Smt. Luxmi Devi And Ors. vs Sh. Neeraj Kumar And Ors.
2008 Latest Caselaw 584 Del

JUDGMENT

Kailash Gambhir, J.

1. The present appeal arises out of the award dated 7th September, 2006 of the Motor Accident Claims Tribunal whereby the Tribunal awarded a sum of Rs. 5,20,000/- along with interest @ 6% per annum to the appellant. The brief conspectus of the facts are as follows:

2. On 6th January 2004 at about 1:45pm Sh. Virender Nath Kashyap was traveling in the bus bearing registration No. DL 1PB 1689 driven by Sh. Neeraj Kumar and when the bus reached HC Sen Road near Kauriya Pul Tikona Park, the driver suddenly applied brakes and due to the sudden jerk the deceased fell down and received fatal injuries and later succumbed to his injuries. The deceased was of 35 years of age on the date of the accident and was engaged in the business of stitching export garments in the name and style of Kashyap Garments. The appellants filed the claim petition and being aggrieved with the award of the learned tribunal have preferred the present appeal for enhancement of compensation.

3. Sh. O.P. Mannie, counsel for the appellants contended that the tribunal has erred in assessing the income of the deceased at Rs. 45,000 per annum whereas the deceased was actually earning Rs. 85,000 to 1,50,000 per annum. It was urged by the counsel that the tribunal erred in not considering future prospects while computing compensation as it failed to appreciate that the deceased would have earned much more in near future as he was aged 35yrs only and would have lived for another 30-35yrs had he not met with the accident. It was also argued by the counsel that the tribunal did not consider that due to high rates of inflation the deceased would have earned much more in near future and the tribunal also failed in appreciating the fact that even the minimum wages are revised twice in a year and hence, the deceased would have earned much more in his life span. The counsel maintained that the tribunal has erroneously applied the multiplier of 16 while computing compensation when according to the second schedule multiplier of 17 is applicable for the age group between 30-35 years. The counsel also contended that the tribunal should have granted at least Rs. 1 lac in place of a meagre amount of Rs. 25,000 towards loss of love and affection and loss of consortium. It was also pointed out by the counsel that no amount has been awarded towards mental pain, sufferings and torture to the appellants by the tribunal. The counsel also contended that the rate of interest allowed by the tribunal is on the lower side and the tribunal should have allowed simple interest @ 18% per annum in place of 6% per annum.

4. The counsel for the appellants has relied upon the following judgments in support of his contentions:

1. Mohinder Kaur and Ors. v. Hira Nand Sindhi (Ghoriwala) and Ors. 2007 ACJ 2123 (SC)

2. United India Insurance Co. Ltd. v. Sulochana and Ors. III (2007) ACC 50 (Mad) (DB)

3. A.P.S.R.T.C. v. M. Pentaiah Chary 2007 VIII AD (SC) 552

5. Per contra, Sh. S.N. Mathur, counsel for Respondent Nos. 1 and 2 and Ms. Sonia Sharma, counsel for respondent No. 3 opposed the contentions of the counsel for the appellants. Counsel for respondent No. 3 contended that the learned tribunal has rightly assessed the income of the deceased @ Rs. 45,000 per annum on the basis of the income tax return for the year 2003-04 placed on record before the learned tribunal. The counsel further submitted that the tribunal has adopted multiplier of 16 in accordance with the second schedule of the MV Act and also stated that once the correct multiplier is applied by the tribunal no question of enhancement of future prospect arises as the formula applied by the tribunal takes into consideration the future prospects of the deceased as per the decision of the Hon'ble Apex Court in Sarla Dixit and Anr. v. Balwant Yadav and Ors. . The counsel maintained that the non-pecuniary damages granted to the appellants towards loss of love and affection and loss of consortium are already on the higher side and hence no further enhancement can be claimed. The counsel also contended that no general damages can be allowed towards mental pain, sufferings and torture to the appellants as under the second schedule there is no such head of compensation concerning mental pain, sufferings and torture. Further, the counsel stated that the learned tribunal has awarded interest @ 6%, which is in accordance with the judgments of the Supreme Court and in accordance with the rate of interest as earned by the companies on FDR, NSC etc., in the relevant period. The counsels for the respondents have relied upon following judgments in support of their contentions:

(1) Arun Sodhi v. Delhi Transport Corporation I (2001) ACC 615;

(2) New India Assurance Co. Ltd. v. Smt. Nirmala Devi and Ors. 2007 (3) TAC 414 (Del);

(3) H.S. Ahammed Hussain v. Irfan Ahammed and Anr. ;

(4) Fakeerappa and Anr. v. Karnataka Cement Pipe Factory and Ors. 2004 III AD 373 (SC)

(5) Unreported decision of this Court in MAC APP No. 40/2004 and Cross objection/2004 dated 25/01/2007

6. I have heard learned Counsel for the parties and have perused the record. On the first contention of the counsel for the appellants that the Tribunal erred in assessing the income of the deceased at Rs. 45,000/- per annum, when actually he was earning about Rs. 85,000/- to 1,50,000/-, I do not find any infirmity in the decision of the tribunal in this regard. On perusal of the record, it is manifest that the income tax returns filed by the deceased for the year 1997-98, 1998-99, 1999-2000, 2000-2001 and 2003-2004 are on the record and in the assessment year 2003-2004 and financial year 2002-2003, his income was Rs. 45,200/-. While assessing compensation, the income at the time of the accident is taken into consideration and the Tribunal rightly took income of the deceased at Rs. 45,000/- on the basis of the income tax return of the year 2003-2004 placed and duly proved on record for the purpose of computation of compensation.

7. On the second contention of the counsel for the appellants pertaining to the future prospects of the deceased, I feel that in the year 1997-98, the income of the deceased was Rs. 6250/-p.a. in 1998-99 it was Rs. 10,750/-p.a. in 1999-2000 it was Rs. 8290/-p.a. in 2000-01 it was Rs. 9500/-p.a and in 2003-04 it was Rs. 45,200/-p.a, therefore, it is manifest that there has been some increase in the income of the deceased till the year 2000-2001 and thereafter the income has taken a leap from Rs. 9,500/- per annum to Rs. 45,200/- per annum. In the year 1999-2001, there was a decline in his income from Rs. 10,750/- per annum to Rs. 8,290/- per annum. The deceased was self employed and nothing has come on record to prove the future advancement in career of the deceased. The aforesaid returns placed on record does not depict steady increase of such magnitude except the increase of one year i.e. 2003-2004 to be sufficient enough to take into account the increased income for determining future prospects, therefore, the future prospects cannot be awarded. Also, the deceased was into a business of stitching readymade garments and businesses are fluctuating in nature, thus, future prospects cannot be awarded in the instant case. It is no more res integra that while claiming future prospects, proof regarding same is required to be placed on record, in this regard, the Hon'ble Apex Court has given following observations in the case of Bijoy Kumar Dugar v. Bidya Dhar Dutta . The same is reproduced as under:

The mere assertion of the claimants that the deceased would have earned more than Rs 8000 to Rs 10,000 per month in the span of his lifetime cannot be accepted as legitimate income unless all the relevant facts are proved by leading cogent and reliable evidence before MACT. The claimants have to prove that the deceased was in a trade where he would have earned more from time to time or that he had special merits or qualifications or opportunities which would have led to an improvement in his income. There is no evidence produced on record by the claimants regarding future prospects of increase of income in the course of employment or business or profession, as the case may be.

8. Therefore, I feel that the tribunal did not err in not awarding the future prospects while computing compensation as there was no sufficient material on record for grant of future prospects. On the contention of counsel for the appellants that the multiplier of 17 is applicable instead of 16 in the facts of the present case as the deceased was 35 years of age at the time of the accident, I feel that the Tribunal mistakenly applied the multiplier of 16 instead of 17. On perusal of the II Schedule of the Motor Vehicles Act, 1988, it is found that a person of 35 years falls in the age group of 'Above 30 years but not exceeding 35 years' and the correct multiplier to be applied in the said age group shall be 17. Hence, in the instant case, the multiplier of 17 shall be applicable. The next contention of the counsel for the appellants is that the Tribunal has awarded a meagre amount of Rs. 25,000/- towards loss of love and affection and consortium and has not awarded anything towards mental pain, sufferings and torture to the appellants. The deceased is survived by his widow, a minor son, two minor daughters and his aged parents. I feel in the circumstances of the case and also after considering the age of the appellants and the deceased it would be appropriate to enhance amount towards loss of love and affection and loss of consortium from Rs. 25,000/- to 75,000/-. Also, in Mohinder Kaur and Ors. v. Hira Nand Sindhi (Ghoriwala) and Anr. 2007 ACJ 2123, the Hon'ble Apex Court in addition to the award passed by the Tribunal allowed Rs. 50,000 towards loss of consortium with interest at the rate of 9% per annum from the date of order till realisation. Hence, enhancement is made in the amount towards loss of love and affection and loss of consortium from Rs. 25,000/- to 75,000/-.

9. It is well settled that the compensation to be awarded should be just, fair, equitable and reasonable. In this regard following observations of the Apex Court in Nagappa v. Gurudayal Singh is relevant and is reproduced below:

7. Firstly, under the provisions of the Motor Vehicles Act, 1988, (hereinafter referred to as "the MV Act") there is no restriction that compensation could be awarded only up to the amount claimed by the claimant. In an appropriate case, where from the evidence brought on record if the Tribunal/court considers that the claimant is entitled to get more compensation than claimed, the Tribunal may pass such award. The only embargo is - it should be "just" compensation, that is to say, it should be neither arbitrary, fanciful nor unjustifiable from the evidence.

10. As regards compensation towards mental pain, sufferings and torture, I feel that it is neither a head for grant of compensation under the IInd Schedule nor same has been considered by the Courts and Tribunals so far and hence, no compensation in this regard is awarded to the appellants for shock, mental torture and agony. In this regard Hon'ble Apex Court has in N. Sivammal v. Pandian Roadways Corpn. observed as follows:

4. Thereafter, the High Court proceeded meticulously to examine every item of compensation included in the award. The High Court held that award of Rs 5000 under the head mental agony suffered by the claimants as a result of the death of the deceased cannot legally be sustained. This is only the different way looking at the same thing which is legally permissible. Muthukrishnan lived for 19 days since the accident and he was throughout under a shadow of death. He had suffered severe injuries. He must have suffered continuous pain and compensation was admissible for pain and suffering, suffered by the deceased. Therefore, the amount of Rs 5000 which the High Court held inadmissible, is legitimately admissible under another head and therefore by changing the head we restore the amount of Rs 5000 awarded by the Tribunal.

The other contention of the counsel for the appellant pertains to the rate of interest awarded by the Tribunal being on the lower side i.e., @6% per annum and it should be enhanced to 18%. In relation to rate of interest in the decision of Abati Bezbaruah v. Dy. Director General, Geological Survey of India , the 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 4A(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.

11. Therefore, I feel that the bank rate as prevalent on the date of award should normally be the guiding factor to determine the rate of interest to be awarded on the compensation amount. In the circumstances of the present case the interest @ 6% per annum is enhanced to 7.5% per annum. On the basis of the above discussion, the income of the deceased shall be assessed at Rs. 45,000/-p.a. which means Rs. 3750/- p.m. and after making 1/3rd deductions towards personal expenses, the loss of dependency shall come out as Rs. 30,000/- and after applying multiplier of 17 the compensation shall come out as Rs. 5,10,000/- to this after adding Rs. 75,000/- towards loss of love and affection and loss of consortium besides Rs. 5000/- towards funeral expenses and Rs. 10,000/- towards loss of estate the total amount of compensation comes out to be at Rs. 6,00,000/-.

12. The insurance company shall pay the differential amount to the appellants with interest @7.5% p.a. from the date of filing of the petition till realization. With these directions the present appeal is disposed of.

13. The matter is remitted back to the Tribunal for apportionment of the differential amount of enhanced compensation in favor of the appellants.