Bombay High Court

Mr. Jagannath Anna Gavade And Ors vs Shri. Shashikant Bhupal Khandekar And ... on 27 August, 2024

      2024:BHC-AS:34151


                                                                                    J-ASFA-702-2016.doc



                                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                                CIVIL APPELLATE JURISDICTION

                                                  FIRST APPEAL NO. 702 OF 2016
                                                                   IN
                                                        M.A.C.P. NO. 34 OF 2013

                            1. Jagannath Anna Gavade
                            Age - 54 years, Occupation- Agriculture
                            2. Shalan Jagannath Gavade
                            Age- 49 years, Occupation- Household
                            3. Dadaso Jagannath Gavade,
                                                                                               ...Appellants
                            Age- 24 years, Occupation- Education                               (Orig.
                            R/o. Brhamnal, Tal. Palus, Dist. Sangli                            Claimants)

                                      Versus
                            1. Shashikant Bhupal Khandekar,
                            Age- 45 years, Occupation- Driver
                            (Driver of the offending vehicle, Truck No. MHL-
                            4113)
                            R/o. Nehrunagar, Taluka Tasgaon,
                            District Sangli.
                            2. Balaso Datta Patil,
                            Age- Major, Occupation- Commerce,
                            R/o. Nimani, Taluka Tasgaon,
                            District Sangli (Owner of offending vehicle as per
                            their document)
                            3. Krishna Dattu Patil,
                            Age- Major, Occupation- Commerce,
                            R/o. Nimani, Taluka Tasgaon,
                            District Sangli (Owner of offending vehicle Truck
                            No.MHL-4113 as per document of insurance)
                            4. The New India Assurance Co. Ltd.                                ...Respondents
          Digitally
                            Address- Civil Road, Sangli                                        (Orig.
          signed by

ASHWINI
          ASHWINI
          JANARDAN                                                                             Opponents)
JANARDAN VALLAKATI
VALLAKATI Date:
          2024.08.27
          14:26:42
          +0530                                                  Page 1 of 16
                                                               August 27, 2024
                       Ashwini Vallakati




                               ::: Uploaded on - 27/08/2024                       ::: Downloaded on - 28/08/2024 10:28:19 :::
                                                            J-ASFA-702-2016.doc




     Mr. Tejpal S. Ingale, Advocate for the Appellants.
     Mr. Nilesh Wable, i/b Umesh R. Mankapure, Advocates for
     Respondent Nos.1 to 3.
     Mr. Sandeep Jinsiwale, Advocate for Respondent No.4.

                     CORAM         : SOMASEKHAR SUNDARESAN, J.

                     RESERVED ON:             AUGUST 19, 2024
                     PRONOUNCED ON:           AUGUST 27, 2024


JUDGEMENT:

(Per, Somasekhar Sundaresan J.)

1. This First Appeal is a challenge to an impugned Judgment

and Award passed by Motor Accident Claims Tribunal, Sangli (" MACT")

dated 13th August, 2015 ("Impugned Judgement") whereby the

Appellants, the next of kin of a 19-year old Sagar Gavade, who died in a

motor accident, seek enhancement of the compensation awarded.

2. At the core of the challenge lie three contentions of the

Appellants namely:-

a) incorrect reliance on the age of the parents of the deceased,

instead of reliance on the age of the deceased, in arriving at the

multiplier factor;

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b) non-consideration of filial consortium;

c) and non-consideration of loss of future prospects in computing

the compensation.

3. On 7th January, 2023, a Learned Single Judge issued notice

and indicated that an endevour would be made to dispose of the First

Appeal at the admission stage. By consent of the parties, on 19 th August,

2024, the Appeal was taken up for final hearing and disposal.

4. Mr. Tejpal S. Ingale, Learned Counsel for the Appellants (the

parents and brother of the deceased) took me through the record to

point out that the MACT had awarded compensation in the cumulative

sum of Rs.2,54,000/-. The Respondents have not preferred any Appeal,

meaning thereby, they do not quarrel with the insurable interest or with

the fact that compensation was payable. However, Mr. Ingale would

seriously fault the Impugned Judgment for evidently adopting a wrong

multiplier of '13' by taking into account the age of the deceased's parents

instead of factoring in the age of the deceased, which would have led to a

multiplier of '18'. At the relevant time, the deceased's parents were aged

52 years and 47 years respectively whereas the deceased was aged 19

years. Consequently, he would submit, in terms of the computation

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table stipulated by the Supreme Court of India in Sarla Verma And

Others v. Delhi Transport Corporation And Another 1 ("Sarla Verma"),

the multiplier factor must necessarily depend on the age of the deceased

rather than the age of the deceased's parents. Evidently, Sarla Verma

has been noticed in the Impugned Judgment but the principles

stipulated therein have been ignored.

5. Next, Mr. Ingale would submit that it is now trite law the

concept of "consortium" has to be applied when computing

compensation in motor accident cases. Likewise, conventional heads

such as loss of estate, and funeral expenses must also be accounted for,

he would submit, and consequently, the Impugned Judgment lends

itself to be corrected in this First Appeal. In this regard Mr. Ingale

would advert to the conclusions recorded in National Insurance Co. Ltd.

v. Pranay Sethi2 ("Pranay Sethi"), rendered by a Constitution Bench of

five Judges of the Supreme Court, which also endorsed the multiplier

table stipulated in Sarla Verma.

6. Finally, and this is the most contentious difference between

the parties, according to Mr. Ingale, the MACT was totally wrong in

(2009) 6 SCC 121

(2017) 16 SCC 680

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rejecting the factum of the deceased being employed in a garment shop

despite noticing that the shop owner who had employed the deceased at

a daily wage of Rs.200/- having been deposed and cross-examined at

length. The only ground on which the deceased's employment on a daily

wage has been rejected, Mr. Ingale would submit, is that the MACT

found the shop owner to be non-compliant with applicable labour law

and did not demonstrate evidence of procedural compliance with

requirements imposed on employers.

7. Mr. Sandip Jinsiwale, Learned Counsel appearing on behalf

of Respondent No. 4 (New India Assurance Co. Ltd., the insurance

company), would fairly state that the facets of the wrong multiplier

factor by erroneous reference to the age of the parents (as opposed to

the age of the deceased), and the facet of future prospects are now well

covered by judgments of the Supreme Court. Mr. Jinsiwale would,

however, defend the Impugned Judgment insofar as it returned findings

that the Appellants had not proved the fact that the deceased had been

working at a daily wage of Rs. 200/-.

8. Mr. Jinsiwale would submit that the MACT had rightly

adopted the conventional notional income of Rs.3,000/- per month

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since the employment was not proved, and had rightly based the

compensation on this basis. By reference to the cross-examination of

Mr. Surgonda Balgonda Patil, the owner of the garment store where the

deceased was said to have worked on daily wage, Learned Counsel

would submit that it is unbelievable that someone would be running a

garment store since 1969, claiming to employ 15 employees, and still

would do so without compliance with employment laws. In the cross-

examination, he would submit, Mr. Patil has professed ignorance of the

need to register with labour authorities and to ensure compliance with

applicable labour laws. According to him, there is no evidence in the

form of signed receipt of the wages from the deceased, or any

appointment letter issued to the deceased. Consequently, he would

submit that the Impugned Judgment may be modified insofar as it

relates to the multiplier factor, future prospects and the like, but all such

computations must be made without disturbing the premise that the

monthly income of the deceased ought to be a notional sum of

Rs.3,000/-.

9. Mr. Nilesh Wable, Learned Counsel for the Respondent Nos.1

to 3 adopted the arguments of Mr. Jinsiwale, and supported the same.

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10. Having heard the Learned Counsel at length and upon

perusal of the record it becomes clear that the only issue to be dealt with

in terms of the difference between the parties is whether it could be

reasonably inferred that the deceased was a daily wager earning a sum

of Rs.200/- per day (which would lead to a monthly income of

Rs.6,000/-). The Appellants submit that since the deceased was a daily

wager, factoring in the days when the shop would be closed, or other

non-attendance at work, it would be reasonable to compute that the fair

estimate would be a working period of 20 days per month, which would

bring the monthly income to Rs.4,000/-.

11. Towards this end, it is evident, that the employer Mr. Patil,

had indeed been examined at Exhibit 49 and he has confirmed that he

was paying the deceased a sum of Rs.200/- per day. It is also apparent

from the books of account of the employer that between 2 nd October,

2012 and 31st October, 2012 the deceased had indeed been given cash

wages of Rs.200/- per day. The extract from the ledger also shows the

respective voucher number in the books of account maintained by the

employer who was running a garment store in the name of Prakash

Vastra Niketan since it appears that the deceased had indeed been

earning a sum of Rs.200/- per day. The employer, himself aged 70, has

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taken the trouble to present himself for participation in the proceedings

and subjected himself to being examined and cross-examined. It is also

evident from the material on record that Prakash Vastra Niketan, had a

MVAT TIN Number and a CST TIN Number, which are registration

numbers assigned by the state and central sales tax authorities.

Therefore, it can be nobody's case that the said store did not exist and

that the entire record is a sham to somehow project an income stream

for the deceased.

12. The material on record indeed suggests that the daily wage of

the deceased inspires a ring of truth. In my opinion, non-compliance by

an employer with labour law compliance requirements applicable tohis

establishment, cannot be determinative of whether the deceased was

being paid a daily wage of Rs.200/- for purposes of compensation in

motor accident claims. There is nothing on record to suggest any other

motivation or connection for a 70-year old employer to take the trouble

of participating in the proceedings only to lead false evidence, and that

too for negligible amounts. It is a matter of public social knowledge that

in the unorganized sector, where daily wage earners are engaged, there

may not be an issuance of an employment or appointment letter,

attendance register and the like. In fact, not only has the employer

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brought on record his ledger of payments made to the deceased, but also

there is nothing to suggest any motivation for his presenting an inflated

picture. While the daily wages of the deceased are pegged at Rs.200/-,

it would stand to reason that the employer would have no axe to grind,

to lead evidence to inflate the earnings of the deceased. Consequently,

the defence of the Impugned Judgement by the insurer does not

commend itself to acceptance.

13. The standard of proof to be brought to bear in proceedings

such as these is one of "preponderance of probability" and not a

standard of "beyond reasonable doubt". The standard that the

Impugned Judgment appears to apply, namely, the non-compliance

with employment laws by the employer can be extrapolated to suggest

that there was no employment of the deceased, is not convincing, going

by the material on record.

14. As regards the two facets of the multiplier factor and future

prospects, and other attendant issues emanating from the law declared

in Sarla Verma and Pranay Sethi, a quick word would be in order. In

Sarla Verma, the Supreme Court (in paragraph 40) tabulated the

multipliers indicated in various judgments of the Supreme Court

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rendered until then, to stipulate that the multiplier table as set out in

U.P. SRTC Vs Trilok Chandra3 and clarified in New India Assurance Co.

Ltd. Vs Charlie4 would be the appropriate multiplier to be applied in

claims for compensation under Section 166 of the Motor Vehicles Act,

1988. In this table, where the age of the deceased is between 15 and 20

years the multiplier scale stipulated is '18'. In paragraph 42 of Sarla

Verma, the Supreme Court explicitly stipulated that the multiplier of 18

must be applied where the age of the deceased is between 15 and 20

years.

15. Despite noticing Sarla Verma, the MACT was evidently in

error by not applying the aforesaid explicit declaration of law in that

very judgement. So also, in Paragraph 31 of Sarla Verma, the Supreme

Court further stated that in regard to bachelors, 50% may be deducted

as personal and living expenses. We note that the Impugned Judgment

has indeed adopted the aforesaid discount of 50% but on the base

derived from a notional income of Rs.3,000/- per month and applying a

multiplier of '13' instead of '18'.

16. The following declarations by the Supreme Court in Sarla

Verma are extracted below:-

(1996) 4 SCC 362

(2005) 10 SCC 720

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18. Basically only three facts need to be established by the claimants for assessing compensation in the case of death:

(a) age of the deceased;

(b) income of the deceased; and

(c) the number of dependants.

The issues to be determined by the Tribunal to arrive at the loss of dependency are:

(i) additions/deductions to be made for arriving at the income;

(ii) the deduction to be made towards the personal living expenses of the deceased; and

(iii) the multiplier to be applied with reference to the age of the deceased.

If these determinants are standardised, there will be uniformity and consistency in the decisions. There will be lesser need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay.

19. To have uniformity and consistency, the Tribunals should determine compensation in cases of death, by the following well-settled steps:

Step 1 (Ascertaining the multiplicand) The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.

Step 2 (Ascertaining the multiplier) Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased. Step 3 (Actual calculation)

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The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the "loss of dependency" to the family. Thereafter, a conventional amount in the range of Rs 5000 to Rs 10,000 may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5000 to 10,000 should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased.

The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also be added.

[Emphasis Supplied]

17. In Pranay Sethi, not only is the ratio in Sarla Verma endorsed

but also how to compute attendant facets of the compensation has been

spelt out. For completeness, the following extracts from Pranay Sethi

would be noteworthy:-

59. In view of the aforesaid analysis, we proceed to record our conclusions:

59.1. 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.

59.2. 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.

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

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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.

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

59.6. The selection of multiplier shall be as indicated in the Table in Sarla Verma read with para 42 of that judgment.

59.7. The age of the deceased should be the basis for applying the multiplier.

59.8. 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.

[Emphasis Supplied]

18. Each side has submitted a chart showing the working of how

the just and reasonable compensation must be computed in a compliant

manner. The core difference between the two is whether the income

should be taken at Rs.3,000/- per month or Rs. 4,000/- per month. In

all other respects, the parties appear to have no difference, and have

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entered the same figures and adopted the same approach.

19. Consequently, since I am of the view that the Appellants have

succeeded in demonstrating that the daily wage of the deceased in the

period just preceding his demise was Rs. 200/-, this Appeal is disposed

of in the following terms:-

i) The loss of income attributable to the deceased may be

taken at Rs.4,000/- per month. The figure of Rs. 6,000/-

per month, which would be the amount derived for a full

month of working at a daily wage of Rs.200/-, is not being

adopted. Discounting for non-attendance and the like, it

would be appropriate to assume 20 working days in a

month, leading to a monthly income of Rs.4,000/-;

ii) Consequently, the annual income could be Rs.48,000/-;

iii) Future prospects at 50% of the amount is allowed, as

contained in the tables provided by both sides, but on the

base income amount of Rs.48,000/- per annum, which

would lead to a further addition of Rs.24,000/-, taking the

total annual amount to Rs.72,000/-;

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iv) A personal deduction of 50% on such amount would lead to

the base compensation amount working out to

Rs.36,000/-;

v) Now, applying the multiplier factor of '18' (correcting it

from '13'), the amount of Rs. 36,000/- would lead to a

compensation amount of Rs. 6,48,000/-;

vi) The parties are agreed that the non-pecuniary elements,

would lead to the following additions:-

a) loss of estate of Rs.18,000/-;

b) funeral expenses at Rs.18,000/-;

c) filial consortium at Rs.48,000/-;

vii) Consequently, the total amount of compensation

computed would work out to Rs. 7,32,000/-. Reducing the

amount of Rs.2,54,000/- already paid by the insurer, the

balance amount payable to the Appellants shall be Rs.

4,78,000/-.

20. Such additional amount of Rs. 4,78,000/- towards enhanced

compensation shall be paid by Respondent No.4, who has carried the

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burden of defending the Impugned Judgment, within a period of three

weeks from today. The Impugned Judgement has granted interest at

the rate of 8% per annum, effective from the date of the filing of the

claim petition until actual realisation. Such interest rate shall also apply

to the enhanced amount. Consequently, interest on the differential shall

be payable from the date of the claim i.e. 16 th January, 2013 until actual

payment.