Lalitesh Chauhan And Ors. vs Harvinder Singh And Ors.
2011 Latest Caselaw 4831 Del

                                        REPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 FAO 152/2003


LALITESH CHAUHAN AND ORS.             ..... Appellants
                 Through: Mr. S.N. Parashar, Advocate

                  versus


HARVINDER SINGH AND ORS.                            ..... Respondents
                 Through:             Mr. J.P.N. Shahi, Advocate for
                                      the Insurance Company


%                          Date of Decision : September 28, 2011


CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

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

: REVA KHETRAPAL, J.

1. The appellants are the dependants as well as legal

representatives of one Sushil Kumar, a motor accident victim, who

have preferred the present appeal being aggrieved and dissatisfied

with the judgment and award of the Motor Accidents Claims Tribunal

dated 22.11.2002.

2. Concisely, the facts relevant for the decision of the appeal are

as under.

3. On 27.04.2000, the deceased Sushil Kumar, a Junior Engineer

with Power Grid Corporation of India Ltd., was riding pillion on the

scooter being driven by one Ram Pal. When the said scooter reached

West Avenue Road, Punjabi Bagh, it was hit from behind by a bus

No.DL-1PA-3773, being driven by its driver in a rash and negligent

manner. Due to the impact, Sushil Kumar fell down on the road and

was crushed under the wheels of the bus. He succumbed to the

injuries sustained by him at the spot and though taken to Maharaja

Agrasain Hospital, was declared brought dead.

4. A Claim Petition was filed by his legal representatives,

claiming compensation of ` 40 lakhs on account of his untimely

demise in the aforesaid road accident, which culminated in the

passing of the impugned award, whereby a sum of ` 17,26,000/- was

awarded, including the interim compensation, with simple interest at

the rate of 9% per annum from the date of the filing of the petition,

that is, 10.07.2000 till realisation.

5. Mr. S.N. Parashar, the learned counsel for the appellants has

assailed the award passed by the learned Tribunal on following

grounds:

(i) The learned Tribunal while assessing the income of the

deceased did not take into account the prospects of

advancement in the career of the deceased.

(ii) The learned Tribunal, keeping in view the fact that the

deceased was survived by six dependent family

members, ought to have deducted not more than one-

fourth (1/4th) of the salary of the deceased towards his

personal expenses, leaving the balance three-fourths

(3/4ths) for the computation of loss of dependency of the

legal representatives of the deceased.

(iii) For the purpose of augmenting the multiplicand

constituting the average annual loss of dependency of the

appellants, the learned Tribunal should have applied the

multiplier of 14, instead of the multiplier of 11.

(iv) A very meagre amount had been awarded by the learned

Tribunal towards non-pecuniary damages and no amount

whatsoever had been awarded under the head of loss of

love and affection to the appellants and also towards

funeral expenses.

6. Mr. J.P.N. Shahi, the learned counsel for the respondent No.3-

Insurance Company, on the other hand, contended that the learned

Tribunal had erred in taking into account the revision in the pay-scale

of the deceased, which had occurred after his death. He further

contended that the learned Tribunal, while assessing the income of the

deceased for the purpose of assessment of the loss of dependency of

his legal representatives, should have deducted the sum of ` 2,100/-

therefrom, which, as reflected in Ex.PW2/X, was received by the

deceased as transite incentive/ex-gratia. It was also contended by him

that keeping in view the fact that the deceased was 41 years of age on

the date of his death, the future prospects of increase in his income

could not have been taken into account by the Tribunal and, in any

case, keeping in view the law laid down by the Supreme Court in the

case of Smt. Sarla Verma and Ors. vs. Delhi Transport Corporation

and Anr., (2009) 6 SCC 121, the addition should not be more than

30% of his actual earnings.

7. The first question which arises for consideration in the present

appeal is as to the meaning and connotation of the term „income‟ for

the purpose of determination of „just compensation‟ as envisaged

under Section 168 of the Motor Vehicles Act, 1988.

8. The aforesaid principle of „just compensation‟, which was

enunciated by the Hon‟ble Supreme Court in the case of Helen C.

Rebello (Mrs.) and Others vs. Maharashtra State Road Transport

Corporation and Anr., (1999) 1 SCC 90, has since been dwelt upon

in a number of subsequent judgments. But much before that, in the

case of Concord of India Insurance Co. v. Nirmaladevi and Ors.

1980 ACJ 55, it had been held by the Supreme Court that the

determination of quantum must be "liberal" and "not niggardly" since

law values life and limb in a free country "in generous scales".

9. Referring to the connotation of the word „just‟, the Supreme

Court in the case of Helen C. Rebello (supra) held: (SCC, page 107)

"In this context, the use of the word "just", which was neither in the English 1846 Act nor in the Indian 1855 Act, now brought in under the 1939 Act, gains importance. This shows that the word "just" was deliberately brought in 110-B of the 1939 Act to enlarge the consideration in computing the compensation which, of course, would include the question of deductibility, if any. This leads us to an irresistible conclusion that the principle of computation of the compensation both under the English Fatal Accidents Act, 1846 and under the Indian Fatal Accidents Act, 1855 by the earlier decisions, were restrictive in nature in the absence of any guiding words therein, hence the courts applied the general principle at the common law of loss and gain but that would not apply to the considerations under Section 110-B of the 1939 Act which enlarges the discretion to deliver better justice to the claimant, in computing the compensation, to see what is just. Thus, we find that all the decisions of the High Courts which based their interpretation on the principles of these two Acts, viz., the English 1846 Act and the Indian 1855 Act to hold that deductions were valid cannot be upheld. As we have observed above, the decision even with reference to the decision of this Court in Gobald Motor Service where the question was neither raised nor adjudicated and that case also, being under the 1855 Act, cannot be pressed into service. Thus, these

Courts by giving a restrictive interpretation in computation of compensation based on the limitation of the language of the Fatal Accidents Act, fell into an error, as it did not take into account the change of language in the 1939 Act and did not consider the widening of the discretion of the Tribunal Under Section 110-B. The word "just", as its nomenclature, denotes equitability, fairness and reasonableness having large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not just. Thus, this field of wider discretion of the Tribunal has to be within the said limitations and the limitations under any provision of this Act or any other provision having force of law. In Law Lexicon, 5th Edn., by T.P. Mukherjee „just‟ is described :

"The term "just" is derived from the Latin word justus. It has various meanings and its meaning is often governed by the context.

'Just' may apply in nearly all of its senses, either to ethics or law, denoting something which is morally right and fair and sometimes that which is right and fair according to positive law. It connotes reasonableness and something conforming to rectitude and justice, something equitable, fair (vide p. 1100 of Vol. 50, Corpus Juris Secundum). At p. 438 of Words and Phrases, edited by West Publishing Co., Vol. 23 the true meaning of the word „just‟ is in these terms :

"The word "just" is derived from the Latin justus, which is from the Latin jus, which means a right and more technically a legal right-a-law. Thus 'jus dicere' was to pronounce the judgment;

to give the legal decision. The word "just" is defined by the Century Standard Dictionary as right in law or ethics and in Standard Dictionary as conforming to the requirements of right or of positive law, in Anderson's Law Dictionary as probable, reasonable, Kinney's Law Dictionary defines "just"

as fair, adequate, reasonable, probable;

and just cause as a just cause, a lawful ground. Vide Bregman v. Kress, NYS at p. 1073."

10. In T.N. State Transport Corporation Ltd. vs. S. Rajapriya &

Ors. (2005) 6 SCC 236, the Supreme Court held as under:

"8. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables 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 together.

9. 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 years' purchase.

10. Much of the calculation necessarily remains in the realm of hypothesis "and in that region arithmetic is a good servant but a bad master" since there are so often many imponderables. In every case "it is the overall picture that matters", and the Court must try to assess as best as it can the loss suffered."

11. The matter is rendered even more complex by the fact that the

word „income‟ has a different connotation and meaning for the

purpose of different statutes. Dealing with the connotation of the

term „income‟ in the context of the Motor Vehicles Act, 1988, the

Supreme Court in the case of "National Insurance Company Ltd. vs.

Indira Srivastava and Others, (2008) 2 SCC 763 observed that:

"9. 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 monetary terms.

10. 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 take 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 the entire family. If 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. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased..........."

It was also observed in the said case:

"19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included

for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted."

12. The Hon‟ble Supreme Court in the aforesaid case further held

that superannuation benefits, contributions towards gratuity,

insurance of medical policy for self and family and education

scholarship were beneficial to the members of the family. The basis

for considering the entire pay packet should be what the dependants

have lost in view of the death of the deceased. Analysing the term

„just compensation‟, the Court held:

"25. The expression 'just' must also be given its logical meaning. Whereas it cannot be a bonanza or a source of profit but in considering as to what would be just and equitable, all facts and circumstances must be taken into consideration."

13. It is in the aforesaid backdrop that it is proposed to examine

what would constitute just and equitable compensation in the present

case. The first and foremost step in the aforesaid process, being the

determination of the „income‟ of the deceased, the process of

computation of the income is of utmost importance. The learned

Tribunal in the instant case, in the context of the income of the

deceased, elaborately discussed the testimony of PW2 E.H.S.

Elangovan, Supervisor from Power Grid Corporation, who deposed

that the gross salary of Sushil Kumar at the time of his death was `

15,848.95, and to this effect he proved the pay-slip of the deceased as

Ex.P4 (wrongly mentioned as Ex.PW2/A in his statement and in the

award of the Tribunal). The statement of PW2 Elangovan was

recorded again on 09.10.2001, wherein he stated that subsequent to

his earlier statement in March, 2001, the pay-scales in their

Department had been revised with effect from 01.01.1997, and the

relevant office Order/Circular on the point was proved by him as

Ex.PW2/Y and PW2/Y-1. Significantly, during his earlier statement

recorded in March, 2001, he had stated that the revision of pay-scale

was pending consideration/approval by the Government of India.

14. As noted by the learned Tribunal, it stands proved from the

Circular Ex.PW2/Y-1 that the pay-scale existing on the date of the

death of the deceased for Grade S-1, to which the deceased belonged,

was ` 2900 - ` 5140/-, which was revised to ` 7300 - ` 12660/-.

The learned Tribunal, therefore, concluded, and I think rightly so, that

for the purpose of computing the amount of compensation to be paid

to the appellants in the present case, it was the amount which was

payable to the deceased at the time of his death as per revised scales

which were operative retrospectively with effect from 01.01.1997,

which was relevant.

15. PW2 Elangovan further proved on record a pay certificate

Ex.PW2/X issued by the Manager, Finance, in which the monthly

income payable to the deceased on the date of the accident in April,

2000, on the basis of the pay-scale implemented from 01.01.1997,

pursuant to circular Ex.PW2/Y-1, had been worked out as `

22,296.06 (Rupees Twenty Two Thousand Two Hundred Ninety Six

and Six Paise Only) per month. It is this amount of ` 22,296.06

shown in the certificate Ex.PW2/X which, in my opinion, is to be

taken into account as the gross income of the deceased at the time of

his death. This certificate is to the following effect:

"This is to certify that the pay details of late Sh. Sushil Kumar, Emp. No.17019, Jr. Engineer, NRLDC for the month of April 2000 are given below:

             Sl.    Details             Amounts       Remarks
             No.
             1.     Basic               Rs.10899.00
             2.     DA                  Rs.2779.00
             3.     CCA                 Rs.300.00
             4.     HRA                 Rs.3269.00    Rent receipt
                                                      required
             5.     Conveyance          Rs.500.00     Claim
                                                      required
             6.     Cash      Canteen   Rs.550.00
                    Subsidy
             7.     Washing             Rs.100.00
                    Allowance
             8.     Transite            Rs.2100.00    Average
                    Incentive/Ex-                     Basis
                    gratia
             9.     News        Paper   Rs.157.00
                    Reimbursement
             10.    Total               Rs.20654.70
             11.    Employer            Rs.1641.36
                    Contribution to
                    PF A/c
             12.    Grand Total         Rs.22296.06

(Rupees twenty two thousand two hundred and ninty six only)"

16. It is clear from the aforesaid certificate that the deceased was

receiving several perks such as City Compensatory Allowance, House

Rent Allowance, Conveyance, Cash Canteen Subsidy, Washing

Allowance, Transite Incentive/Ex Gratia and Newspaper

reimbursement. The question which arises is which of these

allowances is to be taken into consideration for the purpose of

working out the net monthly income of the deceased. As explained

above, the well settled legal position is that for the purpose of

assessment of the income of the deceased, apart from the basic pay

and the dearness allowance, his income must be deemed to include

the City Compensatory Allowance and the House Rent Allowance as

well as the employer‟s contribution to the Provident Fund Account.

However, the Conveyance Allowance, Cash Canteen Subsidy,

Washing Allowance and Newspaper reimbursement cannot form a

part of the monthly income. The transite incentive/ex gratia payment

would also not form part of the monthly income of the deceased. I

say so for the reason that though the transite incentive/ex gratia is

reflected in the statement Ex.PW2/X to be a sum of ` 2,100/- "on

average basis", the Circular Ex.PW2/AX-1 shows that incentive at the

rate of 19.404% was sanctioned for the year in question, that is, for

the year 2000-01 only. PW2 Elangovan in his deposition also stated

that this amount was being paid to the employees as an incentive on

the basis of energy made available for supply. He further stated that

this transmission incentive had a ceiling of ` 25,200/- per annum (Ex.

PW2/AX). He candidly deposed that this amount of incentive paid to

the employees varied from year to year and even quarter to quarter

subject to the ceiling referred to above. From the aforesaid, it may

safely be deduced that the amount of ` 2,100/- towards transite/ex-

gratia incentive, shown in Ex.PW2/X should not be treated to be the

amount available every month to the deceased and his family

members because the same was dependent on the production of

energy by the Power Grid Corporation and its employees. The

learned Tribunal, however, has not deducted this amount. Although it

has accepted the submission of the counsel for the Insurance

Company that this amount ought properly to be deducted from the

income of the deceased, it nevertheless held:

"There is merit in this submission of Sh. Navdeep Singh but this amount shown in certificate Ex.PW2/X is not being deducted keeping in view the prospects of increase in future income of the deceased which concept has been acknowledged by Hon‟ble Supreme Court of India in the cases reported as 1996 ACJ 581 Sarla Dixit and Another vs. Balwant

Yadav and Others and 1994 ACJ 1 G.M.

Kerala State Transport Corporation vs. Susamma Thomas. Allowance towards increase in future income beyond this amount would not be reasonable in the present case as death of Sushil Kumar was just in the year 2000 and it is difficult to predict what would be the future trend of economy in this country. Petitioners‟ counsel submitted that deceased would have got annual increments and would have been promoted from S-1 to S-4 level in the course of time. So far as future increments are concerned non deduction of this amount from the gross amount shown in Ex.PW2/X would be sufficient to compensate the petitioners. On the point of future promotion of Sushil Kumar from S-1 to S-4 level, evidence produced is too vague and un-reliable. Elangovan PW2 initially stated that promotion of the deceased from S-1 level to S-4 level was automatic after every three years. He, however, during cross examination on behalf of Oriental Insurance Co. corrected himself by saying that promotion from S-1 to S-4 was not automatic as testified by him during earlier part of statement. He then explained that he only meant to say that deceased would have been eligible from S-1 to S-4 level but at the same time he admitted that promotion to the next level was subject to his having been found fit by departmental promotion committee, and his having qualified departmental examination. Since promotions of the deceased in future were dependent on many factors and evidence on the point is too vague, no assumption on the point towards increase in his income on this count is possible, though for

the reasons aforesaid it is held that to compensate future normal increase in the monthly income of the deceased petitioners would be fairly compensated by non-deduction of the incentive amount shown in Ex.PW2/X."

17. In view of the law laid down by the Supreme Court, however,

in my opinion, it is not possible to compensate the legal

representatives of the deceased by off-setting the future normal

increase in the monthly income of the deceased with the transite

incentive/ex gratia payment received by the deceased on account of

energy made available to the Power Grid Corporation by its

employees. Accordingly, the sum of ` 2,100/- per month being

received by the deceased as incentive/ex gratia payment must be

deducted while computing his income. The income of the deceased

for the purpose of computation of loss of dependency of his legal

representatives is thus worked out as under:

      Gross Salary                    : ` 22,296.06 x 12

                                      = ` 2,67,552.72 per annum

      Deductions including Conveyance,

Cash Canteen Subsidy, Washing Allowance,

Transite Incentive/Ex Gratia and

Newspaper reimbursement : ` 40,884/- per annum

Net Salary : ` 2,26,668/- per annum

18. As regards the future prospects of the deceased, in the case of

Sarla Verma (supra), the Supreme Court laid down a „rule of thumb‟

that addition in income due to future prospects in cases where the

deceased is in a stable job with annual increments should be only

30% if the age of the deceased is between 40 to 50 years. In the

present case, the deceased was 41 years of age on the date of his

demise. Thus, an addition of 30% to the actual salary income of the

deceased must be made.

19. I am fortified in coming to the conclusion that a revision of

30% should be made towards revision in pay-scale on the basis of a

recent decision of the Supreme Court rendered in Sunil Sharma and

Ors. vs. Bachitar Singh and Ors., 2011 (4) SCALE 383. In the said

case also, the deceased was employed in the Haryana Women

Development Corporation Ltd. and was aged 41 years. After

computing the income of the deceased, the Supreme Court relying

upon its earlier decision in the case of Sarla Verma (supra) allowed

an addition of 30% by way of future prospects. However, as held in

the case of Sarla Verma (supra), where the annual income is in the

taxable range, the words „actual salary‟ should be read as „actual

salary less tax‟. The annual income of the deceased, in the present

case, clearly falls in the tax bracket and thus, computing tax on the

same, as per the slab rate applicable for the Assessment Year 2000-

2001, the actual income works out to ` 1,90,668/-, that is, `

2,26,668/- (net salary) minus ` 36,000/- (tax on salary) = ` 1,90,668/-

only (Rupees One Lac Ninety Thousand Six Hundred and Sixty Eight

Only). Allowing an addition of 30% by way of future prospects, the

annual income of the deceased comes out to ` 2,47,868/-, [that is, `

1,90,668/- (actual salary) plus ` 57,200/- (on account of future

revision in pay-scale)].

20. Adverting to the second contention of Mr. Parashar, the learned

counsel for the appellants, regarding the deductions to be made

towards the personal and living expenses of the deceased, in view of

the fact that the deceased had left behind him six dependent family

members, viz., his widow, four minor children and father, a deduction

of one-fourth (1/4th) of the income of the deceased towards his

personal expenses and maintenance would, in my view, be justified.

This is also in consonance with the guidelines laid down by the

Hon‟ble Supreme Court in the case of Sarla Verma (supra). Thus,

deducting one-fourth (1/4th) from the average monthly income of the

deceased, the average annual loss of dependency of the appellants

come to ` 1,85,901/- per annum.

21. As regards the appropriate multiplier to be adopted in the

present case, although the multiplier of 11 has been considered by the

learned Tribunal to be the appropriate multiplier for assessing the loss

of dependency of the appellants, I am inclined to adopt the multiplier

of 14, which is the tabulated multiplier, approved of by the Hon‟ble

Supreme Court in the case of Sarla Verma (supra) where the age of

the deceased falls in the age group of 41 years to 45 years. Applying

the multiplier of 14, the total loss of dependency of the appellants

works out to ` 26,02,614/- per annum.

22. Apart from the aforesaid amount of pecuniary damages towards

loss of dependency, the appellants must also be held entitled to a sum

of ` 10,000/- each towards non-pecuniary damages under the heads

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

the deceased as well as towards the funeral expenses and last rites of

the deceased. The appellants are, thus, held entitled to a total

compensation of ` 26,42,614/-, which may be rounded off to `

26,43,000/- (Rupees twenty six lakhs forty three thousands Only).

23. Accordingly, the award amount stands enhanced by a sum of `

9,17,000/- (Rupees Nine Lakh Seventeen Thousands Only) to be paid

by the respondent No.3-Insurance Company alongwith interest

thereon at the rate of 7.5% per annum from the date of the petition till

realisation by depositing the same with the Registrar General of this

Court within a period of 30 days from the date of the passing of this

order. Fifty percent of the enhanced amount alongwith proportionate

interest thereon shall enure to the benefit of the widow of the

deceased-the appellant No.1 and the remaining award shall be

apportioned equally between the appellant Nos.2 to 6 alongwith

proportionate interest thereon.

24. The appeal is allowed in the above terms.

25. There shall be no order as to costs.

26. Records of the Claims Tribunal be sent back forthwith to the

concerned Tribunal.

REVA KHETRAPAL (JUDGE) September 28, 2011 km