Calcutta High Court (Appellete Side)
Smt. Pato Mondal vs The New India Assurance Company Limited ... on 3 April, 2008
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
Form No. J(2)
IN THE HIGH COURT AT CALCUTTA
Appellate/Revisional/Civil Jurisdiction
Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
And
The Hon'ble Mr. Justice Rudrendra Nath Banerjee
F.M.A. No. 1805 of 2006
With
C.A.N. 1518 of 2008
Smt. Pato Mondal
Versus
The New India Assurance Company Limited & Anr.
With
F.M.A. No. 306 of 2006
Radhanath Mondal & Ors.
Versus
The New India Assurance Company Limited & Anr.
With
F.M.A. No.1248 of 2007
With
C.A.N. 1531 of 2008
Smt. Purnima Tewari & Anr.
Versus
The National Insurance Company Limited & Anr.
With
F.M.A. No.2500 of 2005
Utpal Dey & Anr.
Versus
The National Insurance Company Limited & Anr.
For the Appellant/Petitioner
in all four appeals : Mr Krishanu Banik.
For the Insurance Company
in FMA 1805/2006: Mr K. K. Das,
Mr Rajesh Singh.
For the Insurance Company
In FMA 306 of 2006: Mr Saibalendu Bhowmik,
Ms Sushama Dutta.
For the Insurance Company
In FMA 1248 of 2007: Mr K.K. Das.
For the Insurance Company
In FMA 2500 of 2005: Mr Abhijit Ganguly.
Heard on: 17.03.2008.
Judgment on: 3rd April, 2008.
Bhaskar Bhattacharya, J.:
All these four appeals under Section 173 of the Motor Vehicles Act, 1988 were heard analogously as points involved herein are common.
In all these matters, Mr Banik appeared on behalf of the appellants/claimants while different learned advocates appeared on behalf of the concerned Insurance Companies.
In all the matters, the victim was a minor and the question that arises for determination in these appeals is what should be the guidelines for assessing the compensation if the victim is a minor below the age of 15 years having no income.
In F.M.A. No.1805 of 2006, the victim was a boy of 15 years being a student and the Tribunal below awarded Rs.1,00,000/- as compensation.
In F.M.A. No.306 of 2006, the victim was aged two years and a half, and the Tribunal awarded a sum of Rs.50,000/- as compensation to be paid by the Insurance Company.
In F.M.A. No.1248 of 2007, the victim was a student of Class-VII and the Tribunal awarded Rs.1,00,000/- as compensation.
In F.M.A. No.2500 of 2005, the victim was aged 3 years at the time of death and the Tribunal awarded a sum of Rs.50,000/- as compensation.
Mr Banik, the learned advocate appearing on behalf of the appellants in all these matters, strenuously contended before us that in case of a death of a minor having no income, the notional income of Rs.15,000/- is to be taken and after deducting 1/3rd of that amount and applying the appropriate multiplier of 15, the compensation amount would be Rs.1,50,000/- and with that amount an additional amount of Rs.4,500/- should be added as funeral expenses and loss of estate and thus, the total amount of compensation should be at least Rs.1,54,500/- payable by the Insurance Company and therefore, the Tribunal below erred in law in disposing of those proceedings by paying a lesser amount of compensation. Mr Banik further contends that in addition to the awarded amount, it was also the duty of the Tribunal to pay interest at the bank rate payable by the Nationalised Banks on fixed deposits for one year from the date of filing of the claim-application until the deposit of the amount by the Insurance Company. He, therefore, prays for setting aside the award and enhancing the said amount to Rs.1,54,000/-. Mr Banik in this connection relied upon the case of Manju Devi & another vs. Musafir Paswan & another reported in 2005 A.C.J. 99 wherein the Supreme Court assessed Rs.2,25,000/- for compensation in favour of the parents on the death of their son aged 13 years. He also relied upon the case of New India Assurance Company Limited vs. Satender & Ors. reported in III (2007) ACC 46 (SC) where the Hon'ble Supreme Court assessed Rs.1,80,000/- for compensation of the death of their son aged 9 years.
Mr Das, the learned advocate appearing on behalf of the Insurance Company in the first matter has seriously disputed the aforesaid contention advanced by Mr Banik and has submitted that there cannot be any hard and fast rule that at least a sum of Rs.1,54,000/- should be awarded in a case where the victim is a minor, below the age of 15. In this connection, Mr Das strongly relies upon the decision of the Supreme Court in the case of Kaushalya Devi vs. Shri Karan Arora & Ors. reported in A.I.R. 2007 S.C. 1912 and in the case of Oriental Insurance Co. Ltd. vs. Syed Ibrahim & Ors. reported in A.I.R. 2008 S.C. 103 where the Supreme Court has pointed out that in case of determination of damages for loss of human life where the victim is a child and a non-earning person, it is very difficult to arrive at a conclusion, inasmuch as, the future of a child is uncertain. According to the Supreme Court, a child is earning nothing but has a prospect to earn and therefore, the income of the deceased child is neither capable of assessment on estimated basis nor is the financial loss suffered by the parents ascertainable by mathematical computation. In those two cases, the Supreme Court did not interfere with the award of Rs.1,00,000/- and Rs. 51,500/- respectively, in view of the fact that the victims were minor below the age of 15 years.
The learned advocate appearing on behalf of the Insurance Companies in other three matters adopted the argument of Mr Das.
Therefore, the only question that arises for determination in these appeals is whether in case of a minor below the age of 15 years who has no earning capacity at the time of accident, the Court should, on the basis of notional income of the minor to be Rs.15,000/- a year, apply the multiplier of 15 after deducting one-third therefrom and pass direction for compensation by adding a sum of Rs.4,500/- as funeral expenses and loss of the estate and further appending interest on the total amount from the date of filing the application for compensation till the date of deposit of the amount.
After hearing the learned counsel for the parties and after going through the materials on record, we find that a Three-Judges-Bench of the Supreme Court in the case of U.P. State Transport Corporation vs. Trilok Chandra reported in 1996(4) S.C.C. 362 made the following observations as regards the Second Schedule of the Motor Vehicles Act, 1988 :-
"The situation has now undergone a change with the enactment of the Motor Vehicles Act, 1988, as amended by Amendment Act 54 of 1994. The most important change introduced by the amendment insofar as it relates to determination of compensation is the insertion of Sections 163-A and 163-B in Chapter XI entitled "Insurance of Motor Vehicles against Third Party Risks". Section 165-A begins with a non obstante clause and provides for payment of compensation, as indicated in the Second Schedule, to the legal representatives of the deceased or injured, as the case may be. Now if we turn to the Second Schedule, we find a table fixing the mode of calculation of compensation for third party accident injury claims arising out of fatal accidents. The first column gives the age group of the victims of accident, the second column indicates the multiplier and the subsequent horizontal figures indicate the quantum of compensation in thousand payable to the heirs of the deceased victim. According to this table the multiplier varies from 5 to 18 depending on the age group to which the victim belonged. Thus, under this Schedule the maximum multiplier can be up to 18 and not 16 as was held in Susamma Thomas case9.
We must at once point out that the calculation of compensation and the amount worked out in the Schedule suffer from several defects. For example, in Item 1 for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicand is shown to be Rs.3000. The total should be 3000 x15=45,000 but the same is worked out at Rs 60,000. Similarly, in the second item the multiplier is 16 and the annual income is Rs9000; the total should have been Rs.1,44,000 but is shown to be Rs.1,71,000. To put it briefly, the table abounds in such mistakes. Neither the tribunals nor the courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependant on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose to emphasise is that the multiplier cannot exceed 18 years' purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16. We thought it necessary to state the correct legal position as courts and tribunals are using higher multiplier as in the present case where the Tribunal used the multiplier of 24 which the High Court raised to 34, thereby showing lack of awareness of the background of the multiplier system in Davies case2."
Therefore, the said Bench although pointed out some mistakes in the table, yet, accepted the same as a guide in arriving at the just compensation. The Court, however, deviated from those provisions with this modification that the selection of multiplier, in all cases, cannot depend upon the age of the victim but the age of the claimant may also be a decisive factor if the deceased happens to be a bachelor and in no case, the multiplier should exceed 18 years' purchase factor.
Subsequently, a Two-Judges-Bench of the Supreme Court in the case of Manju Devi and another vs. Musafir Paswan and another reported in 2005 ACJ 99, while dealing with a case of death of a non-earning boy of 13 years applied the Multiplier method and assessed the compensation at Rs.2,25,000/-. In that connection, the Bench observed as follows:-
"In the case of U.P. State Road Transport Corporation v Trilok Chandra 1996 ACJ 831 (SC), it has been held by this court that there should be no departure from the multiplier method on the ground that payment being made is just compensation. It has been held that the multiplier method for determining and ensuring payment of just compensation as it is the method which brings uniformity and certainty to awards made all over the country. In view of this authority, it will have to be held that the award of compensation had to be made by the multiplier method."
The said Bench, however, while assessing the compensation, took into consideration the age of the victim alone without taking into consideration of the age of the parents, as pointed out in U.P. State Road Transport Corporation (supra), and applied the multiplier of 15 by assuming the income of the victim as Rs.15,000/- per annum. The Bench did not deduct one-third of the amount, as provided in Note-1 of the Second Schedule itself and proceeded to multiply Rs.15,000/- with 15 and arrived at the figure of Rs.2,25,000/-. The Bench also did not add the amount of funeral expenses and the loss of estate amounting to Rs.4,500/- as fixed in the schedule.
Subsequently, another Bench consisting of two Judges of the Supreme Court, in the case of New India Assurance Company Ltd. vs. Satender and others, reported in III (2007) ACC 46(SC), while considering the case of a death of a child aged 9 years, assessed the compensation at Rs.1,80,000/- with interest at the rate of 7.5% per annum from the date of filing the application. The Court found the said amount to be "just compensation" within the meaning of Section 168 of the Act. In arriving at such conclusion, the Bench proceeded to follow the observations of the earlier Bench decisions of the same Court in the cases of 1) State of Haryana vs. Jasbir Kaur and others reported in 2003(7) SCC 484 = AIR 2003 SC 3696, 2) Helen C. Rebello vs. Maharastra SRTC reported in 1999(1) SCC 90 and 3) Lata Wadhwa and others vs. State of Bihar and others reported in 2001(8) SCC 197.
Of the previously mentioned three cases, the case of Jasbir Kaur was one where the death of a cultivator aged 25 years was the subject-matter. In the case of Helen C Rebello, an adult person died and the question was, whether the life insurance money of the deceased was required to be deducted from the claimants' compensation receivable under the Motor Vehicles Act, 1939.
The case of Lata Wadhawa was one where a writ-petition was filed by the three petitioners, invoking the jurisdiction of Supreme Court under Articles 21 and 32 of the Constitution of India for issuance of a writ of mandamus or any other writ or directions, ordering prosecution of the officers of the Tata Iron and Steel Company and their agents and servants for the alleged negligence in organizing the function, held on 3rd of March, 1989 in Jamshedpur and for direction that appropriate compensation be provided to the victims by the State Government as well as the Company. It was also prayed that a writ or direction be issued to the State Government to provide security and safety of the families as it was apprehended that the company might use its influence to harass the petitioners and their relations, who happened to be the victims of the circumstances. The petitioner had also prayed for a direction that legal assistance be given to the victims of the circumstances to pursue the cases before the Criminal and Civil Courts. It was alleged in the writ-petition that while 150th Birth Anniversary of Sir Jamshedji Tata was being celebrated on 3rd of March, 1989 within the factory premises, and a large number of employees, their families including small children had been invited, the organizers had not taken adequate safety measures and on the other hand, several provisions of the Factories Rules and Factories Act had been grossly violated. A devastating fire engulfed the VIP Pandal and the area surrounding, and by the time the fire was extinguished, a number of persons lay dead and many were suffering with burn injuries. Some of the injured also died on the way to the hospital or while being treated at the hospital. The death toll reached 60 and the total number of persons injured was 113. Amongst the persons dead, there were 26 children, 25 women and 9 men. It was also stated that out of the 60 persons, who died, 55 were either employees or relations of employees of the Tata Iron and Steel Company and similarly, out of 113 persons injured, 91 were either employees or their relations. Smt. Lata Wadhwa, the petitioner No.1, lost her both the children, a boy and a girl and her parents. Her husband was an employee of the company. It was alleged in the writ-petition that the State of Bihar had been colluding with the company and there had been total inaction on the part of the State in taking appropriate action against the negligent officers for whose negligence, the tragedy occurred. The State in its counter-affidavits, however, denied the allegations made and further averred that inquiries had been conducted by a Committee constituted by the Government of Bihar, the Department of Labour Employment and Training and report was submitted to the company, indicating the negligence of the personnel and on that basis, criminal prosecution had been launched. The company also filed counter-affidavit denying the charge of negligence and lack of care and sympathy for the injured as well as for the kith and kin of the deceased. The company in its counter-affidavit further indicated the steps taken by the several employees and how the doctors in the hospital worked round the clock. It was also averred that costly medicines from all over the world were brought for prompt and appropriate treatment. It was the positive case of the company that it was because of the steps taken by it, that none of the relatives of the deceased approached any Court or authority for any compensation or damages, except the present petitioners, who were in fact acting on their own. In course of hearing of this petition and pursuant to the interim orders passed by Apex Court, the company furnished the particulars of the persons injured as well as the particulars of the persons, who died. When the writ-petition came up for disposal, the learned senior counsel appearing for the company stated to the Court that notwithstanding several objections, which had been raised in the counter-affidavit, the company did not wish to treat the litigation as an adversarial one, and on the other hand, the matter was left to the Court for determining what monetary compensation should be paid according to law, after taking into consideration all the benefits and facilities already extended and continuing as summarized in the affidavit dated 3rd of February, 1993. The Court, on 15th of December, 1993, came to the conclusion that the question of grant of compensation should be looked into by a person, having expertise and ultimately requested Shri Y. V. Chandrachud, a former Chief Justice of India to look into the matter and determine the compensation, payable to the legal heirs of the deceased as well as the compensation payable to the injured persons. It was also indicated on the basis of an agreement between the parties that in determining the compensation, the principles indicated by the Andhra Pradesh High Court in its decisions in Chairman, A.P.S.R.T.C. v. Safiya Khatoon, 1985 Acc CJ 212; Bhagwan Das v. Mohd. Arif, 1987 Acc CJ 1052 and A.P.S.R.T.C. v. G. Ramanaiya, 1988 Acc CJ 223 should be borne in mind. The Court further observed that while assessing the compensation, the benefits and advantages conferred on the injured persons or upon the legal heirs of the deceased persons by the company, were not to be taken into account and that factor would be taken into consideration, while passing the final orders. The Court, also by the aforesaid order dated 15th December, 1993, stayed the criminal proceedings, pending in the Court of Sub-Divisional Magistrate, Jamshedpur as well as the Criminal Revision Application, pending before the Ranchi Bench of the Patna High Court. It was further directed that the matter should be placed for orders, after receipt of the report from Shri Y. V. Chandrachud.
While considering the report submitted by Shri Y. V. Chandrachud on the assessment of compensation, the Supreme Court made the following observations:-
"So far as the award of compensation in case of children are concerned, Shri Justice Chandrachud, has divided them into two groups, first group between the age of group of 5 to10 years and the second group between the age group of 10 to15 years. In case of children between the age group of 5 to 10 years, a uniform sum of Rs.50,000/- has been held to be payable by way of compensation, to which the conventional figure of Rs.25,000/- has been added and as such to the heirs of the 14 children, a consolidated sum of Rs.75,000/- each, has been awarded. So far as the children in the age group of 10 to 15 years, there are 10 such children, who died on the fateful day and having found their contribution to the family at Rs.12,000/- per annum, 11 multiplier has been applied, particularly, depending upon the age of the father and then the conventional compensation of Rs. 25,000/- has been added to each case and consequently, the heirs of each of the deceased above 10 years of age, have been granted compensation to the tune of Rs.1,57,000/- each. In case of the death of an infant, there may have been no actual pecuniary benefit derived by its parents during the child's lifetime. But this will not necessarily bar the parents' claim and prospective loss will found a valid claim provided that the parents establish that they had a reasonable expectation of pecuniary benefit if the child had lived. This principle was laid down by the House of Lords in the famous case of Taff Vale Rail Co.v. Jenkins, 1913 AC 1, and Lord Atkinson said thus :
"..........................all that is necessary is that a reasonable expectation of pecuniary benefit should be entertained by the person who sues. It is quite true that the existence of this expectation is an inference of fact - there must be a basis of fact from which the inference can reasonably be drawn; but I wish to express my emphatic dissent from the proposition that it is necessary that two of the facts without which the inference cannot be drawn are, first, that the deceased earned money in the past, and, second, that he or she contributed to the support of the plaintiff. These are, no doubt, pregnant pieces of evidence, but they are only pieces of evidence; and the necessary inference can I think be drawn from circumstances other than and different from them."
At the same time, it must be held that a mere speculative possibility of benefit is not sufficient. Question whether there exists a reasonable expectation of pecuniary advantage is always a mixed question of fact and law. There are several decided cases on this point, providing the guidelines for determination of compensation in such cases but we do not think it necessary for us to advert, as the claimants had not adduced any materials on the reasonable expectation of pecuniary benefits, which the parents expected. In case of a bright and healthy boy, his performances in the school, it would be easier for the authorty to arive at the compensation amount, which may be different from another sickly, unhealthy, rickety child and bad student, but as has been stated earlier, not an iota of material was produced before Shri Justice Chandrachud to enable him to arrive at just compensation in such cases and, therefore, he has determined the same on an approximation. Mr. Nariman, appearing for the TISCO on his own, submitted that the compensation determined for the children of all age groups could be doubled, as in his views also, the determination made is grossly inadequate. Loss of a child to the parents is irrecoupable, and no amount of money could compensate the parents. Having regard to the environment from which these children were brought, their parents being reasonably well placed officials of the Tata Iron and Steel Company, and on considering the submission of Mr. Nariman, we would direct that the compensation amount for the children between the age group of 5 to 10 years should be three times. In other words, it should be Rs. 1.5 lakhs, to which the conventional figure of Rs. 50,000/- should be added and thus the total amount in each case would be Rs. 2.00 lakhs. So far as the children between the age group of 10 to 15 years, they are all students of Class VI to Class X and are children of employees of TISCO. The TISCO itself has a tradition that every employee can get one of his child employed in the company. Having regard to these facts, in their case, the contribution of Rs. 12,000/- per annum appear to us to be on the lower side and in our considered opinion, the contribution should be Rs. 24,000/- and instead of 11 multiplier, the appropriate multiplier would be 15. Therefore, the compensation, so calculated on the aforesaid basis should be worked out to Rs. 3.60 lakhs, to which an additional sum of Rs. 50,000/- has to be added, thus making the total amount payable at Rs. 4.10 lakhs for each of the claimants of the aforesaid deceased children."
Shri Y. V. Chandrachud, had been intimating from time to time to this Court as to why it has not been possible to conclude the proceedings before him and when the matter was listed before the Court on 28th September, 2000, it transpired that the proceedings are moving with a snail's pace. The Court, therefore, requested Shri Chandrachud, to conclude the proceedings and intimate the Court by 2nd week of November, as to the results of the same. Shri Y. V. Chandrachud, thereafter, took expeditious and effective steps and passed an order, granting compensation to the tune of Rs. 1,19,58,320/- in favour of the dependants of the deceased persons and Rs. 288 lakh as interim compensation in the injured cases. Finally, Shri Chandrachud had also submitted his report, quantifying the compensation payable in the injury cases too.
On behalf of the petitioners, an objection has been filed to the aforesaid report of Shri Y.V. Chandrachud and on behalf of the respondent-company, an affidavit in opposition to the said objection has been filed. The matter was ultimately heard at length and Ms. Rani Jethmalani argued on behalf of the writ petitioners and Mr. F. S. Nariman, the learned senior counsel, argued on behalf of the company.
The report consists of two parts, Part I dealing with cases of death and Part II dealing with cases of burn injury. In view of the indications in the order of this Court, referring the matter to Shri Chandrachud that in deciding the quantum of compensation, the principles evolved in Safiya Khatoon's case as well as two other cases of Andhra Pradesh High Court, in the report, the principles evolved in the aforesaid judgments have been analysed at the first instance. It has been held that the multiplier method having been consistently applied by the Supreme Court to decide the question of compensation in the cases arising out of Motor Vehicles Act, the said multiplier method has been adopted in the present case. In the report, even the view of British Law Commission has been extracted, which indicates : "the multiplier has been, remains and should continue to remain, the ordinary, the best and only method of assessing the value of a number of future annual sums." It has also been stated in the aforesaid report that though Lord Denning advocated the use of the annuity tables and the actuary's assistance in Hodges v. Harland and Wolff Limited (1965) 1 All ER1086, but the British Law Commission accepted the use and relevancy of the annuity tables in its Working Paper No.27 by observing : "The actuarial method of calculation, whether from expert evidence or from tables, continues to be technically relevant and technically admissible but its usefulness is confined, except perhaps in very unusual cases, to an ancillary means of checking a computation already made by the multiplier method." Even Kemp and Kemp on 'Quantum of Damages' after comparing the multipliers chosen by Judges from their experience found a close proximity between the said multiplier method and those arrived at from the annuity tables in the American Restatement of the Law of Torts. After a thorough analysis of the different methods of computation of the compensation to be paid to the dependants of the deceased and what are the different methods of computing loss of future earnings, Shri Chandrachud has come to the conclusion that the multiplier method is of universal application and is being accepted and adopted in India by Courts, including the Supreme Court and as such, it would be meet and proper to apply the said method for determining the quantum of compensation. The counsel, appearing for the claimants as well as the company also agreed before Shri Chandrachud that the decision should be based on the principles enunciated in the three judgments mentioned in the order of the Supreme Court as well as the cases relied upon in those judgments. Amongst the deceased, there were many housewives and they have been classified in two categories, one those, whose husbands were employees of the company and as such whose income is known, and others who were outsiders, whose husbands' income is not known at all. The deceased- housewives have been grouped into four, on the basis of their age and different multiplier has been applied on the basis of their age. Shri Chandrachud also has considered the income of the husbands of those housewives, who are employees of the company and then on that basis, has tried to determine the loss on the death of the wife and after applying them multiplier and determining the total amount of compensation, an addition of Rs.25,000/- has been made as a conventional figure and the total amount of compensation has been arrived at. So far as the employees of the Tata Iron and Steel Company are concerned who died in the tragedy, their annual income has been arrived at and thereafter 60% of the income has been held to be dependency and then, a multiplier has been applied and on finding out the total amount of compensation, a conventional amount of Rs.25,000/- has been added. So far as the children are concerned, in the absence of any material, a uniform amount has been fixed at Rupees 50,000/- to which again, a conventional figure of Rs.25,000/- has been added for determining the total amount of compensation payable. So far as the children above 10 years of age are concerned, the contribution of those children to their parents have been assessed at Rs.12,000/- per year, taking all imponderables into account and multiplier of 11 has been applied and the conventional amount of Rs.25,000/- has been added. Two of the children in the said age group, whose father did not claim any compensation as they were negotiating with the employer, for getting a piece of land and as such no compensation has been determined in their case. In the case of death of known employees of the company, the annual income has been arrived, and then taking into account the age of the deceased and finding the dependency at 60% of the annual income and then by application of different multipliers, the compensation has been arrived at. As stated earlier, a conventional compensation of Rs.25,000/- has been added in each case. While determining the compensation, the benefits already granted to the dependants of the deceased as well as to the injured persons or their relatives have not been taken into account in view of the specific orders of this Court dated 15th of December, 1993, though it would be a relevant consideration for us, while disposing of the matter finally. No interest however, has been granted, as the question of interest has been left for consideration of this Court. So far as the costs of the proceedings are concerned, this Court had directed the Tata Iron and Steel Company to bear the entire cost of the proceedings."
In our opinion, the observations of the Apex Court, in the said case of Lata Wadha (supra), in connection with the assessment of death of the children out of fire arising out of a function, cannot have any application to a case of death arising out of a motor accident. Such compensation is required to be assessed under the provisions of the Motor Vehicles Act, 1988. The said Act does not provide for different multipliers in case of victims aged up to 15, whereas Shri Chandrachud, in that case, applied different multipliers inconsistent with the ones mentioned in the Act. Similarly, the grant of compensation at the flat rate of Rs.75,000/- in case of death of a child below 10 years, as assessed by Shri Chandrachud, is not provided in the Act. Nor is there any provision for assessing the contribution of the children aged above 10 to be Rs.12,000/- per annum in the Act as followed by Shri Chandrachud. The Supreme Court, however, held that the figures arrived at by Shri Chandrachud were inadequate and accordingly, enhanced the compensation for the death of a child below the age of 10 to Rs.2 lakh and that of a child above 10 but below 15 to be Rs.4.1 lakh.
Therefore, even in the case of Lata Wadhwa (supra), the Apex Court granted more amount of compensation than the minimum amount of Rs.1,54,500/- by treating the notional income of the child to be Rs.15,000/- per annum as provided in the Act.
However, recently, a Two-Judges-Bench of the Supreme Court in two cases, viz. Kaushlya Devi vs. Karan Arora and others (AIR 2007 SC 1912) and Orinetal Insurance Company Ltd. vs. Syeed Ibrahim and others (AIR 2008 SC
103), while dealing with the cases of compensation under the Act for the death of two Children aged 14 years and 7 years, was of the view that the compensations of Rs.1 lakh and Rs. 51,500/- respectively, were just compensations within the meaning of the Act. In both the abovementioned decisions, the Bench principally made the following observations:-
"There are some aspects of human life which are capable of monetary measurement, but the totality of human life is like the beauty of sunrise or the splendor of the stars, beyond the reach of monetary tape-measure. The determination of damages for loss of human life is an extremely difficult task and it becomes all the more baffling when the deceased is a child and/or a non-earning person. The future of a child is uncertain. Where the deceased was a child, he was earning nothing but had a prospect to earn. The question of assessment of compensation, therefore, becomes stiffer. The figure of compensation in such cases involves a good deal of guesswork. In cases, where parents are claimants, relevant factor would be age of parents.
In case of the death of an infant, there may have been no actual pecuniary benefit derived by its parents during the child's life-time. But this will not necessarily bar the parent's claim and prospective loss will find a valid claim provided that the parents establish that they had a reasonable expectation of pecuniary benefit if the child had lived. This principle was laid down by the House of Lords in the famous case of Taff Vale Rly. v. Jenkins (1913) AC 1, and Lord Atkinson said thus:
".....all that is necessary is that a reasonable expectation of pecuniary benefit should be entertained by the person who sues. It is quite true that the existence of this expectation is an inference of fact - there must be a basis of fact from which the inference can reasonably be drawn; but I wish to express my emphatic dissent from the proposition that it is necessary that two of the facts without which the inference cannot be drawn are, first that the deceased earned money in the past, and, second, that he or she contributed to the support of the plaintiff. These are, no doubt, pregnant pieces of evidence, but they are only pieces of evidence; and the necessary inference can I think, be drawn from circumstances other than and different from them." (See Lata Wadhwa and Ors. v. State of Bihar and Ors. (2001 (8) SCC 197)=1998 AIR SCW 3105.
This Court in Lata Wadhwa's case (supra) while computing compensation made distinction between deceased children falling within the age group of 5 to 10 years and age group of 10 to 15 years.
In cases of young children of tender age, in view of uncertainties abound, neither their income at the time of death nor the prospects of the future increase in their income nor chances of advancement of their career are capable of proper determination on estimated basis. The reason is that at such an early age, the uncertainties in regard to their academic pursuits, achievements in career and thereafter advancement in life are so many that nothing can be assumed with reasonable certainty. Therefore, neither the income of the deceased child is capable of assessment on estimated basis nor the financial loss suffered by the parents is capable of mathematical computation."
It, however, appears that the attention of the said Bench was not drawn to the earlier Three-Judges-Bench decision of the said Court in the case of U.P. State Road Transport Corporation (supra), relied upon by the Two-Judges-Bench in the case of Manju Devi and another (supra), where the same Court decided to take the notional income of Rs.15,000/- as the income of a non-earning child by following the Second Schedule. We have already pointed out that in the case of U.P. State Road Transport Corporation (supra), the Bench held that in case of death of a child, the age of applicant is also a decisive factor.
In view of the conflicting decisions of the Supreme Court on the question of grant of compensations in case death of a minor having no earning capacity arising out of a motor accident, this Court is bound to follow the rules of precedents laid down by the Apex Court.
In a recent decision of a Five-Judges-Bench of the Supreme Court in the case of Central Board of Dawoodi Bohra Community v. State of Maharashtra reported in AIR 2005 SC 752 = 2005 AIR SCW 349, the Bench laid down the law in the following way:-
"(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.
(2) A Bench of lesser quorum cannot doubt the correctness of the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of co-equal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of co-equal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.
(3) The above rules are subject to two exceptions: (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and (ii) In spite of rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and others and Hansoli Devi and others (supra)."
By applying the principles mentioned above to the facts of these cases, we are of the view that the Two-Judges-Bench decision in the cases of Kaushlya Devi vs. Karan Arora and others (AIR 2007 SC 1912) and Orinetal Insurance Company Ltd. vs. Syeed Ibrahim and others (AIR 2008 SC 103) cannot be said to be valid binding precedent as the said Bench did not take into consideration the effect of the earlier decisions in the cases of Manju Devi (supra) and U.P. State Road Transport Corporation (supra). We are, therefore, bound to follow the principle laid down in the case of Manju Devi (supra), to this extent that the notional income of Rs.15,000/- as provided in the Second Schedule of the Act must be taken to be the income of a non-earning child victim subject to the other guidelines given in the case of U.P. Road Transport Corporation.
In the Second Schedule of the Act itself, there is no separate multiplier for the victims aged between newborn and 15 years of age and the provision of the notional income is a creature of legislative mandate. Note 6 of the Schedule 2 has, in clear words, directed that in case the victim is found to have no income, the notional income of Rs.15,000/- should be taken to be his income for the purpose of assessment and for that reason, the Supreme Court in the case of Manju Devi (supra) held as follows:-
"As set out in the Second Schedule to the Motor Vehicles Act, 1988, for a boy of 13 years of age, a multiplier of 15 would have to be applied. As per the Second Schedule, he being a non-earning person, a sum of Rs. 15,000 must be taken as the income"
(Emphasis supplied by us) At this juncture, it will be profitable to refer to the following observation of the Supreme Court in the case of Mithilesh Singh vs. Union of India reported in AIR 2003 SC 1714 where the Apex Court reiterated the following well-settled rule of interpretation of the Statute:-
"The intention of legislature is primarily to be gathered from the language used, and as a consequence a construction which results in rejection of words as meaningless has to be avoided. It is not a sound principle of construction to brush aside word(s) in a statute as being inapposite surplusage; if they can have appropriate application in circumstances conceivably within the contemplation of the statute. In the interpretation of statutes the Courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. The Legislature is deemed not to waste its words or to say anything in vain."
Similarly, in the case of Union of India vs. Deoki Nandan Agarwal reported in AIR 1992 SC 96, the Supreme Court reminded the well-established principle of interpretation of Statute in the following manner:-
"It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot rewrite, recast or reframe the legislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the Courts. The Court cannot add words to a statute or read words into it which are not there. Assuming there is a defect or an omission in the words used by the legislature the Court could not go to its aid to correct or make up the deficiency. Courts shall decide what the law is and not what it should be. The Court of course adopts a construction which will carry out the obvious intention of the legislature but could not legislate itself. But to invoke judicial activism to set at naught legislative judgment is subversive of the constitutional harmony and comity of instrumentalities."
On consideration of the entire materials on record, and bearing in mind the rule of interpretation of Statute laid down above, we are, thus, of the firm opinion that the on the face of plain language of the Act, in case of death of a non-earning child up to the age of 15, irrespective of the age, his income should be taken to be notionally Rs.15,000/- per annum and the appropriate multiplier based on, not only the age of the victim-child but also the age of the applicant, as held in the case of U.P. Road Transport Corporation (supra), should be applicable (of the two, the multiplier which is lower is to be applied as pointed out by an earlier Two-Judges-Bench in the case of C.K. Subramonia Iyer and others vs. T. Kunhikuttan and others reported in AIR 1970 SC 376 and referred to in the case of U.P. State Road Transport Corporation) and in arriving at the figure of compensation, all other applicable directions given in the Second Schedule of the Act, such as deduction of one-third of the annual income, addition of funeral charges and loss of estate as specified therein should be followed. However, the mistakes pointed out in the table by the Apex Court in the case of U.P. Road Transport Corporation (supra) should not be followed.
However, there may be cases, where although the child-victim at the time of death had no income, yet, sufficient evidence is available to indicate that he was extraordinary brilliant or had a special talent in a subject which is rarely found in a child of his age and hence, a bright future was assured. Similarly, there may be instances, where the victim is a precious child having regard to peculiar status of his parents, they occupy in their life; there may also be cases, where the parents had invested huge amount of money for the upbringing of the victim or he was the only one to fall back upon in their old age and there is no chance of having another child.
In the proceedings under Section 166 of the Act relating to the death of a child of the abovementioned categories, the Tribunal is entitled to assess higher amount of compensation after taking into consideration those factors.
Applying the aforesaid principles to the four individual cases before us, we now proceed to dispose of those appeals in the following way.
In the case of Pato Mondal, the applicant was aged 45 years and thus, the Tribunal rightly followed the multiplier of 15 and arrived at the figure of Rs.1,54,000/-. However, as the applicant claimed Rs.1,00,000/- only in the application, the Tribunal reduced the same to Rs.1,00,000/-. In this Court, the applicant has made an application for amendment of the claim-application by enhancing the valuation to Rs.1,54,500/-. As pointed out by the Apex Court in the case of Nagappa vs. Gurudayal Singh and others reported in AIR 2003 SC 674, we allow such application as in our opinion, the Tribunal having found the said amount of Rs.1,54,500/- to be just and reasonable having regard to the provision contained in the Act, there is no reason to reduce such amount of compensation. However, the Tribunal, in this case, failed to exercise discretion in terms of Section 171 of the Act by not granting any amount of interest on the said amount from the date of filing the application till the actual deposit of the amount by the Insurance Company. The Insurance Company due to delayed disposal of the application has utilized the amount, which should have come in the hand of the claimant at least earlier, at the rate of interest given by the Nationalized Banks on the deposit for one year. We, therefore, direct the Insurance Company to pay interest at the rate of 8% per annum from the date of application till the deposit of the amount. The excess amount be paid within one month from today.
In the case of Purnima Tewari and another, a 13 years old boy died and his parents within the age limit of 45 years are the applicants. Therefore, the Tribunal erred in law in awarding compensation of Rs.1 lakh. It should be Rs.1,54,500/- by applying the multiplier of 15 with interest at the rate of 8% per annum from the date of filing the claim-application till the date of deposit of the amount. The enhanced amount be deposited within a month from today and the same should be payable in the same manner as ordered in the original award.
In the case of Radhanath Mondal and others, a child aged 2 years and odd died and the claimants are his brothers and sisters as the parents of the victim also died. In such a situation, the Tribunal erred in law in assessing the compensation at Rs.50,000/-. We, thus, set aside the award and enhance the same to Rs.1,54,500/- with interest at the rate of 8% per annum from the date of application till the date of deposit. The enhanced amount should be deposited within a month from today. The money should be paid to the claimants in the same way as ordered in the original award.
In the case of Utpal Dey and another, the parents have prayed for compensation for the death of their child aged 3 years. The Tribunal granted Rs.50,000/- as compensation. In view of our findings above, the claimants are entitled to get Rs.1,54,500/- with interest at the rate of 8% per annum from the date of application till the date of deposit by the Insurance Company. The enhanced amount be deposited within a month from today. The award is modified to the extent indicated above.
F.M.A. No. 46 of 2008
With C.A.N. 6486 of 2007 New India Assurance Co. Ltd.
Versus Smt. Krishna Rani Saha @ Krishna Saha & Ors.
For the Appellant/Petitioner: Mr Parimal Kr. Pahari.
For the Claimants/Respondents: Mr Santosh Kumar Das,
Mrs Sucharita Paul.
Heard on: 19.03.2008.
This appeal was heard subsequent to the conclusion of hearing of the aforesaid four appeals but as the point involved herein is the same, we propose to decide this appeal along with the abovementioned four appeals.
By this appeal the Insurance Company has challenged the award passed by the Tribunal below by which the said Tribunal assessed the compensation in terms of Section 163A of the Act in case of a death of a minor aged 12 years at Rs.2,29,500/- in favour of the parents of the minor.
In assessing such amount, the Tribunal accepted the notional income of the minor to be Rs.15,000/- and multiplied the same by 15 and added Rs.4,450/- as funeral expenses and loss of estate. The Tribunal, as it appears from record, failed to deduct a sum of Rs.5,000/- as required under Note-6 to the Second Schedule before multiplying Rs.15,000/- with 15. Thus, the amount should be Rs.1,54,500/- and should carry interest at the rate of 8% per annum from the date of filing the application till the deposit of the amount by the appellant.
The appeal, thus, is allowed to the extent indicated above. The amount be deposited, if not, already deposited within a month from today. The money should be paid to the mother of the victim alone, she being the sole legal heir.
( Bhaskar Bhattacharya, J. ) I agree.
( Rudrendra Nath Banerjee, J. )