Usha N. Dadlani And Ors. vs A. Kumar Oberoi And Ors.
1991 Latest Caselaw 585 Del

JUDGMENT

Arun Kumar, J.

(1) This is an appeal against the award of the MotorAccident Claims Tribunal dated 1/01/1981. The Tribunal had awardeda sum of Rs. 100351.00with costs and interert at the rate of 6 per cent perannum on the said amount from the date of the award till realisation in theevent of the respondents failing to make payment of the awarded amountwithin 60 days from the date of the award. This award was with respect to theclaim of the widow, children and mother of Shri Narender N. Dadlant onaccount of his death in an accident which took place on 2/11/1977at about 3 20 p.m. on outer Ring Road, New Delhi. The deceased wasdriving a scooter while the Fiat Car which dashed against the deceased wasowned by respondent No. 2 and was being driven by respondent No. 1.Respondent No. 3 is the Insurance Company.

(2) In the petition under Section 110 A 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 wereframed:- "1. Whether the accident was caused due to rash and negligentdriving or Car No. MNS-7777 on the part of respondent No. 1 asalleged?2. Whether the accident was caused to the negligence of thedeceased himself ?3. Whether the petitioners are the L/Rs 1 of the deceased ?4. To what amount of compensation, if any, are the petitioners entitled and from whom ?5. Relief."

(3) Issue No. 1 was decided in favor of the claimants while on IssueNo. 2 it was held that there was no negligence on the part of the decased.On Issue No. 3 it was held that all the claimants were the legal representativesof deceased and were, therefore, entitled to file the petition. It may be notedhere that the mother of the deceased has died during the pendency of theappeal and the only claimants before me are the widow and minor children ofthe deceased. On Issue No. 4 as already noted, the Tribunal determined theamount of compensation as Rs. 100351.00 and awarded the same in favor ofthe claimants Along with interest and costs.

(4) During the course of hearing of the appeal the controversy hasbeen confined only to the question of compensation. So far as the question ofnegligence is concerned, the findings as recorded by the Tribunal have not beenassailed before me. On the question of compensation the appellants haveargued that they should be held entitled to the amount of Rs. five lacs asoriginally claimed by them in the petition, whereas Counsel for the respondentshas tried to justify the award of. the Tribunal and has canvassed that noenhancement in the amount awarded by the Tribunal is called for.

(5) The task of determining the amount of compensation is difficultsince the Court has to ultimately base its opinion on estimates. It can neverbe precise. There are certain guiding factors which can help in arriving at areasonable figure of compensation. It may be noted at the outset that theclaim 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. Noamount of compensation can repair the loss caused to the family of thedeceased; The award of compensation can only to some extent mitigate thefinancial hardship of the dependents. It is in this spirit that it has been saidthat the award should be liberal and not niggardly. It is equally importantthat the Judges cannot afford to be charitable at the expense of the InsuranceCompany. The Juages may feel sympathy for the victim and the family-he leaves behind. Yet they have to ultimately balance the codflictingaspects.

(6) In Gobald Motor Services Ltd. & Anr. v. R.M.K. Veluswami & Ors., , the Supreme Court had occasion to pronounce on theapproach which the Courts have to adopt in such matters. Though the saiddecision was not in relation to a case under the Motor Vehicles Act as that wasa case under the Fatal Accidents Act 1855, the quidelines approved in the saiddecision still hold good. , It may be worth pointing out that there has beensome controversy and there has been a conflict of judicial opinion on the pointas to whether the guidelines approved in this decision can be applied in casesunder the Motor Vehicles Act since this was a case under the Fatal AccidentsAct, yet preponderance of judicial opinion has been in favor of applyingthe said guidelines in cases arising under the Motor Vehicles Act also. Theobservations of Viscount Simon made in Nance v. British Columbia RailwayCorporation Ltd., 1951 Appeal Cases 601, have been quoted with approval inthe said decision. The relevant para is reproduced below. "VISCOUNTSimon then proceeded to lay down the mode ofestimating the damages under the first hand. According to him atfirst the deceased man's expectation of life has to be estimatedhaving regard to his age, bodily health and possibility of prematuredetermination of his life by later accidents; secondly, the amountrequired for the future provision of his wife shall be estimatedhaving regard to the amounts the used to spend on her .during hislife time, and other circumstances; thirdly, the estimated annual sumis multiplied by the number of years of the man's estimated span oflife, and the said amount must be discounted so as to arrive at theequivalent in the form of a lump sum payable on his death; fourthly,further deductions must be made for the benefit accruing to thewidow from the acceleration of her interest in his estate; and fifthly,further amounts have to be deducted for the possibility of the wifedying earlier if the husband had lived the full span of life, and itshould also be taken into account that there is the possibility of thewidow remarrying much to the improvement of her financial position. It would be seen from the said mode of estimation that manyimponderables enter into the calculation, therefore the actualextent of the pecuniary loss to the respondents may depend upondata which cannot be ascertained accurately, but must necessarilybe an estimate, or even partly a conjecture. Shortly stated, thegeneral principle is that the pecuniary loss can be ascertained onlyby balancing on the one hand the loss to the claimants of the futurepecuniary benefit and on the other any pecuniary advantage whichfrom whatever source comes to them by reason of the death, thatis, the balance of loss and gain to a dependant by the death must beascertained."

(7) Before applying these principles, the relevant facts of the case haveto be noted. The accident took place on 2/11/1977 and thedeceased succumbed to the injuries on 5/11/1977 while in hospital.The age of the deceased at the time of the accident was 34 years. He wasmarried and Smt. Usha N. Dadlani, appellant No. 1 is the widow of thedeceased. Besides the widow, the deceased left behind a daughter aged fourand half years and a son aged three years at the time of the accident. Thesaid children are appellants 2 and 3 before me. The mother of the deceasedwas also claimant in the petition under Section 110A of the Motor VehicleAct. 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 wasa qualified Civil Engineer and was employed as Junior Engineer in the DelhiElectric Supply Undertaking, which is a wing of the Municipal Corporationof Delhi. Therefore, the job of the deceased was in the nature of a Government job. He was drawing a salary of about Rs. 1100.00per month at therelevant time. The Tribunal took the sum of Rs. 677.00 as the monthlycontribution of the deceased towards his family out of his aforesaid monthlyincome, on the basis whereof he arrived at the figure of Rs. 8004.00 per annum.This he multiplied by 15 taking the multiplier at that figure and arrived atthe figure of Rs. 1,20060.00 and out of this after making certain deductionsthe figure of Rs. 1,00351.00 was arrived at. The Tribunal held that the normalexpectancy of life was 70-75 years and noted that the mother of the deceasedwho was alive then was aged 72 years. On this basis it was held that thedeceased would have lived at least up to the age of 70 years.

(8) Counsel for the appellant has laid stress on the following pointsand has urged that the compensation awarded by the Tribunal was low andthe same ought to be enhanced to the extent of the claim made in the petitionunder Section 110A of the Motor Vehicle Act :- 1.Multiplier.2. The amount taken as available to the family for purposes ofarriving at the annual income.3. Future prospects of promotion as well as increase in salaryeven if it -was to be assumed that the deceased would havecontinued to be on the same post throughout his career.4. No deductions ought to have been made.5. Interest.

(9) Coming to the point regarding determination of a proper multiplierto be applied in the facts of the present case it has to be noted that thedeceased 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 to75 years and on that basis the deceased would have reached the age of 70years in the normal course. The deceased was having an employment whichwas akin to Government service and would have continued at least up to theage of 58 years. It has further been urged that the deceased being a qualifiedEngineer could have useful employment even after superannuation or he couldhave 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.

(10) The other points noted as points No. 2 and 3 above, are in away co-related with this point because the rise in salary and the future prospects of promotion and having better emolument and status are all co-relatedissues. From these considerations will follow the monthly or annual incomewhich would be available to the .family had the deceased enjoyed a normallife span and 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, theups 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 becorrect to take the number of years from the date of death till the normalspan of working life as the multiplier. "For that would be to make noallowance for the general attitudes of life". Apart from the ups and downsin the working career, like promotions or demotions, there may be ups anddowns in one's own physical health. One cannot rule out the possibility thoughone may wish it to be not there, of ill health or pre-mature death due to anyunforeseen terminal decease or future accident. Keeping all these things inview it may not be correct to co-relate the multiplier with the number ofremaining years of working life. A reduction of multiplier is called for totake into conrideration such diverse factors. At the same time while fixingthe multiplier I intend to keep the brighter side of life in view, that is, chancesof rise in salary and future promotions.

(11) There has been a great divergence of judicial opinion, on thenumber of years which should treated as a proper multiplier. On the oneextreme appears to be the case of Satyavati Pathak v. Hari Ram, 1983 ACJ424 which is a decision of this Court in which the multiplier was taken for theentire remaining working life of the deceased who met with the fatal accidentwhich 39 years of age, and working life was taken up to 75 years. While onthe other hand there is the decision of a Division Bench of this Court inSushila Devi & Ors. v. M.C.D., reported as 1985 Acj 255, wherein in thecase of deceased who was aged 30 years a multiplier of 15 was adopted. Inthis Division Bench decision the view of the learned Single Judge in the caseof Satyavati Pathak was adversely commented upon. After noticing thecommentry in some of the English text books on the subject, the DivisionBench 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 wouldhave been bound to follow the same but for a subsequent Supreme Courtdecision reported as Jyotsna Dey & Ors. v. State of Assam & Ors., 1987 ACJ172. In this later decision the deceased was aged 45 years and taking thespan 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) I have also kept in view the factors life futureprospects of rise in salary and further promotions which the deceased couldhave earned in the normal course.

(12) The question may still be raised as to why in spite of clearmandate of the Division Bench of this Court in Sushila Devi v. M.C.D. (supra)that the multiplier should never be 25,1 have taken the multiplier as 25?For the propriety and legality of this I take shelter under the subsequentSupreme Court judgment in Jyotsna Dey & Others v. State of Assam & Others(supra) where fora deceased aged 45 years a multiplier of 25 was adopted.And for the justification and reasonableness of this, I feel that even in thesame post one cannot overlook rise in salary due to increments as also raise-in pay scales is inescapable. Further promotions in normal course are alsoroutine matters that can be taken note of. Since I am not making allowancefor these factors separately, I have tried to compensate the claimants by fixingthe multiplier at 25.

(13) 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. 1100.00 permonth. After making allowance for what the decased might have spent onhimself, the monthly income available to the family/dependants can reasonably be said to be Rs. 800.00 which gives as annual income of Rs. 9600.00. Thisamount multiplied by 25 comes to Rs. 2,40,000.00. Thus I hold that a reasonable amount of compensation to which the appellants can be said to be entitledto, is Rs. 2,40,000.00.

(14) The next question for consideration is as "to whether certaindeductions ought to be made out of the said amount on account of acceleration in payment or the payment being made by way of a lump sum. TheTribunal has made a deduction of 15% on this account. There is again agreat divergence of judicial opinion on the question whether any deductionsought to be made at all on this account. In Bhagwanti Devi v. Ish Kumar &Ors., 1975 Acj 56, H.L. Anand, J. had .occasion to deal with this. It wasobserved that though the deduction on this account was based on soundprinciple, it is not a rule of universal application and has to be applied in thecontext of such counter balancing factors as may be present in aparticularcase. Such as increasing cost of living proportional devaluation of the rupee,the time lag between the death and the award as also between the award andactual payment.

(15) There are two Division Bench decisions of this Court on thispoint which are almost contemporaneous. They are reported as MohinderKaur v. Manphlool Singh, 1981 Acj 231 and Amarjit Kaur v. VenguardInsurance Co. Ltd., 1981 Acj 495. In the later decision, i.e. one reported atpage 495, there is no discussion as such on this issue, though a 15% deductionhas been allowed on this score. However, in the decision reported at page 231no deduction was allowed, I find some reasoning for this which is to the follow-ing effect:- "SOMEdecisions were brought to our notice which take thisview of deduction on account of lump sum payment. However,there is another set of decisions which take the view that the rise inprices, the normal increments which person would have earnedor chances of his further promotion cannot be ignored Weagree with the second view. A Division Bench of this Court inMunicipal Corporation of Delhi and Others v. Shanti Devi Dutt andAnother, has affirmed that the advantage of lump sum payment isneutralised by the rise in prices of the necessities of life. We agreeand 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 tothe widow."

(16) The reasoning given above has become all the more relevant inthe present context of phenomenal rise in prices. The rate of interest whichone may be able to earn on a deposit in a Nationalised bank is not sufficientto keep pace with the inflation and, therefore, to my mind the lump sumpayment loses all its attraction or significance. The person is not able to earnenough even if the said amount is deposited and the earnings do not matchthe rise in prices and depleting value of money. Counsel for the respondenthas placed reliance on a recent judgment of a single Judge of this Courtreported in New India Ass. Co. v. Motor Rep. Co., 1991 Rlr 246. In thesaid judgment both the aforesaid Division Bench decisions of this Court havebeen noticed.. However, the learned Single Judge has followed the decision in1981 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 495 was deliveredabout 5 months after the earlier decision. However, the earlier decision is notnoticed in the later judgment. Further, as pointed out earlier, I find that thereis some discussion and reasoning contained in the decision in Mohinder Kaur'scase (supra) for disallowing deduction on account of lump sum payments.Whereas in the subsequent decision in Amarjit Kaur's case (supra), there is nodiscussion or reasoning on this point. Similarly in Joytsna Dey v. State ofAssam, 1987 ACJ. 172, though deductions on account of lump sum paymenthas been allowed, with utmost respect, I find that there is no reasoning givenfor allowing deduction on this account. Apart from this there are a largenumber of authorities of this Court subsequent to the aforesaid Division Benchjudgments where deduction on account of lump sum payment has been disallowed. Some of such decisions are :-

(17) Madhya Pradesh S.R.T, Corp v. Sudhakar, 1977 Acj 290; SubashRani v. Dtc, 1987 Acj 66; Pritam Kaur v. Peara Singh, 1987 Acj 217;Prabhati v. Lal Chand, 1987 Acj 506, Hrabhajan Singh v. Dhara Singh, 1987ACJ 537; D.T.C. v. Kamlesh Arora, 1189 Acj 1034 Elizabeth Mathew v.Vasdev, 1990 Acj 461. The last judgment in this series is by the same learnedJudge whose decision is reported in 1991.

(18) 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 theTribunal was made on 31/01/1981 whereas the accident took place on 2/11/1977 and the death took place on 5/11/1977. Eventhough the Insurance Co. accepted the said award and paid the amount, theenhanced compensation by virtue of this judgment will be available to theclaimants nearly 14 years after the date of death. This payment can hardlybe termed as accelerated payment. I fully subscribe to the view expressedby H.L.Anand, J. in the said judgment. The rule of deduction on accountof accelerated or lump sum payment cannot be one of universal applicationand the delay in actual payment and the runaway inflation and consequentdevluation of the rupee which results in depletion of real worth of the totalamount of compensation awarded are very important factors mitigating againstsuch deductions being allowed. Therefore, I hold no deductions ought to beallowed to be made in this case.

(19) This leaves only the point regarding interest to be considered.The Tribunal has awarded interest @ 6% per annum from the date of awardtill realisation in the event of failure of the respondents to pay the awardedamount within 60 days of the award. Counsel for the appellants has arguedthat neither the rate of interest awarded is justified nor the date from whichinterest 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 perannum and the same ought to have been from the date of the applicationunder 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% perannum and that the interest should awarded from the date of filing of theapplication and not from the date of award as has been in the present case. I agree that the awarding of interest at the rate of 6 per centper annum is too low in the present context. In most of the cases interest isbeing 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 saidrate. I also find from various judgments including those of the Supreme Courtthat interest should be awarded from the date of filing of the applicationrather 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 theapplication under Section 110A to the date of payment. This means that theamount awarded by the Tribunal will not be effected by these observationsregarding interest because the said amount already stands paid in accordancewith the award of the Tribunal. After deducting the amount awarded by theTribunal interest will be payable on the balance amount only from the date ofthe application till the date of payment. The award of the Tribunal ismodified and enhanced to Rs. 2,40,000.00 Along with interest, as stated above,and costs which I hereby fix at Rs. 2,000.00.

(20) The appeal is disposed of in these terms.