Act, 1988 - The accident occurred in 2006, and the final award was passed in 2017 after remand, causing nearly 20 years of litigation. Relying on Erudhaya Priya and Malyadri, the Court enhanced the rate of interest from 6% to 9% per annum on the compensation (excluding future medical expenses) to provide just compensation. Held, interest at 9% p.a. is justified given the long pendency. (Paras 13-15)
Issue of Consideration
Whether the liability to pay compensation can be fastened on the owner of the vehicle when the driver held a licence for a different category of vehicle in light of Mukund Dewangan v. Oriental Insurance Co. Ltd.; and whether interest on compensation is liable to be enhanced given the delay.
Final Decision
Appeal allowed in part. The finding on liability in the Impugned Award is set aside; the Insurance Company is liable to pay the compensation awarded. Interest on compensation (excluding future medical expenses) is enhanced from 6% to 9% per annum from the date of claim petition till realisation. Rest of the award remains unchanged.
Law Points
- Driver holding licence for autorickshaw but driving goods autorickshaw does not absolve insurer of liability following Mukund Dewangan
- interest on compensation may be enhanced to 9% per annum for long delay in adjudication
