Ramesh Kumar Chawla & Ors. vs Rita Bedi & Ors.
2010 Latest Caselaw 2656 Del

 *                     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                                    F.A.O. No.171 of 1989
%                                                                            19.05.2010

         RAMESH KUMAR CHAWLA & ORS.                               ...... Appellants
                           Through: None.

                                          Versus
         RITA BEDI & ORS.                                       ......Respondents
                                     Through: Mr. Nitinjya Chaudhary, Advocate for
                                              R-1 to 4.
                                              Mr. K.L. Nandwani & Mr. Sameer
                                              Nandwani, Advocates for R-5.

                                            WITH

+                                    F.A.O. No.194 of 1989

         RITA BEDI & ORS.                                       ...... Appellants
                                     Through: Mr. Nitinjya Chaudhary, Advocate.

                                          Versus

         VIJAY KUMAR & ORS.                                    ......Respondents
                                     Through: Mr. K.L. Nandwani & Mr. Sameer
                                              Nandwani, Advocates for R-4.

                                                             Reserved on: 7th April, 2010
                                                          Pronounced on: 19th May, 2010
         JUSTICE SHIV NARAYAN DHINGRA

1.       Whether reporters of local papers may be allowed to see the judgment?
2.       To be referred to the reporter or not?
3.       Whether judgment should be reported in Digest?

                                    JUDGMENT

1. By this judgment I shall dispose of these two appeals being F.A.O. Nos.171 of

1989 and 194 of 1989.

2. In appeal No.171 of 1989 the appellant Nos.1 and 2, who are owners of the truck

have assailed the order of the Tribunal dated 16th March, 1989 on the ground that the

Tribunal wrongly came to the conclusion that the accident took place due to negligence of

the truck driver. The award is also assailed on the ground that the Tribunal wrongly

calculated the compensation payable in this case as Rs.4,15,000/- as the Tribunal wrongly

applied multiplier of 27.

3. Appeal No.194 of 1989 has been filed by the claimants that the Tribunal awarded

low compensation and did not take into account the right income of the deceased and the

Tribunal wrongfully deducted 20 per cent amount due to uncertainty of life. It is also

urged that the Tribunal gravely erred in coming to conclusion that the liability of

insurance company was limited to Rs.1,50,000/-. The Tribunal failed to appreciate the

proposal form filed by respondent No.4, that is, insurance company in proper perspective

and in context of tariff. There was no evidence to show that liability of insurance

company was limited to Rs.1,50,000/- only.

4. Brief facts relevant for the purpose of deciding these appeals are that Sh. Jitender

Nath Bedi, aged around 37 years, on 11th February, 1983, while going to his office on

scooter bearing No.DEO 5204, was hit on G.T. Karnal Road by a truck bearing No.DLG

3637 driven by Sh. Vijay Kumar (respondent No.1 before the Tribunal). It was alleged

that the accident took place due to rash and negligent driving of the truck driver and the

truck hit rear side of the scooter and dragged the scooter for considerable distance after

the impact. The truck stopped only after alarm was raised by the road users. Sh. Jitender

Nath Bedi succumbed to the injuries received in the accident and died. At the time of his

death, Sh. Jitender Nath Bedi was working as a Sales Executive with M/s. Precision Data

Products, a partnership firm, which was later converted into a private limited company.

Sh. Jitender Nath Bedi was getting salary and commission. His salary at the time of

accident was Rs.1,400/- per month and he used to get one per cent commission on sales

besides conveyance allowances and expenses of sales promotion. The claimants called

for evidence from the employer and proved the commission received by deceased prior to

his death for a period of about 2 ¼ years. The Managing Director of the company

Sh. S.P. Goel appeared as PW-6 and testified about income of the deceased. The record

of commission showed that during calendar year 1981, the deceased had earned

commission of Rs.12,488.63, during calendar year 1982, he had earned commission of

Rs.24,396/- and during the short period of the year 1983, he had earned commission of

Rs.9,367.95.

5. The learned Tribunal for the purpose of calculating compensation assessed the

income of the deceased as Rs.1,400/- as salary and Rs.1,000/- as commission considering

that the commission was paid to the deceased to meet expenses for sales promotion as

well. Out of this amount of Rs.2,400/-, 1/3rd (Rs.800/-) was deducted towards his

personal expenses and the dependency of family was taken as Rs.1,600/- per month. A

multiplier of 27 was applied and the Tribunal arrived at an amount of Rs.5,18,400/-

[(Rs.1600 x 12) x 27]. Out of this amount, 1/5th of the amount, that is, Rs.1,03,680/- was

deducted on account of uncertainties of life and the Tribunal held that claimants were

liable to receive compensation of Rs.4,14,720/- rounded to Rs.4,15,000/-. The Tribunal

also observed that liability of the insurance company in this case was limited to

Rs.1,50,000/- and remaining amount of Rs.2,65,000/- was to be paid by the driver and

owners of the vehicle, namely, respondent Nos.1, 2 and 3 before the Tribunal.

6. Issue of negligence

The learned Tribunal had decided about the negligence of the truck driver after

considering the entire evidence and mechanical inspection report of the truck and the

scooter. The mechanical inspection report of the truck would show that front left

mudguard of the truck had recent damages. This proved the case of the witness who

deposed before the court that the truck was being driven negligently with high speed and

while overtaking the scooter, the front left of the truck struck the scooter. It has also been

proved on record that scooter was dragged for some distance and the truck driver stopped

the truck only when public persons on the road at that time raised noise. These two

factors coupled with the evidence of witness and the fact that it was front left side of the

truck which hit the scooter proves the negligence of the truck driver and the Tribunal

rightly came to the conclusion that it was the driver of the truck who was driving truck

rashly and negligently and hit the scooter from behind. The record of the Investigating

Officer and the investigation done by police was also to the same effect. The site plan,

the blood marks on the road corroborated testimony of Sh. P.K. Sharma, the eye-witness,

at whose behest F.I.R. was recorded. I, therefore, consider that the Tribunal rightly came

to the conclusion that the truck was being driven in rash and negligent manner by its

driver.

7. Just and rightful compensation

It is settled law that while awarding compensation in case of death the court must

endeavour that the compensation awarded must be just and fair commensurating with the

income and age of the deceased taking into account future prospects, dependents and

other parameters.

8. It is argued by counsel for the claimants that the Tribunal wrongly took into

account commission only as Rs.1,500/- per month by taking average commission of the

years 1981 and 1982. He submitted that during the period of about two months of the

year 1983, the commission earned by the deceased was around Rs.9,000/-. Thus, the

Tribunal should have taken commission of the deceased as Rs.4,500/- per month.

9. I consider that there is a fallacy in the arguments of counsel for the claimants. It is

well-known fact that during closing of the financial year, that is, between January and

March, there is rush to purchase the articles and most of the departments are in a hurry to

exhaust the budget and that is why, most of the purchases are made during this period and

more specifically during January and February. Purchases made during January,

February and commission earned for these two months cannot be reflective of the average

monthly commission of the deceased. The commission had to be taken only on annual

basis and the commission cannot be assessed on monthly basis. If we go by commission

earned by the deceased in the year 1982, it was an average of around Rs.2,000/- per

month. However, the appointment letter issued by the company to the deceased shows

that this commission was also given to meet the expenses for procuring orders. The

Tribunal had taken expenses as 1/3rd after taking average of the two years' commission

and assessed income of the deceased from commission as Rs.1,000/-. However I consider

instead of taking average, the Tribunal should have taken commission of the year 1982

into account as in sales carrier, the quantum of sales keeps on increasing with experience

and the income of Sales Executive largely depends upon the incentive that he received by

meeting targets of the sales and the quantum of sale. I, therefore, consider that the

monthly income of the deceased from commission should have been taken as Rs.2,000/-

per month instead of Rs.1,500/- per month. Since the deceased was to meet expenses also

out of this commission, 1/3rd would have gone to meet such expenses and his income

would have been Rs.1,333/- per month. As per testimony given by the officials of the

company where he was working, his monthly salary had increased from Rs.950/- per

month in the year 1979 to Rs.1,400/- per month in the year 1982-1983 and he was also

getting Rs.150/- to meet travelling expenses. I consider that the total monthly income of

the deceased should have been considered as Rs.2,733/- rounded to Rs.2,730/- (Rs.1400 +

Rs.1333). Since the dependents in this case who filed claim petition were four, namely,

wife, two children and mother, I consider that in terms of judgment of Supreme Court in

Sarla Varma & Ors. vs. Delhi Transport Corporation & Anr.; (2009) 6 SCC 121, 1/4th

income of the deceased should have been deducted towards his personal expenses. Thus,

the deduction towards personal expenses would be Rs.682/-. The balance left for the

family would be Rs.2048/-.

10. The deceased in this case was 37 years of age thus, below 40 years of age. He

was a Sales Executive and was having regular job with a private limited company. I,

therefore, consider that 50 per cent should have been added towards future prospects.

Thus, dependency of the claimants would be Rs.3,072/- (Rs.2,048 + Rs.1,024). In terms

of Sarla Varma's case (supra), the multiplier approved by the Supreme Court for the

persons aged between 36 and 40 was 15. Thus, applying multiplier of 15, the total

compensation awardable to the claimants should have been Rs.5,52,960/-[(Rs.3,072 x 12)

x 15]. The claimants would also be entitled to Rs.5,000/- towards loss of estate,

Rs.5,000/- towards loss of consortium and Rs.3,000/- towards funeral expenses. Thus,

the total compensation payable would be Rs.5,65,960/-. The Tribunal in this case had not

awarded any interest over the compensation observing that there was no unreasonable

delay in conclusion of the trial. I consider that interest is not granted because of the fact

that there was reasonable or unreasonable delay in conclusion of the trial. The interest is

granted by the courts since the amount which should have been paid to the claimants

within a reasonable time by the insurance company is not paid within that reasonable time

and the claimants get this amount certainly with some delay. The amount remains under

use of the insurance company/owner. I, therefore, consider that the Tribunal should have

awarded a reasonable rate of interest. Taking into account peculiar facts of this case, I

consider seven per cent simple interest would be a reasonable rate of interest.

11. The Tribunal in this case had held that the liability of the insurance company

would be of Rs.1,50,000/-. The Tribunal relied upon the insurance policy placed on

record by the insurance company as Exhibit R4W1/B where the limits of liability were

stated as Rs.50,000/-. The Tribunal, however, observed that since the statutory liability

was raised by the statute from Rs.50,000/- to Rs.1,50,000/- with effect from 1st October,

1982 and the accident had taken place on 11th February, 1983, the insurance company

was liable to pay Rs.1,50,000/- and rest would be payable by the owners.

12. The insurance company had appeared in both the appeals and taken a stand that its

liability was limited only to Rs.1,50,000/- whereas it has been argued by the claimants as

well as owners that liability of the insurance company was unlimited and not limited to

Rs.1,50,000/-. It is undisputed that the insurance policy shows that it was not an 'Act

Only Policy'. The premium charged by the insurance company was Rs.240/- towards

public risk and Rs.16/- towards risk to driver and cleaner. Total premium charged was

Rs.256/-. In the judgment in F.A.O. No. 257 of 1991 titled Neeta Trehan & Ors. Vs.

Gopal Krishan & Ors. decided on 17th May, 2010, this court analyzed the entire situation

and came to the conclusion that where the premium charged was Rs.240/-, the policy

cannot be said to be the 'Act Only Policy' and it has to be considered as a policy covering

entire public risk, that is, third party risk and the insurance company would be liable to

pay the entire award amount.

13. In view of my above discussion, the award of the learned Tribunal is modified to

the following effect. The claimants would be entitled to a compensation of Rs.5,65,960/-

instead of Rs.4,15,000/-. The claimants would also be entitled to simple interest @ 7 per

cent per annum from the date of claim petition till the payment amount is realized. The

liability to pay entire compensation would be that of the insurance company. The

enhanced amount shall be apportioned amongst the different claimants in the same ratio

in which the Tribunal had ordered for apportionment of the awarded amount. However in

case, mother of the deceased had died, the amount shall be apportioned amongst the other

three claimants in equal ratio.

14. With this, both the appeals stand disposed of.

SHIV NARAYAN DHINGRA J.

MAY 19, 2010 'AA'