Meenu Malhotra & Ors vs United India Insurance Co.
2010 Latest Caselaw 4630 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI

                      +   MAC.APP.No.493/2004

                               Date of Decision : 1st October, 2010
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      MEENU MALHOTRA & ORS               .....Appellants
                  Through : Mr. Navneet Goyal and
                            Mr. Varun Kumar, Advs.

                      versus

      UNITED INDIA INSURANCE CO.          ..... Respondent
                     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 (Oral)

1. The appellants have challenged the award of the

learned Tribunal whereby the compensation of `8,75,000/-

has been awarded to them.

2. The accident dated 5th January, 2001 resulted in the

death of Anil Kumar Malhotra. The deceased was survived

by his widow, son and father who filed the claim petition

before the Claims Tribunal.

3. The deceased was aged 34 years at the time of the

accident and was working as a surveyor with the insurance

companies. It was claimed that the deceased was earning

`12,000/- per annum. The Claims Tribunal took the income of

the deceased as `75,000/- per month, deducted 1/3rd towards

personal expenses and applied the multiplier of 17 to

compute the loss of dependency at `8,50,000/-. `25,000/-

has been awarded towards loss of love and affection and loss

of consortium. The total compensation awarded is

`8,75,000/-.

4. The learned counsel for the appellants has urged

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

(i) The income of the deceased be taken at

`1,03,037/-.

(ii) The future prospects be taken into consideration.

(iii) Compensation be awarded for loss of estate.

(iv) Compensation be awarded towards funeral

expenses.

5. The learned counsel for the respondents, in reply,

submits that the deceased was aged 34 years at the time of

the accident and the appropriate multiplier according to the

Judgment of the Hon'ble Supreme Court in the case of Sarla

Verma Vs. Delhi Transport Corporation, 2009 (6) Scale

129 is 16 and, therefore, the multiplier is liable to the

reduced.

6. With respect to the income of the deceased, PW-1

Jeevan Sharma from Bank of Baroda appeared in the witness

box and proved the statement of account as Ex.PW1/1 to

Ex.PW1/6. PW-2, Dalip Kumar from United India Insurance

Company Limited appeared in the witness box and proved

the certificate, Ex.PW2/1 to the effect that the deceased was

working as a Surveyor with the company. Mr. Sushil Kumar

Kundra, Assistant Manager from New India Assurance

Company Limited appeared as PW-3 in the witness box and

proved two certificates Ex.PW3/1 and Ex.PW3/2 with respect

to the payments made by the company to the deceased and

the tax deducted there from. New India Assurance Company

Limited paid a sum of `2,300/- to the deceased during the

period from 1st April, 2000 to 31st March, 2001 and `1,545/-

during the period from 1st April, 2001 to 31st March, 2002.

PW-5, widow of the deceased appeared in the witness box

and deposed that the deceased was earning Rs.12,000/- per

month. She proved the empanelment letters of the United

India Insurance Company Limited, New India Assurance

Company Limited and Oriental Insurance Company Limited

as Ex.P9 to Ex.P12, the payments and the documents

relating to the income of the deceased as Ex.P13 to Ex.P32.

PW-6, father of the deceased also proved the payments

received by the deceased as Ex.PW6/1 to Ex.PW6/7. The

total income of the deceased during the period from 1 st April,

2000 to 5th January, 2001 (nine months) was `77,278/-. The

said income was for a period of nine months and the annual

income of the deceased on the above basis is taken at

`1,03,037/-. 1/3rd is deducted towards personal expenses of

the deceased and the multiplier of 16 is applied to compute

the loss of dependency at `10,99,064/-.

7. With respect to the future prospects, the learned

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. Following the aforesaid judgment, `75,000/- is awarded

to the appellants towards the future prospects.

9. The Claims Tribunal has awarded `25,000/- towards

loss of love and affection and loss of consortium. However,

no compensation has been awarded towards loss of estate.

`10,000/- is awarded towards loss of estate. The appellants

are entitled to total compensation of `12,09,064/-

(`10,99,064 + `75,000 + `25,000 + `10,000).

10. The appeal is allowed and the award amount is

enhanced from `8,75,000/- to `12,09,064/-. The Claims

Tribunal has awarded interest @9% per annum which is not

disturbed on the original award amount of `8,75,000/-.

However, on the enhanced award amount, the rate of

interest shall be 7.5% per annum from the date of filing of

the petition till realization. The shares of the appellants in

the enhanced award amount shall be as under:-

             Appellant No.1 -          50%
             Appellant No.2 -          40%
             Appellant No.3 -          10%

11. The enhanced award amount along with interest be

deposited by State Bank of India A/c Meenu Malhotra, Tis

Hazari Court Branch through Mr. H.S. Rawat, Relationship

Manager, Tis Hazari Branch, Tis Hazari (Mb: 09717044322)

within 30 days.

12. Upon the aforesaid amount being deposited, the State

Bank of India is directed to release the share of appellant

No.3 immediately without restriction of FDR by transferring

the same to his Saving Bank Account. The remaining

amount be kept in fixed deposit in the following manner:-

(i) Fixed deposit in respect of 10% of the amount for

a period of one year in the name of appellant

No.1.

(ii) Fixed deposit in respect of 5% of the amount for a

period of two years in the name of appellant No.1.

(iii) Fixed deposit in respect of 5% of the amount for a

period of three years in the name of appellant

No.1.

(iv) Fixed deposit in respect of 5% of the amount for a

period of four years in the name of appellant No.1.

(v) Fixed deposit in respect of 5% of the amount for a

period of five years in the name of appellant No.1.

(vi) Fixed deposit in respect of 5% of the amount for a

period of six years in the name of appellant No.1.

(vii) Fixed deposit in respect of 5% of the amount for a

period of seven years in the name of appellant

No.1.

(viii) Fixed deposit in respect of 5% of the amount for a

period of eight years in the name of appellant

No.1.

(ix) Fixed deposit in respect of 5% of the amount for a

period of nine years in the name of appellant

No.1.

(x) Fixed deposit in respect of appellant No.2 be kept

in fixed deposit till he attains the age of 18 years.

13. The interest on the aforesaid fixed deposits shall be

paid monthly by automatic credit of interest in the Savings

Account of appellant No.1.

14. 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.

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

permission of this Court.

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

the FDRs to the appellants and the maturity amount of the

FDRs be automatically credited to the Saving Bank Account

of the beneficiary at the end of the FDRs.

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

said fixed deposit receipts without the permission of this

Court.

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

this Court.

19. On the request of the appellants, the Bank shall

transfer the Savings Account to any other branch according

to the convenience of the appellants.

20. The appellants shall furnish all the relevant documents

for opening of the Saving Bank Account and Fixed Deposit

Account to Mr. H.S. Rawat, Relationship Manager, Tis Hazari

Branch, Tis Hazari (Mb: 09717044322).

21. List for compliance on 3rd December, 2010.

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

parties under the signatures of the Court Master.

23. Copy of this order be also sent to Mr. H.S. Rawat,

Relationship Manager, Tis Hazari Branch, Tis Hazari (Mb:

09717044322) under the signature of Court Master.

J.R. MIDHA, J October 01, 2010