Delhi High Court

Smt.Sunita Jain & Ors. vs Shri Ram Pal & Ors. on 5 September, 2008

Author: V.B.Gupta

*       HIGH COURT OF DELHI : NEW DELHI

                      FAO No.363 of 1996

%             Judgment reserved on: 26th July, 2008

              Judgment delivered on: 5th September, 2008


Smt.Sunita Jain,
Widow of Late Sh.Suil Kumar Jain

2.Miss Surbhi jain
D/o Late Sh.Sunil Kumar Jain

3.Master Abhishek Jain
S/o Late Sh.Sunil Kumar Jain

(Appellant No. 2 and 3 being minors
Through her mother/next friend/natural
Guardian, appellant No.1)
All r/o House No.52, Block A
Double Storey Quarters,
Patel Nagar-II,
Ghaziabad, U.P.                   ....Appellant

                     Through: Mr.Ashok Bhalla, Adv.

                     Versus

1.Shri Ram Pal,
Son of Sh.Shiv Lal,
R/o Village & Post Office Badli
Delhi.

2.Sh.Om Prakash Ved prakash
49, Laxmi Bai Nagar Market
New Delhi.

3.M/s National Insurance Co.Ltd.

FAO No.363 of 1996                               Page 1 of 19
 Divisional Office-14, (351400)
13/32, W.E.A. Arya Samaj Road,
Karol Bagh, New Delhi-110005.          ...Respondents.

                     Through: Ms.Manjusha Wadhwa with
                              Ms.Gagandeep Kaur, Adv. for
                              respondent No.3.

Coram:
HON'BLE MR. JUSTICE V.B. GUPTA

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                       Yes

2. To be referred to Reporter or not?                    Yes

3. Whether the judgment should be reported
   in the Digest?                                        Yes

V.B.Gupta, J.

The present appeal under Section 173 of the

Motors Vehicles Act, 1988 (for short as „Act‟) has been

filed on behalf of the appellant for enhancement of the

compensation to Rs. 35 lacs with costs through out and

interest @ 18% p.a. from the date of filing of the

petition till date.

2. Brief facts of this case are that on 11th July, 1990,

Sunil Kumar Jain (since deceased) was going to his

office on his two wheeler scooter No.DHE-6718. At

about 9.05 a.m., when he was reached National

Highway, Nizamuddin Bridge (near Pole No.41) at a

slow speed and was on his left side, a bus No.DEP-

3898 came from behind and hit the scooter of Sunil

Kumar Jain. As a result of forceful impact on the

scooter, deceased was thrown off on the road and he

was crushed under the front wheel of the offending

bus. He died on the spot.

3. This accident occurred due to rash and negligent

driving on the part of the driver of the offending bus

respondent No.1. The bus is owned by respondent

No.2 and insured with respondent No.3.

4. The case of the appellant is that deceased was

working as a Company Secretary with M/s Montari

Industries Ltd. and was drawing a monthly income of

Rs.9,500/-. It is further stated that deceased was a

talented young professional. He was M.A.LL.B and he

was holding a Diploma in Personal and Industrial

Management. By virtue of his qualification, deceased

would have risen to the position of a Chief Executive in

a large industrial undertaking and would have earned

the income of Rs.25,000/- per month, for at least 30

years. The claimants have assessed the loss of

dependency at Rs.10,000/- per month and have

claimed compensation of Rs.30 lacs. Further

compensation of Rs.5 lacs has been claimed on account

of pain and agony, loss of happy and comfortable life,

loss of enjoyment, etc.

5. All the respondents filed their written statements

before the trial court and contested the claim petition.

6. Vide impugned judgment dated 7th December,

1995 an award for a sum of Rs.7,45,920/- was passed

in favour of the appellants and against the

respondents. Appellants were also awarded interest @

12% per annum from the date of filing of the petition

to the date of its realization.

7. Being aggrieved with the order of the Tribunal,

the appellants have filed the present appeal seeking

enhancement of the compensation.

8. It has been contended by learned counsel for the

appellants that the Tribunal has wrongly taken the

monthly income of the deceased as Rs.5,550/-. In fact

as per the case of the appellants, the deceased was

drawing a monthly salary of Rs.9,500/- per month plus

other perquisites. The appellant has proved on record

the last drawn salary certificate of the deceased. The

total computation of this salary certificate of the

deceased are follows:-

Basic salary                           Rs.4,600/- p.m.

Company Lease                          Rs.2,750/- p.m.
Accommodations

Conveyance allowance                   Rs.1,200/- p.m.

Personal Pay                           Rs. 600/- p.m.

Entertainment allowance             Rs. 350/- p.m.
                                    -------------------
       Total                        Rs.9,500/-p.m.
                                    -------------------

Plus other perquisites and monetary benefits as per Rules of Company.

9. The Tribunal took into consideration only the

basic pay, personal pay and entertainment allowance.

It did not take into consideration the company lease

accommodation and conveyance allowance, which it

ought to have taken.

10. Further, it is contended that future prospects of

the deceased were not considered at all by the

Tribunal though, the claimants have mentioned about

the same in the claim petition and PW1 & PW2 have

also deposed about the same.

11. On the other hand, it has been argued by learned

counsel for the respondent-Insurance Company that

the Tribunal has rightly taken the monthly income of

deceased as Rs.5,500/- which is as per documents

Ex.PW-1/C and which gives the break up of the salary

of the deceased as on 3rd May, 1990. The Tribunal

rightly did not include conveyance allowance, leave

travel allowance and medical reimbursement

allowance, which was personal to the deceased and

which could not be formed part of the dependency.

12. Regarding future prospects, it is contended by

learned counsel for the respondent-Insurance

Company that PW-2 who is the widow of the deceased

in her cross-examination has admitted that there was

no time bound promotion. Thus, the Tribunal rightly,

did not consider the future prospects.

13. Learned counsel for the respondent in support of

her contention has cited Oriental Insurance

Company Limited v. Jashuben and Ors., 2008

INDLAW SC 210, in which it has been laid down that;

"What would have been the income of deceased on the date of retirement, was not a relevant factor in the light of particular facts of this case."

14. Regarding the plea that the Tribunal has not

taken into consideration conveyance allowance and

company lease accommodation to compute the loss of

earnings, appellant no. 1 has appeared in the witness

box and had stated that the deceased was drawing a

salary of Rs.12,000/- per month at the time of his

death.

15. However, in the petition, the income of the

deceased at the time of accident has been mentioned,

as Rs.10,000/- approximately.

16. The certificate Ex. PW2/C issued by Montari

Industries Ltd. gives the break-up of salary as on

03.05.90 in respect of the deceased as follows:-

(i) Basic Pay                 :         Rs.4,600/-

(ii) Personal Pay             :         Rs.600/-

(iii) Others                  :         Rs.350
                                        (Entertainment
                                        allowance)

17. The certificate further states that the deceased

was entitled for company lease accommodation,

conveyance reimbursement and annual perquisites like

LTA, Medical reimbursement as applicable at his level

in the company.

18. The Tribunal while assessing the compensation,

has taken the monthly income of the deceased at

Rs.5,550/- as per certificate issued by the employer.

19. Reverting back to the contentions raised by the

counsel for the appellant claiming inclusion of

company lease accommodation and conveyance

allowances while considering the net income of the

deceased, the recent decision of the Apex Court in

National Insurance Co. Ltd. v. Indira Srivastava

and others, 2008 ACJ 614, will clinch the entire

controversy involved in the present appeal.

20. In the above said case, the Apex Court has

observed as under;

"The term 'income' has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated in monitory terms.

Section 168 of the Act uses the word 'just compensation' which, in our opinion, should be assigned a broad meaning. We cannot, in determining

the issue involved in the matter, lose sight of the fact that the private sector companies in place of introducing a pension scheme takes recourse to payment of contributory provident fund, gratuity and other perks to attract the people who are efficient and hard-working. Different offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of entire family. In some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be determined."

The Apex Court further observed;

"That if some facilities are being provided by the employer whereby the entire family stands to benefit, the same must be held to be relevant for the purpose of computation of total income of the deceased"

21. The Andhra Pradesh High Court in

S.Narayanamma and Ors. v. Secretary to

Government of India and Ors., II (2002) ACC 582,

following Helen C. Rebello (Mrs.) and others v.

Maharashtra State Road transport Corporation

and another, II (1998) ACC 512, held that;

"The contributions made by the deceased-employee towards Employees' Provident Fund, Life Insurance (LIC), Group Insurance and the deductions shown in the salary certificate of the deceased- employee towards the vehicle loan instalment, benefit fund, and also the amounts received by the deceased- employee towards interim Relief, Special Pay, Dearness Allowance, House Rent Allowance, need not be deducted from the gross salary of the deceased for ascertaining the income, because the contributions/deductions made towards, E.P.F., L.I.C., Group Insurance and Benefit Fund would be beneficial to the family of the deceased-employee and it would be the estate of the deceased."

22. Thus, in view of the above discussions, the

Tribunal has not taken proper care while deducting the

amounts from the salary of the deceased. The

deductions made by the tribunal from the salary such

as company lease accommodation cannot be deducted

while computing the net monthly earnings of the

deceased.

23. In so far as his basic salary of Rs.4,600/- p.m.,

personal pay of Rs.600/- p.m. and entertainment

allowance of Rs.350/- p.m. are concerned, there cannot

be any dispute.

24. The company lease accommodation of Rs.2,750/-

per month had to be considered by the Tribunal and it

is not such an allowance, which should be reduced

while computing the net monthly earnings of the

deceased.

25. However, conveyance allowance is exclusively

personal to his professional expenditure and it has to

be ignored.

26. The above findings of the tribunal are contrary to

the principle of 'just compensation' enunciated by the

Supreme Court in the judgment in Divisional

Controller, KSRTC v. Mahadeva Shetty, AIR 2003

SC 4172, where the Apex Court has observed as

under;

"It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which to it appears to be "just". It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. Bodily injury is nothing but a deprivation which entitles the claimant to damages. The quantum of damages fixed should be in accordance with the injury. An injury may bring about many consequences like loss of earning capacity, loss of mental pleasure and many such consequential losses. A person becomes entitled to damages for mental and physical loss, his or her life may have been shortened or that he or she cannot enjoy life, which has been curtailed because of physical handicap. The normal expectation of life is impaired. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be "just" and it cannot be a bonanza; not a source of profit but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be "just" compensation is a vexed question. There can be no golden rule applicable to all cases for

measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of "just" compensation which is the pivotal consideration. Though by use of the expression "which appears to it to be just", a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression "just" denotes equitability, fairness and reasonableness, and non-

arbitrariness. If it is not so, it cannot be just. (See Helen C. Rebello v. Maharashtra State Road Transport Corporation & another, II (1998) ACC

512.)"

27. Thus, taking the monthly salary of deceased at

Rs.8,300/- per month (Basic salary Rs.4,600/- p.m.;

Company Lease Accommodation Rs.2,750/- p.m.;

Personal Pay Rs.600/- p.m.; Entertainment allowance

Rs.350/- p.m.) and after deducting 1/3rd amount for

personal expenses, the net salary comes to Rs.5,534/-

per month, which is rounded off as Rs.5,500/- per

month. Thus, applying the multiplier of 16, the total

dependency comes to Rs.5,500x12x16=Rs.10,56,000/-.

28. As regards the future prospects, the Apex Court

in Oriental Insurance Company Limited v.

Jashuben and Others (supra), as cited by the

respondent counsel has observed as under;

"Salary would be revised or not was not known at that part of time. Only because such salary was revised at a later point of time, the same by itself would not have been a factor which could have been taken into consideration.

The amount of compensation indisputably should be determined having regard to the pecuniary loss caused to the dependants by reason of the death of the victim. It was necessary to consider the earnings of the deceased at the time of the accident. Of course, future prospect is not out of bound for such consideration. But the same should be founded on some legal principle. The Apex Court has further observed as under;

"We, therefore, are of the opinion that what would have been the income of the deceased on the date of

retirement was not a relevant factor......."

29. In Oriental Insurance Co. Ltd. v. Smt.

Kailash Mehta, 1993 ACJ 970, the Gauhati High

Court held that;

"It is well settled that deduction from the calculated amount of compensation to the maximum extent of 30 per cent thereof is to be made because of uncertainty of life and lump sum payment of compensation."

30. In the present case, no such deduction have been

made on the account of uncertainty of life.

31. Hence, the contentions regarding future

prospects made by the counsel for Appellants are

rejected.

32. Accordingly, the award passed by the learned

Tribunal is modified to the extent that appellants are

entitled to a total of sum Rs.10,56,000/- as

compensation, which is just and fair.

33. The appellants have also claimed interest @ 18%

p.a. from the date of filing of the petition till date.

34. The Tribunal has awarded the interest @ 12% p.a.

from the date of filing of the petition to the date of its

realization.

35. Section 171 of the Act provides for the award of

interest where any claim is allowed. It reads as under;

"Where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf."

36. Though this Section confers a discretion on the

Tribunal to award interest, but the same is meant to be

exercised in cases where the claimant can claim the

same as a matter of right.

37. While determining rate of interest and period for

which the same is sought to be granted, the Tribunal

shall give due consideration to the fact as to whether

the claim proceedings sought to be lingered either by

the claimant or owner or insurer, so that it may act as

deterrent against the earning party and compensatory

for the other.

38. The present appeal was filed in the year 1996 but