Punjab-Haryana High Court
New India Assurance Company Limited ... vs Smt. Santosh Wife Of Shri Ajay Kumar Son ... on 29 September, 2010
Author: K. Kannan
Bench: K. Kannan
FAO No.3432 of 2009 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO No.3432 of 2009
Date of Decision. 29.09.2010
New India Assurance Company Limited through its Deputy Manager,
Sector 17-A, Chandigarh ......Appellant
Versus
Smt. Santosh wife of Shri Ajay Kumar son of Shri Basti Ram resident
of village Dhani Pal, Tehsil Hansi, District Hisar and others
......Respondents
2. FAO No.3433 of 2009 New India Assurance Company Limited through its Deputy Manager, Sector 17-A, Chandigarh ......Appellant Versus Smt. Kamlesh wife of Shri Shishpal Singh Nain son of Shri Hem Chand, resident of House No.16, Chander Lane Colony, Kaimri Road, Hisar and others ......Respondents 3. FAO No.3434 of 2009 New India Assurance Company Limited through its Deputy Manager, Sector 17-A, Chandigarh ......Appellant Versus Smt. Kailash Baswana wife of Shri Amar Singh Baswana, resident of House No.16, Bishnoi colony, Hisar and others ......Respondents 4. FAO No.3435 of 2009 New India Assurance Company Limited through its Deputy Manager, Sector 17-A, Chandigarh ......Appellant Versus Satish Kumar son of Shri Ujagar Singh, resident of village Ratta Khera, PO Dhangar, Tehsil Tohana, District Fatehabad and others ......Respondents FAO No.3432 of 2009 -2- 5. FAO No.3487 of 2009 New India Assurance Company Limited through its Deputy Manager, Sector 17-A, Chandigarh ......Appellant Versus Smt. Raj Kala wife of Sh. Azad Singh son of Shri Bani Singh, resident of House No.119, Sunder Nagar, Hisar and others ......Respondents 6. FAO No.2246 of 2009 Smt. Santosh aged about 34 years wife of Ajay Kumar son of Sh. Basti Ram and others ......Appellants Versus Karam Singh son of Shri Bhikhu Ram and others ......Respondents 7. FAO No.2247 of 2009 Smt. Kamlesh aged 37 years wife of Shishpal Singh Nain son of Sh.
Khem Chand and others ......Appellants
Versus
Karam Singh son of Shri Bhikhu Ram and others ......Respondents 8. FAO No.2248 of 2009 Smt. Kailash Baswana aged about 50 years wife of Amar Singh Baswana son of Sh. Manphul Singh Baswana and others ...... Appellants Versus Karam Singh son of Shri Bhikhu Ram and others ......Respondents 9. FAO No.2249 of 2009 Rajbir Singh aged 53 years son of Chandu Lal, resident of House No.265, Sector 13, Hisar ......Appellant FAO No.3432 of 2009 -3- Versus Karam Singh son of Shri Bhikhu Ram and others ......Respondents 10. FAO No.2250 of 2009 Smt. Raj Kala aged about 34 years wife of Azad Singh son of Shri Bani Singh and others ......Appellants Versus Karam Singh son of Shri Bhikhu Ram and others ......Respondents Present: Mr. Ashwani Talwar, Advocate and Mr. Mrigank Sharma, Advocate for the appellant-insurance company.
Mr. Rajesh Sheoran, Advocate for the claimants.
Mr. Navin Kapoor, Advocate for the owner of the offending vehicle.
Mr. Kunal Garg, AAG, Haryana.
CORAM:HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the judgment ? Yes
2. To be referred to the Reporters or not ? Yes
3. Whether the judgment should be reported in the Digest? Yes
-.-
K. KANNAN J.
I. The issue for consideration
1. This batch of cases involves the issue of whether the representatives of the deceased, who have come by a financial benefit through ex gratia payments by the Government arising out of the death of the persons in the motor accident would stand to forfeit the benefit of compensation and if not, would that be relevant to slice down the compensation. The contrary position is FAO No.3432 of 2009 -4- what is contended on behalf of the claimants that ex-gratia payments are wholly irrelevant as the Tribunal has found and that they are entitled to a full compensation on the basis of the extent of dependence of the family as though no benefit has accrued and by the application of suitable multiplier commensurate with the age of the respective deceased at the time of the accident. II. Occurence of motor accident leading to deaths and injuries
2. In this batch of cases, FAO Nos.3432, 3433, 3434 and 3487 relate to cases of deaths of persons, all of whom were Government servants in the State of Haryana. The accident is said to have taken place when on 24.07.2005, the Financial Commissioner and Secretary to Government of Haryana, Agriculture Development and Director of Agriculture Department had called a meeting with high- level officials of various government departments at Panchkula. Officials at various levels attended the meeting and while they were returning in a Government vehicle, they was a collision with a truck belonging to private individual and insured with the New India Assurance Company Limited. Some persons died and several were seriously injured.
III. Text of Government notification
3. All the representatives have come by benefit of notification issued by the Haryana Government, General Administration Department dated 1.08.2006. The notification publishes the rules called the Haryana Compassionate Assistance to the Dependents of FAO No.3432 of 2009 -5- Deceased Government Employees Rules, 2006. The relevant rules are reproduced in so far as, they have a bearing to this case:-
"1. (1) These rules may be called the Haryana Compassionate Assistance to the Dependents of Deceased Government Employees Rules, 2006. (2) They shall come into force at once.
2. The object of the rule is to assist the family of a deceased/missing Government employee of Group C and D category, in tiding over the emergent situation, resulting from the loss of bread-earner while in regular service by giving financial assistance.
3. The eligibility to receive financial assistance under these rules shall be as per the provision in the pension/family pension scheme, 1964.
4. An eligible family member of the deceased/missing Government employee shall make an application i Form A for compassionate financial assistance.
5. (1) On the death of any Government employee, the family of the employee would continue to receive as financial assistance a sum equal to the pay and other allowances that was last drawn by the deceased employee in the normal course without raising a specific claim;-FAO No.3432 of 2009 -6-
(a) for a period of fifteen years from the date of death of the employee, if the employee at the time of his death had not attained the age of thirty five years;
(b) for a period of twelve years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee at the time of his death had attained the age of thirty five years but had not attained the age of forty-eight years;
(c) for a period of seven years or till the date the employee would have retired from Government service on attaining the age of superannuation, whichever is less, if the employee had attained the age of forty five years;
(2) The family shall be eligible to receive family pension as per the normal rules only after the period during which he receives the financial assistance as above is completed.
(3) The family of a deceased Government employee who was in occupation of a Government residence would continue to retain the residence on payment of normal rent/licence fee for a period of one year from the date of death of the employee.FAO No.3432 of 2009 -7-
(4) Within fifteen days from the date of a Government employee, an ex-gratia assistance of twenty five thousand rupees shall be provided to the family of the deceased employee to meet the immediate needs on the loss of the bread earner.
(5) House Rent Allowance shall not be a part of allowance for the purposes of calculation of assistance."
4. As per the said notification, the representatives, who filed the cases were admittedly dependents of the respective deceased persons in FAO Nos.3432 to 3434 and 3487 of 2009 and have been found entitled to claim the salary of the respective deceased persons at the rate last drawn and they will continue to secure the benefit till the time when the respective deceased persons would have superannuated or for a period of 15 years from the date of death, if the deceased had not attained the age of 35 years; it shall be for a period of 12 years or till the date when the employee would have retired from Governments service, whichever is less, if at the time of death, the person had completed the age of 35 years but had not attained the age of 48 years. It shall be for a period of 7 years or till the date when the employee would have retired, whichever is less, if the person had attained the age of 48 years. IV. Employment details of deceased persons
5. The relevant details of the age, income last drawn and the terminal benefits obtained are tabulated here below:- FAO No.3432 of 2009 -8-
Sr. Case Name Age Date of Years due for Last drawn Terminal No No. retirement retirement salary benefits . (Rs.) 1 3432 Ajay 41 Y 31.05.2024 17 years Rs.13,764/- 1,27,420/-
& Kumar
2M
2246
2 3433 Shishpal 52 Y 30.04.2013 6 years Rs.15,612/- 7,96,998/-
& Nain
3M
2247
3 3434 Amar 54 Y 28.02.2011 4 years Rs.25,429/- 15,37,757/-
& Singh
5M
2258
4 3487 Azad 41 Y 30.04.2024 17 years Rs.18,499/- 6,62,777
& Singh
3M
2250
It could be noticed that of the above persons, Ajay Kumar and Azad Singh were both above the age of 35 years and had not attained 48 years and had more than 12 years left, which is maximum period for which the benefit would obtain to the family. Amar Singh and Shishpal Nain, however, were both above the age of 50 years and they had lesser number of years left than 7 years, which would be the maximum period for which the representatives would take the benefit.
V. The respective contentions
6. While it is contended by the learned counsel appearing for the insurer that while determining the compensation, all these benefits, which the representatives have obtained will have to be taken into account, the contention on behalf of the claimants is that ex gratia payments cannot be deducted. The State Government itself is a party in all the cases and the counsel appearing on behalf of the FAO No.3432 of 2009 -9- State would contend that the insurance company ought not to cast a burden on the state by diluting its own liability and expect the State to provide the benefit. Each has a point of view and supported by decisions of Courts.
VI. Contentions examined in the light of court decisions
7. The most significant pronouncement on the relevance of the benefit obtained to the representatives of the deceased has come through the judgment of the Hon'ble Supreme Court in Bhakra Beas Management Board Vs. Kanta Aggarwal 2008(11) SCC 366. In that case the claimant lost her husband in a motor accident. She had been given compassionate appointment through which she received a monthly salary of Rs.4700/- and was also provided accommodation. The Tribunal took this to be totally irrelevant and determined a compensation of Rs.8,48,160/- plus interest @9%. The death had taken place 14 years before the adjudication came to Hon'ble Supreme Court and at the time of admission of the SLP, an amount of Rs.5,00,000/- had been directed to be deposited. The contention on behalf of the Bhakra Beas Management Board, which had been directed to give the compensation was that the compassionate appointment provided to the wife and free accommodation which had been given to her must have been taken due notice of. Reliance was made on the earlier judgment of the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Patricia Jean Mahajan 2002 (6) SCC 281 and still earlier ruling in Gobald Motor Service Ltd. Vs. R.M.K. Veluswami AIR 1962 SC 1. FAO No.3432 of 2009 -10- The judgment traversed the reasoning in Gobald Motor Service Ltd's case (supra), which obtained the benefit of observations of House of Lords in Davies Vs. Powell Duffryn Associated Collieries Ltd. 1942(1) All England Law Reporter 657, which said " the general rule, which has always prevailed in regard to assessment of damages and a Fatal Accidents Act is well settled, namely, that any benefit accruing to a dependent by reason of the relevant death must be taken into account. Under those Acts, the balance of loss and gain to a dependent by the death must be ascertained, the position of each dependent being considered separately." The basis was observed by the House of Lords as "The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible to money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered...... The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death." These observations had been reiterated in subsequent pronouncements of the Hon'ble Supreme Court in Sheikhupura Transport Co. Ltd. Vs. Northerin India Transporters' Ins. Co. Ltd. 1971 (1) SCC 785 and General Manager, Kerala State Road Trans. Corpn. Vs. Susamma Thomas 1994(2) SCC 176. The principle of balance of loss and gain so as to arrive at a just and fair amount of compensation has thus been accepted by the Hon'ble Supreme Corut and expected to be followed FAO No.3432 of 2009 -11- by all Courts as well. A still later decision of the House of Lords in Hodgson Vs. Trapp (1988) 3 All ER 870 gave a fuller expression to the same idea in the following observations:-
"...The basic rule is that it is the net consequential loss and expense which the Court must measure, if, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set agaisnt the aggregate of the plaintiff's losses and expenses in arriving at the measure of his damages. All this is elementary and has been said over and over again. To this basic rule there are, of course, certain well established, though not always precisely defined and delineated, exceptions..... It is the rule which is fundamental and axiomatic and exceptions to it which are only to be admitted on grounds which clearly justify their treatment as such."
VII. Balancing of loss of benefit that would have accrued with benefit that will accrue to representative by reason of death; with exceptions
8. The general principle of estimating damages shall be by balancing of what is the loss to the claimants of the future pecuniary benefits that would accrue to a person if he had not died, with the pecuniary advantage from whichever source it comes. At common law, the balancing act would always be invoked while determining the compensation payable to victims of motor accident claims. This was set in Helen C. Rebello Vs. Maharashtra State Road Trans. Corpn. 1999 (1) SCC 90 as a guiding principle for determining compensation and still later dealt with in great detail by the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Patricia Jean Mahajan and others 2002(6) SCC 281. Having set down the law, the Hon'ble Supreme Court, in Patricia Jean FAO No.3432 of 2009 -12- Mahajan's case, dealt with the exceptions which we have referred to above. It said only the receipts which have correlation with the accidental death would be deductible and amounts received by the dependents on account of insurance policy of the deceased or amounts received by them under social security system, which would have come to them even without reference to death would have no such correlation with the accidental death and hence would not be deductible. The reasoning is obvious. The amount that a person obtains by way of terminal benefits or pension are all methods of deferred payment of wages. It is a consideration for the service already rendered which stand accrued to the estate of the deceased and therefore, they cannot be permitted to be deducted on the death of the person. In matters of insurance, for instance, it is the payment for the premium periodically, which would make possible a return of lump sum on the happening of the event mentioned in the policy. In the case of payments under the social security system, the Court found in Patricia Jean Mahajan that as a matter of fact, they were again returns secured to the family for periodical contributions made and some deductions made from the salary during the life time. Amounts that come by way of recompense or a consideration for some service were found not to be related to the death and therefore, found not deductible. VIII. Pure gratuitous payments shall not be deducted
9. Courts appear never to have taken into account, in the assessment of damages, moneys gratuitously conferred from private FAO No.3432 of 2009 -13- sources upon the plaintiff as a mark of sympathy and assistance. Pure ex gratia payments that have no statutory basis but coming fortuitously is never deducted (See Harjit Kaur v Tochi Transport Company (1986) 2 ACC 70 (P&H), where the widow of the deceased has been granted a pension at the rate of Rs. 300/- per month. An ex-gratia grant of Rs. 11,700/- has also been sanctioned by the department in which Ajaib Singh was employed for his widow. About Rs. 3,000/- was lying in the Provident Fund Account of Ajaib Singh. The Court said that these amounts paid to the widow of the deceased could not be taken into account so as to reduce the quantum of compensation payable to the appellants. See also MLJ
-Motor Vehicle Laws, LexisNexis, 2008, Vol 2 pp 1517-1518 for decisions of all other High Courts. There are also pronouncements from English Courts and they make good for a complete treatment of the subject. In Parry v Cleaver [1970] A.C.1 the House of Lords speaking through Lord Reid said, "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 relations or of the public at large, and that the only gainer would be the wrongdoer". An amount paid from disaster relief fund to victims of a Railway accident was held in a North Ireland casein Redpath v Belfast & County Down Ry [1947]N.I.167 as not going to reckoned for deduction, while ascertaining the compensation payable by the Railways. In an early English decision in Liffen v Watson [1940] 1 KB 556(CA) gratuitous payments made by the master of a domestic FAO No.3432 of 2009 -14- servant as well as free board and lodging during the period when she was not able to continue in her employment due to injuries were held not deductible from compensation payable by the tort- feasor. A similar treatment was made through another judgment of the Court of appeal for ex gratia payments made by a sympathetic employer in Cunningham v Harrison [1973] QB 942. IX. Returns as deferred wages or for services rendered are instances of Impermissible deductions
10. Apart from gratuitous payments privately conferred, there exists another situation where benefits could have accrued by the services of the deceased and payments made after death that take the shape of deferred wage. They would become payable to the representatives of the deceased in consideration of and by virtue of contribution made by the deceased during his life time. Terminal benefits such as earned leave salary, provident fund accumulations, gratuity, etc are the best instances of such entitlements. Another benefit could be compassionate appointment to one of the members of the family arising out of the death of the person in harness, when he or she still has some more years of service left. Here the benefit obtained by the employee through compassionate appointment would give rise to regular source of employment. It could be noticed that though the raison d'être of employment is the death of the person while still in service, the proximate cause for material benefit by recurrent salaries is only his or her services to the employer and hence the benefit could not be deducted. The receipts of pension (N.Sivammal v MD, Pandiyan Roadwasys FAO No.3432 of 2009 -15- Corpn AIR 1985 SC 106) , provident fund (Bahgat Singh v Om Sharma AIR 1983 P&H 94(FB), gratuity (National Insurance Co Ltd v Indira Srivastava (2008) 2 SCC 763), compassionate appointment (Amarjit Kaur v State of Punjab 1999-3 PLR 27, (20000 1 TAC
552) social security benefits (United India Insurance Ltd v Patricia Jean Mahajan (2002) 6 SCC 281)and LIC (Helen C.Rebello v Mharashtra SRTC (1999) 1 SCC 90) have all been held to be irrelevant for computation of compensation for death in motor accident. There is a whole wealth of case law that abounds on this subject and they have been digested fairly extensively in the MLJ - Motor Vehicle Laws, LexisNexis, 2008, Vol 2 pp 1510-1521 and it is too far from doubt that the payments received that have a bearing to the services rendered by the deceased employee cannot be taken into consideration as permissible deductions. X. Gratuitous Payments or benefits, though termed as such, but are specifically enforceable are a different genre and hence ought to obtain different treatment
11. Payments or benefits on a statutory basis or under a scheme which could be legally enforced by the legal representative ought to receive a different treatment for, after all, we are trying to re- create a situation of what the deceased would have done to the family of dependents if he had continued to live. In an injury case in Tamil Nadu State Transport Corporation v Natarajan (2003) 6 SCC 137, even a compassionate appointment received by a workman was held to be a relevant factor to scale down the claim for compensation against an employer to the extent to which the FAO No.3432 of 2009 -16- liability was apportioned on the latter. In Bhakra-Beas Management Board v Kanta Aggarwal (2008) 11 SCC 366 the fact that the wife was given compassionate appointment and also provided with accommodation was taken into consideration to scale down the extent of entitlement, although not taken as completely wiping out the claim. In UK also, the law favors deductions which have an element of enforceability. As opposed to 'public benevolence in the shape of various un-covenanted benefits from the Welfare State', benefits which are earned by the public through their contributions go into reckoning while assessing compensation. Even free medical treatment provided under National Health Service, is taken as relevant to deny medical expenses for injuries which an injured claimant would never have incurred while availing the benefits under NHS (West v Shephard (1964) AC 326; Mitchell v Mulholland (No.2) (1972) 1 QB 65).
XI. Distinction between returns which are not resultant to death and benefits arising out of and as a consequence of death
12. When we consider whether there could be any deduction made for benefits received by the legal representatives of the deceased, the following questions must be asked: Is the benefit the direct result of death? If yes, is the benefit a mode of deferred wage or a return for present services rendered? If yes again, there shall be no deduction. On the contrary, is it a legally enforceable right of monetary benefit that requires no compulsory service to be rendered by the representative to claim the benefit? If the answer is FAO No.3432 of 2009 -17- yes, appropriate deduction shall have to be made, though it may not result in total effacement of the claim.
13. In this case all the representatives have come by fairly large sums of benefit by an accelerated date of payment of the terminal benefits. The amounts, which could be noticed as having accrued by way of terminal benefits as a quid pro quo for services rendered or as consideration for contributions made shall not be liable for deduction. They represent the legitimate accretions to the estate of the deceased and they have no bearing to the death of the government employee and hence, they shall not be treated as resultant to death. On the other hand, the compensation packaged under a compassionate scheme is wholly on a different footing. If under the compassionate scheme, a widow or a member of the family is granted an employment, the aspect of providing employment alone is the result of death. The salary, which such a person obtains on such employment is a consideration for the services rendered by such person only. Therefore, the salary earned by such a person cannot be deducted. The several decisions, which have come about stating that compassionate appointment and salary earned shall not be relevant therefore, do no conflict with the position that we are examining whether financial compensation given by the State should be considered as relevant for deduction or not.
14. The learned counsel appearing for the claimants would refer to several decisions which are to the effect that benefits obtained FAO No.3432 of 2009 -18- by compassionate employment provided shall not be deducted. Even family pension paid shall not be deducted. We have already observed that pension is a deferred wage and a return of what the deceased himself had contributed. I shall refer to those decisions but they have to be properly understood in the factual context that we are setting out for examining the benefit of government scheme that is the subject of adjudication. In National Insurance Company Limited Vs. Renuka Saha and others 2010 ACJ 1936 (Calcutta), the Court held that payment of family pension shall be irrelevant while computing compensation. The Guwahati High Court held in Kanika Hazarika and others Vs. Sreeam Barthakur and others 2003 ACJ 159 that an employment given to a widow by a Bank in which the deceased was working under a scheme and the salary given shall be irrelevant consideration while ascertaining compensation payable due to motor accident. The Court said that the bank was not a wrong doer and the employment was not in any way connected with the accident. The Madhya Pradesh High Court (Indore Bench) also held that the ex-gratia payment received by a claimant could not be deducted in Banwari Bai and others Vs. Union of India and another 2009 ACJ 1319. These judgments must be read down to what the Hon'ble Supreme Court has now explained in Bhakra Beas Management Board's case referred to above and the relevance of employment given to a member of the family and the benefits obtained by virtue of premature death. XIII. Law Stated in Bhakra - Beas Management Board case does not wipe out the possibility of obtaining benefit under MV Act also FAO No.3432 of 2009 -19-
15. In Bhakra Beas Management Board Vs. Kanta Aggarwal 2008(11) SCC 366, the Hon'ble Supreme Court was not completely rejecting the claim by the representatives of the deceased by the only fact that the widow had been granted an employment and had been provided also with a rent free accommodation. Against an amount of Rs.8 lacs and odd, which was determined as compensation, the Hon'ble Supreme Court instead of remitting the matter for fresh consideration for determination of the amount, had, in its exercise of jurisdiction under Articles 136 and 142 to do a complete justice, directed that Rs.5 lacs already deposited should be paid. They were not actually undertaking an actual calculataion of what would be payable in a case where the claimants have come by such benefit. That exercise will have to be undertaken now. XIV. Just compensation shall duly factor benefits obtained through government scheme
16. While evolving a formula for homogenous approach of all Courts, the Hon'ble Supreme Court has laid down certain principles in Sarla Verma Vs. Delhi Transport Corporation 2009(6) SCC 121 . On the choice of multiplicand, the Hon'ble Supreme Court has ruled that in cases where the workman had a security of service such as Government job, the prospect of future increase must be made in such way that if the deceased was less than 40 years of age, the future increase must be provided at 50% of the salary last drawn. If the age was in excess of 40 and less than 50, the increase must be provided at 30% and if the deceased was more than 50 years of age, no future increase need be provided. As regards the FAO No.3432 of 2009 -20- choice of a multiplier also, the Hon'ble Supreme Court suggested numerical less than the value assigned under Schedule II of the Motor Vehicles Act, which is applicable only for persons, whose annual income was less than Rs.40,000/-. The Hon'ble Supreme Court noted several divergent opinions on the choice of multiplier and re-affirmed the principle that the multiplier must be such as to produce a corpus, which if it was capitalized would yield to a return which will approximate to the monthly contribution to the family, due regard being made to provide gradual reduction from the surplus so that the corpus is exhausted by the end of the normal life expectancy. Taking the normal expectancy of 70, the multiplier will have to be worked out.
XV. The mode of reckoning
17. Having set the principles of law enunciated through judicial pronouncements, the next task will be to assign the appropriate multiplier, secure the multiplicands and work out the compensation. I shall explain with reference to one case only before setting out in a table for all other death cases as well. In FAO No.3432, the deceased was 40 years plus. As per Sarla Verma's case (supra), the 30% increase on the salary last drawn must be provided for. The last drawn salary after deducting tax was Rs.12440/-. If we provide 30% future increase, the average salary shall be Rs.16172/-. For a person between 41 to 45, the multiplier suggested in Sarla Verma's case (supra) was 14. The Government scheme itself provides for a maximum number of 12 years' salary for a person who had more FAO No.3432 of 2009 -21- than 12 years of service. Under the scheme, the family would earn the salary at the same rate upto 25.07.2019. If he had been alive, he would have earned his salary upto his date of retirement, which would be 31.05.2024, which means he would have been in service for another five years. I cannot, however, provide for the salary for all the remaining five years for in a case where a person has long number of years left, the multiplier is even less than the number of years of service. On the contrary as the person approaches the age of retirement, the choice of multiplier is even higher than the number of years of service left. For instance, as per the decision in Sarla Verma, a person in the age group of 51 to 55, who may have less than 8 years of service, is provided with a multiplier of 11 and a person who may have even crossed the age of retirement, say, a person between the age of 66-70, the choice of multiplier of 5 is till applied. This is to take care of other uncertainties of life and the sure possibility of contribution to the family even beyond the age of superannuation and to provide for a surplus, which a person normally saves to take care beyond the age of superannuation. In the matter of multiplier, between the numerical value which is less than number of years of service left ( for relatively younger age with many years of service) and a multiplier which is more than the number of years left service (for persons who are near the age of retirement or crossed the age of superannuation), we have little to choose. I would, therefore, take the actual benefit, which obtains to the claimants through the Government scheme and deduct it from the amount, which would become payable if we apply the FAO No.3432 of 2009 -22- formula in Sarla Verma that takes due notice of an estimation for future increase and an application of multiplier appropriate to the age. The difference in the amount is the amount of compensation that will become payable.
Sr. Case Name & Amount payable as per Conventional Total Amount Additional
No No. age formula adopted in Sarla heads i.e. loss of provided by Amount
Verma's case i.e. Monthly consortium @ Government payable
Salary (less tax) + future Rs.10,000/- to
increase (if any) - wife, love and
deduction for personal affection @
expenses X 12 X Rs.5000/- to each
multiplier minor children
and Rs.5000/- for
funral expenses
and loss to estate
1 3432 Ajay 12440+30% of salary Rs.30,000/- Rs.22,13,220/- Rs.17,91,360/- Rs.4,21,860/-
& Kumar x3/4x12x15=
2246 (41) Rs.21,83,220/-
2 3433 Shishpal 14280x2/3x12x11= Rs.25,000/- Rs.12,81,640/- Rs.11,99,520/- Rs.82,120/-
& Nain 12,56,640/-
2247 (52)
3 3434 Amar 22988x2/3x12x11= Rs.20,000/- Rs.20,42,944/- Rs.19,30,992/- Rs.1,11,952/-
& Singh 20,22,944/-
2248 (54)
4 3487 Azad 16546+30% of salary Rs.25000/- Rs.29,28,850/- Rs.23,82,624/- Rs.5,46,226/-
& Singh x3/4x12x15=
2250 (41) Rs.29,03,850/-
XVI. Disposition in respect of cases arising out of deaths
18. All the appeals are disposed of with the additional amounts namely Rs.4,21,860/- for FAO No.3432 & 2246, Rs.82,120/- for FAO No.3433 & 2247, Rs.1,11,952/- for FAO No.3434 & 2248 and Rs.5,46,226/- for FAO No.3487 & 2250. These amounts shall also bear 6% per annum from the date of respective petitions till date of payments. The apportionment shall be made in the same manner as provided for in the respective awards. Since the major portion of the awards are sliced down to accommodate the State assistance and more than 4 years have elapsed since the date of accident, no part of the enhanced amounts need be kept in bank deposit but paid FAO No.3432 of 2009 -23- to the claimants, except to minor claimants, whose amounts shall be kept in the bank deposits for the period of minority and at the option of the respective guardians for the minor may be kept in re- investment plans or interest paid quarterly towards maintenance of the minor children. This shall not be taken as constituting an additional burden on the State, as contended by the counsel for the State. This scheme has come about as matter of welfare policy of the State. In such like matters, the court neither interferes nor dictates policy consideration. It however enables the beneficiary a sure method of enforcement, so long as the policy continues. A self- declared policy cannot be assumed to be a burden cast by the insurer.
XVII. Disposition for injury case
(a) Continuance of employment, irrelevant to ascertain loss and resultant compensation
19. The appeal in FAO No. 3435 of 2009 addresses the claim for compensation for injuries suffered by Satish Kumar. The original contention on behalf of the insurance company had submitted that the injured continues in service and does not suffer any loss. In cases of injury, it is not merely the financial issues that the Courts look at but it also factors the loss of amenities to life, pain and suffering and several non-pecuniary damages. There is definitely a resultant loss of prospects of promotion and loss that is occasioned by the physical disability that a person carries. In a slightly different situation in The Management of Sree Lalithambika Enterprises, Salem Vs. S.Kailasam 1988 (1) LLJ 63 coming under the Workmen's FAO No.3432 of 2009 -24- Compensation Act, the contention was that for a person, who continues in service and has not suffered any financial loss, there shall be no compensation since no loss of earning is sustained by such a workman. This case and several other cases have examined this situation through several judgments. We are not dealing in cases of workmen against the Workmen's Compensation Act but I would still apply the same principle as applicable. In V. Jayaraj Vs. Thanthana Periyar Transport Corporation Ltd. 1989 (2) LLJ 38, Management of Tamil Nadu Cement Corporation Ltd. VS. N. Jayapalm 1994(1) LLJ 838, Kerala Minerals and Metals Limited Vs. Raman Nair 1998(1) LLJ 993 KER and Executive Engineer PWD (B&R) Udaipur Vs. Narain Lal 1978 (1) LLJ 141 (Raj), the Courts have dealt with the situation of continuance of employment of a workman despite the injury and award compensation including projected loss of earning capacity.
20. The Madras High Court posed the question in Lalithambika's case (supra) whether an employer could be relieved of his liability to pay compensation by retaining a person in employment and providing for the same wages. It answered that the mere continuance of work does not disentitle a person from claiming compensation. There is also an opinion of the House of Lords that may be relevant to understand this concept. Bale Vs. William Hunts and Sons Limited 1912 AC 496 was the case of a workman, who was blinded in one eye. The defect was not visible and he was to have appearance as two eyed man. He had come to such a disability status when he had sustained an employment injury in FAO No.3432 of 2009 -25- which the defective eye had to be removed with the consequences that he could not get employment though physically he was as well as before. The House of Lords held that the incapacity of work included inability to work or in other words, there is incapacity for work when a man has a physical defect which makes his working un- saleable in any market reasonably accessible to him. Applying the same logic, a person who has suffered an injury may not come by immediate loss if he is retained in the same employment and does not lose his job, but in his own saleability elsewhere as a fresh recruit to a new employer, he may come by a serious handicap. That shall be a justification enough to provide for compensation in such types of cases.
13. The learned counsel appearing for the insurer is fair to state that he will not make an issue out of the compensation granted by the Tribunal. The appeal in FAO No.3435 filed by the insurer is, therefore, dismissed confirming the award passed by the Tribunal.
14. The appeal in FAO No.2249 of 2009 is at the instance of claimant Rajbir Singh, who was aged 52 years and had suffered fracture of the shaft humerous and collar bone. He had been admitted in the hospital on 24.7.2007 and remained in the hospital upto 04.07.2007 and again re-admitted on 09.09.2007 and remained in the hospital till 09.11.2007. He had been operated and the hospital had charged Rs.30,000/- and he had produced medical bills Ex.P3 to Ex.P86, which add in upto Rs.70,000/-. For the second period of hospitalization from 09.09.2007 to 09.11.2007, he had FAO No.3432 of 2009 -26- been charged with Rs.7500/-. In all, the medical expenses alone have amounted to Rs.1,07,500/-. The Tribunal has awarded Rs.70,000/- towards medical expenses, which shall stand increased to Rs.1,07,500/-, which was supported by documents. For pain and suffering, the Tribunal had awarded Rs.20,000/-. He had two fractures and he underwent two operations and remained in the hospital on two different dates. For each of the fractures, I will award Rs.7500/-. For pain and suffering, hospitalization and post operative trauma, I would provide for another Rs.10,000/- for each episode of operation making it in all Rs.35,000/-. The Tribunal has awarded Rs.10,000/- on account of transportation, special diet and attendance charges, which I shall retain. It has also provided for loss of earning capacity at Rs.10,000/-, which I shall retain. He is not known to have suffered any permanent disability and as a Government servant he ought to have reported to duty. In all, the amount that will become payable, would be Rs.1,62,500/-. The enhanced amount shall, therefore, be Rs.52,500/-, which shall bear interest @6% from the date of the petition till the date of payment.
15. The appeal in FAO No.2249 of 2009 is allowed to the above extent.
(K.KANNAN) JUDGE September 29, 2010 Pankaj*