Iffco Tokio Gen. Ins Co. Ltd. vs Rooniya Devi & Ors. on 30 January, 2012

[Cites 6, Cited by 17]

Delhi High Court

Iffco Tokio Gen. Ins Co. Ltd. vs Rooniya Devi & Ors. on 30 January, 2012

1. This Appeal is for reduction of compensation for the death of Mangal Sahni, who was aged 47 years at the time of the accident, which took place on 15.08.2010. The Motor Accident Claims Tribunal (the Claims Tribunal) by the impugned award granted a compensation of ` 11,28,104/-.

2. The contentions raised on behalf of the Appellant Insurance Company are: -

(i) The Tribunal erred in granting 50% increase on minimum wages on the basis of judgment in National Insurance Co. Ltd. v. Kailash Devi, 2008 ACC 772.

MAC. APP. No.189/2011 Page 1 of 7

(ii) The compensation awarded towards loss of love and affection amounting to ` 1,00,000/- was exorbitant and excessive.

3. In National Insurance Company Ltd. v. Renu Devi & Ors., III (2008) ACC 134, this Court held that the increase in the minimum wages is not on account of promotion of an unskilled worker or on account of advancement in his career but the same is due to increase in the price index and cost of living. It has also to be borne in mind that the minimum wages are revised not only to meet the inflation but also to improve the standard of living of the lowest paid workers and to give the benefit of growth in GDP.

4. A perusal of the Notifications issued under the Minimum Wages Act would show that the minimum wages of an unskilled worker were revised from ` 5,278/- as on 15.08.2010 (i.e. the date of accident) to ` 6,422/- on 01.04.2011. Thus, it has to be noticed that there was increase of about 20% in the minimum wages in just six months. This was not on account of inflation but to provide a better standard of living to the lowest paid workers.

5. In Renu Devi & Ors.(supra) it was held as under:-

"9. In a recent decision of this Court Sh. Narinder Bishal and Anr. v. Sh. Rambir Singh and Ors., MAC App. 1007-08/2006, decided on 20.02.08 by Kailash Gambhir, J., it has been observed as under: -

MAC. APP. No.189/2011 Page 2 of 7

"For determining the earning of the deceased or victim of the accident, the claimants are supposed to prove the exact income of the deceased by leading some cogent and reliable documentary evidence as to the nature of his employment or trade or business or in any other activity he was involved in and then the said income can be taken into consideration for determining the quantum of compensation and if in such a case, the claimants are further able to establish the future prospects as well, then the criteria laid down in Sarla Dixit's case would get attracted. There can be another category of cases where the claimants are able to establish the future prospects of the deceased by quantifying the amount to be earned by the deceased in future with the help of cogent, reliable and convincing evidence and in all such cases the tribunal can take into consideration such future increase as has been established by the claimants on record. The difficulty however, would arise in all those cases where although the claimants are able to sufficiently establish on record the educational qualification of the deceased or the nature of his employment whether skilled, semi- skilled or unskilled but fail to establish by any reliable evidence to prove the exact income of the deceased. In such cases, question MAC. APP. No.189/2011 Page 3 of 7 arises whether the Tribunal can take into consideration the minimum wages and the periodical revision of minimum wages as are fixed by the Government under the Minimum Wages Act. To examine this question, it will have to be considered whether the revision which takes place under the Minimum Wages Act can be equated with the future prospects of a deceased. As would be evident from catena of judgments of the Supreme Court, the future prospects have no correlation with the price index, inflation or denunciation of currency value.

The future prospects would necessarily mean advancement in future career, earnings and progression in one's life. It could be considered by seeing, from which post a person began his career, what avenues or prospects he has while being in a particular avocation and what targets he/she would finally achieve at the end of his career. The promotional avenues, career progression, grant of selection grades etc. are some of the broad features for considering one's future prospects in one's career.

The minimum wage, in the very context of economy has a correlation with the growth and development of the nation's economy, postulating increase in the price index, reduction MAC. APP. No.189/2011 Page 4 of 7 of purchasing power with the denunciation of currency value and consequent fixation of minimum wages giving some periodical increase so as to ensure sustenance and survival of the workman class. Keeping this in view, under no circumstance the revision of minimum wages can be treated on the same footing with the factor of future prospects."

6. At the same time it has to be noted that the deceased was 47 years of age on the date of the accident. Thus, the increase of 50% on account of indexation could not have been extended to the Claimants.

7. It is true that the inflation and price indexation is not the same as the future prospects, yet the future prospects are considered where the deceased or injured is comparatively young. The principles as given in Sarla Verma (supra) while considering the future prospects would equally apply while considering the indexation due to inflation in case of minimum wages i.e. addition of 50% towards inflation and indexation where the deceased / injured was below 40 years and „NIL‟ where the deceased/injured was more than 50 years. Thus, in this case the increase towards minimum wages shall have to be restricted only to 30%.

8. I may mention that, where the Claimants are entitled to loss of dependency on actual basis, normally a nominal sum is awarded MAC. APP. No.189/2011 Page 5 of 7 under the head of loss of love and affection. Loss of love and affection can never be measured in terms of money. Thus, uniformity has to be adopted by the Courts while granting non- pecuniary damages. The Supreme Court in Sunil Sharma v. Bachitar Singh, (2011) 11 SCC 425 and in Baby Radhika Gupta v. Oriental Insurance Company Limited, (2009) 17 SCC 627 granted only ` 25,000/- (in total to all the claimants) under the head of loss of love and affection.

9. The loss of dependency of the deceased taking into consideration ` 5,278/- as the deceased‟s income comes to ` 8,56,302/- [` 5,278/- + 30% 1 x 4/5 (as taken by the Claims Tribunal) x 12 x 13 = ` 8,56,302/-]. After adding the notional sum on other heads, the revised compensation is reassessed as under: -

S. No. Compensation Awarded by Awarded by Head the Claims High Court Tribunal

1. Loss of ` 9,88,104/- ` 8,56,302/-

Dependency

2. Funeral Charges ` 25,000/- ` 10,000/-

3. Love and Affection ` 1,00,000/- ` 25,000/-

4. Loss of ` 10,000/- ` 10,000/-

Consortium

5. Loss of Estate ` 5,000/- ` 5,000/-

TOTAL ` 11,28,104/- ` 9,06,302/-

MAC. APP. No.189/2011 Page 6 of 7

10. The compensation is thus reduced from ` 11,28,104/- to ` 9,06,302/- including the interim compensation awarded, if any. The compensation awarded shall carry interest @ 7.5% per annum from the date of filing of the Appeal till the date of deposit in this Court. The compensation shall be apportioned in the manner as suggested in para 14 of the impugned judgment. Since, the amount was deposited with the Registrar General of this Court, the term deposit in terms of the Claims Tribunal‟s order shall be held in UCO Bank, Delhi High Court Branch, New Delhi.

11. The Appeal is allowed in above terms.

(G.P. MITTAL) JUDGE JANUARY 30, 2012 hs MAC. APP. No.189/2011 Page 7 of 7

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