Jharkhand High Court
Priyatam Mistry vs Hdfc Ergo General Insurance ... on 7 July, 2021
IN THE HIGH COURT OF JHARKHAND AT RANCHI
(Civil Miscellaneous Appellate Jurisdiction)
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M.A. No. 58 of 2018
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1. Priyatam Mistry, S/o Bala Mistry
2.Vinita Devi, W/o Priyatam Mistry ...... Appellants
Versus
1. HDFC ERGO GENERAL INSURANCE COMPANY LIMITED
3. BARFANI ROADWAYS LLP, (Incharge Manager Sri Om Prakash) Sumitralay
Bhawan, Milan Chowk, Khadgarha, Madhukam, P.S. Ratu Road, P.O. Ratu Road,
District Ranchi
4. VIKASH NAYAK, S/o Late Jageshwar Nayak, resident of Village Balumath, P.O. &
P.S. Balumath, District Latehar ......Respondents
WITH
M.A. No. 195 of 2018
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HDFC ERGO GENERAL INSURANCE COMPANY LIMITED ...... Appellant
Versus
1.PRIYATAM MISTRY, S/o Bala Mistry
2. VINITA DEVI, W/o Priyatam Mistry, both residents of Village Jabra, P.O. Barikhap,
P.S. Balumath, District Latehar, Jharkhand- 822112
3. BARFANI ROADWAYS LLP, (Incharge Manager Sri Om Prakash) Sumitralay
Bhawan, Milan Chowk, Khadgarha, P.O. Hehal, P.S. Sukhdonagar, District Ranchi-
834005 (Owner of Dumper/Hywa bearing No.JH-09A(T)9871)
4. VIKASH NAYAK, S/o Late Jageshwar Nayak, resident of Village Balumath, P.O. &
P.S. Balumath, District Latehar- 829202. ......Respondents
CORAM: HON'BLE MR. JUSTICE KAILASH PRASAD DEO
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For the Appellant : Mr. Prashant Kumar Rahul, Advocate (In M.A. No.58/2018)
Mr. S.J. Roy, Advocate (In M.A. No.195/2018)
For the Respondents : Mr. Shashank Shekhar Pd, Advocate (In M.A. No.195/2018)
Mr. Prashant Kumar Rahul, Advocate (In M.A. No.195/2018)
06/Dated: 07/07/2020
1. Both the Misc. appeals are arising out of a common award, as such, both the
appeals are being heard together and disposed of, by a common judgment.
2. Heard, learned counsel for the parties.
3. Both the instant Miscellaneous Appeals have been preferred against the
common judgment dated 18.01.2018 in Motor Accident Claim Case No.30 of
2015 passed by the learned District Judge-2nd-cum-MACT, Latehar, whereby
the claimants namely, 1. Priyatam Mistry and 2. Vinita Devi have been
awarded compensation to the tune of Rs.2,05,000/- along with interest @ 7%
per annum from the date of filing of the claim application i.e. 14.07.2015 till its
realization.
4.Learned counsel for the appellant has submitted that the income
considered by the learned Tribunal is a meager amount, which ought not
to have been less than Rs.5000/- per month in view of the judgment of
Hon'ble Apex Court in the case of Kishan Gopal & Anr. vs. Lala & Ors. as
reported in 2014 (1) SCC 244. Learned counsel for the appellant has further
submitted that this Court has also taken view of the judgment of State of
Haryana v. Jasbir Kaur, (2003) 7 SCC 484, (para-7) and also the judgment
of New India Assurance Co. Ltd. vs. Satender and others (2006) 13 SCC 60.
5. Learned counsel for the appellants has further assailed the impugned
award on the grounds that the learned Tribunal has paid less amount to
the claimants. As per schedule-II of the MV Act, less multiplier has been
given for the deceased less than 15 years of age. The learned Tribunal has
considered the age of the victim on the alleged date of occurrence to be 08
years and Rs.30,000/- notional income has been considered, but no
amount has been paid under the loss of consortium and no amount has
been paid under love and affection and no future prospect has been given
though the Apex Court in the case of Kirti & Anr. Etc. vs. Oriental
Insurance Company Ltd. passed in Civil Appeal Nos.19-20 of 2021 which
allowed future prospect to all the persons vide judgment dated 05.01.2021,
as such, this Court may enhance the compensation.
6. Learned counsel for the appellants-claimants, Mr. Prashant Kumar
Rahul has submitted that the compensation amount awarded by the
learned Tribunal is a meager, which is not a just and fair compensation it
ought to have been Rs.3,75,000/- along with interest @ 7.5% per annum
from the date of filing of the claim application, in view of the judgment
passed by the Apex Court in the case of Kishan Gopal & Anr. vs. Lala &
Ors., reported in 2014 (1) SCC 244, State of Haryana v. Jasbir Kaur, (2003)
7 SCC 484, New India Assurance Co. Ltd. vs. Satender and others (2006) 13
SCC 60 and the judgment passed by this Court in M.A. No.164 of 2019
relying upon the case of Chetan Malhotra Vs. Lala Ram (2016) SCC
Online Del 2981, as such, amount may be enhanced.
7. Learned counsel for the appellants has relied upon the judgment passed
by this Court in the case of Mina Devi vs. Arbinda Das and ors. dated
06.12.2019 passed in MA. No.461 of 2019 and Santosh Yadav and Anr. vs.
Baldeo Sao and Ors. on 16.12.2019 passed in M.A. No.48 of 2017 and has
submitted that this Court has granted compensation in such cases where
the deceased was minor aged about 6 years and 10 years respectively to
the tune of Rs.3,75,000/- along with interest @ 7.5% from the date of
institution of the claim application, as such, this Court may consider the
same.
8. Learned counsel for the Insurance company, Mr. S.J. Roy has submitted
that this Court has passed an order relying upon the judgment passed by
the Delhi High Court in the case of Chetan Malhotra Vs. Lala Ram (2016
SCC Online Del 2981) as well as the view taken by the Apex Court in the
case of Kishan Gopal & Anr. vs. Lala & Ors., reported in 2014 (1) SCC 244,
State of Haryana v. Jasbir Kaur, (2003) 7 SCC 484 and also the judgment of
New India Assurance Co. Ltd. vs. Satender and others (2006) 13 SCC 60
and granted compensation to the tune of Rs.3,75,000/- along with interest
@ 7.5% from the date of institution till the date of indemnifying the award,
but in the present case since the occurrence is of the year 2015, which was
adjudicated in the year 2018, considering it to be just and fair
compensation and thereafter another Miscellaneous Appeal has been
preferred before this Court, as such, this Court may not interfere by
enhancing the amount as the compensation granted to the claimants for
death of their Son namely Saroj Kumar aged about 8 years, is fair and just
compensation, as such, this Court may dismiss the appeal.
9. Learned counsel for the Insurance company, Mr. S.J. Roy submitted that
the Insurance Company has also preferred M.A. No.195/2018 for grant of
right to recover the amount of compensation from owner of the offending
vehicle as there is violation of terms and conditions of the policy even then
the learned Tribunal has not granted right to recover in favour of the
Insurance Company against the owner of the offending vehicle.
10. Learned counsel for the Insurance has drawn attention of this Court
towards para 14 where issue no.6 has been decided and referred page no.9
that though the learned Tribunal has found that D/L was not valid and
effective on the day and time of accident and contention of learned lawyer
for the Insurance Company i.e. O.P. No.1 is that there is violation of the
terms and conditions of the Insurance Policy which appears to be true,
even then the right of recovery has not been granted in favour of the
Insurance Company.
11. Mr. Shashank Shekhar Prasad appearing for the respondent/owner
has submitted and referred relevant portion of para 14 of the impugned
award, which may profitably be quoted hereunder :-
"14............ Though no D/L has been proved and marked Exhibit on
behalf of the claimants but the copy of D/L which has been brought on
record by the OP No.1, when it verified by the Insurance Company it was
found that D/L was in the name of Dilip Kumar Pandey and not in the
name of Vikash Kumar Nayak who has been charge-sheeted in this
accident case by the police after investigation............"
12. Learned counsel for the owner/respondent of the vehicle has fairly
submitted that till date no appeal has been preferred by the owner of the
offending vehicle against the finding recorded by the learned Tribunal, but
since the D/L was with respect to Dilip Kumar Pandey, which was valid,
as such, this finding is bad in law and this Court may not give any right to
recover in favour of the Insurance Company.
13. After hearing, learned counsel for the parties and looking into the
facts and circumstances of the case, it appears that Motor Vehicle Act, 1988
has not taken notice of such eventuality when the deceased will be less
than 15 years. There is no straitjacket formula appended with the Motor
Vehicle Act and this Court has considered the case of Chetan Malhotra
(supra) and has taken note of the cost inflation index in paras 65, 66, 67, 68,
69, 70 and 71 which are profitably quoted hereunder:
"65. Having regard to the fluctuating trends in CPI (IW), this court finds the
Cost Inflation Index (CII) determined and notified by the Ministry of Finance in
Government of India under Section 48 of Income Tax Act, 1961 for each
financial year, to be a better method to off-set the effect of inflation on the real
value of money. This approach, if followed, would ensure that there is no
inconsistency in the awards of compensation in cases of death of children. [R.K.
Malik (supra) and Balram Prasad v. Kumar Saha (2014) 1 SCC 384]. Since the
amount which requires to be subjected to correction was determined by decision
in R.K. Malik wherein cause of action had arisen on 10.11.1997, the financial
year 1997-98 is taken as the "base year".
66. For ready reference, the rates of Cost Inflation Index (CII) notified by the
government till date, to the extent necessary, are reproduced in the table given
below:
Financial CII
Year
1/4/1981
xxx xxx
2014-15 1024
2015-16 1081
CONCLUSIONS
67. In the considered view of this Court, the cases for compensation on account
of death of children in motor vehicular accident cases ought to be dealt with by
considering the claim towards pecuniary damages (towards loss to estate), in
accordance with the age-group wise categories as in R.K. Malik (supra); the
first category being of children less than 10 years' in age, the second category
being of children more than 10 years' and up to 15 years' in age, and the third
category 3 of children more than 15 years' but not having attained the age of
majority (18 years). The children in the third category would ordinarily be of
such age group as is generally receiving formal school education or those that
are (being) imparted special training so as to be equipped with requisite skills to
be gainfully employed in a variety of trades. They are after all nearing
adulthood and thus, on the threshold of becoming self-reliant. In such cases, the
prospects of their employability and earnings in future or present, based on
evidence adduced about their academic track record or training in special
talents or skills, would need to be borne in mind. As in Lata Wadhwa (supra), the
claim for pecuniary damages arising out of death of children of this age group
cannot be at par with the lower age groups falling in the first and second
category. Therefore, the pecuniary loss to estate due to their death would
deserve to be worked out by applying a higher multiplier on the notional income
(of nonearning persons) unless, of course, case is properly made out for higher
considerations. Noticeably, in Sarla Verma (supra) the Supreme Court specified
the multiplier of 18 for cases where the deceased was in the age-group of 15
years' to 20 years' old. For the first and second category, however, the multiplier
of 10 and 15 respectively, as used in R.K. Malik (supra), would hold good.
68. Since in the claims arising out of death of children, generally speaking,
(nonearning hands), the income is to be notionally assumed on the basis of the
second schedule to the MV Act, the general practice of deduction of one-half
(50%) towards personal & living expenses, as applied in case of bachelors
above the age of 18 years would be unfair. Pertinently, the notional income
specified for non-earning persons in the second schedule is very low as
compared to the rates of minimum wages. Therefore, the deduction of one-third
(1/3rd) on this account, as provided by the first note below the second schedule
would only be appropriate.
69. The award of compensation must necessarily take into account nonpecuniary
damages. In R.K. Malik (supra), Rs. 75,000/- awarded by this Court as the
"conventional compensation" was enhanced by the Supreme Court by further
similar amount (Rs. 75,000/-) as the "compensation for future prospects". For
the reasons set out earlier, in the context of pecuniary loss to estate, the
composite sum of non-pecuniary damages of Rs. 1,50,000/- [as awarded in R.K.
Malik (supra)] would deservedly be added, but with suitable correction so as to
ensure that the deficiency in the real value of money is made good. As noted (in
para 46) earlier, the Supreme Court justified the addition of Rs. 75,000/- towards
compensation for "future prospects" by noting that the said amount was
"roughly half of the amount given on account of pecuniary damages". Since the
court had also upheld the award of similar sum (Rs. 75,000/-) by this court as
"conventional compensation", both amounts of nonpecuniary damages, put
together, account for roughly an amount equivalent to the sum computed as
pecuniary loss to estate. Thus, this court is of the view that a composite sum
equal to the amount computed as pecuniary loss to estate may be added as non-
pecuniary damages (inclusive of conventional compensation and for future
prospects), in such cases as at hand to arrive at the appropriate figure of 'just
compensation'.
70. It has been noticed by this Court that the tribunals have been assessing the
compensation and awarding it to the last rupee, at times even in the fraction of a
rupee, not bothering to follow the practice of rounding off. Awards in at least
two of the cases from which the appeals at hand arise provide ready illustration.
This seems to be not correct. It must be added here that human misery cannot be
calculated with such mathematical precision. Even otherwise for convenience of
accounting, it is desirable that the amount of award is rounded off to the nearest
(if not next) thousands of rupees.
71. Subject to all other requisite conditions being fulfilled, for the foregoing
reasons, in order to bring about consistency and uniformity in approach to the
issue, it is held that claims for compensation on account of death of children
shall be determined as follows:
(i). Till such time as the law is amended by the legislature, or the Central
Government notifies the amendment to the Second Schedule in exercise of the
enabling power vested in it by Section 163-A (3) of the Motor Vehicles Act, 1988,
and except in cases wherein the prospects of employability and earnings (in
future or present) of the deceased child are proved by cogent and irrefutable
evidence, this having regard, inter alia, to the academic record or training in
special talents or skills, for computing the pecuniary damages on account of the
loss to estate, the notional income of nonearning persons (Rs.15000/- p.a.) as
specified in the Second Schedule (brought in force from 14.11.1994), shall be
assumed to be the income of the deceased child, and taken into account after it is
inflation-corrected with the help of Cost Inflation Index (CII) as notified by the
Government of India from year to year under Section 48 of the Income Tax Act,
1961, by applying the formula indicated hereinafter.
(ii) For inflation-correction, the financial year of 1997-1998 shall be treated as
the "base year" and the value of the notional income relevant to the date of
cause of action shall be computed in the following manner:-
Rs. 15,000/- × A ÷331
[wherein the figure of 'Rs. 15,000/-' represents the notional income specified in
the second schedule requiring inflation-correction; 'A' represents the CII for the
financial year in which the cause of action arose (i.e. the accident/death
occurred); and the figure of '331' represents the CII for the 'base year']
(iii). After arriving at an appropriate figure of the present equivalent value of the
notional income (i.e. inflation-corrected amount), it shall be rounded off to a
figure in next thousands of rupees.
(iv). The amount of notional income thus calculated shall be reduced to twothird,
the deduction to the extent of one-third being towards personal & living
expenses of the deceased, the balance taken as the annual loss to estate
(hereinafter also referred to as "the multiplicand")
(v) For assessment of the pecuniary damages on account of the death of children
upto the age of 10 years, the loss to estate shall be calculated, capitalizing the
multiplicand, by applying the multiplier of ten (10)
(vi) For children of the age-group of more than 10 years upto 15 years, the loss
to estate shall be calculated by applying the multiplier of fifteen (15).
(vii). For children of the age-group of more than 15 years but less than 18 years,
the loss to estate shall be calculated by applying the multiplier of eighteen (18).
(viii). After the pecuniary loss to estate has been worked out in the manner
indicated above, an amount equivalent to the amount thus computed shall be
added to it as the composite non-pecuniary damages taking care of not only the
conventional heads but also towards future prospects as awarded in R.K. Malik
v. Kiran Pal (2009) 14 SCC 1.
(ix). The final sum thus arrived at, appropriately rounded off, if so required to
the nearest (if not next) thousands of rupees, shall be awarded as compensation
for the death of the child."
14. Under the aforesaid circumstances, considering the cost inflation index
for the year 2014 -2015 as 1024, divided by the cost inflation index of base
year i.e. 1997-1998 as 331 and the said chart of the cost inflation index
notified by the Government up to the year, 2015-2016 is 1081 and for the
year, 2014 - 2015 is 1024. Unfortunate accident took place on 26.02.2015
and considering the notional income of the deceased to be Rs.15,000/-, the
calculation is Rs.15,000 x A ÷ by 331 i.e. 15,000 x 1024 of cost inflation
index divided by 331, then Gross income comes to Rs.46,404.83/- which is
rounded off as Rs.47,000/-.
15. After deducting 2/3rd of Rs.47,000/- and applying the multiplier of 10,
the pecuniary loss to estate is computed as (Rs.47,000 x 2/3 x 10 =
Rs.3,13,333/-). Adding towards composite non-pecuniary damages, the
total compensation considered to Rs.3,75,000/- in view of the judgment
passed in the case of National Insurance Company Ltd. Vs. Farzana 2009
ACJ 2763. In any cause of action arising on or after dated 10.05.2000, the
amount of compensation shall not in any case be less than Rs.3,75,000/- as
it has been awarded in the case of Farzana (Supra).
16. Further in the case of Sayed Mohamad vs. The New India Insurance
Co. Ltd. reported in 2011 (11) SCC 625, Hon'ble Apex Court has held at
para 13 that the Motor Vehicle Act, 1988 is a beneficial legislation intended
to place the claimant in the same position that he was before the accident
and to compensate him for his loss thus it should be interpreted liberally
so as to achieve the maximum benefit, which is para 13 is profitable
quoted herein:-
13. The Motor Vehicles Act of 1988 is a beneficent legislation intended to place
the claimant in the same position that he was before the accident and to
compensate him for his loss. Thus, it should be interpreted liberally so as to
achieve the maximum benefit.
17. Since there is no Schedule, as such, considering the compensation as
considered in the case of deceased having age of 8 years under
different categories cannot be equated in the present case, individually for
deduction as personal and living expenses in view of the judgment passed
by the Apex Court in the case of Sarla Verma (Smt) & others vs. Delhi
Transport Corporation & another, reported in (2009) 6 SCC 121 and with
regard to future prospect in view of the judgment passed by the Apex
Court in the case of Kirti (Supra) and in view of the judgment passed by
the Apex Court in the case of National Insurance Company Ltd. vs.
Pranay Sethi, reported in (2017) 16 SCC 680.
18. Considering the facts and circumstances, it appears that once the
learned Tribunal has held that there is violation of terms and conditions of
the Insurance Policy, it was incumbent upon the learned Tribunal to give
right to recover in favour of Insurance Company after satisfying the award
to the claimants from owner of the offending vehicle, as such, M.A. No.195
of 2018 preferred by the Insurance Company is hereby allowed.
19. As such, this Court directs the Insurance Company to pay a sum of
Rs.3,75,000/- along with interest @7.5% from the date of institution of the
case in view of the judgment of Dharampal and Sons Vs. U.P. State Road
Transport Corporation [2008 (4) JCR 79 (SC)].
20. The Insurance Company is directed to satisfy the award to the
claimants and recovered the same from the owner of the offending vehicle
namely, Barfani Roadways LLP (In-charge Manager Sri Om Prakash).
21. The amount already paid, if any, by the Insurance Company shall be
deducted from the aforesaid amount and the balance amount of the same
shall carry interest from the date of institution of the claim case.
22. The balance amount of the award, in view of the award passed by this
Court shall be indemnified by the Insurance Company within a reasonable
time as the accident is of dated 26.02.2015.
23. Both the instant Miscellaneous Appeals are allowed.
24. The statutory amount deposited by Insurance Company in M.A.
No.195 of 2018 for preferring the appeal shall be remitted to the learned
Tribunal by the learned Registrar General of this Court, within a period of
four weeks, so as to indemnify the claimants after due notice and
verification.
(Kailash Prasad Deo, J.)
sandeep/R.S.-
