National Insurance Co. Ltd. Thru ... vs Smt. Archana Singh And 6 Others
2022 Latest Caselaw 95 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved on 29.10.2021
 
Delivered on 11.2.2022
 

 
Court No. - 46
 
Case :- FIRST APPEAL FROM ORDER No. - 3192 of 2017
 
Appellant :- National Insurance Co. Ltd. Thru Divl. Manager
 
Respondent :- Smt. Archana Singh And 6 Others
 
Counsel for Appellant :- Radhey Shyam,Sushil Kumar Mehrotra
 
Counsel for Respondent :- Mohd. Naushad Siddiqui
 

 
Hon'ble Mrs. Sunita Agarwal,J.

Hon'ble Krishan Pahal,J.

1. Heard Sri Sushil Kumar Mehrotra learned counsel for the appellant and Sri Shirish Srivastava, leaned Advocate holding brief of Mohd. Naushad Siddiqui learned counsel for the claimants-respondents.

2. The challenge to the award passed by the Motor Accident Claims Tribunal/Additional District Judge, Court No. 7, Kanpur Nagar is confined to the issue of quantum of compensation, i.e. the alleged illegality in the computation made by the Tribunal. The issue no. 5 in the decision of the Tribunal under challenge is on the quantum of compensation.

3. The arguments of the learned counsel for the appellant-Insurance Company are two folds: the first is that the Tribunal had wrongly made deduction to the extent of 1/4th for personal expenses of deceased in ignorance of U.P. Motor Vehicles (Eleventh Amendment) Rules, 2011 (In short as "the Rules, 2011) which provides in Rule 220-A (3) that for the purposes of calculation of number of family members as per Clauses (ii) and (iii) of the said sub-rule (2), i.e. for the deduction towards personal and living expenses of a married person (deceased), a minor dependent will be counted as half.

The contention is that as the deceased was survived by two minor children apart from his wife, total number of dependent family members would be two (2). The Tribunal, therefore, ought to have made deduction of 1/3rd in the said category.

4. To deal with this submission, suffice it to note that the dependent family members of deceased as narrated in the claim petition and noted by the Tribunal are five (5); wife, two minor children, mother and father of the deceased. A categorical statement has been made in the claim petition that the claimant wife, her children and parents of deceased were wholly dependent upon him. Nothing contrary could be brought before us. Considering the number of dependent family members being five, we find that the Tribunal had correctly applied the ratio given in Rule 220-A(2)(ii) of the Rules, 2011.

Even if the arguments of the learned counsel for the appellant-Insurance Company regarding application of sub rule (2)(iii) are accepted in this regard, counting minor dependents as half, the total number of dependent family members would be four (4). In both the eventuality, the dependent family members being between four(4) to six(6) in number, the deduction of 1/4th towards personal and living expenses of deceased cannot be said to be unjust or in contravention of Rule 220-A(2)(ii) and (iii).

The first ground of challenge is, therefore, turned down.

5. The second limb of argument of the learned counsel for the appellant is on the multiplier chosen by the Tribunal.

The contention is that the deceased was admittedly more than 31 years of age on the date of the accident. As per the principle laid down by the Apex Court in Sarla Verma and others vs. Delhi Transport Corporation and another1, the multiplier in the table in paragraph '40' was to be applied as against the multiplier mentioned in the Second Schedule for claims under Section 163-A of the Motor Vehicles Act. As per Column (4) of the table given in Sarla Verma (supra), multiplier of 16 had to be applied for the deceased his age being in the bracket of 31 to 35 years. The Tribunal has erred in choosing the multiplier of 17 from the table in the Second Schedule to the Motor Vehicles Act, 1988 (In short as "the Motor Vehicles Act").

6. To contradict this submission, learned counsel for the respondent has placed reliance on a decision of the Apex Court in New India Assurance Co. Ltd. vs. Urmila Shukla and others2, wherein the decision of this Court in a First Appeal against the order passed by the Motor Accident Claims Tribunal was challenged on the ground that Rule 3(iii) of U.P. Motor Vehicles Rules, 1998 is contrary to the conclusions drawn by the Constitution Bench of the Apex Court in National Insurance Company Ltd. vs. Pranay Sethi3

The challenge in the said appeal was to the quantum of compensation on the premise that addition of 20% of the salary in the future prospects of deceased, more than 50 years of age was illegal.

It was contended therein that by application of sub-rule 3(iii) of Rule 220-A of the Rules 1998, the Tribunal has committed an error in taking decision in contravention of the conclusions arrived by the Constitution Bench of the Apex Court wherein it was held that there should be an addition of 15% in case of the deceased between the age of 50 to 60 years and there should be no addition thereafter.

The Apex Court, however, had turned down the objection of the appellant-Insurance Company noticing that the validity of the Rules was not in question in the said matter and the Court cannot restrict the scope of the Rules which afford a favourable treatment to the claimant.

7. Based on this decision, it is vehemently argued by the learned counsel for the respondent claimants that on the date of the decision given by the Tribunal, the Second Schedule was very much in existence on the statute book. The Tribunal, therefore, cannot be said to have erred in giving benefit of the multiplier provided in the Second Schedule.

8. In rejoinder, learned counsel for the appellant, however, asserted that the table given in paragraph '40' of the decision of the Apex Court in Sarla Verma (supra) is final and binding on the High Court and submits that in any case, the Tribunal or this Court cannot deviate from the said decision.

9. To deal with the above contentions, we would be required to go through the decision of the Apex Court in Sarla Verma (supra), specifically paragraphs '13' to '42' which contain the discussion on the question of selection of multiplier. The Apex Court had noticed therein various discrepancies/errors in the multiplier scale given in the Second Schedule table and found that it prescribes a lesser compensation for cases where a higher multiplier of 18 is applicable and a larger compensation with reference to cases where a lesser multiplier of '15', '16' or '17' is applicable. It was, therefore, inferred that a clerical error has crept in the Schedule and the multiplier figure got wrongly typed therein.

Another incongruity which was noticed therein is that the table prescribed the compensation payable even in cases where the annual income ranges between Rs. 3000/- to Rs.12000/- whereas the notional minimum income of non-earning persons is prescribed therein as Rs. 15,000/- per annum. This has led to a situation where the compensation will be higher in cases where the deceased was idle and not having any income than in cases where the deceased was already earning an income ranging between Rs. 3000/- and Rs.12,000/- per annum.

10. The Apex Court, thereafter, considered its earlier decisions in Kerala SRTC vs. Susamma Thomas4, U.P. SRTC vs. Trilok Chandra5 and New India Assurance Co. Ltd. vs. Charlie6 to consider the multiplier indicated therein for claims under Section 166 of the Motor Vehicles Act, in juxtaposition with the multiplier mentioned in the Second Schedule for claims under Section 163-A of the Motor Vehicles Act for carving out the table in paragraph '40' of the decision in Sarla Verma (supra). It was, thereafter, stated that in order to avoid any inconsistency in the cases falling under Section 166 of the Motor Vehicles Act, the multiplier to be used should be as mentioned in Column (4) of the table given in paragraph '40', which was prepared by applying Kerala SRTC vs. Susamma Thomas (supra), U.P. SRTC vs. Trilok Chandra (supra) and New India Assurance Co. Ltd. vs. Charlie (supra).

It is evident from Column (4) of the table in Sarla Verma (supra) that multiplier of 16 for age bracket 31 to 35 years has to be applied whereas Second Schedule to Motor Vehicles Act provides multiplier of 17 for this age bracket. There is no dispute about the age of deceased and that he was above 31 years on the date of accident.

11. We may further note the decision of Apex Court in New India Assurance Co. Ltd. (supra) dated 6th August, 2021, wherein categorical challenge was to the percentage of salary applied for the future prospects of deceased more than 50 years of the age. The percentage of 15% of salary towards future prospects has been carved out by the Apex Court in National Insurance Company Ltd. vs. Pranay Sethi (supra). Some of the observations of the Apex Court in National Insurance Company Ltd. vs. Pranay Sethi (supra), specifically paragraphs '31' and '55' to '58' were noted by the Apex Court in New India Assurance Co. Ltd. (supra).

12. From the careful reading of the extracted paragraphs of National Insurance Company Ltd. vs. Pranay Sethi (supra), it is evident that while applying the principle of standardisation, the Apex Court while dealing with the issue of fixation of future prospects in cases of deceased who are self-employed or on a fixed salary has held that though the decision in Sarla Verma (supra) says that where the age of deceased is more than 50 years, there should be no addition on future prospects, however, taking judicial notice of the fact that the salary does not remain the same, to lay down as a thumb rule that no addition be made after 50 years will be an unacceptable concept. It was, therefore, held that the Court found it appropriate that when a person is in a permanent job, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self-employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. It was then stated that the aforesaid yardstick has been fixed so that there can be consistency in the approach by the Tribunals and the Courts.

13. It is this observations in the Constitution Bench judgment of the Apex Court in National Insurance Company Ltd. vs. Pranay Sethi (supra) which was the bone of contention of the appellants in Civil Appeal No. 4634 of 2021 decided on 6th August, 2021. As against the direction of the Apex Court, the Tribunal had relied on sub-rule 3(iii) of Rule 220-A which provides addition of 20% of the salary for the future prospects of deceased more than 50 years of age. It is in this context the Apex Court in New India Assurance Co. Ltd. (supra) has observed in paragraphs '10' and '11' as under:-

"10. The discussion on the point in Pranay Sethi was from the standpoint of arriving at "just compensation" in terms of Section 168 of the Motor Vehicles Act, 1988.

11. If an indicia is made available in the form of a statutory instrument which affords a favourable treatment, the decision in Pranay Sethi cannot be taken to have limited the operation of such statutory provision specially when the validity of the Rules was not put under any challenge. The prescription of 15% in cases where the deceased was in the age bracket of 50-60 years as stated in Pranay Sethi cannot be taken as maxima. In the absence of any governing principle available in the statutory regime, it was only in the form of an indication. If a statutory instrument has devised a formula which affords better or greater benefit, such statutory instrument must be allowed to operate unless the statutory instrument is otherwise found to be invalid."

The crux of the decision of the Apex Court in New India Assurance Co. Ltd. (supra) to our understanding is that if the statutory instrument affords a favourable treatment, the decision of the Court cannot limit the operation of such statutory provision specially when the validity of the Rules was not put under challenge. In other words, if the formula devised by the statutory instrument affords better or greater benefits, such statutory instrument must be allowed to operate unless it is otherwise found to be invalid.

14. Applying the same principle, we may note that the table carved out in Sarla Verma (supra) was to remove the discrepancies in the multiplier scale with reference to the quantum of compensation given in the Second Schedule table where lesser compensation for higher multiplier and larger compensation with reference to lesser multiplier has been applied. The clerical mistake in the Second Schedule as per the observation made by the Apex Court in Sarla Verma (supra), has been corrected. However, it may be noted that the Second Schedule in Motor Vehicles Act, 1988 was very much on the statute book when the Motor Accident Claims Tribunal gave the decision under challenge. The multiplier of 17 applied by the Tribunal is in conformity with the Second schedule. As per Sarla Verma (supra), the multiplier of 16 should have been applied in the age bracket of 31 to 35 years. The formula as provided in the Second Schedule is found to be beneficial to the claimant/respondent herein.

15. Applying the principle laid down by the Apex Court in New India Assurance Co. Ltd. (supra), we are of the considered view that the Court cannot curtail the benefits provided by the Statute to the claimant/respondent herein when the statutory provision was very much available in the statute book.

16. Applying the above principle, we are not inclined to interfere in the decision of the Tribunal in applying multiplier of 17 as per the Second Schedule while computing the compensation payable to the dependent of deceased/claimants herein.

17. In view of the above discussion, on both the above counts, we do not find merit in the appeal.

No other ground has been pressed.

The appeal is dismissed being devoid of merits.

(Krishan Pahal,J.) (Sunita Agarwal,J.)

Order Date :- 11.2.2022

Brijesh