Allahabad High Court
Mishri Lal Yadav & Anr. vs The Oriental Insurance Co. Ltd. ... on 25 January, 2018
Author: Sudhir Agarwal
Bench: Sudhir Agarwal, Anant Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Court No. - 3 Case :- FIRST APPEAL FROM ORDER No. - 890 of 2005 Appellant :- Mishri Lal Yadav & Anr. Respondent :- The Oriental Insurance Co. Ltd. Faizabad & 2 Ors. Counsel for Appellant :- Chhotey Lal Yadav Counsel for Respondent :- Anil Srivastava Hon'ble Sudhir Agarwal,J.
Hon'ble Anant Kumar,J.
1. Appeal is restored to its original number vide order of date passed on recall application. As agreed by learned counsel for parties, we proceed to decide this appeal at this stage.
2. With the consent of parties, requirement of paper book is dispensed with and we proceed to hear appeal on the basis of record of appeal and Court below.
3. Heard Sri Chhotey Lal Yadav, learned counsel for appellants and Sri Anil Srivastava, Advocate for respondents.
4. This First Appeal From Order filed under Section 173 of Motor Vehicles Act, 1988 (hereinafter referred to as the "Act, 1988") has arisen from judgment and award dated 10.10.2005 passed by Sri Sagwa Singh, IInd Additional District Judge/ Motor Accident Claims Tribunal, Faizabad (hereinafter referred to as the "Tribunal") in Claim Petition No. 75 of 2003.
5. The incident is of 07.03.2002 when Harish Kumar Yadav son of claimants-appellants and his cousin, Ram Dheeraj were going to Lucknow in a hired vehicle, Marshall Jeep No. UP 42-T/0435, which met an accident at about 9.45 pm near Village Basaha, Police Station Raunahi, District Faizabad, when Jeep driver, driving the vehicle rashly and negligently, while overtaking a vehicle lost control over Jeep and the same collided with tree, going downside of road. In the said accident Harish Kumar Yadav son of claimants-appellants died. Application claiming compensation under Act, 1988 was filed claiming compensation of Rs. 15,85,800/- by claimants-appellants impleading Sri Krishna Kant Pandey-Defendant 1, owner of vehicle, Sri Sant Prakash Pandey-Defendant 2, Driver of vehicle and Oriental Insurance Company Ltd., the insurer of the tort feasing vehicle.
6. Deceased was studying in B.A. (First Year) and aged about 19 years. It was said that he was a student. In order to sustain himself and also contributing to family for their sustenance he was undertaking tuition of children and also working at a sweet meat shop, earning Rs. 5200/- per month. The incident was reported to Police but report was not lodged. It is only with the interference of Court, a First Information Report was lodged and investigation was conducted. Defendant-2, i.e., driver did not contest matter.
7. Defendant-1 contested matter and admitted accident having occurred on 07.03.2002 at 9.45 pm but denied that vehicle was being driven rashly and negligently. He also admitted damage to the vehicle and factum of traveling of deceased in vehicle and also his death. He however submitted that vehicle was duly insured with Defendant-3 and driver had valid licence, therefore, liability of payment of compensation was on Insurance Company.
8. Defendant-3, i.e., respondent no. 1 before this Court, Insurance Company, also contested claim by filing its own written statement and as usual, denied insurance of vehicle with said Company. It further pleaded that vehicle was being driven contrary to terms of Insurance Company, papers were not complete, driving licence was not valid, hence Insurance Company was not liable to pay any compensation.
9. Tribunal formulated four issues as under:
^^1- D;k fnukad 07-3-2002 bZ0 dks le; jkr 9 ctdj 45 feuV ij LFkku xzke clgk Fkkuk jkSukgh ftyk QStkckn esa okgu la[;k&;w0ih0 42&Vh@0435 ds M~kbZoj }kjk rsth vkSj ykijokgh ls pyk;s tkus ds dkj.k thi iyV tkus ds dkj.k thi esa cSBs gjh'k dqekj ;kno dh nq?kZVuk esa e`R;q gks x;h\ "1. Whether on 07.03.2002 at 9:45 pm at Village Basaha, PS Raunahi, District Faizabad; vehicle no. UP42T/0435 being driven in a rash and negligent manner by its driver turned turtle causing the death of Harish Kumar Yadav, who was aboard the jeep?
2- D;k nq?kZVuk ds le; okgu ds pkyd ds ikl oS/k M~kbZfoax ykblsUl ugha Fkk\ ;fn gkWa rks izHkko\
2. Whether, at the time of the accident, the driver of the vehicle was not holding a valid driving licence? If so, its effect?
3- D;k nq?kZVuk ds le; okgu foi{kh la[;k&3 ds ;gkWa ls chfer ugha FkkA ;fn gkWa rks izHkko\
3. Whether, at the time of the accident, the vehicle was not insured with the opposite no. 3? If so, it effect?
4- ;kphx.k fdl i{k ls] fdruh {kfriwfrZ ikus ds vf/kdkjh gSa\**
4. How much compensation the petitioners are entitled to get, and from which party?" (English translation by Court)
10. Issue-1 was answered in favour of claimants-appellants holding that accident occurred due to rash and negligent driving by Defendant-2 in which deceased died. Issues-2 and 3 both were answered against Insurance Company. It held that Driver had valid licence and there was no breach of terms and conditions of Insurance Company. Vehicle was duly insured with Defendant-3.
11. Now coming to issue-4, Tribunal held that deceased was unmarried, had passed Intermediate in 2001 and admitted in B.A. Part-I. It referred to deposition of PW-1, Mishri Lal that deceased was not regularly working but used to work occasionally at a sweet meat shop and on that basis determined his income at Rs. 15,000/- per annum. Applying 1/3 deduction thereon it took loss of income to claimants-appellants as Rs. 10,000/- per annum and thereafter multiplier of 12 has been applied on the basis of age of parents. Tribunal computed loss of income to Rs. 1,20,000/- (Rs. 10,000 X 12). Thereafter it provided cremation expenses of Rs. 2000/-, loss of estate as Rs. 2500/-, loss of love and affection as Rs. 5000/- and litigation expenses of Rs. 500/-. Therefore, total sum awarded is Rs. 1,30,000/-.
12. Learned counsel for appellants have challenged impugned award on following points:
(i) Deceased was a bright student undergoing graduation and even if it is taken that he used to work not regularly but occasionally still there was no reason to determine income for less than Rs. 100/- per day which is normally the income payable to an unskilled daily labourer.
(ii) Wrong multiplier has been applied and instead of applying multiplier at the age of deceased, multiplier on parent's age has been applied which is illegal.
(iii) Compensation under the heads of cremation, loss of love and affection, loss of estate etc. are on much lower side and not consistent with the view taken by Constitution Bench in National Insurance Company Ltd. Vs. Pranay Sethi and others, 2017(4) UPLBEC 2633.
(iv) Interest awarded by Tribunal is also on lesser side and it is only 6% though it ought to be 9%.
13. Insurance Company, on the contrary, submitted that deceased being not in regular employment, Tribunal has rightly determined his income as Rs. 15,000/- annual. Learned counsel for Respondent-Insurance Company said that as per law applicable on the date of award, multiplier at the age of parents was applicable hence it was applied rightly. On other heads it is urged that award warrants no interference.
14. In our view, compensation awarded by Court below is not just and, therefore, appeal is liable to succeed partly and judgment and award in question needs modification.
15. Deceased was admittedly a student undertaking graduation and employed at sweet meat shop. It is proved by PW-1, i.e., claimant-appellant no. 1. Whether he was employed for some skilled work for preparation of sweets or as unskilled worker, is not clear but in worst case deceased could not have been denied status of unskilled labourer and minimum income which could have been assumed in respect of unskilled worker should have been taken as notional income of deceased. It could not be disputed by learned counsel for parties that in the year 2002 minimum wages prescribed and applicable for an unskilled labour in State of U.P. was Rs. 100/- per day and that comes to Rs. 3000/- per month and Rs. 36,000/- per annum. Further, in the light of Constitution Bench judgment in National Insurance Company Ltd. Vs. Pranay Sethi (supra), since deceased was below 40 years of age, 40% future prospect has to be allowed. Therefore, total notional income comes to Rs. 50,400/- (Rs. 36,000+40%). Deduction towards personal and living expenses in the case of bachelor has been applied as 50% in Sarla Verma (Smt.) and others Vs. Delhi Transport Corporation and another, (2009) 6 SCC 121. Para 31 of judgment reads as under:
"31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically...." (emphasis added)
16. Therefore, applying deduction of 50%, total loss of income to claimant would come to Rs. 25,200/-(Rs. 50,400-50%). Award in question taking an otherwise view and findings recorded by Court below in this regard are reversed and modified accordingly.
17. Now coming to question of multiplier, we find that a three Judge Bench of Supreme Court in Reshma Kumari and Ors. v. Madan Mohan and Anr. (2013) 9 SCC 65 has held that multiplier is to be used with reference to age of deceased. This has been followed in subsequent judgment in Munna Lal Jain and Anr. v. Vipin Kumar Sharma and Ors., (2015) 6 SCC 347 and Court said as under:
"Whether the multiplier should depend on the age of the dependants or that of the deceased, has been hanging fire for sometime; but that has been given a quietus by another three-Judge Bench decision in Reshma Kumari (supra). It was held that the multiplier is to be used with reference to the age of the deceased. "
18. This view has now been confirmed by Constitution Bench in National Insurance Company Ltd. Vs. Pranay Sethi (supra) wherein in paras 43 to 46, Court said as under:
"43. On a perusal of the analysis made in Sarla Verma which has been reconsidered in Reshma Kumari, we think it appropriate to state that as far as the guidance provided for appropriate deduction for personal and living expenses is concerned, the tribunals and courts should be guided by conclusion 43.6 of Reshma Kumari. We concur with the same as we have no hesitation in approving the method provided therein.
44. As far as the multiplier is concerned, the claims tribunal and the Courts shall be guided by Step 2 that finds place in paragraph 19 of Sarla Verma read with paragraph 42 of the said judgment. For the sake of completeness, paragraph 42 is extracted below:
"42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years."
45. In Reshma Kumari, the aforesaid has been approved by stating, thus:
"It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the Table in Sarla Verma for the selection of multiplier in claim applications made Under Section 166 in the cases of death. We do accordingly. If for the selection of multiplier, Column (4) of the Table in Sarla Verma is followed, there is no likelihood of the claimants who have chosen to apply Under Section 166 being awarded lesser amount on proof of negligence on the part of the driver of the motor vehicle than those who prefer to apply Under Section 163-A. As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A or Section 166 under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the Table in Sarla Verma should be followed. This is to ensure that the claimants in such cases are not awarded lesser amount when the application is made Under Section 166 of the 1988 Act. In all other cases of death where the application has been made Under Section 166, the multiplier as indicated in Column (4) of the Table in Sarla Verma should be followed.
46. At this stage, we must immediately say that insofar as the aforesaid multiplicand/multiplier is concerned, it has to be accepted on the basis of income established by the legal representatives of the deceased. Future prospects are to be added to the sum on the percentage basis and "income" means actual income less than the tax paid. The multiplier has already been fixed in Sarla Verma which has been approved in Reshma Kumari with which we concur." (emphasis added)
19. Applying multiplier as per Column (4) in the table of Sarla Verma (supra), it would come to 18. Therefore, total amount would come to Rs. 25,200 X 18=4,53,600/-.
20. Under other heads, i.e., loss of estate, loss of love and affection and funeral expenses, Constitution Bench in National Insurance Company Ltd. Vs. Pranay Sethi (supra) in para 61(viii) has allowed Rs. 15,000/- towards loss of consortium; Rs. 40,000/- towards loss of consortium and Rs. 15,000/- towards funeral expenses. We also allow aforesaid amount under said heads. Therefore, the total amount of compensation comes to Rs. 5,23,600/-(4,53,600+15,000+ 40,000+15,000=5,23,600).
21. Coming to the question of interest, here also we find that recently Courts have held that appropriate rate of interest should be 9%.
22. In Surit Gupta Vs United India Insurance Company (2015) 11 SCC 457, accident took place in July, 1990. Punjab and Haryana High Court had awarded interest at the rate of 6 %. Court held that it is on lower side and it should be 9 %.
23. In Jitendra Khimshankar Trivedi Vs Kasam Daud Kumbhar and Others (2015) 4 SCC 237, incident was of 21.09.1990. Tribunal awarded 15 % interest which was reduced to 12% by Gujrat High Court. Court held that it is on higher side and awarded 9% interest following its decisions in Amresh Kumari Vs Niranjan Lal Jagdish Parshad Jain 2010 ACJ 551 (SC) and Mohinder Kaur Vs Hira Nand Sindhi (2007) ACJ 2123 (SC).
24. In Kalpanaraj and Others Vs Tamil Nadu State Transport Corporation (2015) 2 SCC where accident took place on or before 1994, High Court had awarded interest at the rate of 9 % per annum which was challenged that it is on higher side. Court upheld said rate of interest.
25. In Neeta Vs The Divisional Manager, MSRTC (2015) 3 SCC 590 where accident took place on 22.03.2011, Court allowed 9% rate of interest and held that interest awarded by Tribunal at 8% was erroneous. Para-11 of the judgment reads as under:-
"The appellants are also entitled to the interest on the compensation awarded by this Court in these appeals at the rate of 9% per annum along with the amount under the different heads as indicated above. The Courts below have erred in awarding the interest at the rate of 8 % per annum on the compensation awarded by them to the Appellants without following the decision of this Court in Municipal Corporation of Delhi, Delhi Vs. Uphaar Tragedy Victims Association and Ors. (2011) 14SCC 481. Accordingly, we award the interest at the rate of 9% per annum on the compensation determined in these appeals from the date of filing of the application till the date of payment."
26. In Kanhsingh Vs. Tukaram, 2015 (1) SCALE 366 where accident had taken place on 02.07.2006 but tribunal awarded no interest, Court held that this is erroneous and 9 % interest should have been allowed in view of the principles laid down in Municipal Corporation of Delhi Vs Association of Victims of Uphaar Tragedy 2011(14) SCC 481.
27. In Shashikala and Others Vs Gangalakshmamma and Another (2015) 9 SCC 150, where accident had taken place on 14.12.2006, Court allowed 9 % rate of interest from the date of claim petition till the date of realization.
28. In Asha Verman and Ors Vs Maharaj Singh & Ors, 2015 (4) SCALE 329, High Court awarded interest at the rate of 8 % . Accident took place on 27.11.2016. It was held that 8 % interest is on lower side and it should be 9 %.
29. In Chanderi Devi and another Vs Jaspal Singh and others (2015) 11 SCC 703, date of accident is September 2006 and the incumbent died on 04.10.2006. Court awarded 9 % interest.
30. In view of above, 6% interest awarded by Tribunal cannot be justified and in our view interest should be paid at 9% per annum. We hold accordingly.
31. In the result, appeal is partly allowed. Judgment and award dated 10.10.2005 is modified and we hold that appellants are entitled to compensation of Rs. 5,23,600/- which shall be paid alongwith 9% interest.
Order Date :- 25.1.2018 AK Court No. - 3 Case :- FIRST APPEAL FROM ORDER No. - 890 of 2005 Appellant :- Mishri Lal Yadav & Anr.
Respondent :- The Oriental Insurance Co. Ltd. Faizabad & 2 Ors.
Counsel for Appellant :- Chhotey Lal Yadav Counsel for Respondent :- Anil Srivastava Order on Recall Application Hon'ble Sudhir Agarwal,J.
Hon'ble Anant Kumar,J.
1. This is an application for recall of the order dated 07.02.2017, whereby appeal was dismissed.
2. We have gone through the affidavit filed in support of this application. The cause shown is sufficient. The order dated 07.02.2017 is recalled and appeal is restored to its original number. The application is, accordingly, allowed.
Order Date :- 25.1.2018 AK