Madras High Court
Nadhiya vs Manavalan
Author: S.Vimala
Bench: S.Vimala
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: .12.2018
CORAM:
THE HON'BLE Dr. JUSTICE S.VIMALA
Civil Miscellaneous Appeal No.2748 of 2017
1. Nadhiya
2. Minor Praveen
3. Minor Hemavathi ... Appellants
st
(Minors are represented by their mother 1 appellant)
..vs..
1. Manavalan
2. The Divisional Manager,
New I ndia Assurance Co. Ltd.,
Vellore Division, Vellore. .... Respondents
(1st respondent remained ex parte
before the Tribunal)
Appeal filed under Section 173 of Motor Vehicles Act 1988, against the
Judgment and Decree dated 10.11.2016 in M.C.O.P.No.89 of 2015 on the file
of the Motor Vehicle Accident Claims Tribunal (in the Court of Subordinate
Judge), Ranipet, Vellore District.
For Appellants : Mr.E.Kannadasan
For R-2 : Mr.K.Padmanaban
---
JUDGMENT
This Civil Miscellaneous Appeal has been filed by the claimants complaining that the compensation awarded is inadequate and that it is the duty of the Tribunal to have awarded compensation, which is 'just'. http://www.judis.nic.in 2 2.1. The 25 years old wife, 3½ years old son and 2½ years old daughter were the claimants before the Claims Tribunal, claiming compensation in respect of death of one Vetriganesan, who died in an accident that took place on 21.01.2015. They claimed compensation of Rs.40,00,000/- on the plea that the deceased was the owner cum driver of the lorry, earning a sum of Rs.15,000/- per month, and hence, there is substantial loss of income apart from loss of guidance and support.
2.2. The claim was disputed by the Insurance Company on the ground that there is no documentary proof for the income and therefore, the claim made is not reasonable.
2.3. The Claims Tribunal, on a perusal of the oral and documentary evidence, has awarded a sum of Rs.8,60,000/- under the following breakup details:-
Head Amount / Rs.
Loss of dependency 7,20,000.00
Loss of consortium 50,000.00
Loss of love and affection 75,000.00
Loss to estate 5,000.00
Funeral expenses 10,000.00
Total 8,60,000.00
2.4. While calculating the loss of dependency, the Tribunal has fixed http://www.judis.nic.in 3 the monthly income at Rs.6,000/- and deducting 1/3rd towards personal expenses and adopting the multiplier of '15' has quantified the loss of dependency at Rs.7,20,000/-.
2.5. The Insurance Company disputed the claim on the ground that there is no documentary proof for the income and therefore, the claim made is not reasonable. It is not always possible to produce evidence for the income earned especially for the people who are in unorganized sector. This necessitates finding a way to find out the income of the deceased/injured.
3. The proof of income by production of evidence is difficult and not possible, in some cases, for all those persons who are under a legal liability to prove the same. This difficulty is more for those who are self-employed, those who are employed in unorganized sector, those who are employed on daily wage basis, etc., Just because there is no proof for income, can it be concluded that they have no income at all. If there is no income, how did they survive or how do they maintain the sustenance level. The fact of existence is apparent on their mere presence. The presence and the growth leading to the continued existence would go to show that there must have been supply of energy for the growth.
3.1. When a person exists, the implication is that some amount of energy has gone inside them, i.e., the fair necessities of life is made available http://www.judis.nic.in 4 to them or they make available to themselves by some means or other. Below this minimum level, human-beings are bound to perish. When they did not perish and they are available, by their physical presence, how do we account for their existence without income. The implication is that from the income spent, one can infer the existence of income. What is the scientific method to do that.
3.2. It is painful to see many judgments of the Tribunal giving a finding that, there is no proof for income and therefore, the compensation awarded should be meagre. Those who already suffer on account of their poverty or vulnerability are made to suffer. To eradicate this evil, this Court wanted to place a scientific method on record, so that the suffering mass would get some solace in the form of just compensation.
3.3. The committee consisting of an expert in the field of law and economy was constituted to look into those issues and the committee has submitted its report.
4. In the first instance, the report submitted by advocate / law member made the following recommendations.
1. Minimum wages notified or the wages notified by the District Collectors should be the minimum income for any trade / profession / http://www.judis.nic.in 5 employment and an amount less than the minimum notified should not be accepted even if the person was exploited and had in fact received less than the minimum wages.
2. Variable Dearness Allowance / Dearness Allowance should be added to the wages if already not factored in.
3. Self- assessment should be accepted if there is no major dispute regarding the same.
4. Consumption data including savings, investments, premiums paid etc as discussed above can also be taken into consideration for determination of income.
5. Replacement cost or the cost of hiring such services at market rates should be taken into account while determining the income or value of invisible work of ‘unemployed’ house wife or elderly at home.
4.1. The above recommendations are generic in nature. These methods can be adopted wherever found suitable and applicable. However, the fourth recommendation concurs with the report of Member Economist. The member Economist in addition to recommending the use of consumption data had suggested way to implement the same with adequate data. It is discussed below.
http://www.judis.nic.in 6 4.1.1. The report raises a pertinent question -how can the family members survive in the absence of income? This is the question this court raised often to the appellants and respondents in many cases. To survive, the family needs at least a minimum amount of income, which is called subsistence level of income. The introduction part of the report throws more light on this question. It is reproduced below:
“1.2. Lack of evidence doesn’t mean that the deceased person didn’t have any income. Unless she/he is employed in a productive activity, she/he and family wouldn’t have survived this far. They were/ are leading a life at least at subsistence level.
1.3. The subsistence is the state or fact of existing. The oxford dictionary defines subsistence level as ‘A standard of living (or wage) that provides only the bare necessities of life’(https://en.oxforddictionaries.com/definition/subsistence_level).Below this level, human being shall perish.
1. 4. Here the observation made in the UNDP’s Human Development Report is worth consideration. This report is to measure progress of world countries in the arena of Human development, measured in terms of education, health and standard of living. The progress is measured in a relative sense by comparing the level of achievement of various countries.
This needs benchmark at minimum and maximum level. In fixing such a benchmark the following observation was made in the report (P. 216 of Human development report 2010 - Technical note 1. Calculating the Human Development Index) “The first step is to create sub indices for each dimension. Minimum and maximum values (goalposts) need to be set in order to transform the http://www.judis.nic.in 7 indicators into indices between 0 and 1. Because the geometric mean is used for aggregation, the maximum value does not affect the relative comparison (in percentage terms) between any two countries or periods of time. The maximum values are set to the actual observed maximum values of the indicators from the countries in the time series, that is, 1980–2010. The minimum values will affect comparisons, so values that can be appropriately conceived of as subsistence values or “natural” zeros are used.Progress is thus measured against minimum levels that a society needs to survive over time. The minimum values are set at 20 years for life expectancy, at 0 years for both education variables and at $163 for per capita gross national income (GNI). The life expectancy minimum is based on long- run historical evidence from Maddison (2010) and Riley (2005). Societies can subsist without formal education, justifying the education minimum. A basic level of income is necessary to ensure survival: $163 is the lowest value attained by any country in recorded history (in Zimbabwe in 2008)......” (http://hdr.undp.org/sites/default/files/reports/270/hdr_2010_en_complete_rep rint.pdf)
1. 5. So to upkeep himself and his family a minimum level of income is necessary. This subsistence level of income needs to be and is being earned by the bread winner of the household. The earning member of the household earns not only for his consumption but also for his dependants.” 4.1.2. Emphasis is supplied to the lines:
“Societies can subsist without formal education...................... A basic level of income is necessary to ensure survival”. Every surviving family needs to earn a basic level of income. The task is to find out what is that basic or subsistence level of income in India. The report submitted by the http://www.judis.nic.in 8 member Economist answer this question with reasonable certainty. The report used Household Consumer Expenditure Surveys (HCES) conducted by National Sample Survey Office (NSSO). As stated in the report these surveys are primary source of data on various indicators of level of living of different strata of the population at National and State levels. This data enables to find out the subsistence level of income.
NSSO conducts quinquennial surveys with larger samples apart from annual survey with smaller samples. The larger sample surveys are more reliable than the smaller one. Hence the report relied on the quinquennial surveys. The consumption data is collected at house hold level and then worked out in terms of per capita. As the family size varies from household to household the consumption data at per capita level is appropriate.
As quoted in the report a detailed description of Household consumer expenditure is given in the chapter Two of Report No 555 of NSSO.” 4.1.3. The initial paragraph of the same is reproduced below:
“Household consumer expenditure: The expenditure incurred by a household on domestic consumption during the reference period is the household's consumer expenditure. Expenditure incurred towards productive enterprises of households is excluded from household consumer expenditure. Also excluded are expenditure on purchase and construction of residential land and building, interest payments, insurance premium payments, payments of fines and penalties, and expenditure on gambling including lottery tickets. Money given as remittance, charity, gift, etc. is not consumer expenditure. However, self-consumed produce of own farm or other household enterprise is valued and included in household consumer expenditure. So are goods and services received as payment in kind orfree from employer, such as accommodation and medical care, and travelling http://www.judis.nic.in 9 allowance excluding allowance for business trips.” 4.1.4. From the above description it is evident that the household consumption expenditure leaves out much expenditure. It covers only the following expenditures:
(i) food, pan (betel leaves), tobacco, intoxicants and fuel &light
(ii)Clothing and footwear and
(iii)Miscellaneous goods and services and durable articles.
4.1.5. To collect the consumption expenditure data, the respondents are requested to recall and report the volume of consumption during a particular period say a week or month. This period is called Reference period or Recall period.
4.1.6. There are three kind of Reference period or Recall period. The Report No 555 of NSSO summarised MPCEs based on different recall periods in page no 9 as follows:
“2.3.4 Uniform Reference Period MPCE (or MPCEURP): This is the measure of MPCE obtained by the NSS consumer expenditure survey (CES) when household consumer expenditure on each item is recorded for a reference period of “last 30 days” (preceding the date of survey).
2.3.5 Mixed Reference Period MPCE (or MPCEMRP) This is the http://www.judis.nic.in 10 measure of MPCE obtained by the CES when household consumer expenditure on items of clothing and bedding, footwear, education, institutional medical care, and durable goods is recorded for a reference period of “last 365 days”, and expenditure on all other items is recorded with a reference period of “last 30 days”.
2.3.6 Modified Mixed Reference Period MPCE (or MPCEMMRP) This is the measure of MPCE obtained by the CES when household consumer expenditure on edible oil, egg, fish and meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and intoxicants is recorded for a reference period of “last 7 days”, and for all other items, the reference periods used are the same as in case of Mixed Reference Period MPCE (MPCEMRP).” 4.1.7. The quinquennial surveys once in five years organise the house hold consumption data, fractile class wise for Rural and Urban areas separately.
4.1.8. The fractile classes’ wise average MPCEURP for various rounds is tabulated in Table 5 of the report of expert committee. It is reproduced below:
4.1.9. Table 5: Fractile classes’ wise average MPCEURP for various rounds:
Round 43rd (1987-88) 50th (1993-94) 55th (1999-00) 61st (2004-05) 68th ( 2011- 2012) Sl no Fractile Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban classes 1 0-5 % 54 75 100 133 161 221 202 281 446 618 2 5-10 % 73 101 131 176 210 290 257 370 564 796 3 10 -20 % 88 122 153 211 247 351 300 444 663 978 4 20 -30 % 103 147 178 248 288 426 346 535 774 1192 5 30 -40 % 117 173 200 287 329 498 392 628 876 1401 http://www.judis.nic.in 11 6 40 -50 % 133 200 222 332 366 578 436 732 977 1632 7 50 -60 % 149 234 249 381 414 678 488 861 1100 1907 8 60 -70 % 170 280 282 448 467 793 550 1019 1249 2246 9 70 -80 % 196 344 325 543 541 955 631 1231 1452 2730 10 80 -90 % 243 440 398 698 673 1216 784 1600 1786 3563 11 90 -95 % 321 594 500 923 864 1615 1014 2165 2292 4994 12 95 – 100 % 623 1216 872 1643 1618 3324 1979 4253 4526 10279 All 158 251 281 458 473 822 566 1056 1279 2399 Reference URP Periods URP URP URP URP Source: NSS Report Nos: 372, 508 and 555.
Note: For 55th (1999-00) round URP based MPCE is not available. Only MRP based MPCE is available. For the purpose of making all the rounds comparable the URP based MPCE was estimated. For this the ratio of MPCEURP to MPCEMRPfor the 61st (2004-05)round was worked out for which both are available and the same was applied to 55th (1999-00) round.
4.2. The above data is available only for the years in which quinquennial survey was conducted. But for the purpose at hand, data is necessary for every year. Hence, it was interpolated using the Compound Annual Growth Rate (CAGR) by the member Economist. For the data subsequent to the year 2011-12 it was extrapolated using the CAGR for the period 2004-05 to 2011-12. Such a table for rural area was annexed as Annexure A and for Urban Area as Annexure B to his report. The same is annexed here. 4.2.1. Among the 12 fractile classes the lowest level of consumption is at 0-5 % Fractile class. It shows without which the human being cannot survive in India.
http://www.judis.nic.in 12 4.2.2. This being the lowest fractile, the member Economist stated that this cannot be treated as subsistence level of consumption. He pointed many shortcomings of this consumption expenditure data for the purpose at hand. It is reproduced below.
“2.23.But this cannot be fixed as the subsistence level of consumption as it is underestimated consumption expenditure. The reasons and logical arguments are below:
a. As stated in the Concepts and definition of NSS Reports it covers only few items. At the cost of recapsulation of relevant extract from Report No.555 is resorted to:
“2.1.2 Household consumer expenditure: The expenditure incurred by a household on domestic consumption during the reference period is the household's consumer expenditure. Expenditure incurred towards productive enterprises of households is excluded from household consumer expenditure. Also excluded are expenditure on purchase and construction of residential land and building, interest payments, insurance premium payments, payments of fines and penalties, and expenditure on gambling including lottery tickets. Money given as remittance, charity, gift, etc. is not consumer expenditure. However, self-consumed produce of own farm or other household enterprise is valued and included in household consumer expenditure. So are goods and services received as payment in kind or free from employer, such as accommodation and medical care, and travelling allowance excluding allowance for business trips.” 4.2.3. From the above it is very much clear that the Consumption Expenditure Survey (CES) do not cover all expenditures which are made at http://www.judis.nic.in 13 household level.
b. Not only some expenditure is left out but financial and nonfinancial savings are left out, asset creation is also left out. It is not in conformity with the economic principle: income is equal to consumption and savings:
Income = Consumption + Savings Y = C+S 7.2.4. As savings are used for investments that is for asset creation this formulae can be rewritten as Income = Consumption + Investment.
7.2.5. The asset formation may follow saving or saving can follow asset creation. In the former case savings are made and assets are created either through purchase or through construction or fabrication using the saved amount. In the latter case assets are created through borrowed money and are repaid in instalments. It is also a saving. It is to be noted in India, the households saving contribute 59% of Gross savings of the country in the year 2015- 16. Domestic Sector savings is Rs 26215.31 Billion (Source: RBI handbook of statistics on the Indian Economy, RBI 2016-17). The estimated population of India in the year 2015 is 1.282 Billion (http://statisticstimes.com/population/population-of-india.php).The per capita annual saving is Rs 20,448. Per month it comes to Rs 1,704. To this extent http://www.judis.nic.in 14 of savings the income is under captured in consumption survey of NSS. It is to be noted that the fractile wise data in this regard is not available.
c. The above estimates are based on URP method as the data is available only for this method for most of the rounds. This ensures comparability. But URP method under-capture theMPCE compared to MRP and MMRP. The following tables show the ratio of URP as a percentage of MRP and MMRP.
Table 7: Ratio of average MPCEURP / average MPCEMRP for 2004-05 at 1993-94 price Rural Urban Fractile Ratio of Ratio of classes URP MRP URP/MRP URP MRP URP/MRP 0-5 % 114 137 83 141 164 86 5-10 % 145 169 86 186 210 89 10 -20 % 169 193 88 223 248 90 20 -30 % 195 220 89 269 294 91 30 -40 % 221 245 90 316 342 92 40 -50 % 246 271 91 368 396 93 50 -60 % 275 299 92 433 461 94 60 -70 % 310 333 93 512 545 94 70 -80 % 359 380 94 619 657 94 80 -90 % 442 455 97 804 854 94 90 -95 % 572 569 101 1088 1144 95 95 – 100 % 1116 938 119 2137 1985 108 all 319 331 96 531 555 96 Table 8: Ratio of average MPCEURP / average MPCEMRPand average MPCEURP /average MPCEMMRPfor2011-12 at current price RURAL URBAN Ratio of Fractile Ratio of Ratio of URP/ classes URP MRP MMRP URP/MRP URP/MMRP URP MRP MMRP MRP R 0-5 % 446 476 521 94 86 618 652 700 95 a 8 5-10 % 564 597 666 94 85 796 840 909 95 8 8 10 -20 % 663 700 783 95 85 978 1030 1118 95 8 8 20 -30 % 774 809 905 96 86 1192 1252 1363 7 95 8 30 -40 % 876 909 1018 96 86 1401 1481 1625 95 7 8 6 http://www.judis.nic.in 15 40 -50 % 977 1016 1136 96 86 1632 1728 1888 94 8 50 -60 % 1100 1140 1266 96 87 1907 2018 2180 94 6 8 60 -70 % 1249 1292 1427 97 88 2246 2377 2548 94 7 8 70 -80 % 1452 1497 1645 97 88 2730 2887 3063 95 8 8 80 -90 % 1786 1823 2007 98 89 3563 3751 3893 95 9 9 90 -95 % 2292 2333 2556 98 90 4994 5268 5350 95 2 9 95 – 100 % 4526 3965 4481 114 101 10279 9732 10282 106 3 1 all 1279 1287 1429 99 90 2399 2477 2630 97 0 9 1 7.3. From the above table, it is very much clear that URP under- capture the consumption expenditure at the lower fractiles.
d. The consumption expenditure based on NSSO’s Household level CES is always lower than Private Final Consumption Expenditure (PFCE) estimated by National Account Statistics (NAS), the method used for calculation of National Income. The following table gives the divergence in estimates of aggregate consumption expenditure between NAS and NSS. Table 9: Divergence in estimates of aggregate consumption expenditure between NAS and NSS Year NSS NAS Aggregate Difference Reference consumption in % (NSS) Base expenditure at currrent prices (in Rs Cr.) NSS NAS 1993-94 URP 1993-94 355770 574772 -38.10 1999-00 URP 1993-94 716391 1271556 -43.66 1999-00 URP 1999-00 716391 1257541 -43.03 2004-05 URP 1999-00 931415 1873729 -50.29 http://www.judis.nic.in 16 2004-05 MRP 1999-00 966393 1873729 -48.42 Source:C. Ravi and M. Venkatanarayana (2011), “Estimating NAS consistent Poverty and Inequality from NSS Data”, Draft Paper presented at Annual Conference of Indian Association Income and Wealth Research (IAIWR) held at Centre for Economic and Social Studies, Hyderabad during 11-12 February, 2011.
7.3.1. The same kind of estimate was done by Sanjay Kumar and N. K Sharma (Sanjay Kumar and Sharma. N. K (2007),“Divergence between the estimates of consumption expenditure in the National Account and the NSS A perspective on NSS data” The Journal of Income and Wealth, Vol 29, No 2, July – December 2007.). The difference estimated by them almost match with the above estimates. Sanjay Kumar and N.K Sharma reviewed various literatures analysing reason for the difference between these two estimates. They observed as follows:
“Hence, what actually is the cause behind the gap has thus remained in the realm of assumptions, conjectures and possibilities-many of which end up contradicting many others. It must therefore be appreciated that the gap between the two data sets remains largely unattributable to the alleged causes like coverage in NSS on agriculture year basis, implicitprices, omission of cooked meals etc. The actual causes must be found somewhere else.” http://www.judis.nic.in 17 7.3.2. At the same time considering the growing divergence year after year and slow growth in consumption compared GDP growth they concluded that the NSS data consumption is underestimated. They observed “That lately, the economy has been growing at a higher pace cannot be ignored (though there may be pettifogging regarding its exact magnitude of growth).
At the same time, NSS consumer surveys appear to show a very mild growth in the consumption; which is not readily acceptable since then it has to be inferred that either there has been no such growth as reflected by NAS or alternatively, that most of the economic benefits of higher growth have been utilised for saving/capital formation purposes-consumption growing at a relatively sluggish pace.” 7.3.3. The fractile-wise divergence as estimated by Ravi and Venkatnarayana (2011). The divergence was found to be in the range of 25 to 50 % for Rural and 40 to 95 % for urban.
e.The compensation fixed on the basis of income/expenditure of bread winner, who was lost doesn’t consider the opportunity cost of the children/siblings who may have to forego their career and become the bread winner of the family. Had the bread winner been alive, the children would have attended school and redeemed their family from poverty. The loss of bread winner forfeits this opportunity.
http://www.judis.nic.in 18 f.High sex ratio: The sex ratio of lower income households is higher than the upper income groups. It shows the female dependency is higher. The female dependency demands more savings towards sridhan, an essential part of Indian culture. It is not captured in NSS CESs.
g. A careful reading of Annexure A and B shows that the growth of consumption expenditure is high in the lower fractiles. The rural consumption expenditure of lowest fractile class was Rs 100 in 1993 - 94 and Rs 153 for 10-20 fractile class. This level of Rs 153 was grossed by the lowest fractile in the year 1999-00. Though there was a sluggish growth in the period 1999-00 to 2004-05 it attained a faster pace thereafter.
h.The average MPCE of Tamil Nadu is higher than all India average MPCE. For illustrative purpose the comparison of average MPCEMMRP of all India and Tamil Nadu is tabulated below:
Table 10.Average MPCEMMRP in different fractile classes of MPCEMMRP:
All India and Tamil Nadufor2011-12 at current price Fractile Rural Urban classes All India Tamil Nadu Ratio All India Tamil Nadu Ratio 0-5 % 521 587 113 701 832 119 5-10 % 666 766 115 909 1051 116 10 -20 % 783 915 117 1118 1242 111 20 -30 % 905 1087 120 1363 1485 109 30 -40 % 1018 1241 122 1625 1737 107 40 -50 % 1136 1380 121 1888 1957 104 http://www.judis.nic.in 19 50 -60 % 1266 1522 120 2180 2221 102 60 -70 % 1427 1711 120 2548 2601 102 70 -80 % 1645 1972 120 3063 3078 100 80 -90 % 2007 2445 122 3893 3865 99 90 -95 % 2556 3170 124 5350 5224 98 95 – 100 % 4481 4786 107 10282 8959 87 All 1430 1693 118 2630 2622 100 2.24. Considering these factors it shall be appropriate to fix the subsistence/minimum level of compensation at the fourth fractile class i.e.20- 30 %.” 7.4. The member economist points out that the NSSO’s Consumption expenditure survey under captures the consumption expenditure due to various factors- recall period, less coverage of number of expenditure items and non consideration of saving and investments etc,. Hence, he recommends fixing the subsistence/minimum level of compensation at the fourth fractile class i.e.20-30 %. By his recommendation in the year 2011-12 Monthly Per Capita consumption Expenditure is Rs 774 for Rural area. It comes to Rs 25 per day. The same in the Year 2017-18 is Rs. 1,490 per month and Rs 48.06 per day. This is very low.
7.5. This court finds that the member economist is niggardly in his recommendation.He himself points out that the NSSO’s Consumption expenditure survey under captures the consumption expenditure http://www.judis.nic.in 20 substantially. Hence, the court is inclined to fix the subsistence level of compensation at 6th fractile class i.e.40-50 %. This is fixed after considering the fact that the probability of accident victims may not be high so as to she/he is only from the family having subsistence level of income.
7.6. The amount of compensation in the cases of fatal accidents depends on the family size, the year of accident and the age of victim. The report suggests indexing the compensation using consumer price index to compensate the loss in value of money between the year of petition and the year of award. The formula for indexed compensation is as follows:
Indexed Compensation = Amount of compensation X Consumer Price Index of preceding year of award / Consumer Price Index of year of petition seeking compensation 7.7. For Rural area it suggests to use Consumer Price Index for Agricultural Labourer and for urban area Consumer Price Index for Industrial workers.
7.8. The definition of Rural and Urban area is given in the Annexure G to the report. It is reproduced below:-
“Annexure G: Extract of the definition of Rural and urban Areas taken from Concepts and Definitions Used in NSS, Golden Jubilee Publication, National Sample Survey Organisation, Department of Statistics, New http://www.judis.nic.in 21 Delhi 2.1.6. RURAL AND URBAN AREAS The rural and urban areas of the country are taken as adopted in the latest population census for which the required information is available with the Survey Design and Research Division of the NSSO. The lists of census villages as published in the Primary Census Abstracts (PCA) constitute the rural areas, and the lists of cities, towns, cantonments, non-municipal urban areas and notified areas constitute the urban areas.
2.1.6.1 URBAN AREA The urban area of the country was defined in 1971 census as follow:
(a) all places with a Municipality, Corporation or Cantonment and places notified as town area
(b) all other places which satisfied the following criteria:
(i) a minimum population of 5000,
(ii) at least 75 percent of the male working population are non-agriculturists, and
(iii) a density of population of at least 1000 per sq. mile (390 per sq. km.).
However, there are urban areas which do not possess all the above characteristics uniformly. Certain areas were treated as urban on the basis of their possessing distinct urban characteristics, overall importance and contribution to the urban economy of the region.
The definition of urban area in 1961 Census was practically the same as in 1971 Census except that an area with at least 75 percent of total (and not male only as in 1971 Census) working population dependent on non- agricultural pursuits and fulfilling other criteria mentioned in paragraph above was treated as urban.
The definitions of urban area adopted for 1981 and 1991 Censuses were the same as those for 1971 Census; but in 1991 Census, a density of at least 400 persons per sq. km. Was the criteria instead of b (iii) given above. 2.1.6.2 RURAL AREA http://www.judis.nic.in 22 The rural sector covers areas other than the urban areas. The rural areas are composed of whole villages as well as part villages. A village includes all its hamlets. When part of a revenue hamlet is treated as urban area, the rural part of the revenue hamlet is termed as part village. Some rural areas may be urbanised and some urban areas may be declared as rural during inter-census periods. If any sample village is found to have been urbanised after the latest census, it is first investigated whether the urban frame (as prepared in the latest Urban Frame Survey of NSS) of the town with which the village has been merged includes that village or not. If the town frame contains that village then no rural survey is conducted in that village. Otherwise, the village is surveyed in the usual manner although it has become an urban area; because, if the village is not surveyed it will be left out from both rural and urban areas. However, in case a town or part of a town is found to have been converted into rural area, then also it is surveyed and considered as an urban area since the rural frame does not contain any part of that town. Such cases, however, are extremely rare. Note: The definition of Urban adopted in 1991 census was continued for 2001 and 2011 also.” 7.9. It also calls for adjustment for the consumption expenditure of lost person from the computed compensation.The MVA made it mandatory to reduce 1/3rd of the amount. However the report suggests that it should be reduced based on the family size. If the family size is 5 the reduction should be restricted to 1/5th, if the family size is 4 the reduction should be restricted to 1/4th and so on. The reason is that the consumption expenditure here used is Monthly Per Capita Consumption Expenditure. Hence if one person is lost only the consumption attributable to that single person alone should be adjusted on a per capita basis.
7.10. To administer the above recommendation the member Economist provided compensation charts for Rural and Urban area http://www.judis.nic.in 23 separately vide Annexure E and F respectively. These charts are modified. Instead of consumption expenditure of 4th fractile consumption of 6th fractile is used. They are reproduced below.
Rural Compensation Chart
MPCE of 40-50 % fractile Agricultural Labourers
( Base: 1986-87 = 100)
Round Year General index
1 2 3 4
43rd 1987-88 133 136
1988-89 145 163
1989-90 158 127
1990-91 172 136
1991-92 187 163
1992-93 204 183
50th 1993-94 222 189
1994-95 241 212
1995-96 262 237
1996-97 285 256
1997-98 310 264
1998-99 337 293
55th 1999-00 366 306
2000-01 379 305
2001-02 393 309
2002-03 407 319
2003-04 421 331
61st 2004-05 436 340
2005-06 489 353
2006-07 549 380
2007-08 616 409
2008-09 691 450
2009-10 776 513
2010-11 871 564
68th 2011-12 977 611
Extrapolated at 2012-13 1096 672
CAGR between 2013-14 1230 750
2004-05 to
2011-12 as the 2014-15 1381 800
http://www.judis.nic.in
24
2015-16 1501 835
data is not
available for this 2016-17 1684 870
period 2017-18 1890 889
Note: The MPCE for the accidents happened prior to the year 1987-88 shall be taken as the MPCE of the year 1987-88.
Urban Compensation Chart
MPCE of 40-50% Industrial workers (Base :
Round Year fractile 1982=100) General Index
1 2 3 4
43rd 1987-88 200 149
1988-89 218 163
1989-90 237 173
1990-91 258 193
1991-92 280 219
1992-93 305 240
50th 1993-94 332 258
1994-95 364 284
1995-96 399 313
1996-97 438 342
1997-98 480 366
1998-99 527 414
55th 1999-00 578 428
2000-01 606 444
2001-02 635 463
2002-03 666 482
2003-04 698 500
61st 2004-05 732 520
2005-06 821 542
2006-07 920 579
2007-08 1032 616
2008-09 1157 671
2009-10 1298 754
2010-11 1455 833
68th 2011-12 1632 903
http://www.judis.nic.in
25
2012-13 1830 995
2013-14 2052 1093
Extrapolated 2014-15 2301 1162
at CAGR
2015-16 2580 1227
between
2004-05 to 2016-17 2894 1278
2011-12 2017-18 3245 1317
Note: The MPCE for the accidents happened prior to the year 1987-88 shall be taken as the MPCE of the year 1987-88.
The step wise calculation is illustrated by taking the current case as an example.
Stepwise calculation: An illustration Step 1: Identification of year of petition in Column 2 Step 2: Identification of MPCE in Column 3. It is Monthly Per Capita Expenditure.
Step 3: Multiply MPCE indentified in step 2 by number of family members. It is Monthly Household Expenditure.
Step 4: Multiply Monthly Household expenditure arrived by step 3 by number 12. It is Annual Household Expenditure.
Step 5: Multiply Annual Household expenditure arrived in step 4 by the multiplier applicable to the age of deceased. It is amount of compensation.
Step 6: Multiply annual Household expenditure arrived by step 5 by CPI (AL) of precedingyear to the year of award identified from column 4 above and divide by CPI (AL) of year petition identified from column 4 above. It is amount of indexed compensation.
Step 7: Divide the compensation arrived by step 6 by the family size i.e number of persons of the family at the time of accident. It is amount to be adjusted for deceased.
Step 8: From indexed compensation arrived in step 6 deduct amount to be adjusted for deceased arrived in step 7. It is indexed adjusted amount of compensation.
Current case as an Example:
The year of accident and petition: 2014-15 Place of Domicile of Victim’s family: Rural http://www.judis.nic.in 26 Age of victim: 35 - 40 years Family Size: 4 Multiplier: 17 Year of award = 2018-19 The preceding year to the year of award = 2017-18 ______________________________________________________ Step 1: Identified year of accident/petition: 2014-15 Step 2: Monthly Per capita expenditure identified from column 3 is Rs 1381 Step 3: Monthly Household expenditure is 1381 * 4 = 5,524 Step 4: Annual Household expenditure is 5,524 * 12 = Rs 66,288. Step 5: Amount of compensation is 66,288* 17 = Rs 11,26,896 Step 6: Amount of indexed compensation 11,26,896* 889/800 = Rs 12,52,263 Step 7: Amount to be adjusted for deceased 12,52,263/4 = Rs 3,13,065 Step 8: Indexed adjusted amount of compensation 12,52,263- 3,13,065 = Rs 9,39,197 7.15. The court is inclined to include future prospects and other general damages to the above amount for the reason given later. It is calculated below:
Head Amount / Rs.
Loss of dependency with future prospects 13,14,875.00
Loss of consortium 40,000.00
Transportation 10,000.00
Loss to estate 15,000.00
Funeral expenses 25,000.00
Total 14,04,875.00
7.16. The amount of Rs.14,04,875/- would have been the
compensation in the absence of evidence for income. However, in this case, http://www.judis.nic.in 27 case specific claim and finding needs to be taken into account.
8. The learned counsel appearing for the claimants submitted that the income fixed is very low, especially when the deceased was the owner cum driver of a lorry which is proved through Ex.P-5-driving licence and Ex.P-4-
R.C.Book.
9. The learned counsel appearing for the second respondent submitted that R.C.Book cannot be relied upon, as it is only a Photo Copy; the Tribunal did not rely upon Ex.R-4-R.C.Book, on the ground that the type and other connected details of the vehicle are not mentioned in the R.C.Book and that the R.T.O. is not examined.
10. Whether this finding by the Tribunal has to be accepted is the issue to be considered.
1. It is relevant to point out that the most interested person to dispute the ownership of the vehicle is the Insurance Company. The Insurance Company submitted in the counter that the petitioners are put to strict proof regarding the validity of R.C.Book, F.C., driving licence, etc., During cross-examination, it is not suggested that the deceased was http://www.judis.nic.in 28 not the owner of the vehicle. When a photo copy is filed, probably, the original might have been with the financier. An opportunity might have been given to the claimants to produce the original, in case the Tribunal has entertained the doubt regarding the authenticity of the document. However, to save time, this Court called for records from the Office of the RTO, Redhills, Chennai. Records were produced only on 30.08.2018. From the perusal of the records, it is evident that the lorry originally belonged to one K.G.Bhaskar sundaram and later, it has been transferred in the name of the Vetriganesan, on and from 13.03.2014. After the death of Vetriganesan it has been transferred in the name of the first claimant-Nadhiya. As on the date of accident, namely, 21.02.2015, the owner of the lorry is the deceased- Vetriganesan.
2. 11.1. The vehicle is a Tipper. The details of the vehicle are as follows:
Vehicle class: Multi Axle GOODS vehicle:203; No of Cylinders: 6; Horse Power: 160; Manufacturer: 004: Ashok Leyland Ltd; Manufacture Year/Month:
2010/2; Laden/unladen weight: 25000/9700; The vehicle of above type certainly would yield Rs 15000 per month.
12. The contention of the learned counsel appearing for the claimants is that the future prospects ought to have been taken into account, when the http://www.judis.nic.in 29 deceased was aged only 38; the Tribunal considered the judgment in 2016 TN MAC 539 (DB) (New India Assurance Co. Ltd., and others v. R.Vijaya and others) but has given a finding that the said decision is not applicable to the facts of the case.
13. The Tribunal is not correct in giving a finding that the future prospects are not applicable to the facts of the case. The Tribunal should have considered future prospects at least at 40%.
14. In view of foregoing reasonings, taking the monthly income at Rs.15,000/- and deducting 1/4th towards the personal expenses, adopting multiplier of 15 and adding 40% towards future prospective increase in income, the compensation for loss of dependency should be fixed at Rs.28,35,000/- (Rs.15,000/- - (¼) x 12 x 15 + 40%).
15. In view of the latest Supreme Court decisions, the amount awarded towards loss of love and affection and loss to estate will not arise and some amount has to be awarded towards transportation and slight modification needed in the amount awarded towards funeral expenses. Thus, the award passed by the Tribunal has to be restructured and the breakup details of the award of compensation reads thus:-
http://www.judis.nic.in 30 Head Amount / Rs.
Loss of dependency 28,35,000.00
Loss of consortium 40,000.00
Transportation 10,000.00
Loss to estate 15,000.00
Funeral expenses 25,000.00
Total 29,25,000.00
16. In the result, the award is enhanced from Rs.8,60,000/- to Rs.29,25,000/- and this enhanced amount of compensation shall be deposited by the second respondent / Insurance Company, less the amount already deposited, if any, along with interest at 7.5% per annum, from the date of petition till the date of deposit, within a period of eight weeks from the date of receipt of a copy of this judgment. The claimants are not entitled to the interest for the default period. On such deposit being made, the first claimant / first appellant is entitled to a sum of Rs.11,25,000/- and the claimants 2 and 3 / appellants 2 and 3 are entitled to a sum of Rs.9,00,000/-
each, totalling to Rs.18,00,000/- (along with their proportionate interest). The Tribunal shall transfer the compensation award amount of the first claimant / first appellant to her Savings Bank Account, through RTGS. Since claimants 2 and 3 / appellants 2 and 3 are minors, their share of compensation shall be deposited in a fixed deposit in any nationalized bank till they attain majority. The interest accrued thereon shall be withdrawn by the guardian of respondents 2 and 3, once in three months, directly from the Bank and shall be utilized for the welfare of the minors. The excess court fee shall be paid by http://www.judis.nic.in 31 the claimants / appellants before receiving the copy of this judgment.
17. In all other cases, where there is no proof for income the above compensation chart holds good. At the same time, if the claimants/appellants can prove with evidence that they were incurring family expenditure more than the amount prescribed in the compensation chart, it needs to be considered and taken as income. This is based on the economic principle Income = Expenditure + Saving (or) Investment.
18. Before moving further it is necessary to discuss the improved life expectancy of Indians since enactment of Motor Vehicle Act 1988.A report prepared under the India State-level Disease Burden Initiative, a joint project between the Indian Council of Medical Research (ICMR), the Public Health Foundation of India (PHFI), and the Institute for Health Metrics and Evaluation (IHME), in collaboration with the Ministry of Health and Family Welfare was published in the journal Lancet in the year 2017. This report made into news in many national dailies. It says life expectancy at birth in the country improved significantly during 1990 to 2016 — from 59.7 years and 58.3 years for females and males respectively in 1990 to 70.3 years for females and 66.9 years for males in 2016.
19. This improved life expectancy means more years of working and more earnings. This necessitates increase in the multiplier used to calculate http://www.judis.nic.in 32 compensation as per Second Schedule to MVA 1988. It is time for the Central Government to amend the second schedule to the Motor Vehicles Act having regard to the increase in the life expectancy of the indian population.
20. The report submitted by Member (Economist) and Member (Law) shall form part of the judgment.
21. In the result, the Civil Miscellaneous Appeal is allowed. No costs.
.12.2018 Index : Yes / No Web : Yes / No srk Annexure :
1.Report of Member, Law
2. Report of Member, Economist Copy to To
1. The Divisional Manager, New India Assurance Co. Ltd., Vellore Division, Vellore.
2. The Section Officer, V.R.Section, Madras High Court, Chennai 104.
3. The Principal Chief Commissioner of Income Tax, Tamil Nadu and Puducherry, http://www.judis.nic.in 33 Dr. S.VIMALA, J., srk C.M.A.No.2748 of 2017 .12.2018 http://www.judis.nic.in