MANGLA RAMversusTHE ORIENTAL INSURANCE CO. LTD. & ORS.

                        [2018] 5 S.C.R. 287                              287


                          MANGLA RAM                                     A
                                  v.
        THE ORIENTAL INSURANCE CO. LTD. & ORS.
               (Civil Appeal Nos. 2499-2500 of 2018)
                          APRIL 06, 2018                                 B
    [DIPAK MISRA, CJI AND A. M. KHANWILKAR, J.]
       Motor Vehicles Act, 1988: s.166 – Compensation –
Contributory negligence – Claimant’s case was that on a fateful
day while he was driving a motorcycle, he was hit by jeep driven by
                                                                         C
respondent no.2 resulting in serious injuries and ultimately
amputation of right leg above the knee – Claim petition – Tribunal
did not accept the evidence of witnesses produced by claimant,
however opined on the basis of police investigation report that the
accident was caused by jeep in question – Tribunal also noted the
site plan and concluded that the claimant was driving on the wrong       D
side of the road and contributed to accident and accordingly
awarded compensation – High Court set aside the award passed by
Tribunal noting that no finding regarding negligence of driver of
offending jeep was recorded by Tribunal rather it found that the
claimant was negligent while riding his motorcycle and that statement
                                                                         E
of claimant that bumper of jeep had hit the rear of his motorcycle
was contradicted by the investigating report which recorded that it
did not bear out that jeep was involved in an accident – Instant
appeal filed by the claimant – Held: High Court committed manifest
error in reversing holistic view of Tribunal in reference to the
statement of witnesses forming part of charge sheet, FIR, jeep           F
seizure report – Indeed, the High Court was impressed by the
Mechanical Investigation Report which stated that only a scratch
mark on the mudguard of the left tyre of the vehicle had been noted
– On that basis, High Court observed that the same was in
contradiction to the case of claimant – This conclusion was based
                                                                         G
on surmises and conjectures and also in disregard of the relevant
fact that the vehicle was seized by the police after investigation,
only after one month from the date of the accident and the possibility
of the same having been repaired in the meantime could not be
ruled out – Further, the fact that the offending jeep was driven
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                                 287
288            SUPREME COURT REPORTS                       [2018] 5 S.C.R.


A     rashly and negligently by respondent No.2 when it collided with the
      motorcycle of the claimant leading to the accident could be discerned
      from the evidence of witnesses and the contents of the charge-sheet
      filed by the police, naming respondent No.2 – The key of negligence
      on the part of the driver of the offending jeep as set up by the
      claimants was required to be decided by the Tribunal on the
B
      touchstone of preponderance of probability and certainly not by
      standard of proof beyond reasonable doubt – Further the finding
      that motor cycle was found one foot wrong side on the middle of the
      road cannot be basis to assume that appellant was driving on the
      wrong side of road at the relevant time – Thus, finding of Tribunal
C     that claimant contributed to occurrence of accident by driving
      motorcycle on wrong side of road was wrong and cannot be
      sustained.
             Motor Vehicles Act, 1988: s.166 – Quantum of compensation
      – The Tribunal noted the claim of the claimant-appellant that he
D     was getting Rs.1500/- per month towards his salary and Rs.600/-
      per month towards food allowance from employer – The fact that
      the claimant had possessed heavy transport motor vehicle driving
      licence has not been doubted – The driving licence on record being
      valid for a limited period, cannot be the basis to belie the claim of
      the claimant duly supported by employer, that the claimant was
E     employed by him on his new truck – Besides the said income, the
      claimant claimed to have earning of Rs.1000/- per month from
      farming fields – The Tribunal, however, pegged the loss of monthly
      income to the claimant at Rs.520/- per month while computing the
      compensation amount on the finding that there was no convincing
F     evidence about complete non-employability of the claimant – Further,
      no provision was made by the Tribunal towards future prospects –
      The Tribunal, therefore, should have computed the loss of income
      on that basis – Additionally, the claimant because of amputation of
      his right leg would be forced to permanently use prosthetic leg during
      his life time – No provision was made by the Tribunal in that regard
G     – On these heads, the claimant is certainly entitled for enhanced
      compensation – Taking the loss of monthly income due to permanent
      disability of 40%, the appellant is held entitled to Rs.2,25,792/-
      plus 40% future prospects – Besides, the amount quantified by the
      Tribunal towards the heads for medical treatment after the accident,
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        MANGLA RAM v. THE ORIENTAL INSURANCE                              289
                  CO. LTD. & ORS.

motorcycle repair, mental and physical problem the appellant is           A
additionally held entitled to medical expenses for procurement of a
prosthetic leg, quantified at Rs.25,000/- .
      Motor Vehicles Act, 1988: s.166 – Liability of insurer to pay
the compensation amount – Insurance company denied liability on
the ground that no payment was received by the company towards            B
the insurance premium as the cover note purportedly taken for the
jeep in question was obtained from the then Development Officer,
who was later on sacked by Insurance Company and, therefore,
same was fraudulent – Held: Insurance company has been able to
show that no insurance policy was issued in respect of the offending
jeep – However, the claim of the driver and the owner of the              C
offending jeep to the extent that they possessed a cover note issued
by the then Development Officer of the Insurance Company is
accepted coupled with the fact that the Cover Note was issued by
the then Development Officer at a point of time when he was still
working with Insurance Company – It must follow that the then             D
Development Officer was acting on behalf of the Insurance
Company, even though stricto sensu the Insurance Company may
not be liable to pay any compensation as no insurance policy was
issued in respect of the offending vehicle, much less a valid insurance
policy – Therefore, to do substantial justice, principle of “pay and
recover” is invoked – Doctrines/Principles – Principle of “pay and        E
recover”.
      Allowing the appeals, the Court
      HELD: 1. The Tribunal did not accept the version of PW-1,
PW-2 and PW-4 about the involvement of Jeep No.RST-4701,                  F
but did not discard their version in toto. The evidence of these
witnesses to the extent they have consistently stated that when
the appellant was riding on his motorcycle at the relevant time, a
green jeep coming at a high speed hit the motorcycle from back
side, as a result of which the appellant fell down and suffered
severe injuries was not doubted. Besides mentioning the                   G
description of the offending vehicle as a “jeep” they have also
spoken about its colour (green) and that it was displaying the
Congress Party flags and banners on the side of the jeep. In other
words, their version limited to having noted the jeep number,
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290           SUPREME COURT REPORTS                     [2018] 5 S.C.R.


A     was not accepted. Besides, the Tribunal relied upon the evidence
      of respondent No.2 (DW-1) and DW-2 who had stated that the
      jeep was deployed in the election campaign of Sarpanch and thus
      denied the involvement of the vehicle in the accident in question.
      Nevertheless, the Tribunal then adverted to the FIR and the
      charge-sheet filed in respect of the accident naming respondent
B
      No.2 as accused. The Tribunal placed reliance upon the copy of
      challan copy of FIR Site Map, Jeep Seizure Report, X-Ray and
      Injury Report to opine that these police records gathered during
      the investigation of the crime not only confirmed that an accident
      had occurred but also indicated the involvement of the offending
C     Jeep which was driven by respondent No.2 at the relevant time.
      The Tribunal went on to conclude that there was no reason to
      disagree with the opinion of the Investigating Agency in that
      behalf. On the basis of the entirety of the evidence, the Tribunal
      had held that Jeep which was driven by respondent No.2 at the
      relevant time was involved in the accident in question, causing
D
      severe injuries to the appellant. The reasons which weighed
      with the High Court for reversing the finding of fact recorded by
      the Tribunal upon holistic analysis of the entire evidence, about
      the involvement of Jeep in the accident, cannot be countenanced.
      Jeep was driven rashly and negligently by respondent No.2 when
E     it collided with the motorcycle of the appellant leading to the
      accident. This can be discerned from the evidence of witnesses
      and the contents of the charge-sheet filed by the police, naming
      respondent No.2. Considering the entirety of the pleadings,
      evidence and circumstances on record and in particular the finding
      recorded by the Tribunal on the factum of negligence of the
F
      respondent No.2, the driver of the offending jeep, the High Court
      committed manifest error in taking a contrary view which is an
      error apparent on the face of record and manifestly wrong. [Paras
      14, 20, 21] [300-E-H; 307-B-C, F-H; 308-A-B]
           Dulcina Fernandes and Ors. v. Joaquim Xavier Cruz
G          and Anr. (2013) 10 SCC 646 : [2013] 10 SCR 480;
           United India Insurance Co. Ltd. v. Shila Datta (2011)
           10 SCC 509 : [2011] 14 SCR 763 – relied on.
           Minu B Mehta & Anr. v. Balakrishna Ramachandra
           Nayan & Anr. (1977) 2 SCC 441 : [1977] 2 SCR 886;
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       MANGLA RAM v. THE ORIENTAL INSURANCE                           291
                 CO. LTD. & ORS.

      Oriental Insurance Co. Ltd. v. Meena Variyal (2007) 5           A
      SCC 428 : [2007] 4 SCR 641; Surender Kumar Arora
      & Anr. v. Dr. Manoj Bisla & Ors. (2012) 4 SCC 552 –
      held inapplicable.
      Kaushnuma Begum & Ors. v. The New India Assurance
      Co. Ltd. and Ors. (2001) 2 SCC 9 : [2001] 1 SCR 8;              B
      Charan Lal Sahu v. Union of India (1990) 1 SCC 613 :
      [1989] 2 Suppl. SCR 597; Union Carbide Corpn. v.
      Union of India (1991) 4 SCC 584 : [1991] 1 Suppl.
      SCR 251; Gujarat SRTC v. Ramanbhai Prabhatbhai
      (1987) 3 SCC 234 : [1987] 3 SCR 404 – referred to.
                                                                      C
      Rylands v. Fletcher (1861-73) All ER Rep 1 – referred
      to.
       2. There is substance in the criticism of the appellant that
the spot where the motor vehicle was found lying after the accident
cannot be the basis to assume that it was driven in or around that    D
spot at the relevant time. It can be safely inferred that after the
accident of this nature in which the appellant suffered severe
injuries necessitating amputation of his right leg above the knee
level, the motorcycle would be pushed forward after the collision
and being hit by a high speeding jeep. Neither the Tribunal nor
the High Court has found that the spot noted in the site map, one     E
foot wrong side on the middle of the road was the spot where the
accident actually occurred. However, the finding is that as per
the site map, the motorcycle was found lying at that spot. That
cannot be the basis to assume that the appellant was driving the
motorcycle on the wrong side of the road at the relevant time.        F
Further, the respondents did not produce any contra evidence to
indicate that the motorcycle was being driven on the wrong side
of the road at the time when the offending vehicle dashed it. Thus,
there is no evidence to answer the issue of contributory
negligence against the appellant. [Paras 23, 24] [311-A-E, F-G]
                                                                      G
      3. The appellant because of amputation of his right leg would
be forced to permanently use prosthetic leg during his life time.
No provision has been made by the Tribunal in that regard. On
these heads, the appellant is certainly entitled for enhanced
compensation. [Para 25] [312-C-D]
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292           SUPREME COURT REPORTS                    [2018] 5 S.C.R.


A           4. Respondents no.2 and 3 had relied on a Cover Note which
      according to Insurance Company was fraudulently obtained from
      the then Development Officer, who was later on sacked by
      Insurance Company. The possibility of misuse of some cover
      notes lying with him could not be ruled out. Insurance Company
      has been able to show that no payment was received by the
B
      company towards the insurance premium nor any insurance policy
      had been issued in respect of the offending vehicle (jeep).
      Pertinently, the Cover Note has been issued by the then
      Development Officer at a point of time when he was still working
      with Insurance Company. But for the Cover Note issued by the
C     Development Officer of respondent No.1 Insurance Company at
      a point of time when he was still working with respondent No.1,
      to do substantial justice, the principle of “pay and recover” is
      invoked. [Para 26] [312-D-H; 313-A-C]
           National Insurance Co. Ltd. v. Swaran Singh & Ors.
D          (2004) 3 SCC 297 : [2004] 1 SCR 180; National
           Insurance Co. Ltd. v. Pranay Sethi & Ors. AIR 2017
           SC 5157 – relied on.
           New India Assurance Co. Ltd. v. Rula & Ors (2000) 3
           SCC 195 : [2000] 2 SCR 148 – held inapplicable.
E          Kaushnuma Begum & Ors. v. The New India Assurance
           Co. Ltd. and Ors. (2001) 2 SCC 9 : [2001] 1 SCR 8;
           Dulcina Fernandes and Ors. v. Joaquim Xavier Cruz
           and Anr. (2013) 10 SCC 646 : [2013] 10 SCR 480;
           Bimla Devi and Ors. v. Himachal Road Transport
F          Corporation and Ors. (2009) 13 SCC 530 : [2009] 6
           SCR 362; Ravi Kapur v. State of Rajasthan (2012) 9
           SCC 284 : [2012] 10 SCR 229; National Insurance Co.
           Ltd. v. Pranay Sethi & Ors. AIR 2017 SC 5157; Kishan
           Gopal & Anr. v. Lala & Ors. (2014) 1 SCC 244 : [2013]
           10 SCR 793; Harbans Lal v. Harvinder Pal 2015 SCC
G          OnLine P & H 9926; New India Assurance Co. Ltd. v.
           Pazhaniammal & Ors. 2011 SCC OnLine Ker 1881;
           United India Insurance Co. Ltd. v. Deepak Goel 2014
           SCC OnLine Del 362; Manisha v. Umakant Marotrao
           Kolhe 2015 SCC OnLine Bom 4613; Mahawati Devi
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      MANGLA RAM v. THE ORIENTAL INSURANCE                    293
                CO. LTD. & ORS.

     v. Branch Manager 2017 SCC OnLine Pat 1145; New          A
     India Assurance Co. Ltd. v. Rula & Ors (2000) 3 SCC
     195 : [2000] 2 SCR 148; Oriental Insurance Co. Ltd. v.
     Meena Variyal (2007) 5 SCC 428 : [2007] 4 SCR 641;
     Minu B Mehta & Anr. v. Balakrishna Ramachandra
     Nayan & Anr (1977) 2 SCC 441 : [1977] 2 SCR 886;
                                                              B
     Surender Kumar Arora & Anr. v. Dr. Manoj Bisla &
     Ors. (2012) 4 SCC 552; N. K. V. Bros. (P) Ltd. v.
     M. Karumai Ammal and Ors. (1980) 3 SCC 457 : [1980]
     3 SCR 101; Charan Lal Sahu v. Union of India (1990)
     1 SCC 613 : [1989] 2 Suppl. SCR 597; Union Carbide
     Corpn. v. Union of India (1991) 4 SCC 584 : [1991] 1     C
     Suppl. SCR 251; Gujarat SRTC v. Ramanbhai
     Prabhatbhai (1987) 3 SCC 234 : [1987] 3 SCR 404;
     National Insurance Co. Ltd. v. Swaran Singh & Ors.
     (2004) 3 SCC 297 : [2004] 1 SCR 180 – referred to .
     Rylands v. Fletcher (1861-73) All ER Rep 1 – referred    D
     to.
                        Case Law Reference
[2001] 1 SCR 8               referred to            Para 7
[2013] 10 SCR 480            relied on              Para 7    E
[2009] 6 SCR 362             referred to            Para 7
[2012] 10 SCR 229            referred to            Para 7
AIR 2017 SC 5157             relied on              Para 7
[2013] 10 SCR 793            referred to            Para 7    F
[2000] 2 SCR     148         held inapplicable      Para 9
[2007] 4 SCR 641             held inapplicable      Para 9
[1977] 2 SCR 886             held inapplicable      Para 9
(2012) 4 SCC 552             held inapplicable      Para 9    G
[1980] 3 SCR 101             referred to            Para 18
[2011] 14 SCR 763            relied on              Para 19
[1989] 2 Suppl. SCR 597      referred to            Para 22
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294             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A     [1991] 1 Suppl. SCR 251             referred to                Para 22
      [1987] 3 SCR 404                    referred to                Para 22
      [2004] 1 SCR 180                    relied on                  Para 26
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2499-
B     2500 of 2018.
             From the Judgment and Order dated 05.01.2017 of the High Court
      of Judicature for Rajasthan at Jodhpur in S. B. Civil Miscellaneous Appeal
      No. 290 of 2001 connected with S. B. Civil Miscellaneous Appeal No.273
      of 2001
C            Rishabh Sancheti, Ms. Padma Priya, Ms. Parijata Bhardwaj,
      P. V. Saravana Raja, Dhruv Sharma, Jaiwant Patankar, Advs. for the
      Appellant.
             K. K. Bhat, Ajay Pal, Ms. Aishwarya Bhati, Jaideep Singh, T. M.
      Patra, Advs. for the Respondents.
D
             The Judgment of the Court was delivered by
             A. M. KHANWILKAR, J. 1. In the present appeals, the
      appellant/claimant has challenged the judgment dated 5th January, 2017
      passed by the High Court of Judicature for Rajasthan, Jodhpur Bench,
      in SB Civil Miscellaneous Appeal Nos.273 of 2001 and 290 of 2001,
E     which set aside the award of the Motor Accident Claims Tribunal [‘the
      Tribunal’] granting compensation to the appellant at the instance of
      respondent Nos.2 and 3 (driver and owner of the offending vehicle,
      respectively) as also negatived the appellant’s prayer for enhancement
      of the compensation amount.
F            2. The appellant alleges that on or about 10th February, 1990,
      while he was riding his motorcycle, bearing No. RJ-19-6636, he was hit
      by jeep No. RST-4701, owned by respondent No.3 and purportedly being
      driven by respondent No.2 at the time, resulting in serious injuries and
      ultimately, amputation of his right leg above the knee. The appellant
G     subsequently filed an application before the Tribunal, Jodhpur, seeking
      compensation against the respondents, including the respondent No.1
      insurance company. He claimed 40% permanent disability and 100%
      functional disability, contending that his primary livelihood of driving heavy
      transport vehicles (HTVs) had been curtailed on account of his
      amputation, and sought compensation to the tune of Rs. 11,17,000/-.
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        MANGLA RAM v. THE ORIENTAL INSURANCE                                  295
         CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

Respondent Nos.2 and 3 denied the accident and the involvement of the         A
jeep in question. The respondent No.1 insurance company argued that
the cover note purportedly taken for the jeep in question was fraudulent.
The cover note had been given unauthorisedly by its then Development
Officer, no premium had been deposited with the company and no policy
had been issued in that regard. Thus, the jeep was not validly insured.
                                                                              B
       3. In its judgment dated 22nd November, 2000, the Tribunal
discussed the evidence on record in detail. PW2 (Chainaram) and PW4
(Thanaram), who had taken the appellant to the hospital after the accident,
deposed that after the accident, the jeep which caused the accident
stopped ahead and they noted the jeep number in the backlight and further,
they heard the driver’s name being called out by the passengers in the        C
jeep. The Tribunal, however, found that their version of having noted the
jeep number and heard the driver’s name seemed to be unnatural. The
Tribunal also discarded the version of the appellant (PW1) about the
details of the vehicle as being not reliable. The Tribunal then noted the
evidence of the defence witnesses, that the jeep in question was nowhere      D
near the area of the accident. The Tribunal, however, opined that the
accident had been caused by the jeep in question, based on the
investigation report filed by the police mentioning that when they seized
the jeep after one month of the accident, the jeep bore a scratch on the
mudguard of the tyre on the upper footboard on the left side. The Tribunal
also relied on the charge sheet (Exh.1) filed by the police, wherein it has   E
been stated that the accident was caused by the jeep in question on the
basis of statements made by the appellant and other witnesses (Roopram,
Thanaram and Pratap Singh). The Tribunal held that there was no reason
to disagree with the conclusion of the police. In short, the Tribunal
disbelieved the evidence of the appellant’s witnesses, regarding the          F
commission of accident by the jeep in question, as unreliable but
nevertheless relied upon the investigation report as also the charge sheet
filed by the police in that regard which was supported by two other
witnesses who did not depose before the Tribunal.
       4. The Tribunal then referred to the site map of the accident          G
(Exh.2), to conclude that the appellant was riding his motorcycle one
foot on wrong side from the middle of the road and hence, had contributed
to the accident by being negligent. The Tribunal also accepted the plea
of the respondent No.1 insurance company that the cover note as regard
the offending jeep was fraudulent. The Tribunal accepted the evidence
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296            SUPREME COURT REPORTS                           [2018] 5 S.C.R.


A     of witness DW4, the branch manager of the respondent No.1 insurance
      company, that the company did not receive any premium under the relevant
      cover note and had not issued any insurance policy in that regard. DW 4
      had deposed that the cover note was not deposited with the company.
      Further, the concerned development officer, whose signature was on
      the cover note, had been removed from the respondent No.1 insurance
B
      company but had in his possession certain cover notes, including the
      relevant cover note. DW 4 stated that no insurance policy was issued on
      the basis of the said cover note. The Tribunal then found that it was
      possible that the Development Officer had backdated the cover note
      and had not deposited the money for issuing a policy with the company.
C     The Tribunal thus held that the vehicle was not insured by the company
      and, therefore, the company was not liable.
             5. Based on the aforesaid observations, the Tribunal took into
      account the injuries caused to the appellant and calculated compensation
      of Rs. 1,27,000/- but, owing to the purported negligence of the appellant,
D     reduced the amount by half and finally awarded a sum of Rs. 63,500/- to
      the appellant payable by the respondent Nos. 2 and 3 jointly.
             6. The appellant filed an appeal (SB Civil Misc. Appeal No.273 of
      2001) for enhancement whereas respondent Nos. 2 and 3 (driver and
      owner of the jeep, respectively) challenged the Tribunal’s award (by
E     way of SB Civil Misc. Appeal No.290 of 2001), before the High Court
      of Rajasthan, Jodhpur Bench. In its judgment dated 5th January, 2017,
      the High Court concluded that the Tribunal’s findings were incorrect,
      unconvincing and not supported by evidence. Further, the Tribunal’s
      reasoning, that it did not believe the oral evidence of the parties but had
      nevertheless answered the issue in favour of the claimant solely on the
F     basis of the police report, on the ground that there was no reason not to
      believe the conclusion arrived at by the police, was flawed and incorrect.
      The High Court noted that the Tribunal was not convinced about the
      involvement of the vehicle, despite which it held that involvement was
      proved. Furthermore, no finding regarding negligence of the driver of
G     the jeep had been recorded by the Tribunal rather it found that the
      appellant was negligent while riding his motorcycle. The High Court
      took the view that mere filing of a charge-sheet, without any finding of
      conviction, was insufficient to prove negligence by respondent Nos. 2
      and 3. Additionally, the High Court also held that the statement of the

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            MANGLA RAM v. THE ORIENTAL INSURANCE                               297
             CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

appellant, wherein he claimed that the bumper of the jeep had hit the          A
rear of his motorcycle, was contradicted by the investigation report of
the jeep which recorded that it did not bear out that the jeep had been
involved in an accident. The High Court, therefore, was pleased to set
aside the Tribunal’s award and allowed the appeal filed by the driver and
owner of the jeep (respondent Nos. 2 and 3 respectively) while dismissing
                                                                               B
the appeal filed by the appellant.
       7. We have heard Mr. Rishabh Sancheti, learned counsel appearing
for the appellant. He contends that the evidence on record clearly indicates
that the accident was caused due to the rash and negligent driving of
Jeep No. RST-4701 by respondent No.2, which fact has been established
by the eye-witnesses. The respondent No.2 failed to adduce any cogent          C
evidence in his defence. He also contends that the vehicle in question
was seized by the police but there was a strong possibility that it had
been repaired in the interregnum creating a discrepancy between the
accounts of the witnesses who were present at the time of the accident
and the actual condition of the vehicle at the time of seizure. Further, the   D
Tribunal’s reliance on the site map to infer that the appellant was riding
his motorcycle on the wrong side of the road is erroneous as the site
map merely reflected the position of the motorcycle after the accident
and not at the time of the accident. The High Court, contends the learned
counsel, erroneously decided the matter on the principle of ‘beyond
reasonable doubt’ whereas proceedings under the Motor Vehicles Act             E
were required to be decided on the basis of preponderance of probabilities
and thus, the degree of proof required was much less. Additionally, the
proceedings under the Motor Vehicles Act were not adversarial and in
that regard, the evidence on record was sufficient to reach at the
conclusion that respondent No.2’s negligence led to the accident and           F
that the appellant was entitled to full compensation. Finally, the appellant
suffered 40% permanent disability and 100% functional disability and on
that basis, the Tribunal erred by not granting higher compensation to the
appellant. He also contends that the courts below erred in absolving the
respondent No.1 insurance company from its liability. The following cases
were cited by the learned counsel in support of the submissions:               G
Kaushnuma Begum & Ors. vs. The New India Assurance Co. Ltd.
and Ors.1, Dulcina Fernandes and Ors. vs. Joaquim Xavier Cruz
and Anr.2 , Bimla Devi and Ors. vs. Himachal Road Transport
1
    (2001) 2 SCC 9
2
    (2013) 10 SCC 646                                                          H
298             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A     Corporation and Ors.3, Ravi Kapur v State of Rajasthan4, National
      Insurance Co. Ltd. v Pranay Sethi & Ors.5, Kishan Gopal & Anr. v
      Lala & Ors.6, Harbans Lal v Harvinder Pal7, New India Assurance
      Co. Ltd. v Pazhaniammal & Ors.8, United India Insurance Co. Ltd.
      v Deepak Goel 9 , Manisha v Umakant Marotrao Kolhe 10 and
      Mahawati Devi v Branch Manager11.
B
             8. We have also heard Ms. Aishwarya Bhati, learned counsel for
      respondent Nos.2 and 3 [in SLP (Civil) No. 28141 of 2017 and respondent
      Nos.1 and 2 in SLP (Civil) No.28142 of 2017] the driver and owner,
      respectively, of the offending jeep and Mr. K.K. Bhat, learned counsel
      appearing for respondent No.1 Insurance Company. They contend that
C     the appellant did not have a valid driving licence at the time of the accident
      and was negligently driving on the wrong side of the road. Even the
      driving licence produced by the appellant was for a different class of
      vehicles and not for a motorcycle, which he was riding at the time of the
      accident. Further, the Tribunal sans examination of the witnesses whose
D     statement were recorded by the police in furtherance of the FIR filed in
      relation to the subject accident could not have based its conclusion merely
      due to filing of a charge sheet in that regard and without any information
      as to any conviction. Mere filing of the charge sheet by the police is not
      enough. That is not a legal evidence, much less sufficient to record a
      finding of fact that either that the jeep in question was involved in the
E     accident or that respondent No.2 was negligently driving the said vehicle.
      The High Court has also categorically opined that no finding on the factum
      of negligence on the part of respondent No.2 driver of the jeep has been
      recorded by the Tribunal; and that the selfsame police report indicates
      that the jeep was not involved in the accident in question.
F           9. On the issue of whether the jeep was validly insured, Ms. Bhati
      contends that the respondent No.3 owner took insurance for the jeep
      and even paid premium for the same and hence, any objection taken by

      3
        (2009) 13 SCC 530
      4
        (2012) 9 SCC 284
G     5
        AIR 2017 SC 5157
      6
        (2014) 1 SCC 244
      7
        2015 SCC OnLine P& H 9926
      8
        2011 SCC OnLine Ker 1881
      9
        2014 SCC OnLine Del 362
      10
         2015 SCC OnLine Bom 4613
      11
H        2017 SCC OnLine Pat 1145
         MANGLA RAM v. THE ORIENTAL INSURANCE                                  299
          CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

the respondent No.3 insurance company that such insurance was                  A
fraudulently obtained, is untenable. Reliance is placed on the decision in
New India Assurance Co. Ltd. Vs. Rula & Ors12, to buttress this
submission. Mr. Bhat, however, argues that the jeep was not insured
and that the official of the company who had issued the cover note had
fraudulently issued the same. It is possible that the said official had
                                                                               B
backdated certain cover notes, for which he had been expelled from the
company. The evidence in that regard is conclusive and there is a finding
by the Tribunal on that count. Mr. Bhat relies upon the decisions in
Oriental Insurance Co. Ltd. v Meena Variyal13, Minu B Mehta &
Anr. v Balakrishna Ramachandra Nayan & Anr.14 and Surender
Kumar Arora & Anr. v Dr. Manoj Bisla & Ors.15.                                 C
        10. The moot question which arises for our consideration in these
appeals is about the justness of the decision of the High Court in reversing
the finding of fact recorded by the Tribunal on the factum of involvement
of Jeep No.RST-4701 in the accident occurred on 10th February, 1990
at about 8.00-8.30 P.M. and also on the factum of negligence of the            D
driver of the jeep causing the accident in question. On the first aspect,
the High Court has noted that the Tribunal having discarded the oral
evidence adduced by the appellant (claimant) could not have based its
finding merely on the basis of the FIR and the charge-sheet filed against
the driver of the offending vehicle and also because the mechanical
investigation report (Exh.5) merely indicated that on the left side of the     E
offending vehicle a scratch mark was noticed on the mudguard of the
left tyre which contradicted the statement of the claimant and the Police
Investigation Report much less showing involvement of the vehicle in
the accident. As regards the second aspect on the factum of negligence,
the High Court noted that the Tribunal did not record any finding about
                                                                               F
the negligence of the driver of the jeep and the site map (Exh. 2) would
indicate that the appellant/claimant himself was negligent in driving the
motorcycle in the middle of the road.
      11. As the judgment of the High Court has been assailed in the
appeal filed by the appellant (claimant) for enhancement of compensation,
including the finding of the Tribunal in discarding the evidence of PW-1,      G
PW-2 and PW-4 on the factum of involvement of the offending vehicle
12
   (2000) 3 SCC 195
13
   (2007) 5 SCC 428
14
   (1977) 2 SCC 441
15
   (2012) 4 SCC 552                                                            H
300             SUPREME COURT REPORTS                           [2018] 5 S.C.R.


A     in the accident and also on the factum of the said vehicle being driven
      rashly and negligently by the driver (respondent No.2), we have been
      called upon to examine even the correctness of the approach of the
      Tribunal. We are conscious of the fact that in an appeal under Article
      136 of the Constitution, ordinarily this Court will not engage itself in re-
      appreciation of the evidence as such but can certainly examine the
B
      evidence on record to consider the challenge to the findings recorded by
      Tribunal or the High Court, being perverse or replete with error apparent
      on the face of the record and being manifestly wrong.
             12. From the evidence which has come on record, the finding
      recorded by the Tribunal that the appellant while riding his motorcycle
C     on 10th February, 1990 between 8.00 P.M. and 8.30 P.M., met with an
      accident when a jeep being driven rashly and negligently, struck his
      motorcycle resulting in falling down and suffering severe injuries on his
      right leg, which was required to be amputated from above the knee level
      at MGH Hospital, seems to us to be a possible view. That position is
D     established from the oral evidence of PWs-1, 2 and 4 and the charge
      sheet and its accompanying documents filed by the police. Even the
      High Court has broadly agreed with this finding recorded by the Tribunal.
            13. The debatable issue is about the factum of involvement of
      Jeep No.RST-4701 allegedly driven by respondent No.2 and whether it
E     was driven rashly and negligently as a result of which the accident
      occurred.
             14. Indeed, the Tribunal did not accept the version of PW-1, PW-
      2 and PW-4 about the involvement of Jeep No.RST-4701, but has not
      discarded their version in toto. The evidence of these witnesses to the
F     extent they have consistently stated that when the appellant was riding
      on his motorcycle bearing No.RJ 19-6636 at the relevant time, going to
      Basni from Panwara Phanta and when he reached near Siviya Nada, a
      green jeep coming at a high speed from Salawas side, hit the motorcycle
      from back side, as a result of which the appellant fell down and suffered
      severe injuries including to his right leg which was eventually amputated
G     from above the knee level, has not been doubted. Pertinently, besides
      mentioning the description of the offending vehicle as a “jeep” they have
      also spoken about its colour (green) and that it was displaying the
      Congress Party flags and banners on the side of the jeep. In other words,
      their version limited to having noted the jeep number, has not been
H
        MANGLA RAM v. THE ORIENTAL INSURANCE                                   301
         CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

accepted. Besides, the Tribunal relied upon the evidence of respondent         A
No.2 Chail Singh (DW-1) and Bhanwar Singh (DW-2) who had stated
that the jeep was deployed in the election campaign of Sarpanch of
Somdar Village on the Salawas Road and thus denied the involvement
of the vehicle in the accident in question. Nevertheless, the Tribunal
then adverted to the FIR and the charge-sheet filed in respect of the
                                                                               B
accident naming respondent No.2 as accused. The Tribunal placed
reliance upon the copy of challan (Exh.1), copy of FIR (Exh.32), Site
Map (Exhs.3 & 4), Jeep Seizure Report (Exh.5), X-Ray (Exh.6) and
Injury Report (Exh.7), to opine that these police records gathered during
the investigation of the crime not only confirmed that an accident had
occurred but also indicated the involvement of the offending Jeep              C
No.RST-4701, which was driven by respondent No.2 at the relevant
time. The Tribunal went on to conclude that there was no reason to
disagree with the opinion of the Investigating Agency in that behalf. The
charge-sheet was accompanied by the statements of the appellant and
the witnesses Rooparam, Thanaram and Pratap Singh. On the basis of
                                                                               D
the entirety of the evidence, the Tribunal had held that Jeep No.RST-
4701 which was driven by respondent No.2 at the relevant time was
involved in the accident in question, causing severe injuries to the
appellant.
       15. The High Court, however, reversed this finding of fact rendered
by the Tribunal essentially on two counts: First, that the Tribunal having     E
discarded the oral evidence about the involvement of Jeep No.RST-
4701 in the accident in question, allegedly driven by respondent No.2,
could not and ought not to have recorded the finding on the relevant
issue against respondent Nos.2 & 3 merely by relying on the documents
forming part of the police charge sheet. Second, the jeep seizure report       F
(Exh. 5) indicated that only a scratch on the mudguard of the left tyre of
the vehicle was noticed, which contradicted the claim of the appellant
about the involvement of the vehicle.
       16. The question is: whether this approach of the High Court can
be sustained in law? While dealing with a similar situation, this Court in     G
Bimla Devi (supra) noted the defence of the driver and conductor of
the bus which inter alia was to cast a doubt on the police record indicating
that the person standing at the rear side of the bus, suffered head injury
when the bus was being reversed without blowing any horn. This Court
observed that while dealing with the claim petition in terms of Section
                                                                               H
302            SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A     166 of the Motor Vehicles Act, 1988, the Tribunal stricto sensu is not
      bound by the pleadings of the parties, its function is to determine the
      amount of fair compensation. In paragraphs 11-15, the Court observed
      thus:
            “11. While dealing with a claim petition in terms of Section
B           166 of the Motor Vehicles Act, 1988, a tribunal stricto sensu
            is not bound by the pleadings of the parties; its function
            being to determine the amount of fair compensation in the
            event an accident has taken place by reason of negligence
            of that driver of a motor vehicle. It is true that occurrence
            of an accident having regard to the provisions contained in
C           Section 166 of the Act is a sine qua non for entertaining a
            claim petition but that would not mean that despite evidence
            to the effect that death of the claimant’s predecessor had
            taken place by reason of an accident caused by a motor
            vehicle, the same would be ignored only on the basis of a
D           post-mortem report vis-à-vis the averments made in a claim
            petition.
            12. The deceased was a constable. Death took place near a police
            station. The post-mortem report clearly suggests that the deceased
            died of a brain injury. The place of accident is not far from the
E           police station. It is, therefore, difficult to believe the story of the
            driver of the bus that he slept in the bus and in the morning found
            a dead body wrapped in a blanket. If the death of the constable
            had taken place earlier, it is wholly unlikely that his dead body in a
            small town like Dharampur would remain undetected throughout
            the night particularly when it was lying at a bus-stand and near a
F           police station. In such an event, the court can presume that the
            police officers themselves should have taken possession of the
            dead body.
            13. The learned Tribunal, in our opinion, has rightly
            proceeded on the basis that apparently there was absolutely
G           no reason to falsely implicate Respondents 2 and 3. The
            claimant was not at the place of occurrence. She, therefore, might
            not be aware of the details as to how the accident took place but
            the fact that the first information report had been lodged in relation
            to an accident could not have been ignored.
H
        MANGLA RAM v. THE ORIENTAL INSURANCE                                  303
         CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

      14. Some discrepancies in the evidence of the claimant’s witnesses      A
      might have occurred but the core question before the Tribunal
      and consequently before the High Court was as to whether the
      bus in question was involved in the accident or not. For the purpose
      of determining the said issue, the Court was required to apply the
      principle underlying the burden of proof in terms of the provisions
                                                                              B
      of Section 106 of the Evidence Act, 1872 as to whether a dead
      body wrapped in a blanket had been found at the spot at such an
      early hour, which was required to be proved by Respondents 2
      and 3.
      15. In a situation of this nature, the Tribunal has rightly
      taken a holistic view of the matter. It was necessary to be             C
      borne in mind that strict proof of an accident caused by a
      particular bus in a particular manner may not be possible
      to be done by the claimants. The claimants were merely to
      establish their case on the touchstone of preponderance of
      probability. The standard of proof beyond reasonable doubt              D
      could not have been applied. For the said purpose, the High
      Court should have taken into consideration the respective
      stories set forth by both the parties.”
                                                      (emphasis supplied)
       17. The Court restated the legal position that the claimants were      E
merely to establish their case on the touchstone of preponderance of
probability and standard of proof beyond reasonable doubt cannot be
applied by the Tribunal while dealing with the motor accident cases.
Even in that case, the view taken by the High Court to reverse similar
findings, recorded by the Tribunal was set aside. Following the enunciation   F
in Bimla Devi’s case (supra), this Court in Parmeswari (supra) noted
that when filing of the complaint was not disputed, the decision of the
Tribunal ought not to have been reversed by the High Court on the ground
that nobody came from the office of the SSP to prove the complaint.
The Court appreciated the testimony of the eye-witnesses in paragraphs
12 & 13 and observed thus:                                                    G
      “12. The other ground on which the High Court dismissed the
      case was by way of disbelieving the testimony of Umed Singh,
      PW 1. Such disbelief of the High Court is totally conjectural. Umed
      Singh is not related to the appellant but as a good citizen, Umed
                                                                              H
304                SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A               Singh extended his help to the appellant by helping her to reach
                the doctor’s chamber in order to ensure that an injured woman
                gets medical treatment. The evidence of Umed Singh cannot be
                disbelieved just because he did not file a complaint himself. We
                are constrained to repeat our observation that the total approach
                of the High Court, unfortunately, was not sensitised enough to
B
                appreciate the plight of the victim.
                13. The other so-called reason in the High Court’s order was that
                as the claim petition was filed after four months of the accident,
                the same is “a device to grab money from the insurance company”.
                This finding in the absence of any material is certainly perverse.
C               The High Court appears to be not cognizant of the principle that
                in a road accident claim, the strict principles of proof in a criminal
                case are not attracted…….”
             18. It will be useful to advert to the dictum in N. K. V. Bros. (P)
      Ltd. Vs. M. Karumai Ammal and Ors.16, wherein it was contended by
D     the vehicle owner that the criminal case in relation to the accident had
      ended in acquittal and for which reason the claim under the Motor Vehicles
      Act ought to be rejected. This Court negatived the said argument by
      observing that the nature of proof required to establish culpable rashness,
      punishable under the IPC, is more stringent than negligence sufficient
E     under the law of tort to create liability. The observation made in paragraph
      3 of the judgment would throw some light as to what should be the
      approach of the Tribunal in motor accident cases. The same reads thus:
                “3. Road accidents are one of the top killers in our country, specially
                when truck and bus drivers operate nocturnally. This proverbial
F               recklessness often persuades the courts, as has been observed
                by us earlier in other cases, to draw an initial presumption in several
                cases based on the doctrine of res ipsa loquitur. Accidents Tribunals
                must take special care to see that innocent victims do not suffer
                and drivers and owners do not escape liability merely because of
                some doubt here or some obscurity there. Save in plain cases,
G               culpability must be inferred from the circumstances where it is
                fairly reasonable. The court should not succumb to niceties,
                technicalities and mystic maybes. We are emphasizing this aspect
                because we are often distressed by transport operators getting
      16
           (1980) 3 SCC 457
H
            MANGLA RAM v. THE ORIENTAL INSURANCE                                  305
             CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

          away with it thanks to judicial laxity, despite the fact that they do   A
          not exercise sufficient disciplinary control over the drivers in the
          matter of careful driving. The heavy economic impact of culpable
          driving of public transport must bring owner and driver to their
          responsibility to their neighbour. Indeed, the State must seriously
          consider no-fault liability by legislation. A second aspect which
                                                                                  B
          pains us is the inadequacy of the compensation or undue parsimony
          practised by tribunals. We must remember that judicial tribunals
          are State organs and Article 41 of the Constitution lays the
          jurisprudential foundation for State relief against accidental
          disablement of citizens. There is no justification for niggardliness
          in compensation. A third factor which is harrowing is the enormous      C
          delay in disposal of accident cases resulting in compensation, even
          if awarded, being postponed by several years. The States must
          appoint sufficient number of tribunals and the High Courts should
          insist upon quick disposals so that the trauma and tragedy already
          sustained may not be magnified by the injustice of delayed justice.
                                                                                  D
          Many States are unjustly indifferent in this regard.”
       19. In Dulcina Fernandes (supra), this Court examined similar
situation where the evidence of claimant’s eye-witness was discarded
by the Tribunal and that the respondent in that case was acquitted in the
criminal case concerning the accident. This Court, however, opined that
it cannot be overlooked that upon investigation of the case registered            E
against the respondent, prima facie, materials showing negligence were
found to put him on trial. The Court restated the settled principle that the
evidence of the claimants ought to be examined by the Tribunal on the
touchstone of preponderance of probability and certainly the standard of
proof beyond reasonable doubt could not have been applied as noted in             F
Bimla Devi (supra). In paragraphs 8 & 9, of the reported decision, the
dictum in United India Insurance Co. Ltd. Vs. Shila Datta17, has
been adverted to as under:
          “8. In United India Insurance Co. Ltd. v. Shila Datta while
          considering the nature of a claim petition under the Motor Vehicles     G
          Act, 1988 a three-Judge Bench of this Court has culled out certain
          propositions of which Propositions (ii), (v) and (vi) would be
          relevant to the facts of the present case and, therefore, may be
          extracted hereinbelow: (SCC p. 518, para 10)
17
     (2011) 10 SCC 509
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306             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A               ‘10. (ii) The rules of the pleadings do not strictly apply as the
                claimant is required to make an application in a form prescribed
                under the Act. In fact, there is no pleading where the
                proceedings are suo motu initiated by the Tribunal.
                *      *        *
B               (v) Though the Tribunal adjudicates on a claim and determines
                the compensation, it does not do so as in an adversarial litigation.
                …
                (vi) The Tribunal is required to follow such summary procedure
                as it thinks fit. It may choose one or more persons possessing
C               special knowledge of and matters relevant to inquiry, to assist
                it in holding the enquiry.’
            9. The following further observation available in para 10 of the
            Report would require specific note: (Shila Datta case, SCC p.
            519)
D
                ‘10. … We have referred to the aforesaid provisions to show
                that an award by the Tribunal cannot be seen as an adversarial
                adjudication between the litigating parties to a dispute, but a
                statutory determination of compensation on the occurrence of
                an accident, after due enquiry, in accordance with the statute.’ ”
E
      In paragraph 10 of the reported decision [Dulcina Fernandes and Ors.
      (supra)], the Court opined that non-examination of witness per se cannot
      be treated as fatal to the claim set up before the Tribunal. In other words,
      the approach of the Tribunal should be holistic analysis of the entire
      pleadings and evidence by applying the principles of preponderance of
F     probability.
             20. In the above conspectus, the appellant is justified in contending
      that the High Court committed manifest error in reversing the holistic
      view of the Tribunal in reference to the statements of witnesses forming
      part of the charge-sheet, FIR, Jeep Seizure Report in particular, to hold
G     that Jeep No.RST-4701 driven by respondent No.2 was involved in the
      accident in question. Indeed, the High Court was impressed by the
      Mechanical Investigation Report (Exh. 5) which stated that only a scratch
      mark on the mudguard of the left tyre of the vehicle had been noted. On
      that basis, it proceeded to observe that the same was in contradiction to
      the claim of the appellant (claimant), ruling out the possibility of
H
         MANGLA RAM v. THE ORIENTAL INSURANCE                                   307
          CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

involvement of the vehicle in the accident. This conclusion is based on         A
surmises and conjectures and also in disregard of the relevant fact that
the vehicle was seized by the police after investigation, only after one
month from the date of the accident and the possibility of the same
having been repaired in the meantime could not be ruled out. In other
words, the reasons which weighed with the High Court for reversing the
                                                                                B
finding of fact recorded by the Tribunal upon holistic analysis of the
entire evidence, about the involvement of Jeep No.RST-4701 in the
accident, cannot be countenanced. For, those reasons do not affect the
other overwhelming circumstances and evidence which has come on
record and commended to the Tribunal about the involvement of the
subject jeep in the accident in question. This being the main edifice, for      C
which the High Court allowed the appeal preferred by respondent Nos.2
& 3, it must necessarily follow that the finding of fact recorded by the
Tribunal on the factum of involvement of Jeep No. RST-4701 in the
accident in question will have to be restored for reasons noted hitherto.
       21. Another reason which weighed with the High Court to interfere        D
in the First Appeal filed by respondent Nos.2 & 3, was absence of finding
by the Tribunal about the factum of negligence of the driver of the subject
jeep. Factually, this view is untenable. Our understanding of the analysis
done by the Tribunal is to hold that Jeep No. RST-4701 was driven
rashly and negligently by respondent No.2 when it collided with the
motorcycle of the appellant leading to the accident. This can be discerned      E
from the evidence of witnesses and the contents of the charge-sheet
filed by the police, naming respondent No.2. This Court in a recent
decision in Dulcina Fernandes (supra), noted that the key of negligence
on the part of the driver of the offending vehicle as set up by the claimants
was required to be decided by the Tribunal on the touchstone of                 F
preponderance of probability and certainly not by standard of proof beyond
reasonable doubt. Suffice it to observe that the exposition in the judgments
already adverted to by us, filing of charge-sheet against respondent No.2
prima facie points towards his complicity in driving the vehicle negligently
and rashly. Further, even when the accused were to be acquitted in the
criminal case, this Court opined that the same may be of no effect on the       G
assessment of the liability required in respect of motor accident cases
by the Tribunal. Reliance placed upon the decisions in Minu B Mehta
(supra) and Meena Variyal (supra), by the respondents, in our opinion,
is of no avail. The dictum in these cases is on the matter in issue in the
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308                SUPREME COURT REPORTS                           [2018] 5 S.C.R.


A     concerned case. Similarly, even the dictum in the case of Surender
      Kumar Arora (supra) will be of no avail. In the present case, considering
      the entirety of the pleadings, evidence and circumstances on record and
      in particular the finding recorded by the Tribunal on the factum of
      negligence of the respondent No.2, the driver of the offending jeep, the
      High Court committed manifest error in taking a contrary view which, in
B
      our opinion, is an error apparent on the face of record and manifestly
      wrong.
             22. In Kaushnuma Begum (supra), whilst dealing with an
      application under Section 163A of the Motor Vehicles Act, 1988, this
      Court expounded that negligence is only one of the species for
C     compensation in respect of the accident arising out of the use of motor
      vehicles. There are other premises for such cause of action. After
      observing this, the Court adverted to the principle expounded in Rylands
      Vs. Fletcher18. It may be useful to reproduce paragraphs 12-14 which
      read thus:
D               “12. Even if there is no negligence on the part of the driver or
                owner of the motor vehicle, but accident happens while the vehicle
                was in use, should not the owner be made liable for damages to
                the person who suffered on account of such accident? This
                question depends upon how far the rule in Rylands v. Fletcher
E               can apply in motor accident cases. The said rule is summarised
                by Blackburn, J., thus:
                   ‘[T]he true rule of law is that the person who, for his own
                   purposes, brings on his land, and collects and keeps there
                   anything likely to do mischief if it escapes, must keep it in at
F                  his peril, and, if he does not do so, he is prima facie answerable
                   for all the damage which is the natural consequence of its
                   escape. He can excuse himself by showing that the escape
                   was owing to the plaintiff’s default, or, perhaps, that the escape
                   was the consequence of vis major, or the act of God; but, as
                   nothing of this sort exists here, it is unnecessary to inquire
G                  what excuse would be sufficient.’
                13. The House of Lords considered it and upheld the ratio with
                the following dictum:

      18
           (1861-73) All ER Rep 1
H
 MANGLA RAM v. THE ORIENTAL INSURANCE                                    309
  CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

   ‘We think that the true rule of law is that the person who, for       A
   his own purposes, brings on his land, and collects and keeps
   there anything likely to do mischief if it escapes, must keep it
   in at his peril, and, if he does not do so, he is prima facie
   answerable for all the damage which is the natural consequence
   of its escape. He can excuse himself by showing that the
                                                                         B
   escape was owing to the plaintiff’s default, or, perhaps, that
   the escape was the consequence of vis major, or the act of
   God; but, as nothing of this sort exists here, it is unnecessary to
   inquire what excuse would be sufficient.’
14. The above rule eventually gained approval in a large number
of decisions rendered by courts in England and abroad. Winfield          C
on Tort has brought out even a chapter on the “Rule in Rylands
v. Fletcher”. At p. 543 of the 15th Edn. of the celebrated work
the learned author has pointed out that
   ‘over the years Rylands v. Fletcher has been applied to a
   remarkable variety of things: fire, gas, explosions, electricity,     D
   oil, noxious fumes, colliery spoil, rusty wire from a decayed
   fence, vibrations, poisonous vegetation’.
   He has elaborated seven defences recognised in common law
   against action brought on the strength of the rule in Rylands v.
   Fletcher. They are:                                                   E

   (1) Consent of the plaintiff i.e. volenti non fit injuria.
   (2) Common benefit i.e. where the source of the danger is
   maintained for the common benefit of the plaintiff and the
   defendant, the defendant is not liable for its escape.                F
   (3) Act of stranger i.e. if the escape was caused by the
   unforeseeable act of a stranger, the rule does not apply.
   (4) Exercise of statutory authority i.e. the rule will stand
   excluded either when the act was done under a statutory duty
   or when a statute provides otherwise.                                 G
   (5) Act of God or vis major i.e. circumstances which no human
   foresight can provide against and of which human prudence is
   not bound to recognise the possibility.

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310             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A               (6) Default of the plaintiff i.e. if the damage is caused solely
                by the act or default of the plaintiff himself, the rule will not
                apply.
                (7) Remoteness of consequences i.e. the rule cannot be applied
                ad infinitum, because even according to the formulation of the
B               rule made by Blackburn, J., the defendant is answerable only
                for all the damage ‘which is the natural consequence of its
                escape’.”
      And again, the Court, after adverting to the decisions in Charan Lal
      Sahu Vs. Union of India19, Union Carbide Corpn. Vs. Union of India 20
C     and Gujarat SRTC Vs. Ramanbhai Prabhatbhai 21, in paragraphs 19
      & 20, observed thus:
             “19. Like any other common law principle, which is acceptable to
             our jurisprudence, the rule in Rylands v. Fletcher can be followed
             at least until any other new principle which excels the former can
D            be evolved, or until legislation provides differently. Hence, we are
             disposed to adopt the rule in claims for compensation made in
             respect of motor accidents.
             20. ‘No fault liability’ envisaged in Section 140 of the MV Act is
             distinguishable from the rule of strict liability. In the former, the
E            compensation amount is fixed and is payable even if any one of
             the exceptions to the rule can be applied. It is a statutory liability
             created without which the claimant should not get any amount
             under that count. Compensation on account of accident arising
             from the use of motor vehicles can be claimed under the common
             law even without the aid of a statute. The provisions of the MV
F            Act permit that compensation paid under “no fault liability” can
             be deducted from the final amount awarded by the Tribunal.
             Therefore, these two are resting on two different premises. We
             are, therefore, of the opinion that even apart from Section 140 of
             the MV Act, a victim in an accident which occurred while using a
G            motor vehicle, is entitled to get compensation from a Tribunal unless
             any one of the exceptions would apply. The Tribunal and the High
             Court have, therefore, gone into error in divesting the claimants
             of the compensation payable to them.”
      19
         (1990) 1 SCC 613
      20
         (1991) 4 SCC 584
H     21
         (1987) 3 SCC 234
         MANGLA RAM v. THE ORIENTAL INSURANCE                                   311
          CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

        23. Be that as it may, the next question is whether the Tribunal        A
was justified in concluding that the appellant was also negligent and had
contributed equally, which finding rests only on the site map (Exh. 2)
indicating the spot where the motorcycle was lying after the accident?
We find substance in the criticism of the appellant that the spot where
the motor vehicle was found lying after the accident cannot be the basis
                                                                                B
to assume that it was driven in or around that spot at the relevant time.
It can be safely inferred that after the accident of this nature in which
the appellant suffered severe injuries necessitating amputation of his
right leg above the knee level, the motorcycle would be pushed forward
after the collision and being hit by a high speeding jeep. Neither the
Tribunal nor the High Court has found that the spot noted in the site map,      C
one foot wrong side on the middle of the road was the spot where the
accident actually occurred. However, the finding is that as per the site
map, the motorcycle was found lying at that spot. That cannot be the
basis to assume that the appellant was driving the motorcycle on the
wrong side of the road at the relevant time. Further, the respondents did
                                                                                D
not produce any contra evidence to indicate that the motorcycle was
being driven on the wrong side of the road at the time when the offending
vehicle dashed it. In this view of the matter, the finding of the Tribunal
that the appellant contributed to the occurrence of the accident by driving
the motorcycle on the wrong side of the road, is manifestly wrong and
cannot be sustained. The High Court has not expressed any opinion on            E
this issue, having already answered the issue about the non-involvement
of the offending vehicle in favour of respondent Nos.2 & 3.
       24. In other words, we are inclined to hold that there is no tittle of
evidence about the motorcycle being driven negligently by the appellant
at the time of accident. The respondents did not produce any such               F
evidence. That fact, therefore, cannot be assumed. Resultantly, the
argument of the respondents that the appellant did not possess a valid
motorcycle driving licence at the time of accident, will be of no
significance. Thus, we hold that there is no legal evidence to answer the
issue of contributory negligence against the appellant.
                                                                                G
      25. The next question is about the quantum of compensation
amount to be paid to the appellant. The Tribunal noted the claim of the
appellant that he was getting Rs.1500/- per month towards his salary
and Rs.600/- per month towards food allowance from Bhanwar Lal.
The fact that the appellant had possessed heavy transport motor vehicle
                                                                                H
312             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A     driving licence has not been doubted. The driving licence on record being
      valid for a limited period, cannot be the basis to belie the claim of the
      appellant duly supported by Bhanwar Lal, that the appellant was employed
      by him on his new truck. Besides the said income, the appellant claimed
      to have earning of Rs.1000/- per month from farming fields. In other
      words, we find that the Tribunal has not analysed this evidence in proper
B
      perspective. The Tribunal, however, pegged the loss of monthly income
      to the appellant at Rs.520/- per month while computing the compensation
      amount on the finding that there was no convincing evidence about
      complete non-employability of the appellant. Further, no provision has
      been made by the Tribunal towards future prospects. The Tribunal,
C     therefore, should have computed the loss of income on that basis.
      Additionally, the appellant because of amputation of his right leg would
      be forced to permanently use prosthetic leg during his life time. No
      provision has been made by the Tribunal in that regard. On these heads,
      the appellant is certainly entitled for enhanced compensation.
D            26. The next question is about the liability of insurer to pay the
      compensation amount. The Tribunal has absolved the insurance company
      on the finding that no premium was received by the insurance company
      nor any insurance policy was ever issued by the insurance company in
      relation to the offending vehicle. The respondents no.2 and 3 had relied
      on a Cover Note which according to respondent No.1 – Insurance
E     Company was fraudulently obtained from the then Development Officer,
      who was later on sacked by respondent No.1 Insurance Company. The
      possibility of misuse of some cover notes lying with him could not be
      ruled out. The respondent Nos.2 & 3 have relied on the decision of this
      Court in Rula (supra). That decision will be of no avail to respondent
F     Nos.2 & 3. In that case, the Court found that the insurance policy was
      already issued after accepting the cheque; whereas in the present case,
      the respondent No.1 Insurance Company has been able to show that no
      payment was received by the company towards the insurance premium
      nor any insurance policy had been issued in respect of the offending
      vehicle (jeep). However, the claim of respondent Nos.2 & 3 to the extent
G     that they possessed a cover note issued by the then Development Officer
      of the Oriental Insurance Company (respondent No.1) will have to be
      accepted coupled with the fact that there is no positive evidence to indicate
      that the said Cover Note is ante dated. Pertinently, the Cover Note has
      been issued by the then Development Officer at a point of time when he
H
            MANGLA RAM v. THE ORIENTAL INSURANCE                                   313
             CO. LTD. & ORS. [A. M. KHANWILKAR, J.]

was still working with respondent No.1 Insurance Company. It must                  A
follow that the then Development Officer was acting on behalf of the
Insurance Company, even though stricto sensu the respondent No.1
Insurance Company may not be liable to pay any compensation as no
insurance policy has been issued in respect of the offending vehicle,
much less a valid insurance policy. But for the Cover Note issued by the
                                                                                   B
Development Officer of respondent No.1 Insurance Company at a point
of time when he was still working with respondent No.1, to do substantial
justice, we may invoke the principle of “pay and recover”, as has been
enunciated by this Court in the case of National Insurance Co. Ltd.
Vs. Swaran Singh & Ors.22
       27. Reverting to the calculation of compensation amount, taking             C
the loss of monthly income due to permanent disability of 40%, the
appellant will be entitled to Rs.2,25,792/- [Rs.840 per month (i.e. 40 %
of Rs.2,100/-) + 40% future prospects [as per Pranay Sethi (supra)] x
12 x 16, i.e. (840 + 336) x 12 x 16. We uphold the amounts quantified by
the Tribunal towards the heads for medical treatment after the accident,           D
motorcycle repair, mental and physical problem, as it is. However, the
appellant, in our opinion, is additionally entitled to medical expenses for
procurement of a prosthetic leg, which is quantified at Rs.25,000/-
(Rupees twenty five thousand only). In summation, the appellant would
be entitled to the following compensation:
                                                                                   E
(i)       Medical treatment after accident             : Rs.     5,000/-
(ii)      Motorcycle repair                            : Rs.     2,000/-
(iii)     Mental and physical problem                  : Rs.    20,000/-
(iv)      Loss of income due to
                                                                                   F
          40% permanent disability                     : Rs. 2,25,792/-
(v)       Cost of prosthetic leg                       : Rs. 25,000/-
                                                   Total: Rs. 2,77,792/-
(Rupees Two Lakh Seventy Seven Thousand Seven Hundred Ninety                       G
Two only)
        28. The appellant would also be entitled to interest on the total
amount of compensation at the rate     th
                                          of 9% per annum from the date of
filing of the claim application i.e. 11 June, 1990 till the date of realization.
22
     (2004) 3 SCC 297 (para 110)                                                   H
314              SUPREME COURT REPORTS                      [2018] 5 S.C.R.


A     The respondents will be entitled for adjustment of amount already paid
      to the appellant, if any.
             29. The appeals are allowed in the above terms with costs.


      Devika Gujral                                            Appeals allowed.
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