Madras High Court
Reliance General Insurance Co.Ltd vs K.Mallika on 14 March, 2016
Bench: S.Manikumar, C.T. Selvam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 14.03.2016
CORAM
THE HONOURABLE MR.JUSTICE S.MANIKUMAR
and
THE HON'BLE MR.JUSTICE C.T. SELVAM
C.M.A.(MD)No.181 of 2016
and
CMP(MD)No.2652 of 2016
Reliance General Insurance Co.Ltd.,
570, Naiganum Cross Road,
Next to Royal Industrial Estate,
Wadala West,
Mumbai ? 400 031. ... Appellant
Vs.
1.K.Mallika
2.K.Saranya
3.K.Krishnaveni
4.K.Selvaraj
5.R.Ramayee
6.P.Ramasamy
7.Ranjitham ... Respondents
PRAYER: The Civil Miscellaneous Appeal is filed under Section 173 of Motor
Vehicle Act, to set aside the award passed in M.C.O.P.no.375 of 2010, on the
file of the Motor Accident Claims Tribunal / District Court, Karur, dated
30.08.2013.
For Appellant : Mr.S.Srinivasa Raghavan
For Respondents : Mr.T.Selvakumaran
(R1 to R6)
:JUDGMENT
(Order of this Court was made by S.MANIKUMAR, J.) Challenge in this appeal is to the quantum of compensation of Rs.20,12,000/- with interest, at the rate of 7.5% per annum, awarded to the legal representatives of the deceased in M.C.O.P.No.375 of 2010, dated 30.08.2013, on the file of the Motor Accident Claims Tribunal / District Court, Karur. As the appeal is restricted only to quantum of compensation, this Court is of the view that there is no need to advert to the finding, fixing negligence on the driver of the Tipper Lorry, bearing Reg.No.TN-69-A- 5487 and insured with Reliance General Insurance Co.Ltd., Mumbai / appellant herein.
2. Short facts leading to the appeals are as follows:-
That on 09.06.2010 about 8.30 p.m., on Karur - Salem N.H.7 road, near Chinna Vadugapatti Junction, driver of a Tipper Lorry, bearing Reg.No.5487, driven by its driver in a rash and negligent manner, dashed against one Kandasamy, who was standing on the road. As a result of which, he sustained multiple injuries and died on the spot. Two other persons standing have also sustained injuries. Legal representatives of the deceased filed MCOP.No375 of 2010 before the Motor Accident Claims Tribunal / District Court, Karur, claiming compensation of Rs.50,00,000/-. The injured filed MCOP.No374 of 2010. As both the claim petitions arose out of the same accident, MCOP.No.374 and 375 of 2010 have been jointly tried.
3. Though Reliance General Insurance Co.Ltd., Mumbai / appellant herein, opposed both the claim petitions, denying negligence and consequently liability, to pay compensation, on evaluation of pleadings and evidence, the Claims Tribunal held that the driver of the Tipper Lorry, bearing Reg.No.TN- 67-A-5487 was negligent in causing the accident and accordingly fastened liability on Reliance General Insurance Co.Ltd., Mumbai / Insurer of the Tipper Lorry / appellant herein.
4. Insofar as the claim of compensation of Rs.50,00,000/- in MCOP.No375 of 2010 is concerned, legal representatives of the deceased Kandasamy have stated that at the time of accident, he was 44 years. As an electrical contractor and through agricultural operations, he earned Rs.30,000/- and Rs.1,00,000/- per month respectively. In support of the same, respondents have examined P.W.4, Inspector from the Income Tax Department, Karur. He has deposed that the deceased had filed Income Tax returns for the year 2008 ? 2009 under Exs.P34 and P35 and the Income Tax returns for the year 2009- 2010, he has deposed that he did not know, as to whether the deceased had filed Income Tax returns earlier. Ex.P24 is the Income Tax acknowledgement for the year 2008-2009; Ex.P25 is the Income Tax acknowledgement for the year 2009-2010; Ex.P26 is the Bank Passbook. Besides, the respondents / claimants have marked Exs.P18, Xerox copies of R.C.Book, for the vehicle, bearing Reg.No.TN-67-A-5487, issued in the name of the deceased Kandasamy.
5. Upon perusal of the entries in Exs.P24 and P25, the Tribunal had not taken into consideration of Ex.P.25, as it has been filed after the death of the deceased Kandasamy, on 09.10.2010. Exs.P3 to P15 are the xerox copies of the Bank deposit receipts and Indira Vikas Patras standing in the name of Kandasamy. Exs.P21 to 23 are the receipts for payment of school fee and other fees for the education of respondents 2 to 4. Ex.P26 Bank Passbook of Kandasamy for the year 2006-2008. As per the entries in Ex.P.24, agricultural income has been shown as Rs.53,000/-. As per the entries in Exs.P24 and P34, Income of the deceased has been shown as Rs.1,71,900/-. Taking note of the entries in Ex.P34, the Tribunal has fixed the annual income as Rs.1,44,930/- and fixed the monthly income as Rs.12,078/-. Age of the deceased has been fixed, on the basis of entries in the driving licence and other documents, as 46 years and it cannot be said to be faulty. Taking note of the above, the Tribunal has added 30% of the annual income, for the purpose of computing the loss of contribution.
6. Applying the decision of the Hon'ble Supreme Court in Rajesh and others Vs. Rajbir Singh and others, reported in 2013 ACJ 1403, the Tribunal had added 30% of the income Rs.43,579-, under the head, 'future prospects'. Total annual income taken by the Tribunal is Rs.1,88,409/- [Rs.1,44,930 + Rs.43,479, rounded of to Rs.1,88,400]. Wife, two daughters, minor son and parents, aged about 70 and 75 years, numbering 6, were the claimants and therefore, the Tribunal has deducted 1/4th towards personal and living expenses of the deceased. Applying 13 multiplier for the age group of persons between 46 to 50, arrived at loss of contribution to the family Rs.18,36,997.50. Added further, the Tribunal has awarded Rs.1,00,000/- towards loss of love and affection and consortium to the wife of the deceased; Rs.10,000/- each under the head of loss of love and affection to the parents and children at Rs.50,000/- and also a sum of Rs.25,000/- for funeral expenses, altogether the Tribunal awarded Rs.20,11,997.50, rounded of to Rs.20,12,000/- with interest, at the rate of 7.5% per annum.
7. Though learned counsel appearing for the Reliance General Insurance Co.Ltd., Mumbai / appellant herein has contended that no document has been filed by the respondents / claimants that the deceased was working as a electrical contractor and thus, the annual income of the deceased determined as Rs.1,44,930/-, based on the income tax returns for the year 2009-10, is enormous this Court is not inclined to accept the said contention for the reasons, after going through the entries in Exs.P3 to P26, except Ex.P25, the Tribunal has arrived at the annual income of the deceased as Rs.1,44,930/- as Rs.12078/- per month. At the time of accident, he was aged about 46 years. He is survived by his wife, two daughters, a minor son and aged parents. To provide food, shelter clothing and other amenities, the deceased could have earned reasonable income. Income of Rs.1,44,930/-, determined on the basis of the above said documents, cannot be said to be manifest illegality. It works out a monthly income of Rs.12,078/-. At this juncture, it is relevant to refer a decision in Divisional Controller, KSRTC v. Mahadeva Shetty and another reported in 2004 (1) TNMAC 534, wherein the Hon'ble Supreme Court has formulated principles to be followed by the Courts/Tribunals for awarding Just compensation. In Paragraph 15 of the judgment it is held as follows:
"It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which to it appears to be 'Just'. It has to be borne in mind that compensation for loss of limbs or life can hardily be weighted in golden scales. Bodily injury is nothing but a deprivation which entitles the claimant to damages. The quantum of damages fixed should be in accordance with the injury. An injury may bring about many consequences like loss of earning capacity, loss of mental pleasure and y such consequential losses. A person becomes entitled to damages for mental and physical loss, his or her life may have been shortened or that he or she cannot enjoy life, which has been curtailed because of physical handicap. The normal expectation of life is impaired. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be "just"
and it cannot be a bonanza; not a source of profit but the same should not be a pittance. The Courts and the Tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be "just" compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of 'just' compensation which is the pivotal consideration. Though by use of the expression "which appears to it to be just', a wide discretion is vested on the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression "just" denotes equability, fairness and reasonableness, and non- arbitrary. If it is so, it cannot be just."
8. Admittedly, the deceased was an income tax assessee. Additional 30% of the income granted under the head, 'future prospects' by relying on the decision of Hon'ble Supreme court reported in 2013 ACJ 1403 (cited supra) cannot be said to be against law. Compensation of just Rs.10,000/- awarded to the daughters and son of the deceased, under the head love and affection is meager and there is no award under the head, 'transportation', 'damages to clothes', 'articles' and 'loss of estate'. On the aspect of future prospects, in a recent judgment in M/s.Royal Sundaram Alliance Insurance Co. Ltd., Salem vs. Tmt.Vennila (C.M.A.Nos.3273 of 2014, 723 and 2386 of 2015, dated 13.10.2015), a Division Bench of this Court, to which, one of us (SMKJ), is a party, after considering the ''Per Capita Income'', ''Gross Domestic Product'' and ''Consumer Price Index'' etc., at paragraphs 54 to 68, held as follows:-
54.Taking into consideration the above illustrative cases of some of the employees, engaged by the Government, on daily rated basis and being revised periodically, we wish to state that the factors taken into consideration or the reasons stated by the Central Government or the District Collector, as the case may be, while revising the wages, from time to time, whether a person is employed in an organised or unorganised sector, would remain the same and consequently, decide the living conditions of different classes of persons, whether engaged in organised or unorganised sectors, as the case may be, to meet out the day to day expenditure and basic amenities.
The difference in the rates of wages between the persons employed in a salaried structure, revisable periodically, though not, in strict sense, be applied with the same percentage to those, engaged in unorganised sectors, but it cannot be contended that there will not be any change in the earning or income.
55.The government servants have an expectation of periodical revision. So also, the employees working in Public Sector, Boards, Corporation, Companies owned and controlled by the Government. In respect of Private Limited Companies, it is more on the basis of terms and conditions of the contract, in which, they are governed. But in the case of self-employed or those, engaged in unorganised sectors, revision of wages or salary or in the case of self-employed, though may not be on par with the salaried structure in organised sectors or on the terms and conditions of the contracts in limited companies, still the important factor, Consumer Price Index, the deciding factor, would be the same, for a change in the earning of the self- employed or revision of salary or wage, even in unorganized sectors and that the expectation of a future event, ie., possibility of a change in wage or financial expectation, cannot be ruled out, for the simple reason that nothing has remained static, in this country.
56.As tabulated in the foregoing paragraphs, it should be noted that Consumer Price Index, Gross Domestic Product and Per Capita Income, have increased. One cannot disown the fact that the percentage of those in unorganized sectors is more than the organised sectors. While that be so, would it be appropriate for the Insurance Companies and Transport Corporations, to contend that there is absolutely no chance of any upward revision in wages or salary of those, employed in unorganised sectors or for that matter in the earnings of self-employed. If the contentions of the Insurance Companies and Transport Corporations have to be accepted, whether the self-employed or those engaged in unorganised sectors, can never have any expectation of an event in future, ie., increase in earnings or wages? With the basic study of the statistics, we are of the considered view that the answer should be a clear 'No'. When the Consumer Price Index is applicable uniformally to rich or raff, it cannot be contended that those who are engaged in unorganized sectors or self-employed, would continue to earn the same income, for years together.
57.For the abovesaid reasons, we are of the considered view that the word, ?prospects? should not be read and understood, only in plural sense, meaning thereby, its prospects or an apparent probability of advancement in employment, in organised sectors alone. Narrowing down the meaning of the words, ?future prospects? only to the employment prospects and consequently, more possibility of earning income, only in the case of organised sector and not in unorganised sector or selfemployed, would affect the majority and therefore, the meaning of the word, ?prospect? used in singular, meaning thereby, expectation, possibility or probability, chances of earning more income in future, depending upon the factors, stated supra, should also be considered.
58.Thus, from the above particulars, extracted supra, it is evident that both the Central and State Governments have periodically revised the minimum wages across the country. It has been raised taking into consideration the Consumer Price Index. In respect of scheduled employments, for skilled, semi-skilled, unskilled, construction workers, labourers, etc., wages, are fixed in various scheduled employments, right from Agarbathi Industry to Woolen Carpet and Shawl wearing machinery.
59.While that be the position in organised sectors, it cannot be contended that insofar as unorganised sectors or self-employed, is concerned, there would not be any revision in the wages or salary or earning. When the minimum wages of an employee in the organised sector, is revised periodically, taking into consideration the Consumer Price Index and Variable Dearness Allowance, the living conditions, then the others, in a unorganised sector may expect more or less the same wage, and if there are more number of persons, there may be chances of lesser wage, on account of surplus human resources and in such cases, the bargaining power of certain class of employees, depending upon the field, for revision of wages or earning, may be less.
60. If a non-salaried domestic worker sells a piece of any article, which he or she manufacturers and if the customer bargains the rate, he or she would immediately reply, as to how much amount, he/she has to spend for buying the basic materials, other materials used, compare the erstwhile travel expenses and the cost of labour. Can anyone in this Country can say that the electricity charges, water charges, rent, fee received by the Government, cost of education, price of commodities, etc., have remained the same, without any change. Cost of tea sold in a ordinary tea stall is the same for any person, whether engaged in organised or unorganised. Contenting inter alia that there would not be any increase in wages or earning for those engaged in unorganised sectors, for years to come, can it be said that he would never take a cup of tea, outside?
61. At this juncture, it should be borne in mind that Consumer Price Index is fixed, taking into consideration that the majority consumers are from unorganised sectors. Thus, with reference to Gross Domestic Product, Per Capita Income, Consumer Price Index and such other economic factors, determined on the basis of participation and contribution of both organised and unorganised sectors, the classification that those engaged in unorganised sectors, should be totally denied of any addition of income under the head, future prospects, would in our humble view, would affect Article 14 of the Constitution of India. When the majority of persons, in unorganised sectors, also decide the economic factors, stated supra, it would be unjust and unreasonable to contend that there would not any prospect or addition in the earning of those engaged in unorganised sector, forever. If there is addition of Variable Dearness Allowance to the basic wages, in the case of organised sector, depending upon the Consumer Price Index, applicable for a particular period, one would reasonably expect the same factor of variable Dearness Allowance, to be a relevant factor, for determining the variation in the wage in case of unorganised sector also, as Consumer Price Index is common to all, whether engaged in organised or unorganised sector.
62. At this juncture, we deem it fit to consider, what ?Dearness Allowance? means? ?Dearness Allowance? is a cost of living adjustment allowance paid to Government employees, Public sector employees (PSU)and pensioners. Dearness Allowance is calculated as a percentage of an Indian's basic salary to mitigate the impact of inflation. Variable Dearness Allowance is always linked to Consumer Prince Index. The notifications of Minimum wages by the Central and State Government reflects how much is the Variable Dearness in each field.
63. In the light of what we have tabulated above, judicial notice can also be taken that the cost of labour, whether it is in agricultural field or manufacturing or services, has increased. Thus, focusing on the increase in wages or earning, in almost all the fields of operation, right from agricultural or industrial or manual labourers, tea shop or road side vendor, the Consumer Price Index, being the same to rich or raff and therefore, correspondingly to meet out the living conditions, atleast for providing the basic amenities, like food, shelter and clothing, and not to add up the expenditure towards health, education, certainly, there would be revision of wages or earning, even in unorganised sectors also. Future is the period of time that will come after the present or things that will happen. Having regard to the consistent and periodical revision of wages by the Governments, it cannot be contended by the Insurers or Transport Corporations that a person in unorganised sector, has no future at all, in the matter of revision of wages or earning.
64. In R.K.Malik's case (cited supra), the Hon'ble Supreme Court considered the quantum of compensation, payable to the legal representatives of the deceased children, aged between 10 and 18 years. Referring to the inflation, price rise, etc., the Hon'ble Supreme Court, by observing that the there would be a future prospects, for the children also, granted a sum of Rs.75,000/- under the head, future prospects, though as on the date of accident, they were children, studying in a school. In V.Mekala's case (cited supra), the injured was a student studying in 11th Standard. While determining the monthly income of the injured as Rs.10,000/-, the Hon'ble Supreme Court added 50% of the income, under the head, future prospects. In the recent decision in Munna Lal Jain's case (cited supra), the Hon'ble Supreme Court added 50% under the head, future prospects. 65. Thus, from the line of judgments, it could be noticed that the Hon'ble Supreme Court has considered the addition of a quantified sum, under the head, future prospects, in effect, indicating that there is a prospect or chance or possibility of earning more income, after a passage of time, though not periodically, as done in the case of Government or Public Sector Undertakings or Boards or Corporations, Companies owned and controlled by the Government or Limited Companies.
66. We have already extracted the orders of the Chief Labour Commissioner, Ministry of Labour and Employment, Government of India, New Delhi and taken into consideration a sample case, City of Chennai. Wage revision may vary in rural or urban areas or metropolitan cities. At the risk of repetition, as observed earlier, the number of persons, engaged in unorganized sectors, agriculture or industrial, or home based or self- employment, etc., are more in number, than those employed in organised sectors.
67. Income from the organised sector alone, is not the deciding factor, for determining Gross Domestic Product, Consumer Price Index or Per Capita Income. Thus, from a basic study of the factors, taken into consideration by the Governments for revision of wages, to the enumerated categories of employees, one cannot lose sight of the fact that the said factors, would also have an indeligible effect on those, engaged in unorganized sectors also. In the light of our discussion and the details considered, we are of the considered view that addition of certain percentage of income under the head, future prospects, has to be done in the case of those engaged in unorganized sector or self-employed also, otherwise, they would be deprived of just compensation. Addition of income under the head,future prospects, should not be restricted to only salaried persons, with stable jobs.
68. Though it is the case of the Insurance Companies and Transport Corporation that in the case of persons engaged in unorganised sector or salaried or persons, who do not have any permanent job, addition of certain percentage of income, under the head, ?future prospects?, to the income drawn, at the time of death, should not be made, for computation loss of dependency compensation, we are not inclined to accept the same, for the reason that the expression ?future prospects? should not be confined only to the prospects of the deceased in the career, progress or upgradation of position, in which, he was engaged, prior to death, but the expression ?future prospects? should also be extended to the likelihood of increase in wages/salary, earned by either a skilled or semi-skilled person, clerical and others, considering the upward increase in the cost price, inflation and such other factors.''
9. Going through the material on record, this Court is of the view that Reliance General Insurance Co.Ltd., Mumbai / appellant herein, has not made out a strong case for interference of the quantum of the award. Hence, the Civil Miscellaneous Appeal is dismissed. The appellant Insurance Company is directed to deposit the entire award amount, as ordered by the Tribunal, less the amount already deposited, if any, within a period of six weeks from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petition is also dismissed.
To The Motor Accident Claims Tribunal / District Court, Karur, .