N.D.M.C. & Ors. vs I.C. Malhotra & Anr.
2012 Latest Caselaw 2798 Del

R-12
*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                    +      FAO NO.30/2003

%                            Reserve on : 27th January, 2012
                            Date of decision : 27th April, 2012

       N.D.M.C. & ORS.                        .......Appellants
                         Through : Mr. Arjun Pant, Adv.
                               versus

       I.C. MALHOTRA & ANR.              ........Respondents
                      Through : Mr. Ashok Bhasin, Sr. Adv.
                                with Mr. Bhagwan Sharma,
                                Mr. Sunklan Porwal and Ms.
                                Anuradha Anand, Advs.

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

                            JUDGMENT

1. The appellant has challenged the judgment of the Claims

Tribunal whereby compensation of `8,31,816/- has been

awarded to the respondents. The respondents have filed

cross-objections seeking enhancement of the award amount.

2. The accident dated 9th January, 1997 resulted in the

death of Arvind Malhotra. The deceased was aged 27 years

and survived by his parents who filed the claim petition. The

deceased was working as Management Trainee with Ballarpur

Industries Limited earning `9,750/- per month. The Claims

Tribunal took the income of the deceased as `8,250/- per

month, added 50% towards future prospects, deducted 50%

towards the personal expenses and applied the multiplier of 11

to compute the loss of dependency to `8,16,816/-. `10,000/-

has been awarded towards pain and suffering and `5,000/- has

been awarded towards funeral expenses. The total

compensation awarded by the Claims Tribunal is `8,31,816/-.

3. The learned counsel for the appellant has urged at the

time of hearing of this appeal that the deceased was

contributory negligent to the extent of 50% and, therefore, the

compensation is liable to be reduced on that account. It is

further submitted that the future prospects awarded to the

respondents be reduced.

4. The learned counsel for the respondents have filed cross-

objections seeking enhancement of the award amount on the

following grounds:-

(i) The income of the deceased be taken as `1,00,000/- per

month.

(ii) The multiplier be enhanced from 11 to 17.

(iii) The compensation be awarded for loss of love and

affection and loss of estate.

5. With respect to the issue of rashness and negligence, it is

noted that the accident occurred at Shanker Road on 9th

January, 1997 at 10AM. The offending truck bearing No. DL-

1LB-0495 was wrongly parked at the right side of the road

along with the divider and the deceased, who was driving his

motorcycle, hit against the stationary truck. The claimants

examined the eye-witness PW1, who deposed that the truck

was un-manned and un-attended at the time of the accident.

PW1 further deposed that the parking lights were not on and

the accident occurred due to the wrong parking of the

offending truck. The defendant examined the driver and

holder of truck as RW1 and RW2. The Claims Tribunal found

serious discrepancies in their statements. The Claims Tribunal

held that the accident occurred due to the negligent parking of

the offending truck by the driver in the peak hours.

6. After considering the testimonies of the witnesses, this

court is of the view that although the offending truck was

parked on the wrong side, the accident would not have

occurred if the deceased had exercised due care and caution.

The deceased was contributory negligent to the extent of 25%

and therefore, the compensation to the deceased is liable to be

reduced to the extent of 25%.

7. The deceased was aged 27 years at the time of the

accident. Since the deceased was unmarried at that time, the

multiplier has to be taken according to the age of the parents.

The mother of the deceased was 53 years at the time of the

accident. The proper multiplier according to the age of mother

is 11 as per the judgment of Supreme Court in Sarla Verma v.

DTC, AIR 2009 SC 3104. The Claims Tribunal has applied the

correct multiplier of 11 and it does not warrant any

enhancement.

8. The deceased was holding a Degree of Engineering as

well as Post Graduate Diploma in Business Management and

was working as a Management Trainee with Balarpur Industries

Limited drawing a salary of `9,750/- per month besides LTA,

medical, PF and superannuation.

9. The claimants have filed cross-objections seeking

enhancement of the award amount. Along with cross-

objections, the claimants filed CM No.1106/2003 to lead

additional evidence to prove the future prospects of the

deceased. Vide order dated 6th March, 2009, the

claimants/respondents No.1 and 2 were permitted to lead

additional evidence. The claimants/respondents No.1 and 2

examined two witnesses. RW1-Chiranjeev Singh, General

Manager, Ballarpur Industries Limited proved the certificate

dated 18th March, 2009 issued by M/s Ballarpur Industries

Limited. The contents of Ex. RW1/A are reproduced herein

under:-

"To Whomsoever it may concern.

This is to certify that Late Arvind Malhotra was employed in our organization with effect from June 1996. He was an engineer and a MBA and his gross

emoluments at the start of the career was Rs.1.50 lacs per annum, besides Medical Insurance and benefit of encashment of Privilege Leave up to 30 days a year.

Had he remained in our employment till date and under normal circumstance, one could expect such a profile to grow up to a level of Deputy General Manager and his annual cost to the company could have risen in the range of Rs.10 to 12 lacs per annum."

10. RW2-Ravinder Singh Negi, batch-mate of the deceased in

Fore School of Management, New Delhi, is working with Bharti

Airtel Ltd. as Vice-President, Sales & Marketing, Delhi Circle

drawing a salary `41 lacs per annum. He has proved the salary

slip of February, 2009 as Ex. RW2/A. He further deposed that

the deceased held a Degree of Engineering and Post Graduate

Diploma in Business Management. In cross-examination, RW 2

deposed that all his other batch mates would be getting similar

salary packages.

11. From the testimony of RW1 and RW2, it has been proved

that the deceased, who was working as a Management Trainee

at a salary of `12,500/- per month had the future prospects of

becoming Deputy General Manager with a salary of `10 lakhs

to `12 lakhs per annum.

12. It is well settled that in the cases of death of

professionals, the earning capacity of the professional has to

be taken into consideration depending upon the professional

degrees held by him. The following judgments may be referred

in this regard :-

(i) Ganga Devi v. New India Assurance Co. Ltd., III (2010)

ACC 6.

(ii) Ramesh Chand Joshi v. New India Assurance Co. Ltd.,

MAC.APP.No.212/2006 decided on 20th January, 2010.

13. It is also well-settled that future prospects beyond 50%

can be awarded in rare and exceptional cases involving special

circumstances. In K.R. Madhusudhan v. The

Administrative Officer, I (2011) ACC 700 (SC), the

Supreme Court awarded future prospects in respect of the

deceased aged more than 50 years on the ground that the

judgment of Sarla Verma v. DTC (supra) permits the future

prospects to be awarded in respect of deceased aged more

than 50 years in rare and exceptional cases involving special

circumstances. The relevant portion of the judgment of the

Supreme Court in K.R. Madhusudhan vs. The

Administrative Officer (supra) is as under:-

"8. The law regarding addition in income for future prospects has been clearly laid down in Sarla Varma (Smt.) and Ors. v. Delhi Transport Corporation and Anr. VI (2009) SLT 663 = 162 (2009) DLT 278 (SC) = III (2009) ACC 708 (sc) = (2009) 6 SCC 121 and the relevant portion reads as follows:

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 the 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 increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculation 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.

9. In the Sarla Verma (supra) judgment the Court has held that there should be no addition to income for future prospects where the age of the deceased is more than 50 years. The learned Bench called it a rule of thumb and it was developed so as to avoid uncertainties in the outcomes of litigation. However, the Bench held that a departure can be made in rare and exceptional cases involving special circumstances. We are of the opinion that the rule of thumb evolved in Sarla Verma (supra) is to be applied to those cases where there was no concrete evidence on record of definite rise in income due to future prospects. Obviously, the said rule was based on assumption and to avoid uncertainties and inconsistencies in the interpretation of different courts, and to overcome the same.

10. The present case stands on different factual basis where there is clear and incontrovertible evidence on record that the deceased was entitled and in fact bound to get a rise in income in the future, a fact which was corroborated by evidence on record. Thus, we are of the view that the present case comes within the `exceptional circumstances' and not within the purview of rule of thumb laid down by the Sarla Verma (supra) judgment. Hence, even though the deceased was above 50 years of age, he shall be entitled to increase in income due to future prospects."

14. In the present case, deceased was holding the Degree of

Engineering and Post Graduate Diploma in Business

Management. He was working as Management Trainee with

Ballarpur Industries Limited at a salary of `12,500/- per month

and had the future prospects of becoming a General Manager

at a salary of `1,00,000/- per month. This case, therefore, falls

within the „exceptional circumstances‟ and is squarely covered

by the judgment of the Supreme Court in K.R. Madhusudan

(supra). Following the aforesaid judgments, this Court is of the

view that it would be appropriate to take the income of the

deceased as `35,000/- per month on the basis of his earning

capacity, professional degrees held by him and certificate Ex.

RW1/A.

15. The Claims Tribunal has not awarded any compensation

towards loss of love and affection and loss of estate. `10,000/-

is awarded as compensation towards loss of love and affection

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

Tribunal awarded `10,000/- as pain and suffering which is not a

permissible head in death cases and, therefore, `10,000/- is

treated as compensation for funeral expenses and is added to

the head of funeral expenses. Taking the monthly income of

the deceased as `35,000/- per month, deducting `10,000/-

towards Income Tax, deducting 50% towards his personal

expenses, applying the multiplier of 11, the loss of dependency

is computed to `16,50,000/-. The total compensation is

computed to be `12,72,500/- as per break-up given

hereinbelow:-

      Income of the deceased                         :   `35,000/-
      Income Tax (less)                              :   `10,000/-
      Personal Expenses(less)                        :   `12,500/-
      Loss of dependency (`12,500/- x 11 x           :   `16,50,000/-
      12)
      25%        towards        contributory         : `4,12,500/-
      negligence(less)
      Compensation for loss of love and              : `10,000/-
      affection
      Compensation for loss of estate                : `10,000/-
      Funeral Expenses                               : `15,000/-
                                       Total         : `12,72,500/-

16. For the reason as aforesaid, the appeal as well as the

cross-objections are partially allowed. The awarded amount is

enhanced from `8,31,816/- to `12,72,500/- along with interest

@ 9% per annum from the date of filing of the claim petition till

realization.

17. The appellant has deposited the entire award amount as

awarded by the Claim Tribunal out of which 50% of the amount

have been released to the claimants and the remaining 50% is

lying in Fixed Deposit. The Registrar General is directed to

release the amount lying in fixed deposit to the claimants in

terms of the award to the Claims Tribunal.

18. The enhanced award amount be deposited by the

appellant with UCO Bank, Delhi High Court Branch, by means

of a cheque drawn in the name of UCO Bank A/c I.C. Malhotra

within a period of 30 days. On the aforesaid amount being

deposited, UCO Bank is directed to release 50% of the said

amount to the respondents 1 and 2 by transferring the same to

their savings bank account and the remaining amount to be

kept in fixed deposit for three years.

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

monthly by automatic credit of interest in the respective Savings

Account of the beneficiaries.

20. Withdrawal from the aforesaid account shall be permitted to

the beneficiaries after due verification and the Bank shall issue

photo Identity Card to the beneficiaries to facilitate identity.

21. No cheque book be issued to the beneficiaries without the

permission of this Court.

22. The original fixed deposit receipts shall be retained by the

Bank in the safe custody. However, the original Pass Book shall

be given to the beneficiaries along with the photocopy of the

FDRs. Upon the expiry of the period of each FDR, the Bank shall

automatically credit the maturity amount in the Savings Account

of the beneficiaries.

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

fixed deposit receipts without the permission of this Court.

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

Court.

25. On the request of the beneficiaries, Bank shall transfer the

Savings Account to any other branch according to their

convenience.

26. The beneficiaries shall furnish all the relevant documents

for opening of the Saving Bank Account and Fixed Deposit

Account to Mr. M.S. Rao, AGM, UCO Bank, Delhi High Court

Branch, New Delhi (Mobile No. 09871129345).

27. Copy of this judgment be sent to Mr. M.S. Rao, AGM, UCO

Bank, Delhi High Court Branch, New Delhi (Mobile

No.09871129345).

J.R. MIDHA, J APRIL 27, 2012