Delhi High Court
Smt Dhaneshwari & Anr. vs Tejeshwar Singh & Ors. on 19 March, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Pronounced on: 19th March, 2012
+ MAC.APP. 997/2011
Reserved on: 7th March, 2012
SMT DHANESHWARI & ANR. ..... Appellants
Through: Ms. Pooja Goel, Advocate
versus
TEJESHWAR SINGH & ORS. ..... Respondents
Through: Ms. Shantha Devi Raman,
Advocate for R-3.
+ MAC.APP. 203/2006
Reserved on: 23rd January, 2012
ORIENTAL INSURANCE CO. LTD. ..... Appellant
Through: Mr. R. B. Shami, Adv.
versus
RAM RATTI & ORS. ..... Respondents
Through: Mr. Charan Singh, Adv.
+ MAC.APP. 955/2011
Reserved on: 29th February, 2012
ROYAL SUNDARAM ALLIANCE INSURANCE CO LTD
..... Appellant
Through: Ms. Suman Bagga, Advocate
versus
MEERA & ORS ..... Respondent
Through: Mr. Rupinder Pal Singh Simak
MAC APP. 997/2011 Etc. Page 1 of 103
with Mr. Rigasha Takkar,
Advocates for the Respondents
No.1 to 4.
+ MAC.APP. 958/2011
Reserved on: 28th February, 2012
ROYAL SUNDARAM ALLIANCE INSURANCE CO LTD
..... Appellant
Through: Ms. Suman Bagga, Advocate
versus
MEENU DEVI & ORS ..... Respondent
Through: Mr. Sanjiv Gupta, Advocate for
the Respondents No.1 to 5.
+ MAC.APP. 461/2010
Reserved on: 6th March, 2012
PREM LATA CHHETRI & ORS ..... Appellants
Through: Mr. Manish Maini, Adv.
versus
BHORDIYA GIRDHAR & ORS...... Respondents
Through: Ms. Shantha Devi Raman, Adv.
for R-3.
+ MAC.APP. 768/2010
Reserved on: 24th February, 2012
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr.K.L.Nandwani, Advocate.
versus
ANJU & ORS ..... Respondent
Through: None.
+ MAC.APP. 137/2011
MAC APP. 997/2011 Etc. Page 2 of 103
Reserved on: 24th February, 2012
ICICI LOMBARD GENERAL INSURANCE CO LTD
..... Appellant
Through: Ms. Suman Bagga, Adv.
versus
RAJNI & ORS ..... Respondent
Through: Nemo.
+ MAC.APP. 566/2010
Reserved on: 12th January, 2012
DAYA MALIK & ANR ..... Appellants
Through: Appellant in person.
versus
SANNA & ORS. ..... Respondents
Through: Mr. Peeush Sharma, Advocate
for R-1 to 5.
+ MAC.APP. 51/2012
Reserved on: 12th January, 2012
SANNA & ORS ..... Appellants
Through: Mr. Peeush Sharma, Advocate
versus
DAYA MALIK & ANR ..... Respondent
Through: Respondent No.1 in person.
+ MAC.APP. 81/2011
Reserved on: 27th February, 2012
MAC APP. 997/2011 Etc. Page 3 of 103
ROYAL SUNDARAM ALLIANCE INSURANCE CO LTD
..... Appellant
Through: Ms. Suman Bagga, Adv.
versus
SANTOSH & ORS ..... Respondent
Through: Mr. Anshuman Bal, Adv. for R-
1 to R-5.
+ MAC.APP. 493/2011
Reserved on: 24th February, 2012
ICICI LOMBARD GENERAL INSURANCE CO LTD
..... Appellant
Through: Ms. Suman Bagga, Adv.
versus
MANJU DEVI & ORS ..... Respondent
Through: Nemo.
+ MAC.APP. 536/2011
Reserved on: 24th February, 2012
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr.K.L.Nandwani, Advocate.
versus
SUMAN DEVI & ORS ..... Respondents
Through: Mr.Ashok Popli, Advocate for
R-1 to R-5.
+ MAC.APP. 862/2011
Reserved on: 24th February, 2012
UNITED INDIA INSURANCE CO LTD ..... Appellant
Through: Ms. Suman Bagga, Adv.
versus
MAC APP. 997/2011 Etc. Page 4 of 103
SMT ANITA & ORS ..... Respondent
Through: Mr. Dalip Singh, Adv. with
Mr. Anil Kumar Shukla, Adv.
for R-1 to R-3.
+ MAC.APP. 38/2011
Reserved on: 28th February, 2012
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr. Kanwal Choudhary,
Advocate
versus
RIMJHIM ISPAT LTD & ORS ..... Respondents
Through: Mr. F.M.Siddiqui, Advocate
+ MAC.APP. 40/2011
Reserved on: 28th February, 2012
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr.Kanwal Choudhary, Adv.
versus
RIMJHIM ISPAT LTD & ORS. ..... Respondents
Through: Mr. F.M.Siddiqui, Advocate
+ MAC.APP. 39/2011
Reserved on: 28th February, 2012
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr. Kanwal Choudhary, Adv.
versus
RIMJHIM ISPAT LTD & ORS ..... Respondents
Through: Mr. F.M.Siddiqui, Advocate
MAC APP. 997/2011 Etc. Page 5 of 103
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. A common question of law falls for determination in these
Appeals:
2. "Whether, in view of the Division Bench judgment of this Court
in Delhi Transport Corporation and Anr. v. Kumari Lalita 22
(1982) DLT 170 (DB) and Rattan Lal Mehta v. Rajinder Kapoor
& Anr. II (1996) ACC 1 (DB) an increase towards inflation can
be granted, particularly when the loss of dependency is to be
assessed according to the minimum wages?
as such addition has been granted by this Court in catena of
judgments rendered by the learned Single Judges including Smt.
Anari Devi v. Shri Tilak Raj & Anr., II (2004) ACC 739; (2005
ACJ 1397), National Insurance Co. Ltd. v. Pooja & Ors., II
(2006) ACC 382 (2007 ACJ 1051), Om Kumari & Ors. v. Shish
Pal & Ors, 140 (2007) DLT 62, Narinder Bishal & Anr. v.
Rambir Singh & Ors.,MAC APP. 1007-08/2006, decided on
20.02.2008, New India Assurance Co. Ld. V. Vijay Singh MAC
APP. 280/2008 decided on 09.05.2008; Oriental Insurance
Company Limited v. Smt. Rajni Devi & Ors. MAC
APP.286/2011 decided on 06.01.2012; Smt. Gulabeeya Devi v.
Mehboob Ali & Ors. MAC APP.463/2011 decided on
10.01.2012 and IFFCO TOKIO Gen. Ins. Co. Ltd. v. Rooniya
Devi & Ors. MAC APP.189/2011 decided on 30.01.2012.
3. The increase in minimum wages is being granted for
computation of loss of dependency primarily on the ground that
minimum wages get doubled within a span of 7 to 10 years on
account of inflation. Thus, protection is required to be given to
the legal representatives (the Claimants) of the deceased on
account of depreciation in the value of money.
4. Indubitably, grant of compensation involving an accident is
within the realm of law of torts. It is based on the principle of
restitution in integrum. The said principle provides that a
person entitled to damages should, as nearly as possible, get that
sum of money which would put him in the same position as he
would have been if he had not sustained the wrong. (Livingstone
v. Rawyards Coal Co. (1880) 5 AC 25 (HL).
5. The first judgment of this Court, on which I could lay my hands
on, where 50% increase was awarded when the deceased‟s
income was computed according to minimum wages is Anari
Devi (supra) where S.K. Mahajan, J. observed that on account
of inflation and rise in the cost of living, minimum wages also
increase from time to time. This Court held that the Claims
Tribunal ought to have taken into consideration increase in the
minimum wages from the date of death of the deceased during
the last five years. Thus, although the minimum wages on the
date of accident were ` 1784/-, the learned Single Judge
assumed it to be ` 2700/- to compute the loss of dependency.
6. Then, there is a report of National Insurance Co. Ltd. v. Pooja
& Ors., II (2006) ACC 382 (2007 ACJ 1051) decided by the
Learned Single Judge on 19.04.2006. Here again, increase in the
minimum wages was given holding as under:-
"15. The deceased expired in 1999. At that time he was
30 years old. Due to inflation and rapid economic
progress, minimum wages have been going up. The
deceased had long working life ahead of him. It was
natural that his earnings in normal course would have
gone up in the next about 30 years. Loss of dependency
is calculated keeping in view the monetary loss suffered
by the dependants in future. Therefore, ld. Tribunal was
justified in not ignoring the possibility of increase in
earnings/income due to inflation, price rise, etc. of the
deceased and taking this factor into consideration."
7. In Om Kumari & Ors. v. Shish Pal & Ors, 140 (2007) DLT 62,
while giving the increase on account of minimum wages,
another Learned Single Judge held as under:-
"16. The future prospects may not be linked to
promotional avenues but certainly would be linked to the
inflation and increased wages over the years.
17. I have before me the minimum wages notified under
the Minimum Wages Act, 1948, which show that
pertaining to matriculates, minimum wages have risen
from ` 325/- per month as on 1.1.1980 to ` 1,014 per
month as on 1.5.1989. The same have risen to ` 2,796 per
month as on 1.2.1999. Between 1.1.80 and 1.5.1989, the
percentage increase is slightly over 200. Over the next
10 years, percentage increase is approximately 180.
18. Minimum wages are notified keeping into account the
inflationary trends and cost indices. These are the
minimum wages which law presumes would be required
for a person to sustain himself at the minimum level of
subsistence."
8. In Narinder Bishal & Anr. v. Rambir Singh & Ors., MAC APP.
1007-08/2006, decided on 20.02.2008, a distinction was drawn
between future prospects and increase granted on account of
inflation by the learned Single Judge of this Court. It was held
that minimum wages has co-relation with the growth and
development of the nation‟s economy, postulating increase in
the price index, reduction of purchasing power and depreciation
in the value of currency. This Court granted 50% increase in the
minimum wages holding as under:-
"16. 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.
17. 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.
18.For instance, minimum wages of unskilled workman
in the year 2000 were ` 2524/- under the Minimum
Wages Act. The said minimum wages in the year 2007 for
the same class of unskilled workman came to be ` 3470/-
under the Act. This increase is not due to any promotion
of unskilled workman or any kind of advancement in his
career but the same are due to increase in the price index
and cost of living which are the determining factors taken
into consideration for increasing the wages under the
Minimum Wages Act. The nature of job of unskilled
workman will not change as the same shall remain
unchanged. The same principle may be true even in the
case of business or trade or other such allied activities
where the future prospects of the deceased can be
considered on the basis of his assets, income tax return,
wealth tax return, balance sheet etc. But as far as the
increase in the minimum wages is concerned the same
takes into consideration the price indeed and the
inflationary trends and the same have no correlation with
the future prospects of a skilled, semi-skilled or an
unskilled workman.
19. In the light of the above discussion, I find myself in
agreement with the argument of counsel for the
appellants that in the given facts and circumstances of
the case, the Tribunal ought to have taken into
consideration the revision in the minimum wages so as to
determine just and fair compensation. In all cases where
the claimants are able to sufficiently establish the income
of the deceased, the benefit of granting any compensation
for future prospects can be taken into consideration only
when sufficient and reliable evidence is placed and
proved by the claimants as per the dictum laid down in
Bijov Kumar Dugar v. Bidva Dhar Dutta and Others,
(2006) 3 SCC 242. While in other cases where in the
absence of sufficient evidence, the Tribunal applied the
yardstick of minimum wages, in all such cases, the
Tribunals can take judicial notice of the revision of
minimum wages, as laid down under the Minimum Wages
Act."
9. In New India Assurance Co. Ld. v. Vijay Singh MAC APP.
280/2008 decided by this Court on 09.05.2008, yet another
Learned Single Judge relying on Narinder Bishal (supra) also
drew a distinction between the grant of future prospects which
is given on account of advancement in career and progression in
employment, on the one hand and increase in the minimum
wages which is granted on account of inflation on the other
hand. The learned Single Judge held as under:-
".. 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 all cases where the claimants are able to
sufficiently establish the income of the deceased, the
benefit of granting any compensation for future prospects
can be taken into consideration only when sufficient and
reliable evidence is placed and proved by the claimants
as per the dictum laid down in Bijov Kumar Dugar v.
Bidya Dhar Dutta and Others, (2006) 3 SCC 242. While
in other cases, where in the absence of sufficient
evidence, the Tribunal applies the yardstick of minimum
wages, in all such cases, the Tribunals can take judicial
notice of the revision of minimum wages, as laid down
under the Minimum Wages Act."
10. Relying on National Insurance Company Ltd. v. Renu Devi &
Ors., III (2008) ACC 134, Narinder Bishal & Anr. v. Rambir
Singh & Ors.,MAC APP. 1007-08/2006, decided on 20.02.2008
and National Insurance Co. Ltd. v. Kailash Devi, 2008 ACC
772, I also took the view that 50% increase has to be added to
the income of the deceased on account of inflation and growth
of GDP, when it is computed according to the minimum wages.
11. It is important to note that the benefit of future prospects is
given to the LRs of the deceased, only when there was evidence
of bright future prospects (Bijoy Kumar Dugar v. Bidya Dhar
Dutta and Others, (2006) 3 SCC 242), but, the benefit of
inflation is being given only in case of minimum wages de hors
the evidence of any future prospects. Perhaps, the lowest paid
workers or the persons in the lowest income group were
considered as a class to be given this benefit.
12. Section 168 of the Motor Vehicles Act (the Act) enjoins the
Claims Tribunal to make an award determining the amount of
compensation which appears to it to be just. However, the
objective factors, which may constitute the basis of
compensation appearing as just, have not been indicated in the
Act. Thus, the expression "which appears to be just" vests a
wide discretion in the Tribunal in the matter of determination of
the compensation. Nevertheless, the wide amplitude of such
power does not empower the Tribunal to determine the
compensation arbitrarily, or to ignore settled principles relating
to determination of compensation. Although the Act is a
beneficial legislation, it can neither be allowed to be used as a
source of profit, nor as a windfall to the persons affected, nor
should it be punitive to the person(s) liable to pay
compensation. The determination of compensation must be
based on certain data, establishing reasonable nexus between
the loss incurred by the dependents of the deceased and the
compensation to be awarded to them. In nutshell, the amount of
compensation determined to be payable to the claimant(s) has to
be fair and reasonable, by accepted legal standards.
13. In General Manager, Kerala State Road Transport
Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors.
(1994) 2 SCC 176, M.N. Venkatachaliah, J. observed that the
determination of the quantum must answer what contemporary
society "would deem to be a fair sum such as would allow the
wrongdoer to hold up his head among his neighbours and say
with their approval that he has done the fair thing". The amount
awarded must not be niggardly since the "law values life and
limb in a free society in generous scales?" At the same time, a
misplaced sympathy, generosity and benevolence cannot be the
guiding factor for determining the compensation. The object of
providing compensation is to place the claimant(s), to the extent
possible, in almost the same financial position, as they were in,
before the accident and not to make a fortune out of misfortune
that has befallen them.
14. In calculating the pecuniary loss to the dependants many
imponderables enter into the calculation. Therefore, the actual
extent of the pecuniary loss to the dependants may depend upon
data which cannot be ascertained accurately, but must
necessarily be an estimate, or even partly a conjecture. 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.
15. Thus, in the realm of determination of damages in a motor
accident claim case some speculation and guess work is
permissible to award just compensation.
16. The issue of grant of increase of 50% in the minimum wages
has been raised by the Insurance Companies (the Insurers)
where LRs of the deceased have been granted such benefits, on
the ground that the same is not permissible. Similarly, the LRs
of the deceased have come in Appeals wherever this benefit has
been denied to them by the Claims Tribunal. For the sake of
convenience, the Insurance Companies will be referred to as
Insurers and the LRs/Victims as the Claimants.
17. The contentions raised on behalf of the Insurers are:-
(i) Grant of compensation is based on the liability of the
tortfeasor to pay the damages to the victim. The damages
suffered must be proved by the victim or his LRs as the
case may be.
(ii) The Court cannot take judicial notice of the increase in
future inflation as nobody knows what is in store in
future.
(iii) Damages are to be assessed on the date of the incident.
Benefit of inflation is inbuilt in the multiplier and if
further addition is made, it would mean increase in the
multiplier and punishing the tortfeasor beyond his
liability.
18. On the other hand, it is urged on behalf of the Claimants that
although the benefit on account of inflation is not akin to future
prospects, yet, the Court cannot be oblivious to the trend over
the last six decades, since independence. Thus, it is contended
that in case of minimum wages, the Claimants are entitled to the
benefit of 50% increase, as granted by the learned Single Judges
of this Court in various judgments.
19. I will deal with the contentions one by one.
ONUS TO PROVE DAMAGES
20. In an ordinary civil suit the burden to prove a fact lies on a
party, who would fail, if no evidence at all is given by the either
side. In a Claim Petition filed under Section 166 of the Act the
Claims Tribunal, trained in law, which is manned by a Senior
Judicial Officer is to hold an inquiry under Section 168 of the
Act to award just compensation. Thus, even if a Claimant failed
to adduce any evidence, the Claims Tribunal is expected to
summon all relevant materials to form an opinion and award a
fair and proper compensation. In Kuldeep Singh Bawa v. Tika
Ram, MANU/DE/3525/2009 J.R. Midha, J. held as under:-
"5. Section 168 of the Motor Vehicles Act provides that
the learned Tribunal shall conduct an inquiry into the
claim petition. Section 169 of the Motor Vehicles Act
provides that the learned Tribunal shall follow such
summary procedure as it deem fit to conduct such an
inquiry. The inquiry stipulated in Section 168 of the
Motor Vehicles Act is different from the civil trial.
Section 168 of the Motor Vehicles Act casts a duty on the
learned Tribunal to conduct an inquiry in a meaningful
manner. The object of the legislature behind making this
provision is that the victims of road accident are not left
at their own mercy........."
21. Difficulty arises where a Claims Tribunal is unable to find any
evidence to assess the loss of dependency. What should be
taken as income to arrive at the loss suffered by the LRs of the
deceased or the victim himself in the case of injury in a motor
accident? In all such cases, a Claims Tribunal sometimes has to
make some guess work objectively considering the facts and
circumstances of each case.
22. At this juncture, I would refer to the Second Schedule to
Section 163-A of the Act, which was inserted by way of
amendment w.e.f. 14.11.1994. Clause 6 of the Second Schedule
provides that even in the case of persons who had no income
prior to the accident, a notional income of ` 15,000/- per annum
is to be considered to assess the loss of dependency or for grant
of compensation towards permanent disability.
23. It may be noticed that the minimum wages of an unskilled
worker on 14.11.1994 (on the date of insertion of Section 163-A
of the Act) were ` 1420/- per month or ` 17,040/- per annum. It
can be presumed that, it must have taken sometime for the
legislature in passing the Amendment Bill and bringing the
amendment on the statue book. Thus, by taking notional
income as ` 15,000/- in case of a non earning person, the
legislature intended that even in Claim Petitions under Section
163-A of the Act where LRs/victims can claim compensation
even without proving negligence, compensation should be
awarded on a scale almost equal to the minimum wages of an
unskilled worker under the Minimum Wages Act.
24. In Ningamma & Anr.v. United India Insurance Company
Limited, (2009) 13 SCC 710, the Supreme Court held as under:-
"34. Undoubtedly, Section 166 of the MVA deals with
"just compensation" and even if in the pleadings no
specific claim was made under Section 166 of the MVA,
in our considered opinion a party should not be deprived
from getting "just compensation" in case the claimant is
able to make out a case under any provision of law.
Needless to say, the MVA is beneficial and welfare
legislation. In fact, the court is duty-bound and entitled to
award "just compensation" irrespective of the fact
whether any plea in that behalf was raised by the
claimant or not."
25. Section 168 of the Act enjoins upon Claims Tribunal to award
"just compensation" and even if in the pleadings no specific
claim is made, a party cannot be deprived of from getting just
compensation in case the claimant is able to make out a case. It
was held that Motor Vehicles Act is a beneficial and welfare
legislation and the Court is duty bound to award "just
compensation", whether any plea in that regard was raised by
the Claimants or not.
26. In Rajnaja Jain v. Aditya Singh, ILR (2008) 2 Delhi 968, the
Appellant had claimed the deceased‟s income to be ` 5,000/- per
month by imparting tuitions at home. In the absence of any
cogent evidence, the Claims Tribunal accepted the deceased‟s
income to be minimum wages as per the deceased‟s
qualification i.e. matriculation which was subsequently affirmed
by the High Court.
27. In Anita Devi v. Mohinder Singh, ILR 2007 (2) Delhi 127, the
deceased was working as a commission Agent for selling yarn.
His income was claimed to be ` 5,000/- per month. At the time
of the accident he was travelling on a two wheeler and was in
possession of two cheques one for ` 1,00,000/- and the other for
` 60,000/- to pay a third party. His income was accepted to be
that of a skilled person under the Minimum Wages Act.
28. In P.Mathiyalagan v. P. Sagunthala (2006) 2 TN MAC 301
(Mad) the deceased was an auto driver, aged 35 years. While
computing the compensation payable under the Workman
Compensation Act, in the absence of any evidence with regard
to his income, his wages were considered to be of an skilled
worker.
29. In United India Insurance Co. Ltd. v. R. Vijayakumar, (2010) 2
TN MAC 307 (Mad) (DB) the injured claimed his income to be `
50,000/- per film on an average. However, no document was
produced to show that the Claimant was in receipt of ` 50,000/-
per film on an average. Even the Income Tax assessment
documents were not proved. In the absence of any cogent
evidence with regard to proof of income, the Madras High
Court held that some amount of conjecture is possible and
assumed the Claimant‟s income to be ` 20,000/- per month or `
2,40,000/- per annum.
30. In the case of a student pursuing a professional course, the
Claims Tribunal is to consider the potential income of the
deceased after completion of the course. In the case of Haji
Zainullah Khan (Dead) by Lrs. v. Nagar Mahapalika,
Allahabad, 1994 (5) SCC 667, death of a young boy, aged 20
years took place in an accident which happened in the year
1972. The deceased was a student of B.Sc (Biology) Ist year, a
compensation of ` 1,46,900/- was increased and rounded off to
` 1,50,000/-.
31. This Court and other High Courts have been following the
Supreme Court‟s judgment in Haji Zainullah Khan (supra)
accepting the potential income of a student pursuing a
professional course in medicine, management, engineering etc.
to award just compensation. This Court in New India Assurance
Co. Ltd. v. Ganga Devi & Ors., MAC APP.135/2008 dediced on
23.11.2009, J.R. Midha, J. assumed the income of a third year
student pursing a degree in medicines to be `18,000/- per month
to compute the loss of dependency.
32. For instance, the Claimants may be able to prove that the
deceased was working as a driver of a truck or a bus or a taxi or
an auto rickshaw; the Claimants may be able to prove that the
deceased was a tailor, a barber or was running a tea shop. But,
they (Claimants) may not be in possession of any evidence to
prove the deceased‟s actual income though, they may establish
the profession of the deceased. In the absence of any evidence
as to the deceased‟s actual income produced by the Claimant,
the Claims Tribunal has to make an endeavor during the course
of inquiry to elicit some material to make an assessment of the
deceased‟s income or to make a guess work wherever possible
or in appropriate cases, the Claims Tribunal may have to take
assistance from the Minimum Wages Act to award the
compensation to the Claimants.
33. The bone of contention is the grant of addition in the minimum
wages, on account of inflation. The learned counsel for the
Insurers place reliance on the report in Kumari Lalita (supra).
In that case a school going girl named Lalita, aged 8 years
suffered grevious injuries in an accident, caused by a DTC bus
on 05.12.1961. A compensation of ` 15,000/- awarded by the
Claims Tribunal was increased by the learned Single Judge in
the first Appeal to ` 50,000/-. Injured Lalita as well as the DTC
were dissatisfied with the judgment of the Learned Single Judge
therefore they preferred to appeal before the Division Bench.
Since the accident took place in the year 1961 and lot of time
had passed in the interregnum, a plea was sought to be raised on
behalf of Kumari Lalita that on account of inflation the real
value of the money was not able to take care of the expenses
incurred by her and her sufferings on account of loss of
amenities. The Division Bench of this Court declined to
enhance the compensation on the ground of inflation holding
that the relevant year which is to be considered, is the date of
accident to the date of Award i.e. 1961 to 1964. I would extract
relevant portions of the report hereunder:-
"21. Counsel for Lalita made a passionate appeal to us
that seeing the severity of the injuries we should increase
the amount of damages especially in view of the fact that
there has been a steep fall in the purchasing power of
money in recent years. He argued that on the ground of
depreciation in the value of money the award of Misra J.
should be updated and brought in line with the current
level of inflation. This argument we cannot accept.
22. In our inflationary times the real value of damages is
dependent upon the state of the currency. The nominal
value of the award must increase as the value of the
rupee decreases. There will be a tendency in times of
inflation for awards to increase. Otherwise the amount
awarded will be contemptible. If the requirement of the
law is to be met, the sum awarded must be substantial in
the context of current money values where the loss is
substantial and the injury grievious. Increase for
inflation is designed to preserve the „real‟ value of
money. (Pickett v. British Rail Engineering Ltd. (1979)
(I) All E.R. 774 (782) (10) per Lord Wilberforce). The
award should keep pace with the times. The award must
be reasonable and should have a relation with the
changing value of money. While it is important from the
point of view of public policy that the general level of
damages should be kept moderate rather than
extravagent, a judge must keep up with the times and in
particular with the decline in the purchasing power of
money. (Bingham's Motor Claims cases 8th ed. P. 482).
23. It would be unrealistic to disregard the present fall in
the value of money. Judges cannot shut their eyes to the
world outside the courts. They do not forget that inflation
affects the plaintiffs as it affects them. If judges do not
adjust their awards to changing conditions and rising
standards of living, their assessment of damages will be
unreal and illusory. In England a radical reappraisal of
the law has been recommended by suggesting periodic
payments and periodic reviews in personal injury
actions. This has been done to mitigate the injustice of
the lump sum system. (See Pearson Report).
24. It is true that "compensation demanded say ten years
ago, is less than quarter of its value when it is received
today." (Motor Owners' Insurance Co. Ltd. v. J.K. Modi,
AIR 1981 SC 2059(11) (2060) per Chandrachud CJ). But
the factor of future inflation cannot be taken into account
in the assessment of damages. That will introduce
speculation and uncertainty in the estimates. The awards
will become more uncertain than before. Because of the
imponderables no one can say what the future holds for
us. The imponderables defy the forecasts of the
economists. So future inflationary trends should not be
admitted. "It would therefore be wrong for the court to
increase the award of damages by attempting to make
further specific allowance for future inflation" (Cookson
v. Koowles (1979) AC 556(12). Only in exceptional cases
would it be right to make some specific allowance for
future inflation. In a recent case in England Lord
Scarman has said :
"The correct approach should be, therefore, in the
first place to assess damages without regard to the
risk of future inflation. If it can be demonstrated
that upon the particular facts of a case, such an
assessment would not result in a fair compensation
(bearing in mind the investment opportunity that a
lump sum award offers), some increase is
permissible. But the victims of tort who receive a
lump sum award are entitled to no better
protection against inflation than others who have
to rely on capital for their future support. To
attempt such protection would be to put them into
a privileged position at the expense of the
tortfeasor, and so to impose upon him an excessive
burden, which might go far beyond compensation
for loss."
(Lim v. Camden Health Authority (1979) 3 WLR
44 (58) (13) (H.L.).
25. In the present case the accident happened on 6-12-
1961. In 1964 the tribunal assessed the damages after
examining the medical evidence and the nature of
injuries. We have to keep these years--1961 and 1964 --
in mind while assessing damages. The principle of law is
that damages must be assessed as at the date when the
damages occurs. The material date for ascertaining the
extent of liability is the date of the accrual of the cause of
action for a claim arising out of the accident, which in
general would be the date of the accident. (Padma
Srinivasan v. Premier Insurance Co. Ltd. (1982) I SCC
613)(14). Tort losses are ordinarily assessed as of the
time when the cause of action accrued, but in case of
personal injuries the Judgment date is justified for
continuing injuries (Philips v. Ward (1956) I All E.R.
874, 877)(15). The award must be made in the context of
the time. The computation of loss has to be made in this
case with reference to early sixties. For the loss of 1962
we cannot adopt the yardstick of 1982. This will be doing
injustice to the tortfeasor. Damages must not be
unreasonably deficient nor a windfall to the injured. The
damages "must necessarily fall to be estimated within a
bracket in justice both to the sufferer and to the
tortfeasor" Yorkshire Electricity Board v. Naylor (1968)
AC 529(16), 552, Rs. 50,000 the learned judge thought
was the right sum to award to Lalita "to see her
through" the rest of her life. Some element of conjecture
or prophecy is inevitable in assessment of damages (M.P.
State Road Transport Corporation v. Sudhakar (1977)
ACJ 290(17), 292 (SC). Unless we find that Misra J. has
made an entirely erroneous estimate of damages we
ought not to interfere with his award.
26. Future inflation has to be disregarded for another
good reason. As has been said by Lord Scarman in Lim's
case (supra) that the victim of the injury is not entitled to
more protection than any other economic group of
society. He cannot enjoy a privileged position. As
another judge has put it. "In an inflationary period the
plaintiffs cannot expect to find themselves in a class
which is shielded from the effects of inflation which the
rest of their fellow citizens battle with." (Moriarity v.
Mc'Carthy (1978) (18) I WLR 155 (159), per O'Connor
J.).
27. The truth is that judicial awards of damages follow
but rarely keep pace with inflation (Pickett (supra) at
page 800). In this case Misra J. could not have gazed
into the future and predicted that some day the value of
rupee will go down to less than 25 paise. Knowledge of
the future was denied to him as it is denied to all of us."
34. From the observations of the Division Bench, three things can
be culled out. Firstly, that the future inflation has to be kept out
while making assessment of damages. On making such
assessment if it is evident that the compensation is not fair,
some increase may be awarded on account of inflation.
Secondly, the Division Bench observed that the years to be
taken into account for award of compensation were 1961 when
the accident occurred and 1964 when the compensation was
awarded and, thirdly, that the material date of ascertaining the
compensation for damages is the accrual of the cause of action
and not thereafter.
35. By the time the Division Bench decided Kumari Lalita (supra)
the multiplier method of awarding compensation had not been
firmly established nor there was any authoritative
pronouncement of the Supreme Court whereby any benefit on
account of bright future prospects could be given. It was in this
context that the Division Bench observed that the material date
for ascertaining the accident of liability is the date of accrual of
the cause of action. The Division Bench was not averse to the
grant of inflation up to the date of the passing of the award by
the Claims Tribunal.
36. In General Manager, Kerala State Road Transport
Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors.
(1994) 2 SCC 176, it was firmly established that the multiplier
method was the best method to award just, fair and proper
compensation. Further, it was also established that wherever
there was evidence of the deceased having a bright future
prospects, benefit thereof must be given to the Claimant which
was against the principle laid down in English decisions, where
it was observed that the damages must be assessed as on the
date of the incident. On the basis of Kumari Lalita (supra)
therefore, it cannot be said that future inflation was liable to be
totally ignored.
37. The Division Bench judgment of this Court in Rattan Lal Mehta
v. Rajinder Kapoor & Anr. II (1996) ACC 1 (DB) which is
heavily relied on by the counsel for the Insurers, the question of
taking future inflation into consideration was directly dealt with.
The Division Bench noticed adoption of a higher multiplier of
„18‟ as against „15‟ already being granted by the Claims
Tribunal and the Courts. The Division Bench referred to the
actuarial method of assessment of damages and relied on
Chairman A.P.S.R.T.C. v. Shifya Khatoon, AIR 1985 AP 83 and
Bhagwandas v. Mohd. Ariff, AIR 1988, AP 99. The Division
Bench observed as under:-
"Multiplier cannot be the difference between age at
death (or age at trial of injured person) and total
expected life. If does not exceed 18 or 20:
This aspect does not indeed fall for consideration
because Parliament has now prescribed the Table in
1994. The maximum multiplier as per the Table is only
18.
Though this aspect is now not relevant still there is
chance of somebody contending that the Table is not to
be applied as multipliers are not above 18. With a view
to clarify the position, we are dealing with this aspect.
27. A multiplier cannot be the difference between the age
at the death (for age at the trial of an injured person) and
his expected years of remaining life. This is because even
if there is no accident, the person's expectation of life
depends upon the general mortality rates applicable to
him as he moves up from one birthday to the next
birthday. While death is certain and men are mortal, the
time of death remains a mystery. Knowledge of future is
denied to mankind (Lord Scarman in Lim's case) 1980
A.C. 174. and that is where mortality rates play an
important role in mathematics, statistics and with
actuaries. Insurance premia are based on these theories
and are computed by actuaries. R. Kidner & K. Richards
(See The Economic Journal, 1974, p.130 at 133) point
out:
"In the case of payment up to the retirement age of
the husband, the probability of his living each year
up to the age of retirement is less than one and
diminishes as time goes on. The probability of a
man aged 21 living until 50 is, for example, 0.94
and to age 60 is 0.82 and so on. These
probabilities are used in calculation of the
theoretically-correct amount of the award ..."
The same principle was reiterated in KSRTC v. Susamma
Thomas, AIR 1994 SC 1631, by the Supreme Court
(See also J.H. Prevett "Actuarial assessment of
Damages: The Thalidomide Case" (Vol.35) Mod. L. Rev.
1972 (p. 140 at p. 146); M/s. K. Richards & R. Kidner in
124 New Law Journal, 1974, p.105).
The future chances of survival from year to year have to
be added up. Present values have to be arrived at by a
discount rate applicable to periods of stable currency
(This is explained below).
28. The advantage of the actuarial multiplier is that it
will give a sum which will exhaust the principal over the
period for which the future dependency (or earnings in
injury case) is to last. The amount arrived at is not like
the one arrived at in the interest method where the
principal remains as an additional gain while interest is
consumed periodically.
In fact, in the most advanced countries like U.K,
Australia, Canada or U.S.A, where mortality rates are
far lower as compared to India and survival rates higher,
the multipliers do not generally extend beyond 18 or 20.
No doubt as per the Supreme Court in G.M.K.S.R.T.C. v.
Susamma Thomas (supra), the highest multiplier can be
only 15. This stands now slightly modified by the
statutory multiplier table of 1994 which shows a
maximum of 18. In fact Winfield & Jolowicz & on Torts
(13th Ed. 1989) (p.618) say that in practice, the
maximum multiplier is seldom more than 16: Street, on
Damages (1983), 7th Ed) (p.218) puts it at 16; McGregor
on Damages, (15th Ed. 1988) (para 1572) treats
maximum as 18. The leading authorities which treat
actuarial evidence as admissible are all set out in
Chairman A.P.S.R.T.C. v. Shifya Khartoon, AIR 1985
AP 83 at 87-88 and in Bhagwandas v. Mohd. Ariff, AIR
1988 AP 99. These principles show that the difference
between the age at death (or trial in case of injured
person) and expected age of life cannot be the
multiplier."
38. The Division Bench went on to add that multiplier takes care of
inflation. In fact, when the rates of interest are high as in the
Indian context, any multiplier above 15 would definitely take
care of some inflation. Before demonstrating the same in a
tabulated form, I would refer to the relevant portion of the
report in Rattan Lal Mehta (supra) hereunder:-
"Multiplier takes care of inflation
The mathematical formula which is used in the law of
Economics (See Prof. A Samuelson of the Massechusetts
Institute of Technology in his Textbook on Economics
(10th Ed. 1980 at p. 609) shows that the discount rate for
discounting future payments to present value occurs in
the dominator and that is why a lower interest rate would
result in a higher multiplier and that is why the 'real rate'
of interest enunciated by Fisher was applied by Lord
Diplock in Mallet v. Mc Monagle, 1970 AC 166. That
case has been followed by our Supreme Court in
M.P.S.R.T.C. v. Sudhakar, AIR 1977 SC 1189 and in
KSRTC v. Susamma Thomas (supra). The rate adopted is
of a 'stable period of currency' say 4% or 5% so that
multipliers will be larger and help full compensation. It
must be noted here that if we adopt a higher rate of
interest for reducing future payments to present values
the multiplier will be very small, as the rate of interest
occurs, in the formula, in the denominator. That is why a
smaller rate of interest applicable to stable periods is
prescribed by Economists of the highest repute like
Fisher or Prof. Samuelson and in all books dealing with
Economics and Insurance. This is also the principle in
pension commutations. Government of India has applied
a rate of 3.5% or 4.5% only. Otherwise if higher rates of
interest are applied pension commutations will get
reduced to smaller figures. Superior Courts in England,
Australia, Canada and USA have accepted this principle
of Economics and held that rate of discount for
converting future payments to present value must relate
to stable periods of currency.
29. In a celebrated passage Lord Diplock said "In
estimating the loss, money should be treated as retaining
its value at the date of the Judgment and in calculating
the present value of annual payments which would have
been received in future years, interest rates appropriate
to time of stable currency such as 4 per cent to 5 per cent
should be adopted". That was to be the discount rate for
reducing future earnings/losses to present value. In
England it was to be 4% or 5%. In Australia, in
Todorovic vs. Waller, (1981) 150 C.L.R. 402, the High
Court followed Lord Diplock's judgment and advocated a
discount rate of 3% for converting future payments to
present value. In the Canadian trilogy of cases, referred
to earlier, the Diplock theory was accepted and a rate of
7% was applied. In U.S.A. the same principles were set
out in Chesapeake & Ohio Rly vs. Kelly (1916) 241 U.S.
485 and recently in Jones and Laughlin vs. Pfeifer, 462
U.S. 523 (1983), proposing 3%.
30. In Bhagwandas case, AIR 1988 99 after referring to
the rate applied by Government of India in regard to
pension commutations and the other data relating to
inflation, a 'real rate' of 4% was applied in our country
and a multiplier Table was worked out on that basis. The
above judgment was affirmed by a Division Bench in
Naravva' vs. V.R. Shangde, 1989 ACJ 715 by Jeevan
Reddy, J. (as he then was) and V.N. Rao, J. The
multipliers evolved in Bhagwanda's case compare very
favourably with the statutory multiplier Table published
in the amendment to the Motor Vehicles Act in 1994. A
smaller discount rate relatable to a stable period of
currency reduces future payments (say) of 1997,1998 and
so on, by giving a higher multiplier in present and leaves
it to the recipient of the money to make a proper
investment today of the said monies. There is voluminous
literature on this subject (See: Inflation, Taxation &
Damage Assessment (1980) Can B. Rev. 280; 1974
Economic Journal p. 130 by R. Kidner & K. Richards;
Damages for Personal Injury & the Effect of Future
Inflation (1982) 56 Aust L.J. 168; Economic Analysis vs.
Court room Controversy, The Present Value of Future
Earnings : John A. Carlson Vol. 62 ABAJ 628; Tort
Damages for Loss of Future Earnings (1986) 34 Amer J.
Comp. L (Supp) 141; Economic Theory & Present Value
of Future Lost Earnings : Anderson & Roberts (1985) U.
Miami L.R. 725); A plain English approach to loss of
Future Earning Capacity (1985) 24 Washburn LJ. 253;)
See also leading books, Munkman; Kemp P. Keap; MC
Grregor; Warfield; John A Fleming etc.
31. After the pecuniary damages are arrived at, Courts
are also awarding 12% interest generally on the sum
arrived at. Together with that interest, the amount comes
into the plaintiffs' hands.
No deduction is to be made from the sum arrived at by
using multiplier:
32. As the statutory multiplier reduces, by means of a
mathematical formula (see the formula explained in
Bhagwandas' case AIR 1988 AP 99 ), the future amounts
to present value, there is no need to further deduct 1/3 or
1/4. The multiplier takes in not only mortality and future
inflation but also the fact that the claimants are receiving
an accelerated payment once and for all"
39. For the purpose of an illustration, let me assume the income of
the deceased, aged 26 years, to be ` 800/- per month who has
left behind him, four dependents including a widow. If I
assume actual rate of interest since the year 1990, (or even
interest @ 8% per annum) the capital sum awarded towards the
loss of dependency would never come to an end, if the inflation
is not factored. Rather, the same would go no increasing from
year to year. The table appended below would make the
aforesaid observations very clear:-
S.No Year Capital Interest Dependency Rate of Excess
Amount Received Interest Amount
1. 1990 1,22,400 12,240 7200 10% 5040
2. 1991 1,27,440 14,018 7200 11% 6818
3. 1992 1,34,258 16,782 7200 12.5% 9582
4. 1993 1,43,840 15,103 7200 10.5% 7903
5. 1994 1,51,743 15,174 7200 10% 7974
6. 1995 1,59,717 18527 7200 11.6% 11,327
7. 1996 1,71,044 21,551 7200 12.6% 14,351
8. 1997 1,85,395 20,949 7200 11.3% 13,749
9. 1998 1,99,144 21,905 7200 11% 14,705
10. 1999 2,13,849 22,454 7200 10.5% 15,254
and so on
40. The compensation which is awarded on basis of multiplier
method is such that as the years go by, some amount should be
taken out from the principal sum so that by the time the
dependency comes to an end, the principal as well as interest
earned on the principal amount are exhausted. The Supreme
Court in a catena of judgment including in United India
Insurance Co. Ltd. v. Bindu, (2009) 3 SCC 705, referred to
Davies v. Powell Duffryn Associated Collieries Ltd. (1942) 2
SCC 176, Nance v. British Columbia Electric Railway Co. Ltd.,
(1951) AC 601, Mallet v. McMonagle, (1970) AC 166, and
Halsbury‟s Laws of England, Volume 34, Para 89, presumed
the real value of money and observed as under:-
"6. There were two methods adopted to determine and
for calculation of compensation in fatal accident actions.
The first multiplier method was mentioned in Davies v.
Powell Duffryn Associated Collieries Ltd. (supra) and
the second in Nance v. British Columbia Electric Railway
Co. Ltd. (supra).
7. "13. The multiplier method involves the ascertainment
of the loss of dependency or the multiplicand having
regard to the circumstances of the case and capitalising
the multiplicand by an appropriate multiplier. The choice
of the multiplier is determined by the age of the deceased
(or that of the claimants, whichever is higher) and by the
calculation as to what capital sum, if invested at a rate of
interest appropriate to a stable economy, would yield the
multiplicand by way of annual interest. In ascertaining
this, regard should also be had to the fact that ultimately
the capital sum should also be consumed up over the
period for which the dependency is expected to last.
14. The considerations generally relevant in the selection
of multiplicand and multiplier were adverted to by Lord
Diplock in his speech in Mallet v. McMonagle (supra)
where the deceased was aged 25 and left behind his
widow of about the same age and three minor children.
On the question of selection of multiplicand Lord Diplock
observed:
"The starting point in any estimate of the amount
of the "dependency" is the annual value of the
material benefits provided for the dependants out
of the earnings of the deceased at the date of his
death. But ... there are many factors which might
have led to variations up or down in the future. His
earnings might have increased and with them the
amount provided by him for his dependants. They
might have diminished with a recession in trade or
he might have had spells of unemployment. As his
children grew up and became independent the
proportion of his earnings spent on his dependants
would have been likely to fall. But in considering
the effect to be given in the award of damages to
possible variations in the dependency there are
two factors to be borne in mind. The first is that
the more remote in the future is the anticipated
change the less confidence there can be in the
chances of its occurring and the smaller the
allowance to be made for it in the assessment. The
second is that as a matter of the arithmetic of the
calculation of present value, the later the change
takes place the less will be its effect upon the total
award of damages. Thus at interest rates of 4½ per
cent the present value of an annuity for 20 years,
of which the first ten years are at £100 per annum
and the second ten years at £200 per annum, is
about 12 years‟ purchase of the arithmetical
average annuity of £150 per annum, whereas if the
first ten years are at £200 per annum and the
second ten years at £100 per annum the present
value is about 14 years' purchase of the
arithmetical mean of £150 per annum. If therefore
the chances of variations in the "dependency" are
to be reflected in the multiplicand of which the
years' purchase is the multiplier, variations in the
dependency which are not expected to take place
until after ten years should have only a relatively
small effect in increasing or diminishing the
"dependency" used for the purpose of assessing
the damages."
15. In regard to the choice of the multiplicand,
Halsbury's Laws of England in Vol. 34, Para 98 states
the principle thus:
„98. Assessment of damages under the Fatal
Accidents Act, 1976.--The courts have evolved a
method for calculating the amount of pecuniary
benefit that dependants could reasonably expect to
have received from the deceased in the future.
First the annual value to the dependants of those
benefits (the multiplicand) is assessed. In the
ordinary case of the death of a wage-earner that
figure is arrived at by deducting from the wages
the estimated amount of his own personal and
living expenses.
The assessment is split into two parts. The first
part comprises damages for the period between
death and trial. The multiplicand is multiplied by
the number of years which have elapsed between
those two dates. Interest at one-half the short-term
investment rate is also awarded on that
multiplicand. The second part is damages for the
period from the trial onwards. For that period, the
number of years which have elapsed between the
death and the trial is deducted from a multiplier
based on the number of years that the expectancy
would probably have lasted; central to that
calculation is the probable length of the deceased's
working life at the date of death.‟
As to the multiplier, Halsbury states:-
"However, the multiplier is a figure considerably
less than the number of years taken as the duration
of the expectancy. Since the dependants can invest
their damages, the lump sum award in respect of
future loss must be discounted to reflect their
receipt of interest on invested funds, the intention
being that the dependants will each year draw
interest and some capital (the interest element
decreasing and the capital drawings increasing
with the passage of years), so that they are
compensated each year for their annual loss, and
the fund will be exhausted at the age which the
court assesses to be the correct age, having regard
to all contingencies. The contingencies of life such
as illness, disability and unemployment have to be
taken into account. Actuarial evidence is
admissible, but the courts do not encourage such
evidence. The calculation depends on selecting an
assumed rate of interest. In practice about 4 or 5
per cent is selected, and inflation is disregarded.
It is assumed that the return on fixed interest
bearing securities is so much higher than 4 to 5
per cent that rough and ready allowance for
inflation is thereby made. The multiplier may be
increased where the plaintiff is a high tax payer.
The multiplicand is based on the rate of wages at
the date of trial. No interest is allowed on the total
figure."
41. I have obtained the Bank rates of interest (of Nationalized
Banks) and compared it with the inflation prevailing in the
country. I have attempted three tables to demonstrate whether
the rate of interest in the Indian context takes care of the
inflation or not.
TABLE - I
It is assumed that the deceased who is aged 26 years dies
leaving behind a widow, a mother and two minor children.
In this Table a notional amount of Rs.800/- is taken to be the
income of the deceased and therefore the capital amount is
arrived at Rs.1,22,400/- (Rs. 800 - 1/4th x 12 x 17).
The dependency is taken to be Rs. 800 p.m - 1/4th (Rs.600) x 12
= 7200 p.a. in 1990.
Further, a notional interest and inflation rate of 8% and 4%
respectively, is taken into consideration which is an assumption
of „real rate of interest‟ (actual inflation rate - actual interest
rate) in stable economy.
The dependency is increased according to the inflation i.e. 4%
and the interest on the Capital amount is taken @ of 8%.
The compensation lasts for over 30 years.
S.No Year Capital Interest Dependency Rate Inflation Excess
Of
Amount Received Amoun
Interest t
1. 1990 1,22,400 9,792 =600x12 8% 4% 2,592
=7,200
2. 1991 1,24,992 9,999 =7,200+288 8% 4% 2,511
=7,488
3. 1992 1,27,503 10,200 =7,488+299 8% 4% 2,413
=7,787
4. 1993 1,29,916 10,393 =7,787+311 8% 4% 2,295
=8,098
5. 1994 1,32,211 10,576 =8,098+324 8% 4% 2,155
=8,421
6. 1995 1,34,366 10,749 =8,421+336 8% 4% 1,992
=8,757
7. 1996 1,36,358 10,908 =8,757+350 8% 4% 1,801
=9,107
8. 1997 1,38,159 11,052 =9,107+364 8% 4% 1,581
=9,471
9. 1998 1,39,740 11,179 =9,471+378 8% 4% 1,330
=9,849
10 1999 1,41,070 11,285 =9,849+393 8% 4% 1,043
=10,242
11. 2000 1,42,113 11,369 =10,242+40 8% 4% 718
9 =10,651
12. 2001 1,42,831 11,426 =10,651+42 8% 4% 349
6 =11,077
13. 2002 1,43,180 11,454 =11,077+44 8% 4% -65
3 =11,520
14. 2003 1,43,114 11,449 =11,520+46 8% 4% -530
0 =11,980
15. 2004 1,42,583 11,406 =11,980+47 8% 4% -1,053
9 =12,459
16. 2005 1,41,530 11,322 =12,459+49 8% 4% -1,634
8 =12,957
17. 2006 1,39,895 11,191 =12,957+518 8% 4% -2,283
=13,475
18. 2007 1,37,611 11,008 =13,475+539 8% 4% -3,005
=14,014
19. 2008 134605 10,768 =14,014+560 8% 4% -3,805
=14,574
20. 2009 1,30,799 10,463 =14,574+582 8% 4% -4,692
=15,156
21. 2010 126106 10,088 =15,156+606 8% 4% -5,673
=15762
22. 2011 1,20,432 9,634 =15,762+630 8% 4% -6,757
=16,392
23. 2012 1,13,674 9,093 =16,392+656 8% 4% -7,954
=17,048
24. 2013 1,05,719 8,457 =17048+681 8% 4% -9,272
=17,729
25. 2014 96,447 7,715 =17,729+710 8% 4% -10,723
=18,439
26. 2015 85,723 6,857 =18,439+737 8% 4% -12,318
=19,176
27. 2016 73,404 5,872 =19,176+767 8% 4% -14,070
=19,943
28. 2017 59,333 4,746 =19,943+798 8% 4% -15,994
=20,741
29. 2018 43,338 3,467 20,741+829 8% 4% -18,102
=21,570
30. 2019 25,235 2,018 21,570+863 8% 4% -20,414
=22,433
31. 2020 4,820 22,433+897 8% 4%
=23,330
TABLE - II
In this Table a notional amount of Rs.800/- is taken to be the
income of the deceased and therefore the capital amount is
arrived at Rs.1,22,400/- (Rs. 800 - 1/4th x 12 x 17).
The dependency is taken to be Rs.800/- p.m - 1/4th (Rs.600) x
12 = 7200 in 1990. For the subsequent years the actual inflation
rate is applied to increase the dependency accordingly.
The capital amount is being increased as per the actual Bank
interest rate on long term fixed deposit.
The compensation lasts for about 21 years.
S.No Year Capital Interest Dependency Rate Of Inflation Excess
Amount Received Interest Amount
1. 1990 1,22,400 12,240 =600x12 =7,200 10% 8.9% 5,040
2. 1991 1,27,440 14,018 =7,200+993 11% 13.8% 5,825
=8,193
3. 1992 1,33,265 16,658 =8,193+958 12.5% 11.7% 7,507
=9,151
4. 1993 1,40,772 14,781 =9,151+576 10.5% 6.3% 5,054
=9,727
5. 1994 1,45,826 14,582 =9,727+992 10% 10.2% 3,863
=10,719
6. 1995 1,49,689 17,363 =10,719+1,093 11.6% 10.2% 5,551
=11,812
7. 1996 1,55,240 19,560 =11,812+1,051 12.6% 8.9% 6,697
=12,863
8. 1997 1,61,937 18,298 =12,863+939 11.3% 7.3% 4,496
=13,802
9. 1998 1,66,433 18,307 =13,802+1821 11% 13.2% 2,684
=15,623
10 1999 1,69,117 17,757 =15,623+718 10.5% 4.6% 1,416
=16,341
11. 2000 1,70,533 15,689 =16,341+637 9.2% 3.9% -1,288
=16,978
12. 2001 1,69,244 14,047 =16,978+747 8.3% 4.4% -3,677
=17,725
13. 2002 1,65,566 11,424 =17,725+655 6.9% 3.7% -6,955
=18,380
14. 2003 1,58,610 9,199 =18,380+698 5.8% 3.8% -9,878
=19,078
15. 2004 1,48,731 8,180 =19,078+744 5.5% 3.9% -11,641
=19,822
16. 2005 1,37,089 8,225 =19,822+1,228 % 6.2% -12,824
=21,050
17. 2006 1,24,264 8,449 =21,050+1,326 6.8% 6.3% -13,926
=22,376
18. 2007 1,10,337 9,930 =22,376+1,409 9% 6.3% -13,855
=23,785
19. 2008 96,482 8,876 =23,785+1,974 9.2% 8.3% -16,882
=25,759
20. 2009 79,599 6,367 =25,759+2,781 8% 10.8% -22,172
=28,540
21. 2010 57,426 4,307 =28,540+3,396 7.5% 11.9% -27,628
=31,936
22. 2011 29,797 2,681 =31,936+3,864 9% 12.1% -33,118
=35,800
23. 2012 -3,321 9% 9.2%
TABLE - III
In this Table the minimum wages which were prevailing in the
year 1990 is considered as the income of the deceased for
computing the dependency and capital amount.
Since there are two revisions in the Minimum wages every year,
the average of the two (767+792 =1559/2 = 780) is considered
for the calculation. This procedure is followed in all the years
when the minimum wages were increased twice in a year.
The dependency is gradually increased according to the
minimum wages increased from time to time. The capital
amount is being increased as per the actual Bank interest rate on
long term fixed deposit.
Therefore, the Capital amount = 780 - 1/4th x 12 x 17 =
1,19,340/-.
The dependency = 780 -1/4th x 12 = 7020/-.
The amount lasts for 17 years.
S.No Year Capital Interest Dependency Rate Excess
Amount Received Of Amount
Interest
1. 1990 1,19,340 11,934 7,020 10% 4,914
2. 1991 1,24,254 13,667 7,836 11% 5,831
3. 1992 1,30,085 16,260 8,844 12.5% 7,416
4. 1993 1,37,501 14,437 9,876 10.5% 4,561
5. 1994 1,42,062 14,206 12,600 10% 1,606
6. 1995 1,43,668 16,665 13,680 11.6% 2,985
7. 1996 1,46,653 18,478 15,084 12.6% 3,394
8. 1997 1,50,047 16,955 16,058 11.3% 897
9. 1998 1,50,944 16,603 17,424 11% -820
10 1999 1,50,123 15,763 21,132 10.5% -5,368
11. 2000 1,44,754 13,317 22,236 9.2% -8,918
12. 2001 1,35,835 11,274 23,256 8.3% -11,981
13. 2002 1,23,853 8,545 24,048 6.9% -15,502
14. 2003 1,08,350 6,284 25,896 5.8% -19,611
15. 2004 88,738 4,880 27,924 5.5% -23,043
16. 2005 65,694 3,941 29,617 6% -25,675
17. 2006 40,018 2,721 31,437 6.8% -28,715
42. Thus, the compensation awarded in the Indian perspective with
a high inflation is unable to provide for full life expectancy even
if some discount is made towards the imponderables in life.
43. At this stage, I may refer to the inflation rate prevailing in India
and other developed countries i.e. UK and USA.
Year India UK USA
2011 12.1% 4.47% 3.16%
2010 11.9% 3.28% 1.64%
2009 10.8% 2.16% -0.34%
2008 8.3% 3.61% 3.85%
2007 6.3% 2.32% 2.85%
2006 6.3% 2.33% 3.24%
2005 6.2% 2.04% 3.39%
2004 3.9% 1.34% 2.68%
2003 3.8% 1.36% 2.27%
2002 3.7% 1.25% 1.59%
2001 4.4% 1.23% 2.83%
2000 3.9% 0.78% 3.38%
1999 4.6% 1.33% 2.19%
1998 13.2% 1.58% 1.55%
1997 7.3% 1.77% 2.34%
1996 8.9% 2.48% 2.93%
1995 10.2% 2.65% 2.81%
1994 10.2% 1.97% 2.61%
1993 6.3% 2.50% 2.96%
1992 11.7% 4.26% 3.03%
1991 13.8% 7.53% 4.25%
1990 8.9% 6.97% 5.39%
44. Thus, it will be seen that in developed countries the inflation
ranges between 1% to 3% most of the times. So much so that
sometimes the inflation is even negative. Thus, an interest rate
of 4 to 5% in those countries is sufficient to take care of
inflation when the multiplier as mentioned in the Second
Schedule or in Sarla Verma (Smt.) & Ors. v. Delhi Transport
Corporation & Anr., (2009) 6 SCC 121 is adopted.
45. At this time, the average life expectancy in India (for a male and
female) is about 64 years. (Female 63.2 years and Male 64.7
years). The life expectancy takes care of the imponderables
because untimely deaths on account of illness are included
therein. Even if further reduction of 10 to 15% is made in the
life expectancy towards the imponderables (accidental death,
disability and unemployment), the dependency for the widow is
to last for whole life and for the dependent children till they are
settled in their life. When the children grow older a lot of
amount is needed for their higher education. The condition in
this country is different from the developed countries, where
one can easily get education loan on nominal rate of interest and
finding employment on completion of higher studies are much
easier. As stated earlier, the principle for grant of compensation
is that the person entitled to damages should, as nearly as
possible get that sum of money as would put him in the same
position as if he had not sustained the wrong.
46. In Susamma Thomas (supra) some provision was made towards
the bright future prospects which came to be reiterated in a
catena of judgments including Sarla Verma (Smt.) & Ors. v.
Delhi Transport Corporation & Anr., (2009) 6 SCC 121
wherein the Supreme Court held that when the deceased‟s age is
upto 40, years an addition of 50% is to be made in the actual
income and when the deceased is aged between 40 to 50 years
an addition of 30% is to be made in the same income to
compute the loss of dependency.
47. I have obtained data which shows that during the last 26 years
the income of the same category of employees has grown up by
about 15 times on account of inflation and growth in the
economy.
Sl. Group of Employees Initial salary Initial salary
(including (including
No. allowances) allowances)
as on Ist as on Ist
January, 1986 January, 2012
1. Group D 930/- 14,108/-
2. LDC 1245/- 15,480/-
3. Section Officer 2550/- 36,650/-
4. Under Secretary to 3700/- 52,714/-
Govt. of India
48. Apart from this almost everybody working in the govt.
department gets at least 4 to 5 promotions during their tenure. A
Clerk at least becomes a Section Officer, an Assistant becomes
a Director in the Govt. of India if not a Joint Secretary, a Civil
Servant (IAS) becomes an Additional Secretary, if not a
Secretary. In private sectors pastures are much greener for some
and not so rosy for the others.
49. The question is whether in all cases, the Courts are providing
compensation which can be said to be just and fair.
50. It will be seen that the compensation is far less than the just
compensation as envisaged under the Act mainly on account of
inflationary trend in this country. Though the multiplier method
does take care of future inflation as held by the Division Bench
of this Court in Rattan Lal Mehta (supra) yet, on account of
inflation which remains in double digits in our country most of
the times, even after the increase granted on account of future
prospects the compensation awarded is not able to take care of
the actual loss of dependency.
51. It is respectfully submitted that I am bound by the Division
Bench judgment of this Court in Rattan Lal Mehta (supra)
which on the aspect of the multiplier taking care of future
inflation was not brought to the notice of this Court earlier and
more importantly escaped my attention. Thus, increase in
minimum wages on account of inflation given by the learned
Single Judges of this Court in various cases including the one
which have been extracted hereinabove, was not permissible.
52. It is urged by Sh. K.L.Nandwani learned counsel for the
Insurance Company that the Judgment in Narinder Bishal and
Anr. v. Rambir Singh and Ors MAC. App. 1007-08/2006
reported as 2009ACJ1881 and many other Judgments where
increase on minimum wages is granted, have been challenged
by way of a Special Leave Petition before the Supreme Court.
By an order dated 14.11.2008, in SLP (CC) No.11630-11631 of
2008, the SLP was admitted and the operation of the judgment
of this Court was stayed subject to the deposit of 50% of the
award amount.
53. There is another aspect of increase being given in the minimum
wages. The increase on account of inflation is given only where
the deceased or the claimant was getting the minimum wages.
In other cases, the increase towards future prospects is given
only when the deceased or the Claimant (in case of injury) had
bright future prospects which is established by leading evidence
in this behalf. Thus, the person getting minimum wages would
be in advantageous position than a person earning more than the
minimum wages. Take a case where a deceased is getting
minimum wages of ` 4,000/- per month and another deceased,
not entitled to future prospects, is having an income of ` 5,000/-
per month (more than the minimum wages). There would be
50% increase in the income of the person getting minimum
wages and there would not be any such increase in the income
of the person who was getting more than the minimum wages
(because there are no future prospects). The loss of dependency
in the case of a deceased getting minimum wages of ` 4,000/-
would be calculated at ` 6,000/- per month whereas, the
deceased who was earning ` 5,000/- per month; his LRs would
end up getting a lesser compensation, even though the deceased
had a better employment and more income than the deceased
getting the minimum wages. This is not a hypothetical example;
this Court has got umpteen cases where such a situation has
arisen and I would be dealing with the specific cases at the
appropriate stage. Suffice it to say that, if benefit of inflation
has to be given, everybody is entitled to that benefit and not
only the person getting the minimum wages unless, they are
treated as a class by themselves.
54. The Supreme Court in Reshma Kumari v. Madan Mohan (2009)
13 SCC 422 framed following two questions in Para 10 of the
report, which are extracted hereunder:-
"10. The common questions which arise for our
consideration in these appeals are:
(1) Whether the multiplier specified in the Second
Schedule appended to the Act should be scrupulously
applied in all the cases?
(2) Whether for determination of the multiplicand, the
Act provides for any criterion, particularly as regards
determination of future prospects?"
55. Although, the question of considering future inflation was not
directly framed, yet, my Lord Hon‟ble Mr. Justice S.B. Sinha
(as he then was) held that, one of the incidental issues which has
also to be taken into consideration while computing
compensation under the Motor Vehicles Act was inflation. I
would extract Para 47 to 49 of the report hereunder:-
"47. One of the incidental issues which has also to be
taken into consideration is inflation. Is the practice of
taking inflation into consideration wholly incorrect?
Unfortunately, unlike other developed countries in India
there has been no scientific study. It is expected that with
the rising inflation the rate of interest would go up. In
India it does not happen. It, therefore, may be a relevant
factor which may be taken into consideration for
determining the actual ground reality. No hard-and-fast
rule, however, can be laid down therefor.
48. A large number of English decisions have been
placed before us by Mr. Nanda to contend that inflation
may not be taken into consideration at all. While the
reasonings adopted by the English courts and its
decisions may not be of much dispute, we cannot blindly
follow the same ignoring ground realities.
49. We have noticed the precedents operating in the field
as also the rival contentions raised before us by the
learned counsel for the parties with a view to show that
law is required to be laid down in clearer terms."
56. The tables extracted in the earlier part of the judgment show
that the interest rates in this country do not always rise with the
inflation. In some of the years the interest rates were lower than
the inflation which would show that the real value of money
was depleting.
57. It may be mentioned that the judgment in Sarla Verma (supra)
was pronounced on 15.04.2009 i.e. before Reshma Kumari
(supra) but the same escaped attention of the learned Judges
when the matter of grant of future prospects was considered and
decided, but the Court was silent about the grant of any benefit
towards the increase in inflation.
58. The subsequent reports of the Supreme Court in Laxman v.
Oriental Insurance Co. Ltd., (2011) 10 SCC 756, Sanjay
Batham v. Munnalal Parihar, (2011) 10 SCC 665, Govind
Yadav v. New India Insurance Co. Ltd. (2011) 10 SCC 683, and
Ibrahim v. Raju, (2011) 10 SCC 634 also referred to Para 47 of
the report in Reshma Kumari (supra) but did not lay any
guidelines as to how and upto what extent the inflation is to be
taken into account in award of just compensation.
59. The learned counsel for the Claimants place reliance on a
judgment of the Patna High Court in Hindustan Concrete Pipe
v. Anjali Devi & Ors., 1990 ACJ 603 wherein my Lord Hon‟ble
Mr. Justice S.B.Sinha as a learned Single Judge of Patna High
Court (as he then was) expressed his sentiments that the
Tribunals while awarding compensation should also take into
consideration the monetary inflation and the reduced buying
power of the citizens in the present-day context. In view of
Rattan Lal Mehta (supra) a Division Bench judgment of this
Court, Anjali Devi (supra) cannot be taken as a precedent.
60. In view of the foregoing discussion, I am of the view that no
addition in the minimum wages cannot be made on account of
inflation for computation of compensation.
61. Having decided the question of law, I proceed to deal with each
cases one by one.
MAC APP.997/2011
62. The Appellants seek enhancement of compensation of `
4,55,568/- on the ground that the addition of 50% to the income
of the deceased Prashant Gupta, which was computed according
to the minimum wages was not done.
63. The deceased Prashant Gupta was working as a Sales Executive
with M/s. Marvy Outsourcing Pvt. Ltd. During inquiry before
the Claims Tribunal it was claimed that the deceased was
getting a salary of ` 7132/-. In the absence of any cogent
evidence, the Claims Tribunal took the minimum wages of a
Matriculate i.e. ` 6448/-, deducted 50% towards personal living
expenses, the deceased being bachelor and adopted the
multiplier of „11‟ as the deceased‟s mother was 53 years, to
compute the loss of dependency as ` 4,25,568/-.
64. Appellant Dhaneshwari filed her Affidavit Ex.P-2/1 and entered
the witness box as PW-2. She testified that her son Prashant
Gupta joined M/s. Marvy Outsourcing Pvt. Ltd. in pursuance of
the appointment letter Ex.PW-2/3. Clause (B) of the
appointment letter shows that the deceased was offered a salary
of ` 7139/-. In cross-examination the Appellant admitted that
she had no documentary evidence to show that the deceased had
joined M/s. Marvy Outsourcing Pvt. Ltd. in pursuance of the
appointment letter. The genuineness of the appointment letter
was not disputed. The appointment letter is dated 21.07.2008
whereas, the deceased died on 24.02.2010. As per Clause (E) of
the appointment letter the deceased was entitled to bonus as per
the payment of Bonus Act, 1965. As per Clause (H) the
appointment could be terminated by giving one month‟s notice.
65. In the absence of any evidence being produced by the Appellant
that the deceased was in permanent employment, obviously, the
benefit of future prospects could not be given, yet considering
that the deceased was entitled to bonus, his income should have
been taken as ` 8,000/- per month (7139/- being the salary) in
addition to the medical and insurance benefits. The loss of
dependency thus comes to ` 5,28,000/- (` 8,000/- ÷2 x 12 x 11).
66. The Claims Tribunal awarded a sum of ` 10,000/- towards loss
of love and affection. Loss of love and affection can never be
measured in terms of money. Thus, uniformity has to be
adopted by the Courts while granting non-pecuniary damages.
The Supreme Court in Sunil Sharma v. Bachitar Singh (2011)
11 SCC 425 and in Baby Radhika Gupta v. Oriental Insurance
Company Limited (2009) 17 SCC 627 granted only ` 25,000/-
(in total to all the claimants) under the head of loss of love and
affection. Thus, I would enhance the compensation under this
head from ` 10,000/- to ` 25,000/-.
67. The overall compensation is re-assessed as under:-
Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal
1. Loss of Dependency `4,25,568/- `5,28,000/-
2. Loss to Estate ` 10,000/- ` 10,000/-
3. Loss of Love & Affection ` 10,000/- ` 25,000/-
4. Funeral Expenses ` 10,000/- ` 10,000/-
Total ` 4,55,568/- ` 5,73,000/-
68. The overall compensation is enhanced from ` 4,55,568/- to `
5,73,000/-. (It may be noticed that if the compensation would
have been granted on 50% addition in the minimum wages, it
would have been higher than the one granted on the actual
income).
69. I have earlier mentioned the rate of interest being paid by the
Nationalized Banks. Higher rate of interest is payable to the
senior citizens by half a percent. In Sarla Verm (supra) the
Hon‟ble Supreme Court granted rate of interest @ 7.5 % per
annum.
70. Rate of interest were in double digits in 1980‟s and 1990‟s. The
interest rate started falling at the beginning of this century.
They started rising and firming up since 2007. Since the rate of
interest on long term deposit is now about 9% per annum, it is
unreasonable to award interest @ 7.5% per annum to the
victims of the motor accident.
71. In Abati Bezbaruah v. Dy. Director General, Geological Survey
of India, (2003) 3 SCC 148, the Supreme Court culled out the
factors to be taken into consideration while awarding interest in
motor accident case. Para 6 and 18 of the report are extracted
hereunder:-
"6. The question as to what should be the rate of interest,
in the opinion of this Court, would depend upon the facts
and circumstances of each case. Award of interest would
normally depend upon the bank rate prevailing at the
relevant time.
x x x x x x x x x x x
x x x x x x x x x x x
18. Three decisions were cited before us by Mr. A.P.
Mohanty, learned counsel appearing on behalf of the
appellant, in support of his contentions. No ratio has
been laid down in any of the decisions in regard to the
rate of interest and the rate of interest was awarded on
the amount of compensation as a matter of judicial
discretion. The rate of interest must be just and
reasonable depending upon the facts and circumstances
of each case and taking all relevant factors including
inflation, change of economy, policy being adopted by
Reserve Bank of India from time to time, how long the
case is pending, permanent injuries suffered by the
victim, enormity of suffering, loss of future income, loss
of enjoyment of life etc., into consideration. No rate of
interest is fixed under Section 171 of the Motor Vehicles
Act, 1988. Varying rates of interest are being awarded
by Tribunals, High Courts and the Supreme Court.
Interest can be granted even if a claimant does not
specifically plead for the same as it is consequential in
the eye of law. Interest is compensation for forbearance
or detention of money and that interest being awarded to
a party only for being kept out of the money which ought
to have been paid to him. No principle could be
deducted nor can any rate of interest be fixed to have a
general application in motor accident claim cases having
regard to the nature of provision under Section 171
giving discretion to the Tribunal in such matter. In other
matters, awarding of interest depends upon the statutory
provisions, mercantile usage and doctrine of equity.
Neither Section 34 CPC nor Section 4-A(3) of the
Workmen‟s Compensation Act are applicable in the
matter of fixing rate of interest in a claim under the
Motor Vehicles Act. The courts have awarded the
interest at different rates depending upon the facts and
circumstances of each case. Therefore, in my opinion,
there cannot be any hard-and-fast rule in awarding
interest and the award of interest is solely on the
discretion of the Tribunal or the High Court as indicated
above."
72. In Rubi (Chandra) Dutta v. United India Insurance Co. Ltd.
(2011) 11 SCC 269, the interest granted by the National
Commission @ 9% was upheld by the Supreme Court. In Sant
Singh v. Sukhdev Singh, (2011) 11 SCC 632, interest @ 9% per
annum was awarded by the Hon‟ble Supreme Court. In Raj
Kumar v. Ajay Kumar & Anr., 2011 (1) SCC 343, the interest @
9% awarded by the Claims Tribunal was approved. In Arvind
Kumar Mishra v. New India Assurance Co. Ltd., (2010) 10 SCC
254, interest @ 9% was awarded on the enhanced amount of
compensation.
73. In the circumstances, I would also follow the Bank rate of
interest and would award interest @ 9% per annum on the
enhanced amount.
74. The enhanced compensation of ` 1,17,432/- shall carry interest
@ 9% per annum from the date of filing of the petition till the
amount is paid. The Respondent Insurance Company is
directed to deposit the enhanced amount within six weeks.
75. The first Appellant shall be getting 75% and the second
Appellant shall be getting 25% of the enhanced amount. The
amount shall be held in fixed deposits for a period of one year
in UCO Bank, Delhi High Court Branch, New Delhi.
76. The Appeal is allowed in above terms.
MAC APP.203/2006
77. The Appellant Oriental Insurance Co. Ltd. seeks reduction of
compensation of ` 5,67,528/- awarded for the death of Kali
Charan who died in a motor accident which occurred on
27.02.2003.
78. The contention raised on behalf of the Appellant are:-
(i) The deceased as per the postmortem report was aged
about 55 years, though the Claimants averred his age to
be 45 years. The multiplier of „16‟ adopted by the
Claims Tribunal was high. The rate of interest @ 7.5%
per annum awarded by the Claims Tribunal is high.
(ii) The driving licence held by the first Respondent was
valid for the period from 23.12.1999 to 22.12.2002 and
was renewed on 13.03.2003. The Appellant successfully
proved the breach of the policy condition, yet it was made
liable to pay the compensation even the recovery rights
were not granted.
79. The first Respondent Ram Ratti in her Affidavit Ex.PW-3
testified the deceased‟s age to be 45 years, which was not
challenged in cross-examination. In the absence of rebuttal the
deceased‟s age was rightly taken as 45 years. The number of
dependents was 7 and thus the deduction towards the personal
living expenses as per Sarla Verma (supra) was required to be
one-fifth instead of one-third. Although, the multiplier of „16‟
adopted by the Claims Tribunal was on the higher side. The
appropriate multiplier as per Sarla Verma (supra) was „14‟.
80. On re-computation and deduction of one-fifth towards personal
living expenses, the compensation would work out as `
5,61,254/- (` 4167/- x 4/5 x 12 x 14) as against ` 5,34,528/-
calculated by the Claims Tribunal.
81. In the absence of any Appeal for enhancement of compensation,
I cannot interfere with the same.
82. Although the rate of interest @ 7.5% is averred to be on the
higher side in the memorandum of Appeal this point was not
raised during the hearing of the Appeal. Otherwise also, grant of
interest @ 7.5% per annum cannot be said to be exorbitant or
excessive.
83. On the question of liability, the Claims Tribunal held as under:-
"Here one contention of R-3 needs to be discussed. By
examining R3W1 and R3W2, R-3 has proved that the
licence of R-1 was valid only from 23-12-1999 to
22.12.2002 and R-1 got the licence renewed only on
13.3.2003. Counsel for R-3 submitted that R-1 had no
valid and effective licence on the date of the accident and
so recovery rights be granted. I have carefully
considered this submission of the Ld. Counsel for R-3.
The fact that R-1 had a valid driving licence till
22.12.2002 shows that he was not disqualified from
holding the licence or from getting this licence renewed
after 22.12.2002. There is a grace period for renewal of
the expired licence and on such renewal the licence
regains its effectiveness. The insurer can avoid liability if
the vehicle was driven by a person who is not duly
licenced or by any person who had been disqualified for
holding or obtaining a licence. In fact R-1 had a driving
licence valid till 23.12.1999 and there is no material on
record to infer that R-2 and R-2A had a knowledge that
the driving licence of R-1 had expired on 23.12.1999.
There is no evidence of R-3 that on the date of the
accident i.e. 27.2.2003 R-1 had been disqualified from
getting his expired licence renewed. In this regard,
reference can be made to an authority reported 2004
ACJ 457 wherein it has been held that licence inspite of
expiry of its validity period continues to exists unless the
licensee had been disqualified to hold it. In view of this I
hold that there is no merit in the submission of the
counsel for R-3 for grant of recovery rights against R-2
and R-2A. Accordingly, I hold that the amount of
compensation is to be paid by R-3. This issue stands
decided accordingly."
84. Thus, it may be seen that the Claims Tribunal made the Insurer
liable to pay the compensation merely on the ground that no
material was produced on record to infer that the Eighth
Respondent and Ninth Respondent had any knowledge that the
driving licence of the Seventh Respondent (the First
Respondent before the Claims Tribunal) had expired. It is
expected of the owner of every vehicle to at least check the
validity of the driving licence of the driver while engaging him.
Once it was established that the driving licence had expired
much before the accident it was for the owner to have shown
the circumstances under which the vehicle was entrusted to the
Seventh Respondent. It can very well be said that the owner
failed to exercise reasonable care to ensure that there is no
breach of the terms of policy. Thus, the owner would be guilty
of the conscious and willful breach of the condition of policy.
85. The other ground on which the Insurer was made liable was that
in spite of the expiry of the validity period the driving licence of
the driver had not been disqualified to hold the same. The
Claims Tribunal relied on Oriental Insurance Company Limited
v. Paulose, 2004 ACJ 457 to fasten the liability on the Insurance
Company.
86. This is no longer good law in view of the judgment of the
Supreme Court in National Insurance Company Limited v.
Jarnail Singh & Ors., (2007) 15 SCC 28, Ram Babu Tiwari v.
United India Insurance Co. Ltd. & Ors., (2008) 8 SCC 165 and
New India Assurance Company Ltd. v. Suresh Chandra
Aggarwal, (2009) 15 SCC 761.
87. In Jarnail Singh (supra) the driver had a driving licence which
expired on 18.05.1994. The accident took place on 20.10.1994.
The licence was renewed with effect from 28.10.1996. While
referring to Section 15 (1) of the Act, the Supreme Court held
that the driver had no licence to drive the vehicle on the date of
the accident i.e. 20.10.1994 and recovery rights were granted to
the Insurance Company. The relevant para of the report are
extracted hereunder:-
"7. There is no dispute that the policy stipulated a
condition that the vehicle would not be driven by a person
without a valid driving licence. It means that the policy
condition had been violated.
8. This Court held in New India Assurance Co. v.
Kamla (2001) 4 SCC 342 that the insurance company is
nonetheless liable to pay the compensation to the third
party on the strength of the valid insurance policy issued
in respect of a vehicle, but the remedy of the insurer when
there was breach or violation of the policy condition was
to recover the amount from the insured..."
88. In para 18 of the report in Ram Babu Tiwari (supra) it was held
as under:-
"18. It is beyond any doubt or dispute that only in the
event an application for renewal of licence is filed
within a period 30 days from the date of expiry thereof,
the same would be renewed automatically which means
that even if an accident had taken place within the
aforementioned period, the driver may be held to be
possessing a valid licence. The proviso appended to
Sub-section (1) of Section 15, however, clearly states
that the driving licence shall be renewed with effect
from the date of its renewal in the event the application
for renewal of a licence is made more than 30 days
after the date of its expiry. It is, therefore, evident that
as, on renewal of the licence on such terms, the driver
of the vehicle cannot be said to be holding a valid
licence, the insurer would not be liable to indemnify the
insured. The second proviso appended to Sub-section
(4) of Section 15 is of no assistance to the appellant. It
merely enables the licensing authority to take a further
test of competent driving and passing thereof to its
satisfaction within the meaning of Sub-section (3) of
Section 9. It does not say that the renewal would be
automatic. ..."
89. Similarly, in Suresh Chandra Aggarwal (supra), the driving
licence of the driver had expired on 25.10.1991 i.e. four months
prior to the date of accident which occurred on 29.02.1992. The
driving licence was renewed w.e.f. 23.03.1992. Since the
renewal of the licence was not within 30 days of the expiry, it
was held that the driver did not possess any effective driving
licence and there was breach of the terms of the policy.
90. Thus, the owner cannot escape the liability.
91. Initially, the Claim Petition was filed against Satish Kumar
being the driver of the offending vehicle and Smt. Surjit Kaur as
owner of the offending vehicle. Surjit Kaur did not dispute the
ownership in the written statement filed by her. Later on, an
application under Order 1 Rule 10 CPC, moved by the
Respondents No.1 to 5 was allowed and Joginder Singh was
impleaded as Respondent No.2A, being registered owner of the
vehicle.
92. The terms "owner" is defined under Section 2 (30) of the Act
means "a person in whose name a motor vehicle stands
registered". Thus, although the actual owner (Respondent
No.8) in law remains vicariously liable for the acts of his
servant, the registered owner (Respondent No.9) also cannot
escape the liability. (Dr. T.V. Jose v. Chacko P. M., AIR 2001
SC 3939).
93. Since the Seventh Respondent also had an expired licence,
resulting into breach of the condition of policy, the Appellant
was entitled to be granted recovery rights.
94. I accordingly hold that the Appellant is entitled to recover the
amount of compensation paid from the Respondents Nos. 7,8
and 9 who were jointly and severally liable to pay the same
along with the driver of the vehicle.
95. The Appeal is allowed in above terms.
MAC APP.955/2011
96. The Appeal is for reduction of compensation of ` 10,21,200/-
awarded for the death of Shoorbir Singh. He was aged about 39
years at the time of the accident and had studied upto 12th class.
It was claimed that he was working as a „Field Executive‟ with
M/s. Zetetic House Keeping since 09.03.2009 and was posted
at Jas India Forwarding Pvt. Ltd.; he was getting a salary of `
6500/- per month.
97. PW-1 Meera, the deceased‟s widow testified about the
deceased‟s employment and proved the salary certificate
Ex.PW-1/D. PW-2 Umed Singh also deposed that the deceased
was working with M/s. Zetetic and was drawing a salary of `
6500/- per month. In the absence of any evidence from the
employer, the Claims Tribunal rejected the salary certificate
Ex.PW-1/D, took the deceased‟s income according to the
minimum wages and added 50% towards the future inflation.
Although, a suggestion was given to PW-1 Meera, who was the
deceased‟s widow that the salary certificate was not genuine,
no such suggestion was given to PW-2 who corroborated PW-
1‟s testimony on the aspect of deceased‟s salary. Moreover,
The Appellant could have produced some evidence to rebut the
salary certificate through its investigator. In the circumstances,
the Claims Tribunal erred in disbelieving the salary certificate
Ex.PW-1/D. Relying on the same, the loss of dependency
works out as ` 8,77,500/- (6500/- x 3/4 x 12 x 15) as against the
loss of dependency of ` 8,91,200/- worked out by the Claims
Tribunal.
98. Relying on Kailash Kaur v. New India Insurance Company,
MAC APP.318/2008 decided on 24.03.2009, the Claims
Tribunal awarded a sum of ` 1,00,000/- i.e. ` 25,000/- each to
the four legal representatives towards loss of love and affection.
99. The loss of love and affection can never be measured in terms
of money. Thus, uniformity has to be adopted by the Courts
while granting non-pecuniary damages. The Supreme Court in
Sunil Sharma v. Bachitar Singh (2011) 11 SCC 425 and in Baby
Radhika Gupta v. Oriental Insurance Company Limited (2009)
17 SCC 627 granted only ` 25,000/- (in total to all the
claimants) under the head of loss of love and affection. Thus, I
would reduce the compensation under this head from `
1,00,000/- to ` 25,000/- only.
100. The overall compensation is re-assessed as under:-
Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal
1. Loss of Dependency `8,91,200/- `8,77,500/-
2. Loss of Love & Affection ` 1,00,000/- ` 25,000/-
3. Loss of Consortium ` 10,000/- ` 10,000/-
4. Funeral Expenses ` 10,000/- ` 10,000/-
5. Loss to Estate ` 10,000/- ` 10,000/-
Total ` 10,21,200/- ` 9,32,500/-
101. The overall compensation is thus reduced from ` 10,21,200/- to
` 9,32,500/-.
102. The excess amount of ` 88,700/- alongwith proportionate
interest and the interest, if any, accrued during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
103. The compensation held payable to Respondents No.1 to 4 shall
be paid in the same proportion as directed by the Claims
Tribunal.
104. The Appeal is allowed in above terms.
MAC.APP. 958/2011
105. The Appellant seeks reduction of compensation of ` 12,18,800/-
awarded for the death of Monu Gupta, who was aged about 23
years at the time of the accident which occurred on 26.12.2009.
106. The quantum of compensation is challenged on the following
grounds:-
(i) 50% addition in the minimum wages was not justified.
The loss of dependency ought to have been calculated on
the minimum wages.
(ii) Award of compensation under the head of loss of love
and affection is on the higher side.
(iii) Interest awarded @ 9% per annum is on the higher side.
107. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working as a cook with Mama Hotel, D-
137/7, Gautam Nagar, New Delhi and was getting a salary of `
5700/- per month in addition he was also driving an auto
rickshaw (TSR) during night time and was earning ` 5,000/- per
month.
108. Although, the accident took place with the offending vehicle
No.HR-47A-9095 while the deceased Monu Gupta was driving
TSR No.DL-1RG-1115, the Claims Tribunal disbelieved the
deceased to be working either as a cook or even driving TSR in
the absence of any documentary evidence. A salary certificate
from Mama Hotel was placed on record but it was not proved in
accordance with law. A suggestion was given to the deceased‟s
widow that the deceased was not working in the said hotel.
Since the salary certificate was not proved, it was rightly
discarded by the Claims Tribunal. Permit of TSR No.DL-1RD-
1115 dated 16.04.2007 in deceased‟s name was placed on the
record. Moreover, the accident took place with this very TSR.
The income of the TSR driver owning his own TSR can be
presumed atleast ` 200/- per day. On working for 25 days, his
income from driving the TSR should be alteast ` 5,000/- per
month. The Respondents No.1 to 5 were entitled to loss of
dependency on the income of ` 5,000/- per month instead of the
income of minimum wages. The loss of dependency thus works
out as ` 8,10,000/- (5,000/- x 3/4 x 12 x 18).
109. The Claims Tribunal awarded a sum of ` 1,25,000/- towards
loss of love and affection which for the reasons stated by me
hereinabove while dealing with MAC APP.955/2011 is reduced
from ` 1,25,000/- to ` 25,000/- only.
110. The overall compensation is re-assessed as under:-
Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal
1. Loss of Dependency `10,63,800/- `8,10,000/-
2. Loss of Love & Affection ` 1,25,000/- ` 25,000/-
3. Loss of Consortium ` 10,000/- ` 10,000/-
4. Funeral Expenses ` 10,000/- ` 10,000/-
5. Loss to Estate ` 10,000/- ` 10,000/-
Total ` 12,18,800/- ` 8,65,000/-
111. The overall compensation is thus reduced from ` 12,18,800/- to
` 8,65,000/-.
112. The excess amount of ` 3,53,800/- alongwith proportionate
interest and the interest, if any, accrued during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
113. Certain amounts were released in favour of Respondents Nos.1,
4 and 5 by the order dated 01.11.2011. Rest of the amount shall
be disbursed in the same proportion/held in the fixed deposits as
directed by the Claims Tribunal.
114. The Appeal is allowed in above terms.
MAC.APP. 461/2010
115. The Appellants who are the parents of deceased Manoj seek
enhancement of compensation of ` 2,27,000/-. It was claimed
that the deceased was doing a private job and was earning `
6,000/- per month. He was also pursuing the Graduation from
Delhi University. The Claims Tribunal, in the absence of any
evidence took the deceased‟s income to be ` 3,000/- per month,
deducted 50% towards his personal and living expenses and
adopted the multiplier of 14, as per the age of the deceased‟s
mother to compute the loss of dependency as ` 2,52,000/-.
116. The Appellants did not disclose the name of the employer nor
presented any evidence to show that the deceased was employed
and was earning ` 6,000/- per month. In the circumstances, the
Claims Tribunal rightly did not take into consideration the
deceased‟s income of ` 6,000/- per month.
117. The minimum wages of a Matriculate on the date of the
accident were ` 3964/- or say ` 4,000/- per month. The loss of
dependency thus works out as ` 3,36,000/- (` 4,000/- - 50% x
12 x 14).
118. Other pecuniary and non-pecuniary damages and the overall
compensation is re-assessed as under:-
Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal
1. Loss of Dependency `2,52,000/- `3,36,000/-
2. Loss of Love & Affection ` 10,000/- ` 25,000/-
3. Funeral Expenses ` 10,000/- ` 10,000/-
4. Loss to Estate -- ` 10,000/-
Total ` 2,72,000/- ` 3,81,000/-
119. The overall compensation is thus enhanced from ` 2,72,000/- to
` 3,81,000/- which shall carry interest @ 9% per annum from
the date of filing of the petition till the date of payment.
120. The enhanced compensation along with proportionate interest
shall be deposited within 30 days which shall be equally shared
in favour of the Appellants and shall be held in fixed deposits
for a period of one year with UCO Bank, Delhi High Court
Branch, New Delhi.
121. The Appeal is allowed in above terms.
MAC.APP. 768/2010
122. The Appeal is for reduction of compensation of ` 9,85,500/-
awarded for the death of Devendra Kumar who died in an
accident which occurred on 07.04.2009.
123. It was claimed that the deceased was pursuing job of a driver
with the owner of the offending bus and his salary was claimed
to be ` 6,000/- per month. The Claims Tribunal, in the absence
of any documentary evidence, disbelieved the deceased‟s salary,
took the minimum wages of a skilled worker as ` 4400/- per
month, added 50% towards inflation to compute the loss of
dependency as ` 9,50,400/-.
124. The averments made in Para 23 of the Claim Petition that the
deceased was working as a driver were not controverted though
the factum of the deceased‟s salary as ` 6,000/- per month was
disputed by the Appellant Insurance Company.
125. The accident took place in year 2009. Since the factum of
deceased‟s employment as a bus driver is not disputed, I would
assume his income to be ` 6,000/- per month i.e. ` 200/- per day.
In my view, the Respondents No.1 to 6 were entitled to loss of
dependency on the income of ` 6,000/- per month. The
dependents were deceased‟s widow, three children and his
mother. The Claims Tribunal rightly deducted one-fourth of the
deceased‟s income towards his personal and living expenses.
The loss of dependency thus works out as ` 8,64,000/- (`
6,000/- x 3/4 x 12 x 16).
126. The overall compensation is re-assessed as under:-
Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal
1. Loss of Dependency `9,50,400/- `8,64,000/-
2. Loss of Love & Affection ` 10,000/- ` 25,000/-
3. Loss of Consortium ` 10,000/- ` 10,000/-
4. Funeral Expenses ` 5,000/- ` 10,000/-
5. Loss to Estate ` 10,000/- ` 10,000/-
Total ` 9,85,400/- ` 9,19,000/-
Round off ` 9,85,500/-
127. The overall compensation is thus reduced from ` 9,85,500/- to `
9,19,000/-.
128. The excess amount of `66,500/- alongwith proportionate
interest and the interest, if any, accrued during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
129. The Appeal is allowed in above terms.
MAC.APP. 137/2011
130. The Appellant ICICI Lombard General Insurance Company
Limited seeks reduction of compensation of ` 9,72,215/-
awarded for the death of Ashok Kumar, who was aged 30 years
at the time of the accident which occurred on 08.11.2009.
131. Respondents No.1 to 4 claimed that the deceased was looking
after business of his father, the fourth Respondent who was not
keeping in good health. He was earning ` 25,000/- per month
from the business of selling automobile parts. A Bank statement
Ex.PX-7 was placed on record in support of the financial
transaction. The Claims Tribunal did not consider it as
substantial evidence to conclude that the deceased was in
business and was earning ` 25,000/- per month. The Claims
Tribunal, therefore, accepted the minimum wages of an
unskilled worker as ` 3953/-, added 50% towards the inflation
to compute the loss of dependency as ` 9,07,215/-.
132. The deceased‟s widow Smt. Rajni filed her Affidavit Ex.PW-
1/1 in support of the averments that the deceased was looking
after all the affairs and management of the business and was
earning ` 25,000/- per month. In cross-examination, PW-1
admitted that the deceased was not filing any Income Tax
Return. She testified that her husband was running a shop at
Mayapuri and had opened a current account in his own name.
Copy of the pass book of saving bank account was proved as
Ex.PX7.
133. There is no Appeal for enhancement of compensation by legal
representatives of the deceased. There are number of entries in
the deceased‟s saving bank account No.20009734251 which
shows that more than a sum of ` 25,000/- was being credited
every month in his account. The deceased owned a motor cycle.
His only son was admitted in a public school, namely, Royal
Indian Public School. He paid school fee of ` 8938/- in the year
2009-10.
134. In the circumstances, the deceased‟s income could have been
assumed to be atleast ` 6,000/- per month, whereas the Claims
Tribunal assumed it to be ` 3953/- + 50% i.e. ` 5929/- per
month. The loss of dependency on the income of ` 6,000/-
works out as ` 9,18,000/- as against 9,07,215/- assessed by the
Claims Tribunal.
135. The overall compensation of ` 9,72,215/- awarded by the
Claims Tribunal, in the facts and circumstances cannot be said
to be exorbitant or excessive.
136. Some of the compensation amount has already been be released.
The balance amount of compensation shall be
deposited/released in terms of the Claims Tribunal‟s order.
137. The Appeal is devoid of any merit. The same is accordingly
dismissed.
MAC.APP. 566/2010 and MAC.APP. 51/2012
138. These are two cross Appeals. MAC APP.566/2010 is filed by
Daya Malik and Manish Sharma, owner and the driver of the
offending vehicle which was a Lancer Car No.DL-1CF-7624,
seeking exoneration on the ground that the second Appellant
was not driving the offending vehicle i.e. Lancer Car, rather her
husband RW-3 Ram Nath Malik was driving the car at the
aforesaid time.
139. In MAC APP.51/2012 preferred by the Claimants by way of
Cross-Objections, the grounds set up is that the deceased‟s
future prospects were not considered and no compensation was
awarded towards loss of love and affection.
140. For the sake of convenience, the Appellants in MAC
APP.566/2010 shall be referred to as the Appellants and the
Objectors in MAC APP.51/2012 shall be referred as the
Claimants.
141. As per the averments made in the Claim Petition, on 27.04.2008
at about 11:23 PM, the deceased was returning from Majnu Ka
Tila and was proceeding to his house in Pul Bangash, Subzi
Mandi on his motor cycle No.DL-3SZ-8996. When he reached
opposite Bara Hindu Rao Hospital, a Lancer Car No.DL-1CF-
7624 which was being driven in a rash and negligent manner
came from Barafkhana‟s side. The Lancer car came on the
wrong side and ran over the motorcycle.
142. In the written statement filed by Daya Malik, owner of the
Lancer car, the manner of accident was disputed. It was stated
that the Lancer Car was parked alongside the pavement in
between Bara Hindu Rao Hospital and Barafkhana. There was
no divider in between. The car was parked and the indicators
were functioning. It was stated that the Claimants cooked up a
false story in collusion with the police to falsely implicate the
owner and her son-in-law.
143. The second Appellant filed a separate written statement raising
a plea that he was not driving the Lancer Car at the time of the
accident. It was claimed that in reply to a notice under Section
133 of the Act, the IO was informed that it was not the second
Appellant but Ram Nath Malik, RW-3 who was the driver of
the Lancer Car.
144. The contentions raised on behalf of the Appellants are :-
(i) There was no negligence on the part of the driver of the
Lancer car, rather, there was negligence on the part of the
deceased as he was over speeding. The driver of the said
car was not the second Appellant but Ram Nath Malik,
the husband of its owner.
(ii) The deceased‟s income was not proved and the
compensation should have been awarded on the basis of
minimum wages.
145. On the other hand, the contentions raised on behalf of the
Claimants are :-
(i) There was no negligence on the part of the deceased. The
Claims Tribunal rightly held that the driver of Lancer Car
was negligent.
(ii) Although the deceased was in a suitable job, no benefit of
future prospects was given.
(iii) No compensation has been awarded towards loss of love
and affection.
(iv) The compensation awarded towards loss to estate and
loss of consortium are on the lower side.
146. In view of the contentions raised by the parties, the question of
negligence assumes importance.
147. The Claims Tribunal while dealing with the issue of negligence,
held as under:-
6. Issue no. 1:-
PW1 has stated that the deceased was traveling on his
motorcycle and was hit by the offending vehicle driven by
respondent no. 2 in rash and negligent manner. She has
however admitted that she was not an eye witness.
Medical record relating to admission, postmortem MLC
and certified copies of the challan filed by the Police
against respondent no. 2 as Ex. PW1/10 are filed on
record. As per postmortem report and M.L.C. deceased
had received vertebral damage due to blunt force impact
on his neck which was possible in a road traffic accident.
It is also stated that the injuries were antemortem in
nature which were consistent with vehicular accident. As
per Police investigation a case against respondent no. 2
for rash and negligent driving was made out. Respondent
no. 2 had been arrested and released on Bail and was
facing trial. IO of the criminal case had repeatedly been
summoned but did not appear in the court as it was
stated that due to severe diabetic condition for past one
year the witness was unable to walk and was taking
treatment at Meerut .
R1W1 i.e. respondent no. 1 reiterated her stand taken in
the reply. In cross-examination she stated that she has
not disclosed in her written statement that her husband
was driving the vehicle at the time of accident. She stated
that she was owner of the vehicle and her vehicle was not
insured. She also stated that she has not lodged any
compliant to the higher authorities in regard to falsely
being implicated in the case.
Respondent no. 2, R1W2 stated that he has wrongly been
implicated in the case and was not driving the offending
vehicle at the time of the accident. In cross-examination
he admitted that he was facing trial in the criminal case
and that he had not lodged any written compliant to
higher authorities for falsely implicating him in the
criminal case. He stated that he had seen the vehicle
standing at the Patri when he reached at 10:30-11:00
p.m.
The mechanical inspection report of the offending vehicle
is on record which shows that the Engine Bonnet was
damaged, front bumper, front glass were broken, right
side mud guard damaged, front right head light broken,
front right and left inductor broken. The motorcycle was
also found to be damaged as per mechanical inspection
report. This clearly shows that the offending vehicle was
involved in the accident in question. The spot map of the
criminal case also shows the position of the offending car
on the wrong side of the road. As per the map, it appears
that the offending vehicle was turned on the wrong side
of the road and had hit the vehicle of the deceased
coming on his right side thereby causing accident. In
view of the documents available on record it is
reasonably established that deceased died due to injuries
in the accident by the offending vehicle driven in rash
and negligent manner by respondent no. 2.
Accordingly, issue no. 1 is decided in favour of the
petitioners."
148. The Appellants claimed that Ram Nath Malik (RW-3) was
present with the Lancer car at the time of the accident which
was parked on the fourth electrical pole leading from Bara
Hindu Rao to Barafkhana as shown in the site plan Ex.RW-3/1.
Neither of the two Appellants nor RW-3 Ram Nath Malik have
stated the purpose of parking the car beside the pavement late
into the night at 11:23 P.M. The mechanical inspection report
of the two vehicles reveals that there was extensive damage on
the front right side of the car - its bonnet was damaged, bumper
broken, front glass broken, front right head light was also
broken. The deceased‟s two wheeler also had extensive damage
on its front. Had the Lancer Car been parked on the left side of
the road, close to the pavement, there would not have been such
an extensive damage to the same. The site plan prepared by the
IO filed along with the Challan Ex.PW-1/10 reveals that the
Lancer car was parked at Point A after the accident whereas, the
two wheeler was lying at Point B. It shows that the Lancer car
had travelled on the right side on the road which is not very
wide. The negligence on the part of the driver of the Lancer car
was writ large and in the absence of any explanation,
presumption of negligence can be drawn on the basis of
principle of res ipsa loquitur. The Claimants were not present at
the time of the accident and no eye witness has been produced.
The owner claims that it was her husband and not her son-in-
law, the second Appellant, who was driving the Lancer Car.
Although, the first Appellant took the plea that the second
Appellant was falsely implication in collusion with the police,
no reason has been given for false implication. Why would the
police involve the son-in-law of the owner of a vehicle? The
police would not even know as to who was the son-in-law. No
complaint was made to the senior police officers that Ram Nath
Malik was the driver at the Lancer Car at the time of the
accident and not the second Appellant. It appears that the plea
that the vehicle was being driven by Ram Nath Malik has been
taken to avoid the criminal case filed against the second
Appellant. As far as the Claim Petition is concerned, even if the
identity of the driver is not established, the owner cannot escape
the liability.
149. Therefore, I agree with the conclusion reached by the Claims
Tribunal that it was the second Appellant who was the driving
the Lancer Car at the time of the accident and that the accident
was caused on account of rash and negligent driving.
QUANTUM OF COMPENSATION
150. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working as an Accountant-cum-Sales
Manager with M/s. Amar Enterprises and was getting a salary
of ` 7,000/- per month. Photocopy of the salary certificate
Ex.PW-1/9 was produced by Smt. Sanna, the deceased‟s
widow. Rakesh Kumar Garg, the deceased‟s employer and
Proprietor of M/s. Amar Enterprises was examined as PW-2.
Although, he testified that the deceased was working with him
since September, 2008, yet his testimony was completely
shaken in cross-examination.
151. This accident took place in April, 2008. The deceased therefore
could not have joined M/s. Amar Enterprises in September,
2008, he being already dead. PW-2 disowned the Certificate
Ex.PW-1/9 which was claimed by Respondent Sanna to have
been issued by PW-2. The witness was not even aware of the
deceased‟s qualification. In the absence of the same, it was
difficult to believe that the deceased would be employed as an
Accountant by PW-2. The Claims Tribunal in the
circumstances, erred in relying on the salary certificate Ex.PW-
1/9. In the absence of any proof with regard to the deceased‟s
qualification, he could have been awarded compensation only
on the basis of minimum wages of an unskilled worker. The
deceased‟s age was 39 years and there were five dependents.
152. The loss of dependency comes to ` 4,90,455/- (3633/- x 3/4 x 12
x 15).
153. On adding notional sum of ` 25,000/- towards loss of love and
affection and ` 10,000/- each towards loss of Consortium, loss
of Estate and funeral Expenses, the overall compensation comes
to ` 5,45,455/-.
154. The compensation payable is accordingly reduced from `
9,81,000/- to ` 5,45,455/-.
155. The excess amount of `4,35,545/- alongwith proportionate
interest and the interest accrued if any, during the pendency of
the Appeal shall be refunded to the Insurance Company.
MAC. APP. No.81/2011
156. The Appellant Royal Sundram Alliance Insurance Co. Ltd.
seeks reduction of compensation of `11,44,700/- awarded for
the death of Mahender Singh who was aged 29 years and died
in an accident which occurred on 14.09.2009. The deceased
was survived by his widow, two sons, a daughter and aged
parents.
157. During inquiry before the Claims Tribunal it was claimed that
the deceased was working as a driver with Mahavir Traders and
was earning `8,000/- per month. The Claims Tribunal did not
rely on the said certificate, took minimum wages of an unskilled
worker, added 50% thereto to compute the loss of dependency
as `10,04,070/-. The Claims Tribunal added a sum of
`1,00,000/- towards loss of love and affection, `25,000/-
towards funeral expenses, `10,000/- towards consortium and
`5,000/- towards loss to estate.
158. The contentions raised on behalf of the Appellant are:
(i) The deceased was not wearing a helmet at the time of the
accident. He, therefore, by himself contributed to the
accident.
(ii) No addition to the minimum wages was permissible.
(iii) The compensation of ` 1,00,000/- awarded towards loss
of love and affection and ` 25,000/- towards funeral
expenses was excessive.
159. The Appellant Insurance Company claims that the deceased
contributed to the accident as no helmet was recovered from the
spot. Puneet Gupta‟s affidavit Ex.R3W1/A to the effect that the
deceased was not wearing a helmet as it was not seized from the
spot cannot be relied upon, to hold that the deceased was not
wearing a helmet. The IO was not summoned to depose on this
aspect. In the circumstances, I am not inclined to believe the
version as put forth by Puneet Gupta, an employee of the
Appellant Insurance Company. Moreover, even if it is assumed
that the deceased was not wearing a helmet, he cannot be said to
have contributed to the accident. Reference is made to a
Division Bench judgment of M.P. High Court in Miss. Vidya
Soni & Anr. v. Pushpesh Dwivedi & Ors., AIR 2008 MP 319
wherein it was held that if a motorcyclist did not wear a helmet
at the time of the accident, he cannot be said to have contributed
to the accident.
160. During inquiry before the Claims Tribunal, Santosh, the
deceased‟s widow filed an Affidavit Ex.PW-1/A by way of her
evidence. She testified that her husband was employed as a
driver and was getting a salary of ` 8,000/- per month.
161. In cross-examination, the witness deposed that her husband was
employed with M/s. Mahavir Traders for the last 10-12 years.
He used to ferry the owner in the small vehicle. The driving
licence of the deceased was proved as Ex.PW-1/3.
162. The wages of a skilled worker on the date of the accident were `
4377/- per month. The Respondent‟s testimony that the
deceased was working as a driver and the proof of his driving
licence was sufficient to conclude that the deceased was
employed as a driver. I would assume his income to be about `
5,000/- per month in the later part of the year 2009 when this
accident occurred.
163. The loss of dependency would come as ` 7,65,000/- (5000/- x
3/4 x 12 x 17).
164. Since, normally a compensation of `25,000/- is granted towards
loss of love and affection (Sunil Sharma v. Bachitar Singh
(2011) 11 SCC 425 and Baby Radhika Gupta v. Oriental
Insurance Company Limited (2009) 17 SCC 627), the same has
to be reduced to `25,000/- from ` 1,00,000/- awarded by the
Claims Tribunal. Funeral expenses are also granted to the extent
of `10,000/- unless there is specific evidence to the contrary.
165. The compensation is recomputed as under:-
S. Head of Compensation Granted by Granted by
the Claims this Court
No.
Tribunal
1. Loss of Dependency `10,04,700/- `7,65,000/-
2. Loss of Love and Affection `1,00,000/- `25,000/-
3. Loss of Consortium `10,000/- `10,000/-
4. Funeral Expenses `25,000/- `10,000/-
5. Loss to Estate `5,000/- `10,000/-
Total `11,44,700/- `8,20,000/-R
166. The overall compensation is reduced from `11,44,700/- to
`8,20,000/-.
167. The excess amount of ` 3,24,700/- along with the proportionate
interest and the interest, if any, accrued during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company immediately.
168. The Appeal is allowed in above terms.
MAC. APP. No.493/2011
169. The Appeal is for reduction of compensation of ` 5,57,160/-
awarded, for the death of Rajesh, a bachelor aged 18 years who
died in an accident on 01.10.2008.
170. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working as an „Assistant/Clerk‟ with Mr.
Santosh r/o C-50, Raja Garden and was drawing a salary of `
5,000/- per month. The name of the employer was not
mentioned in the Claim Petition. The factum of the deceased‟s
employment as a Clerk was disputed in the written statement
filed by the Appellant and Respondents No.2 & 3. In the
absence of any cogent evidence, the Claims Tribunal, in my
view, rightly disbelieved the Respondents plea that the
deceased was working as a Clerk with one Santosh and earning
` 5,000/- per month. No evidence was led as to the deceased‟s
qualification. In view of my observations above, no addition
was permissible towards inflation. The loss of dependency
comes to ` 3,31,470/-(3683 X 1/2 X 12 X 15).
171. The compensation is recomputed as under:
S.No. Head of Compensation Granted by Granted
the Claims by this
Tribunal Court
1. Loss of Dependency `4,97,160/- `3,31,470/-
2. Loss of Love and Affection `40,000/- `25,000/-
3. Funeral Expenses `20,000/- `10,000/-
5. Loss to Estate - `10,000/-
Total `5,57,160/- `3,76,470/-
172. The overall compensation is reduced from `5,57,160/- to
`3,76,470/-
173. The excess amount of `1,80,690/- alongwith proportionate
interest and the interest, if any, accrued during the pendency of
the appeal shall be refunded to the Appellant Insurance
Company immediately.
174. The Appeal is allowed in above terms.
MAC. APP. No.536/2011
175. The Appeal is for reduction of compensation of `9,89,738/-
awarded for the death of Subhash Chand who was aged 30 years
on the date of the accident which occurred on 06.01.2008. The
deceased left behind five dependents i.e. the widow, three
children and a mother.
176. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working as a Nakedar with M/s. Banas Sands
Company and getting a salary of `5,000/- per month.
177. In the absence of any documentary evidence, the Claims
Tribunal declined to believe the Claimants version about the
deceased‟s salary and adopted minimum wages, made addition
of 50% to compute the loss of dependency.
178. Before the Claims Tribunal, it was stated that the deceased was
getting a salary of `3670/- plus overtime and the deceased‟s
approximate income was `5,000/- per month. The name of the
employer was also mentioned in the Claim Petition. The
averments made in paras 5 and 6 were not specifically
traversed. In her affidavit Ex.P1, the First Respondent testified
that the deceased was getting a salary of `5,000/- per month and
was contributing the entire income to the family. The First
Respondent denied the suggestion that her husband was not
employed and was not earning any amount. In view of non
traversal, the averments made in the Claim Petition on the
deceased‟s income of `5,000/- and considering his qualification
of 12th Standard, from the Board of Secondary Education
Rajasthan, I am inclined to accept his income to be `5,000/- per
month. On the basis of the principles laid down earlier, the loss
of dependency comes to `7,65,000/-(5000 X 12 X 3/4 X 17).
179. The compensation is recomputed as under:
S.No. Head of Compensation Granted by Granted
the Claims by this
Tribunal Court
1. Loss of Dependency `9,09,738/- `7,65,000/-
2. Loss of Love and Affection `50,000/- `25,000/-
3. Loss of Consortium `10,000/- `10,000/-
4. Funeral Expenses `10,000/- `10,000/-
5. Loss to Estate `10,000/- `10,000/-
Total `9,89,738/- `8,20,000/-
180. The overall compensation is reduced from `9,89,738/- to
`8,20,000/-
181. The excess amount of `1,69,738/- along with interest, if any
accrued during the pendency of the appeal shall be refunded to
the Appellant Insurance Company immediately.
182. The Appeal is allowed in above terms.
MAC. APP. No.862/2011
183. The Appeal is for reduction of compensation of `12,32,000/-
awarded for the death of Bhimsen who was aged 45 years who
died in an accident which occurred on 10.03.2010.
184. The Motor Accident Claims Tribunal(the Claims Tribunal) by a
judgment dated 05.07.2011 disbelieved the Respondents case
that the deceased was carrying out private job with a caterer
and earning `12,000/- per month. The Claims Tribunal took
the minimum wages of a skilled worker, added 50% towards
inflation to compute the loss of dependency.
185. There was no evidence with regard to the deceased‟s income or
his qualification. His income could have been taken only on
the basis of minimum wages payable to an unskilled worker.
The addition of 50% was not permissible for the reasons as
stated earlier. The loss of dependency comes to `5,91,138/-
(`5278 - 1/3 X 12 X 14). The compensation on account of loss
of love and affection is also required to be reduced to `25,000/-
from `75,000/-.(Sunil Sharma v. Bachitar Singh (2011) 11 SCC
425 and Baby Radhika Gupta v. Oriental Insurance Company
Limited (2009) 17 SCC 627).
186. The compensation is recomputed as under:
S. Head of Compensation Granted by Granted
the Claims by this
No.
Tribunal Court
1. Loss of Dependency `10,92,000/- `5,91,138/-
2. Loss of Love and Affection `75,000/- `25,000/-
3. Loss of Consortium `10,000/- `10,000/-
4. Funeral Expenses `10,000/- `10,000/-
5. Loss to Estate `10,000/- `10,000/-
6. Medicines &Treatment `35,000/- -
Total `12,32,000/- `6,46,138/-
R
187. The overall compensation is reduced from `12,32,000/- to
`6,46,138/-
188. The excess amount of `5,85,862/- alongwith proportionate
interest and the interest, if any, accrued during the pendency of
the appeal shall be refunded to the Appellant Insurance
Company immediately.
189. The compensation held payable to the Respondents No.1 to 3
shall be disbursed/held in Fixed Deposit in the proportion and
the manner as directed by the Claims Tribunal. The deposit
shall be held in UCO Bank, Delhi High Court Branch.
190. The Appeal is allowed in above terms.
MAC. APP. No.38/2011
191. The Appellant New India Assurance Company Limited
impugns a judgment dated 11.08.2010 whereby, a compensation
of ` 7,93,780/- was granted to the Respondents (Claimants) for
the death of Daya Ram who was aged 27 years on the date of
the accident which occurred on 05.05.2006.
192. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working as a driver with M/s. Sonu Tours &
Travels and was getting a salary of ` 6,000/- per month. In the
absence of any cogent evidence with regard to the deceased‟s
employment, the Claims Tribunal took the minimum wages of a
skilled worker, added 50% on account of inflation and
computed the loss of dependency as ` 7,53,780/-.
193. Following contentions are raised on behalf of the Appellant:-
(i) The Tata Sumo vehicle No.DL-6CA-8077 was being
driven by the deceased in a rash and negligent manner.
He himself was responsible or in any case contributed to
the accident and the Insured or the Appellant Insurance
Company were not liable to pay any compensation.
(ii) The compensation awarded on the basis of wages of a
skilled worker and making addition of 50% in minimum
wages was not permissible. Thus, the compensation
awarded was exorbitant or excessive.
194. Claim Petition bearing Suit No.289/2006 was being tried with
Claim Petition bearing Suit No.280/2006, 282/2006, 288/2006
and 281/2006.
195. Claim Petition bearing Suit No.280/2006 and 288/2006 bearing
MAC APP.36/2011 titled „New India Assurance Company
Limited v. Rimjhim Ispat Ltd. & Ors‟. and MAC APP.41/2011
titled „New India Assurance Company Limited v. Rimjhim Ispat
Ltd. & Ors.‟ arising out of this very accident were decided by
the Claims Tribunal. The Appeals were decided by this Court
by a common judgment dated 21.02.2012. In the said Appeals,
the only ground of challenge was the negligence on the part of
Tata Sumo‟s driver i.e. the deceased herein. Para 4 to Para 10
of the judgment in MAC APP.36/2011 are extracted hereunder:-
"4. The only ground of challenge common in both
the Appeals is that the Tata Sumo vehicle hit the truck
from the rear. Unless and until the Tata Sumo was being
driven at a very fast speed the accident could have been
avoided by the driver of the Tata Sumo. It is thus
pleaded that the accident was caused on account of rash
and negligent driving of the driver of the Tata Sumo or in
the alternative it is submitted that there was contributory
negligence of the driver of Tata Sumo. Both these Claim
Petition Bearing Suit No. 280/2006 and 288/2006 were
tried jointly. The Claimants examined several witnesses
including four eye witnesses to the accident.
5. PW 4 Sunil Kumar filed his Affidavit Ex. P-25
by way of evidence. He deposed that the Tata Sumo Car
was being driven by Daya Ram at a very slow speed. At
about 4.30 A.M. the Tata Sumo reached near Chand
Filling Petrol Pump at G.T.Road, Arnia, Police Station
Khurja, Bullandshahar, UP. A truck bearing No.UP
7080 9758 was going ahead of the Tata Sumo Car. The
truck was being driven by Gautam Kumar Tiwari at a
very fast speed rashly and negligently. The driver of the
truck suddenly applied brakes in the middle of the road
as a result of which the Tata Sumo Car which was
following the truck dashed into the truck. In the cross-
examination it was suggested to this witness that the
driver was drowsy or that he was drunk. The witness
showed his ignorance about the same.
6. The second witness examined by the claimants
was Keshav Dutt. He corroborated Sunil Kumar‟s
testimony in his Affidavit Ex.P-16. In the cross-
examination, the witness deposed that the speed of the
truck was about 80 km per hour. The Tata Sumo was
following it at a distance of about 40 feet almost at the
same speed. The witness denied the suggestion that the
driver was drunk or that he was sleepy.
7. The third witness is PW-6 Narendra Bhatt who
in his Affidavit Ex.P-20 corroborated the version as
given by PWs 4 and 5. In cross-examination, a
suggestion was given to him that the truck gave an
indication to take left turn and the accident took place
because of negligence of the driver of Tata Sumo which
was denied by the witness. The witness also denied the
suggestion that the driver of the Tata Sumo was drunk or
was sleepy. Thus, a new case was tried to be set up by
this witness that the truck driver took a left turn after due
indication and that the driver of Tata Sumo on account of
his own negligence dashed his vehicle into the truck.
8. The fourth witness is PW 7 Shambhu Sharma.
He corroborates the three earlier witnesses in his
examination-in-chief by way of an Affidavit (Ex.P-35). In
cross-examination the witness deposed that the truck was
going at the speed of 70-80 kmph whereas the Tata Sumo
was going at the speed of 60 kmph. He denied that the
Tata Sumo driver was drunk or was feeling sleepy. PW
4, PW 5 and PW 7‟s testimony that the truck driver
suddenly applied brakes in the middle of the road was
not challenged in cross-examination. A contrary stand
was taken on behalf of the insurance company in PW6‟s
cross-examination when suggestion was given to this
witness that the truck driver took a left turn after due
signal and that on account of rash and negligent driving
by the driver of Tata Sumo the accident occurred. It is
important to note that driver of Truck No.UP-78T-9758
preferred not to contest the proceedings who was
ordered to be proceeded ex parte.
9. The owner of the truck M/s. Rimjhim Ispat Ltd.
took a contrary stand in the WS and completely denied
the involvement of the truck in the accident. The driver
of the vehicle was not produced to give his version as to
how the accident occurred. Thus I am inclined to accept
the version as given by the four witnesses mentioned
earlier that the accident was caused on account of the
sudden application of brakes by the driver of the truck in
the middle of the road.
10. It may be noticed that the accident took place at
4.30 A.M. It was the duty of the truck driver not to apply
the brakes while he was driving the truck at a very fast
speed. It cannot be said that there was any negligence
on the part of the driver of the Tata Sumo Car."
196. In this view of the matter, it cannot be said that there was any
contributory negligence on the part of deceased Daya Ram. The
driver and owner of the offending truck No.UP-78T-9758 and
the Appellant were rightly held liable to pay the compensation.
197. As far as quantum of compensation is concerned, the deceased‟s
salary was claimed to be ` 5,000/- per month. The same was
disbelieved as no documentary evidence was placed on record.
The deceased‟s driving licence to drive LMV (taxi) was,
however proved during the inquiry before the Claims Tribunal.
198. Gopal, the deceased‟s father filed his Affidavit Ex.P-10 by way
of his examination-in-chief and testified that the deceased was
working as a driver with M/s. Sonu Tours & Travels and was
getting a salary of ` 5,000/- per month. In the absence of any
documentary evidence with regard to the deceased‟s
employment with M/s. Sonu Tours & Travels, the Claims
Tribunal rightly declined to believe Gopal‟s evidence with
regard to the deceased‟s employment, yet the factum of the
deceased‟s working as a driver was not disputed. This coupled
with the fact that the deceased was driving the Tata Sumo at the
time of the accident and possessed a licence to drive taxi was
sufficient to conclude that the deceased was a professional
driver. His income in the year 2006 should have been taken at
least ` 150/- per day or ` 4500/- per month. The Claims Tribunal
erred in awarding compensation on assuming the salary to be `
5542/- per month although, the salary was claimed to be only
`5,000/- per month. The loss of dependency on the income of `
4500/- per month would come to ` 6,12,000/- (4500/- x 2/3 x 12
x 17).
199. On adding notional sum of ` 25,000/- towards loss of love and
affection and ` 10,000/- each towards loss of Consortium, loss
of Estate and funeral Expenses, the overall compensation comes
to ` 6,67,000/-.
200. The compensation payable is reduced from ` 7,93,780/- to `
6,67,000/-.
201. The excess amount of `1,26,780/- alongwith proportionate
interest and the interest accrued, if any, during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
202. The Appeal is allowed in above terms.
MAC. APP. No.40/2011
203. The Appeal is for reduction of compensation of ` 8,13,952/- for
the death of Kamla who was aged 32 years on the date of the
accident. During inquiry before the Claims Tribunal it was
claimed that the deceased was B.A. (Hons.) and was working
with M/s. Fast Track India and was getting a salary of ` 6,000/-
per month.
204. Respondent Sunil Kumar appeared as PW-4 and proved the
Certificate Ex.P-14 regarding deceased‟s qualification and the
Salary Certificate Ex.P-13 in the absence of any witness from
the deceased‟s employer, the same was not believed by the
Claims Tribunal. The Claims Tribunal took the minimum
wages of a Graduate i.e. ` 4031/-, added 50% towards the
inflation and computed the loss of dependency on the income of
` 6046/- amounting to ` 7,73,952/-.
205. Following contentions are raised on behalf of the Appellant:-
(i) The Tata Sumo vehicle No.DL-6CA-8077 was being
driven by the deceased in a rash and negligent manner.
He himself was responsible or in any case contributed to
the accident and the Insured or the Appellant Insurance
Company was not liable to pay any compensation.
(ii) The compensation awarded on the basis of wages of a
skilled worker and making addition of 50% in minimum
wages was not permissible. Thus, the compensation
awarded was exorbitant or excessive.
206. The Claim Petition bearing Suit No.281/2006 out of which the
present Appeal arises was tried along with five Claim Petitions
including Claim Petition bearing Suit No.289/2006, 280/2006,
282/2006 and 288/2006.
207. I have already held above that there was no negligence on the
part of the driver of the Tata Sumo. Even if, it is assumed (as
far as this case is concerned), that there was some negligence on
the part of Tata Sumo‟s driver, it was not a case of contributory
negligence. While disposing of connected MAC APP.36/2011
titled „New India Assurance Company Limited v. Rimjhim Ispat
Ltd. & Ors‟. and MAC APP.41/2011 titled „New India
Assurance Company Limited v. Rimjhim Ispat Ltd. & Ors., this
Court held as under:-
"11. Otherwise also even if it is assumed that there
was some negligence on the part of the Tata Sumo Driver
it was not a case of contributory negligence but of the
composite negligence and the claimants were entitled to
sue all or any of the wrong doer to claim compensation.
In T.O. Anthony v. Karvarnani, (2008) 3 SCC 748, which
is relied on by the Appellants it was held as under: -
"6. „Composite negligence‟ refers to the
negligence on the part of two or more persons.
Where a person is injured as a result of negligence
on the part of two or more wrong doers, it is said
that the person was injured on account of the
composite negligence of those wrong-doers. In
such a case, each wrong doer, is jointly and
severally liable to the injured for payment of the
entire damages and the injured perso has choice of
proceeding against all or any of them. In such a
case, the injured need not establish the extent of
responsibility of each wrong-doer separately, nor
is it necessary for the court to determine the extent
of liability of each wrong-doer separately. On the
other hand where a person suffers injury, partly
due to the negligence on the part of another person
or persons, and partly as a result of his own
negligence, then the negligence of the part of the
injured which contributed to the accident is
referred to as his contributory negligence. Where
the injured is guilty of some negligence, his claim
for damages is not defeated merely by reason of
the negligence on his part but the damages
recoverable by him in respect of the injuries stands
reduced in proportion to his contributory
negligence."
12. Thus although I have already held earlier that
there was negligence on the part of the truck driver and
he was responsible for causing the accident, even if it is
assumed that there was some negligence on the part of
the Tata Sumo driver it does not affect the claim petition
filed by the claimants. In case of composite negligence a
victim can sue all or any of the tortfeasors to claim
compensation for the wrongful act of the joint
tortfeasors."
208. As far as deceased‟s income is concerned, even if it is assumed
that the deceased was a housewife and was to be granted
compensation on the basis of the judgment of this Court in
Royal Sundaram Alliance Insurance Co. Ltd. v. Master
Manmeet Singh & Ors., MAC.APP. 590/2011, decided on 30th
January, 2012 the same would be more than the compensation
awarded by the Claims Tribunal. In Master Manmeet Singh
(supra), this Court noticed the following judgments of the
Supreme Court:-
(i) General Manager, Kerala State Road Transport
Corporation, Trivandrum v. Susamma Thomas (Mrs.)
and Ors. (1994) 2 SCC 176,
(ii) National Insurance Company Limited v. Deepika & Ors.,
2010 (4) ACJ 2221,
(iii) Amar Singh Thukral v. Sandeed Chhatwal, ILR (2004) 2
Del 1,
(iv) Lata Wadhwa & Ors. v. State of Bihar & Ors., (2001) 8
SCC 197,
(v) Gobald Motor Service Ltd. & Anr. v. R.M.K. Veluswami
& Ors., AIR 1962 SC 1,
(vi) A. Rajam v. M. Manikya Reddy & Anr.,
MANU/AP/0303/1988,
(vii) Morris v. Rigby (1966) 110 Sol Jo 834 and
(viii) Regan v. Williamson 1977 ACJ 331 (QBD England),
and laid down the principle for determination of loss of
dependency on account of gratuitous services rendered by a
housewife. Para 34 of the judgment in Master Manmeet Singh
(supra) is extracted hereunder:-
"34. To sum up, the loss of dependency on account of
gratuitous services rendered by a housewife shall be:-
(i) Minimum salary of a Graduate where she is a
Graduate.
(ii) Minimum salary of a Matriculate where she is a
Matriculate.
(iii) Minimum salary of a non-Matriculate in other
cases.
(iv) There will be an addition of 25% in the assumed
income in (i), (ii) and (iii) where the age of the
homemaker is upto 40 years; the increase will be
restricted to 15% where her age is above 40 years
but less than 50 years; there will not be any
addition in the assumed salary where the age is
more than 50 years.
(v) When the deceased home maker is above 55 years
but less than 60 years; there will be deduction of
25%; and when the deceased home maker is above
60 years there will be deduction of 50% in the
assumed income as the services rendered decrease
substantially. Normally, the value of gratuitous
services rendered will be NIL (unless there is
evidence to the contrary) when the home maker is
above 65 years.
(vi) If a housewife dies issueless, the contribution
towards the gratuitous services is much less, as
there are greater chances of the husband‟s re-
marriage. In such cases, the loss of dependency
shall be 50% of the income as per the qualification
stated in (i), (ii) and (iii) above and addition and
deduction thereon as per (iv) and (v) above.
(vii) There shall not be any deduction towards the
personal and living expenses.
(viii) As an attempt has been made to compensate the
loss of dependency, only a notional sum which may
be upto ` 25,000/- (on present scale of the money
value) towards loss of love and affection and `
10,000/- towards loss of consortium, if the
husband is alive, may be awarded.
(ix) Since a homemaker is not working and thus not
earning, no amount should be awarded towards
loss of estate."
209. Thus, taking the deceased Kamla‟s salary of a Graduate of `
4031/-, adding 25% on the principles stated above, the loss of
dependency of a gratuitous services rendered by deceased
Kamla would come to ` 9,67,440/- (4031/- + 25% x 12 x 16).
210. The compensation payable would be more than 8,13,952/- as
awarded by the Claims Tribunal. Consequently, the Appeal is
devoid of merit; the same is accordingly dismissed.
MAC.APP. 39/2011
211. This is another Appeal connected with MAC APP.38/2011 and
40/2011.
212. The Appellant New India Assurance Company Limited seeks
reduction of compensation of ` 4,29,168/- awarded for the death
of Usha Bhatt, an unmarried girl aged about 22 years.
213. Sidhi Devi, the deceased‟s mother filed a Petition claiming
compensation of ` 10,00,000/-.
214. During inquiry before the Claims Tribunal, it was claimed that
the deceased was working in ICICI Bank, Mayur Vihar and was
getting a salary of ` 5,000/- per month. No documentary
evidence was produced by the Respondent (the Claimant) nor
any witness from the ICICI Bank, Mayur Vihar was summoned
to testify that the deceased was employed there. Factum of
deceased‟s employment was disputed in cross-examination of
the Respondent Sidhi Devi. The Claims Tribunal, in the absence
of any evidence with regard to the deceased‟s employment,
strangely increased the deceased‟s income to ` 6046/- per
month (as against claim of ` 5,000/-) to compute the loss of
dependency as ` 3,99,168/-.
215. Following contentions are raised on behalf of the Appellant:-
(i) The Tata Sumo vehicle No.DL-6CA-8077 was being
driven by the deceased in a rash and negligent manner.
He himself was responsible or in any case contributed to
the accident and the Insured or the Appellant Insurance
Company was not liable to pay any compensation.
(ii) The compensation awarded on the basis of wages of a
Graduate and making addition of 50% in minimum wages
was not permissible. Thus, the compensation awarded
was exorbitant or excessive.
216. The first contention is covered by my observations in MAC
APP.38/2011 and 40/2011 above.
217. As far as quantum of compensation is concerned, there is no
evidence that the deceased was a Graduate. Rather, the
Respondent (the Claimant) proved the Senior Secondary School
Certificate and the Identification Card Ex.P-4 that she was a
student of School of Open Learning.
218. I have already held above that addition on account of inflation
cannot be given. The Respondent (the Claimant) was entitled to
compensation on the basis of the minimum wages of a
Matriculate. The loss of dependency come to ` 2,45,454/-
(3719/- x 1/2 x 12 x 11).
219. On adding notional sum of ` 25,000/- towards loss of love and
affection and ` 10,000/- each towards loss of Estate and funeral
Expenses, the overall compensation comes to ` 2,90,454/-.
220. The compensation payable is reduced from ` 4,29,168/- to `
2,90,454/-.
221. The excess amount of `1,38,714/- alongwith proportionate
interest and the interest accrued if any, during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
222. The Appeal is allowed in above terms.
(G.P. MITTAL)
JUDGE
MARCH 19, 2012
vk
23.03.2012
File taken up today.
It has come to my notice that there is a clerical mistake in Para
60 at Page 50 of the judgment where instead of word „can‟ „cannot‟
has been typed. Now Para 60 shall be read as under:-
"60. In view of the foregoing discussion, I am of the
view that no addition in the minimum wages can be made
on account of inflation for computation of
compensation."
Let a Corrigendum to this effect may be issued.
(G.P. MITTAL)
JUDGE
MARCH 23, 2012
vk
