Andhra Pradesh High Court - Amravati

The Divisional Manager vs H Gangamma on 26 September, 2024

                                   1




          THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
                             &
           THE HON'BLE SRI JUSTICE NYPATHY VIJAY

                       M.A.C.M.A.No.1093 OF 2019

JUDGMENT:

per the Hon'ble Sri Justice Ravi Nath Tilhari:-

Heard Sri Suri Babu Pappula, learned standing counsel

appearing for the appellant-Insurance Company. No

representation for the respondents 1 to 3-claimants 1 to 3.

2. This appeal under Section 173 of the Motor Vehicles Act,

1988 (for short, "the M.V Act") was filed by the National Insurance

Company Limited challenging the award dated 28.06.2019 in

M.V.O.P. No.23 of 2017 (in short, "O.P"), passed by the Motor

Accidents Claims Tribunal-cum-II Additional District Judge

Hindupur (for short, "the Tribunal"). By the said award, the claim

of the claimant-respondents 1 to 3 was partly allowed granting

compensation of Rs.7,91,500/- with interest thereon @ 9% p.a

from the date of the claim petition till date of deposit.

FACTS:

3. The claimants-respondents 1 to 3 filed the aforesaid O.P

No.23 of 2017 under Section 166 of the M.V. Act for awarding the

compensation of Rs.10,00,000/- for the death of one Harijana

Hanumanthu (for short, the deceased) in the accident dated

05.10.2016 caused by the rash and negligent driving of the driver

of Eicher Van bearing No.AP-02-V-5231 (in short, "the offending

vehicle") which dashed against the Auto from the back side, near

Agrampalli Village, Hindupur at 12.30 p.m. In the said accident,

the deceased sustained injuries and died in the hospital. The 1st

respondent is the widowed mother, the 2nd and 3rd respondents

are the sisters of the deceased. The deceased was driver cum

owner of the auto and was earning Rs.15,000/- per month. The

4th respondent herein (Respondent No.1 in O.P) was the driver-

cum-owner of the Eicher Van (offending vehicle) and the

appellant is the insurer.

4. The 4th respondent remained ex parte in O.P.

5. The appellant herein (2nd respondent in O.P) filed the

written statement and denied the main averments of the claim

petition. It was pleaded that the owner and insurer of the auto are

necessary parties but not being impleaded claim petition was

liable to be dismissed. The driver of the offending vehicle had no

valid driving license to drive the said vehicle. The owner alone

was liable to pay compensation and the Insurance company was

not liable to indemnify the insured. It was also pleaded that the

offending vehicle did not possess the fitness, registration

certificate and permit at the time of accident and was also not

insured. The claim was said to be highly excessive and

exorbitant.

6. The Tribunal framed the following issues:

"(1). Whether the accident had happened on the account of the rash and negligent driving of the driver of the offending Eicher Van bearing No.AP 02 V 5231? (2) Whether the driver of the offending Eicher Van bearing No.AP 02 V 5231, possessed valid driving license as on the material date of accident? (3) Whether the petitioners are entitled for compensation, and if so, to what extent and from which of the respondent?

(4) To what relief?."

7. On behalf of the claimants, the 3rd claimant,

Nagarathnamma, was examined as P.W.1 and one Khaleed, the

alleged eye witness to the occurrence, was examined as P.W.2

and they got marked Ex.A.1 attested copy of FIR in Cr.No.98 of

2016 dated 05.10.2016, Ex.A.2 attested copy of charge sheet,

Ex.A.3 true copy of postmortem certificate of deceased, Ex.A.4

attested copy of inquest report, and Ex.A.5 photos and C.D of the

Auto.

8. On behalf of the appellant (2nd respondent in O.P),

P. Manjula, Assistant Manager of 2nd respondent insurance

company, was examined as R.W.1 and one A. Chaitanya Kumar,

Junior Assistant, Regional Transport Office, Hindupur, was

examined as R.W.2. Insurance company got marked Ex.B.1

authorization letter, Ex.B.2 insurance policy of offending vehicle,

Ex.B.3 authorization letter and Ex.B.4 driving license of

respondent No.4 (respondent No.1 in O.P).

AWARD OF TRIBUNAL:

9. The Tribunal recorded the finding that the accident

occurred due to rash and negligent driving of the driver of the

offending vehicle in which the deceased died. The insurance

policy of the offending vehicle was in force at the time of the

accident. The driver of the offending vehicle possessed a valid

driving license. The license was to drive the Light Motor Vehicle

(Non Transport). He was driving the offending vehicle which was

classified as Light Motor Vehicle (Transport). The contention of

the insurance company that the driver did not possess a valid

driving license because the offending vehicle was Light Motor

Vehicle (transport) was negatived. The owner-cum-driver of the

offending vehicle was held liable severally and jointly with the

insurance company to pay the compensation. The Tribunal

placed reliance in National Insurance Company vs. Swarn

Singh and others1 to hold that the offending vehicle was driven

by the driver who was having valid license at the time of accident.

The insurance company was liable to pay the compensation.

10. On the point of compensation, the Tribunal recorded the

age of the deceased as 20 years, the income of the deceased as

Rs.5,000/- per month. 1/3rd was deducted towards personal living

expenses of the deceased. The loss of dependency was

determined as Rs.5,000/- (-) Rs.1660 = Rs.3,340/- per month and

annual income as Rs.40,080/-. Applying the multiplier of 18, the

total compensation was determined Rs.7,21,440/-, which was

awarded with interest @ 9% per annum from the date of filing the

claim petition till the date of payment. The Tribunal partly allowed

the claim petition.

ARGUMENTS:

11. Learned counsel for the appellant submitted that the

challenge is on two grounds, (i) The Tribunal ought to have

deducted 50% (i.e., ½) towards the personal and living expenses

2004 ASJ (1) SC

of the deceased, and not 1/3rd. (ii) Interest @ 9% per annum is on

the higher side.

12. Learned counsel for the appellant submitted that though in

the appeal, the plea was taken that the driver of the offending

vehicle was not having a valid driving license as his driving

license was to drive Light Motor Vehicle (Non Transport) and not

the license of Light Motor Vehicle (transport) which caused the

accident, but, he submitted that he is not pressing that ground,

in view of the law settled subsequently that, the driver having

Light Motor Vehicle (non transport) shall be considered as having

a valid driving license to drive Light Motor Vehicle (transport).

13. The respondents' counsel did not appear to argue.

14. However, it is the duty of the court to award just and fair

compensation to the claimants. We would consider that aspect as

well, in view of the settled legal position.

POINTS FOR DETERMINATION:

15. The points that arise for consideration are as under:

"A) Whether the compensation awarded is just and fair compensation in the light of the submission advanced or is excessive or inadequate?

B) Whether the interest @ 9% p.a calls for interference?

JUST AND FAIR COMPENSATION:

16. In N. Jayasree v. Cholamandalam Ms General

Insurance Company Limited2, the Hon'ble Apex Court held that

the provisions of the Motor Vehicles Act, 1988, give paramount

importance to the concept of "just and fair" compensation. It is a

beneficial legislation which has been framed with the object of

providing relief to the victims or their families. Section 168 of the

MV Act deals with the concept of "just compensation" which

ought to be determined on the foundation of fairness,

reasonableness and equitability. Although such determination

can never be arithmetically exact or perfect, an endeavour should

be made by the Court to award just and fair compensation

irrespective of the amount claimed by the applicant(s).

17. Para Nos.9 and 10 in N.Jayasree (3rd supra) reads as

under:

09. The provisions of the Motor Vehicles Act, 1988 (for short "the MV Act") give paramount importance to the concept of "just and fair" compensation. It is a beneficial legislation which has been framed with the object of providing relief to the victims or their families. Section 168 of the MV Act deals with the concept of „just compensation‟ which ought to be determined on the foundation of fairness, reasonableness and equitability. Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair

(2022) 14 SCC 712

compensation irrespective of the amount claimed by the applicant(s).

10. In Sarla Verma, this Court has laid down as under: (SCC pp.131-132, para 16)

"16. ..."Just compensation" is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well-settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit."

18. In Surekha v. Santosh3, where the High Court of Bombay

though agreed with the stand of the appellants therein that just

compensation amount ought to be Rs.49,85,376/-, declined to

grant enhancement merely on the ground that the appellants had

failed to file cross-appeal, the Hon'ble Apex Court observed in

para-2 is as under:

"2. By now, it is well-settled that in the matter of insurance claim compensation in reference to the motor accident, the court should not take hypertechnical approach and ensure that just compensation is awarded to the affected person or the claimants."

ANALYSIS:

Point-(A)

(2021) 16 SCC 467

Income of deceased:

19. To determine just and fair compensation, we would

consider the income aspect of the deceased. The finding of the

Tribunal in para 31 is as under:-

"Now a days, a Coolie would earn Rs.200/- per day. Having regard to the facts and circumstances of the case, this Tribunal is of considered it just and reasonable to take the income of Harijana Hanumanthu (deceased) at Rs.5,000/- per month as notionally.........."

20. From the aforesaid, it is evident that the Tribunal was of the

view that Rs.200/- per day a coolie would earn. Therefore, even

going by that finding the monthly income of the deceased would

come to Rs.6,000/- per month and not Rs.5,000/- as determined

notionally by the Tribunal. The notional income would be not less

than Rs.6,000/-. Such an error is apparent.

21. We accordingly hold the notional income of the deceased

as Rs.6,000/- per month i.e., Rs.72,000/- annually.

Deduction towards personal expenses of the deceased:

22. The Tribunal deducted 1/3rd towards personal living

expenses of the deceased. The contention of the appellant's

counsel is that the deceased was bachelor. He submitted that in

Sarla Verma and others vs. Delhi Transport Corporation and

another4, 50% i.e. ½ deduction, was prescribed.

23. We have considered Sarla Verma (supra). On the above

point, the Hon'ble Apex Court has held in para No.30 TO 32 as

under:

"30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having a considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one- third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.

31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to

2009 ACJ 1298

the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant on the father. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.

32. In Susamma Thomas, this Court stated the principle relating to multiplier thus:

"The multiplier represents the number of years' purchase on which the loss of dependency is capitalized. Take for instance a case where annual loss of dependency is Rs.10,000. If a sum of Rs.1,00,000 is invested at 10% annual interest, the interest will take care of the dependency, perpetually, the multiplier in this case work out to 10. If the rate of interest is 5% per annum and not 10% then the multiplier needed to capitalize the loss of the annual dependency at Rupees 10,000 would be

20. Then the multiplier, i.e. the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lumpsum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last etc., Usually in English Courts the operative multiplier rarely exceeds

16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependents, whichever is higher) goes up."

24. In United India Insurance Company Limited vs. Poura

Sudharshanamma (M.A.C.M.A.No.356 of 2024 dated

20.09.2024, this Court considered the aforesaid point and held as

under:

"22. So with respect to the deceased being bachelor, the law is settled that in case of mother being the dependent, deduction should be 50%. The siblings being dependent, the deduction towards personal and living expenses may be restricted to one-third. So it is not that in all the cases of the deceased being bachelor, only one half is to be deducted. It can also be one-third.

23. The mother of the deceased was widowed mother. The sister of the deceased has also been held by the Tribunal as dependent on the deceased since her father was not alive. On the point that, the widowed mother and the sister of the deceased were dependent on the deceased, the finding has not been challenged before us.

24. The appellant-insurance company did not lead any evidence to show that the sister, the claimant/2nd respondent herein. was an earning member or was not dependent upon the deceased.

25. Consequently, we are of the view that there are two dependents on the deceased and not the widowed mother alone. The Tribunal did not commit any illegality in deducting

one-third(1/3rd) towards personal and living expenses of the deceased.

26. In the result, we hold that the deduction of one-third towards personal expenses of the deceased cannot be faulted. There is no merit in the appeal."

25. The deceased was bachelor. But, he was having widowed

mother and two sisters. So, it is not a case of only widowed

mother being the claimant. In addition, he was having the family

of two more persons, the sisters. Father was not alive. The

evidences of P.Ws.1 and 2 shows that they deposed that the

deceased was only bread earner. There was no evidence to the

contrary by the insurance company. So, the sisters were also

dependent on the deceased bachelor's earnings. It is in those

cases where the deceased is bachelor and is survived by the

mother claimant alone or there are siblings also, but dependent

either on themselves or on father, that one half is to be deducted.

Consequently, we do not find any illegality in deducting 1/3rd

towards personal expenses of the deceased. The same is

maintained.

FUTURE PROSPECTS:

26. We find on the face of the Tribunal's award that, the

Tribunal has not granted any amount towards future prospects.

27. The deceased was below 40 years of age. He was 20

years. He was engaged in private work/self employed.

28. In National Insurance Company Limited vs. Pranay

Sethi and others,5 the Constitution Bench of the Hon'ble Apex

Court, has held as under in Paras 59.3 and 59.4 :-

"59.3. 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.

59.4. 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."

(2017) 16 SCC 680

29. Consequently, we award 40% of the income determined, as

future prospects to be added to the income of the deceased.

CONVENTIONAL HEADS:

30. On the point of the conventional heads, as per the

judgment in National Insurance Company Limited V. Pranay

Sethi and Others,6Magma National Insurance Company

Limited vs Nanu Ram @ Chuhru Ram and Ors.7and Smt.

Anjali and Others V. Lokendra Rathod and Others,8 United

India Insurance Co. Ltd. vs. Satinder Kaur @ Satwinder Kaur

and Ors,9 and Rojalini Nayak vs. Ajit Sahoo and others10 the

claimants are entitled for an amount of Rs.48,400/- to each of the

claimants, being Rs.1,45.200/- for loss of consortium, towards

funeral expenses Rs. 18,150/- and towards loss of estate Rs.

18,150/-, i.e with an increase of 10% each 3 years, as was

awarded in Rojalini Nayak (supra).

31. In our view, the claimants are entitled for the following

amount, as just and fair compensation on redetermination as per

the table below:

(2017) 16 SCC 680

(2018) 18 SCC 130

(2022) SCC OnLine SC 1683

(2021) 11 SCC 780

2024 SCC OnLine SC 1901

S. No. Head Compensation Awarded

1. Net Annual Income Rs. 6,000/- x 12 = Rs. 72,000/-

2. Future Prospects Rs. 28,800/-

(i.e., 40% of the income) Total (i.e., 1+2) = Rs. 1,00,800/-

3. Deduction towards personal Rs. 33,600/-

expenditure (i.e.1/3rd)

4. Total Annual loss Rs. 67,200/-

5. Multiplier of 18 at the age of 20 18 x 67,200/- = Rs. 12,09,600/-

years i.e.

6. Conventional Heads:

              i) Loss of Consortium                      Rs. 1,45,200/-
                                                       (Rs. 48,400/- x 3)

              ii) Loss of Estate                          Rs. 18,150/-

              iii) Funeral expenses                       Rs. 18,150/-

  7.             Total Compensation                     Rs. 13,91,100/-

POINT-B:

Interest:

32. The Tribunal granted interest @ 9% p.a from the date of

claim petition till payment/deposit.

33. We do not find force in the submission of the learned

counsel for the appellant that 9% p.a is on the higher side.

34. In Kumari Kiran vs. Sajjan Singh and others,11 the

Hon'ble Apex Court set aside the judgment of the Tribunal therein

awarding interest @ 6% as also the judgment of the High Court

awarding interest @7.5% and awarded interest @ 9% p.a. from

the date of the claim petition. In Rahul Sharma & Another vs.

National Insurance Company Limited and Others,12the

Hon'ble Apex Court awarded @ 9% interest p.a. from the date of

the claim petition. Also, in Kirthi and another vs. Oriental

Insurance Company Limited,13 the Apex Court allowed interest

@ 9% p.a. and in Smt. Anjali and Others V. Lokendra Rathod

and Others,14 the Hon'ble Apex Court while referring

toMalarvizhi & Ors. Vs. United India Insurance Co. Ltd. &

Ors.15 allowed interest @ 9% p.a.

35. Accordingly, on the aforesaid amount the claimants are

entitled for interest @ 9 % p.a. from the date of the claim petition

till realization as awarded by the Tribunal.

RESULT:

36. In the result:

i) The appeal is dismissed.

(2015) 1 SCC 539

(2021) 6 SCC 188

(2021) 2 SCC 166

(2022) SCC OnLine SC 1683

(2020) 4 SCC 228

ii) The claimants/respondent Nos.1 to 3 are granted enhanced

compensation of Rs.13,91,100/- as just and fair compensation,

with interest @ 9% per annum, thereon, from the date of the

claim petition till realization/deposit;

iii) The appellant/insurance company shall deposit the amount as

aforesaid, adjusting the amount already deposited if any, before

the Tribunal within one month, failing which the amount shall be

recovered as per law;

iv) On such deposit being made, the claimants/respondents 1 to 3

shall be entitled to withdraw the same in the proportion as per the

award of the Tribunal.