Delhi High Court
National Insurance Co. Ltd. vs Kumud Khosia And Ors. on 22 August, 1994
Equivalent citations: I(1995)ACC463, 1995ACJ107, 1994IIIAD(DELHI)1312, 1994(31)DRJ45
JUDGMENT C.M. Nayar, J.
(1) The present judgment will dispose of Fao No. 261 of Ww (National Insurance Company Vs. Mrs. Kumud Khosla & others) and Fao No. 256 of 1989 (Mrs. Kumud Khosla Vs. Rajesh Rajore & others).
(2) These appeals arise out of a judgment dated July 24, 1989 of Shri K.C.Lohia, judge. Motor Accident Claims Tribunal, New Delhi. Fao 26l of 1989 has been filed by the National Insurance Company to impugn the judgment of the Tribunal awarding compensation to the tune of Rs.4,50,000.00 including Rs. 15,000.00 already paid under Section 92-A of the Motor Vehicles Act in favor of the claimant, respondent no. 1 and respondent No.3 with costs and interest at the rate of 9 % per annum from the date of petition i.e. May 11, 1987 till the date of order. Fao 256 of 1989 has been filed by Mrs. Kumud Khosla, respondent No. 1, for enhancement of compensation to Rs.37 lakhs with costs and interest.
(3) The brief facts of the case are that Shri Vivek Khosla son of the claimant, respondent no.1 herein, was a businessman, aged about 19 1/2 years. He was going in a car No. Pan 58 on March 25, 1987, and the said car was driven by one Shri Rajesh Rajore, respondent no.2. The deceased was sitting in the car, which was going from Connaught Place to Nizamuddin. At about 11.41) P.M. when the car reached the crossing to Hexagan near Dr. Zakir Hussain Marg, the same struck against the Central verge on the Jaipur House side due to which the car overturned, resulting in the fatal injuries on the person of the deceased Vivek Khosla. It is further alleged that the respondent No.2 was driving the car at that time at a fast speed and in a rash and negligent manner and without taking case and caution struck the car with the central verge. The matter was reported to the police and FIR. No. 102 of 1987 was registered at P.S. Tilak Marg, New Delhi. The said Vivek Khosla died on the spot. The claimant is the mother to the deceased Vivek Khosia, who was unmarried at the time to accident. He was the only son of the claimant and respondent no.3. It is averred that the deceased was a brilliant youngman and he had done his schooling from Welham, Dehradun and passed his matriculation from Mayo College, Ajmer. He was graduate in Commerce from Government College, Ludhiana and was actively participating in the family business and was progressing fast. The income of the deceased was alleged to be in the range to Rs.13,000.00 to Rs.l5,000.00 per month. I he claimant has further contended that in view of the death of the de- ceased, who was her son, the estate has suffered a set back. The deceased was a partner in Sohan Theatre, Hissar. He was the partner and Director of Swadeshi Karyala Textile Pvt. Ltd and was also a partner in M/s Globe Trotters, Ludhiana. He Was responsible for looking after the sales promotion, export promotion and accounts. The claim petition was filed in the Motor Accident Claims Tribunal, Delhi, for compensation for death of the said Vivek Khosla. The respondents, imp leaded in the said petition, are Shri Rajesh Rajore, who was driving the vehicle, Shri Virender Khosia to whom the vehicle belonged and who was father of the deceased and National Insurance Company the appellant herein. The claim raised in the petition was for the sum of Rs.37 lakhs with costs and interest.
(4) The written statement was filed by the respondents. The main contesting party is the Insurance Company, who denied the liability on various grounds, as referred to in the written statement. It was reiterated that the claim petition was not maintainable in law, as insured is husband of the claimant and father of the deceased. The insured cannot be indemnified for his own fault and since insured is one of the legal heirs of the deceased, the, claim petition is not maintainable. This objection forms part of the preliminary objections raised by the Insurance Company. The claim of respondent no. 1 (FAO No. 261 of 1989) was also denied on merits and it was contested that the petition was liable to be rejected.
(5) The factum of accident was not denied by respondent no.2. According to him, the car was not driven at a high speed or in rash and negligent manner. I he said respondent, however, has admitted that at the time of accident he was driving the car with care and caution and the accident occurred by chance. To similar effect is the written statement filed by respondent no.3 wherein it is reiterated that the car, at the time of accident, was driven by respondent no.2 under the direction and with permission and knowledge of the answering respondent. The car was insured with the appellant. National Insurance Co. Ltd. comprehensively and, as such, the amount is payable by the appellant who had undertaken to indemnity the insured, under the policy of the insurance. The appellant denied its liability, as referred to above, and contended that the Insurance Company was not liable to pay any amount of compensation as the insured has no insurable interest and the deceased who did not possess the driving license was driving the vehicle. It is further alleged that the petition has been filed in collusion with respondents 2 and 3 and respondent no.1 is not/and the only legal heir of the deceased. The factum of accident was also denied for want of knowledge. The Insurance Company, appellant herein, did not, however, deny that the vehicle was insured under a comprehensive insurance policy with the company.
(6) On the pleadings of the parties, the following issues were framed: 1. Whether the accident took place due to the rash and negligent driving on the part: of respondent no.1 (respondent no. 2 in the appeat) while driving car No. PAN58? 2. To what amount of compensation, if any, are the petitioners entitled and from whom? 3. Relief.
(7) The Tribunal after appraising evidence on record came to the conclusion that the accident took place due to the rash and negligent driving of respondent no.2 and the same resulted in the death of Vivek Khosla. This issue was decided accordingly. With regard to the quantum of compensation as well as the multiplier to be used on the facts of the present case, .the learned Judge dealt with the evidence on record and held as follows: "KEEPING in view the nature of the work and various businesses activities carried out by the parents of the deceased and the deceased, in my opinion in terms of money the contribution of the deceased towards the parents should have been around Rs.2,500.00 p.m. keeping in view the last income shown as per the document Ex.PW 10/11 which is Rs.67,409.00 p.a. Since the deceased has started living in Delhi and since belonged to a good family, as such his personal expenditures should not be less than Rs.3000.00 p.m. Keeping in view the age of the petitioner no.I which was 52 years and age of father of the deceased respondent no.2 around 48 years, in my opinion contribution of the deceased towards the parents would have been for a period of 15 years and as such after applying the multiplier of 15 years to the amount of Rs.2,500.00 p.m., the compensation in this case comes to Rs.4,50,000.00 (Rupees four lakhs fifty thousand only)."
The respondent was awarded simple interest at the rate of 9 per cent from the date of the petition i.e. May Ii, 1987 till the date of the order. On the question of liability to make the payment of the awarded amount, the Tribunal held that the amount is payable by the Insurance Company, appellant herein, on the basis of the liability in terms of the policy of Insurance. The amount of compensation was held to be sharable by respondent no. 1 and respondent no.3 in the proportion of Rs.2,35,000.00 and Rs. 2 lakhs respectively.
(8) The learned counsel for the appellant. Insurance Company, has contended that the insurer, who is appellant in the present case, cannot be held liable under Section 96 of the Motor Vehicles Act, 1939 (hereinafter referred to as the Act) where the insured himself stands exonerated of any such liability. In the present case, it is argued that no liability is in- curred by the owner i.e. Shri Virender Khosla, respondent no.3. The Insurance Company cannot be held liable under Section 96 of the Act to pay the amount. This proposition was not canvassed before the Tribunal and has been raised for the first time before this Court.
(9) The counsel for the insurance Company has referred me to the judgment of Gujarat High Court in Oriental Fire & General Insurance Co. Ltd Vs. Aminbhai Pirmohomad Master and others 1987 Acj 87 where a similar question arose and it was held that the contention raised is not of technical nature and is a pure question of law and goes to the very root to the matter. The same can, therefore, be raised in an appeal before the High Court. I am also not inclined to reject the contention of the appellant merely on the ground that it has not been raised and argued before the Tribunal.
(10) It may be necessary now to reproduce the relevant terms of the Insurance Policy, which was valid during the period accident took place. The liability to third parties is enumerated in Section Ii of the Policy and the same reads as under:
"SECTION Ii - Liability to Third Parties 1. The company will indemnify the insured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of: (a) death of or bodily injury to any person including occupants carried in the Motor Car provided that such occupants are not carried for hire or reward but except so far as is necessary to meet the requirements of section 92-A and Section 95 of the Motor Vehicles Act,1939, the Company shall not be liable where such death or injury arises out of and in the course of employment of such person by the insured. (b) damage to property other than property belonging to the insured or held in trust by or in the custody, or control of the insured. 2. The company will pay all costs and expenses incurred with its written consent 3. In terms of and subject to the limitations of the indemnity which is granted by this section to the insured the company will indemnity any driver who is driving the motor car on the insurers order or with his permission provided that such driver:- (a) is not entitled to indemnity under any other policy; (b) shall as though he were the insured observe fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they can apply. 4. In terms of and subject to the limitation of the indemnity which is granted by this section in connection with the motor Car the Company will indemnify the insured whilst personally driving a private Motor Car (but not a Motor Cycle) not belonging to him and not hired to him under a Hire Purchase Agreement.
5. In the event of the death of any person entitled to indemnity under this Policy the Company will in respect of the liability incurred by such person indemnify his personal representatives in the terms of and subject to the limitations of this Policy provided that such personal representatives shall as though they were the insured observe fulfill and be subject to the terms exceptions and conditions of this policy in so far as they can apply. 6. The company may at its own option (s) arrange for representation at any Inquest or Fatal Inquiry in respect of any death which may be the subject to indemnify under this Section and (b) undertake the defense of proceedings in any Court of Law in respect of any act or alleged offence causing or relating to any event which may be the subject of indemnity under this Section."
(11) The learned counsel appearing for the Company has cited number of cases to support the proposition that no liability can be fastened on the insurer when the insured himself is not held liable of any such liability. In this context, he has cited the following judgments of different High Courts: A.Mangilal v. Parasram and others ; B. Chanchalben and others v. Shailesh Kumar Pandorao Thakore and others 1974 A.C.f. 393; C. New India Assurance Co. Ltd. v. Parvathamma and others 1977 A.C.J. 469; D. Abdul Ghafoor and others v. The New India Assurance Co. and others and E. New India Assurance Company Ltd. v. Surjit Kaur and another 1985 A.C.J. 726.
(12) It may not be necessary to cite paragraphs from each judgment, as referred above. Suffice it will be to say that the proposition, which has been held in all these cases, is that it was never intended by the Legislature that the insurer would become liable de hors the insured when the insured had been wholly exonerated of any liability. The Full Bench judgment in Orintal Fire & General insurance Co. Ltd v. Bachaii Singh and others 1982 ACj 211 has advanced this proposition and the same has been strongly relied upon by counsel for the Insurance Company. Paragraph 8 at page 214 reads as follows: "AS a necessary consequence of the aforesaid legal position, and even otherwise, it seems to be well settled that in a claim turn damages for a tortious act against the tortfeasor, the insurer of the latter is neither a necessary party nor in any way liable to the claimant under the general law. This is plainly so because of the absence of any privity of contract between the claimant on the one hand and the insurer or the tortfeasor on the other. It bears repetition that this privity of contract exists only betwixt the insurer and the insured who mutually bind themselves and no rights or liabilities accrue there under to any third party. Therefore, in a claim for tort, the common law visualizes a decree or an award against the tortfeasor alone in the first instance. It is only thereafter that the insured tort-feasor could possibly claim to be indemnified by his insurer under the con-tract of insurance. It is thus elementary that de hors any special statutory provisions, a judgment or an award could be executed only against the tortfeasor and not against his insurer because no direct liability of the insurer arises qua the claimant. Finally if the insured himself was not saddled with any liability or the loss he could not make any claim against his insurer. Such a claim can only arise where the insured himself is fastened with liability or a judgment or an award is rendered against him. To put it in other words, tillinsurer's liability is secondary and conditional to that of the insured. Once that is so, it seems plain on principle that unless liability is first fastened on the insured, none can possibly fall on the insurer who has only undertaken to indemnify the loss or damage suffered by the insured. It can, therefore, be said as a dictum ( subject of course to qualification) that, no judgment against the insured-no judgment against the insurer."
The learned Judges then cited the provisions of Section 96 of the Act in paragraph 9 and the conclusions thereafter read as follows: "NOW what indeed was the intent of the legislature in enacting the aforesaid section 96 and the true import thereof is the crucial question. Did it intend thereby to make the insurer liable independently of the insured? I do not think so. The language of section 96 plainly is no warrant for this rather radical proposition. Indeed it seems to be a clear pointer to the contrary. A plain reacting of sub-section (1) of Section 96 would indicate that herein the pro-condition of the liability of the insurer arises when a judgment is obtained against the insured person who has taken up the policy of insurance. It is then and then alone that the insurer is obliged to pay the claimant the amount due under such a judgment as if the insurer was the judgment-debtor. Therefore, in the absence of a judgment obtained against the insured no liability whatsoever would arise against the insurer, according to language of sub-section (1). When read with sections 94 and 95 it would appear that the patent intent of the legislature was to compel insurance against third party risk in cases of motor vehicle and in order to avoid the multiplicity of proceedings ( that is, the necessity of the claimant first obtaining a judgment against the insured and later suing his insurer to be indemnified therfor) it was made possible to execute the judgment against the insurer directly as if he were the judgment-debtor for the satisfaction of the claim against the insured. The statute does not intend plainly to do more than this. Even here further safeguards were provided to the insurer by making it mandatory that he should be made a party to the proceedings instituted by the claimant against the insured and then to defend the action on specified, though limited grounds. Section 96 of the Act consequently makes it plain that it was never intended by the Legislature nor does it flow from its language that the insurer would become liable de hors the insured and even when the insured has been wholly exonerated of any liability."
(13) On the contrary, the learned counsel appearing for respondent no. 1,the claimant, has contended that the claimant, who is the mother of the deceased, tiled the claim petition against the person who caused the accident, the insured Shri Virender Khosla, who was her husband and father of the deceased as respondent no.2 and National Insurance Co., appellant herein as respondent no.3. The claimant, accordingly, claimed the necessary relief against all the three persons and it is futile to contend that as no decree was passed against the insured, who happened to be the father of the deceased, no liability can be fastened on the Insurance Company. The decree has been passed against all the respondents although the appellant was held liable in terms of the policy and the proposition of law as highlighted in the above said judgments, as cited by counsel for the appellant, are of no consequence and have no application to the facts of the present case.
(14) The liability of the insurance company is determined under Section 96 read with Sections 94 and 95 of the Act. The owner of the vehicle is the insured under the policy and in addition to him any person, who is driving the vehicle at the time of accident, is also insured person under the policy and if a judgment is obtained by a third party against the driver or owner of the vehicle. Insurance Company is bound to indemnify the person accordingly.
(15) Reverting back to the facts of the present case, it has been highlighted that the claim petition was filed by mother of the deceased, respondent no.1 against the driver of the vehicle as well as the insured, Shri Virender Khosia, who happened to be the father of the deceased and the Insurance Company, appellant herein. On this basis it has been vehemently argued that as the owner of the vehicle, who happened to be the father of the deceased, has not incurred any liability in respect of death of his son, there is no liability and it is not intended to be covered by the insurance. This objection was not taken before the Tribunal and the same is being canvassed belatedly on wrong interpretation of different provisions of law, particularly Section 96 of the Act (Section 149 of the 1988 Act) as well as the judgments, which have been cited before me. In case, this interpretation is accepted and applied to the facts of the present case, the entire purpose of legislation relating to insurance of motor vehicles covering third party claims, will be rendered obsolete. Section 96 (1) of the Act provides that if, after a certificate of insurance has been issued under sub- section (4) of Section 95 in favor of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of Sub- section (1) of Section 95 (being a liability covered by the terms of the policy), is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this Section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there under , as if he were the judgment debtor. The liability is, accordingly, limited to the liability as covered by the policy which is in operation. The interpretation to this extent is correct and valid but to stretch it too far to the extent that there must be an effective decree against the insured before any amount is paid by the insurer will cause unnecessary hardship as the purpose of an enactment will be defeated whose primary purpose is to mitigate the possible injury to the claimant by providing for payment of the claims by insurance. The basic conditions, which require to be fulfillled in order to render the use of motor vehicle lawful, are that (a) that there must be a policy of insurance in force in relation to the use of the vehicle on a road; and (b) it must be a policy complying with the relevant statutory requirements. This was the nature of insurance, which has been defined in Halsbury's Laws of England, Fourth Edition,, volume 25, paragraph 759 at page 385. The purpose of insurance in respect of third party rights has been highlighted by the judgment of the Supreme Court in New Asiatic Insurance Co. L.td. v. Pessumal Dhanamal Aswani and others . Paragraphs 12 and 13 may be reproduced as under: "CHAPTER Viii of the Act, it appears from the heading, makes provision for insurance of the vehicle against third-party risks, that is to say, its provisions ensure that third- parties who suffer on account of the user of the motor vehicle would be able to get damages for injuries suffered and that their ability to get the damages will not be dependent on the financial condition of the driver of the vehicle whose user led to the causing of the injuries. The provisions have to be construed in such a manner as to ensure this object of the enactment. Section 94 provides, as a matter of necessity, for insurance against third-party risk, the use of a motor vehicle by any person unless there exists a policy of insurance in relation to the use of the vehicle by that particular person and the policy of insurance complies with the requirements of Chapter VIII. The policy must, therefore, provide insurance against any liability to third party incurred by that person when using that vehicle. The policy should therefore be with respect to that particular vehicle. It may, however, mention the person specifically or generally by specifying the class to which that person may belong, as it may not be possible to name specifically all the persons who may have to use the vehicle with the permission of the person owning the vehicle and effecting the policy of insurance. The policy of insurance contemplated by Section 94 therefore must be a policy by which a particular car is insured."
(16) The judgment of Hon'ble Supreme Court in Skandia Insurance Co. Ltd Vs. Kokilaben Chandravadan and others Air 1987 Supreme Court 1184 underlines the purpose of the legislation for interpretation of the relevant provisions. In that judgment the Court went to the extent to hold that even in a case where there is an exclusion clause in the policy prohibiting driving by person, other than one holding driving license, that does not per se absolve the insurer of his liability. It must also be established that the insured himself was guilty of committing breach and violation of promise or infringement of the contract of insurance. It may be interesting to reproduce the following passage from paragraph 14: "SECTION 96(2)(b)(ii) extends immunity to the Insurance Company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not fully licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification. The expression 'breach' is of great significance. The dictionary meaning of 'breach' is 'infringement or violation of a promise or obligation' (see Collins English Dictionary). It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is not (sic) duly licensed will have to be in charge of the vehicle. I he very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promisor must be a willful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amis', in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving license, (sic) it can be said that he is 'guilty' of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insurer is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insured can hide under the umbrella of the exclusion clause."
(17) The Supreme Court also upheld the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose' of the provision so that the 'exclusion clause' does not cross swords with the main purpose of the enactment.
(18) The judgment of the Full Bench of Punjab and Haryana High Court has been relied upon for the proposition that no liability can be fastened on the appellant insurer when there is no judgment operating against the insured. This judgment operates on the basis of the facts stated therein and cannot hold the field as a precedent for other cases, particularly when the purpose of legislation is going to be defeated by such interpretation. The Pull Bench has further recorded its dissent from the judgment of Patna High Court in The' Vanguard Insurance Co. Ltd. v. Foolchand Mandal and others as well as from the judgment of Gauhati High Court (M/s Assam Corporation and another v. Binu Ram Ao and others Air 1975 Gauhati 3). The judgment of the Patna High Court in The Vanguard Insurance Co. Ltd.'s case highlights the proposition that where both the insurer and insured were parties, no question could arise about the judgment being against one or the other or against both. The relevant passage may be reproduced as follows: "APPARENTLY, in holding that the insurer must pay, whatever objections were raised by the insurer under section 96(2) were considered and it was held that the liability to pay must fall on the insurer according to section 96(1). It is difficult to accede to the contention that the claim has been dismissed against the insured. The expressions used by the Claims Tribunal must be held to mean that the actual payment must be made by the insurer, as if it were the judgment-debtor, because the vehicle was insured at the time of the accident and it was running with a valid road permit. The decision arose out of a regular suit instituted in a court and in the decision it appears that the owner of the vehicle had not been imp leaded as a party at all. These decisions are, therefore, quite distinguishable. Thus the last contention raised on be halt to the appellant must fail."
(19) In M/s Assam Corporation and another (supra) the Division Bench of Gauhati High Court has held that the compensation payable by insured to third party is liable to be paid by the insurer independently of Section 96 if policy covered third party risk. The relevant passage is paragraph 28, at page 9 and the same may be reproduced as under: "28.The provisions of Section 110-A, the requirement of clause 14 of the form to mention the name and address of the insurer, the provisions of Section 110-B and of Rule 19 requiring the Tribunal to specify in the award the amount payable by the insurer; the provisions of Section IIO-E laying down the procedure of recovery of compensation money from the insurer and the exclusive jurisdiction given to the Tribunal under Section 110- F barring the jurisdiction of the Civil Court to entertain any question relating to any claim for compensation in respect of accidents involving death of or of bodily injury to person arising out of the use of motor vehicles, which may be adjudicated upon by the Tribunal lead to the irresistible conclusion that the Legislature has imposed a statutory liability on the insurer to pay such compensation which is payable by the insured in terms of the policy, independently of the provisions of Section 96 of the Act. We find no reason to hold that the provisions of Sections 110 to 110-F are controlled by Section 96. Section 96 lays down the statutory liability of the insurer to pay the amount due under the decree passed against the insured treating the insurer as the J.D. There is no scope under this section to pass any decree or award against the insurer."
(20) I may again notice the view expressed by the Full Bench judgment of the Punjab High Court in the case of Oriental Fire and General insurance Co. c. Bachan Singh and others (supra) in respect of the Division Bench judgment in New India Assurance Company Ltd, New Delhi v. Norati Devi Air 1978 Punjab & Haryana 113, which has been over ruled. The matter was disposed of by the Division Bench in liming but that may itself not be a valid ground to ignore the judgment rendered therein. The facts in that case were that the accident took place, which caused the death of a person whose widow moved an application before the Motor Accident Claims Tribunal for compensation. The offending vehicle was driven by Assistant Attache, Embassy of Federal Republic of Germany in India. The claim for diplomatic immunity was raised by the driver and his name was struck off from the array of respondents. The Tribunal awarded compensation to the widow of the deceased and the Insurance Company came up in appeal before the High Court. The Division Bench held that Section 96 of the Act only qualifies that if an award is made, it would be the duty of the insurance Company to meet the claim. The contention raised therein and the findings of the Court are referred to in paragraph 2 of the judgment and the same reads as follows: "MR. Sabharwal, the learned counsel for the appellant-Company, has drawn our attention to S. 96 of the Motor Vehicles Act, 1939, which lays down that after an award has been made against an insured person it would be the duty of the insurance company to meet the claim. From the wording employed in this section, the learned counsel sought to argue that until and unless the person involved in the accident had not been imp leaded as a party, no award could be made against the Insurance Company. In support of this proposition, he has placed reliance upon a single Bench decision of this Court in Ruby General Insurance Co. Ltd V. Smt. Misri Devi, and a Division Bench judgment of the Jammu and Kashmir High Court in New Asiatic Insurance Co. Ltd. Vs. Kulwanti Devi Air 1959 J and K 90. In none of the cases cited by the learned counsel the insurer was such a person who could claim diplomatic immunity from being sued in an ordinary Court. Even otherwise, we feel that if the Insurance Company is allowed to contest the claim in accordance with the principles of natural justice or the procedure envisaged by the Act and the rules on the subject, it is not open to it to escape liability on the basis of such a hypertechnical plea because in the ultimate analysis it alone has to satisfy the claim. Section 96 of the said Act only clarifies that if an award is made, it would be the duty of the Insurance Company to meet the claim. It nowhere lays down that if the insurance company is allowed to contest the liability in the absence of the insurer it should not be held liable, it is significant to mention that in Smt. Misri Devi's case (supra), decided by a learned judge of this Court it was conceded before him that owner of the vehicle was a necessary party to the proceedings. As at present advised, we cannot subscribe to the broad proposition that an Insurance company can never be held liable so long as the insurer is not imp leaded as a party to the proceedings, or having been imp leaded his name is ordered to be strike off from the array of respondents on the basis that he enjoys diplomatic immunity from being sued in a Court.
(21) In the light of the above, it cannot be said that the Pull Bench judgment of the Punjab & Haryana High Court in Oriental Fire & General In- surance Co. Ltd. v. Bachan Singh and others (supra) will apply to all cases irrespective of the facts, which may arise in each case. Indeed, the application of that judgment will be of no relevance to the facts of the present case.
(22) The Full Bench of the Gauhati High Court in United India Insurance Co. Ltd v. Motor Accidents Claims Tribunal and others (1994) 79 Company Cases page 188 has clearly analysed the principle behind the provisions of the Act and has based its reasoning on various judgments of the Supreme Court particularly in the case of Skandia Insurance Co. Ltd. (supra) to which reference has been made to in earlier part of this judgment. The first passage, which is reproduced below, highlights the proposition that the Court must consider the provision of a statute in such a manner as to sub-serve the object of the enactment, this passage reads as follows: "IF the language of the provision of the statute under consideration is plain, clear and unambiguous, the language must guide the court and determine the meaning and content. It, however, there is a case for interpretation, the court must certainly consider the provision in such a manner as to subserve the object of the enactment. See New Asiatic insurance Co.Ltd. Vs. IV'ssumal Dhanamal Aswani . This has been amply made clear by the Supreme Court in Skandia Insurance Co. Ltd. V. Kokilaben Chandravadan (1987) 62 Comp Case 138; Air 1987 Sc 1184. In that decision the Supreme Court was considering the exclusion clause in the policy prohibiting driving by persons other than one holding a driving license. The driver in the case had a license. He left the car with the ignition key in the lock. In the absence of the driver the cleaner moved the car and that resulted in an accident. Section 96(2)(b)(ii) refers, inter alia, to a condition excluding driving by a person who is not duly licensed. Referring to the statutory mandate contained in section 94 requiring a person using a motor vehicle in a public place to insure against third party risk, the court observed (at page 145): "Surely, the obligation has not been imposed in order to promote the business of the insurers engaged in the business of automobile insurance. The provision has been inserted in order to protect the members of the community traveling in vehicles or passing the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependents of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the courts would be recoverable from the persons held liable for the consequences of the accidents." Referring to the possibility of the driver and the owner not having resources to pay the compensation, the court observed (at page 146): "To overcome this ugly situation the Legislature has made it obligatory that no motor vehicle shall be used unless a third party insurance is in force." Referring to the right of the insurer to stipulate conditions in the policy, the Supreme Court observed (at page 146) : "The insurance policy might provide for liability walled in by conditions which may be specified in the contract of policy in order to make the protection real, the Legislature has also provided that the judgment obtained shall not be defeated by the incorporation of exclusion clauses other than those authorised by Section 96 and by providing that except and save to the extent permitted by Section 96, it will be the obligation of the insurance company to satisfy the judgment obtained against the persons insured against third party risks (vide section 96). In other words, the Legislature has insisted and made it incumbent on the user of a motor vehicle to be armed with an insurance policy covering third party risks which is in conformity with the provisions enacted by the Legislature. It is so provided in order to ensure that the injured victims of automobile accidents or the dependents of the victims of fatal accidents are really compensated in terms of money and not in terms of promise. Such a benign provision enacted by the Legislature having regard to the fact that in the modern age, the use of motor vehicles notwithstanding the attendant hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defeats the purpose of the legislation. The provision has, therefore, to be interpreted in the twilight of the aforesaid perspective, Accordingly, the court held that the provision regarding infringement of the condition really means willful infringement or vietation. In that case the insured was not at fault and the driver was negligent. The insurer was held liable. The Court further observed (at page 148) : "It is the statutory provision defining the conditions of exemption which is being interpreted. These must, therefore, be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfill its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not tuned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the Legislature has given, the court cannot deprive of by way of an exercise in interpretation when the view which renders the provision potent is equally plausible as the one which renders the provision impotent . . . When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice."
(23) The Court then dealt with the relevant provisions of the 1988 Act, which are more or less similar to those contained in 1939 Act. The following paragraphs may now be reproduced as under: "Section 149 of the Act deals with the duty of the insurer to satisfy judgments and awards against persons insured in respect of third party risks. Sub-section (1) states, inter alia that when judgment or award is obtained against an insured, then, notwithstanding that the insurer, may be' entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of the section, pay the claimant any sum not exceeding the sum assured, as if he were the judgment-debtor. This duty laid on the insurer is subject to sub-section 12), according to which the insurer shall not be liable in respect of any judgment or award unless before the commencement of the proceedings the insurer had notice through the Tribunal of the bringing of the proceedings. Sub section (2) further states that an insurer to whom notice of bringing of any such proceeding is given, shall be entitled to defend the action on any of the grounds set out in clauses (a) and (b) It is necessary to bear in mind that a contract of insurance is practically a contract of indemnity. To effectuate the contract of indemnity, a decree has to be first obtained against the insured and thereupon the liability of the insurer to discharge the decree arises. A contract .of insurance is a contract by which the insurer promises to save. the insured from the loss caused to him by the conduct of any other person. By virtue of section 125 of the Indian Contract Act, 1872, the promisee, acting within the scope of his authority, is entitled to recover from the promiser all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies. The expression "compelled to pay" does not mean that he should have already paid. It is, this principle which is incorporated in section 149 of the Act. Under the common law an insurer has no right to be made a party to the action by the injured person against the insured. But such a right has been given to the insurer under section 96(2) of the 1939 Act. It is a right created by statute and its content necessarily depends on the provisions of the statute. The Supreme Court in Itbar Singh's case , considered the right of the insurer to raise defenses and held that section 96(2) clearly provides that when an insurer is made a party in an action he is not entitled to take any defense which is not specified in it. The Supreme Court also indicated that section 96(2) deals with defenses other than those based on the conditions of a policy, the Supreme court observed (at page 66): "THE statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and, therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defenses open to the assured can then be urged by him and there is no other defense that he claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub-section (3) and under sub-section (4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck....The loss had to fall on some one and the statute has thought fit that it shall be borne by the insurer." Thus, it is clear that the insurer can raise only those defenses which are permitted under Section 96(2) (section 149 of the 1988 Act) unless the insurer has in the policy reserved the right to defend the action in the name of the insured, in which case all defenses open to the insured are open to the insurer also."
(24) The question of impleadment is then dealt with by Section 170 of 1988 Act (Section Hoc (2A) of the 1939 Act) which will sufficiently safeguard the interest of the insurance company. The provision as well as the findings of the Court read as under: "170.Impleading insurer in certain cases- Where in the course of any inquiry, the Claims Tribunal is satisfied that- (a) there is collusion between the person making the claim and the person against whom the claim is made, or (b) the person against whom the claim made has failed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be imp leaded as a party to the proceeding and the insurer so imp leaded shall thereupon have, without prejudice to the provisions contained in sub-section (2) of Section 149 the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made."
The above provision enables the Tribunal under certain circumstances and for reasons to be recorded in writing to direct that the insurer shall be imp leaded, as a party to a proceeding. Thereupon the insurer shall have the right to contest the claim on all or any of the grounds that are available to the insured. The circumstances are, collusion between the claimants and the insured and failure of the insured to contest the claim. It unnecessary to take a hypertechnical view of section 17(1 and hold that the provision can be invoked only when- the insurer was not originally a party and the Tribunal has not already issued notice to the insurer. Section 170 contemplates two matters, namely, impleadment of the insurer and the right of the insurer to raise grounds available to the insured. Even where notice has already been issued to the insurer or the insurer was already a party, the Tribunal can invoke section 170 and thereupon the insurer will be able to raise defenses contemplated therein. This provision is intended to prevent the abuse of the process of the Tribunal in appropriate cases. It is a special device incorporated by the Legislature to meet specific contingencies. In our opinion, this provision cannot help the court to come to the conclusion that in the appellate forum the insured has an unrestricted right to raise defenses."
(25) In the present case, the appellant Insurance Company was imp leaded as a respondent and had full opportunity to contest the-claim. There is, therefore, no prejudice, which has been caused to the insurer, appellant herein, and the matter has been disposed of after due contest between the parties. The Insurance Company, accordingly, could not raise the plea that there was collusion of any kind in the matter.
(26) The position, which now emerges from the facts of the present case is that the vehicle was insured by respondent no.3 with the appellant, insurance company. The insurance policy covered third party risk and contained no limitations for payment of the claim, if any, in case the accident took place and death was caused. The appellant has only resisted the claim on the ground that since there is no decree which is operating against the insured, who happens to be the father of the deceased, the company cannot be held liable. I have carefully analysed the law and discussed the same in the preceding paragraphs. Firstly, the claim petition was filed by mother of the deceased and she imp leaded the insurance company as well as the insured and the person driving the vehicle on the date of accident. She claimed the relief against all the respondents including the insured. The claim has merely been resisted on the ground that the father of the deceased, who was the insured, will benefit and in this eventuality the company cannot be held liable. This proposition will be against the spirit of the legislation and cannot be sustained. In case this is upheld, it will lead to inequitable and irrational results. The insurance of motor vehicle is compulsory and the third party risks are covered by Chapter Viii of the 1939 Act and it has been clearly stated therein in Section 94 that "no persons shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter." The proceedings commenced before the Tribunal and the claimant duly made the insurance company as party to the proceedings and it cannot now be said that the appellant insurance company cannot be held liable as there is no decree operating against the insured. The Tribunal has passed the decree against all the respondents including the insured and this plea was rightly not canvassed before the Tribunal. The same having been raised at the appellate stage has been duly considered by me and is found to be maritless. The judgments cited by the appellant cannot be held applicable to the present case in view of its distinguishing facts. The purpose of insurance of a motor vehicle for third party risk will be defeated in case the contention of the appellant is upheld. The insurer has to comply with the award of compensation that may be rendered after due contest. The purpose of the legislation is not to deprive the legal heirs merely on technical plea and the claimant who is the mother of the deceased is a recognised class I heir under the relevant provisions of law.
(27) The Tribunal has, however, erred in apportioning the amount of compensation between the claimant, respondent No. 1 herein, and the insured who happens to be the father of the deceased. The respondent-claimant filed a claim petition against the insurer, the driver as well as the insured. The claim has been upheld by the Tribunal and it was futile and -unnecessary on the part of the learned Judge to apportion the same, particularly in view of the fact that the claimant had filed a petition against the appellant Insurance Company as well as against the insured and had prayed for the necessary relief against all the respondents. The objection of the appellant at the appellate stage will become redundant in case the apportionment in favor of the insured is set aside and the earlier part of the award in favor of the respondent-claimant is upheld. In view of the facts and circumstances I order accordingly and will modify the necessary relief by awarding the entire compensation in favor of respondent No. 1 and against the Insurance Company, which is legally bound to discharge the claim. The appeal of the insurance Company with reward to the award of compensation in favor of the respondent-claimant is dismissed and the claim is upheld with the modification as above. Quantum of compensation (28) The judgment of the Tribunal has then been assailed by the insurance company (in Fao No. 261 of 1989) and by the claimant (in Fao No.256 of 1989) with regard to the quantum of compensation awarded by the Tribunal. The learned counsel for the appellant in the first appeal has contended that the compensation under Section 110-B of the 1939 Act has to be just and fair compensation and the same must be co-related with the financial loss of the dependents and, in case, no loss is proved no compensation can be awarded. He has cited the judgments as reported in Ramji Das and another v. Sham Singh and others 1971 A.C.J. 468 and Purnima Vindal and others v. Chatar Mal and others 1986 A.C.J. 130 to advance this proposition. He has further argued that the assessed income of the deceased for the assessment year 1986-87 is shown to be Rs.67,409.00 out of which Rs.l5,650.00 was the tax paid to the Authorities. The net available income of the deceased comes to Rs.52,000.00 , which is approximately Rs.4,500.00 per month. The deceased could have contributed the amount of Rs.l,500.00 per month to the claimant and this contribution may have only continued till the date of his marriage. In this view of the matter, it has been argued that the compensation at the rate of Rs.l,15,000.00 , if invested, would bring an income of Rs.l,500.00 per month and this would be just and fair compensation.
(29) The learned counsel for the claimant has, however, claimed an amount of Rs.37 lakhs in the claim petition on the ground that the deceased was well settled in business and had a bright future and was a rising star of the family. The future prospects of the deceased were bright and increased income was expected in an actual way in the near future. Therefore, the claim for the amount of Rs.37 lakhs is just and fair.
(30) I have perused the claim petition wherein it has been highlighted that the deceased Vivek Khosia was active in his business and was progressing fast and his expected income in the years to come would have been Rs.20,000.00 and Rs.25,000.00 per month. He was an asset to the family and the parents of the deceased obviously expected pecuniary support from the deceased for at least 30-35 years. The estate of the deceased has suffered a set back in his sudden demise. He was partner of various firms, as referred to in paragraph 22(iii) of the petition, which reads as follows: "MR. Vivek Khosia, shifted to New Delhi to start his own unit, in the name of Globe Trotters and was also helping in promotion of sales of M/s Swadeshi Karyala (Textile) Pvt. Ltd., Daressi Road, Ludhiana where he was looking after all liason jobs and filling up tender forms of Government The learned counsel then referred me to various pieces of evidence such as, of the workers who were associated with the deceased and other evidence to prove the income of the deceased. The income tax returns for the relevant years have also been filed. The gross return for the assesment years for 1985-1986, 1986-1987 and 1987-88 indicated the income of the deceased as Rs.37,991.00 , Rs.67,409.00 and Rs.41483.00 respectively. The tax paid on these amounts are Rs.2730.00 , Rs.l5,850.00 and Rs.3330.00 respectively and certain permissible deductions have also been made from the gross income. I have not been taken through any other evidence, which may be of relevance to prove the averments made in the claim petition to substantiate the claim of Rs.37 lakhs. The learned Judge considered the evidence on record and came to the conclusion that at best the deceased would have contributed a sum of Rs.2,500.00 per month to his parents on the basis of the return for the assessment year 1986-87. It has further been noticed that the deceased was 19 1/2 years of age and his business interests were mostly derived from his parents. He had started living in Delhi and obviously belonged to a good family with good future prospects. The learned Judge has made a small error in recording the age of the claimant as 52 years whereas she was infact 42 years at the relevant time. He has adopted a multiplier of 15 and has awarded a total compensation Rs.4,50,000.00 on that basis. It has been contended by. the counsel for the claimant that in case the age had been correctly noted the compensation would have been higher than the amount as awarded by the Tribunal. Reference is then made to the various judgments for enhancement of the amount.
(31) In Union of India through the Secretary, Ministry of defense, New Delhi v. Sudhir Khanna and others 1990 A.C.J. 215 the learned Single Judge of the Himachal Pradesh High Court adopted a multiplier of 22 and awarded compensation of Rs.4,51,160.00 . That case concerns the death of a young person aged 25 years and the claimants were his parents, who were aged 46 and 44 years respectively. The multiplier of 22 was adopted on the basis of contribution to the joint family at the rate of Rs.l,500.00 per month.
(32) The next judgment, which has been cited, is reported as Vijay Chopra and others v. Udham Singh and others 1989 A.C.J. 589. The income of the deceased, who was working abroad, was assessed to over Rs.2 lakhs and it was held that he was contributing 50 per cent of the said income to the family members for their maintenance. The deceased was 36 years of age and applying a multiplier of 16, the claimants were held entitled to Rs.l6,24,560.00 .
33.The award of compensation on the basis of multiplier has been recognised to be sound and accepted by the Supreme Court even in the recent judgments. The Supreme Court in National Insurance Co. Ltd, v. M/s Swarantata Das and others has reiterated the proposition. It has been held that "the appropriate method of assessment of compensation is the method of capitalisation of net income choosing a multiplier appropriate to the age of the deceased or the age of the dependants whichever multiplier is lower. It is, no doubt, true' that as a rough and ready measure, the method of aggregating the total expected income for the remainder of a life- expectancy with appropriate deductions towards uncertainities of life and for lump sum payments is also resorted to. But this method is now considered unscientific and is virtually obsolete. At all events wherever it is resorted to it would require to be crosschecked with the results of the appropriate and the more scientific method of capitalisation of the loss of dependency.
34.In General Manager, Kerala State Road Transport Corporation, Trivandrum v. Mrs. Susamma Thomas and others , the Supreme Court considered the law on the subject in detail and upheld the multiplier method as well as reiterated the basis on which the damages can be awarded in case of fatal accident. The learned Judges have quoted from Halsbury's Laws of England in paragraph 10 of the judgment, which may be reproduced as follows: "IN regard to the. choice of the multiplicand the Halsbury's Laws of England in Vol. 34, Para 98 states the principle thus: "98 .Assessment of damages under the Fatal Accidents Act, 1976. The courts have evolved a method for calculating the amount of pecuniary benefit that dependants could reasonably expect to have received from the deceased in the future. First the annual value to the dependants of those benefits (the- multiplicand) is assessed. In the ordinary case of the death of a wage- earner that figure is arrived at by deducting from the wages the estimated amount of his own personal and living expenses. The assessment is split into two parts. The first part comprises damages for the period between death and trial. The multiplicand is multiplied by the number of years which have elapsed between those two dates. Interest at one-half the shortterm investment rate is also awarded on that multiplicand. The second part is damages for the period from the trial onwards. For that period, the number of years which have elapsed between the death and the trial is deducted from a multiplier based on the number of years that the expectancy would probably have lasted; central to that calculation is the probable length of the deceased's working life at the date of death. As to multiplier, Halsbury states: The calculation depends on selecting an assumed rate of interest. In practice about 4 or 5 per cent is selected, and inflation is disregarded. It is assumed that the return on fixed interest bearing securities is so much higher than 4 to 5 per cent that rough and ready allowance turn inflation is thereby made. The multiplier may be increased where the plaintiff is a high tax payer. The multiplicand is based on the rate of wages at the date of trial. No interest is allowed on the total figure. However, the multiplier is a figure considerably less than the number of years taken as the duration of the expectancy. Since the dependants can invest their damages, the lump sum award in respect of future loss must be discounted to reflect their receipt of interest on invested funds, the intention being that the dependants will each year draw interest and some capital (the interest element decreasing and the capital drawings increasing with the passage of years), so that they are compensated each year for their annual loss, and the fund will be exhausted at the age which the court assesses to be the correct age, having regard to all contingencies. The contingencies of life such as illness, disability and unemployment have to be taken into account. Acturial evidence is admissible, but the courts do not encourage such evidence." They then proceeded to determine the basis of the multiplier method and the award of compensation in paragraph Ii, which reads as under: "It is necessary to reiterate that the multiplier-method is logically sound and legally well established. There are some cases which have proceeded to determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a percentage there from towards uncertainties of future life and award the resulting sum as compensation. This is clearly unscientific. For instance, if the deceased was, say 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the loss of dependency for 45 years- virtually adopting a multiplier of 45- and even if one-third or one-fourth is deducted there from towards the uncertainties of future life and for immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible. We are aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. Some judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110 (b) of the Motor Vehicles' Act, 1939 insofar as it envisages the compensation to be 'just', the statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier-method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases. The multiplier represents the number of years' purchase on which the loss of dependency is capitalised. Take for instance a case where annual loss of dependency is Rs.10,000.00 . If a sum. of Rs.l,00,000.00 is invested at 10% annual interest, the interest will take care of the dependency, perpetually. The multiplier in this case works out to 10. If the rate of interest is 5% per annum .and not 10% then the multiplier needed to capitalise the loss of the annual dependency at Rupees 10,000.00 would be 20. Then the multiplier i.e., the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last etc. Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependants, whichever is higher) goes up."
(33) In the facts of the case as stated above, which indicated the age of the deceased as 38 years and his income being taken at Rs.2,000.00 having regard to the advancement to the future career, the Court proceeded to determine the loss of dependency capitalised with the appropriate multiplier of 12 on the basis of Rs.l400.00 per month or Rs.17,000.00 per year and awarded a compensation of Rs.2,04,000.00 (Rupees 17,000.00 x 12) apart from the loss of consortium and loss of the estate each in the sum of Rs.l5,000/". The facts of the present case will indicate that the deceased was a young man of 19 1/2 years and he had commenced his business career under the care and guidance of his parents. The estate were mostly derived from them although he was a partner in different concerns. The income tax record, which has been filed before the Tribunal, does not indicate a very high level of income, which was earned by the deceased. The parents were effluent and they had put up the deceased for the business career in the hope that he will be more successful in the near future. There is no compensation for the loss of young life, which obviously has caused heart break to the family. The amount of money which the deceased would have contributed to the family with certainity can also not be visualised, as he died at a very young age and there is no evidence on record to indicate any such contribution though it is contended that he was contributing the amount regularly. The Tribunal has taken into consideration the income of the deceased for the year 1986-87 and arrived at the conclusion that he would be contributing a sum of Rs.2500.00 per month and applying a multiplier of 15, the award of compensation was made in the sum of Rs.4,50,000.00 . He, accordingly, rejected the claim for the amount of Rs.37 lakhs, as claimed in the petition.
(34) The learned counsel for the claimant has pointed out to me an error in the judgment to the effect that the age of the claimant is recorded as 52 years whereas, she was only 42 years at the relevant time and he has contended that this will obviously increase the compensation on the basis of the multiplier, as applied. No- doubt,there is an inadvertant error but this fact alone will not make great difference in the facts of this case on the award of compensation as the same will have a very insignificant and inconsequential bearing on the adoption of a suitable multiplier to determine the compensation which has to be just and fair on the basis of the evidence, as led by the parties and the circumstances of the case.
(35) To recapitulate the facts it may be mentioned that the deceased was set up by his parents in business and had established an office in Delhi and was a partner/Director in various concerns. He met with an accident as his car struck against the road and over-turned resulting in fatal injuries. He was a young man and would in all probability got married after a couple of years and, therefore, his contribution to the claimant, who was his mother, could not be determined with certainity and in this context the age of the claimant cannot assume great importance taking into consideration the facts of the case. The learned Judge has adopted the income for the one assessment year (1986-87) and same to the conclusion that the deceased would have contributed a sum of Rs.2500.00 per month as contribution towards his parents. It may be mentioned again that the claimant or any other witnesses have not specified any fixed amount which was being contributed in this regard. There is, therefore, no evidence on record about the exact contribution which the deceased was making to his parents. There is, however, an averment in the claim petition that the deceased Vivek Khosia was progressing fast and very soon his income was likely to be as high as between Rs.20,000.00 & Rs.25,000.00 per month, and he would have contributed reasonable pecuniary support to his parents for atleast 30-35 years. The claimant has also reiterated in her evidence that the deceased was contributing money regularly to her.
(36) In view of the facts as stated above, this petition falls in the realm of some guess work and will highlight the proposition that the award in this situation must necessarily be an estimate or even partly conjecture as the burden caused on the claimant has not been fully discharged with regard to the extent of loss. Reference may be made to the judgment of the Supreme Court in Gobald Motor Service Ltd. & another v. R.M.K.. Veluswami & others . The relevant passage may be reproduced as follows: ".THEREFORE, the actual extent of the pecuniary loss to the respondents may depend upon data which cannot be ascertained ac- curately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained."
To similar effect are the observations of the Supreme Court in General Manager, Kerala State Road Transport Corporation, Trivendrum (supra). Paragraph 7 reads as follows: "THE assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether. The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct there from such part of his income as the deceased was accustomed to spend upon himself, as regards both self- maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalized by multiplying it by a figure representing the proper number of year's purchase. Much of the calculation necessarily remains in the realm of hypothesis "and in that region arithmetic is a good servant but a bad master" since there are so often many imponderables. In every case "it is the overall picture that matters" and the court must try to assess as best as it can the loss suffered."
(37) The deceased was a young man of 19 1/2 years and was at the threshold of his business career. It cannot be said with any particular amount of certainity the exact contribution he would have made to his parents and for how long. He was, however, already in active business and on the road to a successful career and that the future prospects of the deceased were bright and there was every likelihood of his contributing a reasonable sum of money in the years to come. The learned Judge has taken the income of the deceased for the assessment year 1986-87 at Rs.67,409.00 and has held that since the deceased had started living in Delhi and since he belonged to a good family his personal expenditure would not be less than Rs.3,OUO.00 per month. In this context and taking into consideration the relevant factors, he has adopted the multiplier of 15 vears to the amount of Rs.25UO.00 per month which he may have contributed towards his parents. He has, however, not taken into account the fact that the deceased also paid income tax in the amount of Rs.l5,850.00 while working out the monthly income of the deceased at Rs.5500.00 . This will obviously reduce the net income of the deceased. However, he has made an error, which has been admitted by the learned counsel for the parties that age of the claimant has been wrongly recorded as 52 years whereas she was aged about 42 years at the relevant time. Therefore, the period for contribution by the claimant would increase. Taking into consideration the over-all picture, the contribution of Rs.2500.00 , as held by the Tribunal , cannot be termed as unreasonable and per se seems to be just and fair.
(38) The fact remains that the deceased was a young man of about 20 vears, who had studied in good Institutions and was a Graduate in Commerce. He was successfully set up in the family business by his parents and his sudden death has created a vacuum in their lives, which cannot be even compensated by terms of money. It is, however, brought on record that he was progressing well in business and there was every likelihood of his making further success and substantial increase of income could not be ruled out. The Supreme Court in the case to Hardeo Kaur and others v. Rajasthan State Road Transport Corporation and another 1992 Acj 300 adopted a multiplier of 24 in a case where a young Major aged 36 years at the time of accident lost his life leaving behind his wife and three minor children. The Court took span of life at 70 vears in view of the high rise in the life expectancy and adopted the multiplier of 24, as the deceased was held to be a healthy person. The following passage from the judgment of the Court in Concord of India Insurance Co. L.td. v. Nirmala Devi 1980 Acj 55 (SC) was cited: "THE determination of the quantum must be liberal, not niggardly since the law values life and limb in a free country in generous scales."
(39) In view of the facts and circumstances of the present case, the award of compensation in favor of the claimant can be held to be just fair and reasonable and the multiplier of 15 is adequate.
(40) There is, however, no justification for any further enhancement and the claim raised by the claimant for the amount of Rs.37 lakhs is obviously exaggerated and cannot be sustained. There is no evidence on record to support any further revision in the amount awarded by the Tribunal nor any such evidence has been brought to my notice during the time of arguments. The plea is, accordingly, rejected.
(41) The claimant (appellant in Fao No. 256/89 and respondent no. I in Fao No. 261/89) is also held entitled to interest at the rate of 12 per cent per annum from May Ii, 1987, the date of application filed before the Tribunal, till the date of realisation.
(42) No other point has been urged before me.
(43) In view of the above, Fao No. 261 of 1989 is dismissed with the modification, as indicated. Fao No. 256 of 1989 filed by the claimant is also dismissed, subject to the award of interest as mentioned above. There will be no order as to costs.