Smt. Sudesh Kapoor W/O Late Sh. ... vs Prithvi Chand S/O Sh. Khajana Ram, ...
2004 Latest Caselaw 138 Del

JUDGMENT

Madan B. Lokur, J.

1. The Appellants are aggrieved by an Award dated 13th July 1987 passed by the learned Motor Accident Claims Tribunal (MACT) in Suit No. 27 of 1981. According to the Appellants, the compensation awarded on the death of O.P. Kapoor was inadequate.

2. The deceased was working as an Operations Assistant with Indian Airlines and was drawing a salary of Rs.1506.07 per month. He was unfortunately involved in an accident on 16th September 1980 and succumbed to his injuries. The accident is said to have taken place because of the rash and negligent driving of a car by Respondent No.1. The car was insured with Respondent No.3. The Appellants are the legal representatives of the deceased and they had filed a claim for compensation before the learned MACT.

3. On the pleadings of the parties, the learned MACT framed the following issues: --

1. Whether the deceased sustained fatal injuries due to rash and negligent driving of car No. PUM-8129 on the part of Respondent No.1?

2. Whether the respondents are not liable to pay compensation for the preliminary objections taken in their written statements?

3. Whether the petitioners are the legal representative of the deceased and are entitled to maintain the claim petition?

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

5. Relief.

4. In respect of Issue No.1, the learned MACT answered in the affirmative and held that the deceased sustained fatal injuries due to the rash and negligent driving of a vehicle by Respondent No.1. Issue No.2 was also decided in favor of the Appellants and against the Respondents. As regards Issue No.3, it was held that the Appellants are the legal representatives of the deceased and could maintain the claim petition.

5. In respect of the 4th Issue, the learned MACT found that as per the office record the salary of the deceased was Rs.1,594.36 per month. He was found to be about 45 years of age. It was stated in the claim petition that the deceased used to provide a sum of Rs.1000.00 per month for household expenses. His widow affirmed this during her cross-examination. On this basis, the learned MACT took his contribution for household expenses to be Rs.900.00 per month. The learned MACT held that he would have worked up to the age of 58 years and, therefore, adopted a multiplier of 13 and awarded an amount of Rs.1,40,000.00 as compensation on account of his death. The learned MACT directed that the Appellants be paid interest at 12% per annum on this amount from the date of the order till realization of the amount. The liability to make the payment was fixed on the insurance company (Respondent No.3). The learned MACT did not award any amount of compensation towards the loss of consortium or loss of estate.

6. Learned counsel for the Appellants has complained that the future prospects of the deceased were not taken into consideration by the learned MACT while awarding compensation. It has also been contended that the dependency of Rs.900.00 per month is too low. It was submitted that the gross monthly salary of the deceased should have been taken to be Rs.3200.00 per month instead of Rs.1600.00. It was submitted that had the correct salary been taken, on the basis of future prospects, the dependency would have been much higher. As regards the multiplier, it was submitted that in terms of the Second Schedule to the Motor Vehicles Act, 1988 (the Act) the appropriate multiplier should have been 15 and not 13. As regards the interest awarded by the learned MACT, it was submitted that 12% per annum should have been awarded from the date of the claim petition and not from the date of the order. Finally, it was submitted that the conventional amount towards loss of consortium and loss of estate was erroneously not awarded in favor of the Appellants.

7. With respect to the multiplier to be adopted, it is now well settled by decisions of the Supreme Court that the Second Schedule to the Act is a safe guide. Even though the Second Schedule is applicable to Section 163-A of the Act, it is still the safest method of finding out what multiplier is to be applied while awarding compensation in the case of a fatal accident. (See for example U.P. State Road Transport Corporation vs. Trilok Chandra , Kaushnuma Begum vs. New India Assurance Co Ltd. (2001) 2 SCC 9 and Abati Bezbaruah vs. Dy. Director General, Geological Survey of India & Anr., ). Taking resort to the Second Schedule on the basis of the above decisions of the Supreme Court, it must be held that the Appellants were entitled to claim compensation with the multiplier being 15 and not 13. It is ordered accordingly.

8. The question of dependency has always been a rather difficult one to answer. In General Manager, Kerala State Road Transport Corporation vs. Susamma Thomas , the deceased was about 38-39 years of age and was employed in a newspaper establishment on a monthly salary of Rs.1032.00. In paragraph 19 of the Report, the Supreme Court said: --

"We think, having regard to the prospects of advancement in the future career, respecting which there is evidence on record, we will not be in error in making a higher estimate of monthly income at Rs.2000 as the gross income. From this has to be deducted his personal living expenses, the quantum of which again depends on various factors such as whether the style of living was spartan or bohemian. In the absence of evidence it is not unusual to deducted one-third of the gross income towards the personal living expenses and treat the balance as the amount likely to have been spent on the members of the family and their dependants."

9. Applying the Thomas principle to the facts of the present case, the gross income of the deceased should be doubled to Rs.3200.00, particularly since the deceased was holding a steady job with a public sector undertaking, namely, Indian Airlines.

10. In Sarla Dixit vs. Balwant Yadav, , the deceased was a young man aged about 27 years and was a Captain in the Indian Army. He had a stable job, a brilliant academic record and performance in military service over seven years. The Supreme Court referred to Susamma Thomas and "adopting the same scientific yardstick as laid down in the aforesaid judgment" doubled the gross monthly income of the deceased who was at the time of his death earning Rs.1500.00 (rounded off) to Rs.3000.00, a figure to which it was reasonably expected to shoot up. The Supreme Court then calculated "the average gross future monthly income" of the deceased by adding this figure to his income at the time of his death and dividing the result by 2 (Rs.1500.00 + Rs.3000.00 = Rs.4500.00 divided by 2, that is, Rs.2200.00). The figure of Rs.2200.00 per month was taken to be the gross monthly average income available to the family of the deceased had he survived as the breadwinner. From this amount, one-third was deducted towards personal expenses and other liabilities like payment of income tax etc. leaving a balance of Rs.1500.00 as the monthly dependency of the family of the deceased.

11. Learned counsel for the Appellants pointed out that the Dixit formula is not the same as the Thomas principle. In the Thomas principle, the income at the time of death is doubled to arrive at the estimate of the gross income. However, in the Dixit formula, a new calculation is made by taking the "average gross future monthly income", which is not postulated in the Thomas principle. It was submitted that having accepted the Thomas principle as laying down a "scientific yardstick", there was no discernible reason for the Supreme Court to have departed from that principle, to the detriment of the claimants and introduce a formula different from the scientific yardstick of the Thomas principle.

12. Learned counsel submitted that, as observed by the Supreme Court in Ashwani Kumar vs. Regional Transport Authority, , the Act is claimed to be a social welfare legislation and seeks to give effect to the expanding notions of social security because of ever-increasing motor vehicle accidents in a fast-moving society and, therefore, it should be interpreted liberally in favor of the claimants of a deceased rather than to their detriment. Learned counsel, therefore, advocated the application of the Thomas principle, which he submitted did not require any variation.

13. Learned counsel submitted that this Court has been consistently taking the view that Thomas principle should be applied and not the Dixit formula. He referred to certain decisions of this Court in support of his contention.

14. In Vishakha Devi & Ors. vs. Delhi Transport Corporation & Anr., 2002 ACJ 2076, the deceased was about 42 years of age and his income at the time of his death in February, 1988 was Rs.1,450.00 per month. For the purpose of calculating compensation, a Division Bench of this Court assessed his salary (including commission and other allowances received by him) at Rs.3,000.00 per month.

15. In Krishna Gupta & Ors. vs. Madan Lal & Ors., 2003 ACJ 933, the deceased was a teacher in a school managed under the Delhi Administration. At the time of his death in August, 1974, he was getting a salary of Rs.834.35 per month and was a young man of 38 years. A Division Bench of this Court assessed his monthly salary at Rs.1,700.00 and awarded compensation accordingly.

16. In Hussan Bano & Ors. vs. Subhash Chand & Ors., 2003 ACJ 1114 and Delhi Transport Corporation vs. Deep Kanta & Ors., 2003 ACJ 1369, a learned Single Judge of this Court did not apply the Thomas principle but employed the calculations suggested by the Supreme Court in the case of Donat Louis Machado & Ors. vs. L. Ravindra & Ors., . These decisions, therefore, do not advance the contention of learned counsel for the Appellants on the general applicability of the Thomas principle.

17. So far as the present case is concerned, the deceased was about 45 years of age and was earning Rs.1,600.00 per month (rounded off). He had a steady job with Indian Airlines and would have continued working for about another 13 years till the age of superannuation of 58 years. It is unlikely that during the period of 13 years, in the normal course, his salary would have more than doubled for a considerable period so as to make the average gross monthly income Rs.3,200.00 in accordance with the Thomas principle. However, it can reasonably be said that his salary would have increased considerably, and may even have doubled so that the average gross monthly income would have been a figure between his salary at the time of his death and double that figure at the time of his retirement. Under the circumstances, the more appropriate multiplicand can be arrived at by applying the Dixit formula. In fact, in Sarla Dixit, the deceased was much younger than the deceased in the present case and was also earning more or less the same amount per month (rounded off) at the time of his death.

18. Applying the Dixit formula, the average gross future monthly income of the deceased would work out to Rs.2,400.00 had he survived as the bread winner of his family. From this amount, if 1/3rd is deducted towards his personal expenses, the balance would be Rs.1,600.00 per month which would represent the appropriate multiplicand in so far as the present case is concerned.

19. Applying the multiplier of 15, the compensation due to the deceased would then work out to Rs.2,88,000.00 (1600 x 12 x 15 = 288000).

20. The next grievance of learned counsel for the Appellants is that interest should have been awarded at 12% per annum from the date of the claim petition and not from the date of the Award passed by the learned MACT. In this regard, learned counsel is right in contending that the interest should have been from the date of filing of the claim petition. The requirement of Section 171 of the Act is that simple interest should be paid not earlier than the date of making the claim. There is nothing to suggest that the Appellants were in any manner guilty of delaying the proceedings for the purposes of earning interest on the amount of compensation. Consequently, in the absence of any material that would suggest to the contrary, interest is liable to be paid from the date of filing the claim petition. The Award is modified to this extent.

21. However, the award of interest at 12% per annum from the date of filing of the claim petition will be available to the Appellants only in respect of the amount awarded by the learned MACT, since there is no challenge to this part of the Award. With regard to the enhanced amount, the Appellants will be entitled to interest at 9% per annum from the date of filing of the claim petition. The award of interest at 9% per annum is being made on the basis of the decision of the Supreme Court in Kaushnuma Begum, Abati Bezbaruah and Donat Louis Machado.

22. The final contention of learned counsel for the Appellants is that a conventional amount towards loss of consortium and loss of estate was not awarded to the Appellants. This contention of learned counsel has to be accepted. But what is the conventional amount to be awarded for loss of consortium and loss of estate? According to a learned Single Judge of this Court, the amount of Rs.50,000.00 is the conventional amount that is awarded towards loss of consortium, loss of love and affection and funeral expenses, etc. (Veena Aggarwal & Ors. vs. Inderjeet Pandey & Ors., 2003 V AD (Delhi) 584). However, the Supreme Court has differing views on this subject.

23. In National Insurance Co. Ltd. vs. Swaranlata Das, 1993 Supp (2) SCC 743, the Supreme Court quantified the conventional figure as Rs.7,500.00 each for loss of consortium and loss of estate (paragraph 9 of the Report). In Susamma Thomas, the Supreme Court quantified the conventional figure as Rs.15,000.00 each for loss of consortium and loss of estate (paragraph 19 of the Report). In Sarla Dixit, the Supreme Court quantified the conventional figure as a total of Rs.15,000.00 for loss of consortium and loss of estate (paragraph 7 of the Report). In Trilok Chandra, loss of consortium and loss of estate were compositely referred to as "loss of expectation of life." The amount of compensation for this was quantified at Rs.10,000.00 (paragraph 15 of the Report).

24. Considering the above decisions of the Supreme Court, it seems appropriate to quantify the conventional figure for loss of consortium and loss of estate at Rs.7,500.00 each, as held in Swaranlata and Sarla Dixit. This is also closer to the figure determined by the Supreme Court in Trilok Chandra than the figure given in Susamma Thomas.

25. To conclude:

(a) The Second Schedule to the Act is a safe and reliable guide for determining the multiplier to be applied.

(b) On the facts of this case, the Dixit formula is more appropriate than the Thomas principle.

(c) As held by the learned MACT, the Appellants will be entitled to simple interest @ 12% per annum on the amount awarded. However, this will be from the date of filing the claim petition.

(d) On the enhanced compensation, the Appellants will be entitled to simple interest @ 9% per annum from the date of filing the claim petition.

(e) The conventional figure for loss of consortium and loss of estate is quantified at Rs.7,500.00 each or a total of Rs.15,000.00.

26. The appeal is allowed to the above extent. The amount that is required to be invested or disbursed, as the case may be, shall be in accordance with the directions given by the learned MACT in its Award. No costs.