Gauhati High Court
New India Assurance Company Ltd vs Lata Agarwala And Ors on 31 March, 2022
Page No.# 1/22
GAHC010108552011
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : MACApp./205/2011
NEW INDIA ASSURANCE COMPANY LTD.
HAVING ITS REGISTERD OFFICE and HEAD OFFICE AT 87, M.G. ROAD,
FORT, MUMBAI AND ITS REGIONAL OFFICE AT G.S.ROAD, BHANGAGARH,
GUWAHATI AND REPRESENTED BY THE CHIEF REGIONAL MANAGER,
GUWAHATI REGIONAL OFFICE, G.S. ROAD, BHANGAGARH, GUWAHATI.
VERSUS
LATA AGARWALA AND ORS
W/O LATE KAILASH KR. AGARWAL
2:MISS NISHA AGARWAL
D/O LATE KAILASH KR. AGARWAL
ALL ARE RESIDENTS OF NEW MARKET COLE ROAD DIBRUGARH TOWN
P.O. and P.S. DIBRUGARH
DIST. DIBRUGARH
ASSAM.
3:BIKASH KR. JAIN
S/O SRI PRAKASH CHAN JAIN
R/O NEW MARKETCOLE ROAD DIBRUGARH TOWN
P.O. and P.S. DIBRUGARH
DIST. DIBRUGARH
ASSAM OWNER OF VEHICLE NO. AS-06/D-7254
4:SHANTILAL JAIN
S/O ALTE NEMICHAND JAIN
R/O NEW MARKET COLE ROAD
DIBRUGARH TOWN
P.O. and P.S.DIBRUGARH
DIST. DIBRUGARH
ASSAM DRIVER OF VEHICLE NO. AS-06/D-725
Advocate for the Petitioner : MR.R GOSWAMI
Advocate for the Respondent : MR.S K JAIN
Page No.# 2/22
Linked Case : MACApp./209/2011
LATA AGARWAL AND 2 ORS
W/O LATE KAILASH KUMAR AGARWAL.
2: SMTI. NISHA AGARWAL
D/O LATE KAILASH KUMAR AGARWAL
3: PRATEEK MORE
S/O LATE KAILASH KUMAR AGARWAL
ALL ARE RESIDENTS OF NEW MARKET COLE ROAD
DIBRUGARH
P.O. DIBRUGARH
P.S. DIBRUGARH
DIST. DIBRUGARH
ASSAM.
VERSUS
BIKASH KUMAR JAIN AND ORS
S/O SRI PRAKASH CHAND JAIN
R/O NEW MARKET COLE ROAD
DIBRUGARH
POST OFFICE and POLICE STATION
DIBRUGARH
DIST. DIBRUGARH
ASSAM.
2:SHANTILAL JAIN
S/O LATE NEMICHAND JAIN
R/O NEW MARKET COLE ROAD
DIBRUGARH
P.O. and P.S. DIBRUGARH
DIST. DIBRUGARH
ASSAM.
3:THE DIVISIONAL MANAGER
THE NEW INDIA ASSURANCE CO. LTD.
DIVISIONAL OFFICE
ROTARY ROAD
DIBRUGARH
P.O. and P.S. DIBRUGARH
DIST. DIBRUGARH
ASSAM.
------------
Advocate for : MR.K AGARWAL
Advocate for : MR.R GOSWAMI appearing for BIKASH KUMAR JAIN AND ORS
Page No.# 3/22
BEFORE
HON'BLE MR. JUSTICE DEVASHIS BARUAH
Date of hearing : 5/1/2022
Date of Judgment: : 31/03/2022
JUDGEMENT AND ORDER (CAV)
1. Both the appeals are taken up together for disposal as both the appeals
arise against the judgment and award dated 26/08/2011 in MAC Case
No.41/2005.
2. For the purpose of adjudication of the appeals, it is relevant to take note of
the facts involved. As the facts in both the appeals are same, the factual details
are narrated herein on the basis of the status of the parties as they stood before
the Tribunal below.
3. The deceased Kailash Kumar Agarwal was travelling as a pillion rider in a
Bajaj Motorcycle bearing Registration No.AS06D/7254 from New Market to
Chiring Chapori, Dibrugarh through Mancotta Road to visit Durga Puja Math
Pandal on 23/10/2004 at about 2 AM. As they reached the over bridge, the
Opposite Party No.2, who was riding the said motorcycle lost control and hit the
railing of the over bridge and fell down. Consequently, the said Kailash Kumar
Agarwal (since deceased) sustained multiple injuries and was taken to Srimanta
Shankardeva Hospital and then to Aditya Diagnostic Hospital and ultimately to
Sristi Hospital and Research Center Dibrugarh, where he succumbed to his
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injuries. The post mortem was carried out on 25.10.2014 and in the post
mortem report it was mentioned that the cause of death is coma resulting from
head injuries and all injuries are ante-mortem and caused by blunt force impact
consistent with the vehicular accident. On the basis of the information received
from Binod Kumar Agarwal, the brother of the deceased, about the accident,
Dibrugarh Police Station Case No.531/04 (G.R. Case No.1865/04) under Section
279/304A of the Indian Penal Code was registered. After the completion of the
investigation, the police submitted charge sheet under Section 279/304A IPC
against the Opposite Party No.2.
4. The claimants Nos.1, 2 and 3, i.e the wife, daughter and son of late
Kailash Kumar Agarwal, filed a claim petition before the Member of Motor
Accidents Claims Tribunal at Dibrugarh on 29.03.2005. The same was registered
as MACT Case No.41/2005. In the said claim petition, the claimant sought for a
compensation of Rs.31,12,743/- along with interest @ 15% per annum on the
award amount from the date of filing of the case till realization of the same as
well as the cost of the proceedings. The Opposite Party No.1 who was the
owner of the motorcycle filed his written statement stating inter alia that the
motorcycle bearing Registration No. AS06D/ 7254 was duly insured with the
New India Assurance Company Ltd. bearing Insurance Policy No.530100/31/
04/00419 which was valid from 18.10.2004 to 17.10.2005. It was mentioned
that on the date of the alleged incident, the policy covered the risk and the
Opposite Party No.2 had a valid driving license was riding the said motorcycle.
In the said written statement, it was also mentioned that without admitting to
any liability and claim, the amount claimed in the claim petition was highly
excessive, imaginary, exorbitant, exaggerated, arbitrary, fanciful and without any
basis.
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5. The Opposite Party No.2 who was the person, who was riding the
motorcycle also filed his written statement stating inter alia that the motorcycle
in question was duly insured with the New India Insurance Company Ltd. and
on the date of the alleged accident, the Insurance Policy was valid. It was also
mentioned that the Opposite Party No.2 have a valid driving license at the time
when the alleged accident happened. On a perusal of the written statement
filed by the Opposite Party No.2 would show that it is the verbatim reproduction
of the written statement filed by the O.P. No.1.
6. The O.P. No.3 i.e. the New India Assurance Company Ltd. filed their
written statement wherein they admitted that the motorcycle in question was
duly insured with the Opposite Party No.3 at the time when the alleged accident
took place. It was however, submitted that the said policy was issued to the
registered owner covering the risk including personal accident cover/benefit to
the owner cum driver for Rs.1,00,000 but excluding personal accident cover to
the pillion rider subject to the terms and conditions thereof. It was also
mentioned that the liability, if any is always subject to the terms, exceptions,
exclusions, and compliance of the drivers clause mentioned therein and also the
provisions of the Motor Vehicles Act, 1988 (for short the "Act of 1988") and the
rules framed therein under.
7. Taking into account, the contentions raised in the instant appeals, it is
relevant to take note of the manner in which the proceedings before the learned
Tribunal below had proceeded. It appears from the records that after the filing
of the claim petition on 29.03.2005, notice was issued on 19.04.2005 to the
opposite parties. It was only on 25.03.2006 that the pleadings stood completed
and 27.04.2006 was fixed for issues and documents. The record further reveals
that on 19.02.2007 as many as 7 issues were framed by the learned Tribunal
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below which for the sake of convenience are quoted herein below.
(i) Whether the claim petition is maintainable in law as well as facts in
present form?
(ii) Whether the claimants have right to file the claim petition?
(iii) Whether there was rash and negligent act of driving
on the part of the driver?
(iv) Whether the deceased was a gratuitous pillion rider and accident
occurred due to his own negligence?
(v) Whether the O.P. No.1 breached the terms of policy
condition?
(vi) Whether the claimants are entitled to get compensation ?
If so, from whom and what amount ?
(vii)To what reliefs the parties are entitled to ?
8. After the framing of the said issues on 19.02.2007, the case was thereafter
fixed for steps S.B.P.H. Thereafter, the records reveal that the claimants filed
their evidence on affidavit of 2 (two) witnesses on 31.08.2007 along with
various documents. It was only on 02.05.2009 that the claimants witnesses
were cross-examined and discharged. Relevant herein to note that on
22.08.2008 the counsels for the Opposite Party Nos.1 and 2 had already cross-
examined the claimant witnesses and on that date the cross-examination by the
Opposite Party No.3 could not be done as the learned counsel for the Opposite
Party No.3 sought for time. Vide order dated 02.05.2009, the learned Tribunal
below directed the opposite parties to file their evidence on 09.06.2009. The
Opposite Party No.3 filed the Evidence on Affidavit of its witnesses on
17.09.2009. However the Opposite Party No.2 sought for time. Vide an order
dated 05.12.2009 as the Opposite Party No.2 did not file his evidence on
affidavit, the Court fixed 08.01.2010 for cross-examination of the witness of the
Opposite Party No.3. The records further reveal that on 19.06.2010, the witness
of the Opposite Party No.3 were cross examined and discharged and the case
was fixed for arguments. Relevant herein to note that during this period the
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claimants side did not seek for any adjournment and adjournment was sought
on 03.04.2010 and 15.05.2010 as the witness of the Opposite Party No.3 could
not appear before the learned Tribunal. The Court below after discharging the
witness of the Opposite Party No.3 on 19.06.2010 fixed 30.07.2010 for
arguments. The records further show that on 30.07.2010, 27.08.2010,
01.10.2010 and 03.12.2010 the hearing was not done and it was only on
18.12.2010 that the learned Tribunal below after hearing both the parties fixed
the case for judgment on 06.01.2011. Thereafter the learned Tribunal did not
pass the judgment on 06.01.2011, 29.01.2011, 24.02.2011, 23.03.2011,
29.04.2011, 20.05.2011, 17.06.2011 and 22.07.2011. It was only on 26.08.2011
the judgment was passed which have been impugned in both the appeals.
9. In the said judgment dated 26.08.2011, the learned Tribunal below
decided the Issue Nos.1 and 2 in the favour of the claimants. As regards the
Issue No.3, it was held that the accident occurred due to rash and negligent
driving of the rider/driver of the motorcycle. In respect to the Issue No.4, which
pertains to as to whether the deceased was a gratuitous pillion rider and the
accident occurred due to his own negligence, it was held that the policy in
question issued by the Opposite Party No.3 was a comprehensive policy
including the premium for the pillion rider and no extra premium was required
and the opposite party insurance company failed to prove that the accident took
place due to the negligence of the deceased pillion rider. As regards, the Issue
No.5 as to whether the Opposite Party No.1 breached the terms and conditions
of the policy, the learned Tribunal below held that the Opposite Party No.1 did
not breach the terms of the policy conditions. As regards the Issue No.6 which
is vital for the purpose of the deciding the instant appeals, as to whether the
claimants were entitled to get compensation and if so, from whom and what
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amount, the learned Tribunal below held that in view of the notification/
guidelines issued by the Tariff Advisory Committee and the Insurance Regulatory
Development Authority (I.R.D.A), all insurance companies are liable in respect of
the occupants in private car with effect from 25.03.1977 and in respect of a
pillion rider on a scooter/motorcycle with effect from 02.06.1986 under the
Comprehensive/Package Policy. The Tribunal below further took into
consideration the circular dated 16.11.2009 and 03.12.2009 issued by the
I.R.D.A. reiterating the position as in terms with the circulars dated 25.03.1977
and 02.06.1986 and accordingly held that the Opposite Party No.3 Insurance
Company was liable to pay compensation. In arriving at the amount of
compensation to be payable, the learned Tribunal below took into consideration
that the salary of the deceased at the time of death was Rs.18,185 and came to
the opinion that the claimants were entitled to future prospects @ 25% and
applied the multiplier of 11 taking into consideration that the petitioner was 52
years on the basis of Ext.D which was the certificate issued by the employer of
the deceased stating that the date of birth of the deceased was 23.10.1952.
The Tribunal below further granted Rs.5,000/- on account of funeral expenses,
Rs.5,000/- on account of loss to state and Rs.5,000/- for loss of consortium.
Accordingly, the learned Tribunal below came to a finding that a total
compensation was Rs.20,15,460/-. In doing so, the learned Tribunal did not
grant the medical expenses of Rs.47,743/- as claimed as admittedly the entire
amount for medical expenses of the deceased was reimbursed by his employer
namely National Insurance Company Ltd. under the Staff Medi Claim as was
apparent from Ext.D. It was further directed that the opposite party Insurance
Company was at liberty to deduct the income tax according to the provisions of
Income Tax Act applicable to the present case.
Page No.# 9/22
10. On the basis of the above conclusions the learned Tribunal below held
that the total compensation to which the claimants were entitled to was
Rs.20,15,460/- which shall carry a simple interest @ 5% per annum from the
date of the judgment and the said amount was directed to be paid by the
Opposite Party No.3, insurance company within 3 (three) months from the date
of delivery of the judgment, failing which interest shall be 9% per annum from
the date of expiry of the 3 (three) months. It is further relevant to mention that
vide a separate order dated 26.08.2011, it was held by the learned Tribunal
below that the Claimants were entitled to simple interest @5% per annum
upon compensation amount from the date of judgment on the ground that as
per the records the claimants as well as the Opposite Party Nos.1 and 2 were
found responsible for causing delay in disposal of the case.
11. In the backdrop of the above aforementioned facts, let this Court take
into consideration the ground of objections as taken by the Opposite Party No.3,
Insurance Company in its appeal i.e. MAC Appeal No.205/2011. On a perusal of
the said grounds of objection it would reveal that that appellant in MAC Appeal
No.205/2011 urged that the assessment of the compensation without deduction
of income tax from the salary of the deceased was against the principle of just
and fair compensation as envisaged under the Act of 1988 and as such the
compensation so adjudged without deducting the applicable tax was liable to be
interfered with. It was also urged that the liberty granted to the Insurance
Company to make adjustment in the award after it has attended finality is
totally alien to the manner in which a compensation is to be computed.
12. On the other hand the claimants who happens to be the appellants in
MAC Appeal No.209/2011 are primarily aggrieved at not granting the interest as
claimed that too from the date of filing of the claim petition as it is the mandate
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of Section 171 of the Act of 1988 that whenever any Claims Tribunal allows a
claim for compensation made under the Act, such Tribunal may direct that in
addition to the amount of compensation, simple interest shall also be payable at
such rate and from such date not earlier than the date of making the claim as it
may specified in that behalf. It is the specific case of the claimants in their
Appeal i.e. MAC Appeal No.209/2011 that award of interest from the date of
making the claim petition is the rule and refusal thereof can only be on the basis
of exceptional circumstances and neither in the award nor in the separate order
dated 26.08.2011 there is any mention as to why the claimants have been held
to be guilty in the delay in disposal of the claim proceedings. In the said memo
of appeal i.e. MAC Appeal No.209/2011, it has also been urged that the
computation of the compensation have been wrongly made on the ground that
the age of the deceased was 49 years at the time of his death and as the
Tribunal below had taken the age to be 52 years, the multiplier and the future
prospects have been incorrectly applied and consequently the said computation
of the compensation has been erroneously done. It was also urged that the
medical expenses ought to have been granted though that the said medical
expenses were duly received from the employer under the Staff Medical Policy.
13. I heard the learned counsels for the parties and given my anxious
consideration to the matter. Upon perusal of the facts and the grounds urged by
the parties the following points of determination arises the consideration.
i) Whether the Tribunal below was justified in not taking into consideration
the income tax to which the deceased was liable to pay while computing the
income of the deceased ?
ii) Whether the Tribunal below was justified in granting interest only @5%
that too from the date of the judgment and not from the date on which the
claim petition was filed ?
iii) Whether the compensation awarded by the learned Tribunal below was a
just and fair compensation and if not what would be the just and fair
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compensation ?
14. It is no longer res integra that generally the actual income of the
deceased less Income Tax should be the starting point for calculating the
compensation and when the only income is in taxable range the words "Actual
Salary" should be read as "Actual Salary Less Tax". As such it is clear that if the
annual income comes within the taxable range, income tax is required to be
deducted for determination of the actual salary but while deducting income tax
from the salary, it is necessary to note the nature of the income of the victim. If
the victim is receiving income chargeable under the head "Salaries" one should
keep in mind that under Section 192(1) of the Income Tax Act 1961, any person
responsible for paying any income chargeable under the head "Salaries" shall at
the time of the payment, deduct income tax on the estimated income of the
employee from "Salaries" for that financial year. Such deduction is commonly
known as Tax Deducted at Source (T.D.S.). When the employer fails in default to
deduct the T.D.S. from the employee's salary as it is his duty to deduct the
T.D.S., then the penalty for non-deduction of T.D.S. is prescribed under Section
201(1-A) of the Income Tax Act 1961. Therefore, in case the income of the
victim is only from "Salary" the presumption would be that the employer under
Section 192(1) of the Income Tax Act 1961 has Deducted the Tax at Source
from the employee's salary. In case, if an objection is raised by any party, the
objector is required to prove by producing evidence such as last pay certificate
to suggest that the employer failed to deduct the T.D.S. from the salary of the
employee. In the backdrop of the above, let this Court take into consideration
the evidence led before the Tribunal below as to whether any tax was deducted
from the salary of the deceased. Ext.2 is the last pay certificate of the
deceased. It shows that the total salary was 18,185.51/-. From the deduction
column of the last pay certificate, it shows that there has been deductions on
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account of P.F, V.P.F, G.T.I.S., Professional Tax and others, but there has been no
deduction on account of income tax. Under such circumstances as the actual
income of the deceased, less income tax should be the starting point for
calculation of the compensation and the same having not been done, this Court
is of the opinion that the computation of the compensation having been based
on Rs.18,185/- without deducting Income Tax as well as the Professional Tax
was erroneous. At this stage, it may be further relevant to take note of that the
relevant Income Tax slab for the assessment year 2010-2011. Income up to
Rs.1,60,000/- the income tax was nil; for the amount from 1,60,000/- to
3,00,000/- it was 10% of the amount exceeding Rs.1,60,000/- and for
Rs.3,00,000/- to 5,00,000/-, Rs.14000/- +20% of the amount exceeding
3,00,000/-. As the gross salary per month was Rs.18,185/-, the gross salary per
year in the case of the deceased would be Rs.2,18,220/-. The deduction on
account of Professional Tax which was @Rs.205/- per month and the yearly
being Rs.2,460/-. Accordingly the taxable income of the deceased was
Rs.2,15,760/-. Being so, as the amount of the taxable income was beyond
Rs.1,60,000/-, the learned Tribunal below ought to have taken into
consideration that the deduction of account of income ought to have been
made, more so when on a perusal of Ext.2, it clearly shows that there was no
deduction on account of income tax. Having said so, this Court therefore finds
that the computation of the income of the deceased without taking into
consideration the income tax have resulted in an erroneous computation of the
compensation.
15. The second point of determination relates to whether grant of interest
@5% was justified and that too from the date of the judgment and award. The
facts above mentioned would clearly show that although the claim was filed on
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29.03.2005, the notice was issued on 19.04.2005. The pleadings were
completed only on 25.03.2006. It was only on 19.02.2007 that the issues were
framed and the case was fixed for S.B.P.H. It was on 31.08.2007 that claimants
filed their evidence on affidavit. The record would show that on 02.05.2009 the
claimants witnesses were cross-examined and discharged. Relevant to take note
of that on 22.08.2008 the witnesses of the claimants were already cross-
examined by the O.P. Nos.1 and 2 and the further cross-examination of the said
witnesses were deferred at the instance of the O.P. No.3. The Court below on
02.05.2009 after discharging the claimant witnesses fixed 09.06.2009 for the
purpose of filing the Evidence on Affidavit of the witnesses of the opposite
parties. On 17.09.2009, the Opposite Party No.3 filed their evidence on affidavit
and the evidence of O.P No.2 stood closed on 05.02.2009 on their failure to file
their evidence. Thereafter 08.01.2010 was fixed for cross-examination of the
witness of the O.P. No.3. It is relevant to note that on 08.01.2010, 03.04.2010
and 15.05.2010 the Opposite Party No.3, Insurance Company sought for time
on the ground of non-availability of the witness. On 06.02.2010 and 02.03.2010,
the cross-examination of the witness of the O.P. No.3 could not be done for no
fault of the claimant. Thereafter, it further appears from the records that on
19.06.2010 after the cross-examination of the O.P. was over the case was fixed
on 30.07.2010 for arguments. On 18.12.2010 the arguments were completed
and thereafter only on 26.08.2011 the learned Tribunal below passed the
judgment and award. It further appears on a perusal of the award, there is no
mention whatsoever as to why the learned Tribunal came to a finding that the
claimant is entitled to interest @5% per annum and that too from the date of
judgment. However, in the separate order dated 26.08.2011 the learned
Tribunal below again did not come to a finding as to why interest @5% per
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annum was adjudged as the applicable interest on the compensation. In the
said separate order it was mentioned that the records revealed that the
claimants as well as the Opposite Party Nos.1 and 2 were found responsible for
delay of the case and as such, the interest so granted upon the compensation
amount was from the date of claim petition. This finding of the Tribunal below
that the record reveals that the claimant as well as the Opposite Party No.2
causing delay in disposing of the case is perverse inasmuch as the records
would show that the claimant under no circumstances can be said to have
caused the delay in the disposal of the said claim proceedings. On the other
hand, the records should indicate that the Opposite Party Nos.1, 2 and 3 were
responsible for causing the delay. It is also relevant herein to note that on
18.12.2010 the arguments were concluded and the learned Tribunal below had
taken more than 8 (eight) months to deliver the judgment. As such this Court is
of the opinion that the finding arrived at the separate order dated 26.08.2011
that the claimant along with the Opposite Party Nos. 1 & 2 were responsible for
causing delay in disposing of the case suffers from perversity and accordingly
stands interfered with.
16. Now the next question which arises as to whether the learned Tribunal
below was justified in granting simple interest @5% per annum. From the
award as well as the separate order dated 26.8.2021 nothing has been reflected
on what basis the learned Tribunal had come to a finding as regards granting
the interest @5% per annum. Section 171 of the M.V. Act being relevant is
quoted herein below.
"171. Award of interest where any claim is allowed.--Where any Claims
Tribunal allows a claim for compensation made under this Act, such Tribunal
may direct that in addition to the amount of compensation simple interest shall
also be paid at such rate and from such date not earlier than the date of
making the claim as it may specify in this behalf."
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17. A perusal of the above quoted section stipulates that the Claim Tribunal
while allowing a claim for compensation made under the Act may direct that in
addition of amount of compensation simple interest shall also be paid at such
rate and from such date not earlier than the date of making the claim as it may
specify in that behalf. A perusal of Section 171 of the Act of 1988 shows that
there is statutory mandate to award interest when a claim is allowed. The
purpose for awarding interest is to put pressure on the relevant person not to
delay in making the payment and to compensate the victim or his dependents at
least to some extent for such delay as may occur by way of interest. Even
though the expression "May" is used, a duty is laid on the Claims Tribunal to
consider the question of interest separately with regard to the facts and
circumstances of the case. At this stage, it may be relevant herein to take note
of a judgment of the Supreme Court rendered in the case of Puttamma and
others Vs. K.L. Narayana Reddy and others reported in (2013) 15 SCC page 45
wherein the Supreme Court took into consideration the question of grant of
interest and laid down certain parameters which ought to be taken into
consideration while granting interest. Paragraphs No. 59 to 64 of the said
judgment being relevant is quoted herein below:
"Grant of Interest
59. Section 171 of the 1988 Act deals with the award of interest where
any claim is allowed, it reads as follows:
"171, Award of interest where any claim is allowed. -Where any claims
Tribunal allows a claim for compensation made under this Act, such
Tribunal may direct that in addition to the amount of compensation
simple interest shall also be paid at such rate and from such date not
earlier than the date of making the claim as it may specify in this behalf."
Under the said provision no rate of interest has been fixed and its duty is
bestowed upon the Tribunal to fix the rate of interest.
60. The rate of interest provided and granted under the different Acts is
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as under:
60.1 Section 4-A(3) of the Workmen's Compensation Act, 1923 provides
payment of interest @12% per annum or at such higher rate not
exceeding the maximum of the lending rate of the scheduled banks for
the delayed payment of compensation.
60.2 The Consumer Protection Act even though provides no provision for
grant of interest, this Court has granted interest by invoking Section 3 of
the Interest Act and Section 34 CPC and has awarded interest @12% to
18% for delayed payment.
60.3. The Land Acquisition Act provides for the interest for delayed
payment @9% for the first year and 15% for the rest of the years.
60.4 The Arbitration and Conciliation Act, 1996 provides for interest @
18% per annum under Section 31(7) of the Act.
61. This Court in Kaushnuma Begum Vs. New India Assurance Company
Ltd. Noticed that the nationalized banks are granting interest @ 9% on
fixed deposit for one year and held as follows: (SCC p.16, para 24)
"24. Now, we have to fix up the rate of interest. Section 171 of the M.V.
Act empowers the Tribunal to direct that 'in addition to the amount of
compensation simple interest shall also be paid at such rate and from
such date not earlier than the date making the claim as may be specified
in this behalf'. Earlier, 12% was found to be the reasonable rate of simple
interest. With a change in economy and the policy of Reserve Bank of
India the interest rate has been lowered. The nationalized banks are now
granting interest at the rate of 9% on fixed deposits for one year. We,
therefore, direct that the compensation amount fixed hereinbefore shall
bear interest at the rate of 9% per annum from the date of the claim
made by the appellants. The amount of Rs.50,000/- paid by the
Insurance Company under Section 140 shall be deducted from the
principal amount as on the date of its payment, and interest would be
recalculated on the balance amount of the principal sum from such date."
62. This Court in Abati Bezbaruah Vs. Geological Survey of India noticed
that varying rates of interest are being awarded by the Tribunals, the
High Courts and this Court. In the said case, this Court held that the rate
of interest must be just and reasonable depending on the facts and
circumstances of the case and should be decided after taking into
consideration relevant factors like inflation, change in economy, policy
being adopted by Reserve Bank of India from time to time, how long the
case is pending, loss of enjoyment of life, etc.
63. In Supe Dei Vs. National Insurance Company Ltd. This Court held
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that the proper interest would be 9% per annum.
64. In view of the aforesaid provisions of the 1988 Act of (Section 171)
and the observation of this Court as noticed above, we keep this
question open for Tribunals and Courts to decide the rate of interest after
taking into consideration the rate of interest allowed by this Court in
similar cases and other factors such as inflation, change in economy,
policy adopted by Reserve Bank of India from time to time and the
period since when the case is pending."
18. From the above quoted paragraphs, one can ascertain that the rate of
interest must be just and reasonable depending on the facts and circumstances
of each case and should be decided after taking into consideration relevant
factors like inflation, change in economy, policy being adopted by the Reserve
Bank of India from time to time, how long the case is pending, loss of
enjoyment of life etc. Relevant to take note that in the said case the Supreme
Court granted interest @ 12% per annum from the date of filing of the Claim
Petition. In that view of the matter the law as it stands insofar as granting of
interest under Section 171 of the Act of 1988 is concerned, the Supreme Court
had in the said case left it open for the Tribunals and Courts to decide the rate
of interest after taking into consideration the rate of interest allowed by this
Supreme Court in the similar cases and other factors such as inflation, change in
economy, policy adopted by the Reserve Bank of India from time to time and
the period since when the case is pending. In that view of the matter, this Court
deems to defer the decision on the fixation of the rate of interest at the time of
dealing with the point of determination No.3. However, this Court categorically
observes that the Tribunal below did not take into consideration any factor while
granting the interest of 5% as the same would appear on a perusal of the
impugned judgment and award and the separate order dated 26.8.2011.
Consequently this Court interferes with the rate of interest awarded by the
learned Tribunal below as well as granting of the interest from the date of
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judgment and not from the date of filing of the Claim Petition.
19. Now, let this Court take into consideration the third point for
determination which pertain to as to what would be the just and fair
compensation inasmuch as the Tribunal below as already observed hereinabove
while dealing with the point of determination No.1 had erroneously arrived at
the actual income of the deceased without taking into account the income tax
which ought to have been deducted. At it would appear from Ext.2 the gross
salary per month of the deceased was Rs.18,185/- per month and accordingly
the gross salary per year would be Rs.2,18,220/-. The deduction on account of
Professional Tax for a year would be Rs.2460/- calculating @205/- per month
and therefore, the total taxable income was Rs.2,15,760/-. As already noted
hereinabove for the amount above, Rs.1,60,000/-, there would be tax 10%.
Accordingly, the tax would be 5,576/-. In addition to that there was Education
Cess of 2% and Secondary and Higher Education Cess of 1% on the tax and
adding the said Cess the total tax which ought to be deducted is Rs.5,748/-. On
the basis thereof, the actual income would be 2,10,012/-.
20. Taking into consideration from Ext.D that the deceased was 52 years as
on the date when he expired and apply ratio as laid down by the Constitution
Bench in the case of National Insurance Company Ltd. Vs. Pranay Sethi reported
in (2017) 16 SCC 680 there should be an addition of 15% towards the future
prospects. Further to that in terms with the judgment of the Supreme court in
the case of Sarala Verma and Others Vs. Delhi Transport Corporation and
Another reported in (2009) 6 SCC 121 and more particularly to paragraph No.30
1/3rd has to be deducted on account of personal expenses as the deceased was
survived by his wife and two children. Furthermore, in terms of paragraph
No.42 of the said judgment in the case of Sarala Verma (supra) the appropriate
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multiplier would be 11 taking into consideration that the deceased was 52 years.
In the judgment of Pranay Sethi (supra) the Supreme Court held at paragraph
59.8 that the reasonable figures on conventional heads namely loss of state,
loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/-,
and Rs.15,000/- respectively and the said amount should be enhanced @ 10%
in every 3 (three) years. The said judgment was delivered on 31.10.2017 and
accordingly the said amounts of 15,000/-, 40,000/-, and 15,000/- on account of
loss of state, loss of consortium and funeral expenses ought to be enhanced by
10% in the instant case. Subsequent to the said exposition of law in Pranay
Sethi (supra), the Supreme Court in various judgments i.e. in the case of
Magma General Insurance Company Ltd. Vs. Narayana reported in (2018) SCC
130, New India Assurance Company Ltd. Vs. Somwati and Others reported in
(2019) SCC 644 as well as in United India Insurance Company Ltd. Vs.
Sathinder Kaur alias Sathbindar Kaur and Others reported in A.I.R. 2020 SCC
376 have categorically held that loss of consortium would not only include
spousal consortium but also parental consortium and filial consortium.
Paragraphs 21 to Paragraph 23 of the judgment of the Supreme Court in the
case of Magma General Insurance Company Ltd. (supra) being relevant is
quoted herein below.
"21.A Constitution Bench of this Court in Pranay Sethi dealt with the
various heads under which compensation is to be awarded in a death
case. One of these heads is loss of consortium. In legal parlance,
"consortium" is a compendious term which encompasses "spousal
consortium", "parental consortium" and "filial consortium". The right to
consortium would include the company, care, held, comfort, guidance,
solace and affection of the deceased, which is a loss to his family. With
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respect to a spouse, it would include sexual relations with the deceased
spouse.
21.1 Spousal consortium is generally defined as rights pertaining to the
relationship of a husband-wife which allows compensation to the
surviving spouse for loss of "company, society, cooperation, affection,
and aid of the other in every conjugal relation.
21.2 Parental consortium is granted to the child upon the premature
death of a parent, for loss of "parental aid, protection, affection, society,
discipline, guidance and training".
21.3 Filial consortium is the right of the parents to compensation in the
case of an accidental death of a child. An accident leading to the death
of a child causes great shock and agony to the parents and family of the
deceased. The greatest agony for a parent is to lose their child during
their lifetime. Children are valued for their love, affection, companionship
and their role in the family unit.
21. Consortium is a special prism reflecting changing norms about the
status and worth of actual relationships. Modern jurisdictions world-over
have recognized that the value of a child's consortium far exceeds the
economic value of the compensation awarded in the case of the death of
a child. Most jurisdictions therefore permit parents to be awarded
compensation under loss of consortium on the death of a child. The
amount awarded to the parents is a compensation for loss of the love,
affection, care and companionship of the deceased child.
22. The Motor Vehicles Act is beneficial legislation aimed at providing
relief to the victims or their families, in cases of genuine claims. In case
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where a parent has lost their minor child, or unmarried son or daughter,
the parents are entitled to be awarded loss of consortium under the head
of filial consortium. Parental consortium is awarded to children who lose
their parents in motor vehicle accidents under the Act. A few High Courts
have awarded compensation on this count. However, there was no clarity
with respect to the principles on which compensation could be awarded
on loss of filial consortium."
21. Thus on the basis of the above quoted judgment in the case of Magma
General Insurance Company Ltd. (supra), each of the claimants are entitled to
44,000/- each on the head of loss of consortium. Accordingly, the compensation
so awarded by the learned Court below is modified has herein under.
Head Compensation
Awarded
1) Actual Income 2,10,012/-
2) Future Prospects @15% 31,501.80/-
3) Less 1/3rd for Personal Expenses 80504.60/-
Multiplicand 1,61,009.20/-
4) Multiplier 11 x Multiplicand 1771101.20/-
(161009.20 x 11)
5) Loss of Consortium including 1,32,000/-
Spousal and Parental Consortium
(44,000/- x 3)
6) Loss of Estate 16,500/-
7) Funeral Expenses 16,500/-
Total 1936101.20/-
22. Now coming to the question of grant of interest, this Court had already
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observed that the learned Court below had granted interest @5% without
taking into consideration in factors which are relevant. As have already been
decided hereinabove in respect of point of determination No.2, in the instant
case, the deceased expired in the year 2004 and thereafter, the claimants have
been pursuing the instant litigation since the past 18 years. Taking into
consideration, the recent trend of the judgments of the Supreme Court and the
present inflation rate, this Court deems it proper to enhance the rate of interest
to 9%. Further taking into consideration the materials on record, this Court
further deems it proper that the said interest shall be payable from the date of
filing the Statement of the Claim. The records also shows that an amount of Rs.
14,10,822/- was deposited before the learned Tribunal below on 3.2.2012 and it
was recorded in the order dated 28.2.2012 by the learned Tribunal that the said
deposit of Rs. 14,10,822/- was the compensation amount less the 30% Tax
Deducted at source.
23. Be that as it may, this Court in view of the findings abovementioned,
directs the modified Award of Rs. 19,36,101.20/- shall carry an interest @ 9%
per annum from the date of filing of the claim petition. The Insurance Company
herein who is liable to pay the said amount shall deposit the compensation after
deducting the payment already made within a period of six weeks from today.
24. With the above observations and directions, both the Appeals stands
disposed. However, no costs. The Registry is directed to return the L.C.R. to the
Tribunal below.
JUDGE
Comparing Assistant
