Gujarat High Court
Tata Aig General Insurance Co. Ltd vs Bhumi Hareshkumar Ramnani on 25 August, 2025
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C/FA/4116/2024 JUDGMENT DATED: 25/08/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4116 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
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TATA AIG GENERAL INSURANCE CO. LTD.
Versus
BHUMI HARESHKUMAR RAMNANI & ORS.
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Appearance:
MS KIRTI S PATHAK(9966) for the Appellant(s) No. 1
JIGNESHKUMAR M NAYAK(8558) for the Defendant(s) No. 5,7
MR DK CHAUDHARI(5361) for the Defendant(s) No. 6
MR RATHIN P RAVAL(5013) for the Defendant(s) No. 8
MR.HIREN M MODI(3732) for the Defendant(s) No. 1,2,3,4
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 25/08/2025
ORAL JUDGMENT
1. The present appeal is filed at the instance of the Insurance
Company under Section 173 of the Motor Vehicles Act, 1988
(hereinafter referred to as the "Act, 1988") being aggrieved
and dissatisfied with the impugned judgment and award dated
05.09.2024 passed by the learned Motor Accident Claims
Tribunal, Ahmedabad (Rural) in MACP No.1156 of 2020. By
the said impugned judgment and award, the Tribunal has
partly allowed the claim petition preferred by the present
respondents no. 1 to 4 - original claimants under Section 166
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of the Act, 1988, thereby holding them entitled to recover an
amount of Rs.55,37,476/- from the original opponent nos. 1
and 2, jointly and severally together with interest at the rate
of 9% from the date of filing of claim petition till its actual
realization, along with proportionate cost. The Tribunal has
further exonerated the original opponents no. 3 to 6 from
their liability to pay compensation. Hence, the present appeal
at the instance of the appellant - Insurance Company mainly
disputing the awarding of amount of compensation.
2. The Coordinate Bench noticing the only issue of income of
the deceased being determined on higher side has vide order
dated 28.11.2024 issued notice for final disposal. In the
meantime, the application for stay preferred by the present
appellant- Insurance Company, the Court had stayed the
operation, execution and implementation of the impugned
judgment and award passed by the Tribunal on condition to
deposit of entire decreetal amount, along with the costs and
interest, by the applicant Insurance Company before the
concerned Tribunal. The Coordinate Bench had also issued
appropriate direction about disbursement of the 30% of the
amount deposited and remaining 70% of the amount to be
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invested in the Fixed Deposits Scheme with any Nationalized
Bank initially for a period of five years, which was further
directed to be renewed, pending the appeal.
3. In response to the aforesaid notice, learned advocate Mr.
Hiren Modi has entered his appearance on behalf of the
respondent nos. 1 to 4 - original claimants and Mr. Jignesh
Nayak, learned advocate has entered his appearance on
behalf of respondent nos. 5 and 7, Mr. D.K. Chaudhari,
learned advocate has entered his appearance on behalf of
respondent no.6 and Mr.Rathin Raval, learned advocate has
entered his appearance on behalf of respondent no.8. The
matter was taken up for hearing with the assistance of the
learned advocates for the respective parties on record.
4. Learned advocate Ms. Pathak, appearing on behalf of the
appellant has vehemently assailed the impugned judgment
and award by submitting that the Tribunal committed grave
error in considering the income tax returns of the deceased,
more particularly of financial year 2016-2017, produced on
record at Exhibit 43, as the basis for the purpose of
determination of income of the deceased at the time of
accident which had admittedly taken on 16th February 2020.
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According to learned advocate, admittedly, no proof of income
was led by the original claimants about the income of the
deceased prevailing at the time of occurrence of accidents
i.e. on 16th February 2020. She has therefore submitted that
as per the settled legal position, the Tribunal ought to have
followed the criteria of minimum wages for the purpose of
determination of the income of the deceased at the time of the
occurrence of accident. Learned advocate had invited my
attention to the findings and reasons assigned by the Tribunal
and has submitted that no reasons have been assigned by the
Tribunal to consider the gross income for the financial year
2016-17 as reflected in the income tax returns of FY 2016-17
produced on record at Exh.43 for the purpose of
determination of the income of the deceased. The reliance was
placed on the decision of the Hon'ble Supreme Court In the
case of National Insurance Company Ltd versus Pranay
Shetty and others, reported in (2017) 16 SCC, 680.
According to the learned advocate, the Hon'ble Supreme
Court while considering the issue of future prospects, has
observed that though Section 168 of the Act deals with the
concept of just compensation, the same has to be determined
on the foundation of fairness, reasonableness and equitability
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on acceptable legal standards. She has further emphasised on
the observation made by the Hon'ble Supreme Court that
though the aim is to achieve an acceptable degree of
proximity to arithmetical precision, the same has to be on the
basis of material brought on record in every individual case.
She has therefore submitted that the determination of the
income has to be on the foundation of evidence brought on
record as regards the age as well as the income of the
deceased. She has further submitted that the heavy burden
lies upon the claimants to prove the income of the deceased as
on the date of occurrence of accident by leading evidence.
Learned advocate had also emphasised on the doctrine of
"actual income" at the time of the death of the deceased.
According to her, the Hon'ble Supreme Court in the aforesaid
decision has held that the Courts are bound to follow the
doctrine of actual income at the time of death and not to add
an amount with regard to future prospects to the income for
the purpose of determination of multiplicant. Thus, according
to her, the Tribunal committed grave error in ignoring the
aforesaid principles of doctrine of actual income while
determining the income of the deceased on notional basis, in
absence of any direct evidence of proof of income of the
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deceased at the relevant point of time being produced on
record. She has therefore urged this Court to apply the
prescribed minimum wages notified by the State Government
at the time of occurrence of accident for the purpose of future
prospects.
5. Per contra, learned advocate Mr. Hiren Modi appearing for
the respondents- original claimants has vehemently argued
that in absence of any controversy with regard to foundational
facts of the case, it is an undisputed fact that the deceased
was aged around 42 years at the time of accident and was
engaged in business of vegetable on large scale. The aforesaid
fact has been established by the original claimants by
bringing on record the income tax returns filed by the
deceased. The attention of this Court was invited to the fact
that the income tax returns are spread over for long years
has been brought on record, which starts from Financial Year
2011-12, 2012-13, 2014-15, 2015-16 and 2016-17. Referring
to the aforesaid income tax returns produced on record at
Exhibit No. 43, learned advocate had further drawn my
attention to the fact that the gross income of the deceased for
FY 2011-12 as reflected in the ITR is Rs.151,358/-, Rs.
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1,70,175/- (FY 2012-13), Rs.3,22,670/- (FY2014-15),
Rs.3,81,660/-, (FY 2015-16) and Rs. 4,15,450/- (FY 2016-17).
He has therefore submitted that there is a consistent rise in
the gross income of the deceased across these years. He has
further clarified that for some reasons, unfortunately, the
deceased has not filed the income tax returns for last two
preceding years from the date of the accident, however, that
does not mean that he was not having any income at all
during the aforesaid years. He has tried to contradict the
submission of learned advocate to consider the minimum
wages by contending that the legal heirs of the deceased
could have very well subsequently submitted the income tax
return of the deceased in order to receive higher amount of
compensation, however, they have chosen not to take such
undue benefit of the death of the deceased. He has therefore
submitted that no error can be found with the approach of the
Tribunal who has considered the income tax returns of FY
2016-17 as the base group of income for the purpose of
determining the base income of the deceased at the time of
the occurrence of accident. In support of his submission,
learned advocate had relied upon the decision of Hon'ble
Supreme Court in the case of Malarvizhi and others versus
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United India Insurance Company reported in 2020 ACJ
526 and has pointed out that the facts suggest that the
accident had taken place on 25th May 2001 and the claimants
have brought on record the income tax returns of the years
1995 to 2001. The Hon'ble Supreme Court while upholding
the decision of the High Court which had proceeded to
determine the income reflected in the income tax return of
assessment year 1997-1998, which was prior to 2 years of the
date of occurrence of accident by observing that the
determination must proceed on the basis of income tax
returns were available. The Hon'ble Supreme Court held that
the income tax returns is a statutory document on which
reliance can be placed to determine the annual income of the
deceased. He has therefore submitted that even in case where
the income tax return of the date of occurrence of accident
was made available on record, the Hon'ble Supreme Court has
upheld the approach of the High Court in considering the
income tax returns reflecting the highest income of the
deceased for the purpose of determining the income of the
deceased as on the date of occurrence of accident. He has
therefore submitted that applying the aforesaid principles in
the facts of the case, the Tribunal having noticed the gross
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annual income of the deceased of Financial Year 2016-17
(Exhibit 43), reflecting the highest income of the deceased,
has rightly considered the same for the purpose of
determining the future prospects. He has also relied upon the
unreported decision of the Division Bench of this Court in the
case of Rajeshwariben Vs. Yunusbhai order dated 6th May
2022 passed in First Appeal No. 579 of 2019 and allied
matters. It was pointed out that in the facts of the said case,
the accident had taken place on 9th April 2011. The income
tax returns filed for 2003 to 2008 were placed for
consideration. The last returns filed by the deceased brought
on record relate to FY 2007-2008. The heirs and legal
representative of the deceased had thereafter chosen to
submit the last two returns which were filed after the date of
accident. The returns indicated a hike in the income. The
Hon'ble Division therefore ignored the aforesaid last two
returns filed by the heirs of the deceased by taking it as an
artificial hike in the income and has chosen to consider the
income tax returns of FY 2007-2008 for the purpose of
determining future prospects. He has therefore submitted
that there is no straight jacket formula to be applied in case if
the income tax returns are made available on record to
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determine the amount of income based on the last returns
filed. He has therefore submitted that considering the
benevolent scheme of the Act, the legislation in its wisdom
has left the discretion with the Tribunal's / Courts to
determine the income in the facts of each case individually
and independently, basically guided by the evidence brought
on record. He has therefore urged this Court to dismiss the
present appeal.
6. Having submitted so, the learned advocate had further
urged this Court to invoke the powers conferred under Order
XLI, Rule 33 of the Code of Civil Procedure to modify the
impugned judgment and award passed by the Tribunal, more
particularly, by considering the amount of compensation
awarded under the head of loss of consortium is concerned.
The attention of this Court was invited to the fact that the
claimants included, apart from the widow of the deceased,
three minor children. Mr. Modi, learned advocate for the
respondents- original claimants has placed reliance upon the
decision of the Hon'ble Supreme Court in the case of
Surekha w/o Rajendra Nakhate vs. Santosh/ so Namdeo
Jadhav reported in (2021) 16 SCC 467 as well as the
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judgment dated 19.4.2024 passed by the Division Bench of
this Court in the case of ICICI Lombard General Insurance
Company Limited vs. Legal heirs of the deceased Bharat
Narshibhai Parmar and ors rendered in First Appeal
No.1840 of 2015 and the decision of the learned Single
Judge in the case of New India Assurance Company
Limited vs. Zaverbhai @Durlabbhai Chhanabhai Ahir
and Ors rendered in First Appeal No.912 of 2015 dated
20.12.2024. He has therefore submitted that considering the
settled principles of law laid down by the Constitutional Bench
in the case of Pranay Sethi (supra) and revisited by the
Hon'ble Supreme Court in the case of Magma General
Insurance Co. Ltd vs. Nanu Ram Alias Chuhur Ram &
Ors reported in (2018)18 SCC 130, each of the claimants
shall be entitled to the amount of compensation under the
head of loss of consortium. The concept of consortium as
evaluated by the Hon'ble Supreme Court is not only confined
to spousal consortium, but also children can claim the loss of
a parent's consortium- parental consortium. He has therefore
urged this Court to consider a 10% rise to the amount of
consortium awarded and to enhance such amount from Rs.
40,000/- to Rs.1,93,600/-.
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7. In rejoinder, learned advocate Ms. Pathak appearing for the
Insurance Company has vehemently objected to the aforesaid
submissions of learned advocate for the original claimants. It
was submitted that in absence of any appeal or cross
objection being filed by the original claimants, the other
components of quantum of compensation has attained the
finality and therefore, this Court may not exercise its
discretion by invoking the powers conferred under Order XLI
Rule 33 of the Code of Civil Procedure. In support of her
submission, reliance was placed on the decision of the Hon'ble
Supreme Court in the case of Samundra Devi and Others
vs. Narendra Kaur and others reported in (2008) 9 SCC
100 as well as decision of the Hon'ble Supreme Court in the
case of Lakshmanan and Others vs. G.Ayyasamy reported
in (2016) 13 SCC 165 which has followed the earlier
decision in the case of Samundra Devi and Others (supra).
Referring to the relevant observations of the Hon'ble Supreme
Court, learned advocate has submitted that this Court may not
exercise the power under Order XLI Rule 33 of the Code
ignoring the legal interdict laid down in the aforesaid
decisions. She has therefore, reiterated her prayer to allow
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the appeal and not to grant any further relief by enhancing
the amount of compensation as prayed for the first time in the
appeal preferred at the instance of the Insurance Company.
8. Learned advocate appearing for the respondent Insurance
Company though being exonerated from their liability to pay
amount of compensation, have supported the findings and
reasons assigned by the Tribunal.
9. I have given thoughtful consideration to the aforesaid
submissions of the learned advocates appearing for the
respective parties, in light of the findings and reasons
assigned by the Tribunal as well as settled principles of law
laid down by the respective Courts as relied upon by the
learned advocates for the respective parties. The only issue
which falls for consideration of this Court in the present
appeal is whether in absence of income tax returns of the
deceased being produced on record, in relation to the FY
2019-20, corresponding year in which accident had occurred,
the Tribunal was right in considering the income tax returns
of FY 2016-17 for the purpose of assessment of income of the
deceased on the date of accident viz. 16.2.2020?
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10. At the outset, it would be required to be noted that looking
to the limited controversy raised by the appellant - Insurance
Company, the other issues which were decided by the
Tribunal i.e. issue of negligence of driver of offending vehicle -
insured vehicle of the appellant Insurance Company and the
liability of the owner of the insured vehicle, in absence of any
challenge, has attained the finality. The foundational facts
including age of the deceased, the nature of the business of
the deceased has remained uncontroverted. Upon
appreciation of the original Record and proceedings, in light
of the findings and reasons assigned by the Tribunal, this
Court is of the view that the Tribunal has rightly considered
the age of the deceased as 42 years as noted by the Tribunal.
The Pan Card of the deceased has been produced on record at
Exh.37. Even the driving license of the deceased has also been
produced on record at Exh.36. On bare appreciation of the
aforesaid documentary evidence from the record, the date of
the birth of the deceased is indicated as 02.09.1978 whereas
the accident had taken place on 16.02.2020. Thus, the age of
the deceased at the time of occurrence of the accident was 41
years 5 months i.e. approximately 42 years. As regards the
nature of vocation of the deceased is concerned, it has
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transpired on record, more particularly, the evidence of the
widow of the deceased and the corroborative material in the
nature of income tax returns produced on record which is
established by the original claimants that the deceased was
doing business as vegetable vendor on larger scale.
10.1. Having noted the aforesaid factors, coming to the core
controversy raised in the present appeal, as regards the issue
of actual income of the deceased is concerned, the income tax
return filed by the deceased from AY 2011-12 (mark 27/8), AY
2012-13 (mark 27/9), AY2014-14 (mark 27/10), AY 2015-16
(mark 27/11) and 2016-17 (Exh.43) has been produced on
record. As rightly pointed out by learned advocate for the
respondents- original claimants that on bare comparison of
the gross income of the deceased spread across aforesaid
Assessment Years, it is evident that the gross income of the
deceased for the AY 2016-17 relates to the highest income of
the deceased amongst these years. On the other hand, it is
undisputed that no proof of income in the form of ITR has
been produced on record as on the date of occurrence of
accident i.e. AY 2019-20. The seminal issue therefore, arises
for consideration of this Court is as to whether the Tribunal
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was justified in considering the income of the tax return of the
year 2016-17 as proof of the base income of the deceased for
the purpose of future prospects. In order to appreciate the
controversy raised at the instance of the Insurance Company,
it would be relevant to look into the relevant observation of
Hon'ble Supreme Court in the case of the Pranay Sethi
(supra). The Constitutional Bench was constituted in order to
answer the reference raised by the two Judges Bench of the
Hon'ble Supreme Court in the case of National Insurance
Company Limited vs. Pushpa and others reported in
(2015) 9 SCC 166 noticing the cleavage of opinion prevailing
in light of two different views expressed by the Hon'ble
Supreme Court in its earlier decision in the case of
Reshmakumari and others vs. Madan Mohan and
Another reported in (2013) 9 SCC 65 and in the case of
Rajesh and others vs. Rajbir Singh and others reported in
(2013) 9 SCC 54. The principal controversy involved in the
aforesaid decision, which was to be decided by the
Constitutional Bench was on the appropriate multiplier to be
applied in case of claim petition preferred under Section 166
of the Motor Vehicles Act, more particularly, in fatal cases and
deduction for personal and living expenses to be considered
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while determining the just and proper compensation. In the
process, the Constitutional Bench had also ruled on grant of
loss of estate, loss of consortium and funeral expenses and
had also touched on the different approach of the Courts
being noticed with regard to fixation of the future prospects in
case of the deceased being self-employed on a fixed salary.
Learned advocate for the appellant -Insurance Company has
highly emphasized on the doctrine of actual income to be
applied by the Tribunal / Courts while considering the income
of the deceased. I have given thoughtful consideration to the
aforesaid submissions of the learned advocate for the
appellant -Insurance Company. Learned advocate for the
Insurance Company to substantiate her arguments has
mainly relied upon the observations of the Constitutional
Bench as recorded in para 12, 13, 46, 55 to 59. Undoubtedly,
burden lies on the claimant to prove actual earning of the
deceased at the time of accident by leading proof of actual
income, however, there is no straight jacket formula that in
case of self employee deceased, in absence of proof of income
including IT returns of particular assessment year of date of
accident, the Courts are required to strictly consider
minimum wages for the purpose of determining the income of
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the deceased more so where earlier year income tax returns
are made available for consideration. The Courts can certainly
deviate from the aforesaid principle by considering the
notional income of the deceased in order to fulfill the object of
just and proper compensation as aimed by the legislation.
Learned advocate for the appellant -Insurance Company is
right in contending that "just compensation" has to be
determined on foundation of fairness, reasonableness and
equitability on acceptable legal standard, the Constitutional
Bench of the Hon'ble Supreme Court in the case of Pranay
Sethi (supra) while considering the controversy of the
multiplication to be applied had also considered argument
canvassed on behalf of the claimant on the concept of the
"just compensation" and what should be included within the
ambit of of "just compensation". The Court had also noted the
range of self-employed persons which can include unskilled
labourer to a skilled person and had thereby concluded that
therefore, while introducing the element of standardization
and categories in which the person can be self employed
would tantamount to remaining oblivious of ground realities.
The Court also noted the difficulties to assimilate the entire
range of self-employed categories or professionals in one
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compartment. The Court held that the aim is to achieve an
acceptable degree of proximity to arithmetical precision on
the basis of materials brought on record in an individual case.
The Court also held that the determination has to be on the
foundation of evidence brought on record, as regards the age
and income of the deceased and thereafter the opposite
multiplier to be applied. The Court therefore observed that
the Tribunals and the Courts have to bear in mind that the
basic principle lies in pragmatic computation, which is in
proximity to reality. While deciding the seminal issue of
fixation of future prospects in case of deceased who are self-
employed on a fixed salary, the Constitutional Bench mainly
approved its earlier view in the case of Sarla Verma and ors.
vs. Delhi Transport Corporation and Anr. reported in
(2009) 6 SCC 121. While distinguishing the two categories of
self-employed and fixed salary deceased is concerned, the
Court made few remarkable observations with regard to self-
employed persons, which reads thus:
"57. Having bestowed our anxious consideration, we
are disposed to think when we accept the principle of
standardization, there is really no rationale not to
apply the said principle to the self-employed or a
person who is on a fixed salary. To follow the doctrine
of actual income at the time of death and not to add
any amount with regard to future prospects to the
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income for the purpose of determination of
multiplicand would be unjust. The determination of
income while computing compensation has to include
future prospects so that the method will come within
the ambit and sweep of just compensation as
postulated under Section 168 of the Act. In case of a
deceased who had held a permanent job with inbuilt
grant of annual increment, there is an acceptable
certainty. But to state that the legal representatives of
a deceased who was on a fixed salary would not be
entitled to the benefit of future prospects for the
purpose of computation of compensation would be
inapposite. It is because the criterion of distinction
between the two in that event would be certainty on
the one hand and staticness on the other. One may
perceive that the comparative measure is certainty on
the one hand and uncertainty on the other but such a
perception is fallacious. It is because the price rise
does affect a self-employed person; and that apart
there is always an incessant effort to enhance one's
income for sustenance. The purchasing capacity of a
salaried person on permanent job when increases
because of grant of increments and pay revision or for
some other change in service conditions, there is
always a competing attitude in the private sector to
enhance the salary to get better efficiency from the
employees. Similarly, a person who is self-employed is
bound to garner his resources and raise his
charges/fees so that he can live with same facilities. To
have the perception that he is likely to remain static
and his income to remain stagnant is contrary to the
fundamental concept of human attitude which always
intends to live with dynamism and move and change
with the time. Though it may seem appropriate that
there cannot be certainty in addition of future
prospects to the existing income unlike in the case of a
person having a permanent job, yet the said
perception does not really deserve acceptance. We are
inclined to think that there can be some degree of
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difference as regards the percentage that is meant for
or applied to in respect of the legal representatives
who claim on behalf of the deceased who had a
permanent job than a person who is self-employed or
on a fixed salary. But not to apply the principle of
standardization on the foundation of perceived lack of
certainty would tantamount to remaining oblivious to
the marrows of ground reality. And, therefore, degree-
test is imperative. Unless the degree-test is applied
and left to the parties to adduce evidence to establish,
it would be unfair and inequitable. The degree-test has
to have the inbuilt concept of percentage. Taking into
consideration the cumulative factors, namely, passage
of time, the changing society, escalation of price, the
change in price index, the human attitude to follow a
particular pattern of life, etc., an addition of 40% of
the established income of the deceased towards future
prospects and where the deceased was below 40 years
an addition of 25% where the deceased was between
the age of 40 to 50 years would be reasonable."
Thus, even considering the doctrine of actual income, the
Court in the case of self-employed deceased, held that while
determining income of the deceased between 40 to 50 years,
the addition of 25% should be made to the actual salary of the
income of the self-employed deceased for the purpose of
future prospective.
11. Considering the aforesaid principles of law laid down by
the Hon'ble Supreme Court in light of the view taken in the
case of Malarvizhi and others (supra), in my view the
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income tax return being statutory document as rightly been
considered as the evidence for the purpose of determination
of the income of the deceased at the time of accident. This
Court is of the view that no error can be found with the
approach of the Tribunal in treating the income tax return of
AY 2016-17 at Exh.43 to be the best evidence available on
record for the purpose of determination of base income of the
deceased on the date of occurrence of accident. This view is
further strengthened in light of the decision of the Hon'ble
Division Bench of this Court in the case of Rajeshwariben
(supra).
11.1 On bare reading of the facts of the case of Malarvizhi
and others (supra), as rightly pointed out by the learned
advocate for the respondents- original claimants the date of
occurrence of accident was 25.5.2001 though income tax
return of FY 1995-96 to 2000-01 were made available on
record by the original claimants, the Hon'ble Supreme Court
had upheld the approach of the High Court in considering the
income tax return of AY 1997-98 as the evidence for the
purpose of considering the base income of the deceased at the
time of accident. Following the aforesaid principles in the
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facts of the case, the argument of the learned advocate for the
appellant - Insurance Company that Tribunal committed error
in not considering the minimum wages in absence of income
tax returns of the date of accident being produced on record
is fallacious. Assuming for the sake of argument of the learned
advocate for the Appellant- Insurance Company that income
tax returns were not filed by the deceased for the aforesaid
last two preceding year of the date of accident, one of the
possible inference which can be drawn is that the income of
the deceased was not falling within the range of taxable
income, which was Rs.2,50,000/- or more. Thus, considering
the aforesaid income limit of Rs.2,50,000/- for the last two
preceding years as compared to the other income tax returns
being produced on record right from AY 2011-12 to 2016-17,
this Court noticing benevolent scheme of the Act can always
consider the highest income of the deceased as reflected in AY
2016-17 as the indicator of the base income of the deceased at
the time of accident.
12. For the foregoing reasons, the only challenge at the
instance of the appellant- Insurance Company in the present
appeal with regard to the income of the deceased is
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concerned, the same being misconceived is hereby rejected.
13. This brings me to the second limb of controversy raised
with regard to invocation of powers conferred under Order
XLI Rule 33 of the Code of Civil Procedure is concerned.
Considering the objections raised by the learned advocate for
the appellant- Insurance Company about legal interdict to be
considered before exercising power under Order XLI Rule 33
of the Code of Civil Procedure is concerned. It would be
appropriate to revisit the settled principles of law laid down
by the Hon'ble Supreme Court in this regard in the case of
Ranjana Prakash and others versus Divisional Manager
and Another reported in (2011) 14 SCC 639, the appeal
was preferred by the claimant who were widow, two sons and
mother of the deceased, who had unfortunately expired in
motor accident. In absence of any evidence as to the actual
income of the tax paid, the order of the Tribunal with regard
to the amount of compensation though being upheld by the
High Court had opined that the Tribunal ought to have
deducted 30% of the annual income towards income tax. The
insurer appeal was first entertained by relying upon the
decision of the Hon'ble Supreme Court in the case of Sarla
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Verma and ors. vs. Delhi Transport Corporation and Anr.
reported in (2009) 6 SCC 1211 and Shyam Vakil Sarma
versus Karam Sing reported in (2010)12 SCC 378. In the
appeal referred by the claimants, the Hon'ble Supreme Court
in para 6 and 7 observed that the High Court committed an
error in ignoring the contention of the claimants. In the
process, the Court held that though the claimants have not
challenged the award of the Tribunal before the High Court,
the claimant can certainly defend the quantum of
compensation awarded by the Tribunal by pointing out the
other errors or omissions in the award, which if taken note of,
would show that there was no need to reduce the amount
awarded as compensation. The Hon'ble Supreme Court was
guided by the principles, which flows from Order XLI Rule 33
of the Code, to do complete justice between the parties. The
Court observed that provisions of Order XLI Rule 33 of the
Code can be pressed into service to make the award more
effective or maintain the award on other grounds or to make
the other parties to the litigation to share the benefits or the
liability, though it cannot be invoked to get a larger or higher
benefit. The Court also observed that if the compensation
determined by the High Court is lesser than the compensation
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awarded by the Tribunal, the High Court cannot obviously
increase the compensation in an appeal by owner/insurer for
reducing the compensation nor can it reduce the
compensation in an appeal by the claimants seeking
enhancement of compensation. The three Judges Bench of the
Hon'ble Supreme Court in the case of Surekha (supra) has
gone to the extent by finding that in matter of insurance
claim, compensation in reference to motor accident claim, the
Court should not take hypothetical approach and ensure that
just compensation is awarded to the affected persons or
claimants.
13.1. Unfortunately, the tribunal has lost sight of the well
settled principles of law in so far as awarding an amount of
compensation under the head of loss of consortium is
concerned. For the benefit of all concerned stake holders, It is
necessitated to reiterate the legal position in this regard as
settled by the Hon'ble Supreme Court in the case of Pranay
Sethi (supra). It would be relevant to consider the principles
laid down as observed :
48. Another aspect which has created
confusion pertains to grant of loss of estate,
loss of consortium and funeral expenses. In
Santosh Devi (supra), the two-Judge Bench
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followed the traditional method and granted
Rs. 5,000/- for transportation of the body, Rs.
10,000/- as funeral expenses and Rs. 10,000/-
as regards the loss of consortium. In Sarla
Verma, the Court granted Rs. 5,000/- under
the head of loss of estate, Rs. 5,000/- towards
funeral expenses and Rs. 10,000/- towards loss
of Consortium. In Rajesh, the Court granted
Rs. 1,00,000/- towards loss of consortium and
Rs. 25,000/- towards funeral expenses. It also
granted Rs. 1,00,000/- towards loss of care
and guidance for minor children. The Court
enhanced the same on the principle that a
formula framed to achieve uniformity and
consistency on a socio-economic issue has to
be contrasted from a legal principle and ought
to be periodically revisited as has been held in
Santosh Devi (supra). On the principle of
revisit, it fixed different amount on
conventional heads. What weighed with the
Court is factum of inflation and the price
index. It has also been moved by the concept
of loss of consortium. We are inclined to think
so, for what it states in that regard. We
quote:-
"17.... In legal parlance,
"consortium" is the right of the
spouse to the company, care, help,
comfort, guidance, society, solace,
affection and sexual relations with
his or her mate. That non-pecuniary
head of damages has not been
properly understood by our courts.
The loss of companionship, love, care
and protection, etc., the spouse is
entitled to get, has to be
compensated appropriately. The
concept of non- pecuniary damage
for loss of consortium is one of the
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major heads of award of
compensation in other parts of the
world more particularly in the United
States of America, Australia, etc.
English courts have also recognised
the right of a spouse to get
compensation even during the period
of temporary disablement. By loss of
consortium, the courts have made an
attempt to compensate the loss of
spouse's affection, comfort, solace,
companionship, society, assistance,
protection, care and sexual relations
during the future years. Unlike the
compensation awarded in other
countries and other jurisdictions,
since the legal heirs are otherwise
adequately compensated for the
pecuniary loss, it would not be
proper to award a major amount
under this head. Hence, we are of
the view that it would only be just
and reasonable that the courts award
at least rupees one lakh for loss of
consortium."
61In view of the aforesaid analysis, we proceed to
record our conclusions:-
(i) The two-Judge Bench in Santosh Devi should
have been well advised to refer the matter to a
larger Bench as it was taking a different view
than what has been stated in Sarla Verma, a
judgment by a coordinate Bench. It is because a
coordinate Bench of the same strength cannot
take a contrary view than what has been held by
another coordinate Bench.
(ii) As Rajesh has not taken note of the decision
in Reshma Kumari, which was delivered at
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earlier point of time, the decision in Rajesh is not
a binding precedent.
(iii) While determining the income, an addition of
50% of actual salary to the income of the
deceased towards future prospects, where the
deceased had a permanent job and was below
the age of 40 years, should be made. The
addition should be 30%, if the age of the
deceased was between 40 to 50 years. In case
the deceased was between the age of 50 to 60
years, the addition should be 15%.
Actual salary should be read as actual salary less tax.
(iv) In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased
was below the age of 40 years. An addition of 25%
where the deceased was between the age of 40 to 50
years and 10% where the deceased was between the
age of 50 to 60 years should be regarded as the
necessary method of computation. The established
income means the income minus the tax component.
(v) For determination of the multiplicand, the
deduction for personal and living expenses, the
tribunals and the courts shall be guided by
paragraphs 30 to 32 of Sarla Verma which we have
reproduced hereinbefore.
(vi) The selection of multiplier shall be as indicated in
the Table in Sarla Verma read with paragraph 42 of
that judgment.
(vii) The age of the deceased should be the basis for
applying the multiplier.
(viii) Reasonable figures on conventional heads,
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namely, loss of estate, loss of consortium and funeral
expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs.
15,000/- respectively. The aforesaid amounts should
be enhanced at the rate of 10% in every three years."
13.2. The aforesaid decision of the Hon'ble Constitutional
Bench of the Supreme Court was pronounced on 31.10.2017
holding the reasonable amount of compensation towards loss
of consortium to be Rs. 40,000 however, the Court has further
clarified that the aforesaid amount fixed shall be revised by
applying 10 % rise in every three years. The aforesaid view
expressed by the Constitutional Bench was followed and
further clarified by Hon'ble Supreme Court in the case of
Magma General Insurance Company (supra), pronounced
on 18.09.2018, wherein the Court has observed thus:
"6. We have heard learned Counsel for the parties, and
perused the record.
The principal grounds on which the S.L.P. has
been filed by the Insurance Company are:
i. The High Court has erroneously awarded 50%
towards Future Prospects, even though as per
the judgment of this Court in National
Insurance Co. Ltd. v. Pranay Sethi only 40%
could have been awarded.
ii. The deduction of the income of the deceased
ought to have been made at ½, and not at 1/3rd,
as he was a bachelor.
iii. The minimum wages of the deceased ought
to have been taken at Rs. 5,341 and not Rs.
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6,000 as that was the prevailing rate of
minimum wages in Haryana at the time of the
accident.
iv. The father and sister of the deceased could
not be considered as dependants, and were not
entitled to compensation. In the case of death
of a bachelor, only the mother could be
considered to be a dependant.
v. The grant of Rs. 1,00,000 on account of loss
of love and affection, and Rs. 25,000 towards
funeral expenses is erroneous.
It was contended that only Rs. 30,000 could have
been awarded as per the judgment in Pranay
Sethi (supra).
8.6. The MACT as well as the High Court have not
awarded any compensation with respect to Loss of
Consortium and Loss of Estate, which are the other
conventional heads under which compensation is
awarded in the event of death, as recognized by the
Constitution Bench in Pranay Sethi (supra).
The Motor Vehicles Act is a beneficial and welfare
legislation. The Court is dutybound and entitled to
award "just compensation", irrespective of whether
any plea in that behalf was raised by the Claimant.
In exercise of our power under Article 142, and in
the interests of justice, we deem it appropriate to
award an amount of Rs. 15,000 towards Loss of
Estate to Respondent Nos. 1 and 2.
8.7. A Constitution Bench of this Court in Pranay
Sethi(supra) dealt with the various heads under
which compensation is to be awarded in a death
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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, help, comfort, guidance, solace and affection of
the deceased, which is a loss to his family. With
respect to a spouse, it would include sexual relations
with the deceased spouse.
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."
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."
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
parentis to lose their child during their lifetime.
Children are valued for their love, affection,
companionship and their role in the family unit.
Consortium is a special prism reflecting changing
norms about the status and worth of actual
relationships. Modern jurisdictions worldover 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
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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.
The Motor Vehicles Act is a beneficial legislation
aimed at providing relief to the victims or their
families, in cases of genuine claims. In case 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 count5. However, there was no clarity with
respect to the principles on which compensation
could be awarded on loss of Filial Consortium.
The amount of compensation to be awarded as
consortium will be governed by the principles of
awarding compensation under 'Loss of Consortium'
as laid down in Pranay Sethi (supra).
In the present case, we deem it appropriate to award
the father and the sister of the deceased, an amount
of Rs. 40,000 each for loss of Filial Consortium."
Thus, the Court has evolved the concept of consortium
which was initially confined to the spousal consortium and has
thereby held the parents and /or unmarried son/ daughter also
entitled to be awarded loss of consortium towards Filial /
parental consortium respectively.
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13.3. Applying the aforesaid principles in the facts of the case,
while considering the impugned judgement and award passed
by the Tribunal, in absence of any appeal being preferred by
the original claimants, though the amount of compensation
awarded under the other heads is to be treated as having
attained finality. However, at the same time, the Court cannot
obliviate from the object of the Act, which otherwise aims to
award just and proper compensation. The Tribunals/ Courts
are bound by the settled principles of law as laid down by the
Hon'ble Supreme Court wherein in the catena of judgments
much emphasised has been laid on awarding of just and
proper compensation including the amount of compensation
under the head of loss of consortium.
13.4 Undisputedly, the claimants include the widow as well as
their three minor children. In such circumstances, it was
obligatory for a Tribunal to award the amount of
compensation under the head of loss of consortium
individually to each of the claimants. Having failed to do so, in
order to meet with the ends of justice, this Court is guided by
the provisions, more particularly Order XLI Rule 33 of the
Code, in the absence of any appeal or cross objections being
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filed by the original claimants, to extend the benefit of this
scheme. Thus, in light of the decision of the Hon'ble Supreme
Court in the case of Pranay Sethi (supra) and Magma
General Insurance Company (supra), the Tribunal
committed grave error in not extending the benefit of loss of
consortium to each of the claimants. Noticing the date of
accident, as rightly pressed by learned advocate for the
original claimants, the amount of compensation awarded
under the head of loss of consortium is required to be
reconsidered and is enhanced to Rs. 1,93,600/-.
14. For the foregoing reasons, the appeal is dismissed.
14.1. However, the impugned judgment and award dated
5.9.2024 passed by the learned Motor Accident Claims
Tribunal (Auxi), Ahmedabad Rural, Ahmedabad passed in
MACP No.1156 of 2020 is hereby modified by holding the
original claimants entitled to recover an amount of
Rs.56,82,676/- (Rs.55,37,476/- + Rs.1,45,200/-) with running
interest at the rate of 9% pa from the date of filing of the
claim petition till its actual realization, along with the
proportion costs. The present appellant Insurance Company,
who has been held jointly and severally liable along with
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original opponent nos. 1 and 2 to pay the amount of
compensation, is directed to deposit the enhanced amount of
compensation to the tune of Rs.1,45,200/-(Rs.1,93,600/- minus
Rs.48,400/-) with interest and costs as awarded by this Court,
within a period of eight weeks from the date of receipt of the
certified copy of this order. The deposited award amount is
directed to be apportioned in terms of the impugned judgment
and award amongst the claimants, which shall be followed by
the disbursement and investment as directed herein above.
On deposit of the aforesaid enhanced amount of compensation
with proportionate costs and interest, the Tribunal is hereby
directed to release the entire award amount qua the
respondent no.1 wife of the deceased subject to due
verification.
14.2. So far as the amount of award to be deposited qua
present respondent nos. 2 to 4, who are minor children of the
deceased, is directed to be invested in the Fixed Deposit
Scheme, till they attained the age of majority with any
nationalized bank. The Tribunal shall retain the original FDR's
in the name of respective claimants till they attained the date
of majority. The interest which may accrue on such Fixed
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Deposits is permitted to be withdrawn periodically through
their natural guardian / respondent no.1 herein being mother
of the minor children.
15. Before parting with the judgement, this Court would like
to express the concern over the ignorance of settled principles
of law on the amount of compensation to be awarded under
the head of loss of consortium. The claimants are unnecessary
drag to High Court to apply in appeal to secure rightful
compensation towards the conventional heads, at their cost
and expenses of court fees and advocate fees, adding to the
figures of pendency of cases. It is painful to note that despite
the settled principle of law being laid down by the highest
Court of the nation, whereby, the Constitutional Bench of the
Supreme Court has expressed and held the victims / claimants
of motor vehicle accident entitled to compensation under the
head of loss of consortium along with other heads recognized,
and the aforesaid principle being further clarified by the
Hon'ble Supreme Court holding each of the dependent being
entitled to loss of consortium under the related heads, this
Court has noticed that the Tribunals have failed to implement
the aforesaid ratio in its true spirit. This Court has come
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across various matters, whereby the amount of compensation
under the head of loss of consortium is only confined to
spousal consortium despite presence of the parents and the
children as party to the proceedings. Thus, Registrar General
of this Court is directed to circulate the present order
amongst the learned Members of the Tribunals to draw their
kind attention about the settled principles of law and with a
hope that the same shall be duly adhered to as and when
circumstances demand. Article 141 of the Constitution of
India mandates that a principle of law enunciated by the
Supreme Court shall be a binding precedent for the Courts
below including the Tribunals.
16. With these observations, the First Appeal stands disposed
of. The Record and proceedings are directed to be sent back
forthwith to the concerned Tribunal.
sd/-
(NISHA M. THAKORE,J)
RATHOD KAUSHIKSINH
