Usha N. Dadlani And Ors. vs A. Oberoi And Ors.
1991 Latest Caselaw 495 Del

JUDGMENT

Arun Kumar, J.

1. This is an appeal against the award of the Motor Accidents Claims Tribunal dated 31st January 1981. The Tribunal had awarded a sum of Rs. 100351/ - with costs and interest at the rate of 6 per cent per annum can be sale amount from the date of the award till realisation in the event of the respondents failing to make payment of the awarded amount within 60 days from the date of the award. This award was with respect to that claim of the widow, children and mother of Shri Narender N. Dadlani on account of . his death in an accident which took place on 2nd November 1977 at about 3.20p.m. on outer Ring Road, New Delhi. The deceased was driving a scooter while the Fiat Car which dashed against the deceased was owned by respondent No. 2 and was being driven by respondent No. 1. Respondent No. 3 is the Insurance Company.

In the petition under Section 110A of the Motor Vehicles Act, 1939, the claimants had claimed a sum of Rs. five lacs. The petition was contested by the respondents. On the pleadings of the parties the following issues were framed: -

1. Whether the accident was caused due to rash and negligent driving of Car No. MNS-7777 on the part of respondent No. 1 as alleged?

2. Whether the accident was caused due to the negligence of the deceased himself?

3. Whether the petitioners are the L/Rs of the deceased?

4. To what amount of compensation, if any, are the petitioners entitled and from whom?

5. Relief.

2. Issue No. 1 was decided in favor of the claimants while on Issue No. 2 it was held that there was no negligence on the part of the deceased. On Issue No. 3 it was held that all the claimants were the legal representatives of the deceased and were, therefore, entitled to file the petition. It may be noted here that the mother of the deceased has died during the pendency of the appeal and the only claimants before me are the widow and minor children of the deceased. On Issue No. 4, as already noted, the Tribunal determined the amount of compensation as Rs. 1,00,351/- and awarded the same in favor of the claimants Along with interest and costs.

During the course of hearing of the appeal the controversy has been confined only to the question of compensation. So far as the question of negligence is concerned, the findings as recorded by the Tribunal have not been assailed before me. On the question of compensation the appellants have argued that they should be held entitled to the amount of Rs. five lacs as originally claimed by them in the petition, whereas counsel for the, respondents has tried to justify the award of the Tribunal and has canvassed that no enhancement in the amount awarded by the Tribunal is called for.

3. The task of determining the amount of compensation is difficult since the Court has to ultimately base its opinion on estimates. It can never be precise. There are certain guiding factors which can help in arriving at a reasonable figure of compensation. It may be noted at the outset that the claim for compensation has to be a loss of dependency and not a solarium, nor can it be equated to death price or sop to the bereaved relatives. No amount of compensation can repair the loss caused to the family of the deceased. The award of compensation can only to some extent mitigate the financial hardship of the dependents. It is in the spirit that it has been said that the award should be liberal and not giggardly. It is equally important that the Judges cannot afford to be charitable at the expense of the Insurance Company. The Judges may feel sympathy for the victim and the family he leaves behind. Yet they have to ultimately balance the conflicting aspects.

4. In Gobald Motor Services Ltd. and Anr. v. R.M.K. Veluswami and Ors., the Supreme Court had occasion to pronounce on the approach which the Courts have to adopt in such matters. Though the said decision was not in relation to a case under the Motor Vehicles Act as that was a case under the Fatal Accidents Act 1855, the guidelines approved in the said decision still hold good. It may be worth pointing out that there has been some controversy and there has been a conflict of judicial opinion on the point as to whether the guidelines approved in this decision can be applied in cases under the Motor Vehicles Act since this was a case under the Fatal Accidents Act, yet preponderance of judicial opinion has been in favor of applying the said guidelines in cases arising under the Motor Vehicles Act also. The observations of Viscount Simon made in Nance v. British Columbia Railway Corporation Ltd. 1951 Appeal Cases 601, have been quoted with approval in the said decision. The relevant para is reproduced below.

Viscount Simon then proceeded to lay down the mode of estimating the damages under he first hard. According to him at first the deceased man's expectation of life has to be estimated having regard to his age, bodily health and possibility of premature determination of his life by later accidents; secondly, the amount required for the future provision of his wife shall be estimated having regard to the amounts he used to spend on her during his life time, and other circumstances; thirdly, the estimated annual sum is multiplied by the number of years of the man's estimated span of life, and the said amount must be discounted so as to arrive at the equivalent in the form of a lump sum payable on his death; fourthly, further deductions must be made for the benefit accruing to the widow from the acceleration of her interest in his estate ; and fifthly, further amounts have to be deducted for the possibility of the wife dying earlier if the husband had lived the full span of life, and it should also be taken into account that there is the possibility of the widow remarrying much to the improvement of her financial position. It would be seen from the said mode of estimation that many imponderables enter into the calculation, therefore, the actual extent of the pecuniary loss to the respondents may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even parity a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the. claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained.

5. Before applying these principles, the relevant facts of the case have to be noted. The accident took place on 2nd November 1977 and the deceased succumbed to the injuries on 5th November 1977 while in hospital. The age of the deceased at the time of the accident was 34 years. He was married and Smt. Usha N. Dadlani, appellant No. l is the widow of the deceased. Besides the widow, the deceased left behind a daughter aged four and half years and a son aged three years at the time of the accident. The said children are appellants 2 and 3 before me. The mother of the deceased was also a claimant in the petition under Section 110A of the Motor Vehicle Act. However, she was imp leaded as respondent No. 4 in the present appeal. The mother has died during the pendency of the appeal. The deceased was a qualified Civil Engineer and was employed as Junior Engineer in the Delhi Electric Supply Undertaking, which is a wing of the Municipal Corporation of Delhi. Therefore, the job of the deceased was in the nature of a Government job. He was drawing a salary of about Rs. 1 100/- per month at the relevant time. The Tribunal took the sum of Rs. 677/- as the monthly contribution of the deceased towards his family out of his aforesaid monthly income, on the bases whereof he arrived at the figure of Rs. 8004/- per annum. This he multiplied by 15 taking the multiplier at that figure and arrived at the figure of Rs. 1,20060/ and out of this after making certain deductions the figure of Rs. 100351/- was arrived at. The Tribunal held that the normal expectancy of life was 70 -- 75 years and noted that the mother of the deceased who was alive then was aged 72 years. On this basis it was held that the deceased would have lived at least up to the age of 70 years.

6. Counsel for the appellant has laid stress on the following points and has urged that the compensation awarded by the Tribunal was low and the same ought to be enhanced to the extent of the claim made in the petition under Section 110A of the Motor Vehicle Act:-

1. Multiplier.

2. The amount taken as available to the family for purposes of arriving at the annual income.

3. Future prospects of promotion as well as increase in salary even if it was to be assumed that the deceased would have continued to be on the same post throughout his career.

4. No deductions ought to have been made.

5. Interest.

7. Coming to the point regarding determination of proper multiplier to be applied in the facts of the present case it has to be noted that the deceased was aged 34 years at the time of the accident resulting in his death. The Tribunal has held the reasonable expectancy of life in India to be 70 to 75 years and on that basis the deceased would have reached the age of 70 years in the normal course. The deceased was having an employment which was akin to Government service and would have continued at least up to the age of 58 years. It has further been urged that the deceased being a qualified Engineer could have useful employment even after superannuation or he could have had his own business earned will with all his experience. Therefore, he could have been expected to have a good income at least till the age of 70 years.

8. The other points noted as points No. 2 and 3 above, are in a way co-related with this point because the rise in salary and the future prospects of promotion and having better emoluments and status are all co-related tissues. From these considerations will follow the monthly or annual income which would be available to the family had the deceased enjoyed a normal life span and a normal career. It is in this context that the various imponderables referred to by the Supreme Court in M/s Global Motor Services (supra) become relevant. Human life is always not a continuous enjoyable thing, the ups and downs of life, its pains and sorrows as well as its joys and pleasures, have to be kept in mind. So in determining the multiplier it may not be correct to take the number of years from the date of death till the normal span of working life as the multiplier. "For that would be to make no allowance for the general vacuities of life". Apart from the ups and downs in the working career, like promotions or demotions, there may be ups and downs in one's own physical health. One cannot rule out the possibility though one may wish it to be not there, of ill health or premature death due to any unforeseen terminal decease or future accident. Keeping all these things in view it may not be correct to co-relate the multiplier with the number of remaining years of working life. A reduction of multiplier is called for to take into consideration such diverse factors. At the same time while fixing the multiplier I intend to keep the brighter side of life in view, that is, chances of rise in salary and future promotions.

9. There has been a great divergence of judicial opinion on the number of years which should be treated as a proper multiplier. On the one extreme appears to be the case of Satyavati Pathak v. Hari Ram 1983 ACJ 424 which is a decision of this Court in which the multiplier was taken for the entire remaining working life of the deceased who met with the fatal accident while 39 years of age, and working life was taken up to 75 years. While on the other hand there is the decision of a Division Bench of this Court in Sushila Devi and Ors. v. M.C.D., reported as 1985 ACJ 255:1 (1985) ACC 121, wherein in the case of deceased who was aged 30 years a multiplier of 15 was adopted. In this Division Bench decision the view of the learned Single Judge in the case of Satyavati Pathak was adversely commented upon. After noticing the commentary in some of the English text books on the subject, the Division Bench held that the "usual multiplier is between 14 and 16, rarely it is 18. Never 25."This being a Division Bench judgment of this Court, I would have been bound to follow the same but for a subsequent Supreme Court decision reported as Jyotsna Dey and Ors. v. State of Assam and Ors. 1987 ACJ 172:1 (1987) ACC 173 (SC). In this later decision the deceased was aged 45 years and taking the span of life to be 70 years, the multiplier of 25 was adopted. In the present case the deceased was aged 34 years. I propose to adopt a multiplier of 25. While fixing the multiplier at 25,1 have also kept in view the factors like future prospects of rise in salary and further promotions which the deceased could have earned in the normal course.

10. The question may still be raised as to why in spite of clear mandate of the Division Bench of this Court in Sushila Devi v. M.C.D. (supra) that the multiplier should never be 25, I have taken the multiplier should never 25, I have taken the multiplier as 25? For the propriety and legality of this I take shelter under the subsequent Supreme Court judgment in Jyotsna Dey and Ors. v. State of Assam and Ors. (supra) where for a deceased aged 45 years a multiplier of 25 was adopted. And for the justification and reasonableness of this, I feel that even in the same post one con not overlook rise in salary due to increments as also raise in pay scales is inescapable. Further promotions in normal course are also routine matters that can be taken note of. Since I am not making allowance for these factors separately, I have tried to compensate the claimants by fixing the multiplier at 25.

11. Having fixed the multiplier at 25, I have to find the annual purchase, i.e. the income available to the family out of the salary of the deceased. The last drawn salary of the deceased was, as per record, Rs. 1100/- per month. After making allowance for what the deceased might have spent on himself, the monthly income available to the family/ dependants can reasonably be said to be Rs. 800/- which gives as annual income of Rs. 9600/-. This amount multiplied by 25 comes to Rs. 2,40,000/-. Thus I hold that a reasonable amount of compensation to which the appellants can be said to be entitled to, is Rs. 2,40,000/-.

The next question for consideration is as to whether certain deductions ought to be made out of the said amount on account of acceleration in payment or the payment being made by way of a lumpsum. The Tribunal has made a deduction of 15% on this account. There is again a great divergence of judicial opinion on the question whether any deductions ought to be made at all on this account. in Bhagwanti Devi v. Ish Kumar and Ors. 1975 ACJ 56, H.L. Anand, J. had occasion to deal with this. It was observed that though the deduction on this account was based on sound principle, it is not a rule of universal application and has to be applied in the context of such counter balancing factors as may be present in a particular case. Such as increasing cost of living and proportional devaluation of the rupee, the time lag between the death and the award as also between the award the actual payment.

12. There are two Division Bench decisions of this Court on this point which are almost contemporaneous. They are reported as Mohinder Kaur v. Manphool Singh 1981 ACJ 23! and Amarjit Kaur v. Venguard Insurance Co. Ltd. 1981 ACJ 495. In the later decision, i.e. one reported sat page 495, there is no discussion as such on this issue, though a 15% deduction has been allowed on this score. However, in the decision reported at page 231 no deduction was allowed, I find some reasoning for this which is to the following effect: --

Some decisions were brought to out notice which take this view of deduction on account of lump sum payment. However, there is another set of decisions which take the view that the rise in prices, the normal increments which person would have earned or changes of his further promotion cannot be ignored. We agree with the second view. A Division Bench of this Court in Municipal Corporation of Delhi and Ors. v. Shanti Devi Dutt and Anr. has affirmed that the advantage of lump sum payment is neutralised by the rise in prices of the necessities of life. We agree and follow the Division Bench judgment.

There is a phenomenal rise in prices since 1963. We, therefore, hold that no deduction should be made from the lump sum due to the widow.

The reasoning given above has become all the more relevant in the present context of phenomenal rise in prices. The rate of interest which she may be able to earn on a deposit in a Nationalised Bank is not sufficient to keep pace with the inflation and, therefore, to my mind the lump sum payment loses all the attraction or significance. The person is not able to earn enough even if the said amount is deposited and the earnings do not match the rise in prices and depositing value of money. Counsel for the respondent has placed reliance on a recent judgment of a single Judge of this Court reported in New India Ass. Co. v. Motor Rep. Co. 1991 RLR 246. In the said judgment both the aforesaid Division Bench decisions of this Court have been noticed. However, the learned Single Judge has followed the decision in 1981 ACJ 495 on the ground that the said decision is later in point of time. It is important to note that the decision reported at page No. 495 was delivered about 5 months after the earlier decision. However, the earlier decision is not noticed in the later judgment. Further, as pointed out earlier, I find that there is some discussion and reasoning contained in the decision in Mohinder Kaur's case (Supra) for disallowing deduction on account of lump sum payments. Whereas in the subsequent decision in Amarjit Kaur's case (supra), there is no discussion or reasoning on this point. Similarly in Jyotsna Dey v. State of Assam 1987 A.C.J. 172, though deductions on account of lump sum payment has been allowed, with utmost respect, I find that there is no reasoning given for allowing deduction on this account. Apart from this there are a large number of authorities of this Court subsequent to the aforesaid Division Bench judgments where deduction on account of lump sum payment has been disallowed. Some of such decisions are:-

Madhya Pradesh S.R.T. Corp. v. Sudhakar 1977 ACJ 290; Subash Raniv. DTC 1987 ACJ 66; Pritam Kaur v. Peara Singh 1987 ACJ 217; Prabhati v. Lal Chand 1987 ACJ 306:1 (1986) ACC 531; Harbhajan Singh v. Dhara Singh 1987 ACJ 537:11 (1986) ACC 1.DT.C. v. Kamlesh Arora 1189 ACJ 1034 and Elizabeth Mathew v. Vasdev 1990 ACJ 461. The last judgment in this series is by the same learned Judge whose decision is reported in 1991.

Reverting to Bhagwanti Devi's case (supra) wherein on the facts of the case no deduction was allowed on this account, I find that in the facts of the present case also the same reasons are attracted to some extent. The award of the Tribunal was made on 31st January 1981 whereas the accident took place on 2nd November 1977 and he death took place on 5th November 1977. Even though the Insurance Co. accepted the said award and paid the amount, the enhanced compensation by virtue of this judgment will be available to the claimants hearty 14 years after the date of death. This payment can hardly be termed as accelerated payment. I fully subscribe to the view expressed by H.L. Anand, J. in the said judgment. The rule of deduction on account of accelerated or lump sum payment cannot be one of universal application and the delay in actual payment and the runaway inflation and consequent devaluation of the rupee which results in depletion of real worth of the total amount of compensation awarded are very important factors mitigating against such deductions being allowed. Therefore, I hold no deductions ought to be allowed to be made in this case.

This leaves only the point regarding interest to be considered. The Tribunal has awarded interest @ 6% per annum from the date of award till realisation in the event of failure of the respondents to pay the awarded amount within 60 days of the award. Counsel for the appellants has argued that neither the rate of interest awarded is justified nor the date from which interest ought to be awarded has been correctly fixed. According to him, interest ought to have been awarded at least at the rate of 18 per cent per annum and the same ought to have been from the date of the application under Section 110-A of the Motor Vehicles Act. He has cited certain judgments showing that interest has been awarded by the Courts up to 18% per annum and that the interest should be awarded from the date of filing of the application and not from the date of award as has been done in the present case. I agree that the awarding of interest at the rate of 6 per cent per annum is too low in the present context In most of the cases interest is being awarded at least at the rate of 12 per cent per annum and following the same, I am inclined to award interest in favor of the appellants at the said rate. I also find from various judgments including those of the Supreme Court that interest should be awarded from the date of filing of the application rather than from the date of the award. Following the same, I hold that the appellants are entitled to interest @ 12% per annum on the enhanced amount of compensation as per this judgment from the date of filing of the application under Section 110 A to the date of payment This means that the amount awarded by (he Tribunal will not be effected by these observations regarding interest because the said amount already stands paid in accordance with the award of the Tribunal. After deducting the amount awarded by the Tribunal interest will be payable on the balance amount only from the date of the application till the date of payment The award of the Tribunal is modified and enhanced to Rs. 2,40,000/- Along with interest, as stated above, and costs which I hereby fix at Rs. 2,000/-.

The appeal is disposed of in these terms.