Calcutta High Court (Appellete Side)
The National Insurance Company Ltd vs Smt. Ayesha Sekh & Ors on 17 December, 2014
Author: Subhro Kamal Mukherjee
Bench: Subhro Kamal Mukherjee
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
PRESENT:
The Hon'ble Mr. Justice Subhro Kamal Mukherjee
AND
The Hon'ble Mr. Justice Subrata Talukdar
FMA 2565 of 2007
The National Insurance Company Ltd.
-Vs-
Smt. Ayesha Sekh & Ors.
For the Appellant : Sri Kamal Krishna Das;
Pradip Kumar Pal Chowdhury
For the Respondents : Sri Uday Shankar Chattopadhyay;
Suman Sankar Chatterjee;
Matri Prasad Das
Heard on : 20/11/2014, 21/11/2014
Judgement on : 17 /12/2014
Subrata Talukdar, J.: This is an appeal in connection with a motor accident claims case challenging the judgment and award dated 22nd February, 2007 passed by the Motor Accident Claims Tribunal (for short MACT), Burdwan in case No. 136 of 2005 (previously numbered as 468 of 2004). The Insurance Company is the appellant before this Court, the respondent Nos. 1, 2 and 3 are the claimants and the respondent No. 4 is the owner of the offending vehicle in question. The respondent Nos. 2 and 3 are minors and therefore represented by the respondent No. 1, their mother and natural guardian.
By the judgment and award impugned the Ld. Tribunal was pleased to award a sum of Rs. 25,09,970/- in favour of the three claimants as compensation under Section 166 of the Motor Vehicle Act, 1988 (for short the 1988 Act).
The short facts of the case are as follows:-
a) That the victim, one Sk. Zear Ali @ Jiyarli Sk. was husband of the claimant/OP No. 1 and the father of the claimants/OP Nos. 2 and
3. On the fateful date of 23rd August, 2004 at about 17.00 hours the victim was standing by the side of G.T. Road and talking with one Sk. Abdus Salek when suddenly the offending lorry bearing the registration No. WBK 9313 while travelling from Durgapur to Burdwan tried to overtake another vehicle. The driver of the offending lorry lost his control and hurtled along the Southern side of the road where victim was standing and dashed against the victim. The victim died on the spot.
b) A case was registered under Galsi Police Station being case No. 106 of 2004 dated 23rd August, 2004 under Sections 279/304-A IPC for rash and negligent driving. The post mortem was conducted at Burdwan Medical College and Hospital.
c) At the time of his death the victim was aged around 41 years. The victim was the sole bread winner of his family and the claimants, being his family members, were therefore entirely dependent on him. The victim used to work as an agent of the Life Insurance Corporation of India (for short LICI), Guskara Branch and earned a sum of Rs. 2,78,886/- per annum.
The Claimants claimed compensation of Rs. 31,88,860/-, after deducting one third of Rs. 2,78,886/- towards the personal expenses of the victim and applying the multiplier of Rs. 15 along with the additional sum of Rs. 4,00000/- towards non-pecuniary damages due to mental agony.
The Ld. Tribunal held as follows:-
i) That from the deposition of the PWs it is admitted that the victim was an LICI agent attached to Guskara Branch. From the evidence on record and the deposition of the PW2 it is also admitted that the victim met with a tragic accident after being hit by the offending lorry and no charge of contributory negligence can be imputed against the victim. From the date of birth on 10th November, 1962 as appearing in the certificate of the West Bengal Board of Secondary Education the victim was aged around 42 years on the date of the accident.
ii) In support of the income of the victim at the relevant point of time the claimants relied upon the T.D.S. certificate showing the income of the victim for the financial year 2003-2004. The said T.D.S. certificate was marked Exhibit-1 and discloses the income of the victim as Rs. 2,78,886/- for the year 2003-2004.
However, after deducting income tax the actual annual income of the victim comes to Rs. 2,50,997.10 paise.
iii) Taking note of the argument advanced by the Insurance Company that the Claimants being the legal heirs of the victim are entitled to receive hereditary commission upon death of the agent calculated on the basis of the premium deposited, the Ld. Tribunal was of the view that in a claim case it need not be concerned with any amount which is receivable by the heirs of the deceased that has no relation with the accident. According to the Ld. Tribunal it is only concerned with the applicable compensation relatable to the accident and not to the death as such. The Ld. Tribunal found support from a decision of the Hon'ble Guwahati High Court reported in 2007 (1) T.A.C. 196 to arrive at the abovenoted conclusion.
iv) Therefore applying the multiplier of 15 and considering the income of the deceased at Rs. 2,50,997.10p. after deduction of income tax and personal expenses, the Ld. Tribunal awarded the sum of Rs. 25,09,970/- in favour of the claimants and ex parte against the present respondent No. 4 who, arrayed as the OP No. 1 before the Ld. Tribunal did not contest the case. The Ld. Tribunal directed the present appellant, who was the OP No. 2 before it, to pay the sum awarded to the claimants on a pro rata basis further awarding an interest of 10 per cent per annum from the date of the judgment till realisation. The claimant No. 1 was directed to hold the shares of the minor claimant Nos. 2 and 3 on execution of a bond and to keep such shares of money in a fixed deposit account in a nationalised bank.
Sri Kamal Krishna Das, Ld. Counsel appearing for the appellant Insurance Company submits that the short point which has arisen for consideration in this appeal is that the Ld. Tribunal erred grossly in law by failing to consider the amounts receivable by the heirs of the deceased on account of his death and to deduct the same from the compensation.
Sri Das asserts that the Ld. Tribunal was wrong in holding that it is only concerned with the compensation receivable by the claimants having a nexus to the accident and not to the death of the victim as such. He brings to the notice of this Court the fact that the claimants were entitled to receive the hereditary commission calculated on the basis of the premium deposited upon the death of the victim-agent and, the Ld. Tribunal ought to have deducted such hereditary commission from the total awarded amount.
In support of his submission Sri Das relies upon the decision of the Hon'ble Apex Court in United India Insurance Co. Ltd. And Others Vs. Patricia Jean Mahajan And Others reported in 2002 (2) T.A.C. 721 (S.C.).
According to Sri Das Paragraphs 21, 22 and 23 are relevant for consideration by this Court. The said paragraphs read as follows:-
"21) Mr. Soli J. Sorabji submitted that while assessing the amount of compensation, the benefits which have accrued to the claimants by reason of death must also be taken into account. A kind of balancing of losses and the gains or benefit by reason of death would be necessary.
In support of the above contention he has referred to a decision reported in 162 (1) S.C.R. 929, Gobald Motors Service Limited v. R.M.K. Veluswami and others. It is a decision by three-Judges Bench of this Court, and at page 938 the observations made by the House of Lords in Davies v. Powell Duffryn Associated Collieries Ltd., 1942 A.C. page 601, has been quoted which reads as follows:
"The general rule which has always prevailed in regard to the assessment of damages under the Fatal Accidents Acts 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."
22) To further elaborate the above proposition, observations made by Lord Wright in Devies case (supra), have also been quoted. It reads as follows:
"The damages are to be based on the reasonable expectation of pecuniary benefit of benefit reducible to money value. In assessing the damages all circumstances which may be legitimately placed 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."
23) The learned Counsel laid stress on the last part of observation made to the effect that for the purposes of balancing losses and gains any pecuniary advantage which from whatever source come to them, has to be considered."
Sri Das also relies upon the judgment of the Hon'ble Apex Court reported in AIR 2008 SCW 5256 in the matter of Bhakra Beas Management Board Vs. Smt. Kanta Aggarwal And Others wherein the Hon'ble Apex Court was pleased to consider the judgment in Mahajan's case (supra) on the point of the amount of compensation which can accrue to the claimants by reason of death which also (emphasis supplied) must be taken into consideration to balance the losses and gains by reason of death.
Sri Das further relies upon the salutary principle elucidated in Sarla Verma And Others Vs. Delhi Transport Corporation And Another reported in 2009 (6) SCC 121 underscoring the award of a "just compensation" in favour of the claimants. The abovenoted principle of "just compensation" was also noticed in 2003 (7) SCC 197 in the matter of Divisional Controller, KSRTC Vs. Mahadeva Shetty And Another.
Per contra, Sri Uday Sankar Chattopadhyay, Ld. Counsel appearing for the claimants has strenuously argued that in Mahajan' Case (supra) the Hon'ble Apex Court has permitted deductions from the total amount of compensation receivable by a claimant only in the event such benefits arise as a consequence of the accident suffered and, not otherwise.
Sri Chattopadhyay therefore strongly relies on paragraphs 37 and 38 of Mahajan's judgment (supra) to make the point that the hereditary commission receivable by the claimants has no nexus to the accident per se and would have been anyway receivable by the heirs of the agent even in the normal course of his death. According to Sri Chattopadhyay, the Ld. Tribunal did not commit any wrong while holding that the compensation must have a nexus with the accident and not with the fact of death per se.
Upon the consideration of the rival submissions and the sole point of law this Court notices the judgment of the Hon'ble Apex Court in Helen C. Rebello And Others Vs. Maharashtra State Road Transport Corporation And Another reported in 1999 (1) SCC 90. In Rebello's Case (supra) the Hon'ble Apex Court was pleased to consider the general principle of estimating damages under the common law qua the "pecuniary advantage" which accrues to the claimants solely on account of the death of the victim.
The Hon'ble Apex Court in Rebello's Case (supra), inter alia, held that under the Motor Vehicles Act an amount receivable by the claimant not on account of the accidental death but, otherwise on the death of the insured person, will not come under the meaning of "pecuniary advantage" which is liable for deduction. In the words of the Hon'ble Apex Court death, which is not accidental, "is only a step or contingency in terms of the contract, to receive the amount". Therefore, the Hon'ble Apex Court found that benefits attributable to provident fund or Life Insurance Policy will not come under the purview of accidental death benefits and hence will not be liable for deduction while calculating compensation for motor accident deaths.
At paragraphs 32, 33 and 35 of Rebello's Case (supra) the Hon'ble Apex Court held as follows:-
"32) So far as the general principle of estimating damages under the common law is concerned, it is settled that the pecuniary loss can be ascertained only by balancing on one hand, the loss to the claimant of the future pecuniary benefits that would have accrued to him but for the death with the "pecuniary advantage" which from whatever source comes to him by reason of the death. In other words, it is the balancing of loss and gain of the claimant occasioned by the death. But this has to change its colour to the extent a statute intends to do. Thus, this has to be interpreted in the light of the provisions of the Motor Vehicles Act, 1939. It is very clear, to which there could be no doubt that this Act delivers compensation to the claimant only on account of accidental injury or death, not on account of any other death. Thus, the pecuniary advantage accruing under this Act has to be deciphered, correlating with the accidental death. The compensation payable under the Motor Vehicles Act is on account of the pecuniary loss to the claimant by accidental injury or death and not other forms of death. If there is natural death or death by suicide, serious illness, including even death by accident, through train, air flight not involving a motor vehicle, it would not be covered under the Motor Vehicles Act.
Thus, the application of the general principle under the common law of loss and gain for the computation of compensation under this Act must correlate to this 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 under this Act, 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 will include all the assets moveable, immovable, shares, bank accounts, cash and every amount receivable under any contract. In other words, all heritable assets including what is willed by the deceased etc. 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 wrongful act or negligence, which contributes to the death, would have in many cases no liability or meagre liability. In our considered opinion, the general principle of loss and gain takes colour of this statute, viz., the gain has to be interpreted which is as a result of the accidental death and the loss on account of the accidental death. Thus, under the present Act, whatever pecuniary advantage is received by the claimant, from whatever source, would only mean which comes to the claimant on account of the accidental death and not other forms of death. The constitution of the Motor Accident Claims Tribunal itself under Section 110 is, as the section states:
"...for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to,...".
33) Thus, it would not include that which the claimant receives on account of other forms 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 which 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 incident 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 and in the course of employment of an employee.
35) Broadly, we may examine the receipt of the provident fund which is a deferred payment out of the contribution made by an employee during the tenure of his service. Such employee or his heirs are entitled to receive this amount irrespective of the accidental death. This amount is secured, is certain to be received, while the amount under the Motor Vehicles Act is uncertain and is receivable only on the happening of the event, viz., accident, which may not take place at all. 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 corelation 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 the 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, the insurer indemnifies to pay the sum to the heirs, again in terms of the contract for the premium paid. Again, this amount is receivable by the claimant not on account of any accidental death but otherwise on the 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 corelation 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 a similar and same plane having nexus, inter se, between them and not to which there is no semblance of any correlation. The insured (deceasesd) contributes his own money for which he receives the amount which has no corelation to the compensation computed as against the tortfeasor for his negligence on account of the 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 the 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 principle of paying compensation underscored in Rebello's Case (supra) was reiterated by the Hon'ble Apex Court in Mahajan's Case (supra). While disallowing any deduction from the compensation on account of receipts of insurance policy and social security benefits by the claimants the Hon'ble Apex Court in Mahajan's Case (supra) held at paragraph 34 as follows :-
"34) We are in full agreement with the observations made in the case of Helen Rebello (supra), that principle of balancing between losses and gains, by reason of death, to arrive at amount of compensation if a general rule, but what is more important is that such receipts by the claimants must have some co-relation with the accidental death by reason of which alone the claimants have received the amounts. We do not think it would be necessary for us to go into the question of distinction made between the provisions of Fatal Accidents Act and the Motor Vehicles Act. According to the decisions referred to the earlier part of this judgment, it is clear that amount on account of social security as may have been received must have nexus or relation with the accidental injury or death, so far to be deductible from the amount of compensation. There must be some co-
relation between the amount received and the accidental death or it may be in the same sphere, absence the amount received shall not be deducted from the amount of compensation. Thus the amount received on account of insurance policy of the deceased cannot be deducted from the amount of compensation though no doubt the receipt of the insurance amount is accelerated due to pre- mature death of the insured. So far other items in respect of which learned Counsel for the Insurance Company has vehemently urged for example some allowance paid to the children, and Mrs. Patricia Mahajan under the social security system no co-relation of those receipts with the accidental death has been shown must less established. Apart from the fact that contribution comes from different sources for constituting the fund out of which, payment on account of social security system is made one of the constituent of fund is tax which is deducted from income for the purpose. We feel that the High Court has rightly disallowed any deduction on account of receipts under the insurance policy and other receipts under social security system which the claimant would have also otherwise entitled to receive irrespective of accident al death of Dr. Mahajan. If the proposition "receipts from whatever source" is interpreted so widely that it may cover all the receipts, which may come into the hands of the claimants, in view of the mere death of the victim, it would only defeat the purpose of the Act providing for just compensation on account of accidental death. Such gains may be on account of savings or other investment etc. made by 8the deceased would not go to the benefit of wrong doer and the claimant should not be left worse of, if he had never taken an insurance policy or had not made investments for future returns."
This Court is in respectful agreement with the proposition of law underscored in both Rebello and Mahajan (supra). This Court is therefore of the considered opinion that the hereditary commission receivable by the claimants cannot be said to have any nexus with the accident and would have been receivable by the claimants even otherwise on the death of the victim. While it is no doubt true that the receipt of the hereditary commission was accelerated due to the premature death of the victim, even then the commission cannot be said to have any nexus with the accident.
Therefore, this Court notices that although the Ld. Tribunal had no occasion to consider the legal principle emanating out of the judgments delivered in Rebello (supra) and in Mahajan (supra), unwittingly the Ld. Tribunal followed the law by holding that no claim which is receivable by the Claimants on account of the death of the victim and not relatable to the accident should be brought within the ambit of deductions from the compensation. The Ld. Tribunal rightly followed the law by holding that it "only concerned with the pecuniary compensation available to the claimants which they derive because of the accident and not because of the death as such".
This Court also notices the concept of "just" compensation as discussed in Rebello's Case (supra). At paragraph 28 it was held as follows:-
"28) The word "just", as its nomenclature, denotes equitability, fairness and reasonableness having a large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not just. Thus, this field of wider discretion of the Tribunal has to be within the said limitations and the limitations under any provision of this Act or any other provision having the force of law. In Law Lexicon, 5th Edn., by T.P. Mukherjee "just" is described:
"The term "just" is derived from the Latin word justus. It has various meanings and its meaning is often governed by the context. 'Just' may apply in nearly all of its senses, either to ethics or law, denoting something which is morally right and fair and sometimes that which is right and fair according to positive law. In connotes reasonableness and something conforming to rectitude and justice, something equitable, fair (vide p. 1100 of Vol. 50, Corpus Juris Secundum). At p. 438 of Words and Phrases, edited by West Publishing Co., Vol. 23 the true meaning of the word 'just' is in these terms: 'The word "just" is derived from the Latin justus, which is from the Latin jus, which means a right and more technically a legal right-a-law. Thus "jus dicere"
was to pronounce the judgment; to give the legal decision. The word "just" is defined by the Century Standard Dictionary as right in law or ethics and in Standard Dictionary as conforming to the requirements of right or of positive law, in Anderson's Law Dictionary as probable, reasonable, Kinney's Law Dictionary defines "just" as fair, adequate, reasonable, probable; and justa cause as a just cause, a lawful ground. Vide Bregman v. Kress NYS at p. 1073'."
In the backdrop of the above discussion the judgment and award dated 22nd February, 2007 is not interfered with except that the awarded sum of Rs. 25,09,970/- will carry interest at the rate of 6(six)% per annum from the date of filing the application till actual payment. The respondent No. 1/claimant shall hold the shares of the minor respondent Nos. 2 and 3/claimants in the manner as directed by the Ld. Tribunal. For the purpose of receiving the quantum of compensation stipulated by this order the Ld. Advocate of the respondent No. 1/Claimant, shall supply her bank particulars to the Ld. Advocate for the appellant/Insurance Company.
FMA No. 2565 of 2007 is thus dismissed.
There will be, however, no order as to costs.
Urgent Xerox certified photocopies of this judgment, if applied for, be given to the parties upon compliance of all requisite formalities. (Subhro Kamal Mukherjee, J.) (Subrata Talukdar, J.)