The Oriental Insurance Company ... vs Sharif Ahmad Khan And Others
2018 Latest Caselaw 3201 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. - 58
 

 
Case :- FIRST APPEAL FROM ORDER No. - 3730 of 2010
 

 
Appellant :- The Oriental Insurance Company Ltd.
 
Respondent :- Sharif Ahmad Khan And Others
 
Counsel for Appellant :- Arun Kumar Shukla
 
Counsel for Respondent :- R.P.Singh
 
 			   With
 
Case :- FIRST APPEAL FROM ORDER No. - 3461 of 2013
 

 

 
Appellant :- Sharif Ahmad Khan & Others
 
Respondent :- Oriental Insurance Co. Ltd. & Others
 
Counsel for Appellant :- Alok Kumar Singh
 
Counsel for Respondent :- Arun Kumar Shukla,R.P.Singh
 

 

 
Hon'ble Ashwani Kumar Mishra,J.

These two appeals are directed against an award of the Motor Accident Claims Tribunal, Ghaziabad dated 01.10.2010 passed in Motor Accident Claims Petition No. 708 of 2009.

The Tribunal, under its award, has decreed claim for compensation amounting to Rs. 1,74,000/-. The insurance company has challenged the award on the ground that the tractor, with which accident is alleged to have been caused, was not involved in the accident, instead it was a different tractor with which accident was caused, which also belonged to the same owner. It is contended that in the first information report lodged, the number of other tractor was specified, but as the other tractor was not insured, therefore, in the claim petition, details of other tractor has been specified in collusion with the vehicle owner by the claimants. It is also urged during the course of argument that the tractor was being used for transporting bricks, which was a breach of the policy condition and that, right of recovery ought to have been given to the insurance company.

Per contra, in the appeal of the claimants, enhancement is sought over and above the amount awarded on the ground that notional income could not have been treated below Rs. 3,000/- per month and that, the Tribunal has erred in treating the annual income of deceased to be Rs. 15,000/- per annum. It is also stated that since total number of dependants upon deceased was between 4 to 6, the personal deduction could be to the extent of 1/4th only and that, the Tribunal has erroneously accounted for 1/3rd towards personal expenses of deceased.

Both these appeals have been heard together and are being disposed of by a common judgment.

So far as appeal, filed by the insurance company, i.e., First Appeal From Order No. - 3730 of 2010, is concerned, the primary submission, advanced by the learned counsel for the appellant, is that the vehicle, specified in the claim petition, was not the one which was involved in the accident and that, it was a different vehicle. Attention of this Court has been invited to the first information report lodged in respect of the accident, in which the vehicle registration number is specified as UP 14 - AM 1803. In the claim petition, however, a different tractor is specified, i.e., UP 14-AW 3039. In the award of the Tribunal, it is mentioned that while submitting the charge sheet, the registration number of the vehicle, however, has been specified as UP 14-AW 3039.

Learned counsel for the appellant submits that since the owner of both the vehicles was the same, therefore, it was by way of collusion with vehicle owner that a different vehicle was introduced in the claim petition and that, the Tribunal has failed to consider this aspect. This argument has been examined by this Court. Two grounds have been taken by the Tribunal not to accept the objections of the insurance company. Firstly, it is noticed that after investigation, while filing the charge sheet, vehicle registration number, with which accident was caused, has been specified as 'UP 14 - AW 3039.' Secondly, it has been mentioned that the vehicle, with which accident was caused, was seized by the Police on spot and later, tractor was released on the application of the owner of the vehicle. In the release application, registration number of tractor is specified as 'UP 14-AW 3039.'

While arguing this appeal, learned counsel for the appellant - insurance company has not been able to challenge these factual narrations recorded in the order of the Tribunal. The argument of the counsel for the claimants, that the owner, being the same, the trolley number mentioned behind the tractor of other vehicle, i.e., UP 14-AM 1803, appears to have been taken note of while filing the first information report, appears to have substance. Undisputedly, the offending vehicle with which accident was caused was seized on the spot and while releasing the vehicle, its registration number was specifically mentioned as 'UP 14-AW3039.' Even otherwise, while submitting the charge sheet, the description of tractor has been specified as 'bearing registration number UP 14-AW 3039.' These factual assertions noticed by the Tribunal are not shown to be perverse or illegal. Findings, returned in that regard, therefore, are not liable to be interfered with. Challenge laid to the award on the first ground, therefore, cannot be sustained.

The second plea, taken by the learned counsel for the insurance company, that vehicle was being used for commercial purposes contrary to the terms of policy, need not be examined by this Court; in as much as, no such plea was taken before the Tribunal. In absence of any plea in that regard, no issue was framed either. An issue, which was not before the Tribunal and on which no findings have been returned, need not be entertained, for the first time, in exercise of appellate jurisdiction of this Court. The second ground for challenging the award of the Tribunal also fails, accordingly.

No other ground is pressed. The appeal of the insurance company, therefore, stands dismissed, accordingly.

So far as the appeal filed by the claimants is concerned, it is contended that the deceased was a self-employed person and performing embroidery work. It is asserted by the witnesses that the deceased had established his own small unit, in which number of persons were engaged and he was earning Rs. 10,000/- to Rs. 12,000/- per month. This plea, however, has not been accepted by the Tribunal in view of absence of any evidence to support such contention. The Tribunal, however, has treated income of the deceased notionally as Rs. 15,000/- per annum. This quantification of notional income is not liable to be sustained; in as much as, in view of the law laid down by the Apex Court in Sarla Verma and Others Vs. Delhi Transport Corporation and Another (2009 (2) TAC 677 SC), the notional income ought to be treated as Rs. 3,000/- per month. The award of the Tribunal, therefore, is liable to be modified by treating the income of the deceased to be Rs. 36,000/- per annum.

The claimants have alleged that the number of dependants was 7, but the Tribunal has treated it to be 5. In view of the principles laid down in Sarla Verma (supra), the deduction towards personal and living expenses of deceased ought to be deducted to the extent of 1/4. Income of the deceased, for the purposes of compensation, after addition of 40% towards future prospects, therefore, is fixed as Rs. 37,800/-. This Court in Surya Prakash Kulshresth and Another Vs. Rajjan Kumar and 2 Others (First Appeal From Order No. 1330 of 2017, decided on 09.10.2018) has already held that benefit of future prospects would be available even where income of deceased is fixed notionally. The observation, in that regard, is reproduced herein after:-

"The next issue, raised on behalf of the appellants, is with regard to grant of future prospects for the deceased.  This plea is countered by Shri Mohan Srivastava, counsel for the respondents, by contending that law on the issue has been settled by by the Apex Court in Pranay Sethi (supra) and that, in cases where income is fixed notionally, there is no provision made in the judgement of Apex Court for grant of future prospects.  Attention of this Court has been invited to paragraph nos. 55 onwards of the judgment in Pranay Sethi (supra), in order to submit that future prospects have been restricted to self-employed person and salaried person alone and there exists no direction for allowing future prospects where income is determined notionally.

Learned counsel for the insurance company is right in contenting that there is no specific direction issued by the Apex Court for grant of future prospects in the case where income of the deceased is determined notionally.  This, however, would not be determinative of the issue.  It transpires that before the Apex Court, the issue was basically raised in the context of self-employed person and salaried person and it was in that context that Their Lordships proceeded to observe as under in paragraph no. 59:-

"59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable."

A perusal of paragraph no. 61 of the judgment of the Apex Court would go to show that the Apex Court has provided for appropriate enhancement in the conventional heads of compensation, i.e., loss of estate, loss of consortium and funeral expenses, @ 10% for every three years. Appropriate increase of income under the head of 'future prospects' has also been provided for in paragraph no. 61 of the judgment, which reads as under:-

"61. In view of the aforesaid analysis, we proceed to record our conclusions:-

(i) The two-Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.

(ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent.

(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.

(iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

(v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore.

(vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment.

(vii) The age of the deceased should be the basis for applying the multiplier.

(viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years."

There does not appear to be any justifiable reason to deny grant of future prospects to a person whose income is determined notionally. Admittedly, the Motor Vehicle Act of 1988 is in the nature of welfare legislation and its object is to award a just compensation. Increase in the income over a period of time is awarded considering a large number of factors, like cost of living index and periodical increase in the salary and wages of persons based upon cost index. The notional determination of income is also based upon present level of income, which a person is generally expected to earn. In absence of anything to the contrary, there would be no basis or justification to deny benefit of future prospects, even in a case where the income of the deceased is determined notionally. The principles, laid down in paragraph no. 59 in Pranay Sethi (supra), therefore, would be available for the person whose income is assessed notionally also.

The argument of the learned counsel for the appellants, therefore, is liable to be accepted; in as much as, the claimants would be entitled to future prospects in terms of the parameters laid down by the Apex Court in Pranay Sethi (supra)."

Considering the age of the deceased as 32 years, the future prospect is determined at 40%. Further, considering the fact that the age of the deceased was 32 years, the correct multiplier to be applied would be '16.' The claimants would also be entitled to loss of estate amounting to Rs. 15,000/-, loss of consortium amounting to Rs. 40,000/- and funeral expenses amounting to Rs. 15,000/-. These amounts would be due and payable in view of the law laid down by the Apex Court in National Insurance Co. Limited Vs. Pranay Sethi and Others, reported in AIR 2017 (SC) 4973.

Thus, in view of the discussions and observations made herein above, the appellants - claimants would be entitled to following compensation:-

1.

Notional Annual Income:

Rs.36,000/-

2.

40% of the Notional Annual Income to be added as Future Prospects:

Rs. 36,000/- + Rs. 14,400/- = Rs. 50,400/-

3.

After deduction of 1/4 as personal expenses, Annual Income comes to:

Rs.50,400/- - Rs. 12,600/- = Rs. 37,800/-.

4.

Compensation after Multiplier of 16:

Rs. 37,800/- X 16 =

Rs. 6,04,800/-.

5.

Loss of Estate:

Rs. 15,000/-

7.

Funeral Expenses:

Rs.15,000/-

8.

Consortium:

Rs.40,000/-

9.

Total amount of compensation awarded:

Rs. 6,74,800/-.

10.

Original Award of Tribunal:

Rs. 1,74,000/-

11.

Difference of (9) - (10):

Rs.5,00,800/-

The claimants would also be entitled to simple interest @ 7% per annum on the enhanced amount, i.e., Rs. 5,00,800/-, from the date of filing of the claim petition till the date of actual payment.

The appeal of the claimants, therefore, succeeds and is allowed in part. The judgment and award of the Motor Accident Claims Tribunal, Ghaziabad dated 01.10.2010 passed in Motor Accident Claims Petition No. 708 of 2009 is modified to that extent.

Order Date :- 11.10.2018

Amit Mishra