Delhi High Court
National Insurance Co. Ltd. & Anr. vs Prakasho Devi & Ors. on 17 March, 2015
$-4 & 5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 17th March, 2015
+ MAC.APP. 124/2005
NATIONAL INSURANCE CO. LTD. & ANR. ..... Appellants
Through: Mr. Garud M.V., Advocate for Ms.
Shantha Devi Raman, Advocate
versus
PRAKASHO DEVI & ORS. ..... Respondents
Through: Mr. Navneet Goyal, Advocate for
Respondents no. 1 to 5.
Mr. Pawan K. Bahl, Advocate for
Respondent no. 7.
+ MAC.APP. 426/2005
PRAKASHO DEVI & ORS. ..... Appellants
Through: Mr. Navneet Goyal, Advocate
versus
SANJAY KUMAR & ORS. ..... Respondents
Through: Mr. Pawan K. Bahl, Advocate for
Respondent no. 2.
Mr. Garud M.V., Advocate for Ms.
Shantha Devi Raman, Advocate for
Respondent no. 3.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
CM. APPL. 17901/2014 in MAC. APP. 124/2005
1. The Appellants pray for dispensing with the service of Respondent no.
6 as Respondent no. 6 was earlier served through publication. It is
stated that Respondent no. 6 did not even contest the proceedings
before the Claims Tribunal. The fact is not disputed by the
Respondents. In view of this, Respondent no.6 is deemed to be served.
2. The application stands disposed of.
MAC. APP. 124/2005 AND MAC. APP. 426/2005
3. These two appeals (MAC. APP. 124/2005 and MAC. APP. 426/2005)
arise out of judgment dated 03.11.2004 passed by the Motor Accident
Claims Tribunal (the Claims Tribunal) whereby compensation of
₹2,70,000/- along with interest @ 9% per annum was awarded in
favour of Prakasho Devi and Onkar Singh Rana for the death of Sanjiv
Kumar, who suffered fatal injuries in a motor vehicular accident
which occurred on 08.02.2000.
4. For the sake of convenience, the Appellant in MAC. APP. 124/2005
shall be referred to as the Insurance Company, whereas the Appellants
in MAC. APP. 425/2005 shall be referred to as the claimants.
5. The finding on negligence has not been challenged by the Insurance
Company.
6. During inquiry before the Claims Tribunal, it was claimed that
deceased Sanjiv Kumar had joined Parmar Construction Company,
Inder Puri, New Delhi as a helper. He was later promoted as an
operator. He was getting a salary of ₹4,200/- per month at the time of
his death. The Claims Tribunal declined to believe that the deceased
was getting a salary of ₹4,200/- per month and proceeded to award
compensation on the basis of minimum wages of a matriculate i.e.
₹3,000/- per month. The Claims Tribunal made a deduction of 1/3
towards personal and living expenses and applied the multiplier of 10
to compute the loss of dependency. The Claims Tribunal also
negatived the plea raised on behalf of the Insurance Company that
there was breach of terms and conditions of the insurance policy and
therefore, the Insurance Company was liable to pay the compensation.
7. Following contentions are raised on behalf of the Insurance Company:
(i) Deduction towards personal and living expenses ought to have
been 1/2 instead of 1/3 taken by the Claims Tribunal. Reliance
is placed on Sarla Verma (Smt.) & Ors. v. Delhi Transport
Corporation & Anr., (2009) 6 SCC 121; and
(ii) The Insurance Company established that the driving licence
held by the driver was valid to drive only LMV non-transport
which was valid for the period 18.08.1999 to 17.08.2019. This
did not entitle the driver to drive Tata 407, a transport vehicle
which was involved in the present accident. Thus, the Insurance
Company was entitled to avoid indemnification of the insured
and therefore, at least recovery rights ought to have been
granted to the Insurance Company.
8. Per contra, the learned counsel for the claimants states that the
compensation awarded is on the lower side. The income of the
deceased was sufficiently proved to be ₹4,200/- per month, addition of
50% ought to have been made towards future prospects and the
multiplier ought to have been as per the age of the deceased. Reliance
is placed on Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013)
9 SCC 65.
9. On the other hand, the learned counsel for Respondent no. 7 in MAC.
APP. 426/2005 (owner of the vehicle) supports the impugned award
with regard to liability. It is contended that the Insurance Company
failed to discharge the initial onus that there was willful and conscious
breach of terms and conditions of the insurance policy by the owner.
The Insurance Company was therefore, not entitled to avoid liability
and was under obligation to satisfy the award on behalf of the insured.
MULTIPLICAND AND COMPENSATION:
10. In order to prove the income of the deceased, the claimants examined
Om Prakash Gupta, Supervisor of Parmar Construction Company as
PW-3. He testified that deceased Sanjiv Kumar had initially joined the
earlier said company as a helper. He was, however, promoted as an
operator to operate Tata Hitachi no. 200. He proved the salary
certificate Ex. PW3/A. The salary certificate Ex. PW3/A is extracted
hereunder:
"TO WHOMSOEVER IT MAY IT MAY CONCERN
This is to certify that Sh. Sanjeev Kumar S/o Sh. Onkar Singh
Rana R/o Village: Nangrah, P.O. Palan, Distt. Ropar(Punjab),
has worked with this organization as helper to the operator of
Hitachi Excavator (Vacco) between period 01.12.1998 to
31.12.1999. During this period he was paid a salary of
Rs.1500/-(Rupees one thousand five hundred only) per month
plus Perks. Thereafter, he worked as operator on the above
machine at a salary of Rs.4,200/-(Rupees four thousand two
hundred only) per month plus Perks. He ceased to be our
employee on being killed in a road accident on 8th February
2000.
During his employment he was found to be a hardworking and
honest worker."
11. PW-3 was cross-examined at length on behalf of the Insurance
Company. He admitted that in the salary certificate Ex. PW3/A, the
salary was mentioned as ₹1,500/- per month, whereas in the salary
register brought by him, the salary for the months of November and
December, 1999 is mentioned as ₹1,800/- per month. He stated that
₹300/- was paid to the deceased towards conveyance. It may be noted
that the accident in question took place on 08.02.2000. It is the plea of
the claimants which is sought to be proved through PW-3 that the
deceased was promoted as an operator in January, 2000 on account of
his extraordinary work. No documentary evidence except the salary
certificate Ex. PW3/A was placed on record or proved by the
claimants to establish that the deceased was earning a salary of
₹4,200/- per month at the time of his death. In my view, the Claims
Tribunal rightly discarded the salary certificate in the absence of any
corroborative documentary evidence with regard to the same,
particularly when the deceased was admittedly working on a salary of
₹1,500/- per month since the year 1998 and took the minimum wages
of a matriculate to calculate the loss of dependancy. In the absence of
any documentary evidence, it is not believable that the salary of the
deceased would have been doubled suddenly and that too in the month
prior to his accident. There is no evidence that the deceased was ever
paid a salary of ₹4,200/- per month even for the month of January,
2000. Further, since I have already discarded the evidence that the
deceased had been promoted as an operator, he was working only as a
helper and in the absence of any evidence with regard to good future
prospects, no addition is permissible. A reference may be made to the
judgment passed by this Court in HDFC Ergo General Insurance Co.
Ltd. v. Smt. Lalta Devi and Ors. MAC APP No. 189/ 2014 decided on
12.01.2015, wherein it was held that the three Judge Bench decision in
Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65 on
the aspect of future prospects shall be taken as a binding precedent.
12. Also, it is well settled that in case of a bachelor, deduction towards
personal and living expenses shall be 50%. (Sarla Verma (Smt.) &
Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121).
13. The question of selection of multiplier was dealt with at great length
by me in Shriram General Insurance Co. Ltd. v. Maneesha Karnatak
and Ors., MAC APP 655 of 2014 decided on 20.03.2015 wherein
Paras 10 to 34, it was held as under:
"10. Coming to the question of multiplier to be selected,
the question of selection of multiplier was dealt with at great
length by me in Vijay Laxmi & Anr. v. Binod Kumar Yadav &
Ors., ILR (2012) 6 Del 447. In that case, the learned counsel
for the Appellant had relied on the following judgments (i)
Smt. Sarla Verma & Ors. v. Delhi Transport Corporation &
Anr., 2009 (6) SCC 121; (ii) Mohd. Ameeruddin v. United
India Insurance Co. Ltd., 2010 (12) SCALE 155; (iii) P.S.
Somanathan v. District Insurance Officer, I (2011) ACC 659
(SC); (iv) Bilkish v. United India Insurance Co. Ltd. & Anr.,
2008 (4) SCALE 25; (v) National Insurance Co. Ltd. v. Azad
Singh & Ors., 2010 ACJ 2384 (SC); (vi) Oriental Insurance
Co. Ltd. v. Deo Patodi & Ors., 2009 ACJ 2359 (SC) and (vii)
Divisional Manager, New India Assurance Co. Ltd. v. T.
Chelladurai & Ors., 2010 ACJ 382 (SC).
11. I had discussed the law laid down in the earlier
stated judgments and had further referred to the judgments in
General Manager, Kerala State Road Transport Corporation,
Trivandrum v. Susamma Thomas (Mrs.) and Ors., (1994) 2
SCC 176; U.P. SRTC v. Trilok Chandara, (1996) 4 SCC 362;
Fakeerappa v. Karanataka Cement Pipe Factory, (2004) 2
SCC 473 and New India Assurance Company Limited v. Shanti
Pathak (Smt.) & Ors., (2007) 10 SCC 1 to hold that the
multiplier has to be selected as per the age of the deceased or
the Claimant whichever is higher.
12. The learned counsel for Respondents No. 1 and 2 has
submitted that in view of the three Judge Bench decision in
Reshma Kumari v. Madan Mohan & Anr., (2009) 13 SCC 422
and a later judgment of the Supreme Court in M. Mansoor &
Anr. v. United India Insurance Company Limited & Anr.,
(2013) 15 SCC 603, the judgment in Vijay Laxmi (supra) of
this Court needs to be revisited and the multiplier has to be as
per the age of the deceased and age of the Claimant is not at
all relevant for selection of the multiplier.
13. Section 168 of the Motor Vehicles Act, 1988 (the Act)
enjoins a Claims Tribunal to determine the amount of
compensation which is just and reasonable. It can neither be a
source of profit nor should be a pittance. In other words, it
should not be meager nor should be a windfall. In this
connection, a reference may be made to the report of the
Supreme Court in State of Haryana v. Jasbir Kaur, (2003) 7
SCC 484, which dealt with the grant of compensation in case
of injury which principles equally apply in case of award of
compensation in fatal accident cases. In Para 7, the Supreme
Court held as under:
"7. It has to be kept in view that the Tribunal
constituted under the Act as provided in Section 168 is
required to make an award determining the amount of
compensation which is to be in the real sense „damages‟
which in turn appears to it to be „just and reasonable‟. It
has to be borne in mind that compensation for loss of
limbs or life can hardly be weighed in golden scales. But
at the same time it has to be borne in mind that the
compensation is not expected to be a windfall for the
victim. Statutory provisions clearly indicate that the
compensation must be „just and it cannot be a bonanza;
not a source of profit; but the same should not be a
pittance. The courts and tribunals have a duty to weigh
the various factors and quantify the amount of
compensation, which should be just. What would be „just‟
compensation is a vexed question. There can be no
golden rule applicable to all cases for measuring the
value of human life or a limb. Measure of damages
cannot be arrived at by precise mathematical
calculations. It would depend upon the particular facts
and circumstances, and attending peculiar or special
features, if any. Every method or mode adopted for
assessing compensation has to be considered in the
background of „just‟ compensation which is the pivotal
consideration. Though by use of the expression „which
appears to it to be just‟ a wide discretion is vested in the
Tribunal, the determination has to be rational, to be done
by a judicious approach and not the outcome of whims,
wild guesses and arbitrariness. The expression „just‟
denotes equitability, fairness and reasonableness, and
non-arbitrary. If it is not so it cannot be just."
14. Initially, the trend of the Courts was to ascertain the
life expectancy, deduct the age of the deceased and to award
the compensation on the basis of the residual life span. The
Courts started deducting certain sums out of the sum as
arrived above on account of lump sum payment.
15. However, in General Manager, Kerala State Road
Transport Corporation, Trivandrum v. Susamma Thomas
(Mrs.) and Ors., (1994) 2 SCC 176, an attempt was made for
the first time to award just and reasonable compensation on
the basis of the multiplier method. The Supreme Court referred
to the report in Gobald Motor Service Ltd. & Anr. v. R.M.K.
Veluswami & Ors., AIR 1962 SC 1 and observed that actual
pecuniary loss can be ascertained only by balancing, on one
hand, the loss to the Claimant of the future pecuniary benefits
and on the other hand, any pecuniary advantage which from
whatever sources comes to them by reason of death. Paras 8
and 9 of the report in Susamma Thomas (Mrs.) (supra) are
extracted hereunder:-
"8. The measure of damage is the pecuniary loss
suffered and is likely to be suffered by each dependant.
Thus "except where there is express statutory direction to
the contrary, the damages to be awarded to a dependant
of a deceased person under the Fatal Accidents Acts must
take into account any pecuniary benefit accruing to that
dependant in consequence of the death of the deceased. It
is the net loss on balance which constitutes the measure
of damages." (Per Lord Macmillan
in Davies v. Powell [(1942) AC 601, 617 : (1942) 1 All
ER 657 (HL)].) Lord Wright in the same case said, "The
actual pecuniary loss of each individual entitled to sue
can only be ascertained by balancing on the one hand the
loss to him of the future pecuniary benefit, and on the
other any pecuniary advantage which from whatever
source comes to him by reason of the death". These
words of Lord Wright were adopted as the principle
applicable also under the Indian Act in Gobald Motor
Service Ltd. v. R.M.K. Veluswami [AIR 1962 SC 1 :
(1962) 1 SCR 929 : 1962 MLJ (Cri) 120] where the
Supreme Court stated that the general principle is that
the actual 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.
9. The assessment of damages to compensate
the dependants is beset with difficulties because from the
nature of things, it has to take into account many
imponderables, e.g., the life expectancy of the deceased
and the dependants, the amount that the deceased would
have earned during the remainder of his life, the amount
that he would have contributed to the dependants during
that period, the chances that the deceased may not have
lived or the dependants may not live up to the estimated
remaining period of their life expectancy, the chances
that the deceased might have got better employment or
income or might have lost his employment or income
altogether."
16. The Supreme Court referred to
Davies v. Powell, (1942) AC 601 and Nance v. British
Columbia Electric Railway Company Limited, (1951) AC 601
and in Paras 13 and 14 of the report in Susamma Thomas
(Mrs.) (supra), the Supreme Court observed as under:-
"13. The multiplier method involves the ascertainment
of the loss of dependency or the multiplicand having
regard to the circumstances of the case and capitalizing
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 Mallett
case [Mallett v.McMonagle, (1970) AC 166 : (1969) 2 All
ER 178 (HL)] 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.""
17. The purpose of adopting the multiplier as per the age
of the deceased or as per the age of the Claimant whichever is
higher was that if the Claimant is of much higher age,
particularly in case of death of a bachelor where the mother or
for that matter the parents may be double the age of the
deceased, the dependency is to come to an end in a much
lesser period as against the dependency of a widow or minor
children of a deceased. In any case, the deceased was not to
support more than his own life span and thus, by providing the
dependency to the Claimants, it was held that the dependency
has to be as per the age of the deceased or the Claimant
whichever is higher.
18. The law laid down in Susamma Thomas (Mrs.)
(supra) with regard to adoption of multiplier method and
selection of multiplier according to the age of the deceased or
the Claimant whichever is higher was affirmed by a three
Judge Bench decision in U.P. SRTC v. Trilok Chandra, (1996)
4 SCC 362. The three Judge Bench laid down that the
multiplier cannot in all cases be solely dependant on the age of
the deceased and the age of the parents would also be relevant
in case of death of a bachelor in the choice of multiplier. In
para 18 of the report of the Supreme Court in Trilok Chandra
(supra), it was observed as under:-
"18....... Besides, the selection of multiplier cannot in all
cases be solely dependant on the age of the deceased.
For example, if the deceased, a bachelor, dies at the age
of 45 and his dependants are his parents, age of the
parents would also be relevant in the choice of the
multiplier........."
19. There was some confusion as to the selection of the
multiplier because of the multiplier table as given in the
Second Schedule of the Act under Section 163-A which was
inserted w.e.f. 14.11.1994. Some of the cases had adopted the
multiplier as given in the Second Schedule. Although, the three
Judge Bench in Trilok Chandra (supra) had noticed some
clerical mistakes in the multiplier table as given in the Second
Schedule, it stated that the said table can be taken as a guide.
Noticing the wide variations in the selection of multiplier, a
two Judge Bench of the Supreme Court in Sarla Verma (Smt.)
& Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC
121 noted the multiplier as adopted in Susamma Thomas,
Trilok Chandra and New India Assurance Company Limited v.
Charlie & Anr. (2005) 10 SCC 720 and in the Second
Schedule and in Para 40 of the report, it compared the same in
a tabulated form which is extracted hereunder:-
Age of the Multiplier scale Multiplier scale as Multiplier scale Multiplier Multiplier actually
deceased as envisaged in adopted by Trilok in Trilok specified in used in Second
Susamma Chandra [(1996) 4 Chandra4as Second Schedule to the
Thomas [(1994) SCC 362] clarified in Column in MV Act (as seen
2 SCC 176 : Charlie [(2005) the Table in from the quantum
1994 SCC (Cri) 10 SCC 720 : Second of compensation)
335] 2005 SCC (Cri) Schedule to
1657] the MV Act
(1) (2) (3) (4) (5) (6)
20. The Supreme Court with a view to having a
uniform multiplier held that the multiplier as given in Column
(4) of the above table should be usually followed. In Paras 41
and 42 of the report in Sarla Verma (Smt.), the Supreme Court
observed:-
"41. Tribunals/ courts adopt and apply different
operative multipliers. Some follow the multiplier with
reference to Susamma Thomas [(1994) 2 SCC 176 : 1994
SCC (Cri) 335] [set out in Column (2) of the table
above]; some follow the multiplier with reference
to Trilok Chandra [(1996) 4 SCC 362] , [set out in
Column (3) of the table above]; some follow the
multiplier with reference to Charlie [(2005) 10 SCC 720 :
2005 SCC (Cri) 1657] [set out in Column (4) of the table
above]; many follow the multiplier given in the second
column of the table in the Second Schedule of the MV Act
[extracted in Column (5) of the table above]; and some
follow the multiplier actually adopted in the Second
Schedule while calculating the quantum of compensation
[set out in Column (6) of the table above]. For example if
the deceased is aged 38 years, the multiplier would be 12
as per Susamma Thomas [(1994) 2 SCC 176 : 1994 SCC
(Cri) 335], 14 as per Trilok Chandra [(1996) 4 SCC
362], 15 as per Charlie [(2005) 10 SCC 720 : 2005 SCC
(Cri) 1657], or 16 as per the multiplier given in Column
(2) of the Second Schedule to the MV Act or 15 as per the
multiplier actually adopted in the Second Schedule to the
MV Act. Some tribunals, as in this case, apply the
multiplier of 22 by taking the balance years of service
with reference to the retiring age. It is necessary to avoid
this kind of inconsistency. We are concerned with cases
falling under Section 166 and not under Section 163-A of
the MV Act. In cases falling under Section 166 of the MV
Act, Davies method [Davies v. Powell Duffryn Associated
Collieries Ltd., 1942 AC 601 : (1942) 1 All ER 657 (HL)]
is applicable.
42. We therefore hold that the multiplier to be used
should be as mentioned in Column (4) of the table above
(prepared by applying Susamma Thomas [(1994) 2 SCC
176 : 1994 SCC (Cri) 335], Trilok Chandra [(1996) 4
SCC 362] and Charlie [(2005) 10 SCC 720 : 2005 SCC
(Cri) 1657] ), which starts with an operative multiplier of
18 (for the age groups of 15 to 20 and 21 to 25 years),
reduced by one unit for every five years, that is M-17 for
26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to
40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50
years, then reduced by two units for every five years, that
is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7
for 61 to 65 years and M-5 for 66 to 70 years."
21. It may be noted that the Supreme Court had gone into
the history of adoption of multiplier method and referred to
Nance v. British Columbia Electric Railway Company Limited,
(1951) AC 601 and Davies v. Powell, (1942) AC 601.
22. Sarla Verma (Smt.) & Ors. v. Delhi Transport
Corporation & Anr., (2009) 6 SCC 121 related to the death of
a Scientist who died leaving behind his widow, three minor
children, parents and grandfather. Thus, the Supreme Court
while laying down that the multiplier has to be adopted as per
Column 4 of the table as per the age of the deceased, was
generally referring to the award of compensation in cases of
death of a person who had a family consisting of widow,
children and parents. Of course, general principles with
regard to award of compensation in case of death of a
bachelor were also laid down by the Supreme Court in Sarla
Verma (Smt.), but it was not specifically laid down that even in
the case of death of a bachelor, the age of the Claimants who
may be aged parents will be totally irrelevant.
23. However, in Amrit Bhanu Shali v. National Insurance
Company Limited, (2012) 11 SCC 738, the Supreme Court
stated that the selection of the multiplier has to be as per the
age of the deceased and not on the basis of the age of the
dependants. It was a case which related to the death of a
bachelor.
24. On account of divergence of opinion in the earlier
cases, a reference to a larger Bench was made by a two Judge
Bench in Reshma Kumari v. Madan Mohan & Anr., (2009) 13
SCC 422. The question of award of compensation in relation
to multiplier and future prospects was gone into at great
length by a three Judge Bench of the Supreme Court in
Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9
SCC 65. The two referred questions by Reshma Kumari v.
Madan Mohan & Anr., (2009) 13 SCC 422 were:-
"1.1. Whether the multiplier specified in the Second
Schedule appended to the Motor Vehicles Act, 1988 (for
short "the 1988 Act") should be scrupulously applied in
all cases" and
1.2. Whether for determination of the multiplicand, the
1988 Act provides for any criterion, particularly as
regards determination of future prospects?"
25. While answering the points, in Para 43, the Supreme
Court observed as under:-
"43. In what we have discussed above, we sum up our
conclusions as follows:
43.1. In the applications for compensation made under
Section 166 of the 1988 Act in death cases where the age
of the deceased is 15 years and above.
43.2. In cases where the age of the deceased is up to 15
years.
43.3. As a result of the above, while considering the claim
applications made under Section 166 in death cases
where the age of the deceased is above 15 years, there is
no necessity for the Claims Tribunals to seek guidance or
for placing reliance on the Second Schedule in the 1988
Act.
43.4. The Claims Tribunals shall follow the steps and
guidelines stated in para 19 of Sarla Verma v. DTC,
(2009) 6 SCC 121 for determination of compensation in
cases of death....."
26. In Reshma Kumari & Ors. v. Madan Mohan & Anr.,
(2013) 9 SCC 65, these were general observations that the
steps and guidelines stated in para 19 of Sarla Verma (Smt.)
have to be followed. In Sarla Verma (Smt.), it was laid down
that having regard to the age of the deceased and period of
active career, the active multiplier should be selected and the
multiplier should be chosen from the table with reference to
the age of the deceased. As I have observed above, it was not
the intention in Sarla Verma (Smt.) to apply the multiplier of
18 in case of death of a bachelor aged 25 years where the
dependants may only be the aged parents. Thus, in Reshma
Kumari also, it was not laid down that the multiplier has to be
according to the age of the deceased even when the deceased
is a bachelor having dependency of the parents only.
27. Of course, in M. Mansoor & Anr. v. United India
Insurance Company Limited & Anr., (2013) 15 SCC 603, the
two Judge Bench observed that the multiplier has to be as per
the age of the deceased and even in case of death of a bachelor
aged 24 years, the multiplier will be 18.
28. However, there is a three Judge Bench decision of the
Supreme Court in New India Assurance Company Limited v.
Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 wherein a
bachelor aged 25 years lost his life in a motor vehicular
accident which occurred on 11.11.2002. The Claims Tribunal
adopted a multiplier of 17, as per the age of the deceased (25
years). On appeal filed by the New India Assurance Company
Limited before the High Court, it was contented that the
multiplier has to be as per the age of the Claimants (in that
case) and not as per the age of the deceased. The Division
Bench of High Court of Uttarakhand declined to accept the
contention and dismissed the appeal. In the SLP filed by the
Insurance Company, the multiplier of 17 was reduced to „5‟ on
the age of the mother of the deceased being 65 years.
29. Also, in the latest judgment of the Supreme Court in
Ashvinbhai Jayantilal Modi v. Ramkaran Ramchandra Sharma
& Anr., (2015)2 SCC 180, a two Judge Bench of the Supreme
Court dealt with the questions of multiplier and the
appropriate multiplier in case of death of a bachelor in the
said case was taken as 13, keeping in mind the age of the
parents of the deceased. Para 11 of the report is extracted
hereunder:-
"11. The deceased was a diligent and outstanding student
of medicine who could have pursued his MD after his
graduation and reached greater heights. Today, medical
practice is one of the most sought after and rewarding
professions. With the tremendous increase in demand for
medical professionals, their salaries are also on the rise.
Therefore, we have no doubt in ascertaining the future
income of the deceased at Rs 25,000 p.m. i.e. Rs 3,00,000
p.a. Further, deducting 1/3rd of the annual income
towards personal expenses as per Oriental Insurance Co.
Ltd. v. Deo Patodi [(2009) 13 SCC 123 : (2009) 5 SCC
(Civ) 29 : (2010) 1 SCC (Cri) 963] and applying the
appropriate multiplier of 13, keeping in mind the age of
the parents of the deceased, as per the guidelines laid
down in Sarla Verma case [Sarla Verma v. DTC, (2009)
6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC
(Cri) 1002], we arrive at a total loss of dependency at Rs
26,00,000 [(Rs 3,00,000 minus 1/3 × Rs 3,00,000) ×
13]......."
30. Thus, right from the two Judge Bench decision in
General Manager, Kerala State Road Transport Corporation,
Trivandrum v. Susamma Thomas (Mrs.) and Ors., (1994) 2
SCC 176, which for the first time held that the multiplier
method is the best way of awarding just compensation, which
was approved in U.P. SRTC v. Trilok Chandara, (1996) 4 SCC
362, wherein it was held that the multiplier has to be as per
the age of the deceased or the Claimant whichever is higher,
which is reiterated in New India Assurance Company Limited
v. Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 by applying
the multiplier as per the age of the mother of the deceased
(bachelor), the consensus of the larger Bench decisions seems
to be that the multiplier has to be selected as per the age of the
deceased or the Claimant whichever is higher. The judgment
in Vijay Laxmi & Anr. v. Binod Kumar Yadav & Ors., ILR
(2012) 6 DEL 447 has thus, correctly interpreted the law.
Three Judge Bench decision in U.P. SRTC v. Trilok Chandara,
(1996) 4 SCC 362 shall be taken as a binding precedent in the
matter of selection of multiplier as per the age of the deceased
or the Claimants.
31. Moreover, even if there is divergence of opinion in
subsequent two Judge Bench decisions or three Judge Bench
decisions (although there is no divergence by three Judge
Bench decisions), the law laid down by three Judge Bench in
Trilok Chandra (supra) shall be taken as a binding precedent.
In this connection, a reference may be made to Central Board
of Dawoodi Bohra Community and Anr. v. State of
Maharashtra & Anr., (2005) 2 SCC 673, wherein, in para 12,
the Supreme Court observed as under:-
"12. Having carefully considered the submissions made
by the learned Senior Counsel for the parties and having
examined the law laid down by the Constitution Benches
in the abovesaid decisions, we would like to sum up the
legal position in the following terms:
(1) The law laid down by this Court in a decision
delivered by a Bench of larger strength is binding on any
subsequent Bench of lesser or coequal strength.
(2) A Bench of lesser quorum cannot disagree or dissent
from the view of the law taken by a Bench of larger
quorum. In case of doubt all that the Bench of lesser
quorum can do is to invite the attention of the Chief
Justice and request for the matter being placed for
hearing before a Bench of larger quorum than the Bench
whose decision has come up for consideration. It will be
open only for a Bench of coequal strength to express an
opinion doubting the correctness of the view taken by the
earlier Bench of coequal strength, whereupon the matter
may be placed for hearing before a Bench consisting of a
quorum larger than the one which pronounced the
decision laying down the law the correctness of which is
doubted.
(3) The above rules are subject to two exceptions: (i) the
abovesaid rules do not bind the discretion of the Chief
Justice in whom vests the power of framing the roster and
who can direct any particular matter to be placed for
hearing before any particular Bench of any strength; and
(ii) in spite of the rules laid down hereinabove, if the
matter has already come up for hearing before a Bench of
larger quorum and that Bench itself feels that the view of
the law taken by a Bench of lesser quorum, which view is
in doubt, needs correction or reconsideration then by way
of exception (and not as a rule) and for reasons given by
it, it may proceed to hear the case and examine the
correctness of the previous decision in question
dispensing with the need of a specific reference or the
order of the Chief Justice constituting the Bench and such
listing. Such was the situation in Raghubir Singh [(1989)
2 SCC 754] and Hansoli Devi [(2002) 7 SCC 273]."
32. Similarly, in Safiya Bee v. Mohd. Vajahath Hussain
@ Fasi, (2011) 2 SCC 94, in para 27, the Supreme Court
observed as under:-
"27. However, even assuming that the decision in WP
No. 35561 of 1998 did not operate as res judicata, we are
constrained to observe that even if the learned Judges
who decided WP No. 304 of 2001 did not agree with the
view taken by a coordinate Bench of equal strength in the
earlier WP No. 35561 of 1998 regarding the
interpretation of Section 2 (c) of the Act and its
application to the petition schedule property, judicial
discipline and practice required them to refer the issue to
a larger Bench. The learned Judges were not right in
overruling the statement of the law by a coordinate Bench
of equal strength. It is an accepted rule or principle that
the statement of the law by a Bench is considered binding
on a Bench of the same or lesser number of Judges. In
case of doubt or disagreement about the decision of the
earlier Bench, the well-accepted and desirable practice is
that the later Bench would refer the case to a larger
Bench."
33. Also, in Union of India and Ors. v. S.K. Kapoor,
(2011) 4 SCC 589, while holding that the decision of the Co-
ordinate Bench is binding on the subsequent Bench of equal
strength, it was held that the Bench of Co-ordinate strength
can only make a reference to a larger Bench. In para 9 of the
report, the Supreme Court held as under:-
"9. It may be noted that the decision in S.N. Narula
case [(2011) 4 SCC 591] was prior to the decision in T.V.
Patel case [(2007) 4 SCC 785 : (2007) 2 SCC (L&S) 98].
It is well settled that if a subsequent coordinate Bench of
equal strength wants to take a different view, it can only
refer the matter to a larger Bench, otherwise the prior
decision of a coordinate Bench is binding on the
subsequent Bench of equal strength. Since, the decision
in S.N. Narula case [(2011) 4 SCC 591] was not noticed
in T.V. Patel case [(2007) 4 SCC 785 : (2007) 2 SCC
(L&S) 98] , the latter decision is a judgment per
incuriam. The decision in S.N. Narula case [(2011) 4
SCC 591] was binding on the subsequent Bench of equal
strength and hence, it could not take a contrary view, as
is settled by a series of judgments of this Court."
34. Thus, in view of this, the three Judge Bench decision
in Trilok Chandra (supra), later reiterated in the three Judge
Bench decision of New India Assurance Co. Ltd. v. Shanti
Pathak (supra) shall be taken as a binding precedent. The
multiplier will be as per the age of the deceased or the
Claimant whichever is higher."
14. Therefore, in case of death of a bachelor, the appropriate multiplier
will be as per the age of the dependants, in this case the mother. In the
instant case, there is no documentary record to show the age of Smt.
Prakasho Devi. In her statement recorded on 19.05.2000, she stated
her age to be 45 years. Thus, it is assumed that on the date of the
accident, claimant Prakasho Devi would have been aged between 44-
45 years. Consequently, the appropriate multiplier will be 14 as
against 10 as adopted by the Claims Tribunal.
15. The loss of dependency thus, comes to ₹2,52,000/- (₹3000/- x 12 x 1/2
x 14). In addition, the claimants are entitled to a sum of ₹1,00,000/-
towards loss of love and affection, ₹25,000/- towards funeral expenses
and ₹10,000/- towards loss to estate. (See Rajesh & Ors. v. Rajbir
Singh & Ors., (2013) 9 SCC 54)
16. The overall compensation therefore, comes to ₹3,87,000/-.
17. The compensation is hence, enhanced by ₹1,17,000/- which shall carry
interest @ 9% per annum from the date of filing of the claim petition
till its payment.
LIABILITY:
18. The plea of the Insurance Company is that since driver Sanjay Kumar
possessed a licence bearing no. P-04081999147426/ LMV (NT), he
shall be deemed to be driving Tata 407, the vehicle involved in the
accident without a valid and effective driving licence. The learned
counsel for the Insurance Company relies on the testimony of R3W1
Rakesh Kumar Kadayala who proved the copy of the insurance policy
as Ex. R3W1/A. He further proved report Ex. R3W1/B of the
investigator. The report reveals that licence no. P-04081999147426
was valid only for motor cycle and LMV (NT).
19. At this stage, it will be appropriate to refer to the respective pleadings
of the parties. Harvinder Singh, owner of the insured vehicle involved
in the accident in his written statement denied that the accident was
caused on account of rash and negligent driving on the part of the
driver. He took the plea that the vehicle was insured with National
Insurance Company and the policy was valid for the period
08.01.2000 to 07.01.2001 vide policy no. 354501/1999/6704637/New.
Harvinder Singh further took the plea that in any case, he is not liable
to pay the compensation as the vehicle involved was duly insured with
the earlier said Insurance Company.
20. A perusal of the written statement filed by the Insurance Company
reveals that only a vague and general plea was taken with regard to its
liability. It would be appropriate to extract the defence of the
Insurance Company taken in column 2 of para 23 of the written
statement to show as to what kind of defence was taken. The same is
extracted hereunder:
"That if at any stage it is proved that the vehicle in question
(sic) involved in the alleged accident, even then no liability
can be fastened on the answering respondent unless and
until it is proved that the alleged driver of the offending
vehicle was holding a valid and effective driving licence and
was not disqualified to hold or obtain the same and further
that the alleged accident was caused due to the fault or
negligence on the part of the driver and/or owner of the
offending vehicle and further the said vehicle was not
sold/transferred by the insured/owner before the date of
alleged accident."
21. It may be noted that the written statement was filed by the Insurance
Company without even verifying whether the said vehicle was
involved in the accident, whether the driver possessed a valid driving
licence and whether the licence was valid and effective to drive the
vehicle involved in the accident. It is very strange that on the basis of
this vague plea, the Insurance Company seeks exoneration or in the
alternative, recovery rights. The Insurance Company never preferred
to amend the written statement to take any specific plea, yet it was
permitted to lead evidence to prove that there was willful breach of the
terms and conditions of the insurance policy by the insured. As stated
earlier, the Insurance Company examined R3W1, Rakesh Kumar
Kadayala, Asstt. Administrative Officer of the Insurance Company. It
may be noted that no notice was issued to Harvinder Singh, insured
and owner of the offending vehicle to produce the original insurance
policy or to produce the driving licence of the driver. The copy of the
insurance policy placed on record although exhibited as Ex.R3W1/A
is inadmissible in evidence in the absence of any notice requiring the
insured to produce the said insurance policy. No notice was issued to
the insured to produce the driving licence of the driver. Had it been so,
the owner might have come forward with some explanation as to the
circumstances under which the vehicle was entrusted to the driver as
well. The insured could have either produced the driving licence of the
driver. Nothing of this sort was done by the Insurance Company. It is
well settled that the initial onus is on the Insurance Company to prove
that there was willful and conscious breach on the part of the insured.
22. In the absence of any notice, the Insurance Company has failed to
discharge the initial onus of proving that there was willful and
conscious breach of the terms and conditions of the insurance policy.
The Insurance Company therefore, cannot escape its liability.
23. The accident relates to the year 2000. The compensation awarded shall
be released to the claimants in terms of the orders passed by the
Claims Tribunal.
24. 50% of the enhanced compensation along with proportionate interest
shall be held in Fixed Deposit for a period of one year; rest shall be
released on deposit.
25. The compensation shall be equally shared between Respondents no. 1
and 2 in MAC. APP. 124/2005 who are the parents of the deceased.
26. The enhanced compensation of ₹1,17,000/- along with interest shall be
deposited by the Insurance Company with the Claims Tribunal within
six weeks.
27. Pending applications stand disposed of.
28. Statutory amount, if any, deposited shall be refunded to the Appellant
Insurance Company.
(G.P. MITTAL)
JUDGE
MARCH 17, 2015
pst
