Oriental Insurance Company Ltd vs Sahab Ali And 5 Ors
2022 Latest Caselaw 335 Gua

                                                                     Page No.# 1/16

GAHC010170082017




                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                                Case No. : MACApp./459/2018

            ORIENTAL INSURANCE COMPANY LTD
            HAVING ITS REGD OFFICE AT ORIENTAL HOUSE, A-25/27, ASAF ALI ROAD,
            NEW DELHI- 110002 AND REGIONAL OFFICE AT GUWAHATI- 7, REP. BY
            THE REGIONAL MANAGER



            VERSUS

            SAHAB ALI and 5 ORS
            S/O- LATE MUKTAL

            2:MEHERON NESSA
            W/O SAHAB ALI

            3:BANIS ALI
             S/O SAHAB ALI

            4:PINJIRA KHATUN
             D/O SAHAB ALI

            5:SAJIDA KHATUN
             D/O SAHAB ALI ALL ARE RESIDENT OF VILL- LACHANGA P.O.
            CHARCHARIA P.S. KALGACHIA DIST. BARPETA
            ASSAM
             PRESENTLY RESIDING AT- SIJUBARI CHARIALI
             P.O. and P.S. HATIGAON
             GUWAHATI - 38
             DIST. KAMRUP M
            ASSA

Advocate for the Petitioner   : MR. S DUTTA

Advocate for the Respondent :
                                                                        Page No.# 2/16




                                     BEFORE
                    HONOURABLE MR. JUSTICE PARTHIVJYOTI SAIKIA

                                    JUDGMENT

Date : 02-02-2022

Heard Mr. S. Dutta, learned counsel appearing for the applicant. Also heard Mr.

S. Ahmed, learned counsel for the respondents.

2. This is an appeal under Section 173 of the Motor Vehicles Act, 1988

whereby the legality and propriety of the judgment and award dated 27.05.2016

passed by the MACT No. 2, Kamrup(M), Guwahati in MAC case No. 1064/2014

has been put to challenge.

3. On 05.04.2014 at about 4 pm, the deceased was hit by a tractor bearing

registration No. As-19C-1926. The death was instant.

4. The claim application under Section 166 of the Motor Vehicles Act was

filed before the learned tribunal seeking a compensation of Rs.41,65,000/-.

5. The opposite parties contested the claim application by filing the written

statements wherein they pleaded routine defences.

Page No.# 3/16

6. On the basis of the pleadings of the parties, the tribunal framed the

following three issues:-

I. Whether on 25.04.2014, at about 04:00 P.M., a motor

vehicular accident took place at village Amguri on PWD road,

under Kalgachia police station, in the district of Barpeta, Assam,

due to rash and negligent driving of the driver of the vehicle

No.AS-19-C-1926?

II. Whether Meher Ali sustained grievous injuries on his head,

chest and other parts of his body and was died due to the

accident in question?

III. Whether the claimants are entitled to get compensation as

prayed for? If so, from whom and to what extent?

7. The claimant examined two witnesses but the opposite party did not

adduce any evidence. On the basis of the evidence on record, the tribunal

awarded a compensation of Rs.5,00,000/-.

Page No.# 4/16

8. Mr. Dutta has submitted that the learned tribunal awarded Rs.5,00,000/-

after considering the matter under Section 140 of the Motor Vehicle Act, 1988.

According to Mr. Dutta, under Section 140 of the Motor Vehicles Act, a sum of

Rs. 50,000/- can only be awarded as a compensation.

9. I have bestowed my anxious consideration to the submissions made by

the learned counsels of both sides.

10. At this stage, I am of the opinion that the paragraph 27 of the judgment is

relevant and it is quoted as under:-

In view of the above, in the instant case, as the deceased was

merely a 20 years' old boy, the ends of justice will be served if

an amount of Rs. 5,00,000/- (Rupees five lakh) only, is awarded

as compensation to the claimants, which I award accordingly.

Further, in view of the Sarla Verma (supra), as only the mother

can be considered to be a dependant of the deceased Meher

Ali, she only would receive the said compensation amount.

11. In Sarla Verma v. DTC, (2009) 6 SCC 121, the Supreme Court has held Page No.# 5/16

that compensation awarded does not become "just compensation" merely

because the Tribunal considers it to be just.

12. The House of Lords in Devies v. Powell Duffryn Associated

Collieries Ltd., (1942) AC 601 at p. 617 (I), through Lord Wright observed:

"It is a hard matter of pounds, shillings and pence, subject

to the element of reasonable future probabilities. The starting

point is the amount of wages which the deceased was earning,

the ascertainment of which to some extent may depend upon

the regularity of his employment. Then there is an estimate of

how much was required or expended for his own personal and

living expenses. The balance will give a datum or basic figure

which will generally be turned into, a lump sum by taking a

certain number of years' purchase. That sum, however, has to

be taxed down by having due regard to uncertainties, for

instance, that the widow might have again married and thus

ceased to be dependent, and other like matters of speculation

and doubt".

13. Then the Privy Council, through Lord Simon, in Nance v. British Page No.# 6/16

Columbia Electric Rly. Co., Ltd., (1951) AC 601 has held--

"The claim to damages in the present case falls under two

separate heads. First, if the deceased had not been killed, but

had eked out the full span of life to which in the absence of the

accident he could reasonably have looked forward, what sums

during that period would he probably have applied out of his

income to the maintenance of his wife and family?

x x x x Secondly, in addition to any sum arrived at under the first

head, the case has been argued on the assumption, common to

both parties, that according to the law of British Columbia it

would be proper to award a sum representing such portion of

any additional savings which he would or might have

accumulated during the period for which, but for his accident, he

would have lived, as on his death at the end of this period would

probably have accrued to his wife and family, by devolution

either on his intestacy or under his will, if he made a will.

X X X X A figure having been arrived at under first head, there Page No.# 7/16

should be added to it a figure arrived at under the second head.

The question there is what additional amount he would probably

have saved during the.....years if he had so long endured, and

what part, if any, of these additional saving his family would

have been likely to inherit".

14. In Sarla Verma (supra), the Supreme Court has held as under --

"The general principles

10. Before considering the questions arising for decision, it

would be appropriate to recall the relevant principles relating to

assessment of compensation in cases of death. Earlier, there

used to be considerable variation and inconsistency in the

decisions of courts and tribunals on account of some adopting

the Nance method [Nance v. British Columbia Electric Railway

Co. Ltd., 1951 AC 601 : (1951) 2 All ER 448 (PC)] enunciated

in Nance v. British Columbia Electric Railway Co.

Ltd. [Nance v. British Columbia Electric Railway Co. Ltd., 1951

AC 601 : (1951) 2 All ER 448 (PC)] and some adopting

the Davies method [Davies v. Powell Duffryn Associated Page No.# 8/16

Collieries Ltd., 1942 AC 601 : (1942) 1 All ER 657 (HL)]

enunciated in Davies v. Powell Duffryn Associated Collieries

Ltd. [Davies v. Powell Duffryn Associated Collieries Ltd., 1942

AC 601 : (1942) 1 All ER 657 (HL)]

11. The difference between the two methods was considered

and explained by this Court in Kerala SRTC v. Susamma

Thomas [(1994) 2 SCC 176 : 1994 SCC (Cri) 335] . After

exhaustive consideration, this Court preferred the Davies

method [Davies v. Powell Duffryn Associated Collieries Ltd.,

1942 AC 601 : (1942) 1 All ER 657 (HL)] to the Nance

method [Nance v. British Columbia Electric Railway Co. Ltd.,

1951 AC 601 : (1951) 2 All ER 448 (PC)] .

12. We extract below the principles laid down in Susamma

Thomas [(1994) 2 SCC 176 : 1994 SCC (Cri) 335] : (SCC p.

177e)

"In fatal accident action, the measure of damage is the

pecuniary loss suffered and is likely to be suffered by each

dependant as a result of the death."

Page No.# 9/16

"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.

10. The manner of arriving at the damages is to ascertain the

net income of the deceased available for the support of himself

and his dependants, and to deduct therefrom such part of his

income as the deceased was accustomed to spend upon

himself, as regards both self-maintenance and pleasure, and to

ascertain what part of his net income the deceased was

accustomed to spend for the benefit of the dependants. Then Page No.# 10/16

that should be capitalised by multiplying it by a figure

representing the proper number of years' purchase."

"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."

"16. It is necessary to reiterate that the multiplier method is

logically sound and legally well established. There are some

cases which have proceeded to determine the compensation on

the basis of aggregating the entire future earnings for over the

period the life expectancy was lost, deducted a percentage Page No.# 11/16

therefrom towards uncertainties of future life and award the

resulting sum as compensation. This is clearly unscientific. For

instance, if the deceased was, say 25 years of age at the time of

death and the life expectancy is 70 years, this method would

multiply the loss of dependency for 45 years--virtually adopting

a multiplier of 45--and even if one-third or one-fourth is

deducted therefrom towards the uncertainties of future life and

for immediate lump sum payment, the effective multiplier would

be between 30 and 34. This is wholly impermissible."

15. The Apex Court further held ---

14. The lack of uniformity and consistency in awarding

compensation has been a matter of grave concern. Every

district has one or more Motor Accidents Claims Tribunal(s). If

different Tribunals calculate compensation differently on the

same facts, the claimant, the litigant, the common man will be

confused, perplexed and bewildered. If there is significant

divergence among the Tribunals in determining the quantum of

compensation on similar facts, it will lead to dissatisfaction and Page No.# 12/16

distrust in the system.

16. Compensation awarded does not become "just

compensation" merely because the Tribunal considers it to be

just. For example, if on the same or similar facts (say the

deceased aged 40 years having annual income of Rs 45,000

leaving his surviving wife and child), one Tribunal awards Rs

10,00,000 another awards Rs 5,00,000, and yet another awards

Rs 1,00,000, all believing that the amount is just, it cannot be

said that what is awarded in the first case and the last case is

just compensation. "Just compensation" is adequate

compensation which is fair and equitable, on the facts and

circumstances of the case, to make good the loss suffered as a

result of the wrong, as far as money can do so, by applying the

well-settled principles relating to award of compensation. It is

not intended to be a bonanza, largesse or source of profit.

17. Assessment of compensation though involving certain

hypothetical considerations, should nevertheless be objective.

Justice and justness emanate from equality in treatment, Page No.# 13/16

consistency and thoroughness in adjudication, and fairness and

uniformity in the decision-making process and the decisions.

While it may not be possible to have mathematical precision or

identical awards in assessing compensation, same or similar

facts should lead to awards in the same range. When the

factors/inputs are the same, and the formula/legal principles are

the same, consistency and uniformity, and not divergence and

freakiness, should be the result of adjudication to arrive at just

compensation. In Susamma Thomas [(1994) 2 SCC 176 : 1994

SCC (Cri) 335] , this Court stated: (SCC p. 185, para 16)

"16. ... The proper method of computation is the multiplier

method. Any departure, except in exceptional and extraordinary

cases, would introduce inconsistency of principle, lack of

uniformity and an element of unpredictability, for the

assessment of compensation."

16. The method of computation of just compensation is now standardized

in claim cases. The Supreme Court preferred Davies (supra) principle,

which held that the actual pecuniary loss of each individual entitled to sue Page No.# 14/16

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. The

pecuniary loss has to be ascertained by first determining the monthly

income of the deceased, then deducting there from the amount spent on

the deceased, and thus assessing the loss to the dependents of the

deceased. The annual dependency assessed in this manner is then to be

multiplied by the use of an appropriate multiplier.

17. Basically only three facts need to be established by the claimants for

assessing compensation in the case of death:

(a) age of the deceased;

(b) income of the deceased; and

(c) the number of dependants.

18. The issues to be determined by the Tribunal to arrive at the loss of

dependency are:

(i) additions/deductions to be made for arriving at the

income;

Page No.# 15/16

(ii) the deduction to be made towards the personal living

expenses of the deceased; and

(iii) the multiplier to be applied with reference to the age of

the deceased.

19. If these determinants are standardized, there will be uniformity and

consistency in the decisions. There will be lesser need for detailed

evidence. It will also be easier for the insurance companies to settle

accident claims without delay.

20. Awarding compensation by a motor accident claims tribunal is not a matter

of charity. The tribunals are required to follow the standardize procedures for

awarding compensation.

21 Here I find that the tribunal did not follow the standardized procedure to

grant compensation to the claimant. The compensation granted by the tribunal is

based on the personal opinion of the tribunal. This is not permitted by law. I

have already mentioned hereinbefore that granting compensation in motor

accident claim cases is not a matter of charity nor the compensation awarded

become "just compensation" merely because the Tribunal considers it to be just.

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22. Now this Court is of the view that the impugned judgment is not

sustainable in law. Therefore, the judgment dated 27.05.2016 passed by the

MACT No.2, Kamrup(M), Guwahati in MAC case No. 1064/2014 is set aside.

23. The claim case is remanded to the learned tribunal for passing a fresh

judgment after hearing oral argument of both sides.

24. Send back the LCR.

JUDGE

Comparing Assistant