Delhi High Court
Shamshera & Ors vs National Insurance Co Ltd on 20 May, 2016
$~9 & 10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 20th May, 2016
+ MAC.APP. 248/2014
NATIONAL INSURANCE CO LTD ..... Appellant
Through: Mr. Amit Gaur & Mr. Pradeep Gaur,
Advs.
versus
SHAMSHERA & ORS ..... Respondents
Through: Mr. Anshuman Bal, Adv. for R-1 & 2.
AND
+ MAC.APP. 44/2015
SHAMSHERA & ORS ..... Appellants
Through: Mr. Anshuman Bal, Adv.
versus
NATIONAL INSURANCE CO LTD ..... Respondent
Through: Mr. Amit Gaur & Mr. Pradeep Gaur,
Advs. for R-1.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. On 12.02.2011, Samim, aged 16 and 1/2 years died as a result of
injuries suffered in a motor vehicular accident, statedly involving negligent
driving of bus bearing registration no.UP-17D-2910 (the offending vehicle).
His parents (appellants in MAC appeal no.44/2015) instituted an accident
claim case (suit no.650/2011) on 28.07.2011 seeking compensation. The
tribunal held inquiry, and by judgment dated 23.01.2014, upheld the case of
death having occurred due to negligent driving of the bus. The
compensation in the sum of `12,02,040/- was awarded and granted with
interest at the rate of 9% per annum from the date of filing petition till
realization, National Insurance Co. Ltd. (appellant in MAC appeal no.
248/2014) having been burdened with liability to pay, it having concededly
issued the insurance policy against third party risk for the period in question.
2. The tribunal had calculated the compensation as under:-
Loss of financial dependency :`10,67,040/-
Loss of love and affection :`1,00,000/-
Loss of Estate :`10,000/-
Funeral expenses :`25,000/-
Total :`12,02,040/-
3. The insurance company, by its appeal (MAC appeal no.248/2014),
has submitted that the award is unduly high. Per contra, the claimants in
their appeal (MAC Appeal no.44/2015) have argued that the compensation
deserves to be enhanced. The learned counsel on both sides fairly agree that
this being a claim on account of death of child, the compensation may be
awarded in accordance with principles laid down in judgment of this court in
MAC appeal no. 554/2010, Chetan Malhotra vs. Lala Ram decided on
13.05.2016 which read as under:-
"Subject to all other requisite conditions being fulfilled, for the foregoing
reasons, in order to bring about consistency and uniformity in approach to
the issue, it is held that claims for compensation on account of death of
children shall be determined as follows :
(i). Till such time as the law is amended by the legislature, or
the Central Government notifies the amendment to the Second
Schedule in exercise of the enabling power vested in it by Section
163-A (3) of the Motor Vehicles Act, 1988, and except in cases
wherein the prospects of employability and earnings (in future or
present) of the deceased child are proved by cogent and
irrefutable evidence, this having regard, inter alia, to the
academic record or training in special talents or skills, for
computing the pecuniary damages on account of the loss to estate,
the notional income of non-earning persons (`15000/- p.a.) as
specified in the Second Schedule (brought in force from
14.11.1994), shall be assumed to be the income of the deceased
child, and taken into account after it is inflation-corrected with
the help of Cost Inflation Index (CII) as notified by the
Government of India from year to year under Section 48 of the
Income Tax Act, 1961, by applying the formula indicated
hereinafter.
(ii) For inflation-correction, the financial year of 1997-1998
shall be treated as the "base year" and the value of the notional
income relevant to the date of cause of action shall be computed
in the following manner :-
` 15,000/- x A ÷331
[wherein the figure of „`15,000/-‟ represents the
notional income specified in the second schedule
requiring inflation-correction; „A‟ represents the CII
for the financial year in which the cause of action arose
(i.e. the accident / death occurred); and the figure of
„331‟ represents the CII for the „base year‟]
(iii). After arriving at an appropriate figure of the present
equivalent value of the notional income (i.e. inflation-corrected
amount), it shall be rounded off to a figure in next thousands of
rupees.
(iv). The amount of notional income thus calculated shall be
reduced to two-third, the deduction to the extent of one-third
being towards personal & living expenses of the deceased, the
balance taken as the annual loss to estate (hereinafter also
referred to as "the multiplicand").
(v). For assessment of the pecuniary damages on account of
the death of children upto the age of 10 years, the loss to estate
shall be calculated, capitalizing the multiplicand, by applying the
multiplier of ten (10).
(vi). For children of the age-group of more than 10 years upto
15 years, the loss to estate shall be calculated by applying the
multiplier of fifteen (15).
(vii). For children of the age-group of more than 15 years but
less than 18 years, the loss to estate shall be calculated by
applying the multiplier of eighteen (18).
(viii). After the pecuniary loss to estate has been worked out in
the manner indicated above, an amount equivalent to the amount
thus computed shall be added to it as the composite non-
pecuniary damages taking care of not only the conventional heads
but also towards future prospects as awarded in R.K. Malik v.
Kiran Pal (2009) 14 SCC 1.
(ix). The final sum thus arrived at, appropriately rounded off, if
so required to the nearest (if not next) thousands of rupees, shall
be awarded as compensation for the death of the child."
4. Since the death had occurred on 12.02.2011, the CII for financial year
2010-2011 (i.e. 711) would apply. Thus, the inflation corrected income is
calculated as (15,000x711/331) `32,221/- rounded off to `33,000/-. Having
regard to the fact that the deceased child was 16 and 1/2 years in age,
multiplier of 18 is applied and the pecuniary loss to estate is calculated, after
deduction of one-third as (33000x2/3x18) `3,96,000/-. Adding similar
amount towards composite non-pecuniary damages, the total compensation
in the case is worked out as (3,96,000x2) `7,92,000/-.
5. The computation is reduced to `7,92,000/-. It shall carry interest at
the rate of 9% per annum as levied by the tribunal. The award is modified
accordingly.
6. By order dated 21.03.2014 (in MAC Appeal no.248/2014), the
insurance company had been directed to deposit the entire awarded amount
with up-to-date interest from which 60% was allowed to be released, the
balance kept in fixed deposit. The Registrar General shall now recalculate
the amount payable to the claimants and release the same from the balance
lying in deposit, refunding the remainder with statutory deposit, if any, to
the insurance company.
7. Both the appeals are disposed of in above terms.
(R.K. GAUBA)
JUDGE
MAY 20, 2016
ssc
