Gujarat High Court
New India Assurance Company Limited ... vs Thakker Kesharbai Wd/O Pragaji Hansraj on 14 February, 2025
NEUTRAL CITATION
C/FA/2543/2009 CAV ORDER DATED: 14/02/2025
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Reserved On : 31/01/2025
Pronounced On : 14/02/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2543 of 2009
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NEW INDIA ASSURANCE COMPANY LIMITED THROUGH Versus THAKKER KESHARBAI WD/O PRAGAJI HANSRAJ & ORS.
========================================================== Appearance:
MR VIBHUTI NANAVATI(513) for the Appellant(s) No. 1 KAASH K THAKKAR(7332) for the Defendant(s) No. 3,4,5 MR KK THAKKAR(2834) for the Defendant(s) No. 3,4,5 RULE UNSERVED for the Defendant(s) No. 1,1.1 UNSERVED EXPIRED (R) for the Defendant(s) No. 2 ========================================================== CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI CAV ORDER Being aggrieved by the judgment and award passed by the learned Chairman, Motor Accident Claims Tribunal (Aux.), Banaskantha at Palanpur on 19.7.2008 in MAC Petition No. 364 of 1986, the appellant has preferred this appeal whereby the learned tribunal awarded compensation of Rs.6,11,000/- with interest at the rate of 9% from the date of filing of the petition till its realization, the appellant has filed this appeal.
2. The Short fact of the case are that the accident had occurred on 17.4.1986 at 4 clock on the road leading from Khimana to Deodar nearby Reva village. One Prajapati Kalubhai was traveling in Jeep bearing No. GAE 3705. He was going from Deodar to Khimana. The jeep was going slowly on its right side. Suddenly one Truck coming from opposite Page 1 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined bearing No. GTP 4363. The Truck was coming negligently in the middle of the road. Jeep driver has left the road and speed of jeep was reduced but the truck collided with the Jeep on the right side. There was big collusion. The steering of Jeep was broken. The Jeep driver died on the spot. Jeep loss the control and went into nearby field. The applicants were seriously injured, some injured were died, their legal heirs filed the claim petition.
2.1 The learned tribunal after considering the oral and documentary evidence has passed the award as stated in paragraph 1 of this judgment.
3. Method of fixing the income of the deceased has been mainly questioned by the appellant-insurance company. In support of such contention learned advocate Mr.Nanavaty appearing for the appellant referred to the unnumbered paragraph of the impugned judgment and award (page 19) to submit that learned tribunal has seriously erred in taking future pay of the deceased to fix the income. Elaborating his submission, learned advocate Mr.Nanavaty submit that learned tribunal added the salary of the deceased at the time of death with the salary that the deceased could fetch if he survived and taken mean of the same to fix income of the deceased, he would submit that such approach of the learned tribunal to fix income is erroneous.
3.1 Learned advocate Mr.Nanavaty would refer the decision rendered by this Court in First Appeal No.1856 of 2012 dated 06/01/2025 and decision in case of Oriental Insurance Company Limited vs. Jashuben [2008 (4) SCC 162] to submit that estimate of the amount of loss of Page 2 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined dependency in a case where petition is filed under Section 166 of the MV Act may be arrived at by adopting various methods, application of structured formula being one of them. He would submit that while determining the amount of compensation, certain well-known principles must be kept in mind. He would submit that it is not a case where, as on the date of death, the salary of the deceased was revised with retrospective effect which may permit the court to adopt revised salary as last pay before death. Learned Advocate Mr.Nanavaty would submit that deceased at the time of road accident was earning Rs.684/- per month, revised salary taken into consideration by the tribunal was Rs.7,138/-, learned tribunal has taken mean of that, to fix the income of the deceased to Rs.3,911/- and added some amount of supervisory loss for agriculture field and adopted Rs.4,000/- towards monthly income of the deceased, which is erroneous approach on the part of the tribunal to compute and assess the compensation.
3.2 By making above submissions, learned Advocate Mr.Nanavaty would submit to allow this appeal and to interfere with the finding of the learned tribunal in respect of determination of the income aspect.
4. Per contra, learned Advocate Mr.Kash Thakkar referring to the decision rendered by the co-ordinate Bench of this Court in First Appeal No.2738 of 2022 dated 24/07/2023 would submit that in the identical fact situation, the co-ordinate Bench has taken the view that if the data of revised pay-scale is available, the same should be taken into consideration as average of the income is needed to be fixed into the income of the deceased.
Page 3 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined 4.1 Learned Advocate Mr.Thakakr would also refer to the decision in
case of Ramrao Lala Borse vs. New India Assurance Company Limited [2018 (3) SCC 204] to argue that if the evidence of enhanced income is available, the Court needed to take into consideration to decide the income aspect for arriving at just and fair compensation. Reference is also made to the decision in case of Sureshchandra Bagmal Doshi vs. New India Assurance Company Limited [2018 ACJ 1434] to submit that if the evidence available on record, the departure from the formula carved out in the case of National Insurance Company Ltd. Vs. Pranay Shethi [(2017) 16 SCC 680] is permissible. It is further submitted that it is not always necessary to grant loss of future prospect either at 40% or 50% as the case may be ; departure there-from is permissible in case of evidence available on record. He would submit that before the learned tribunal the claimant have produced the certificate issued by the Deputy Executive Engineer, Deesa, Irrigation Department, Division-2, Deesa to show the salary of the deceased at the time of his death and the salary which he could have obtained if he survived. He would submit that in view of such aspect, since sufficient evidence was available learned tribunal has not committed any error in taking up the average of the salary and to fix the average as income of the deceased to grant compensation.
4.2 By making above submissions, he would submit to dismiss the present appeal.
5. Having heard the learned advocates appearing for the respective Page 4 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined parties, it is noticeable that issue of road accident, death of deceased out of the said road accident is no more in dispute. It is also undisputed that deceased was working as Work Charge Watchman in the office of Deesa Irrigation Department and died on 17/04/1986 out of the road accident and at that time his gross salary was Rs.684/- per month. Insistence of learned advocate Mr.Thakkar appearing for the org. claimant that as the data of salary for the year 2007 is available at Exh.112, the same rightly been visited by the learned tribunal while fixing the income and base for computing future dependency loss and loss of future prospect.
5.1 Notably, the learned tribunal adopted the method of adding the income of the deceased at the time of his death and the salary for the work-charge watchman available at October, 2007 and then take up the average of it to fix the income of the deceased at Rs.4,000/-.
6. In case of Jashuben (supra), the Hon'ble Apex Court has held in paragraph 11 to 13 as under:
"11. The amount of compensation payable to the heirs and legal representatives of a deceased victim of an accident must be a fair and reasonable one. The estimate of the amount of loss of dependency may be arrived at by adopting various methods, application of structured formula being one of them. Such a formula has also been provided for in Schedule II appended to the Motor Vehicles Act, 1988. While determining the amount of compensation, certain well-known principles must be kept in mind.
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12. It is not a case where, as on the date of death, the salary of the deceased was revised with retrospective effect from 1994. Salary would be revised or not was not known at that part of time. Only because such salary was revised at a later point of time, the same by itself would not have been a factor which could have been taken into consideration for determining the amount of compensation. The Tribunal, therefore, committed a serious illegality in taking into consideration the latter aspect.
13. The amount of compensation indisputably should be determined having regard to the pecuniary loss caused to the dependents by reason of the death of the victim. It was necessary to consider the earnings of the deceased at the time of the accident...."
7. In Pranay Shethi (supra) by making detailed analysis of various method for assessing loss of future earning and loss of future prospect, the Hon'ble Apex Court has held in paragraph 31 to 33 as under:
"31. At this stage, a detailed analysis of Sarla Verma (supra) is necessary. In the said case, the Court recapitulated the relevant principles relating to assessment of compensation in case of death and also took note of the fact that there had been considerable variation and inconsistency in the decision for Courts and Tribunals on account of adopting the method stated in Nance v. British Columbia Electric Railway Co. Ltd. 35 and the method in Davies v. Powell Duffryn Associated Collieries Ltd.36. It also analysed the difference between the considerations of the two Page 6 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined different methods by this Court in Susamma Thomas (supra) wherein preference was given to Davies method to the Nance method. Various paragraphs from Susamma Thomas (supra) and Trilok Chandra (supra) have been reproduced and thereafter it has been observed that lack of uniformity and consistency in awarding the compensation has been a matter of grave concern. It has stated that when different tribunals 1951 SC 601 : (1951) 2 All ER 448 (PC) 1942 AC 601 : (1942) 1 All ER 657 (HL) calculate compensation differently on the same facts, the claimant, the litigant and the common man are bound to be confused, perplexed and bewildered. It adverted to the observations made in Trilok Chandra (supra) which are to the following effect:-
"15. We thought it necessary to reiterate the method of working out 'just' compensation because, of late, we have noticed from the awards made by tribunals and courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realised that the Tribunal/court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused. ..."
32. While adverting to the addition of income for future prospects, it stated thus:-
Page 7 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined "24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words "actual salary" should be read as "actual salary less tax"). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted.
Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances."
33. Though we have devoted some space in analyzing the precedential value of the judgments, that is not the thrust of the controversy. We are required to keenly dwell upon the heart of the Page 8 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined issue that emerges for consideration. The seminal controversy before us relates to the issue where the deceased was self- employed or was a person on fixed salary without provision for annual increment, etc., what should be the addition as regards the future prospects. In Sarla Verma, the Court has made it as a rule that 50% of actual salary could be added if the deceased had a permanent job and if the age of the deceased is between 40 - 50 years and no addition to be made if the deceased was more than 50 years. It is further ruled that where deceased was self-employed or had a fixed salary (without provision for annual increment, etc.) the Courts will usually take only the actual income at the time of death and the departure is permissible only in rare and exceptional cases involving special circumstances."
8. What could be deduced from the aforesaid ratio that the actual salary of the deceased should be taken to calculate the dependency and loss of future prospect. Salary of the deceased as potential to revise at later point of time would not be the factor which could have been taken into consideration for determining the amount of compensation. Future is uncertain. There may be or may not be revision in the income. The case like on hand where the deceased was work charge employee could have lost his job for multiple reason. The Hon'ble Apex Court in Pranay Shethi (supra) therefore carved out the formula to assess the loss of future prospect. Such formula or method carved out by the Apex Court cannot be brushed aside by the learned tribunal by taking up the effect of Exh.112 to hold that the salary of the deceased on 04/04/1986 was Rs.684/- which is to be added with the revised salary which the deceased could have fetched in 2007 and to take the average income thereof to Page 9 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined assess the loss of dependency and loss of future prospect. Such being a novel method or procedure adopted by the tribunal having no backing of the provisions of law could not sustain and cannot be made basis to compute the just and fair compensation. There is no evidence on record which permit the learned tribunal to deviate from the settled legal position of law to take departure from principle carved out in aforesaid cases. Therefore, the finding of the tribunal is found to be seriously erroneous and therefore deserves to be quashed and set aside.
9. Insofar as the decision rendered in First Appeal No.2738 of 2022 by the co-ordinate Bench is concerned, against which the SLP (Civil) No.51628 of 2023 is filed whereby the Hon'ble Apex court stayed the implementation of the judgment. The decision in case of Ramrao Lola Borse (supra) is also on different aspect than the facts of the present case and therefore the said ratio would not be helpful to the case of the org. claimant.
10. In view of the above, the appeal deserves to be allowed. Accordingly, it is allowed. The calculation of just and fair compensation arrived at by the learned tribunal is quashed and set aside and matter is remanded to the learned tribunal for fresh consideration on income aspect of the deceased. The proceedings of MACP No.364 of 1986 arising from MACT, Mehsana is remanded to the tribunal concerned for fresh consideration on the aspect of income permitting the parties to lead necessary evidence if they so desire. Learned PDJ, Mehsana is requested to decide the said case, as early as possible, preferably within three months from the date of the receipt of the writ of this order. To be noted Page 10 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025 NEUTRAL CITATION C/FA/2543/2009 CAV ORDER DATED: 14/02/2025 undefined that if any amount pursuant to the judgment and award is paid to the org. claimant, the same shall not be recovered. At the same time, if any amount is deposited by the appellant before the tribunal, precluding statutory payment, the same shall continue in FDR and shall be subject to the outcome of fresh decision on the claim petition.
Registry to return back the R & P forthwith; without fail.
(J. C. DOSHI,J) sompura Page 11 of 11 Uploaded by SOMPURA MANISHKUMAR JYOTINDRA(HC00189) on Fri Feb 14 2025 Downloaded on : Sat Feb 15 03:25:18 IST 2025