Delhi High Court
Oriental Insurance Company Ltd. vs Smt. Rajni Devi & Ors. on 6 January, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 6th January, 2012
+ MAC APP. 286/2011
ORIENTAL INSURANCE COMPANY LTD....... Appellant
Through: Ms. Manjusha Wadhwa Advocate
Ms. Angana Goswami Advocate
Versus
SMT. RAJNI DEVI & ORS. ..... Respondents
Through: Mr. Ajay Kumar Advocate with
Mr. Anil Singh Advocate for R-1.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant Oriental Insurance Company Ltd. seeks
reduction of compensation of `9,41,040/- awarded by the Motor
Accident Claims Tribunal, (the Tribunal) for death of Raju
Kumar Mandal who succumbed to the fatal injuries in an
accident which took place on 23.06.2007. During inquiry before
the Tribunal, it was claimed that deceased Raju Kumar Mandal
was aged about 25 years on the date of the accident. He was a
professional driver and getting a salary of ` 6,000/- per month.
Deceased's driving licence Ex.PW-1/1 was proved where the
deceased's date of birth was mentioned as 14.01.1982. In the
absence of any cogent evidence with regard to the deceased's
income of ` 6,000/- per month, the Tribunal took the minimum
wages of a skilled worker (` 3940/- per month), added 50%
towards inflation, deducted one-third towards personal and
living expenses and applied the multiplier of 18 to arrive at the
loss of dependency as ` 8,51,040/-. The Tribunal further granted
sum of ` 50,000/- towards loss of love and affection, ` 10,000/-
towards loss of estate, `10,000/- towards loss of consortium and
` 20,000/- for last rites.
2. The contentions raises on behalf of the Appellant's are:-
(1) There should have been deduction of 50% as against one-
third taken by the Tribunal as the deceased left behind
only a widow.
(2) In the absence of any evidence led by the Claimants with
regards future prospects 50% increase could not have
been given in the minimum wages adopted by the
Tribunal.
(3) The compensation awarded towards conventional heads
i.e. loss of love and affection, loss of consortium and
funeral expenses is excessive.
3. On the other hand, it is contended by the learned counsel for the
Respondents that 50% deduction is made in case of a bachelor.
In case of a married person, the minimum deduction is one-
third. Reliance is placed on Sarla Verma & Ors. v. Delhi
Transport Corporation & Anr., (2009) 6 SCC 121.
4. The Hon'ble Supreme Court considered the judgments of G.M.,
Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176; U.P.
SRTC v. Trilok Chandara, (1996) 4 SCC 362; Sarla Dixit v.
Balwant Yadav, (1996) 3 SCC 179 and New India Assurance
Co. Ltd. v. Charlie, (2005) 10 SCC 720, and held that where the
deceased is a bachelor deduction towards the personal expenses
should be 50%. However, where a bachelor leaves behind a
widowed mother and young siblings dependant on him, the
deduction towards the personal and living expenses should be
one-third. In the case of married person where the number of
dependants was 2-3, the deduction suggested was one-third.
5. In this case the deceased died issueless. He did not leave
behind the parents. Thus, the widow was the only dependant;
applying the ratio of Sarla Verma (supra), the deduction
towards the personal and living expenses has to be one-half and
not one-third. Obviously, the deceased would spend not less
than 50% on himself. The Tribunal erred in making deduction
of only one-third towards the personal living expenses of the
deceased. In my view, it has to be one-half.
6. It is true that there was no evidence led towards the deceased's
future prospects. It was claimed that the deceased was getting a
sum of `6,000/- per month. The same was not believed by the
Tribunal in the absence of any cogent evidence. The Tribunal,
therefore, took the minimum wages of a skilled worker, added
50% towards the future prospects/inflation.
7. In National Insurance Company Ltd. v. Renu Devi & Ors., III
(2008) ACC 134, this Court held that the increase in the
minimum wages is not on account of promotion of a unskilled
worker or on account of advancement in his career but the same
is due to increase in the price index and cost of living. It has
also to be borne in mind that the minimum wages are revised
not only to meet the inflation but also to improve the standard
of living of the lowest paid workers and to give the benefit of
growth in GDP.
8. A perusal of the Notifications issued under the Minimum
Wages Act would show that the minimum wages of a skilled
worker were revised from `4377/- on 01.08.2009 to ` 6448/- on
01.02.2010. Thus, it has to be noticed that there was increase of
about 50% in the minimum wages just in six months. This was
not on account of inflation but to provide a better standard of
living.
9. In Renu Devi & Ors.(supra) it was held as under:-
"9. In a recent decision of this Court Sh.
Narinder Bishal and Anr. v. Sh. Rambir Singh and
Ors., MAC App. 1007-08/2006, decided on
20.02.08 by Kailash Gambhir, J., it has been
observed as under:-
"For determining the earning of the
deceased or victim of the accident, the
claimants are supposed to prove the
exact income of the deceased by
leading some cogent and reliable
documentary evidence as to the
nature of his employment or trade or
business or in any other activity he
was involved in and then the said
income can be taken into
consideration for determining the
quantum of compensation and if in
such a case, the claimants are further
able to establish the future prospects
as well, then the criteria laid down in
Sarla Dixit's case would get attracted.
There can be another category of
cases where the claimants are able to
establish the future prospects of the
deceased by quantifying the amount to
be earned by the deceased in future
with the help of cogent, reliable and
convincing evidence and in all such
cases the tribunal can take into
consideration such future increase as
has been established by the claimants
on record. The difficulty however,
would arise in all those cases where
although the claimants are able to
sufficiently establish on record the
educational qualification of the
deceased or the nature of his
employment whether skilled, semi-
skilled or unskilled but fail to
establish by any reliable evidence to
prove the exact income of the
deceased. In such cases, question
arises whether the Tribunal can take
into consideration the minimum
wages and the periodical revision of
minimum wages as are fixed by the
Government under the Minimum
Wages Act. To examine this question,
it will have to be considered whether
the revision which takes place under
the Minimum Wages Act can be
equated with the future prospects of a
deceased. As would be evident from
catena of judgments of the Supreme
Court, the future prospects have no
correlation with the price index,
inflation or denunciation of currency
value.
The future prospects would
necessarily mean advancement in
future career, earnings and
progression in one's life. It could be
considered by seeing, from which post
a person began his career, what
avenues or prospects he has while
being in a particular avocation and
what targets he/she would finally
achieve at the end of his career. The
promotional avenues, career
progression, grant of selection grades
etc. are some of the broad features for
considering one's future prospects in
one's career.
The minimum wage, in the very
context of economy has a correlation
with the growth and development of
the nation's economy, postulating
increase in the price index, reduction
of purchasing power with the
denunciation of currency value and
consequent fixation of minimum
wages giving some periodical
increase so as to ensure sustenance
and survival of the workman class.
Keeping this in view, under no
circumstance the revision of minimum
wages can be treated on the same
footing with the factor of future
prospects."
10. In The New India Assurance Co. Ltd. v. Smt.
Nirmala Devi and Ors., [2007] VI AD (Delhi) 730,
this Court held:-
"A perusal of the minimum wages
notified under the Minimum Wages
Act show that the minimum wages
gets increased by nearly 150% in 10
years."
11. The Court further observed:-
"Noting that minimum wages
virtually double after every 10 years
to neutralise increase in inflation,
cost of living, purchasing power of
rupee....."
12. Since the minimum wages have doubled in
the past 10 years as per the Minimum Wages Act,
therefore, safely the said increase at least can be
taken in view as a future increase of double
Minimum Wages under the Minimum Wages Act.
Applying the said criteria, the income of the
deceased as assessed in the year 2005 would
increase to Rs. 4,800/- and taking an average of
the same, the Tribunal rightly assessed the income
of deceased at Rs. 3,200/- per month."
10. The Tribunal's finding on this aspect, therefore, cannot be
faulted.
11. Where full compensation for loss of dependency is granted,
only a notional sum is awarded towards the non-pecuniary
damages i.e. loss of love and affection, loss of consortium and
loss of estate. Funeral charges are awarded on actual basis.
There has to be uniformity in the award of compensation under
these heads irrespective of the status of the deceased or the
Claimants. No evidence was led as to the actual funeral
expenses spent by the Respondent.
12. Hence, revised loss of dependency works out as `6,38,280/-
(3940/- + 50% ÷ 2 x 12 x 18).
13. The overall revised compensation is tabulated hereunder:-
(1) Loss of dependency = ` 6,38,280/-
(2) Loss of love and affection & loss of consortium
= ` 25,000/-
(3) Loss of estate = ` 10,000/-
(4) Funeral Expenses = ` 10,000/-
TOTAL = ` 6,83,280/-
14. The compensation is reduced from ` 9,41,040/- to ` 6,83,280/-
including the interim compensation of ` 50,000/-.
15. 50% of the amount was ordered to be released to Respondent by
the order of this Court dated 28.04.2011.
16. The excess amount along with interest earned, if any, on the
sum of ` 2,57,760/- shall be refunded to the Appellant Insurance
Company. The statutory amount of `25,000/- shall also be
refunded.
17. The appeal is allowed in above terms.
18. The report from the Registry may be obtained as to the amount
released and the amount lying deposited. List on 23.01.2012.
(G.P. MITTAL)
JUDGE
JANUARY, 06, 2012
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