Ram Lal & Anr. vs Arjan Dass & Ors.
2009 Latest Caselaw 1347 Del

IN THE HIGH COURT OF DELHI AT NEW DELHI

                 FAO No. 43/1995

      Judgment reserved on:    13th March, 2008.

      Judgment delivered on: 13.4.2009.


Ram Lal & Anr.                      ..... Appellants.

                 Through: Mr. Sanjeev Sachdeva, Adv.

                     Versus

Arjan Dass & Ors.              ..... Respondents

Through: Mr. Kamal Chaudhary, Adv.

CORAM:

HON'BLE MR. JUSTICE KAILASH GAMBHIR,

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

KAILASH GAMBHIR, J. :

1. The present appeal arises out of the award dated

22.9.94 of the Motor Accident Claims Tribunal whereby the

Tribunal awarded a sum of Rs.40,000/- along with interest

@ 12% per annum to the claimants.

2. The brief conspectus of the facts is as follows:

On 12.9.82, at about 2:50PM, deceased Sandeep

Kumar, aged 13 years, student of 6th class was crossing the

bridge towards ring road, near bus stand Arjun Nagar.

Suddenly Respondent no.2 under the employment of

Respondent no.1 came driving the truck bearing registration

no. DHL-2287, rashly and negligently and struck against the

deceased by attempting to overtake a DTC bus. As a result

of which, Sandeep Kumar sustained multiple injuries

resulting in his death on 13.9.82.

A claim petition was filed on 09.3.1983 and an award

was passed, on 22.9.94. Aggrieved with the said award

enhancement is claimed by way of the present appeal.

3. Sh. Sanjeev Sachdeva, counsel for the appellants

urged that the award passed by the learned Tribunal is

inadequate and insufficient looking at the circumstances of

the case. It is stated that deceased was a boy of 13 years at

the time of accident, studying in VI class and was to be

given higher education. He was also helping his father in

his work. The counsel submitted that Ld. Tribunal erred in

not awarding compensation proportionate to the loss

resulted from the death to the parents and the mental pain,

shock, suffering undergone by them. It is further submitted

that Ld. Tribunal failed to observe the long life span in the

family of the deceased. It is also stated that the inflation

factor has also not been considered from the year 1983 till

the date of award. The counsel further stated that the Ld.

Tribunal erred in awarding costs only to the extent of

Rs.500/- to the appellants as the case took 11 years in the

lower court and number of witnesses were recorded. It was

further submitted that the evidence produced by the

appellants has not been appreciated. It is also stated that

the Ld. Tribunal erred in passing the order that 50% of the

awarded amount alongwith interest shall be kept in FDR in

any scheduled bank in the name of each claimant for a

period of 7 years with liberty to draw quarterly interest. It

is urged by the counsel that award amount may be

enhanced to Rs.6,50,000/- with future interest @ 12% p.a.

4. Per Contra Mr. Pankaj Seth, counsel for respondent

insurance company submitted that there is no illegality in

the impugned award. Counsel further contended that award

passed by Tribunal is absolutely fair, just and reasonable

and no fault can be found with the same.

5. I have heard learned counsel for the parties and

perused the record.

6. The assessment of damages to compensate the

dependants is beset with difficulties because while doing so,

many imponderables have to be taken into account, e.g.,

the life expectancy of the deceased and the dependants,

the amount that the deceased would have earned during

the remainder of his life, the amount that he would have

contributed to the dependants during that period, the

chances that the deceased may not have lived or the

dependants may not live up to the estimated remaining

period of their life expectancy, the chances that the

deceased might have got better employment or income or

might have lost his employment or income altogether. The

manner of arriving at the damages is to ascertain the net

income of the deceased available for the support of himself

and his dependants, and to deduct therefrom such part of

his income as the deceased was accustomed to spend upon

himself, as regards both self-maintenance and pleasure,

and to ascertain what part of his net income the deceased

was accustomed to spend for the benefit of the dependants.

Then that should be capitalised by multiplying it by a figure

representing the proper number of year's purchase. In this

relation, the Apex Court has held in plethora of judgments

that the multiplier method is the best method.

7. In this regard in G.M., Kerala SRTC v. Susamma

Thomas, (1994) 2 SCC 176 the Hon'ble Apex Court

observed as under:

"12. There were two methods adopted for determination and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case3 and the second in Nance v. British Columbia Electric Railway Co. Ltd.

13. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing 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.

16. It is necessary to reiterate that the multiplier method is logically sound and legally well- established. There are some cases which have proceeded to determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a percentage therefrom towards uncertainties of future life and award the resulting

sum as compensation. This is clearly unscientific. For instance, if the deceased was, say 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the loss of dependency for 45 years -- virtually adopting a multiplier of 45 -- and even if one-third or one- fourth is deducted therefrom towards the uncertainties of future life and for immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible. We are, aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier-method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. Some judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act, 1939 insofar as it envisages the compensation to be 'just', the statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases."

8. Thus, the tribunal erred in awarding a lumpsum

amount to the appellants.

9. There are some aspects of human life, which are

capable of monetary measurement, but the totality of

human life is like the beauty of sunrise or the splendor of

the stars, beyond the reach of monetary tape measure. The

determination of damages for loss of human life is an

extremely difficult task and it becomes all the more baffling

when the deceased is a child and/or a non-earning person.

The future of a child is uncertain. Where the deceased was

a child, he was earning nothing but had a prospect to earn.

The question of assessment of compensation, therefore,

becomes stiffer. The figure of compensation in such cases

involves a good deal of guesswork.

10. In cases of young children of tender age, in view of

uncertainties abound, neither their income at the time of

death nor the prospects of the future increase in their

income nor chances of advancement of their career are

capable of proper determination on estimated basis. The

reason is that at such an early age, the uncertainties in

regard to their academic pursuits, achievements in career

and thereafter advancement in life are so many that

nothing can be assumed with reasonable certainty.

Therefore, neither the income of the deceased child is

capable of assessment on estimated basis nor the financial

loss suffered by the parents is capable of mathematical

computation.

11. This case pertains to the year 1982 and at that time II

Schedule to the Motor Vehicles Act was not brought on the

statute books. The said schedule came on the statute book

in the year 1994 and prior to 1994 the law of the land was

as laid down by the Hon'ble Apex Court in Lata Wadhwa

and Ors. v. State of Bihar and Ors. - (2001) 8 SCC

197.

12. In Lata Wadhwa's case (supra) while computing

compensation, the Apex Court made distinction between

deceased children falling within the age group of 5 to 10

years and age group of 10 to 15 years. In the said case, the

Apex Court had awarded Rs. 1,50,000/- as pecuniary

damages and Rs. 50,000/- towards non-pecuniary damages

to the claimants of the deceased children falling within the

age group of 5 to 10 years and in case of the children falling

within the age group of 10 to 15 years, the Court decided

that the multiplier method should be applied and the

contribution of the children to the family was taken to be at

Rs. 24,000/-pa and then a multiplier of 15 was applied and

over and above that the conventional compensation of

Rs.50,000/- had been added to it, making the total

compensation as Rs. 3,60,000/-.

13. In the light of the above discussion, I would assess the

compensation in the instant case. It has come on record

that the deceased at the time of the accident was of 13

years of age and was studying in VI standard. The Pw4

father of the deceased deposed that the deceased was a

healthy and an intelligent child and was to be given higher

education. But nothing has come on record to prove the

educational background of the family of the deceased.

14. The tribunal should have atleast assessed the income

as that of an skilled workman on the basis of the minimum

wages notified under the Minimum Wages Act prevailing at

the time of the accident i.e. at Rs. 400/- pm.

15. Furthermore, it has been the consistent view of this

court that whenever aid of Minimum Wages Act is taken

while computing income, then increase in minimum wages

should also be considered. It is well settled that future

prospects are not akin to increase in minimum wages. To

neutralize increase in cost of living and price index, the

minimum wages are increased from time to time. A perusal

of the minimum wages notified under the Minimum Wages

Act show that to neutralize increase in inflation and cost of

living, minimum wages virtually double after every 10

years. For instance, minimum wages of skilled labourers as

on 1.1.1980 was Rs. 320/- per month and same rose to Rs.

1,083/- per month in the year 1990. Meaning thereby, from

year 1980 to year 1990, there there has been an increase of

nearly 238% in the minimum wages. Thus, it could safely be

assumed that income of the deceased would have doubled

in the next 10 years.

16. Also, since in catena of cases the Apex Court has in

similar circumstances made 1/3rd deductions. Therefore,

1/3rd deductions towards personal expenses is made.

17. Also, considering that this case pertains to the year

1982 and at that time II schedule to the Motor Vehicles Act

was not brought on the statute books. The said schedule

came on the statute book in the year 1994 and prior to

1994 the law of the land was as laid down by the Hon'ble

Apex Court in 1994 SCC (Cri) 335, G.M., Kerala SRTC v.

Susamma Thomas. In the said judgment it was observed

by the Court that maximum multiplier of 16 could be

applied by the Courts, which after coming in to force of the

II schedule has risen to 18. The age of the deceased at the

time of the accident was 13 years and he is survived by his

parents and the age of the father at the time of the accident

was 49 years. In the facts of the present case I am of the

view that after looking at the age of the claimants and the

deceased and after taking a balanced view considering the

multiplier applicable as per the II Schedule to the MV Act,

the multiplier of 12 shall be applicable.

18. As regards the issue that the Ld. Tribunal erred in

passing the order that 50% of the awarded amount

alongwith interest shall be kept in FDR in any scheduled

bank in the name of each claimant for a period of 7 years

with liberty to draw quarterly interest, I feel that the same

does not suffer from infirmity. In Lilaben Udesing Gohel

vs. Oriental Insurance Co. Ltd. - 1996 ACJ 673 (SC)

the Hon'ble Apex Court broad guidelines which the Claims

Tribunal should follow while disposing of the claim

applications arising under the Motor Vehicles Act, 1939 to

scotch complaints of misapplication of compensation money

and that as per those guidelines the compensation money

should be invested in a nationalised bank as a fixed deposit

and the interest thereon should be paid directly to the

claimant or his guardian, as the case may be. Therein, the

Apex Court also held that in personal injury cases if

treatment is necessary the Claims Tribunal on being

satisfied about the same may after recording reasons for

such satisfaction direct the Insurance Company to pay such

amount to the claimant as is necessary for incurring the

expenses for such treatment. This permission should be

granted strictly after verifying the necessity of medical

expenses. Therefore, the appellant can always seek

withdrawal of the said deposited amount upon proof of

exigency. Therefore, no interference is made in the award

on this count.

19. Also, compensation towards loss of love and affection

is awarded at Rs. 20,000/-; compensation towards funeral

expenses is awarded at Rs. 10,000/- and compensation

towards loss of estate is awarded at Rs. 10,000/-.

20. On the basis of the discussion, the income of the

deceased would come to Rs. 600/- after doubling Rs. 400/-

to Rs. 800/- and after taking the mean of them. After

making 1/3rd deductions the monthly loss of dependency

comes to Rs. 400 and the annual loss of dependency comes

to Rs. 4,800 per annum and after applying multiplier of 12 it

comes to Rs. 57,600/-. Thus, the total loss of dependency

comes to Rs. 57,600/-. After considering Rs. 40,000/-, which

is granted towards non-pecuniary damages, the total

compensation comes out as Rs. 97,600/-.

21. In view of the above discussion, the total

compensation is enhanced to Rs. 97,600/- from Rs. 40,000/-

with interest @ 7.5% per annum from the date of filing of

the present petition till realisation and the same should be

paid to the appellants by the respondent no. 3. The

enhanced compensation be distributed equally between

the appellants.

22. With the above direction, the present appeal is

disposed of.

 13.4.2009                   KAILASH GAMBHIR J.