Delhi High Court
Kusum Jugram & Ors. vs Sanju Boro & Ors. on 23 January, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 9th January, 2012
Pronounced on: 23rd January, 2012
+ MAC.APP. 501/2004
KUSUM JUGRAM & ORS. ..... Appellant
Through: Mr. Navneet Goyal Adv. with
Ms. Suman N. Rawat, Adv.
versus
SANJU BORO & ORS. ..... Respondents
Through: Ms. Neerja Sachdeva, Adv. for
R-3.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. The Appellants who are the legal heirs of the deceased J.P.
Jugran impugns the judgment dated 05.07.2004 whereby a
compensation of ` 12,86,900/- was awarded for the death of the
deceased, who died in an accident, which took place on
08.01.2002.
2. The deceased was working as a Deputy Manager (Sports) with
M/s. Bongaigaon Refinery and Petro Chemicals Ltd. and was
getting a salary of ` 30,635/- in the pay scale of ` 16,000/- to
20,000/-. The Motor Accident Claims Tribunal, (the Tribunal)
took ` 20,000/- as the deceased's income after excluding the
tax and allowances, added 50% towards the future prospects,
deducted one-third towards the personal expenses and applied
the multiplier of '14' to compute the loss of dependency as `
33,60,000/-. The overall compensation of ` 33,85,000/- was
computed.
3. The Tribunal further deducted a sum of `20,98,100/- on account
of the Group Insurance Policy obtained by the deceased
employee on the basis of the principles of balancing the loss and
gain as laid down in Gobald Motor Service Ltd. & Anr. v.
R.M.K. Veluswami & Ors., AIR 1962 SC 1, an overall
compensation of ` 12,86,900/- was awarded in favour of the
Appellants and Respondents No.4 and 5.
4. The impugned award is challenged on the following grounds:-
(i) All perquisites should have been taken into account as
they were part of the salary.
(ii) Since there were five dependents (including the parents
Respondents No.4 and 5), one-fourth should have been
deducted towards the personal and living expenses.
(iii) The payment of ` 20,98,100/- made by another Insurance
Company on account of Group Insurance was not liable
to be deducted.
5. A perusal of the Pay Certificate Ex.PW-1/22 reveals that
various allowances including DA, constituted a component of
about ` 10,000/-. It is well settled that all perquisites which are
part of the salary have to be included for the purpose of
computation of loss of dependency.
6. It is well settled that for the purpose of computation of the loss
of dependency not only take home salary but also other
allowances and perks which would have benefited the entire
family and prospective loss of future earning is to be considered
(National Insurance Company Limited v. Saroj, (2009) 13 SCC
508 and National Insurance Company Limited v. Indira
Srivastava, (2008) 2 SCC 763).
7. The Supreme Court in the case of Sarla Verma v. Delhi
Transport Corporation & Anr., (2009) 6 SCC 121 laid down the
following principles for grant of compensation in death cases:-
"I. MULTIPLIER
Age of the Multiplier
deceased (in
years)
II. DEDUCTION FOR PERSONAL AND LIVING
EXPENSES
Deceased - unmarried
(i) Deduction towards personal expenses.
: 1/2 (50%)
(ii)
Deduction where the family of the
bachelor is large and dependent on the
income of the deceased.
: 1/3rd (33.33%)
Deceased - married
(i) 2 to 3 dependent family members. : 1/3rd
(ii) 4 to 6 dependent family members : 1/4th
(iii) More than 6 family members : 1/5th
(iv) Subject to the evidence to the
contrary. : Father, brother and
sisters will not be
considered as
dependents.
III. FUTURE PROSPECTS
(i) Permanent job : Actual salary - tax + 50%
Below 40 years of age towards future prospects.
(ii) Permanent job : Actual salary - tax + 30%
Between 40-50 years towards future prospects.
(iii) More than 50 years with: Actual salary only.
permanent job. No addition for future
prospects.
(iv) Deceased employed at a fixed: Only actual income to be
Salary (without provision for taken. No addition.
Annual increments)"
8. Thus, even if the deceased's father is excluded from the
dependency, there were four dependents on the deceased and
deduction of one-fourth was required to be made towards the
personal living expenses as against one-third made by the
Tribunal. At the same time, addition of only 30% should have
been made in future prospects as against 50% done by the
Tribunal. The tax liability on the income of ` 4,77,906/- in the
assessment year 2002-2003 was ` 1,18,544/-. Thus, the
revised loss of dependency works out as ` 37,73,308/- (30,365/-
+ 30% x 12 - 1,18,544/- (tax liability) - 1/4 x 14) .
9. I would further award a sum of ` 25,000/- towards the loss of
love and affection, ` 10,000/- towards consortium, ` 10,000/-
towards loss of estate and ` 5,000/- towards funeral expenses.
The overall compensation comes to ` 38,23,308/-.
10. The moot question, however, is whether the amount of `
20,98,100/- is to be deducted from the amount of compensation
payable to the legal representatives of the deceased.
11. In Gobald Motor Service Ltd. & Anr. v. R.M.K. Veluswami &
Ors., AIR 1962 SC 1, it was held that the principle of balancing
between the loss and gain by reason of death to arrive at the
amount of compensation is the general rule. In para 7 of the
report, it was held as under:-
"........Shortly stated, the general principle is that
the pecuniary loss can be ascertained only by
balancing on the one hand the loss to the
claimants of the future pecuniary benefit and on
the other any pecuniary advantage which from
whatever source comes to them by reason of the
death, that is, the balance of loss and gain to a
dependant by the death must be ascertained."
12. In Helen C. Rebello (Supra), the Supreme Court considered the
various English decisions to form an opinion as to what would
be the pecuniary advantage liable to be deducted from the
compensation payable on account of the death or the injuries
suffered in an accident. The Supreme Court referred to the
English decision in Bradurn v. Great Western Rail Co., (1874-
80) All ER 195, where it was held as under:-
"Where a plaintiff suffers personal injuries
through the negligence of the defendant, the
damages awarded are not to be reduced because
the plaintiff has insured himself against accidental
injury. In such a case the plaintiff is entitled to
receive the amount payable by the insurer in
addition to the damages recoverable from the
defendant."
13. In a later decision in Dalby v. India and London Life Assurance
Co., (1854) 15 CB 365, it was held that the person who suffers
injuries ought to have got the amount from his own insurer in
addition to the damages from the tortfeasor.
14. The trend changed in Grand Trunk Railway of Canada v.
Jennings, (1888) 13 AC 800, where it was held that pecuniary
benefits from insurance policies, whatever the source and
pension schemes whether contributory or non-contributory,
were liable to be deducted.
15. In Helen C. Rebello (supra) it was held that the amount of
Provident Fund, sum payable on life insurance policy, etc. were
not deductable from the amount of compensation because these
sums are payable to the legal representatives of the deceased
even when the death is not accidental. The distinction was
made on gains on account of natural death and accidental death.
It was held that whatever comes to the legal representatives by
virtue of the accidental death only would be liable to the
deducted. I extract Para 34 and 35 of the report hereunder, :-
"34. So far as the general principle of
estimating damages under the common law is
concerned, it is settled that the pecuniary loss
can be ascertained only by balancing on one
hand, the loss to the claimant of the future
pecuniary benefits that would have accrued to
him but for the death with the "pecuniary
advantage" which from whatever source comes
to him by reason of the death. In other words, it
is the balancing of loss and gain of the
claimant occasioned by the death. But this has
to change its colour to the extent a statute
intends to do. Thus, this has to be interpreted in
the light of the provisions of the Motor Vehicles
Act, 1939. It is very clear, to which there could
be no doubt that this Act delivers compensation
to the claimant only on account of accidental
injury or death, not on account of any other
death. Thus, the pecuniary advantage accruing
under this Act has to be deciphered, co-relating
with the accidental death. The compensation
payable under the Motor Vehicles Act is on
account of the pecuniary loss to the claimant by
accidental injury or death and not other forms
of death. If there is natural death or death by
suicide, serious illness, including even death by
accident, through train, air flight not involving
motor vehicle, would not be covered under the
Motor Vehicles Act. Thus, the application of
general principle under the common law of loss
and gain for the computation of compensation
under this Act must co-relate to this type of
injury or deaths, viz., accidental. If the words
'pecuniary advantage' from whatever source
are to be interpreted to mean any form of death
under this Act it would dilute all possible
benefits conferred on the claimant and would
be contrary to the spirit of the law. If the
'pecuniary advantage' resulting from death
means pecuniary advantage coming under all
forms of death then it will include all the assets
movable, immovable, shares, bank accounts,
cash and every amount receivable under any
contract. In other words, all heritable assets
including what is willed by the deceased etc.
This would obliterate both, all possible
conferment of economic security to the
claimant by the deceased and the intentions of
the legislature. By such an interpretation the
tortfeasor in spite of his wrongful act or
negligence, which contributes to the death,
would have in many cases no liability or
meagre liability. In our considered opinion, the
general principle of loss and gain takes colour
of this statute, viz., the gain has to be
interpreted which is as a result of the
accidental death and the loss on account of the
accidental death. Thus, under the present Act
whatever pecuniary advantage is received by
the claimant, form whatever source, would only
mean which comes to the claimant on account
of the accidental death and not other form of
death. The Constitution of the Motor Accidents
Claims Tribunal itself Under Section 110 is, as
the Section states;
"...for the purpose of adjudicating
upon claims for compensation in
respect of accidents involving the
death of, or bodily injury to,..."
35. Thus, it would not include that which
claimant receives on account of other form of
deaths, which he would have received even
apart from accidental death. Thus, such
pecuniary advantage would have no
correlation to the accidental death for which
compensation is computed. Any amount
received or receivable not only on account of
the accidental death but that would have come
to the claimant even otherwise, could not be
construed to be the 'pecuniary advantage',
liable for deduction. However, where the
employer insures his employee, as against
injury or death arising out of an accident, any
amount received out of such insurance on the
happening of such incidence may be an amount
liable for deduction. However, our legislature
has taken note of such contingency, through the
proviso of Section 95. Under it, the liability of
the insurer is excluded in respect of injury or
death, arising out of, in the course of
employment of an employee." (underlines are
mine).
16. From Helen C. Rebello (supra) it is evident that the sums which
are payable to the legal representatives only on account of the
accidental death, are liable to be deducted. Other sums of
money i.e. Provident Fund, Family Pension, payment under Life
Insurance Policy, cash, Bank balance, shares, fixed deposits,
etc. which are otherwise receivable as legal heirs are not liable
to be deducted.
17. Thus, the payable compensation comes to `38,23,308/- -
29,98,100/- = 17,25,208/-. The amount of compensation is
enhanced from ` 12,86,900/- to `17,25,208/-.
18. This accident took place in the year 2002. The deceased's
children i.e. Appellants No.2 and 3 must have grown up now.
The enhanced compensation shall carry interest @ 7.5 % per
annum from the date of filing of the petition till the date of
payment.
19. 50% of the awarded amount shall be released to Appellant No.1
forthwith. Rest of the 50% shall be held in fixed deposit for the
period of three years. The Appellant No.1 shall be entitled to
premature encashment for higher education of Appellants No.2
and 3.
20. The entire amount shall be deposited in UCO Bank, Delhi High
Court Branch, New Delhi through the Registrar General of this
Court within 30 days.
21. The Appeal is allowed in above terms. No costs.
(G.P. MITTAL)
JUDGE
JANUARY 23, 2012
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