Delhi High Court
National Insurance Co Ltd vs Akim Schwarz & Anr on 25 November, 2019
$~17&18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decided on: 25.11.2019
+ CM APPL. 21502/2016 & CM APPL. 31196/2018 in MAC.APP.
472/2016
NATIONAL INSURANCE CO LTD ..... Appellant
versus
AKIM SCHWARZ & ANR ..... Respondents
+ MAC.APP. 316/2017
AKIM SCHWARZ ..... Appellant
versus
NATIONAL INSURANCE CO LTD ..... Respondent
Through: Mr. Pradeep Gaur and Mr. Kishore
Rawat, Advocates for insurance
company.
Mr. Sunil Malhotra and Mr. B.S.
Randhawa, Advocates for Akim
Schwarz.
CORAM:
HON'BLE MR. JUSTICE NAJMI WAZIRI
NAJMI WAZIRI, J (Oral)
MAC.APP. 472/2016 & 316/2017 Page 1 of 13
1. This appeal impugns the award of compensation dated 19.02.2016
passed by the learned MACT in MACP No. 130/10/07 on the ground that
the compensation awarded to the claimant is on the higher side.
Facts:
2. On 31.05.2016, the appellant/insurer had admitted its liability to
indemnify the claimant. In terms of Ex. PW5/A the minimum wage
applicable to a skilled worker in Federal Republic Germany between 2006
and 2011 was Euro 2306/- per month. The same has been taken into
consideration by the learned Tribunal and the compensation towards „loss of
future income‟ was calculated on this basis. The impugned order reads as
under:-
"42.The petitioner has deposed that he was not working
at the time of accident. Hence the income of the petitioner can
be taken as minimum wages at the time of accident. In order to
prove the minimum rates of wages in Germany, the petitioner
has examined Smt. Selvi Ganesh, Legal Advisor of the German
Embassy as PW5. She proved the letter dated 03.11.2011
issued by Sh. Ulrich Meinecke, Counsellor, Social and Labour
Affairs, Vocational Education and Training as Ex.PW5/A
which shows the rates of minimum wages of a skilled worker in
June 2006 as 2036 Euro. The petitioner has filed on record the
certificate Ex.PW4-/A2 issued by Sabrina Schmidt Koshella,
Counsellor and Consul, Head of Legal and Consular Affairs,
Embassy of Federal Republic of Germany which shows the
conversion rates of euro on the day of accident as 58.96 INR.
The income of the petitioner at the time of accident thus comes
to Rs.1,20,042.56/- which may be rounded as of Rs.1,20,043/-
per month or Rs.14,40,516/- per annum(i.e.58.96x2036)."
Unemployment Dole:
MAC.APP. 472/2016 & 316/2017 Page 2 of 13
3. The claimant/injured was unemployed since 31.05.2000. The insurer
contends that because the claimant was receiving only Euro 400/- per month
as unemployment allowance from the government of Federal Republic
Germany, therefore only ought to have been considered as his monthly
income. The said argument is untenable because what is to be seen is the
extent of the loss of skill of the injured. The claimant was a skilled person.
Employment in an economy is subject to market forces and the same cannot
be held against an individual who is unable to find employment despite his
certified skills. What is given by the Government is only the substance
amount. The accident has rendered the skilled workman incapable of
utilizing his skills for earning his livelihood. Insofar as he has been disabled
apropos his training for the vocation of Skilled Tool Mechanic, due
compensation would have to be award to the injured.
Skilled Workman
4. The Training Certificate has been issued by M/s DMW Schwarze Pvt.
Ltd. & Com., to the effect that, the claimant had worked with the said
company from 01.08.1889 till 14.06.1993 as an „Apprentice Toolmaker‟.
He met all their requisite standards as per the Chamber of Commerce, which
would be applicable for activities by a toolmaker. In other words, the skill
of the claimant as toolmaker had duly been tested and certified by the then
employer M/s DMW Schwarze Pvt. Ltd. & Com. There is another affidavit
of the said company to the effect that the claimant was working with it from
01.06.1997 to 31.05.2000 and that he had carried out his task to the
company‟s full satisfaction apropos in the Tools and Repair Department and
that he had also taken an in-house training in "Try Out Press for Action".
MAC.APP. 472/2016 & 316/2017 Page 3 of 13
5. The sequitor to the above is that i) the skilled workman would be
employable on the basis of his skill certification and ii) coupled with the fact
that he had a work experience. Whether he was employed or not, at the time
of the accident would be a matter depending upon the economy of the
country, his personal circumstances, etc. He may have come to India for a
holiday but since his skill as a workman got affected because of the
irreversible debilitation on account of the accident, he would need to be
compensated for the loss which he would suffer on account of the said
disability in carrying out duties of the vocation for which he is qualified.
Compensation to be based on Minimum Wages
6. The learned counsel for the appellant submits that the minimum
wages would not be applicable in this case because what the claimant was
earning an unemployment allowance of only 400 Euros. Therefore, his loss
would only be to the extent of such allowance and the compensationshould
so correspond. However, PW-5, Mrs. Selvi Ganesh, the Legal Advisor to
German Embassy in Delhi, had proven the letter issued by Exhibit PW-5/A
that shows the minimum wages of a skilled worker in Germany was Euro
2036/- as mentioned in the said document.
7. Therefore, the appellant‟s argument is specious and is rejected,
because what is to be kept in mind is that unemployment allowance is a dole
given by a Government to its citizens for supporting their sustenance,
depending upon its social welfare policy. It does not tantamount to payment
of minimum wages of the beneficiary/recipient of such allowance/dole. A
qualified medical doctor or engineer or a lawyer who may be incapacitated
in a motor accident or may not have been working at the relevant time
would not be given an un-employment dole equivalent to the amount which
MAC.APP. 472/2016 & 316/2017 Page 4 of 13
she/he would have been earning prior to such incapacitation. Such
professional may have chosen to stay away from professional practice and if
in that duration he meets an accident, it would not mean that such person
who was on unemployment dole, would be entitled to only the dole
compensation. The degree of skill incapacitation has to be seen and not the
financial condition of the individual concerned. Therefore, the aforesaid
argument too is rejected.
8. The learned counsel for the insurance company refers to the affidavit
of the claimant wherein he has himself admitted that he was not employed
between 2003 and 2006 and he was otherwise touring in South Asia,
therefore, he cannot be compensated from the basis of minimum wages.
"14. That the deponent visited frequently to India and Nepal
during the period from March 2003 to Dec 2006. However, as
during the said period deponent was not under continuous
employment so, for proper assessment of deponent earning
capacity, on deponent's request through his Advocate Mr. B.
S.Randhawa, the Embassy of Federal Republic of Germany, New
Delhi vide letter dated 03.11.2011 has confirmed the monthly
minimum wage rate of skilled worker (Tool Mechanic) in
Germany for the month of June 2006 as 2036/- Euros and year
2011 as 2307/- Euros."
9. The Court is of the view that non-employment or voluntarily not
being in employment due to market exigencies or optional vacation by an
individual cannot be the basis for calculation of „loss of earnings‟.
10. The insurer contends that the awarded amount is on the higher side
and should be reduced. The argument is bland, it is untenable and is
rejected. The insurer next contends that high living standards as applicable
to the claimant a foreign national, should not be applicable in the present
MAC.APP. 472/2016 & 316/2017 Page 5 of 13
case. However, this argument is no longer valid in view of the dicta of the
Supreme Court in United India Insurance Co. Ltd. and Ors. vs. Patricia
Jean Mahajan and Ors., (2002) 6 SCC 281.
Extent of Functional Disability:
11. The insurer further contends that 80% permanent physical disability
of the claimant had never been established and his functional disability also
remains undetermined. The Court would note that the PW-6, Dr. Sunil Tuli,
the Consultant Orthopedic at Orthonova Hospital, New Delhi, had deposed
that the injured was admitted to the hospital apropos his injury from 15th to
26th January 2007 for a fractured accetabulum right hip. He also stated that
the injured has suffered permanent disability upto 80% apropos his full body
and that he would not be able to sit down because sitting would involve
movement of his hip, resultantly he would not be able to work properly. It
was opined that resultantly his earning capacity from work which involved
movement his hip, was affected 100%. He would need a hip replacement.
Dr. Tuli also stated that he examined the claimant on 28.11.2011 and found
that his disability confirms to the opinion given by the German doctor in her
deposition. His deposition reads as under:
"PW6 Dr. Sunil Tuli S/o Sh. Roshan Lai Tuli R/o 15, DDA Flats,
Shivalik
Road, Panchsheel park. New DeIhi-17
OnSA
I am consultant Orthopaedic surgeon at Orthonova Hospital, C-
5/29,
-
S.D.A Oppt. IIT Gate New Delhi. I have operated upon Mr. Akim
Schwarz
for fracture hip and left hand for a grade-IV injury on
15.01.2007 till 26.01.2007. During this duration he was operated
upon for his hip and left
hand. He was discharged on 29.01.2007. He was again admitted
on 17.02.2007 till 18.02.2007. He was re-operated on his left
hand and reconstruction was tried on his hand. The treatment
given by me in North point hospital and its bills are already
exhibited as PW4/A (colly) (28 sheets) are correct. The petitioner
brought medical report by Dr. Antonious dated 15.02.2011 and a
disability certificate. I have thoroughly read the medical report
of petitioner and disability certificate which are already
EX.PW4/K and Ex.PW4/J. He has 80% permanent disability to
whole body. He is a skilled tool mechanic and has to work with
his hands. He needs to sit down also and work at times because
of the involvement of his hip and hand he will not be able to
execute his work properly. The disability amounts to almost 80%
work capacity wise and earning capacity wise it was almost
100%. I examined him on 28.11.2011 and I found that his
disability conforms to the opinion given by the German Doctor.
He needs a hip /replacement and further reconstruction of his
hand to enable him to earn his livelihood. The cost to the surgery
including hospitalisation and drugs and surgeons fee would be
approximately Rs. 3,16,500/-. The provisional estimate dated
09.12.2011 is being attached which is Ex.PW6/A.
XXXXXXXX by Sh. Rakesh Talwar, counsel for respondent no. 2,
I am summoned witness. I have my visiting card to show that I
am consultant at Orthonova hospital, the same is Ex.PW6/RA.
The estimate of the treatment for surgery for hip replacement and
hand surgery was got prepared by me from Orthonova hospital
where I do said surgeries. It is wrong to suggest that Ex.PW6/A
is false document. Ex.PW4/0 is a discharge summary. It is wrong
to suggest that discharge summary and bills discharge summary.
It is wrong to suggest that discharge summary and bills are
forged and fabricated documents. It is correct that in India the
board is constituted by a Govt. Hospital to assess the disability
sustained. It is correct that petitioner did not obtain disability
certificate from any of the Govt. Hospital in Delhi. I do not know
whether payment was made in respect of the bill dated
29.01.2007. I have mentioned in my statement about the
profession of the injured on the basis of his statement. It is wrong
to suggest that petitioner did not suffered disability to the extent
of 80% of the whole body. It is further wrong to suggest that
earning capacity of the petitioner has not been affected to the
extent of 100% due to the disability. It is wrong to suggest that 1
am deposing falsely."
12. The opinion of the German doctor is recorded in the document, which
the learned Tribunal refers to as "opinion of a surgeon for determination of
the disability". The claimant was admitted to the Accidental Surgical Clinic
of Medical Center Bielefeld, Germany from 05.05.2007 to 12.05.2007.
PMMA chain was inserted in his left hand. On 08.05.2007, the claimant‟s
fistula was excised at the left wrist. The impugned order records it as under:
".....the petitioner has filed on record the translated
copy of Opinion of a surgeon for determination of the
disability which shows that the petitioner was admitted in
Accidental Surgical Clinic of Medical Center Bielefeld from
5.5.2007 and was discharged on 12.5.2007 and on
08.5.2007 the fistula excised, at the left hand wrist of the
fixator distant externally and a PMMA Chain was
inserted".
Loss of Future Prospects:
13. The learned counsel for the claimant submits that compensation for
loss of future prospect has not been granted. In terms of dicta of the
Supreme Court in National Insurance Co. Ltd. vs. Pranay Sethi & Ors.,
(2017) 16 SCC 680 as well as Parminder Singh vs. New India Assurance
Co. Ltd. & Ors., (2019) SCC OnLine SC 802, the same would be payable.
The claimant has suffered 80% full body disability. The learned counsel
refers to a certificate issued by the attending medical official in Germany
which recorded that the disability level which was 80% as on 19.06.2011
had reduced to 70% on 04.09.2012. It is argued that since there was
reduction in disability level, the lesser disability ought to have been
considered. The Court finds merit in the said argument and, accordingly, the
disability level is reduced from 80% to 70%. What is important to be
considered is whether despite 70% full body physical disability the injured
would be able to carry out the duties for which he was qualified i.e. whether
he would be able to carry out assignments of a skilled tool mechanic. The
deposition of Dr. Sunil Tuli (PW6) is instructive in this regard, he has
opined that the injured had suffered a permanent disability of 80% apropos
his full body and he will not be able to execute his work properly and that he
would need a hip replacement. Subsequently, the opinion of the German
doctor too has been taken into consideration by the learned Tribunal.
14. The learned counsel for the appellant refers to the dicta of the
Supreme Court in Patricia Jean Mahajan (supra) to contend that in the
present case the multiplier should be reduced when the multiplicand is high.
The Court is of the view that the aforesaid reliance is misplaced because in
terms of National Insurance Co. Ltd. v. Pranay Sethi & Ors (2017) 16
SCC 680, multiplier apropos age of the injured and/or deceased has to be
taken into consideration.
15. In Raj Kumar vs. Ajay Kumar IV (2010) ACJ 815, it was held that
the degree of loss and consequent assessment of compensation should be
realistic as to whether the injured would be able to earn anything at all,
despite the injuries. The Court is of the view that the learned Tribunal has
assessed the disability on the basis of the said principles, it calls for no
review or interference. Apropos claimant‟s contention that compensation
towards „future prospects‟ have not been granted, the learned counsel for the
appellant submits that „future prospects‟ is already built into the
compensation awarded. The appellant‟s contention has merely to be stated to
be rejected because what is to be taken into consideration is not the quantum
of the compensation which a person get towards loss of earning, but also the
prospective loss in future due to enhancement in earnings. Loss of future
prospects takes into consideration many aspects factors, including the likely
increase in earnings of the individual on account of his/her experience in the
vocation, acquisition of greater efficiency, better time management and
higher/better technical qualification over time, etc. A person always hopes
and expects that she/ he will do better in future. This hope and aspiration
cannot be denied to any individual. These factors will need to be kept in
mind and as well as the settled law in Pranay Sethi (supra) and in
Parminder Singh v. New India Assurance Co. Ltd. & Ors 2019 SCC
OnLine SC 802, for grant of compensation for „loss of future prospects‟.
16. In Parminder Singh (supra), it was a case of paraplegic. He was
awarded 50% towards „loss of future prospects‟. In the present case what
would be assessed is the minimum wage for a skilled person, notified in
Federal Republic of Germany.
17. The learned Tribunal assessed the compensation payable to the
claimant on the basis of the aforesaid minimum wages converted into Indian
Rupees @Rs.58.96 per Euro, after deducting the 400 Euros therefrom, it was
rounded off toRs.1,20,043/- per month. The relevant tax slab for AY 2006-
07 was applied: Total income Rs.14,40,516/- less tax Rs.3,42,155/-. The
post tax income was Rs.10,98,361/-, of which only 80% was assessed as
functional loss resulting in loss of equivalent earning capacity. A multiplier
of 16 was applied since the claimant was 34 years of age.
18. However, as discussed hereinabove, although the claimant was first
was assessed as 80% physically disabled, later reduced to 70% physical
disability, he would nevertheless be unable to carry out the functions of a
skilled workman. Therefore, his functional disability has to be and is
considered as 100%.
19. Thus the amount payable to the claimant for loss of warning capacity
and loss of future prospects shall be:
I.
100% of the post tax „loss of earning capacity‟ i.e. Rs,10,98,361/- + 50%
[(loss of future prospects) Rs.5,49,180.5 less income tax @30% i.e.
Rs.1,64,754.15 = Rs.384,426.35)]
= Rs.14,82,787.35 x16 (multiplier) = Rs.2,37,24,597.60
II.
Add to this the already awarded non-pecuniary compensation towards:
Disfigurement of Body Rs.100,000/-; Loss of Marriage Prospects
Rs.100,000/-; Future Treatment3,16,500/-; Medical expenses already
incurred Rs.166,535/-; Attendant Charges Rs.20,000/- , Pain and Suffering
Rs.200,000/-, Loss of Amenities of life Rs.50,000/- ; Conveyance and
Special Diet Rs.50,000/-.
20. The excess amount, as may be, shall be deposited before the learned
Tribunal, within three weeks from the date of receipt of copy of this order,
to be disbursed to the beneficiary of the Award, in terms of the scheme of
disbursement specified therein.
Deduction of Income Tax in India:
21. The claimant contends that the taxes should not be deducted in India
because ultimately the awarded amount would be assessed to tax in the
country where the claimant is ordinarily a resident. The said argument is
untenable because withholding taxes are levied in the remitter country where
the revenue is generated. It will be open to the assessee for avoidance of
double taxation or set-off, in case of such treaty of India and country of his
place of residence or regular tax assessment. In any case, no such argument
was raised before the learned Tribunal nor were any supporting documents
placed on record by the claimant. Therefore, taxes as applicable on the said
amount in India shall be deducted.
22. Lastly, the claimant submits that the rate of exchange on which the
amount was assessed has altered significantly and the monies be released at
the earliest so that the claimant can utilize the same optimally. Especially in
view of the fact, that the debilitating accident occurred over 13 years ago.
The Court would note that the assessment was made on the basis of monies
which were otherwise receivable by the injured in Euros. The claim would
therefore have to be made on the basis of Euros after deduction of the
monthly dole of 400 Euros. The rate of exchange of Euros at the time of
56.84 and presently it is over Rs. 88/-. Once the compensation in Euros is
assessed, the same would be paid to the claimant. The insurance company
has deposited the compensation amount in Indian Rupees at the conversion
rate in terms of the award. The claimant has not sought modification of the
same i.e. the monies should be assessed and paid only in Euros. Therefore,
the assessment of the monies in Indian Rupees cannot be altered.
23. Details of the respondent-claimant‟s address and Bank Account has
been furnished in an Annexure (A-316) as:
Account No. IBAN DE20 41262501 64038403 00, BIC/Swift:
GENODEM1AHL, address: Volksbank e.G, Munsterstr. 34, 48231
Warendorf, Germany. The Bank may verify this before remittance.
24. The amount already deposited shall be released directly into the Bank
account of the claimant in terms of this order. The details of the bank
account of the claimant in Germany, alongwith photocopies of his passport
and affidavit to the aforesaid effect in support of the said detail shall be filed
with an advance copy to the learned counsel for the insurance company.
25. The statutory amount shall be returned to the insurance company
alongwith corresponding interest accrued thereon.
26. The appeal is disposed of in the above terms.
NAJMI WAZIRI, J
NOVEMBER 25, 2019
AB/KK/RW/kb
