Bombay High Court
The New India Assurance Co. Ltd vs Smt.Alpa Rajesh Shah on 19 October, 2013
Author: A.S.Oka
Bench: A.S.Oka, Revati Mohite Dere
1 fa848 final draft
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELATE JURISDICTION
FIRST APPEAL NO.848 OF 2012 WITH
CROSS OBJECTION ST.NO.25362 OF 2013
The New India Assurance Co. Ltd. ...Appellant
vs.
Smt.Alpa Rajesh Shah
Master Urvil Rajesh Shah
Kasturben Mulchand Shah
Ramkrishna S. Ghawte ...Respondents
Mr.Devendranath S. Joshi for the Appellant in FA
848/2012
Mr.T.J.Mendon for the respondent in FA 848/2012 and
in Cross Objection
CORAM : A.S.OKA, AND REVATI MOHITE DERE, JJ.
DATE ON WHICH JUDGMENT IS RESERVED:SEPTEMBER 30,2013
DATE ON WHICH JUDGMENT IS PRONOUNCED:OCTOBER 19,2013
JUDGMENT:(Per A.S.Oka,J.) 1 By this appeal, the appellant the New India Assurance Company Limited has taken an exception to the Judgment and Award dated 23 rd September 2011 passed by the learned Chairman of the Motor Accident Claims Tribunal, Mumbai in a claim petition filed by the respondents under section 166 of the Motor Vehicles Act,1988 (for short "the said Act"). The claim for compensation was made on account of death of one Rajesh Shah in a vehicular accident on 18 th February 1989. The first respondent is the widow of the deceased Rajesh. The second respondent is the minor son of the deceased Rajesh and the third ::: Downloaded on - 27/11/2013 20:27:53 ::: 2 fa848 final draft respondent is the mother of the deceased Rajesh. To the original claim petition, even the father of the deceased Rajesh was made a party who died during the pendency of the claim petition. Thereafter, his name has been deleted.
2 The case made out in the claim petition was that on 18th February 1999, the deceased Rajesh was proceeding by a car on Mumbai Pune highway. The accident occurred at about 9.00 p.m close to Balewadi stadium near Pune. At that time, a motor tanker came from the opposite direction. The motor tanker was admittedly owned by the fourth respondent which was admittedly insured with the appellant on the date of accident. The tanker gave a dash to the car by which the deceased was travelling. It is alleged that the accident occurred due to rash and negligent driving of the tanker by its driver. As a result of the injuries sustained in the accident, Rajesh died.
3 Though the claim petition was not contested by the fourth respondent, after obtaining a leave under section 170 of the said Act, the appellant contested the claim. The Tribunal held that the accident occurred due to rash and negligent driving on the part of the driver of the tanker. The Tribunal proceeded to grant compensation of Rs.21,90,000/- with interest thereon at the rate of 7.5% per annum from the date of filing of the claim petition. First to third respondents claimed compensation of Rs.1 crore. Cross objection Stamp No.25362 of 2013 has ::: Downloaded on - 27/11/2013 20:27:53 ::: 3 fa848 final draft been filed by the first to third respondents claiming additional compensation of Rs.30,00,000/-.
4 The learned counsel for the appellant urged that it was a case of head on collision and therefore, even the driver of the car had contributed to the accident. He urged that the Tribunal ought to have held that the liability of both the vehicles was equal. He submitted that the income taken by the Tribunal for the purposes of calculating multiplicand is on the higher side. He urged that even in the deposition of the first respondent, she did not state that the father of the deceased was financially dependent on the deceased. He, therefore, urged that there were only three dependents viz; widow, son and mother of the deceased. He, therefore, urged that the Tribunal committed an error by deducting only ¼ income of the deceased on account of personal expenditure of the deceased and that the deduction ought to have been 1/3. He submitted that the age of the deceased on the date of accident was more than 30 but less than
31. Relying upon the decision of the Apex Court in case of Sarla Verma and others vs. Delhi Transport Corporation1, he submitted that the multiplier of 16 ought to have been applied which is applicable to the age group of 31 to 35 years. He urged that the compensation granted is exorbitant.
5 The learned counsel for the respondent Nos.1 to 3 submitted that as the deceased had not completed 1 2009 (6) SCC 121 ::: Downloaded on - 27/11/2013 20:27:53 ::: 4 fa848 final draft age of 31 years, multiplier of 17 has been rightly applied as per the decision of the Apex Court in case of Sarla Verma. He urged that in the claim application it is stated that even the father of the deceased was dependent on the deceased. He urged that merely because the father died during the pendency of the claim application, his dependency cannot be ignored. He urged that in the income tax returns for the Assessment years 1997-1998 to 1999- 2000 show that there was a steady increase in the income of the deceased who was running a liquor shop. He, therefore, urged that the future prospects increase in the earnings of the deceased ought to have been taken into consideration by the Tribunal. He submitted that 50% of the income of the deceased on the date of accident ought to have been added for the purpose of calculating the multiplicand. He urged that in the light of the decision of the Apex Court in the case of Vimal Kanwar and others Vs. Kishore Dan and others2 a sum of Rs.1,00,000/- each ought to have been granted to the respondent Nos.1 to 3 on account of loss of love and affection.
6 The learned counsel for the appellant relying upon the recent decision of the Apex Court in case of Reshma Kumari and others vs. Madan Mohan and another3, submitted that the Apex Court has held that in case of a deceased who was self employed, 2 2013 ACJ 1441 3 Civil Appeal No.4646 of 2009 and 4647 of 2009 decided on 2nd April 2013 ::: Downloaded on - 27/11/2013 20:27:53 ::: 5 fa848 final draft future prospects of enhancement of income can be considered only in exceptional cases.
7 We have considered the submissions. The first question will be as regards the negligence. The first to third respondents examined one Hemant who was travelling with the deceased at the time of accident. He has deposed that at the time of accident, the car was proceeding in a moderate speed. He deposed that the tanker came on its wrong side and gave a dash. In the cross examination, he admitted that the accident took place at about 9.30 p.m. He stated that the headlight of the motor car were on. In the cross examination, he denied the correctness of the suggestion that the driver of the car was driving the vehicle in a very high speed.
In the cross examination, it is brought on record that the width of the road at the spot of the accident was 60 feet. He stated that at the time of accident, Maruti Zen car by which he was travelling was at the distance of 12 feet from the left edge of the road. Thus, there was a distance of about 18 feet between the car and the center of the road. It is stated that the front portion of the tanker dashed against the car. All this has come on record in the cross examination of the witness made by the appellant. All this supports the case that the tanker came on its wrong side. There was no attempt made by the appellant to examine the driver of the Tanker. Therefore, it was a fit case to draw an adverse inference against the Appellant and the insured. That is why the Tribunal rightly came to ::: Downloaded on - 27/11/2013 20:27:53 ::: 6 fa848 final draft the conclusion that the accident occurred on the part of the driver of the tanker. There is no reason to disturb the said finding.
8 Now, the other issue is regarding the quantum of compensation. The first respondent (the widow of the deceased) stepped into the witness box. She stated that at the time of death, the deceased was the Proprietor of business of M/s.Roshni Wines. She produced income tax returns of the deceased in evidence. The said income tax returns were marked as Exh.25 (collectively). The income tax return of the assessment year 1997-98 shows that the net profit of earned by the deceased was Rs.1,75,739/-. Income tax return for the assessment year 1998-99 shows that the net income of the deceased was Rs.2,30,453/-. The income tax return for the assessment year 1999-2000 shows that the net income of the deceased was Rs.2,10,750/-. We must note here that the deceased died on 18th February 1999. Thus, the net income of the deceased of Rs.2,10,750/- for the financial year ending with 31st March 1999 was in fact the income for the period of approximately 11 months.
9 The learned Member of the Tribunal while calculating the multiplicand has deducted the tax payable from the net income for the said three years and has taken the average of the income of three years. Thus, he has taken the yearly income of the deceased at Rs.1,60,000/- for the purposes of computing multiplicand. We find that the learned ::: Downloaded on - 27/11/2013 20:27:53 ::: 7 fa848 final draft Member has committed an error by taking the average of the income for last three years. The income on the date of death ought to have been taken into consideration after deducting the income tax payable.
10 Now another question is whether future prospects of income should be taken into consideration. In the case of Reshma Kumari and others, in paragraph 36 of the decision, the Apex Court observed thus:
"36...In the case where the deceased was self-employed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases."
(emphasis added) This observation will apply only to the cases where the deceased was self employed or was employed on a fixed salary with no provision for increments. In other cases, the decision of Sarla Verma will apply.
11 We must refer to another decision of the Apex Court in case of Santosh Devi vs. National Insurance Co. Ltd.4. In paragraph 14 of the said decision, 4 Civil AppealNo.3723/2012 decided on 23rd April 2012 ::: Downloaded on - 27/11/2013 20:27:53 ::: 8 fa848 final draft the Apex Court considered the decision in case of Sarla Verma (supra). The Apex Court observed that the decision in case of Sarla Verma (supra) does not lay down a rule that there will be no addition in the income of the persons who were self employed. In fact the Apex Court also observed that it would be reasonable to say that a person who is self employed will also get 30% increase in his total income over a period of time.
12 Thus, there is no prohibition on considering the future prospects of increase in the earning of the deceased who was self employed. However, the claimants must produce satisfactory evidence to show that there were genuine prospects of increase or enhancement in the earnings of the deceased. The observation of the Apex Court in case of Reshma Kumari (supra) means that normally in case of a deceased who was self employed, the Tribunal cannot take into account the future prospects of increase in earnings of the deceased. However, only when there is strong and positive evidence on record to show that there were definite prospects of increase in the income of the deceased in future, such a case can be treated as an exceptional case in which future prospects of increase in the earning can be considered by the Tribunal.
13 Turning to the facts of the case, the learned Member of the Tribunal has recorded a finding that for carrying on business of sale of wine or liquor, a licence is required. The Tribunal observed that ::: Downloaded on - 27/11/2013 20:27:53 ::: 9 fa848 final draft even the licence has not been produced by the respondent No.1 to 3. Perusal of the affidavit in lieu of examination-in-chief of the first respondent shows that she has not even stated that the deceased had obtained a licence which was in force up to a particular date. In the cross examination, she stated that she was not aware where the certificate of shop of the deceased under the Shop and Establishment Act,1948 and liquor licence were lying. She admitted that at the place where business of M/s.Roshni Wines was being conducted, the brother-in-law of her sister-in -law (wife of the brother of deceased)is carrying on the business sale of dry fruits. The first respondent has not even disclosed the year from which the deceased started business of Roshni Wines. She has not given any particulars as regards the investments made by the deceased, the number of staff members employed by the deceased and the right of the deceased in respect of the premises in which he was carrying on business. There was no evidence adduced as regards the potential to earn more income in future. In absence of any such evidence, it is not possible to consider the future prospects of increase in earnings of the deceased who was self employed.
14 Income tax returns for the period of three years immediately prior to the date of death of the deceased show that the net income of the deceased was Rs.1,75,739/-, Rs.2,30,435/- and Rs.2,10,750/- respectively. The last figure represents income for about 11 months. The income on the date of death ::: Downloaded on - 27/11/2013 20:27:53 ::: 10 fa848 final draft will have to be taken into consideration for determination of multiplicand. It is true that for the purpose of calculating multiplicand, income tax payable on net income has to be deducted. The income tax paid by the deceased for the assessment year 1999-2000 was Rs.29,554/- out of which a sum of Rs.25,000/- was already paid on 15th December 1998 during the life time of the deceased. After deducting the said amount of Rs.29,554/- from the income of the deceased of Rs.2,10,750/- for about 11 months, the net amount comes to Rs.1,81,196/-.
Thus, the net monthly income after deducting income tax was Rs.16,472/-. Adding Rs.16,472/- to Rs.1,81,196/-, the yearly net income at the time of death of deceased comes to Rs.1,97,668.00 which can be rounded off to Rs.2,00,000/-.
15 The other issue is regarding the number of the dependents on the deceased at the time of his death. In the deposition of the first respondent, she has stated that she herself, her daughter and her mother-in-law were dependents. She has not at all stated that her father-in-law was also depending on the deceased for financial support. Therefore, the learned counsel for the appellant was right to the extent that the total number of dependents ought to have been taken as three and in terms of the decision of the Apex Court in the case of Sarla Verma, 1/3rd amount ought to have been deducted on account of personal expenditure of the deceased. After deducting 1/3rd amount from Rs.2,00,000/-, yearly income can be taken at Rs.1,33,333/-.
::: Downloaded on - 27/11/2013 20:27:53 :::11 fa848 final draft 16 The other issue is regarding the multiplier to be applied in terms of the decision of the Apex Court in the case of Sarla Verma (supra). The date of birth of the deceased was 29th June 1968. So on the date of accident, his age was about 30 years and 8 months. The Apex Court in paragraph 42 of its decision in the case of Sarla Verma (supra) has held that the multiplier of 17 shall be applied for the age group of 26 to 30 years and multiplier of 16 shall be applied for the age group of 31 to 35 years. The submission of the learned counsel for the appellant is that the deceased was falling in the age group of 31 to 35 years. However, the deceased had not completed age of 31 years. On this aspect, it will be necessary to make a reference to the decision of this Court in the case of National Insurance Company Limited vs. Vaishali Harish Devare and others5. This was a case where the age of the deceased was more than 40 years but less than 41 years. The issue was whether the deceased will fall in the age group of 36 to 40 years or the age group of 41 to 45 years in terms of the decision of the Apex Court in the case of Sarla Verma. Relying upon the decision of the Apex Court in the case of Sarla Verma (supra), in paragraph 26 this Court held thus:
"26....The completed age of the deceased at the time of death was 40 years. In terms 5 First Appeal No.1068 of 2012 decided on 31st August 2012 ::: Downloaded on - 27/11/2013 20:27:53 ::: 12 fa848 final draft of the decision of the Apex Court in case of Sarla Verma and others (supra), for the age group of 36 to 40 multiplier of 15 has been specified. For the age group of 41 to 45, multiplier of 14 has been specified. Therefore, by applying multiplier of 15, the total 1000 of dependency will be Rs.49,95,000/-..."
17 The said decision of this Court was challenged by the appellant therein before the Apex Court by filing a Special Leave Petition. The Special Leave Petition was dismissed by the Judgment and Order dated 28th January 2013. While dismissing the Special Leave Petition, the Apex Court held thus:
"In our view, the findings recorded by the Tribunal, which have been approved by the High Court, on the issues of rash and negligent driving of the offending truck by its driver and liability of the petitioner to pay compensation to the claimants are based on correct analysis of the pleadings and evidence produced by the parties. The approach adopted by the Tribunal and the High Court for determination of the amount of compensation is also correct and is consistent with the law laid down by this Court and the impugned Judgment does not call for interference under Article 136 of the Constitution."
(underline supplied) ::: Downloaded on - 27/11/2013 20:27:53 ::: 13 fa848 final draft 18 Therefore, in the present case, the deceased will fall in the age group of 26 to 30 years. Hence, multiplier of 17 will have to be applied. If multiplier of 17 is applied, total amount comes to Rs.22,66,661/-. Relying upon the decision of Vimal Kanwar and others the learned counsel for the claimant contended that a sum of Rs.1,00,000/- will have to be granted to the respondent Nos.1 to 3 each account of loss of love and affection. Perusal of the said decision shows that the Apex Court has not laid down as a proposition of law that the children and parents of the deceased are entitled to compensation of Rs.1,00,000/- each on account of loss of love and affection. It is in the facts of the case before the Apex Court that such amounts have been granted. We are dealing with the accident of the year 1999. Therefore, amount of Rs.25,000/- each deserves to be granted on account of funeral expenses and loss of consortium to the respondent Nos.1. Thus, adding a sum of Rs.50,000/-, total compensation payable will be Rs.23,16,661/- which can be rounded off to Rs.23,16,700/-. The Tribunal has granted interest on the compensation amount at the rate of 7.5% per annum from the date of the claim application till its realization. We find no fault with the said part of the impugned Judgment and Award.
19 Hence, we pass the following order:
(I) Impugned Judgment and Award dated 23rd September 2011 is hereby modified. We direct ::: Downloaded on - 27/11/2013 20:27:53 ::: 14 fa848 final draft that total compensation payable to the respondent Nos.1 to 3 shall be Rs.23,16,700/-
(inclusive of no fault liability under section 140 of the Motor Accident Act,1988) instead of Rs.21,90,000/-. Rest of the award as regards the interest and proportionate costs of the claim petition is maintained.
(II) First Appeal No.848 of 2012 is accordingly dismissed. Cross Objection Stamp No.25362 of 2013 is accordingly partly allowed. The respondent Nos.1 to 3 shall be entitled to proportionate costs of both the Appeal and Cross Objection from the Appellant;
(III) Apportionment of the compensation shall be as per the impugned Judgment and Award; (IV) Civil application No.1789 of 2012 does not survive and the same is disposed of.
(REVATI MOHITE DERE,J.) (A.S.OKA,J.) ::: Downloaded on - 27/11/2013 20:27:53 :::