The 18-year wait: Why Calcutta High Court told insurance giant to ‘pay Rs 11 lakh first, recover later’ in fatal Tata Sumo accident

“Similarly, the general public should also be made aware of the consequences of travelling in a vehicle which is not for carrying passengers but for goods. For this purpose, awareness programmes are necessary,” the Calcutta High Court said in its March 11 order.

The trial court, in its 2014 order, had earlier exonerated the National Insurance Company Ltd. and held only the vehicle owner, Kala Chand Gain, liable to pay compensation of Rs 8.20 lakh.

‘Awareness required among vehicle owners, passengers’

• The court observed that greater awareness is required among vehicle owners, members of the public and insurance companies regarding insurance coverage of gratuitous passengers.
• It was noted that the motor accident compensation law is a welfare legislation intended to compensate victims of road accidents and protect vehicle owners from the heavy financial burden arising from such accidents.
• The Calcutta High Court said that the vehicle owners must be properly informed about insurance policies so that both owners and third-party victims do not suffer when accidents occur.

• The State Legal Services Authority is requested to organise awareness programmes regarding motor vehicle insurance policies and the consequences of travelling in vehicles that are not meant to carry passengers.
• The present case is about a dispute regarding insurance coverage of passengers travelling in the vehicle and the liability of the insurance company to compensate the victims of the accident.
• The court held that since the vehicle was insured and rash and negligent driving was proved, the insurance company must first pay the compensation amount to the claimants.
• It was also mentioned by the court that the insurance company will be at liberty to recover the amount from the vehicle owner in accordance with the law.

Reassessment of compensation

• The high court modified the trial court’s order to the extent that the family of the victim are entitled to get a compensation of Rs 11 lakh from the National Insurance Company Limited.
• The insurance company should make such payment by depositing before the Calcutta Registrar General High Court within eight weeks from the date of communication of this order.
• The insurance company will be entitled to recover the compensation amount from the vehicle owner, Kala Chand Gain, upon instituting recovery proceedings before the trial court, where parties will be entitled to raise relevant points of law.
• While assessing compensation, the court held that 40 per cent should be added towards future prospects.
• Applying a multiplier of 17, the court calculated the dependency loss at Rs 11. 42 lakh.
• Further, it was held that the family of the victim is entitled to recover Rs 84000 on account of loss of consortium, funeral expenses and loss of estate.
• However, the court ultimately held that a total compensation of Rs 11 lakh is just and reasonable in this case.

‘The 2007 accident’

• In December 2007, around 11 pm, the victim was travelling by the offending vehicle, a Tata Sumo, when it suddenly dashed into a roadside tree, and thereafter it capsized into the roadside.
• As a result, Halder died on the spot, and some other occupants of the vehicle sustained serious injuries.
• It was claimed that the rash and negligent driving on the part of the driver of the offending Tata Sumo was solely responsible for this tragic accident.

• Before this accident, it was claimed that the victim had very good health and an active lifestyle.
• It was further alleged that due to the death of the victim, her family has suffered great financial loss, mental pain and agony.
• The family of the victim filed the case, and a notice was issued to the opposite parties, the National Insurance Company Ltd and the vehicle owner.
• The National Insurance Company contested the case by filing a written statement, but the vehicle owner did not contest the case.
• The trial court directed Kala Chand Gain, the owner of the vehicle, to pay compensation to the claimants to the tune of Rs. 8.20 lakh.
• The vehicle owner was also directed to pay an amount of Rs 5.000 as loss of consortium to the family of the victim.

‘Trial court erred in considering victim’s income’

• Appearing for the claimants, advocate Saidur Rahaman submitted that the trial court erred in considering the income of the victim as Rs 6,000 per month.
• It was further submitted that the Trial court should have granted a future prospect.
• Rahaman also emphasised that the trial court was in error in exonerating the Insurance Company to pay the compensation amount, and imposed an obligation upon the vehicle owner only.

‘Vehicle used contrary to policy’

• On the contrary, representing the insurance company, advocate Saibalendu Bhowmik submitted that the trial court did not err in awarding the compensation on the basis of the monthly income of Rs. 6,000 of the victim.
• Bhowmik further submitted that the offending vehicle was used for hire, which is contrary to the terms of the policy.
• Therefore, the trial judge rightly exonerated the Insurance Company, and the high court should not interfere with the order.