Suganthi And Anr. vs Khairati Lal Agan Pal & Ors.
2010 Latest Caselaw 2949 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

                      +       FAO.No.104/1994

                                Date of reserve: 26th March, 2010
%                               Date of Decision: 4th June, 2010

       SUGANTHI AND ANR.                 ..... Appellants
                     Through : Mr. V.P. Choudhary, Sr. Adv.
                               with Mr. Nitinjya Choudhary
                               and Ms. Sushma, Advs.
                versus

       KHAIRATI LAL AGAN PAL & ORS.      ..... Respondents
                      Through : Mr. Pankaj Seth, Adv.

CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA

1.       Whether Reporters of Local papers may                 YES
         be allowed to see the Judgment?

2.       To be referred to the Reporter or not?                YES

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

                              JUDGMENT

1. The appellants have challenged the award of the learned

Tribunal whereby compensation of Rs.7,50,000/- has been

awarded to the appellants. The appellants seek enhancement

of the award amount.

2. The accident dated 28th June, 1988 resulted in the death

of K.M. Kasi. The deceased was survived by his widow, one

minor son and parents.

3. The deceased was aged 28 years at the time of the

accident and was working as Senior Executive with Maruti

Udyog Limited earning Rs.6,285/- per month as per salary

certificate, Ex.PW3/1. The deceased was Chartered

Accountant-cum-ICWA. The Deputy Manager (Personal) of

Maruti Udyog Ltd. appeared in the witness box as PW-3 and

deposed that the deceased joined Maruti Udhyog Ltd. on 3rd

January, 1985 as Accounts Officer and he was promoted as

Senior Executive -Level 12 on 1st April, 1987. PW-3 proved the

salary certificate of the deceased as Ex.PW3/1. PW-3 further

deposed that the deceased had a chance of promotion after

3-4 years and he was expected to become General Manager

of the Company depending upon his performance. PW-3

further deposed that the deceased had got his first promotion

after two years in 1987.

4. The Claims Tribunal took the income of the deceased as

Rs.6,285/- per month, deducted Rs.2,285/- towards his

personal expenses and applied the multiplier of 15 to compute

the loss of dependency at Rs.7,50,000/-

5. The learned senior counsel for the appellant has urged

following grounds at the time of hearing of this appeal:-

(i) The personal expenses of the deceased be reduced

from 1/3rd to 1/4th.

(ii) The multiplier be enhanced from 15 to 18.

(iii) The future prospects be taken into consideration

and the income of the deceased be taken as

Rs.18,855/-

(iv) The compensation be awarded for loss of

consortium, loss of love and affection, loss of

estate and funeral expenses.

6. The deceased was aged 28 years at the time of the

accident and was survived by four legal representatives,

namely, his widow, one minor son and parents. According to

the principles laid down by the Hon'ble Supreme Court in the

case of Sarla Verma vs. Delhi Transport Corporation,

2009 (6) Scale 129, the appropriate multiplier at the age of

28 years is 18 and the appropriate deduction towards

personal expenses of the deceased is 1/4th. Following the

aforesaid judgment, the multiplier is enhanced from 15 to 18

and the personal expenses of the deceased are reduced from

1/3rd to 1/4th.

7. With respect to the future prospects, the learned senior

counsel for the appellant refers to and relies upon the

judgment of the Hon'ble Supreme Court in the case of R.K.

Malik Vs. Kiran Pal, 2009 (8) Scale 451 in which the

Hon'ble Supreme Court has awarded future prospects in

respect of a minor child. The relevant portion of the aforesaid

judgment is reproduced as under:-

"14. For calculating the yearly loss of dependency the starting point is the wages being earned by the deceased, less his personal and living expenses. This provides a basic figure. Thereafter, effect is given to the future prospects of the deceased, inflation and general price rise that erodes value and the purchasing power of money. To the multiplicand so calculated, multiplier is to be applied. The multiplier is decided and determined on the basis of length of dependency, which must be estimated. This has to be necessarily discounted for contingencies and uncertainties. Reference in this regard may be made to the judgments of this Court in the case of Sarla Dixit v. Balwant Yadav; Managing Director TNSTC Ltd. v. K.T. Bindu, AIR 2005 SC 4425; T.N. State Transport Corporation Ltd. v. S. Rajapriya, AIR 2005 SC 2985; New India Assurance Co. Ltd. v. Charlie, AIR 2005 SC 2157 and United India Insurance Co. Ltd. v. Patrica Jean Mahajan, [2002] 3 SCR 1176.

15. The real problem that arises in the cases of death of children is that they are not earning at the time of the accident. In most of the cases they were still studying and not working. However, under no stretch of imagination it can be said that the parents, who are appellants herein, have not suffered any pecuniary loss. In fact, Loss of dependency by its very nature is awarded for prospective or future loss. In this context, Lord Atkinson aptly observed in Taff Vale Rly. Co. v. Jenkins MANU/AG/0452/1912 as follows:

In case of the death of an infant, there may have been no actual pecuniary benefit derived by its parents during the child's lifetime. But this will not necessarily bar the parents' claim and prospective loss will found a valid claim provided that the parents establish that they had a reasonable expectation of pecuniary benefit if the child had lived.

16. Then, how does one calculate pecuniary compensation for loss of future earnings and loss of dependency of the parents, grandparents etc. in the case of non-working student? Under the Second Schedule of the Act in case of a non earning person, his income is notionally estimated at Rs. 15,000/- per annum. The Second Schedule is applicable to claim petitions filed under Section 163A of the Act. The Second Schedule provides for the multiplier to be applied in cases where the age of the victim was less than 15 years and between 15 years but not exceeding 20 years. Even when compensation is payable under Section 166 read with 168 of the Act, deviation from the structured formula as provided in the Second Schedule is not ordinarily permissible, except in exceptional cases. [see Abati Bezbaruah v. Dy. Director General, Geological Survey of India, [2003]1SCR1229; United India Insurance Company Ltd. v. Patricia Jean Mahajan, [2002] 3SCR 1176 and UP State Road Transport Corporation v. Trilok Chandra, (1996) 4SCC 362].

17. Reverting back to the factual position of the present case, the date of accident is 18.11.1997. Prior to this, the Second Schedule of the Act was already introduced w. e. f. 14.11.1994. Thus, the notional income mentioned in the Second Schedule and the multiplier specified therein can form the basis for the pecuniary compensation for the loss of dependency in the present cases. No fact and reason was highlighted during the

arguments why the Second Schedule should not apply in the present cases. The Second Schedule also provides for deduction of 1/3rd consideration towards expenses; which the victim would have incurred on himself if he had lived. As compensation for loss of dependency is to be calculated on the basis of notional income because the deceased was a child. It by necessary implication takes into account future prospects, inflation, price rise etc."

"31. A forceful submission has been made by the learned Counsels appearing for the claimants- appellants that both the Tribunal as well as the High Court failed to consider the claims of the appellants with regard to the future prospects of the children. It has been submitted that the evidence with regard to the same has been ignored by the Courts below. On perusal of the evidence on record, we find merit in such submission that the Courts below have overlooked that aspect of the matter while granting compensation. It is well settled legal principle that in addition to awarding compensation for pecuniary losses, compensation must also be granted with regard to the future prospects of the children. It is incumbent upon the Courts to consider the said aspect while awarding compensation. Reliance in this regard may be placed on the decisions rendered by this Court in General Manager, Kerala S. R. T. C. v. Susamma Thomas(1994) 2 SCC 176; Sarla Dixit v. Balwant Yadav (1996) 3 SCC 179; and Lata Wadhwa case (supra).

32. In view of discussion made hereinbefore, it is quite clear the claim with regard to future prospect should have been be addressed by the courts below. While considering such claims, child's performance in school, the reputation of the school etc. might be taken into consideration. In the present case, records shows that the children were good in studies and studying in a reasonably good school. Naturally, their future prospect would be presumed to be good and bright. Since they were children, there is no yardstick to measure the loss of future prospects of these children. But as already noted, they were performing well in studies, natural consequence supposed to be a bright future. In the case of Lata Wadhwa (supra) and M. S. Grewal (supra), the Supreme Court recognised such future prospect as basis and factor to be considered. Therefore,

denying compensation towards future prospects seems to be unjustified. Keeping this in background, facts and circumstances of the present case, and following the decision in Lata Wadhwa (supra) and M. S. Grewal (supra), we deem it appropriate to grant compensation of Rs. 75,000/- (which is roughly half of the amount given on account of pecuniary damages) as compensation for the future prospects of the children, to be paid to each claimant within one month of the date of this decision. We would like to clarify that this amount i.e. Rs. 75,000/- is over and above what has been awarded by the High Court."

8. The learned senior counsel for the appellant also refer to

and relies upon the judgment of the Hon'ble Supreme Court in

the case of Sarla Verma (Supra) in which the Apex Court has

permitted the future prospects to be taken into consideration

and has also permitted departure in exceptional cases. The

learned counsel for the appellant refers paras 10 and 11 of

the judgment of the Hon'ble Supreme Court in the case of

Sarla Verma (Supra), which are reproduced hereunder:-

"10. Generally the actual income of the deceased less income tax should be the starting point for calculating the compensation. The question is whether actual income at the time of death should be taken as the income or whether any addition should be made by taking note of future prospects. In Susamma Thomas, this Court held that the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand (annual contribution to the dependants); and that where the deceased had a stable job, the court can take note of the prospects of the future and it will be unreasonable to estimate the loss of dependency on the actual income of the deceased at the time of death. In that case, the salary of the deceased, aged 39 years at the time of death, was Rs.1032/- per month. Having regard to the evidence in regard to future prospects, this Court was of the view that the higher estimate of monthly income could be made at Rs.2000/- as gross income

before deducting the personal living expenses. The decision in Susamma Thomas was followed in Sarla Dixit v. Balwant Yadav [1996 (3) SCC 179], where the deceased was getting a gross salary of Rs.1543/- per month. Having regard to the future prospects of promotions and increases, this Court assumed that by the time he retired, his earning would have nearly doubled, say Rs.3000/-. This court took the average of the actual income at the time of death and the projected income if he had lived a normal life period, and determined the monthly income as Rs.2200/- per month. In Abati Bezbaruah v. Dy. Director General, Geological Survey of India [2003 (3) SCC 148], as against the actual salary income of Rs.42,000/- per annum, (Rs.3500/- per month) at the time of accident, this court assumed the income as Rs.45,000/- per annum, having regard to the future prospects and career advancement of the deceased who was 40 years of age.

11. In Susamma Thomas, this Court increased the income by nearly 100%, in Sarla Dixit, the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. [Where the annual income is in the taxable range, the words `actual salary' should be read as `actual salary less tax']. The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more than 50 years. Though the evidence may indicate a different percentage of 14 increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances. Re : Question (ii) - deduction for personal and living expenses."

9. The learned counsel for the respondent in reply refers to

paras 22 to 24 of the judgment of Hon'ble Supreme Court in

the case of Sarla Verma (Supra), which are reproduced

hereunder:-

"22. In this case as noticed above the salary of the deceased at the time of death was Rs.4,004. By applying the principles enunciated by this Court to the evidence, the High Court concluded that the salary would have at least doubled (Rs.8008/-) by the time of his retirement and consequently, determined the monthly income as an average of Rs.4004/- and Rs.8008/- that is Rs.6006/- per month or Rs.72072/- per annum. We find that the said conclusion is in conformity with the legal principle that about 50% can be added to the actual salary, by taking note of future prospects.

23. Learned counsel for the appellants contended that when actual figures as to what would be the income in future, are available it is not proper to take a nominal hypothetical increase of only 50% for calculating the income. He submitted that though the deceased was receiving Rs.4004/- per month at the time of death, as per the certificates issued by the employer (produced before High Court), on the basis of pay revisions and increases, his salary would have been Rs.32,678/- in the year 2005 and there is no reason why the said amount should not be considered as the income at the time of retirement. It was contended that the income which is to form the basis for calculation should not therefore be the average of Rs.4004/- and Rs.8008/-, but the average of Rs.4004/- and Rs.32,678/-.

24. The assumption of the appellants that the actual future pay revisions should be taken into account for the purpose of calculating the income is not sound. As against the contention of the appellants that if the deceased had been alive, he would have earned the benefit of revised pay scales, it is equally possible that if he had not died in the accident, he might have died on account of ill health or other accident, or lost the employment or met some other calamity or disadvantage. The imponderables in life are too many. Another significant aspect is the non-

existence of such evidence at the time of accident. In this case, the accident and death occurred in the year 1988. The award was made by the Tribunal in the year 1993. The High Court decided the appeal in 2007. The pendency of the claim proceedings and appeal for nearly two decades is a fortuitous circumstance and that will not entitle the appellants to rely upon the two pay revisions which took place in the course of the said two decades. If the claim petition filed in 1988 had been disposed of in the year 1988-89 itself and if the appeal had been decided by the High Court in the year 1989-90, then obviously the compensation would have been decided only with reference to the scale of pay applicable at the time of death and not with reference to any future revision in pay scales. If the contention urged by the claimants is accepted, it would lead to the following situation: The claimants only could rely upon the pay scales in force at the time of the accident, if they are prompt in conducting the case. But if they delay the proceedings, they can rely upon the revised higher pay scales that may come into effect during such pendency. Surely, promptness cannot be punished in this manner. We therefore reject the contention that the revisions in pay scale subsequent to the death and before the final hearing should be taken note of for the purpose of determining the income for calculating the compensation."

10. The learned counsel for respondent no.1 submits that in

the case before Hon'ble Supreme Court, the deceased was

earning Rs.4,004/- per month in 1988 and it was the

contention of the claimants that the deceased would have

been earning Rs.32,678 in the year 2005 and, therefore, the

average of Rs.4,004/- and Rs.32,678/- be taken, which was

rejected by the Hon'ble Supreme Court and the average of

Rs.4,004/- and Rs.8,008/- was taken.

11. The learned Senior counsel for the appellant submits

that the facts of the case of Sarla Verma and this case are

distinguishable. The learned Senior Counsel submits that in

the present case, the deceased got the promotion in the first

two years and he was in the promotion range in the 3-4 years

as compared to Sarla Verma where the deceased expired in

1988 and the claimants claimed the revision of the salary in

2005 as Rs.32,678/- due to pay commission and promotion,

which was rejected.

12. This Court is of the view that the facts of this case are

clearly distinguishable from the facts in the case of Sarla

Verma (supra) because the promotion of the deceased was

not dependent upon any contingency of the pay Commission

as in the aforesaid case. This case squarely falls in the

category of rare and exceptional cases involving special

circumstances in respect of which the Hon'ble Supreme Court

has permitted the departure from the normal rule as laid

down in the case of Sarla Verma (supra). The deceased was

a qualified Chartered Accountant-cum-ICWA and got his first

promotion as Senior Executive in Maruti Udyog Ltd. in two

years in 1987. The deceased had a chance of another

promotion after 3-4 years and was excepted to become

General Manager as per the statement given by the Deputy

Manager (Personnel) of Maruti Udyog Ltd. who appeared in

the witness box before the Claims Tribunal as PW-3. The

income of the deceased would have risen to Rs.18,855/- in

ordinary course. However, considering that the accident

relates to the year 1988 and the appellants would be entitled

to substantial amount by way of interest, this Court would like

to restrict the future prospects to 50% of the income of the

deceased according to the normal rule laid down by the

Hon'ble Supreme Court in the case of Sarla Verma (supra).

Taking the income of the deceased as Rs.6,285/- and adding

50% towards future prospects, the income of the deceased for

computation of compensation is taken to be Rs.9,427.50

(Rs.6,285 + 50% of Rs.6,285).

13. The Claims Tribunal has not awarded any compensation

for loss of consortium, loss of love and affection, loss of estate

and funeral expenses. Rs.10,000/- is awarded towards loss of

consortium, Rs.10,000/- towards loss of love and affection,

Rs.10,000/- towards loss of estate and Rs.10,000/- towards

funeral expenses.

14. Taking the income of the deceased as Rs.9,427.50,

deducting 1/4th towards personal expenses, applying the

multiplier of 18, adding Rs.10,000/- towards loss of

consortium, Rs.10,000/- towards loss of love and affection,

Rs.10,000/- towards loss of estate and Rs.10,000/- towards

funeral expenses, the total compensation is computed to be

Rs.15,67,255/- [(Rs.9,427.50 x 3/4 x 12 x 18) + Rs.10,000 +

Rs.10,000 + Rs.10,000 + Rs.10,000].

15. The appeal is allowed and the award amount is

enhanced from Rs.7,50,000/- to Rs.15,67,255/-. The Claims

Tribunal has awarded interest @12% per annum which is not

disturbed on the original award amount of Rs. 7,50,000/-.

However, on the enhanced award amount, the appellants shall

be entitled to interest @7.5% per annum from the date of

filing of the claim petition, i.e., 19th December, 1988 up to the

date of realization.

16. The enhanced award amount along with interest be

deposited by respondent No.2 with UCO Bank, Delhi High

Court Branch A/c Suganthi through Mr. M.M. Tandon, Member-

Retail Team, UCO Bank Zonal, Parliament Street, New Delhi

(Mobile No. 09310356400) within 30 days.

17. Upon the aforesaid deposit being made, UCO Bank is

directed to release 10% of the same to appellant No.1 by

transferring the same to her Savings Bank Account. The

remaining amount be kept in fixed deposit in the following

manner:-

(i) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.1 for a period

of six months.

(ii) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.2 for a period

of one year.

(iii) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.1 for a period

of one and a half years.

(iv) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.2 for a period

of two years.

(v) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.1 for a period

of two and a half years.

(vi) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.2 for a period

of three years.

(vii) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.1 for a period

of three and a half years.

(viii) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.2 for a period

of four years.

(ix) Fixed deposit in respect of 10% of the award

amount in the name of appellant No.1 for a period

of four and a half years.

18. The interest on the aforesaid fixed deposits shall be paid

monthly by automatic credit of interest in the Savings Account

of appellant No.1.

19. Withdrawal from the aforesaid account shall be

permitted to appellant No.1 after due verification and the

Bank shall issue photo Identity Card to appellant No.1 to

facilitate identity.

20. No cheque book be issued to appellant No.1 without the

permission of this Court.

21. The Bank shall issue Fixed Deposit Pass Book instead of

the FDRs to appellant No.1 and the maturity amount of the

FDRs be automatically credited to the Saving Bank Account of

the beneficiary at the end of the FDR.

22. No loan, advance or withdrawal shall be allowed on the

said fixed deposit receipts without the permission of this

Court.

23. Half yearly statement of account be filed by the Bank in

this Court.

24. On the request of appellant No.1, the Bank shall transfer

the Savings Account to any other branch of UCO Bank

according to the convenience of the appellants.

25. The appellants shall furnish all the relevant documents

for opening of the Saving Bank Account and Fixed Deposit

Account to Mr. M.M. Tandon, Member-Retail Team, UCO Bank

Zonal, Parliament Street, New Delhi (Mobile No.

09310356400).

26. Copy of the order be given dasti to counsel for both the

parties under signatures of the Court Master.

27. Copy of this order be also sent to Mr. M.M. Tandon,

Member-Retail Team, UCO Bank Zonal, Parliament Street, New

Delhi (Mobile No. 09310356400) through the UCO Bank, High

Court Branch under the signature of Court Master.

J.R. MIDHA, J JUNE 04, 2010