Punjab-Haryana High Court
National Insurance Company Limited vs Gurdev Kaur And Others on 18 February, 2014
FAO No. 929 of 2014(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO No. 929 of 2014(O&M)
Date of decision :18.02.2014
National Insurance Company Limited ......Appellant
Versus
Gurdev Kaur and others ...... Respondents
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CORAM : HON'BLE MR. JUSTICE AJAY TEWARI
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Present : Dr.(Mrs.)Swatantar Kapoor, Advocate
for the appellant.
Mr.Munish Gupta, Advocate
for respondents No. 1 and 2-caveators.
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i. Whether Reporters of local papers may be allowed to see the judgment?
ii. To be referred to the Reporters or not?
iii.Whether the judgment should be reported in the Digest?
AJAY TEWARI, J. (Oral)
This appeal has been filed against the award dated 11.11.2013 passed by the MACT, Hoshiarpur.
Brief facts of the case are that on 12.03.2012 at about 6.30 p.m. Ashok Kumar (since deceased) was driving motor cycle bearing no. PB- 07Q-3340 and was returning from village Nasrala to his native village Chak Gujran. Piara Lal son of Harnam Dass was following him on another motor cycle. When Ashok Kumar reached Hoshiarpur-Jalandhar Road, a tempo traveller bearing No. PB-01-7134 came from opposite side being driven in a very rash and negligent manner and at a very high speed struck against the Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 2 motor cycle of the deceased with full force on coming to wrong side of the road due to which the deceased was stuck in the front wheel of the tempo traveller and was dragged to some distance and received various multiple grievous injuries. He was shifted to Civil Hospital, Hoshiarpur but he died on the way to hospital. He was 25 years of age at the time of his death. The Tribunal presumed him to be a labourer, assessed his monthly income at Rs. 4000/- to which deduction of 50% was applied towards the personal expenses of the deceased. 30% increase was granted to him towards future prospects and multiplier of 18 was applied. Amount of Rs. 25,000/ each was awarded for funeral expenses and loss of love and affection. In this way the total compensation awarded to the claimants was Rs. 6,21,600/-.
Learned counsel for the appellant has primarily argued on the correctness of the view taken by this Court in FAO No. 5181 of 2010, Nanak Singh and another v. State of Punjab and another decided on 17.01.2014 where this Court held as follows:-
" Learned counsel for the respondent No.2-PRTC has further argued that the Tribunal has considered only the age of the deceased while the age of the claimant has to be kept in mind for the purpose of multiplier and has relied upon the judgments in U.P. State Transport Corporation and others v. Trilok Chandra and others (1996) 4 SCC 362, Ramesh Singla and others v. Satbir Singh and another 2008 (1) SCC 667 and Shakti Devi v. New India Insurance Company Ltd. And another 2010 (14) SCC 575, wherein the Hon'ble Supreme Court has laid down a different provision by stating that the multiplier should be applied after taking into the consideration the age of the claimants.
Learned counsel for the appellants has countered by arguing that the multiplier of 18 has to be applied instead of 16 Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 3 according to the age of the deceased. He has further argued that in Sarla Verma v. DTC (2001) 6 SCC 121, P.S.Somanathan and others v. District Insurance Officer and another (2011) 3 SCC 566 and Amrit Bhanu Shali and others v. National Insurance Co. Ltd. and others 2012 ACJ 2002; the Hon'ble Supreme Court held that only the age of the deceased shouldbe kept into FAO No.5181 of 2010 -3-consideration while fixing the multiplier. In my opinion, while adopting a multiplier, the ageof the deceased as well as the age group of the claimants is a valid consideration. The expectancy of life of deceased is to be taken into consideration to arrive at a conclusion as to for how many years he could have supported the claimants. So far as the claimants are concerned their age-group is required to be considered to arrive at a conclusion as to for how many years they would have survived and could have enjoyed the dependency allowance of the deceased. Keeping in view the conflicting decisions of the Hon'ble Supreme Court and taking support from the decision of Division Bench of our High Court in United India Insurance Company Limited v Raj Rani 1998 (1) ACJ 175, in my considered view, the age of the deceased as well as the age group of the claimants is required to be taken into consideration while adopting a multiplier for determining the dependency to award compensation to the claimant."
Learned counsel for the appellant has argued that the formula worked out by this Court of taking the average of the age of the deceased and the claimant is too simplistic and needs to be reworked.
In my opinion this argument though not without certain merit has to be rejected. The endeavour of the law relating to compensation under the Motor Vehicles Act has been jurisprudentially designed to be simplified so as to obviate the chances of an unruly discretion. The same argument could be used against multiplier system as well but, as has been noticed in a catena of judgments, there is an element of guess work necessarily involved Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 4 in putting value to a limb or a life. In the circumstances I am not persuaded to differ with the view taken.
Learned counsel for the appellant has then argued that even on the basis of this view the grant of multiplier of 18(as per the age of the deceased) when the mother was almost 50 years old, is excessive. Learned counsel for the caveators has not been able to deny the logic of this argument but has pointed out that the Tribunal erred in granting only future prospects to the extent of 30% instead of 50% and further erred in computing the income at Rs.4000/- per month. As per him it was proved that the deceased was a diploma holder in mechanical engineering. He had claimed his income to be Rs. 6500/- and at the relevant time the minimum wage for an unskilled labourer prescribed in the Wages Act was Rs. 5200/- and in this connection he would be filing a separate appeal.
Even with regard to future prospects learned counsel for the appellant has argued that though the judgments in Rajesh and others v. Rajbir Singh and others reported as 2013(9) SCC 54 and Reshma Kumari and others v. Madan Mohan and another reported as 2013 AIR SC(Civil) 1731 were both delivered by a bench consisting of three Hon'ble Judges and within 10 days of each other, yet now another bench of the Supreme Court consisting of three Hon'ble Judges in Civil Appeal No. 5256 of 2008, Sanjay Verma v. Haryana Roadways decided on 29.01.2014 has considered both the judgments and has leaned in favour of the exposition of law made in Reshma Kumari and others(supra). In this judgment their lordships held as follows:-
"11. The appellant was a self employed person. Though he had Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 5 claimed a monthly income of Rs.5,000/-, the Income Tax Returns filed by him demonstrate that he had paid income tax on an annual income of Rs.41,300/-. No fault, therefore, can be found in the order of the High Court which proceeds on the basis that the annual income of the claimant at the time of the accident was Rs.41,300/-. Though in Sarla Verma (Smt.) and Others vs. Delhi Transport Corporation and Another1 this Court had held that in case of a self employed person, unless there are special and exceptional circumstances, the annual income at the time of death is to be taken into account, a Coordinate Bench in Santosh Devi vs. National Insurance Company Ltd.and Others has taken a different view which is to the following effect:
"14. We find it extremely difficult to fathom any rationale for the observation made in para 24 of the judgment in Sarla Verma case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be naïve to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life."
12. The view taken in Santosh Devi (supra) has been reiterated by a Bench of three Judges in Rajesh and Others vs. Rajbir Singh and Others by holding as follows :
"8. Since, the Court in Santosh Devi case actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects. Needless to say that the actual income Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 6 should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years.
9. In Sarla Verma case, it has been stated that in the case of those above 50 years, there shall be no addition. Having regard to the fact that in the case of those self- employed or on fixed wages, where there is normally no age of superannuation, we are of the view that it will only be just and equitable to provide an addition of 15% in the case where the victim is between the age group of 50 to 60 years so as to make the compensation just, equitable, fair and reasonable. There shall normally be no addition thereafter."
13. Certain parallel developments will now have to be taken note of. In Reshma Kumari and Others vs. Madan Mohan and Another, a two Judge Bench of this Court while considering the following questions took the view that the issue(s) needed resolution by a larger Bench "(1) Whether the multiplier specified in the Second Schedule appended to the Act should be scrupulously applied in all the cases?
(2) Whether for determination of the multiplicand, the Act provides for any criterion, particularly as regards determination of future prospects?"
14. Answering the above reference a three Judge Benchof this Court in Reshma Kumari and Ors. vs. Madan Mohan and Anr. reiterated the view taken in Sarla Verma (supra) to the effect that in respect of a person who was on a fixed salary without provision for annual increments or who was self- employed the actual income at the time of death should be taken into account for determining the loss of income unless there are extraordinary and exceptional circumstances. Though the expression "exceptional and extraordinary circumstances" is not capable of any precise definition, in Shakti Devi vs. New India Insurance Company Limited and Another there is a practical application of the aforesaid principle. The near certainty of the regular employment of the deceased in a government department following the retirement Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 7 of his father was held to be a valid ground to compute the loss of income by taking into account the possible future earnings. The said loss of income, accordingly, was quantified at double the amount that the deceased was earning at the time of his death.
15.Undoubtedly, the same principle will apply for determination of loss of income on account of an accident resulting in the total disability of the victim as in the present case. Therefore, taking into account the age of the claimant(25 years) and the fact that he had a steady income, as evidenced by the income-tax returns, we are of the view that an addition of 50% to the income that the claimant was earning at the time of the accident would be justified."
In the circumstances it has to be held that the criteria for granting future prospects has to be a finding that the income is steady and once this is established the person would be entitled for future prospects. In most cases of self employed people who come before the Court there is no evidence of income and consequently the Courts have accepted the principle of minimum wage being the index of the income of a person. This view has gained wide currency and has in fact no opposition in any judgment. It is also a fact that the wage increase of Government servants [to which reference was made in Sarla Verma v. DTC, 2009 ACJ 1298(SC) ] contains for a larger part, the element of increase on account of dearness allowance. In the circumstances it has to be held that the concept of future prospects has been developed in large measure due to the inflationary trend in the economy and it is only due to such inflationary trends that even minimum wages are increased from time to time. Consequently even if a Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document FAO No. 929 of 2014(O&M) 8 person is working on minimum wages, as quoted by their lordships in paras 11 and 12(supra), it would not be unreasonable to grant him future prospects since even then there would be a steady income(albeit at the minimum wages) In view of this the present appeal is dismissed. However, the issue regarding multiplier would be considered in the appeal filed by the claimant, if any.
( AJAY TEWARI ) JUDGE February 18 , 2014 sunita Nagpal Sunita 2014.02.25 15:23 I attest to the accuracy and integrity of this document