Bombay High Court
New India Assurance Co. Ltd. And Ors. vs Govind Laxman Angne And Ors. on 28 November, 2002
Equivalent citations: 2004ACJ636
Author: R.M.S. Khandeparkar
Bench: R.M.S. Khandeparkar
JUDGMENT Khandeparkar, J.
1. Heard advocates for the parties. Perused the records. This appeal arises from award dated 30.8.1988 passed in Motor Accident Claim Petition No. 255 of 1986 by the Motor Accidents Claims Tribunal, Raigad, Alibag. By the impugned award the appellants have been directed to pay the amount of Rs. 3,95,000 to respondents, herein who are the claimants in the claim petition together with the interest at the rate of 9 per cent per annum thereon.
2. The facts in brief relevant for the decision are that on 23.2.1986 one Arun was travelling as a pillion rider on the motor cycle No. TMB 1968 while one Chimanlal Dayabhai Panchal was riding the motor cycle proceeding from Bombay to Nagothane. When the motor cycle reached milestone No. 52/2 near village Nidi, it met with an accident as it was dashed by lorry No. MHL 2011 coming from opposite direction. As a result of the accident, Arun suffered grievous injuries and subsequently succumbed to his injuries on 1.3.1986. Accusing the driver of the lorry to have driven the vehicle in a rash and negligent manner and that being the cause for accident, the respondents have filed an application claiming compensation to the tune of Rs. 5,00,000 on account of death of Arun. The claim petition was filed against the owner of lorry and the insurance company. Though the owner was duly served and filed his appearance in the matter he did not file any written statement in the proceedings. The written statement was filed only by insurance company opposing the claim of the respondents on various grounds. The claimants examined 4 witnesses in support of their claim and the respondents, apart from placing insurance policy on record of the proceedings, did not lead any evidence. The Tribunal by the impugned award held that the claimants had proved that Arun died in the said motor accident which took place on account of rash and negligent driving of the lorry No. MHL 2011 owned by opponent No. 1 to the claim petition who was the predecessor of appellant Nos. 2 to 2E and insured with opponent No. 2 in the claim petition who is appellant No. 1 herein and, therefore, entitled for compensation to the extent of Rs. 3,95,000 with interest.
3. The impugned award is sought to be challenged on four counts. Firstly, that the Tribunal erred in ignoring the law laid down by the Supreme Court in the case of Gobald Motor Service Ltd. v. R.M.K. Veluswami, 1958-65 ACJ 179 (SC), while deciding the claim for the compensation payable to the respondent. Secondly, the Tribunal erred in ignoring the decision of the Full Bench of this court in the case of Hirjee Veerjee and Co. v. Saroja Narayan Shetty, 1983 ACJ 177 (Bombay), laying down the law that the benefit to the legal representatives lies only in acceleration of the succession to the estate of the deceased and not in relation to the entire estate of the deceased, which in any case, would devolve upon them by way of inheritance and, therefore, the value of such acceleration is to be taken into account while computing the compensation payable to the respondents. In this connection reliance is also placed in the decision of the Apex Court in the matter of C.K. Subramonia Iyer v. T. Kunhi Kuttan Nair, 1970 ACJ 110 (SC). Thirdly, there was no justification in the present case to award interest prior to the date of passing of the award and that at a rate higher than 6 per cent per annum. Fourthly, it is sought to be contended that there is no evidence on record to justify grant of compensation on different heads on which the Tribunal has granted. On the other hand, it was contended that the ruling of the Apex Court in Gobald Motor Service Ltd. case as well as of Full Bench of this court in Hirjee Veerjee case can be of no help to decide the matter as the Apex Court in Helen C, Rebello v. Maharashtra State Road Trans. Corporation, , has clearly ruled that the procedure for fixing of compensation under Motor Vehicles Act, 1939, is different from the one under Fatal Accidents Act and the decisions which have been relied upon by the appellants were delivered in relation to the cases arising under the Fatal Accidents Act and that the compensation which is to be awarded under the Motor Vehicles Act is a just compensation to be decided by the Tribunal. Further drawing attention to the decision of Division Bench of this court in Maharashtra State Road Trans. Corporation v. Babalal Daud Mulani, 1985 ACJ 282 (Bombay) and in the case of Padmadevi Shankarrao Jadhav v. Kabalsing Gormilsing Sardarji, 1985 ACJ 382 (Bombay), it was submitted that once the Tribunal after taking into consideration all the materials on record as well as bearing in mind the deductions to be made arrives at a final figure there can be no justification for deduction of the rate of interest on the amount awarded as the compensation payable to the claimants. Reliance is also placed in the decision in the case of Ramesh Chandra v. Randhir Singh, , wherein it is held that claimants are entitled for interest on compensation irrespective of the fact whether there is a claim for interest or not. Refuting the argument regarding non-applicability of the decision of the Supreme Court in Gobald Motor Service case (supra) and Full Bench of this court in Hirjee Veerjee case (supra), the learned counsel for the appellants placing reliance in the decision of the Full Bench of this court in Parappa Ningappa Khanded v. Mallappa Kallappa Kore, 1955 (48) Bom LR 404, submitted that the decision in Gobald case was by three Judges whereas the one in Helen C, Rebello's case (supra), it was by two Judges and, therefore, following the law laid down by the Full Bench of this court in Ningappa's case, the decision of the larger Bench of the Supreme Court should be held as binding on this court as against the decision of the Bench of two Judges of the Apex Court.
4. Upon hearing the learned advocates for the parties and on perusal of the record, following questions arise for consideration;
(1) Whether in the claim petition filed under Motor Vehicles Act, 1939, the criteria to be adopted for fixation of the compensation is the one in terms of law laid down by the Apex Court in Gobald Motor Service, 1958-65 ACJ 179 (SC) or that in Rebello's case, (2) Whether the compensation to be awarded to the claimants is to be reduced by the monetary benefit available to the claimants on account of acceleration in succession to the estate of the deceased?
(3) Whether the rate of interest and the amount awarded by the Tribunal in the case in hand is just and appropriate?
(4) Whether the award of compensation under different heads was warranted in the facts and circumstances of the case?
5. Undoubtedly, the Bench of three Judges of the Apex Court in Gobald Motor Service case, 1958-65 ACJ 179 (SC), had ruled that the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained. It is pertinent to note that the Apex Court was dealing with the matter arising out of judgment passed in accordance with the provision of Fatal Accidents Act, 1855. After taking note of the fact that Section 1 of Fatal Accidents Act was in substance a reproduction of the provision of law in the English Fatal Accidents Act and placing reliance in the decision by House of Lords in Davies v. Powell Duffryn Associated Collieries Ltd., (1942) AC 601, wherein it was ruled that for the assessment of damages under the Fatal Accidents Act, any benefit accruing to a dependant by reason of the relevant death must be taken into account and the balance of loss and gain to a dependant by the death must be ascertained and further that the damages are to be based on reasonable expectation of pecuniary benefit or benefit reducible to money value. Further, taking note of proviso to Section 2 of the Fatal Accidents Act and the ruling by Lord Wright in the above referred decision of the House of Lords to the effect that "the injury suffered by the individual from the death cannot be computed without reference to the benefit also accruing from the death to the same individual from whatever source", and thereafter considering judgment of the Lahore High Court in Secretary of State v. Gokal Chand, AIR 1925 Lahore 636, ruled that the rights of action under Sections 1-A and 2 of Fatal Accidents Act, 1855, are quite distinct and independent and if a person taking benefit under both the sections is the same, he cannot be permitted to recover twice over for the same loss and that in awarding damages under both the heads, there shall not be duplication of the same claim, that is, if any part of the compensation representing the loss to the estate goes into the calculation of the personal loss under Section 1-A of the Act, that portion shall be excluded in giving compensation under Section 2 and vice versa. Plain reading of this decision leaves no room for any doubt that the decision is clearly in terms of the statutory provision contained in Fatal Accidents Act, 1855.
6. The Apex Court in Rebello's case, , after taking into consideration the provisions of the Fatal Accidents Act as well as Motor Vehicles Act, 1939, as also various judicial pronouncements including the decision in Gobald Motor Service case, 1958-65 ACJ 179 (SC), ruled thus:
"This court in Gobald Motor Service, 1958-65 ACJ 179 (SC), considering the quantum of damages under Sections 1-A and 2 of the Fatal Accidents Act, 1855, referred to the said principle as enunciated in the English decisions, since our provisions under the Act in consideration were similar to Section 9 of the English Fatal Accidents Act, 1846. This court was neither called upon to consider computing damages under the Motor Vehicles Act nor to consider any form of deductions, whether justified under the Motor Vehicles Act."
Referring to provisions in Section 1-A of the Fatal Accidents Act, 1855, it was observed that while interpreting the said provision the Apex Court as well as other courts have rightly drawn the general principle of common law of loss and gain and has further held that:
"But Section 110-B of 1939 Act empowers the Tribunal to determine the compensation which appears to it to be just. The words used in Section 110-B are: 'which appears to it to bejust'. Use of these words, widen the scope of determination of compensation which is neither under the Indian Fatal Accidents Act, 1855 nor under the English Fatal Accidents Act, 1846."
After taking note of the classic work on Law of Torts by Fleming which was referred to in Sushila Devi v. Ibrahim, 1974 ACJ 150 (MP), at p. 160 and considering the scope of the expression 'just' in Section 110-B of the Motor Vehicles Act, 1939, in comparison to the provisions of the Indian Fatal Accidents Act, 1855, as well as English Fatal Accidents Act, 1846, it was observed thus:
"This shows that the word 'just' was deliberately brought in Section 110-B of the 1939 Act to enlarge the consideration in computing the compensation which, of course, would include the question of deducibility, if any. This leads us to an irresistible conclusion that principle of computation of the compensation both under the English Fatal Accidents Act, 1846 and under the Indian Fatal Accidents Act, 1855 by the earlier decision, were restrictive in nature in the absence of any guiding words therein, hence the courts applied the general principle at the common law of loss and gain but that would not apply to the considerations under Section 110-B of 1939 Act which enlarges the discretion to deliver better justice to the claimant, in computing the compensation, to see what is just... Considering the word 'just' as its nomenclature denotes eq-uitability, fairness and reasonableness having large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable...It was ruled that while computing the compensation under Section 110-B of the 1939 Act has a wider discretion than what it had under 1855 Act. Various provisions of this Act indicate legislature's intent conferring visible benefit to claimant by securing the compensation through casting the obligation on the tortfeasor and the insurer."
It is thus clear that the Supreme Court in Rebello's case in no uncertain terms has ruled that the decision under Fatal Accidents Act, though may have persuasive value depending upon facts of the case, would not be binding principles while dealing with the matters under the Motor Vehicles Act, 1939.
7. Above plain reading of the decision in Gobald Motor Service case, 1958-65 ACJ 179 (SC), as well as in Rebello's case, , discloses that the former deals with the case squarely under Fatal Accidents Act, 1855, and the latter, apart from laying down the law that the decision under fatal accident case cannot be a binding principle in the matters under Motor Vehicles Act, 1939, is in fact in relation to the case under Motor Vehicles Act. Being so, the decision of the Full Bench in Parappa Ningappa's case, 1955 (48) Bom LR 404, is of no help to the appellants to contend that the ruling of the Supreme Court in Gobald Motor Service case is to be applied to the facts of the case as a binding principle on the point in question, the ruling in Parappa Ningappa's case could have been of assistance if ruling in two decisions were to be conflicting with each other on the same subject and issue.
8. As regards the second point, drawing attention to the testimony of DW 1, it was sought to be argued on behalf of the appellants that the deceased had left National Savings Certificates worth Rs. 40,000 as well as had purchased a flat at Lalbag, Mumbai by investing Rs. 2,00,000 and, therefore, the claimants were benefited by property worth Rs. 2,40,000 on account of accidental death of Arun, which property, claimants could not have acquired if Arun was not to die in March, 1986. Undoubtedly, the Full Bench of this court in Hirjee Veerjee case referring to the insurance amount which comes to the hand of the legal representatives by way of inheritance has observed that:
"All that happens on the unnatural or accidental death of the deceased is that the pecuniary benefit in the form of insurance amount which would have come to the heirs by inheritance as a part of the estate of the deceased after the natural death of the deceased now comes to them much earlier in point of time, though as a result of the unfortunate circumstances of the death of the deceased. Properly looked at, therefore, the benefit to the claimants truly lies only in the fact of acceleration in the succession to the estate of the deceased including the insurance amount and not in the fact that the entire estate has come to them, which in any case would have come by way of inheritance."
The Full Bench has ruled that the benefit to the legal representative lies only in the acceleration of receipt of insurance money, the value of which has to be taken into account while assessing damages which the. claimants are entitled to on account of death in the proceedings under Fatal Accidents Act. Apparently, the Division Bench was dealing with the case under the Fatal Accidents Act, 1855. Much is not required to be said on this aspect except relying upon the decision of the Supreme Court in Rebello's case, . The decision in Hirjee Veerjee's case, 1983 ACJ 177 (Bombay), on the fatal accidents claim cannot be a binding principle while assessing the compensation under Motor Vehicles Act, 1939.
9. As rightly submitted by the learned advocate for the respondents the contention that while computing the compensation the interest which the claimant would enjoy on the lump sum amount need to be deducted, is to be rejected in view of the decisions of the Division Bench of this court in Babalal Daud Mulani's case, 1985 ACJ 282 (Bombay) and Padmadevi S. Jadhav's case, 1985 ACJ 382 (Bombay), as well as decision of the Apex Court in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC). The Division Bench in Padmadevi's case while dealing and rejecting similar contention, has held that:
"Deciding the compensation wholly on the basis of the interest the lump sum will receive or derive, is an unscientific method. We had an occasion to consider a somewhat similar question in Maharashtra State Road Trans. Corporation v. Babalal, 1985 ACJ 282 (Bombay), in which also a contention was raised that ultimately the compensation should be quantified by giving a second thought as to what interest will be received on the lump sum. After making a reference to the decision in Jokhi Ram v. Naresh Kama, 1978 ACJ 80 (P&H), the decision of the Andhra Pradesh High Court in Srisailam Devastanam v. Bhavani Pramilamma, 1983 ACJ 580 (AP) and the decision of the Supreme Court in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC), this court held that deduction on the basis of interest theory is wholly unwarranted because of the rapidly falling rate of the value of the rupee. There is a good interest rate only for long term investments. Meanwhile there is increase in prices and cost of living and consequent fall in the value of rupee. This outweighs the rate of interest even on long term investment. Further, because of illiteracy and ignorance, the prudent investment itself is an exception and not a normality. Therefore, it is not possible to lay down a general rule that while fixing just and fair compensation it should always be based on the basis of the interest which will be derived or received if the lump sum is prudently invested,"
Even the facts of the case and the evidence on record in no way justifies any deduction of interest amount on lump sum while calculating the compensation. While considering the contention regarding the theory of deduction of interest on lump sum, the court cannot ignore the fall in the value of rupee as well as rise in prices and cost of living as has been observed by the Division Bench of this court. In order to import the theory of deduction of interest on lump sum, it would be, therefore, necessary for the parties advancing the said theory to establish the claim in that regard by cogent evidence on record to the satisfaction of the court regarding non increase of prices and cost of living and the value of rupee being static. Undisputedly, the material on record in no way disclose any such evidence. Mere advancement of argument for application of such theory is, therefore, totally devoid of substance and is to be rejected.
10. As regards the point pertaining to interest the normal procedure provided under Civil Procedure Code is to be followed unless otherwise there is specific provision to the contrary in the said Act and the rules made thereunder. Being so, in the matter of payment of interest on the compensation to be awarded, the guiding principle under Section 34 of Civil Procedure Code would apply. However, at the same time the Tribunal has to exercise its jurisdiction to award the payment of interest bearing in mind the provisions of Section 110-B which speaks of 'just compensation'. Harmonious reading of the provisions of Section 110-B with Section 34 of the Civil Procedure Code, therefore, would empower the Tribunal to award interest at the rate, it would warrant in the facts and circumstances of each case. That apart the Apex Court in Ramesh Chandra v. Randhir Singh, 1990 ACT 777 (SC), has clearly ruled that addition of interest to the compensation, by judicial discretion, is sequential in the eyes of law and no claim in that regard specifically need to be made in the claim petition. The grant of interest in my view is not dependent on the pleadings in that regard and can even be orally asked if the contingency arises. Being so, in a case where a breadwinner of the family who was not only contributing towards the survival of the members of the family, but also had contributed substantial amount for marriage of one of his sisters and lost his life at the age of 25, the dependants have been awarded compensation at the rate of 9 per cent per annum can it be said by any stretch of imagination either to be arbitrary or exorbitant rate of interest?
11. Coming to the last point regarding the compensation awarded under different heads, the award discloses compensation awarded to the tune of Rs. 10,000 by way of consortium, Rs. 10,000 for the loss of love and affection and Rs. 15,000 for loss to the estate as usually granted. Apart from submitting that there is no justification for grant of compensation of Rs. 10,000 for loss of love and affection and no occasion for grant of compensation by way of consortium, no justifiable ground is made out for interference in the award in relation to the compensation under these heads. Undoubtedly, evidence on record discloses death of a young person of 25 years of age who was not only a breadwinner for the family but had contributed towards other obligations on his part, viz., marriage of his sister. The evidence on record discloses that the marriage expenses for his sister to the tune of Rs. 60,000 were contributed exclusively by the deceased Arun. Being so, there is no justification for interference in the impugned award as far as compensation awarded under the head of loss of love and affection and loss, to the estate. Undoubtedly, there could not have been award by way of consortium. However, in the facts and circumstances of the case, I am not inclined to interfere even in the said compensation awarded under the said head. The compensation which is awarded otherwise to the tune of Rs. 3,95,000 being squarely just and appropriate compensation, the appeal in the circumstances is liable to be dismissed. The said amount of Rs. 10,000 to be deemed to have been awarded towards the cost of this appeal in favour of the claimants.
12. In the result, therefore, there being no case made out for interference. The appeal fails and is hereby dismissed.