Gujarat High Court
Oriental Insurance Co. Ltd vs Nishit Kiritkumar Raval & 4 on 13 November, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Vipul M. Pancholi
C/FA/4040/2007 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 4040 of 2007
TO
FIRST APPEAL NO. 4043 of 2007
With
FIRST APPEAL NO. 4172 of 2007
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
================================================================
1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
================================================================
ORIENTAL INSURANCE CO. LTD.....Appellant(s)
Versus
NISHIT KIRITKUMAR RAVAL & 4....Defendant(s)
================================================================
Appearance in FA Nos.4040 to 4043 of 2007
MR RAJNI H MEHTA, ADVOCATE for the Appellant(s) No. 1
MR AJAY R MEHTA, ADVOCATE for the Defendant(s) No. 3
MR YN RAVANI, ADVOCATE for the Defendant(s) No. 1 - 2
Page 1 of 28
C/FA/4040/2007 JUDGMENT
NOTICE SERVED for the Defendant(s) No. 4 - 5
FA No.4072 of 2007
MS RENU SINGH FOR MR ARPIT A KAPADIA, ADVOCATE for the
Appellant(s) No. 1
MR AJAY R MEHTA, ADVOCATE for the Defendant(s) No. 2
MR YN RAVANI, ADVOCATE for the Defendant(s) No. 1
NOTICE SERVED for the Defendant(s) No. 3 - 5
================================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 13/15-11-2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. This group of appeals arise out of a common judgment rendered by the Motor Accident Claims Tribunal, Bharuch dated 10th May 2007, in a group of claim petitions, MACP No.375/05 being treated as the main petition.
2. Briefly stated, facts are that on the fateful day on 1.1.2005, one Kiritkumar Raval along with his family members and neighbours was travelling in his Maruti car from Vadodara to Bharuch on National Highway No.8. At about 10 O' clock night, a truck which was insured by the Oriental Insurance Company was lying on the road with flat tyre. The car dashed straight against the said stationary truck with considerable force causing instantaneous death of four passengers and bodily injuries to the fifth. Different Page 2 of 28 C/FA/4040/2007 JUDGMENT claim petitions, therefore, came to be filed by the claimants, i.e. injured and the dependents of the deceased travellers. The Maruti car was insured with Iffco Tokio General Insurance Company. The Tribunal in the impugned judgment concluded that the accident occurred due to the sole negligence of the driver of the truck in parking the vehicle on the highway without any signals. The Tribunal went into the details of the earning capacity of the deceased and awarded various amounts to the claimants.
3. The Oriental Insurance Company has questioned this judgment and awards, both on the ground of negligence of the truck driver as well as on the computation of the compensation awarded by the Claims Tribunal. In one case, one Nishit Kiritkumar Raval, original claimant, has filed appeal seeking enhancement of the compensation. Iffco Tokio General Insurance Company obviously had no cause to appeal but has responded to the notice of the Court and opposed the rival insurance company on the question of negligence of the driver of the Maruti car.
4. We may first deal with the question of negligence. Before the Claims Tribunal, the claimants examined Seema Ravikumar Sheth, a co-passenger in the Maruti car, at Ex.42. In the examination-in- chief in the form of a sworn affidavit, she stated that on the date of the incident, she along with her husband Ravikumar Sheth, daughter Aakansha and their landlord Kiritkumar Raval and his wife Shobhnaben had gone to Vadodara. When they were returning to Bharuch, a truck was parked on the road with which the Maruti Zen Page 3 of 28 C/FA/4040/2007 JUDGMENT car collided causing the death of all other passengers and causing serious injuries to her. In the cross-examination by the insurer of the Maruti car, she stated that the highway was four-lane road with divider in between. The truck was parked without any reflectors, parking light or signal light. It was lying in the middle of the road. It was dark at the time of the accident and there was nothing to indicate the presence of the truck on the road. The car was being driven by Kiritbhai with all care and caution. The accident occurred because of the truck lying in the middle of the road. In the cross- examination by the insurance company of the truck, she stated that the car headlight was on with which one could see upto a distance of about 100 feet. The car was being driven at a speed of about 80 to 100 k.m. per hour. She agreed that the panchnama was drawn in the same position as the vehicles were at the time of the accident. She specifically denied that the headlight of the truck was on. She denied that the accident occurred due to the negligence of the drive of the car.
5. Before the Claims Tribunal, the claimants also produced FIR at Ex.29, which was lodged by the conductor of the truck in which he had stated that he along with the driver of the truck were going towards Bharuch carrying cotton bales. On the way they had a puncture in the tyre of the truck. The truck was then taken on the side for changing the tyre. When he and the driver were in the process of changing the tyre, one Maruti car came at a high speed from Vadodara and collided with the back side of the truck with great force completely smashing the vehicle.
Page 4 of 28C/FA/4040/2007 JUDGMENT
6. Panchnama of the scene of the accident was produced at Ex.30. It showed that the accident took place on National Highway No.8 near Boston Hotel on Vadodara-Bharuch road just after a curve where a ten wheel truck loaded with cotton bails was lying. Behind it, at a distance of 4 feet, a Maruti Zen car was lying. Left hand side wheel of the truck was missing The panchnama also recorded that the right hand side parking light was in working condition. The glass of the right hand side was broken but the light was in working condition. The Maruti car was completely smashed and was damaged. The road had a width of 20 to 25 feet on either side with a line of Gulmohar trees in between.
7. The opponents examined one Prakash Thakre, driver of the truck at Ex.86. He deposed that on the night of the incident, a tyre of the truck was burst near Boston hotel. He then parked his truck on a side taking two wheels on the kachha road. He had kept the indicator of the parking light on. He had also put stones to mark the presence of the parked truck. At the time of the accident, the conductor was near the truck. He had gone to Boston hotel and therefore not seen the incident. In the cross-examination, he denied that the truck was parked on the road to enable him to fit the jack to lift the truck. He denied the suggestion that he had not kept the parking light indicator on or put stones near the truck. He agreed that the truck was fully loaded.
8. This in nutshell is the evidence with respect to negligence. As Page 5 of 28 C/FA/4040/2007 JUDGMENT noted, Seemaben Ravikumar in her deposition clearly stated that the truck was parked on the road. There were no indicators suggesting the presence of the truck. The truck neither had a reflector nor the rear lights were on. On the other hand, Prakash Thakre, driver of the truck stated that he had put the stones behind the truck and also kept the truck light and the indicators on. According to him, the truck was taken off the road so that the left hand side wheels were on the kachcha road and the right hand side wheels were on the pucca road.
9. Panchnama at Ex.30, however, does not record any stones behind the truck to warn incoming drivers nor did the panchnama record that the left hand side wheels of the truck were off the road. The theory of the driver that he had taken the truck on the extreme left hand side of the road taking both the wheels off the pucca road is also quite an improbable one. Firstly, the truck was heavily loaded with cotton bales. Even the driver admitted to this fact. Secondly, it had a punctured tyre. It would, therefore, be very difficult to drive the truck further once the tyre was burst and the truck was fully loaded. If the truck is taken off the road leaving two wheels off the road to a kachha road, it would lead to parking the vehicle imbalanced on the one side. It would be quite impossible to fit the jack on such a truck to lift it hydraulically to free one side of the wheel to take it out and be replaced by a repaired wheel. All this, with a truck totally imbalanced on one side and fully loaded with cotton bales. The theory of the truck driver that he had taken part of the truck off the road must, therefore, be discarded. Equally Page 6 of 28 C/FA/4040/2007 JUDGMENT his statement that he had kept the truck light and the indicators on cannot be believed. Firstly, Seemaben, one of the co-passengers in the Maruti car deposed that the truck was parked without any reflectors, and brake or parking lights. She also stated that there were no other marks to indicate the presence of the truck on the road. This was duly corroborated by the the panchnama. Contrary to what was stated by the driver, the panchnama did not notice any stones behind the truck to warn the incoming traffic. The panchnama merely recorded that the rear light on the right hand side of the truck was in working condition. It did not record that the lights were on. The driver of the truck claimed that he was not present at the spot when the accident took place and therefore had not witnessed the incident. Again, this was contrary to what the conductor of the truck had stated before the police in his FIR suggesting that he and the driver were in the process of changing the tyre when the accident took place. For all these reasons, the deposition of the truck driver cannot be believed. On the other hand, we have the deposition of eye witness Seemaben along the panchnama which substantially supports her statements.
10. Following things, therefore, emerge from such evidence. Firstly, the truck was parked on the road due to punctured tyre. Secondly, it was night time at about 10 'O clock. Thirdly, the truck was lying right after a turn on the road. Fourthly, the driver and the conductor of the truck had not put any marks such as branches of tree or stones to warn the incoming traffic about the presence of the parked truck. Fifthly, there were no reflectors or parking light or Page 7 of 28 C/FA/4040/2007 JUDGMENT brake light of the truck on. These factors would indicate that the truck driver was negligent in parking his vehicle on a highway late at night where immediately after a bend, it was quite difficult for the incoming traffic to anticipate a stationary vehicle. The driver of the Maruti car, therefore, could not have expected some object in the middle of the road suddenly after a curve. The driver of the truck, therefore, must take the larger share of the responsibility. Despite this, we cannot lose sight of the fact that the Maruti car was being driven admittedly at a fairly high speed. There were no brake marks noticed at the site in the panchnama. If the driver of the Maruti car had taken proper precaution, by driving the vehicle at a moderate speed, it would have been perhaps possible to reduce the impact by braking the speed or at any rate to swerve the car at the last minute. Either of these reactions may not have avoided the accident altogether, but surely the impact of the accident could have been considerably reduced. Under the circumstances, we attach 80% negligence on the part of the truck driver and 20% on the driver of the Maruti car. Insofar as all accident claims other than that arising out of the death of the driver, the insurance companies would be liable to satisfy the awards jointly and severally. However, their inter-se liability would be 80% : 20% for internal computation. Insofar as the claim arising out of the death of the driver is concerned, since 20% negligence is attached to his own driving, the claimant would receive 80% of the assessed compensation from the insurance company of the truck.
11. Coming to the quantification of the compensation, we may Page 8 of 28 C/FA/4040/2007 JUDGMENT deal with each claim petition individually.
12. First Appeal No.4040 of 2007 is filed by the Oriental Insurance Company and arises out of MACP No.375 of 2005. the claim petition was filed by the son of deceased Kiritkumar Raval. The Claims Tribunal awarded compensation of Rs.33,30,844/- which included loss of dependancy benefits of Rs.33,08,844/-, Rs.20,000/- towards loss of estate and Rs.2,000/- towards funeral expenses. The claimant has filed a cross appeal being First Appeal No.4172 of 2007. These two appeals would be clubbed for common consideration.
13. The claimant, as noted above, was the son of deceased Kiritkumar Raval. The claimant examined himself at Ex.45 deposing that his father was aged about 50 years at the time of death. He was working as Manager in Finance Department of the Gujarat Narmada Vally Fertilizer Company receiving salary of more than Rs.40,000/- per month. He had chances of promotion and receiving higher salary. The claimant also examined one Nareshbhai Hiralal Gandhi at Ex.55. He was the Manager, Personnel in GNFC. He deposed that Kiritkumar Raval was working as Manager in the said Company. He produced at Ex.56 to 59 the pay-slips and other details of the salary of the deceased for 12 months of the year 2004. In the cross-examination he admitted that the Company had paid a sum of Rs.20,62,300/- at the time of death of the deceased towards the group personal accident insurance, premium of which was paid by the Company. No deduction of this premium was made from the Page 9 of 28 C/FA/4040/2007 JUDGMENT salary of the employee.
14. On the basis of such evidence, the Tribunal believed the monthly income of the deceased at Rs.37,600/-, one-third of which was deducted for his personal expenditure leaving net amount of Rs.25,067/- for the dependents. The Tribunal adopted multiplier of 11 and that is how calculated the dependency benefits of Rs.33,08,844/-.
15. Before us, the learned counsel Shri Mehta for the appellant insurance company submitted that the Tribunal committed an error in ignoring the income tax component from the salary of the deceased for arriving at his net income. He would draw our attention to the salary slips to contend that out of the gross salary paid by the employer, the deceased suffered tax deducted at source which was totally ignored by the Tribunal. The counsel further submitted that the amount received by the family towards personal accident policy should have been adjusted from the ultimate compensation payable to the claimant. He relied heavily on the decision of the Supreme Court in the case of Helen C. Rebello v. Maharashtra State Road Transport Corporation, (1999) 1 SCC
90. Counsel pointed out that the said decision was considered and noted with approval by the Supreme Court in the case of United India Insurance Co. Ltd v. Patricia Jean Mahajan, (2002) 6 SCC
281.
16. On the other hand, learned counsel Ms. Renu Singh for Page 10 of 28 C/FA/4040/2007 JUDGMENT the claimant pointed out that the amount of group insurance could not be adjusted against the compensation calculated under the motor accident case since two were completely unconnected and unrelated claims. In this respect, she relied on a decision of this Court in the case of Heirs, Girdharbhai @ G.D., Rekha v. R.G.Khanpara, 2012 (2) GLH 246. Counsel further submitted that the Tribunal committed an error in not granting any increase in the current income totally ignoring the prospects of the deceased for further promotion and revision in pay. She relied on the decision of the Supreme Court in the case of Rajesh v. Rajbir Singh, (2013) 9 SCC 54.
17. We may first consider the question of computation of dependency benefits. The salary slips of the deceased for the year 2004 may be seen closely. For the month of January 2004, the basic salary was shown at Rs.10,355/- and dearness allowance of Rs.5646/-. Several other allowances and perquisites were added, such as personal pay, house rent allowance, vehicle expenditure reimbursement, etc. The gross salary of the deceased was Rs.26,608/-. Income tax of Rs.2436/- was deducted from such gross salary. Though there were other deductions such as provident fund and voluntary provident fund, surely, such deductions which were in the nature of the employee's own investment to be received with interest in future either compulsorily or voluntarily made would not go to diminish his income. This pay structure broadly continued upto April 2004 when his basic salary was revised to Rs.14,080/-. His gross salary for the said month was nearly Rs.32,000/- of which Page 11 of 28 C/FA/4040/2007 JUDGMENT income tax of Rs.5849/- was deducted at source. Once again this pattern continued substantially except for the month of November, 2004 when in addition to the normal salary, he received incentive bonus of Rs.28,500/-, making a salary of Rs.61,600/-. The salary slip for the month of December 2004 showed a gross income of Rs.37,679/- and income tax of Rs.9245/-was deducted.
18. It can thus be seen that though there was some fluctuation in the salary of the deceased, it generally showed a trend of upward revision. In the last month of 2004, he was paid gross salary of Rs.37,679/-. In the said month, though income tax of Rs.9245/- was deducted, the tax liability of the deceased ranged for earlier months from Rs.2,000/- and increased gradually. We may, therefore, take the average tax burden of the deceased at Rs.5,500/- per month. That will leave net salary at Rs.32,179/- rounding off to Rs.32,200/-. The Tribunal granted no rise for future prospects. The deceased was admittedly working in a senior managerial position in a Government company. We have noticed that in the year 2004 itself, his basic salary was revised from Rs.10,355/- to Rs.14,580/-. As per the deposition of the witness, he was due for promotion. Considering these factors, in particular, looking to the certainty of tenure and broad possibilities of further promotions, at least 15% revision in income for the future prospect cannot be ruled out. For this purpose, we take support from the decision of the Supreme Court in the case of Rajesh v. Rajbir Singh (supra). Even the decision in the case of Sarla Varma v. DTC, (2009) 6 SCC 121, wherein providing for a broad formula for increase in future income Page 12 of 28 C/FA/4040/2007 JUDGMENT in different age groups, it is further observed that though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardstick being applied and different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary, 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.
19. Income of the deceased would thus come to Rs.32,200 + Rs.4380 = Rs.37030/-. One-third thereof, i.e. Rs.12,343/- rounded off to Rs.12,400/- would be deducted from such income leaving net amount of Rs.24,630/- for the claimants. Adopting the multiplier of 11, the total amount would come to Rs.24,630 x 12 x 11 = Rs.32,51,160/-. To this amount, we would have to add the amount towards loss of estate. Though as the son of the deceased, the claimant may not entitled to any amount towards loss of consortium which is a concept applicable in case of husband and wife, he must receive adequate compensation under the head of loss of affection and care. We must realize that in the fatal accident the claimant lost both his parents. In a cruel twist of fate, he was within a fraction of a moment left orphaned. In a recent judgment dated 14.10.2014 rendered in First Appeal No.3894 of 2006, this Court had discussed such issue. Considering the various judgments of the Supreme Court, this Court held and observed as under:
"At this stage, learned counsel Shri Kakkad for the claimants urged Page 13 of 28 C/FA/4040/2007 JUDGMENT that in terms of the judgment of the Supreme Court in the case of Rajesh v. Rajbir Singh, (2013) 9 SCC 54, the claimants would be entitled to Rs.1 lac under the head of consortium and Rs.1 lac towards loss of care and guidance to the child. He pointed out that in a later decision in the case of Vimal Kanwar v. Kishore Dan, (2013) 7 SCC 476, the Supreme Court once again granted Rs.1 lac under such heads. It was also pointed out that in the case of Sanobanu Nazirbhai Mirza v. Ahmedabad Municipal Transport Service, 2013 ACJ 2733, the Supreme Court awarded similar amounts relying on the decision in the case of Rajesh (supra).
On the other hand, learned counsel for the appellant drew our attention to a decision of the Supreme Court in the case Minu Rout v. Satya Pradhymna Mohapatra, (2013) 10 SCC 695 in which a sum of Rs.50,000/- was awarded under conventional heads. He pointed out that this Court in the case of United India Insurance Co. Ltd v. Naynaben, wd/o Bharatkumar Bhalchandra Patel, in First Appeal No.481 of 2001 referring to the decision in the case of Minu Rout (supra) awarded a combined sum of Rs.50,000/- towards loss of consortium, loss of estate and funeral expenses.
In the case of Rajesh (supra), the Supreme Court advocated for increase in the amount of consortium being awarded in fatal cases. It was observed as under:
"17. The ratio of a decision of this Court, on a legal issue is a precedent. But an observation made by this Court, mainly to achieve uniformity and consistence on a socio- economic issue, as contrasted from a legal principle, though a precedent, can be, and in fact ought to be periodically revisited, as observed in Santosh Devi. We may therefore, revisit the practice of awarding compensation under conventional heads: loss of consortium to the spouse, loss of love, care and guidance to children and funeral expenses. It may be noted that the sum of Rs.2500 to Rs.10,000 in those heads was fixed several decades ago and having regard to inflation factor, the same needs to be increased. In Sarla Varma case, it was held that compensation for loss of consortium should be in the rage of Rs.5000 to Rs.10,000. In legal parlance, "consortium" is the right of the spouse to the company,care, help, comfort, guidance, society, solace, Page 14 of 28 C/FA/4040/2007 JUDGMENT affection and sexual relations with his or her mate. That non-pecuniary head of damages has not been properly understood by our courts. The loss of companionship, love, care and protection, etc. the spouse is entitled to get, has to be compensated appropriately. The concept of non- pecuniary damage for loss of consortium is one of the major heads of award of compensation in other parts of the world more particularly in the United States of America, Australia, etc. English courts have also recognized the right of a spouse to get compensation even during the period of temporary disablement. By loss of consortium, the courts have made an attempt to compensate the loss of spouse's affection, comfort, solace, companionship, society, assistance, protection, care and sexual relations during the future years. Unlike the compensation awarded in other countries and other jurisdictions, since the legal heirs are otherwise adequately compensated for the pecuniary loss, it would not be proper to award a major amount under this head. Hence, we are if the view that it would only be just and reasonable that the courts award at least rupees one lakh for loss of consortium."
In the said judgment, the Supreme Court awarded a sum of Rs.1 lac separately for loss of care guidance for the minor children. One may, however, notice that no separate amount was awarded for loss of estate. Later, in the case of Vimal Kanwar (supra), the Supreme Court once again awarded compensation in following manner:
"33. Having regard to the facts and evidence on record, we estimate the monthly income of the deceased Sajjan Singh at Rs.9,000 x 2 = Rs.18,000/- per month. From this his personal living expenses, which should be 1/3rd, there being three dependents has to be deducted. Thereby, the 'actual salary' will come to Rs.18,000 - Rs.6,000/- = Rs.12,000/- per month or Rs.12,000 x 12 =1,44,000/- per annum. As the deceased was 28 ½ years old at the time of death the multiplier of 17 is applied, which is appropriate to the age of the deceased. The normal compensation would then work out to be Rs.1,44,000/- x 17 =Rs.24,48,000/- to which we add the usual award for loss of consortium and loss of the estate by providing a conventional sum of Rs. 1,00,000/-; loss of love and affection for the daughter Page 15 of 28 C/FA/4040/2007 JUDGMENT Rs.2,00,000/-, loss of love and affection for the widow and the mother at Rs.1,00,000/- each i.e. Rs.2,00,000/- and funeral expenses of Rs.25,000/-."
Likewise, in the case of Sanabanu Nazirbhai Mirza (supra) also the Supreme Court awarded such amounts without separately awarding any compensation for loss of estate.
It is true that in the case of Minu Rout, a Division Bench of the Supreme Court confined the compensation under conventional heads to Rs.50,000/-. This Court has, as noted above, adopted such a modality in the case of United India Insurance Company v. Naynaben (supra).
It can thus be seen that the compensation to be awarded towards consortium and loss of love and affection to the children is not rigidly standardized. Nevertheless, the trend and the indications available from different decisions of the Supreme Court are in favour of increasing such compensation under conventional heads to keep in tune with the reducing purchasing power of the rupee as also bearing in mind the concept of sudden tragic and needless loss of life resulting into trauma and mental agony to the family members of the deceased. If it happens to be the wife, she would be deprived of life long love, affection and protection and companionship. The children at tender age would lose a parent without whom their upbringing and parenting would indefinitely be incomplete. The judgments of the Supreme Court noted above, including one in the case of Minu Raut cited by the counsel for the appellant do suggest a break from the present trend of awarding rather conservative amounts towards consortium or loss of love and affection to the children.
In the facts of the present case, therefore, we adopt a sum of Rs.1 lac towards combined heads of loss of consortium and loss of live and affection to the children. No separate amount is being awarded to the loss of estate."
The claimant would, therefore, receive an amount of Rs.1 lac towards loss of estate and loss of care and protection and Rs.10,000/- for post death ceremonies. Thus, total amount of Page 16 of 28 C/FA/4040/2007 JUDGMENT compensation comes to Rs.32,51,160 + Rs.1,00,000 + Rs.10,000 = Rs.33,61,160/-. Since we have held that the deceased himself as a driver was negligent to the extent of 20%, the entitlement of compensation would have to be reduced by 20% or Rs.6,72,232/- and the amount then comes to Rs.26,88,928/- rounded off to Rs.26,89,000/-.
20. Counsel for the claimant drew our attention to the insurance policy Ex.88 taken from the Iffco Tokio General Insurance Company, insurer of the Maruti car. It shows payment of additional premium of Rs.100/- towards personal accident of the owner-driver. This additional premium thus was accepted by the insurance company to cover the risk of the owner-driver himself. It would mean that even if the accident occurred due to the negligence of the driver, the Insurance Company would be liable to cover the risk. This cover, however, is limited to Rs.2 lacs. The said Insurance Company would, therefore, be liable to pay Rs.2 lacs to the claimant under this additional clause of the policy.
21. Coming to the question of adjustment of the compensation received by the claimants from the employer under the personal accident policy, we notice that the issue of adjustability of various payments made to the family of the deceased upon accidental death has cropped up before various courts on number of occasions. In the case of Heirs of deceased Girdharbhai @ G.D. Rekha (supra), a Division Bench of this Court was confronted with the question of adjustment of the salary received by the widow of Page 17 of 28 C/FA/4040/2007 JUDGMENT the deceased who was granted compassionate appointment on the death of her husband in an accident. The Court referred to various decisions including that of the Supreme Court in the case of Helen C. Rebello (supra) and came to the conclusion that such salary can never form the basis for adjustment from the entitlement of the claimants to receive compensation under the Motor Vehicles Act. Several courts have held that the amounts received by the family of the deceased towards gratuity, provident fund, ex-gratia payments, etc. can never form part of the adjustment from the compensation to be paid to the claimants under the Motor Vehicles Act. In fact, it has also been held that personal insurance payments also cannot be adjusted. It is not necessary to refer to all such decisions since the issue is more than clear by virtue of the decisions of the Supreme Court in the case of Helen C. Rebello (supra) and in the case of Patricia Jean Mahajan (supra). We would, therefore, take a closer look at these judgments.
22. In the case of Helen C. Rebello (supra), the deceased was travelling in a Maharashtra State Road Transport Corporation bus. The bus met with an accident causing his death. The claimants included his widow and children. The family had received a sum of Rs.3,15,067/- towards life insurance under a policy taken by the deceased. Such amount was adjusted by the Claims Tribunal towards the assessed compensation under the Motor Vehicles Act, paying only balance amount of Rs.74,932/- to the claimants. The issue ultimately reached the Supreme Court. The Supreme Court posed a question for its consideration, namely, whether from the Page 18 of 28 C/FA/4040/2007 JUDGMENT compensation computed under the Motor Vehicles Act, the life insurance amount received by the claimants on account of the death of the deceased is deductible or not. It was contended before the Supreme Court that the legal heirs of the deceased received the amount in terms of a contract which cannot be said to have been received only on account of the death of the deceased, but by way of premium paid by the deceased during his life time. The deceased had bought this insurance policy as an act of prudence to confer benefits either on himself or on his heirs in case of his death. Such amount was receivable by the claimants irrespective of the accidental death. The Supreme Court held that the application of general principle under the common law of loss and gain for the computation of compensation under the Motor Vehicles Act must correlate to the type of injury or death, viz. accidental. If the words 'pecuniary advantage' from whatever source are to be interpreted to mean any form of death, it would dilute all possible benefits conferred on the claimant and would be contrary to the spirit of the law. If the pecuniary advantage resulting from death means pecuniary advantage coming under all forms of death then it would include all the assets, movable, immovable, shares, bank accounts, cash and every amount receivable under any contract. This would obliterate both all possible conferment of economic security to the claimant by the deceased and the intentions of the legislature. By such an interpretation the tortfeasor in spite of his wrongly act or negligence which contributed to the death would in many cases escape all liability. The Court, therefore, concluded as under:
Page 19 of 28C/FA/4040/2007 JUDGMENT "33. Thus, it would not include that which claimant receives on account of other form of deaths, which he would have received even apart from accidental death. Thus, such pecuniary advantage would have no corelation to the accidental death for which compensation is computed. Any amount received or receivable not only on account of the accidental death but that would have come to the claimant even otherwise, could not be construed to be the 'pecuniary advantage', liable for deduction. However, where the employer insures his employee, as against injury or death arising out of an accident, any amount received out of such insurance on the happening of such incidence may be an amount liable for deduction. However, our legislature has taken note of such contingency, through the proviso of Section
95. Under it, the liability of the insurer is excluded in respect of injury or death, arising out of, in the course of employment of an employee.
34. This is based on the principle that the claimant for the happening of the same incidence may not gain twice from two sources. This, it is excluded thus, either through the wisdom of legislature or through the principle of loss and gain through deduction not to give gain to the claimant twice arising from the same transaction, viz., same accident. It is significant to record here in both the sources, viz., either under the Motor Vehicles Act or from the employer, the compensation receivable by the claimant is either statutory or through the security of the employer securing for his employee but in both cases he receives the amount without his contribution. How thus an amount earned out of one's labour or contribution towards one's wealth, savings, etc. either for himself or for his family, which such person knows, under the law, has to go to his heirs after his death either by succession or under a will could be said to be the 'pecuniary gain' only on account of one's accidental death. This, of course, is a pecuniary gain but how this is equitable or could be balanced out of the amount to be received as compensation under the Motor Vehicles Act. There is no co-relation between the two amounts. Not even remotely. How can an amount of loss and gain of one contract could be made applicable to the loss and gain of another contract. Similarly, how an amount receivable under a statute has any co-relation with an amount earned by an individual. Principle of loss and gain has to be on the same place within the same sphere, of course, subject to the contract to the contrary or any provisions of law.
Page 20 of 28 C/FA/4040/2007 JUDGMENT
xxxx
Similarly, family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No co-relation between the two. Similarly, life insurance policy is received either by the insured or the heirs of the insured on account of the contract with the insurer, for which insured contributes in the form of premium. It is receivable even by the insured, if he lives till maturity after paying all the premiums, in the case of death insurer indemnifies to pay the sum to the heirs, again in terms of the contracts for the premium paid. Again, this amount is receivable by the claimant not on account of any accidental death but otherwise on insured's death. Death is only a step or contingency in terms of the contract, to receive the amount. Similarly any cash, bank balance, shares, fixed deposits, etc. though are all a pecuniary advantage receivable by the heirs on account of one's death but all these have no co-relation with the amount receivable under a statute occasioned only on account of accidental death. How could such an amount come within the periphery of the Motor Vehicles Act to be termed as 'pecuniary advantage' liable for deduction. When we seek the principle of loss and gain, it has to be on similar and same plane having nexus inter se between them and not to which, there is no semblance of any co-relation. The insured (deceased) contributes his own money for which he receives the amount has no co-relation to the compensation computed as against tortfeasor for his negligence on account of accident. As aforesaid, the amount receivable as compensation under the Act is on account of the injury or death without making any contribution towards it, then how can fruits of an amount received through contributions of the insured be deducted out of the amount receivable under the Motor Vehicles Act. The amount under this Act, he receives without any contribution. As we have said the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the life insurance policy is contractual."
The decision in the case of Helen C. Rebello (supra) was noted Page 21 of 28 C/FA/4040/2007 JUDGMENT with approval in the case of Patricia Jean Mahajan (supra) and the Supreme Court refused to adjust from the compensation of the claimants the security benefits received by the family under the social security act.
23. It can thus be seen that in the above noted decisions, the Supreme Court authoritatively laid down that the amounts received by the heirs or dependents of the deceased by way of social security or under a benevolent scheme or a personal insurance policy taken out by the deceased cannot be adjusted from the compensation payable to the claimants. While saying so, a minute distinction was made by providing that in case of personal insurance policy, the claimant himself pays the premium the amount of the maturing policy would be payable to the insured if he is alive and in case of his premature death to his heirs or nominees. Such amount will be payable irrespective of the nature of death, be it accidental or natural. The Court, however, did recognize the principle that the same event cannot lead to compensation being paid twice and the situation would be different if the amount is received under accident claim policy taken out by the employer without any contribution from the employee. In the present case, the insurance policy was of one of accident claims. It was taken out by the employer. The premium thereof was paid by the employer without any deduction from the employee's salary. It was on account of the accidental death that the policy got activated under which the family received compensation of more than Rs.20 lacs. All the ingredients of an exception recognized by the Supreme Court in the case of Helen C. Page 22 of 28 C/FA/4040/2007 JUDGMENT Rebello (supra) were present in this case. To reiterate, it was not a simple life insurance policy. It was neither taken by the employee nor the employer deducted the premium from his salary. It was an accident claim policy taken out by the employer directly contributing the premium without any deduction from the salary of the employee. Such amount, therefore, must be accounted for while awarding the compensation to the claimants under the Motor Vehicles Act. The claimants would, therefore, receive an amount of Rs.6,26,700/- (Rs.26,89,000 - Rs.20,62,300) from the insurer of the truck and Rs.2 lacs from the insurance company of the Maruti car.
24. Coming to First Appeal No.4041 of 2007, we notice that the claim has been filed by Nishit Kiritkumar Raval for the death of his mother who was a house-wife. The Claims Tribunal awarded a total compensation of Rs.3,34,000/- considering her notional income at Rs.3,000/- deducting one-third therefrom and leaving Rs.2,000/- net for the claimant. The Tribunal adopted the multiplier of 13 considering the age of the deceased. We are in agreement with the view of the Tribunal. No modification, therefore, is necessary. This appeal is, therefore, required to be dismissed.
25. Coming to First Appeal No.4042 of 2007 which was filed by the heirs of deceased Ravikumar Sheth, we notice that the Claims Tribunal had worked out the loss of dependency benefits at Rs.26,11,200/- taking the income of the deceased at Rs.13,593/- per month. The Tribunal added a sum of Rs.20,000/- for the loss of Page 23 of 28 C/FA/4040/2007 JUDGMENT estate and consortium and Rs.2,000/- towards transportation charges awarding compensation of Rs.26,33,200/-. Claimants had in addition to examining Seema Ravikumar Sheth, wife of the deceased as a witness, also examined one Ajaybhai Jagdishchandra Sharma, at Ex.66. He deposed that he was working as Officer, Personal and Welfare in Gujarat Alkalies and Chemicals Ltd. Deceased Ravikumar Sheth was serving in the said Company as an Engineer. He produced salary slips to show the income of the deceased between January and December 2004. In the cross-examination, this witness also agreed that the Company had taken out group personal accident policy for which the premium was paid by the Company without deducting the same from the salary of the employee. Under this insurance policy, the family of the deceased received Rs.6,56,460/-. The insurance company also relied on a letter dated 16th May 2005 written by the Manager (Personnel) of the GACL to Ms.Seema Sheth which shows that in addition to the insurance amount of Rs.6,56,460/-, the family also received a sum of Rs.5,75,177/- which was the amount received from all employees of the Company who had contributed their one day salary to enable the family to overcome the hardship due to the demise of the employee. The contention of the insurance company is that the amount received under the personal accident policy as well as that contributed by the co-employees should be deducted from the total compensation payable to the claimants.
26. Salary slip for the month of December 2004, which was the last salary drown by him showed his basic salary of Rs.7989/-.
Page 24 of 28C/FA/4040/2007 JUDGMENT He received dearness allowance, house rent allowance and city
compensatory allowance and other allowances and perquisites. His gross salary was Rs.20,114/-. His gross earning for the year was Rs.1,76,753/-. His taxable income was Rs.1,22,757/- and his tax liability was shown as Rs.2730/- for the year. It can thus be seen that the last drawn salary of the deceased was close to Rs.20,000/-. Looking to the tax bracket and his provident fund investments which qualified for tax deduction, he had negligible tax liability. We would, therefore, adopt Rs.20,000/- as his income at the time of his death. He was aged about 38 years. As per the decision of the Supreme Court in the case of Sarla Verma (supra), 50% increase for the future rise in income would be justified, bringing his earning at Rs.30,000/- per month. Out of that amount, one-third would be set apart for his personal expenditure, bringing the net sum for the dependents to Rs.20,000/- per month. Multiplier of 15 as per the decision in the case of Sarla Verma (supra) would bring the loss of dependency benefits to the family at Rs.20,000 x 12 x 15 = Rs.36,00,000/-. To this we would add a sum of Rs.1 lac for the loss of estate and consortium and Rs.10,000/- towards post death ceremonies bringing the amount to Rs.37,10,000/-. From this amount, the accident claim of Rs.6,56,460/- would have to be deducted. However, the amount of Rs.5,75,177/- received from the contribution of the co-employees cannot form the basis of any adjustment. Such amount was collected by the co-employees to mitigate the immediate hardship of the family arising out of the sudden and tragic death of sole bread winner. Ex-gratia payment by way of charity by other employees can never form the basis for Page 25 of 28 C/FA/4040/2007 JUDGMENT reducing the liability arising out of the negligence or wrong doing of a person. This aspect has been discussed at length by this Court in the case of Heirs of deceased Girdharbhai @ G.D., Rekha (supra) as well as in the decisions of the Supreme Court in the case of Helen C. Rebello (supra) and in the case of Patricia Jean Mahajan (supra). We may quote a decision of the House of Lords in the case of Perry v. Cleaver, (1969 ACJ 363 (HL, England) wherein it was observed that:
"It would be revolting to the ordinary man's sense of justice and therefore, contrary to public policy, that the sufferer should have his damages reduced so that he would gain nothing from the benevolence of his friends or relation of the public at large, and that the only gainer would be the wrong doer."
In our calculation, computation of the compensation comes to Rs.37,10,000 - Rs.6,56,460 = Rs.30,53,540/-. However, the claimants herein have been awarded Rs.26,33,200/-. The claimants are not in appeal. The appeal of the insurance company, therefore, shall have to be dismissed.
27. First Appeal No.4043 of 2007 arose out of the personal injury to Seemaben Ravikumar Sheth. We have perused the award of the Claims Tribunal and find no reason to interfere with the compensation of Rs.1,88,495/-.
28. In the result, all the appeals are disposed of apportioning the liability of the Insurance Companies of the truck and Maruti car in the ratio of 80% : 20% respectively. Insofar as all claim petitions except in case of the claim arising out of death of driver of Maruti car Kiritkumar Raval is concerned, the liability of Page 26 of 28 C/FA/4040/2007 JUDGMENT the Insurance Companies will be joint and several. First Appeal No.4040 of 2007 is allowed in part. The appellant insurance company shall pay a compensation of Rs.6,26,700/- to the claimant with proportionate cost and interest. First Appeal No.4172 of 2007 is dismissed against the Oriental Insurance Company Limited. However, it is partly allowed by providing that the insurance company of the Maruti car, Iffco-Tokio General Insurance Company Ltd. will pay compensation of Rs.2 lacs with interest and costs to the claimants. Rest of the appeals are dismissed.
29. In First Appeal No.4040 of 2007, the appellant Insurance Company had deposited the entire amount awarded to the claimants with proportionate cost and interest. After adjusting an amount of Rs.6,26,000/- + Rs.2 lacs i.e. Rs.8.26,000/- with proportionate cost and interest which would be payable to the claimants, excess amount would be refunded to the appellant Oriental Insurance Company Limited. It is clarified that a sum of Rs.2 lacs with cost and interest would be recoverable by the appellant insurance company from Iffco-Tokio General Insurance Company. In rest of the First Appeals, the amounts deposited by the Oriental Insurance Company for the satisfaction of the award would be adjusted against the liability of Iffco-Tokio General Insurance Company and the same shall be paid by the said insurance company to the Oriental Insurance Company Ltd. with simple interest at the rate of 9% from the date of claim petition till payment.
(AKIL KURESHI, J.)
Page 27 of 28
C/FA/4040/2007 JUDGMENT
(VIPUL M. PANCHOLI, J.)
(vjn)
Page 28 of 28