Sh. Krishan Lal Popli And Anr. vs Ms. Mona Virk And Ors.
2008 Latest Caselaw 406 Del

JUDGMENT

Kailash Gambhir, J.

1. By way of the present appeal, the appellant seeks enhancement in the compensation amount over and above the amount awarded by the Tribunal vide order dated 22.11.2005.

2. Mr. K.C. Mannie, counsel appearing for the appellant has raised five contentions for claiming enhancement in the compensation. The first contention raised by him is that the Tribunal has wrongly deducted 50% towards personal expenses of the deceased. The contention of the appellant is that it could not have exceeded 1/3rd of the personal expenses. In support of his argument, counsel for the appellant has relied upon a judgment of the Apex Court reported in Fakeerappa and Anr. v. Karnataka Cement Pipe Factory and Ors. I (2004) ACC 494 (SC).

3. The second contention raised by the appellants is that the Tribunal has not correctly taken into account the income of the deceased which was proved on record. The contention of the counsel for the appellants is that the earnings of the deceased was at Rs. 8,500/- per month besides conveyance allowance of Rs. 1,000/-. The contention of learned Counsel for the appellants is that although the case was filed against the said owner, but still he has supported the fact regarding income of deceased as asserted by the appellants in the claim petition. In respect of his arguments, counsel for appellants has relied upon a judgment reported in National Insurance Co. Ltd v. Indira Srivastava and Ors. 2008 (1) RCR (Civil) 359.

4. The third contention raised by the counsel for the appellants is that the Tribunal has not correctly applied multiplier. The contention of learned Counsel for the appellants is that considering the young age of the deceased multiplier should have been at least of 10 and in any case not less than 8, even if the age of the mother is taken into consideration. Counsel, thus, contends that as per the structural formula of the Second Schedule, multiplier should have been 8 in place of five as applied by the Tribunal. The appellants have proved on record the age of the father as 63 years and that of the mother as 60 years, and therefore, considering the age of the mother, the said multiplier should have been 8 in place of 5.

5. The fourth contention raised by the counsel for the appellants is that the Tribunal has awarded lower rate of interest i.e., 6% per annum which should have been 12% per annum. In support of his contention, learned Counsel has placed reliance on Fakeerappa and Anr. v. Karnataka Cement Pipe Factory and Ors. (supra).

6. The appellants have also challenged the finding of the Tribunal on the lower amount awarded towards loss of love and affection. The contention of learned Counsel for the appellants is that at least 50,000/- each should have been awarded by the Tribunal towards loss of love and affection. In support of this argument, learned Counsel has relied upon the judgment of the Apex Court reported in Lata Wadhwa and Ors. v. State of Bihar and Ors. .

7. Mr. L.K. Tyagi, learned Counsel for the respondent insurance company on the other hand submits that the Tribunal has assessed the income of the deceased based on the Income Tax Return placed on record by the appellants themselves disclosing the income of the deceased as Rs. 52,000/- per annum. On the issue of deduction of income towards personal expenses, the contention of Mr. L.K. Tyagi, learned Counsel for the respondent is that the Tribunal has considered granting of benefit of future prospect to the extent of almost double, therefore, no fault can be found with deducting 1/2 of the personal expenses out of the income of the deceased.

8. Counsel for the respondent further contends that the Tribunal has correctly applied multiplier of 5 as laid down in the Second Schedule of the Act for above 60 years of age, appropriate multiplier laid down therein is 5 only and not 8 as claimed by the appellants, herein.

9. Award of interest at the rate of 6% is also correct as per the submission of learned Counsel for the respondent and similarly, the counsel states that no fault can be found with the grant of Rs. 50,000/- towards loss of love and affection.

10. I have heard learned Counsel for the parties and have perused the record.

11. As regards the contention of the counsel for the appellant that the 50% deduction made by the tribunal is on the higher side as the deceased is survived by his parents only and the tribunal ought to have deducted 1/3rd towards personal expenses, I feel that the contention of the counsel for the appellants has force. In support of this argument, counsel for the appellant has placed reliance on the judgment of the Supreme Court reported in (2004) 3 AD 373 (SC) Fakeerappa and Anr. v. Karnataka Cement Pipe Factory and Ors. In the facts of this case before the Supreme Court, the deceased was aged 27 years and was getting Rs. 2,000/- per month. The Tribunal in this case had applied multiplier of 18 and directed deduction of 50% of income towards personal expenses. The appeal filed against the order of the Tribunal was dismissed by the High Court and thereafter the Hon'ble Supreme Court after taking into consideration the facts and circumstances of the case, felt it appropriate to restrict the deduction of personal expenses only to 1/3rd monthly income of the deceased. It would be relevant to refer to the following paras from the said judgment.

7. What would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula of universal application. It would depend upon circumstances of each case. The deceased undisputedly was a bachelor. Stand of the insurer is that after marriage, the contribution to the parents would have been lesser and, therefore, taking an overall view the Tribunal and the High Court were justified in fixing the deduction.

8. It has to be noted that the ages of the parents as disclosed in the claim petition were totally unbelievable. If the deceased was aged about 27 years as found at the time of post-mortem and about which there is no dispute, the father and mother could not have been aged 38 years and 35 years respectively as claimed by them in the claim petition. Be that as it may, taking into account special features of the case we feel it would be appropriate to restrict the deduction for personal expenses to one-third of the monthly income. Though the multiplier adopted appears to be slightly on the higher side, the plea taken by the insurer cannot be accepted, as there was no challenge by the insurer to the fixation of the multiplier before the High Court and even in the appeal filed by the appellants before the High Court, the plea was not taken.

12. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into consideration many imponderables and nothing can be said with certainty in carrying out such assessment of damages. In catena of cases the Apex Court has in similar circumstances made 1/3rd deductions. Therefore, I am inclined to interfere with the award on this ground and modify the award by deducting 1/3rd expenses towards personal expenses.

13. As regards the income, it is no more res integra that mere bald assertions regarding the income of the deceased are of no help to the claimants in the absence of any reliable evidence being brought on record. On perusal of the award it becomes manifest that the appellants could not bring on record any cogent or reliable evidence to prove that the income of the deceased was Rs. 8,500/- per month besides conveyance allowance of Rs. 1,000/-per month. The appellants had brought on record only Ex. PW 1/12 the Income Tax Return of the assessment year 2002-2003, filed by the deceased, wherein his annual income was assessed as Rs. 52,000/- and in the absence of the salary slip or any other evidence in this regard the tribunal while considering the said Ex. PW 1/12, assessed the income annual income of the deceased at Rs. 52,000/-. The counsel has relied upon the judgment of the Apex Court in this regard in Indira Srivastava's case (Supra) and the same does not help the appellants in the facts of the present case. The issue before the Apex Court in the aforesaid judgment was as to what are the components of income and the issue herein is as to what is the income of the deceased. I do not find any infirmity in the award in this regard and the same is not interfered with.

14. As regards the contention of the counsel for the appellants that the tribunal has erred in applying the multiplier of 5, when in the facts and circumstances of the case, multiplier of 8 should have been applied, I feel that the tribunal has committed no error. The appellant father of the deceased was of 63 years of age and the appellant mother was of 60 years of age at the time of the accident. The selection of particular multiplier to a large extent depends upon the age of the deceased and the age of the dependants whichever is higher. In this regard, the Apex Court in New India Assurance Co. Ltd. v. Kalpana has observed as under:

7. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalising the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last.

15. From the above discussion it is clear that the application of the multiplier on the basis of age of the victim of the accident or claimant itself has been taken as the sole basis for the selection of a multiplier. Therefore, for determining the compensation under Section 166 of the Motor Vehicles Act, the structured formula laid down under the Second Schedule will act as a guide but the same can be deviated from if there are exceptional and sufficient reasons for such deviation. In the facts of the present case, I am of the view that after looking at the age of the claimants and the deceased the multiplier of 5 should have been applied. Therefore, in the facts of the instant case the multiplier of 5 shall be applicable.

16. As regards the issue of interest that the rate of interest of 6% p.a. awarded by the tribunal is on the lower side and the same should be enhanced to 12% p.a., I feel that the rate of interest awarded by the tribunal requires interference. No rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. The Interest is compensation for forbearance or detention of money and that interest is awarded to a party only for being kept out of the money, which ought to have been paid to him. Time and again the Hon'ble Supreme Court has held that the rate of interest to be awarded should be just and fair depending upon the facts and circumstances of the case and taking in to consideration relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time and other economic factors. In this regard in Abati Bezbaruah v. Deputy Director General, Geological Survey of India , the Hon'ble Apex Court has given following observations:

6. The question as to what should be the rate of interest, in the opinion of this Court, would depend upon the facts and circumstances of each case. Award of interest would normally depend upon the bank rate prevailing at the relevant time.

18. No ratio has been laid down in any of the decisions in regard to the rate of interest and the rate of interest was awarded on the amount of compensation as a matter of judicial discretion. The rate of interest must be just and reasonable depending upon the facts and circumstances of each case and taking all relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. No rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if a claimant does not specifically plead for the same, as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money, which ought to have been paid to him. No principle could be deduced nor can any rate of interest be fixed to have a general application in motor accident claim cases having regard to the nature of provision under Section 171 giving discretion to the Tribunal in such matter. In other matters, awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity. Neither Section 34 CPC nor Section 4-A(3) of the Workmen's Compensation Act are applicable in the matter of fixing rate of interest in a claim under the Motor Vehicles Act. The courts have awarded the interest at different rates depending upon the facts and circumstances of each case. Therefore, in my opinion, there cannot be any hard-and-fast rule in awarding interest and the award of interest is solely on the discretion of the Tribunal or the High Court as indicated above.

17. In the facts and circumstances of the case, I find infirmity in the award regarding award of interest and the same is enhanced @ 7.5% pa.

18. On the contention regarding that the tribunal has erred in not granting adequate compensation towards loss of love & affection, I feel that the same requires no interference. The tribunal has awarded Rs. 25,000/- each towards loss of love and affection to the appellants, which in the facts and circumstances of the case appear just and equitable. Therefore, no interference is made in the award on this ground.

19. In view of the above discussion, the total compensation is enhanced to Rs. 3,15,000/- from Rs. 2,50,000/- with interest @ 7.5% per annum from the date of filing of the petition till realisation and the same should be paid to the appellant by the respondents.

20. With these directions the present appeal is disposed of.