Jharkhand High Court
Santosi Minz Aged About 39 Years W/O Late ... vs The Divisional Manager (Legal) The ... on 3 October, 2024
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.A. No. 195 of 2020
1. Santosi Minz aged about 39 years W/o Late Masih Minz
2. Anup Minz aged about 20 years S/o Late Masih Minz
3. Atul minz aged about 18 years S/o Late Masih Minz
4. Mahima Minz aged about 15 years D/o Late Masih Minz.
Applicant No 4 is Minor and is represented through
Applicant No 1 i.e. her mother
All Resident of Village-Jhiri, P.O. Kamre P.S.- Ratu, District-Ranchi
... ... Appellants
Versus
1. The Divisional Manager (legal) The Oriental Insurance Co. Ltd.,
D.O.-I Tiwary Market Complex 2nd floor Circular Road, Near
Lalpur Chowk, P.O. G.P.O, P.S. Kotwali Distt Ranchi.
AT Present
3rd Floor, Prabodh Tower, S.N. Ganguli Road, P.O. G.P.O, P.S.
Kotwali, Main Road, Ranchi District Ranchi.
2. Mr. Karuna Minz W/o Late Biswas Minz R/o village Jhiri, P.O.
Ratu, P.S. -Ratu, District- Ranchi.
(Owner of Tempo registration No. JH-01K-6654)
... ... ... Opp. Parties/Respondents
---
CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Appellants : Mr. Nikhil Ranjan, Advocate
For the Respondents : Mr. Manish Kumar, Advocate
---
10/03.10.2024 Lastly heard on 24.07.2024
1. This miscellaneous appeal has been filed against part of the
Award dated 18.07.2019, passed by the learned Presiding Officer,
Motor Vehicles Accident Claims Tribunal, Ranchi, in Motor Accident
Claim Case No. 295 of 2016.
Arguments of the Appellants (Claimants)
2. The sole issue involved in the present case is as to whether the
learned tribunal has erred in not adding future prospects to the income
of the deceased while granting compensation under Section 163A of
Motor Vehicles Act, 1988 (hereinafter referred to as the Act of
1988).
3. The learned counsel appearing on behalf of the appellants has
relied upon the judgment passed by the Hon'ble Supreme Court
reported in (2009) 14 SCC 1 (R.K. Malik and Another versus Kiran
Pal and Others), and referred to paragraph 36 of the said judgment to
submit that in the said case, the matter arose out of the quantification
of compensation under Section 163A of the Motor Vehicles Act, and
future prospects were taken into consideration while granting
compensation.
4. He has further referred to the judgment passed by the Hon'ble
Supreme Court in the case reported in (2017) 16 SCC 680 (National
Company Insurance Ltd. versus Pranay Sethi and others), and in
particular referred to the reference before the Hon'ble Supreme Court
as mentioned in paragraph no.3. He submitted that the reference noted
a divergence of opinion with regard to computation under Section
163A and 166 of the Motor Vehicles Act, 1988, and the methodology
for computation future prospects. The learned counsel submits that the
said judgment dealt with computation of income under section 163A
as well as Section 166, and therefore, in order to arrive at just
compensation, the future prospects are to be taken into consideration
as is admittedly applicable while computing compensation under
Section 166 of the Motor Vehicles Act. He has in particular referred to
para 55 to 57 of the said judgment.
5. The learned counsel further submits that the aforesaid two
judgments have been followed by different High Courts to grant
compensation by taking into consideration future prospects. Those
cases are:-
a) The judgment passed by Hon'ble Bombay High Court in First
Appeal No. 250 of 2019 (Tata AIG General Insurance
Company Limited versus Smt. Mayuri Mahesh Rane and
Others) dated 23.12.2022, where the future prospects were
taken into consideration by the court concerned and the
Hon'ble High Court refused to interfere with the same by
referring to the judgment passed in the case of Pranay Sethi
(supra).
b) The judgment passed by Hon'ble Gauhati High Court in the
case of New India Assurance Company Limited versus S.
Muana and Others in MAC No. 17 of 2017, decided on
17.11.2017, and has referred to paragraphs 10, 16 and 17 of the
said judgment.
c) Another judgment passed by Hon'ble Gauhati High Court in
the case of The New India Assurance Company Limited
versus Smt. Lalseli reported in 2022 0 Supreme (Gau) 365
wherein at paragraph 12(iii), the issue was framed, and
answered in paragraph 19 by following the case of R.K. Malik
(supra).
d) The Judgment passed by Hon'ble Delhi High Court, reported in
2017 SCC OnLine Del 11706 (Oriental Insurance Company
Ltd. versus Maman Singh & Ors.), referred to paragraphs 3
and 5, to submit that the Hon'ble Delhi High Court has also
recorded that the decision in Pranay Sethi's case makes no
distinction between a claim under Section 166 and a claim
under Section 163A of Motor Vehicles Act for assessing
income.
6. The learned counsel submits that different yardstick cannot be
taken for the purposes of assessing income while granting
compensation under section 163A of Motor Vehicles Act, on the one
hand, and while granting compensation under Section 166 of the
Motor Vehicles Act on the other hand.
Argument of the Respondent (Insurance Company)
7. The learned counsel appearing on behalf of the respondents
while opposing the prayer, submitted that it has been held by the
Hon'ble Supreme Court in numerous judgments that the provision of
section 163A is a self-contained code and it arises out of payment of
compensation even in cases where there is no negligence. The learned
counsel submits that it is certainly open to the claimants to invoke
Section 166 or 163A whatever they deem proper, and there is no
overlap between the two. He submits that the principle of computation
under Section 163A is different from that of Section 166 of Motor
Vehicles Act, and therefore, the question of adding future prospects to
the income while calculating the income of the deceased under
Section 163A cannot be applied.
8. The learned counsel has also submitted that another bench of
Hon'ble Bombay High Court at Aurangabad Bench in First Appeal
No. 1403 of 2017, has taken a different view and the entire provision
has been taken into consideration while holding that the judgement
passed in the case of Pranay Sethi (supra) is not applicable in claims
filed under section 163A of Motor Vehicles Act. He submitted that not
only the aforesaid judgments, but other judgments have also been
referred to in paragraph 10 of the said judgment.
9. The learned counsel has further referred to the judgment passed
by the Sikkim High Court reported in 2022 SCC OnLine Sikkim 26
(Branch Manager, Shriram General Insurance Company Limited
versus Dilu Rai and Others) to submit that the entire history of
amendment made from time to time and insertion of section 163A has
been considered by the Hon'ble Division Bench and ultimately it has
been held that once a person invokes the provision of Section 163A,
the question of inclusion of pecuniary compensation for non-tangible
and future prospects does not arise. The learned counsel has also
submitted that it has been held that the judgment passed in the case of
R.K. Malik (supra) which in turn referred to the decision in the case
of Lata Wadhwa vs. State of Bihar was held to be of no relevance as
those were the matters concerned with deaths of minors who were
non-earning members. The Hon'ble Court has held that under Section
163A, future prospects or any other pecuniary heads finds no place
and compensation in a claim petition under Section 163A of Motor
Vehicles Act is to be strictly computed on the structured formula
provided in the Second Schedule to the Act. The learned counsel
submits that those heads which are mentioned in the Schedule and
pronouncement has been made by the Hon'ble Supreme Court in the
case of Pranay Sethi (supra) stands modified to that extent, but there
is no reference of any future prospect in the Second Schedule, and
therefore, future prospects cannot be included while computing
income under section 163A of Motor Vehicles Act.
10. The learned counsel has further submitted that if the future
prospects are added to the income while computing income under
Section 163A, then there would be no difference in the quantification
of final compensation under Section 163A and 166 of Motor Vehicles
Act. He submits that other heads which are mentioned in the Schedule
are absolutely common under which compensation is payable under
Section 166 of Motor Vehicles Act.
11. The learned counsel has also relied upon the judgment passed
by the Hon'ble Supreme Court reported in (2009) 13 SCC 654 (Raj
Rani and others versus Oriental Insurance Company Limited and
Others) paragraph 13 to submit that the Hon'ble Supreme Court has
considered the arguments advanced on behalf of the Insurance
Company and has observed that it may be correct to some extent that
for the purposes of computation of total income of compensation
under section 163A of Motor Vehicles Act, the future prospects may
not be of such relevance but in a case where claim petition has been
filed in terms of Section 166 of the Motor Vehicles Act, the same
would be relevant. He has also submitted that the judgement passed in
the case of (2009) 13 SCC 654 (supra) has been passed by the same
bench of the Hon'ble Supreme Court which has passed the judgement
in the case of R.K. Malik (supra) and the date of judgments are 06th
May 2009 and 15th May 2009 respectively.
Rejoinder Argument of the Appellants
12. The learned counsel appearing on behalf of the appellants, in
response, has submitted that the entire calculation in the impugned
judgment is based on the judgment passed by the Hon'ble Supreme
Court in the case of Pranay Sethi (supra) except that the impugned
judgment is absolutely silent with respect to future prospects.
Findings of this Court
13. Admittedly, the claim in the present case was filed under
Section 163A of the Motor Vehicles Act, 1988. Considering the
submissions, the sole point for determination is -
Whether the Claimants are entitled to addition of future
prospects to the income of the deceased when the
application for compensation has been filed under Section
163A and not under section 166 of the Motor Vehicles Act,
1988?
14. The provisions of Section 163A of Motor Vehicles Act, 1988 is
a special provision for payment of compensation on structured
formula based in terms of the Second Schedule to the Act. The said
provision has an overriding effect as is apparent from bare perusal of
the said section. It has been provided under sub-section 2 that for any
claim of compensation under sub-section 1, the claimant is not
required to plead or establish that the death or permanent disablement
was caused due to any wrongful act or neglect or default of the owner
of the vehicle or of any other person. So far as section 166 of the Act
is concerned, the same is a general provision seeking compensation
arising out accident of motor vehicle in case of death or injury. It is
not in dispute that the claimants may opt to apply under Section 163A
or to apply under the general provision of Section 166 of the Act of
1988.
15. The structural formula for computation under Section 163A as
provided in the Second Schedule has various columns dealing with the
age of the victim and the annual income of the victim. Different
multipliers have been prescribed for different age group of victims and
the compensation amount has been prescribed in a tabular form
corelating to the annual income of the victim. The Second Schedule
has further conditions and also heads on compensation which, inter
alia, includes: -
a) The amount of compensation so arrived at the case of fatal accident
claims shall be reduced by 1/3rd in consideration of the expenses
which the victim would have incurred towards maintaining himself
had he been alive.
b) Amount of compensation shall not be less than Rs. 50,000.
c) General Damage (in case of death)-
The following General damages shall be payable in addition to
compensation outlined above-
Funeral expenses Rs. 2,000
Loss of Consortium, if beneficiary Rs. 5,000
is the spouse
Loss of Estate Rs. 2,500
Medical Expenses-actual expenses Rs. 15,000
incurred before death supported
by bills/vouchers but not
exceeding
Notational income for compensation to those who had no income prior
to accident-
Fatal and disability in non-fatal accident-
Non-earning persons Rs. 15,000 p.a.
Spouse Rs. 1/3rd income of the earning
surviving spouse.
In case of other injuries only "General Damage" as applicable.
16. The conventional heads as prescribed in the Second Schedule to
the Motor Vehicles Act has been found to be defective being
redundant, irrational and unworkable due to changed scenario
including the present cost of living and current rate of inflation and
increased life expectancy and different amount was fixed under
various heads by different judgments. The issue has now been
crystalized by the judgement in the case of Pranay Sethi (supra) vide
paragraph 50 to 52 and it has been held that loss of estate, loss of
consortium and funeral expenses should be Rs 15,000, Rs 40,000 and
Rs 15,000 respectively which should be enhanced on percentage basis
in every three years and the enhancement should be at the rate of 10%
in a span of three years.
17. Thus, compensation under the conventional head under Section
163A as well as Section 166 of the Act of 1988 is guided by the
quantum as mentioned in paragraph 52 of the judgment of Pranay
Sethi (supra).
18. With respect to deduction on account of personal expenses, it
has been held in paragraphs 25 and 26 of Sarla Verma (supra) that
one-third deduction on account of personal expenses got statutory
recognition under the Second Schedule to the Act, in respect of claims
under Section 163A of the Motor Vehicles Act, 1988 but, such
percentage of deduction is not an inflexible rule and offers merely a
guideline. Accordingly, it was held that it became necessary to
standardise the deductions to be made under the head of personal and
living expenses of the deceased which has been prescribed in
paragraph 32 of the judgement. Vide judgement in the case of Pranay
Sethi (supra) [paragraph 59.5] paragraph 30 to 32 of Sarla Verma
(supra) has been approved for determination of multiplicand and
personal expenses. It has been held that where the deceased was
married, the deduction towards personal and living expenses of the
deceased, should be-
Dependents Deduction from income of deceased on
account of personal expenses
2 to 3 1/3rd
4 to 6 1/4th
Exceeds 6 1/5th
Deceased is Bachelor 50%
Deceased bachelor survived by mother 50%
and siblings - only mother is treated as
dependent
Large family of deceased bachelor 1/3rd
consisting of widowed mother and large
number of younger non-earning sisters
or brothers
19. Thus, deduction of personal expenses under Section 163A as
well as Section 166 of the Act of 1988 is guided by the same
principles by virtue of judicial pronouncements.
20. The above discussions reveal that many components of
compensation on account of death have been put at par while granting
compensation under Section 163A and under Section 166.
21. The comparison between Section 163A and Section 166 of the
Act of 1988 has been considered in paragraph 34 onwards of the
judgement passed in the case of "Sarla Verma" (supra) and
discrepancies/errors in the multiplier scale given in the Second
Schedule table were pointed out and thereafter a table in paragraph 40
of the judgement to project different multipliers as decided by
different judgments as compared to that of Second Schedule to section
163A. The paragraphs are quoted as under: -
34. The Motor Vehicles Act, 1988 was amended by Act 54 of 1994, inter
alia, inserting Section 163-A and the Second Schedule with effect from
14-11-1994. Section 163-A of the MV Act contains a special provision
as to payment of compensation on structured formula basis, as
indicated in the Second Schedule to the Act. The Second Schedule
contains a table prescribing the compensation to be awarded with
reference to the age and income of the deceased. It specifies the amount
of compensation to be awarded with reference to the annual income
range of Rs 3000 to Rs 40,000. It does not specify the quantum of
compensation in case the annual income of the deceased is more than
Rs 40,000. But it provides the multiplier to be applied with reference to
the age of the deceased. The table starts with a multiplier of 15, goes up
to 18, and then steadily comes down to 5. It also provides the standard
deduction as one-third on account of personal living expenses of the
deceased. Therefore, where the application is under Section 163-A of
the Act, it is possible to calculate the compensation on the structured
formula basis, even where the compensation is not specified with
reference to the annual income of the deceased, or is more than Rs
40,000, by applying the formula: (2/3 × AI × M), that is two-thirds of
the annual income multiplied by the multiplier applicable to the age of
the deceased would be the compensation. Several principles of tortious
liability are excluded when the claim is under Section 163-A of the MV
Act.
35. There are however discrepancies/errors in the multiplier scale
given in the Second Schedule table. It prescribes a lesser
compensation for cases where a higher multiplier of 18 is applicable
and a larger compensation with reference to cases where a lesser
multiplier of 15, 16, or 17 is applicable. From the quantum of
compensation specified in the table, it is possible to infer that a
clerical error has crept in the Schedule and the "multiplier" figures
got wrongly typed as 15, 16, 17, 18, 17, 16, 15, 13, 11, 8, 5 and 5
instead of 20, 19, 18, 17, 16, 15, 14, 12, 10, 8, 6 and 5.
36. Another noticeable incongruity is, having prescribed the notional
minimum income of non-earning persons as Rs 15,000 per annum, the
table prescribes the compensation payable even in cases where the
annual income ranges between Rs 3000 and Rs 12,000. This leads to an
anomalous position in regard to applications under Section 163-A of
the MV Act, as the compensation will be higher in cases where the
deceased was idle and not having any income, than in cases where the
deceased was honestly earning an income ranging between Rs 3000
and Rs 12,000 per annum. Be that as it may.
37. The principles relating to determination of liability and quantum of
compensation are different for claims made under Section 163-A of the
MV Act and claims under Section 166 of the MV Act. (See Oriental
Insurance Co. Ltd. v. Meena Variyal.) Section 163-A and the Second
Schedule in terms do not apply to determination of compensation in
applications under Section 166. In Trilok Chandra this Court, after
reiterating the principles stated in Susamma Thomas, however, held
that the operative (maximum) multiplier, should be increased as 18
(instead of 16 indicated in Susamma Thomas), even in cases under
Section 166 of the MV Act, by borrowing the principle underlying
Section 163-A and the Second Schedule.
40. The multipliers indicated in Susamma Thomas, Trilok Chandra and
Charlie (for claims under Section 166 of the MV Act) is given below in
juxtaposition with the multiplier mentioned in the Second Schedule for
claims under Section 163-A of the MV Act (with appropriate
deceleration after 50 years):-
Age of the Multiplier Multiplier Multiplie Multiplier Multiplier
deceased scale as scale as r scale in specified actually used in
envisaged in adopted by Trilok in Second Second Schedule
Susamma Trilok Chandra Column in to the MV Act (as
Thomas [(19 Chandra [(19 4as the Table seen from the
94) 2 SCC 96) 4 SCC clarified in Second quantum of
176 362] in Schedule compensation)
Charlie [ to the MV
(2005) 10 Act
SCC 720
(1) (2) (3) (4) (5) (6)
yrs
yrs
yrs
yrs
yrs
yrs
yrs
yrs
yrs
yrs
yrs
yrs
41. .......................... We are concerned with cases falling under
Section 166 and not under Section 163-A of the MV Act. In cases
falling under Section 166 of the MV Act, Davies method is applicable.
42. We therefore hold that the multiplier to be used should be as
mentioned in Column (4) of the table above (prepared by applying
Susamma Thomas, Trilok Chandra and Charlie), which starts with an
operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17 for 26 to
30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for
41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units
for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70 years."
22. Thus, the principles of applying multiplier under Section 166
has been adopted from Second Schedule to Section 163A although the
applied multiplier is slightly different for the two sections as is
apparent from the aforesaid chart.
23. In the judgment passed by the Hon'ble Supreme Court
reported in (2009) 13 SCC 654 (Raj Rani and others Vs. Oriental
Insurance Company Limited and others), decided on 06.05.2009, the
Hon'ble Supreme Court was of the view that for the purposes of
computation of total amount of compensation under Section 163A of
Motor Vehicles Act, the future prospects may not be of much
relevance, but in a case where the claim petition has been filed in
terms of Section 166 of the Act, the same would be a relevant factor.
In the said case, the immediate future prospects of the deceased were
taken into consideration to determine the income. However, the
determination of compensation was under Section 166 of the Motor
Vehicles Act.
24. In the latter judgment passed by the Hon'ble Supreme Court,
reported in (2009) 14 SCC 1, (R. K. Malik and Anr. vs. Kiran Pal and
others) dated 15.05.2009, the matter was relating to compensation for
deceased children and claim was made under Section 163A of Motor
Vehicles Act. The question which fell before the Hon'ble Supreme
Court was to the grant of and quantification of compensation for
pecuniary and non-pecuniary loss in case of non-working students.
The Hon'ble Supreme Court in paragraph no.26 has observed that
while quantifying and arriving at a figure for "loss of expectation of
life", the court has to keep in mind that this figure is not to be
calculated for the prospective loss or future pecuniary benefits that has
been awarded under another head i.e. pecuniary loss. The
compensation payable under this head is for loss of life and not loss of
future pecuniary prospects. Under this head, compensation is paid for
termination of life, which results in constant pain and suffering which
does not dependent upon financial position of the victim or the
claimant, but the capacity and ability of the deceased to provide
happiness to the claimant.
The Hon'ble Supreme Court also considered that the record showed
that the children were good in studies and were studying in reasonably
good school and were bright, and thereafter the Hon'ble Supreme
Court considered the earlier judgments whereby the Hon'ble Supreme
Court had recognized such future prospects as a basic factor to be
considered and ordered accordingly for future prospects of children
vide paragraph nos.35 and 36 of the aforesaid judgment.
25. This Court finds that the matter regarding grant of
compensation where the children are victims has been subsequently
considered in various judgments including Reshma Kumari and Ors.
versus Madan Mohan and Anr. reported in (2013) 9 SCC 65 wherein
it has been held in paragraph 43.2 that in cases where the age of the
deceased is up to 15 years, irrespective of Section 166 or Section
163A under which the claim for compensation has been made,
multiplier of 15 and the assessment as indicated in Second Schedule
subject to correction as pointed out in Column (6) of the table in
"Sarla Verma" (supra) should be followed. It has been further held in
paragraph 43.3 that while considering the claim applications made
under Section 166 in death cases where the age of the deceased is
above 15 years, there is no necessity for the Claims Tribunal to seek
guidance or place reliance on the Second Schedule of Motor Vehicles
Act of 1988. It has also been held in paragraph no.43.1 that an
application for compensation made under Section 166 of 1988 Act in
death cases where the age of the deceased is 15 years and above, the
Claims Tribunal shall select the multiplier as indicated in Column (4)
of the table prepared in "Sarla Verma" (supra) read with paragraph
no.42 of the judgment.
26. This Court finds that the case of children victim has been
differently considered in the matter of grant of compensation, be it
under section 166 or section 163A of the Motor Vehicles Act.
Accordingly, reliance on the judgment passed by the Hon'ble
Supreme Court in the case of "R. K. Malik" (supra) to claim future
prospects in compensation under Section 163A of Motor Vehicles Act
for an adult does not apply.
27. The conclusions that were summed up in the case of "Reshma
Kumari" (supra) and also in the case of "Sarla Verma" (supra) has
been quoted in the case of Pranay Sethi (supra) in paragraph nos.40
to 44 as under:
"40. The conclusions that have been summed up in Reshma Kumari
are as follows: (SCC p. 91, para 43)
"43.1. In the applications for compensation made under Section
166 of the 1988 Act in death cases where the age of the deceased is
15 years and above, the Claims Tribunals shall select the multiplier
as indicated in Column (4) of the Table prepared in Sarla Verma
read with para 42 of that judgment.
43.2. In cases where the age of the deceased is up to 15 years,
irrespective of Section 166 or Section 163-A under which the claim
for compensation has been made, multiplier of 15 and the
assessment as indicated in the Second Schedule subject to
correction as pointed out in Column (6) of the Table in Sarla
Verma should be followed.
43.3. As a result of the above, while considering the claim
applications made under Section 166 in death cases where the age
of the deceased is above 15 years, there is no necessity for the
Claims Tribunals to seek guidance or for placing reliance on the
Second Schedule in the 1988 Act.
43.4. The Claims Tribunals shall follow the steps and guidelines
stated in para 19 of Sarla Verma for determination of
compensation in cases of death.
43.5. While making addition to income for future prospects, the
Tribunals shall follow para 24 of the judgment in Sarla Verma.
43.6. Insofar as deduction for personal and living expenses is
concerned, it is directed that the Tribunals shall ordinarily follow
the standards prescribed in paras 30, 31 and 32 of the judgment
in Sarla Verma subject to the observations made by us in para 41
above."
41. On a perusal of the analysis made in Sarla Verma which has been
reconsidered in Reshma Kumari, we think it appropriate to state that as far
as the guidance provided for appropriate deduction for personal and living
expenses is concerned, the tribunals and courts should be guided by
Conclusion 43.6 of Reshma Kumari. We concur with the same as we have
no hesitation in approving the method provided therein.
42. As far as the multiplier is concerned, the Claims Tribunal and the
courts shall be guided by Step 2 that finds place in para 19 of Sarla
Verma read with para 42 of the said judgment. For the sake of
completeness, para 42 is extracted below:
"42. We therefore hold that the multiplier to be used should
be as mentioned in Column (4) of the Table above (prepared
by applying Kerala SRTC v. Susamma Thomas, (1994) 2 SCC
176, UP SRTC v. Trilok Chandra, (1996) 4 SCC 362 and
New India Assurance Co. Ltd. v. Charlie, (2005) 10 SCC
720), which starts with an operative multiplier of 18 (for the
age groups of 15 to 20 and 21 to 25 years), reduced by one
unit for every five years, that is, M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to
45 years, and M-13 for 46 to 50 years, then reduced by two
units for every five years, that is, M-11 for 51 to 55 years, M-
9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to
70 years."
43. In Reshma Kumari, the aforesaid has been approved by stating, thus:
"37. ... It is high time that we move to a standard method of selection of
multiplier, income for future prospects and deduction for personal and
living expenses. The courts in some of the overseas jurisdictions have made
this advance. It is for these reasons, we think we must approve the Table
in Sarla Verma for the selection of multiplier in claim applications made
under Section 166 in the cases of death. We do accordingly. If for the
selection of multiplier, Column (4) of the Table in Sarla Verma is followed,
there is no likelihood of the claimants who have chosen to apply under
Section 166 being awarded lesser amount on proof of negligence on the
part of the driver of the motor vehicle than those who prefer to apply under
Section 163-A. As regards the cases where the age of the victim happens to
be up to 15 years, we are of the considered opinion that in such cases
irrespective of Section 163-A or Section 166 under which the claim for
compensation has been made, multiplier of 15 and the assessment as
indicated in the Second Schedule subject to correction as pointed out in
Column (6) of the Table in Sarla Verma should be followed. This is to
ensure that the claimants in such cases are not awarded lesser amount
when the application is made under Section 166 of the 1988 Act. In all
other cases of death where the application has been made under Section
166, the multiplier as indicated in Column (4) of the Table in Sarla
Verma should be followed."
44. At this stage, we must immediately say that insofar as the aforesaid
multiplicand/multiplier is concerned, it has to be accepted on the basis of
income established by the legal representatives of the deceased. Future
prospects are to be added to the sum on the percentage basis and
"income" means actual income less the tax paid. The multiplier has
already been fixed in Sarla Verma which has been approved in Reshma
Kumari with which we concur."
28. In the judgment passed in the case of "Sarla Verma" (supra), it
has been clearly held in paragraph no.37 that the principles relating to
determination of liability and quantum of compensation are different
for claims made under Section 163A of Motor Vehicle Act and claims
made under Section 166 of Motor Vehicles Act. It has also been held
that Section 163A and Second Schedule in terms do not apply to
determination of compensation under Section 166. However, it has
been held that operative maximum multiplier should be increased to
18 even in cases under Section 166 of Motor Vehicles Act by
borrowing the principles underlying Section 163A and the Second
Schedule and the multiplier prescribed in the Second Schedule has
been rectified in terms of Column 6 of the aforesaid chart in the case
of "Sarla Verma" (supra).
29. This Court finds that under the Schedule, there is no concept of
future prospects. Further, the maximum income prescribed in the table
in the Schedule to the Motor Vehicles Act for computation of
compensation is 40,000/- and the manner in which compensation is to
be calculated under Section 163A when the annual income is more
than 40,000/- has been considered in the case of "Sarla Verma"
(supra). In paragraph no.34 of the judgment passed in the case of
"Sarla Verma" (supra), it has been held that where the application is
under Section 163A of the Motor Vehicles Act, it is possible to
calculate the compensation on structured formula basis, even where
the compensation is not specified with reference to the annual income
of the deceased, or is more than Rs.40,000/- by applying the formula
(2/3 x AI x M) i.e. 2/3rd of the annual income multiplied by multiplier
applicable to the age of the deceased would be the compensation. It
has also been observed that several principles of tortious liability are
excluded when the claim is under Section 163A of Motor Vehicles
Act.
30. This Court is of the considered view that the quantum of
compensation under Section 163A and under Section 166 are not one
and the same, although certain principles are common by virtue of
various judgments of the Hon'ble Supreme Court.
31. This Court is of the considered view that future prospects,
having not been specifically provided in the Schedule and
compensation having been provided on structured basis under Section
163A, there is no scope for granting any amount as future prospects
while calculating the quantum of compensation under Section 163A
except in case of deceased being less than 15 years as held by the
Hon'ble Supreme Court as quoted above.
32. In the judgment passed by the Hon'ble Bombay High Court
Bench at Aurangabad in First Appeal No. 1403 of 2017 (Late Suman
Vishwanath Chavan and others Vs. The Divisional Controller), it
has been held that while determining the compensation under Section
163A, read with Second Schedule of Motor Vehicles Act, only
structural formula, prescribed therein can be taken into consideration
and has been ultimately held that no compensation can be added
towards loss of future prospects. In the judgment passed by the
Hon'ble Sikkim High Court reported in 2022 SCC Online Sikk 26
(Branch Manager, Sriram General Insurance v. Dilu Rai), the entire
background of the Motor Vehicles Act and the manner of fixing
compensation arising out of accident due to motor vehicle has been
considered and, inter alia, held that once a person invokes provisions
of Section 163A, the question of inclusion of future prospects does not
arise. It has also been held that the ratio of the judgment passed by the
Hon'ble Supreme Court in the case of R. K. Malik (supra) which
adverts to the decision in Lata Wadhwa v. State of Bihar (2001) 8
SCC 197 holds no relevance as those matters were concerned with
deaths of minors who were non-earning members. This Court agrees
with the views expressed by the aforesaid two judgements so far as
they relate to non-applicability of inclusion of future prospects while
computing compensation under section 163A read with the Second
Schedule to the Act which provides a structured formula for grant of
compensation when negligence of the owner /driver of the offending
vehicle need not be proved by the claimants.
33. Consideration of other judgements cited by the parties: -
A. In the judgment passed by the Hon'ble Delhi High Court
reported in 2017 SCC OnLine Del 11706 (Oriental Insurance
Company Ltd. v. Maman Singh), the tribunal had allowed an
element of future prospects while granting compensation under
Section 163A of Motor Vehicles Act and it was also contended
that the tribunal had failed to make any deduction on account of
personal and living expenses. In the said case, the Hon'ble High
Court observed that the claimant was not able to prove the
regular income of the deceased and, therefore, the tribunal was
constrained to go by the minimum wages and held that the
decision in the case of Pranay Sethi (supra), makes no
distinction between a claim under Section 166 or 163A of
Motor Vehicles Act for assessing the income and sustained the
element of future prospects.
This Court is of the considered view that compensation granted
for loss of annual income is different from compensation
granted by taking into account future prospects. This Court is of
the considered view that future prospects by itself is not a
component of annual income; for the purposes of computation
of compensation under Section 163A, what is required is the
assessment of annual income as per the Second Schedule to the
Act and not assessment of income inclusive of future prospects.
Accordingly, with all respect, this Court does not agree with the
views expressed in the aforesaid judgment passed by the
Hon'ble Delhi High Court.
B. In the judgment passed by the Hon'ble Gauhati High Court
reported in (2017) 0 Supreme (Gau) 1363 (New India
Assurance Co. Limited v. S. Muana and others), the Court
referred to judgment passed in the case of R. K. Malik (supra)
and held that just compensation would include payment of
compensation for future prospects. The same view was taken in
the judgment reported in 2022 0 Supreme (Gau) 365 (The New
India Assurance Company Ltd. v. Smt. Lalseli) wherein the
judgment passed by the Hon'ble Supreme Court in the case R.
K. Malik (supra) was followed to hold that future prospects is
to be considered while quantifying the claim under Section
163A of Motor Vehicles Act. Since this Court has come to a
conclusion that the judgement of R. K. Malik (supra) awarding
future prospects under section 163A is applicable only when the
victim is a child, the judgement passed by Hon'ble Gauhati
High Court following the judgement passed in the case of R. K.
Malik (supra) does not apply to the facts of this case where the
deceased was aged 32 years.
C. In the judgment passed by Hon'ble Bombay High Court in First
Appeal No. 250 of 2019 (Tata AIG General Insurance Co.
Ltd. Vs. Smt Bhagyashree Dhananjay Babardesari & Ors.), it
has been observed that claim petition can be filed under Section
166 or 163A, but while awarding compensation, it cannot be
differentiated on the basis of sections under which it is filed,
and therefore, the awarding of future prospects under Section
163A of Motor Vehicles Act cannot be questioned. This Court
finds that the said judgment in First Appeal No.250 of 2019 is
contrary to the judgment passed by the same High Court in
First Appeal No.1403 of 2017 and the judgment passed in First
Appeal No. 1403 of 2017 was not brought to the notice of the
court while deciding First Appeal No. 250 of 2019 on
23.12.2022.
34. This Court is of the considered view that the scheme of
computation of compensation under Section 166 and 163A are
different, although by virtue of judicial pronouncements there has
been standardization while giving benefits under certain heads
including conventional heads, deduction on account of personal
expenses which have been uniformly made applicable to
compensation under section 163A and 166 by citing reasons. The
multiplier prescribed under Column 4 of the aforesaid chart is
applicable under Section 166 for deceased above 15 years and
multiplier prescribed under Column 6 of the aforesaid chart is
applicable under Section 163A. Upon comparison of Column 4 and 6
of the aforesaid chart, the multipliers of all the age groups beyond age
of 20 years are same or less under column 6 except in column for 15
to 20 years the multiplier is higher in column 6 (19) as compared to
column 4 (18). If future prospects are permitted to be added to income
while computing income under Section 163A for deceased between 15
to 20 years, the claimants would end up getting more compensation
under Section 163A as compared to Section 166. A person seeking
compensation under Section 163A cannot be placed at a better footing
as compared to one seeking compensation under Section 166 of the
Act. The law is well settled that the compensation under Section 163A
shall not exceed the compensation under Section 166. A claimant who
has not to prove negligence of the owner/driver of the offending
vehicle under Section 163A cannot be better placed than a person who
has to prove negligence of driver/owner of the offending vehicle under
section 166 of the Act.
35. This Court is of the considered view that inclusion of future
prospects while calculating the compensation under Section 163A is
not contemplated under the Act and the scheme of Second Schedule to
the Act.
36. This Court is of the considered view that in general, there is no
scope for awarding future prospect while computing income of the
deceased aged more than 15 years for compensation under Section
163A of Motor Vehicle Act, although future prospect constitutes an
important component while computing compensation under Section
166 of Motor Vehicles Act.
37. In the present case, the deceased is the driver of the vehicle who
was hit by another vehicle. The claimants need not prove the
negligence of the owner/driver of the other vehicle to claim
compensation under Section 163A. The claimants have been
accordingly held to be entitled for compensation irrespective of out of
the two drivers, who was at fault or was negligent. The claimants
having invoked Section 163A cannot be permitted to claim
applicability of the principles of awarding compensation under
Section 166. Rather, they are to be guided by the scheme of the
method of calculation under Section 163A read with the Second
Schedule and also read with various judgments of the Hon'ble
Supreme Court as discussed above. In case the future prospects of the
deceased are allowed to be included while quantifying the
compensation under Section 163A of the Act, there would be no
difference between the quantification of damages under Section 163A
and 166 of the Act which would be against the scheme of Act and for
the age group 15 to 20, the compensation under Section 163A would
be higher than under Section 166 of the Act.
38. As a cumulative effect of the aforesaid findings, this Court
answers the point of determination by holding the Claimants are not
entitled to addition of future prospects to the income of the deceased
in computation of compensation under Section 163A of the Motor
Vehicles Act, 1988.
39. This miscellaneous appeal is accordingly dismissed.
(Anubha Rawat Choudhary, J.)
Binit/Saurav
