Madras High Court
The National Insurance Company Limited vs )F.Johnson on 28 March, 2016
Bench: S.Manikumar, C.T.Selvam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 28.03.2016
CORAM
THE HONOURABLE MR.JUSTICE S.MANIKUMAR
and
THE HONOURABLE MR.JUSTICE C.T.SELVAM
Civil Miscellaneous Appeal(MD)No.239 of 2016
and
C.M.P(MD)No.3310 of 2016
The National Insurance Company Limited.,
Rep.by its Branch Manager,
Having Office at Branch Office,
1st Floor, Anguvilas Building,
112 North Car Street,
Nagercoil, Kanyakumari District. .... Appellant
vs.
1)F.Johnson
2)Daisy Glory Bai
3)Abi Sundar
4)A.Jeyaraman ... Respondents
Appeal filed under Section 173 of the Motor Vehicles Act, 1988, against
the judgment and decree dated 24.06.2014 in MCOP.No.30 of 2009 on the file of
the Motor Accident Claims Tribunal, Special Court for Forest Offence Cases,
Nagercoil.
!For Appellant : Mr.D.Sivaraman
^For Respondent :
:JUDGMENT
(Judgment of the Court was made by Mr.Justice S.MANIKUMAR) Being aggrieved by the award made in MCOP.No.30 of 2009 dated 24.06.2014, by the Motor Accident Claims Tribunal, Special Court for Forest Offence Cases, Nagercoil, the appellant has filed this appeal. As the challenge is limited only to quantum of compensation of Rs.14,71,800/- with interest @ 7.5% per annum, awarded to the legal representatives of the deceased, there is no need to advert to the finding of the Tribunal, fixing negligence on the driver of the offending vehicle, insured with the appellant company and the consequential liability.
2.Though several grounds have been raised in the memorandum of appeal, assailing the correctness of the impugned judgment, Mr.D.Sivaraman, learned counsel for the appellant confined his submission, only to the application of multiplier. According to him, the Tribunal ought to have taken the multiplier applicable to the age of the parents/claimants and accordingly computed the loss of dependency.
3.Legal representatives should be awarded with just compensation. Few decisions on this aspect are as under:-
(i) In R.D.Hattangadi v. M/s.Pest Control (India) Pvt. Ltd., reported in AIR 1995 SC 755, wherein, the Apex Court held as follows:
"In its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of disability caused. But all the aforesaid elements have to be viewed with objective standards."
(ii) In Common Cause, A Registered Society v. Union of India reported in 1999 (6) SCC 667, at Paragraph 128, held as follows:-
?The object of an award of damages is to give the plaintiff compensation for damage, loss or injury he has suffered. The elements of damage recognised by law are divisible into two main groups : pecuniary and non- pecuniary. While the pecuniary loss is capable of being arithmetically worked out, the non-pecuniary loss is not so calculable. Non-pecuniary loss is compensated in terms of money, not as a substitute or replacement for other money, but as a substitute, what Mcgregor says, is generally more important than money: it is the best that a court can do. In Re: The Medianna (1900) A.C. 1300, Lord Halsbury L.C. observed as under:
"How is anybody to measure pain and suffering in moneys counted? Nobody can suggest that you can by arithmetical calculation establish what is the exact sum of money which would represent such a thing as the pain and suffering which a person has undergone by reason of an accident...But nevertheless the law recognises that as a topic upon which damages may be given."
(iii) In yet another decision in Divisonal Controller, KSRTC v. Mahadeva Shetty and another reported in (2003) 7 SCC 197, at Paragraph 12, the Supreme Court has held that, "Broadly speaking, in the case of death the basis of compensation is loss of pecuniary benefits to the dependents of the deceased which includes pecuniary benefits to the dependents of the deceased which includes pecuniary loss, expenses etc. and loss to the estate. The object is to mitigate hardship that has been caused to the legal representatives due to the sudden demise of the deceased in the accident. Compensation awarded should not be inadequate and should neither be unreasonable, excessive, nor deficient. There can be no exact uniform rule for measuring the value of human life and the measure of damage cannot be arrived at by precise mathematical calculation; but amount recoverable depends on broad facts and circumstances of each case. It should neither be punitive against whom claim is decreed nor should it be a source of profit for the person in whose favour it is awarded."
At Paragraph 15 of the said judgment, the Supreme Court has held that, "Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of "just" compensation which is the pivotal consideration. Though by use of the expression "which appears to it to be just", a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness, and non-arbitrariness. If it is not so, it cannot be just."
(iv) In Nizam Institute of Medical Sciences v. Prasanth S.Dhananka reported in (2009) 6 SCC 1 = 2010 ACJ 38 (SC), the Hon'ble Supreme Court, comprising of three Hon'ble Judges Bench was dealing with a case arising out of a complaint filed under the Consumer Protection Act, 1986. While enhancing the compensation awarded by the National Consumer Disputes Redressal Commission from Rs.15 lakhs to Rs.1 crore, the Hon'ble Bench made the following observations which can appropriately be applied for deciding the petitions filed under Section 166 of the Act:
?We must emphasise that the court has to strike a balance between the inflated and unreasonable demands of a victim and the equally untenable claim of the opposite party saying that nothing is payable. Sympathy for the victim does not, and should not, come in the way of making a correct assessment, but if a case is made out, the court must not be chary of awarding adequate compensation. The ?adequate compensation? that we speak of, must to some extent, be a rule of thumb measure, and as a balance has to be struck, it would be difficult to satisfy all the parties concerned. ...At the same time we often find that a person injured in an accident leaves his family in greater distress vis-`-vis a family in a case of death. In the latter case, the initial shock gives way to a feeling of resignation and acceptance, and in time, compels the family to move on. The case of an injured and disabled person is, however, more pitiable and the feeling of hurt, helplessness, despair and often destitution enures every day. The support that is needed by a severely handicapped person comes at an enormous price, physical, financial and emotional, not only on the victim but even more so on his family and attendants and the stress saps their energy and destroys their equanimity.?
(emphasis supplied)
(v) In Reshma Kumari and others v. Madan Mohan reported in (2009) 13 SCC 422, the Hon'ble Apex Court reiterated that the compensation awarded under the Act should be just and also identified the factors which should be kept in mind while determining the amount of compensation. The relevant portions of the judgment are extracted below:
?The compensation which is required to be determined must be just. While the claimants are required to be compensated for the loss of their dependency, the same should not be considered to be a windfall. Unjust enrichment should be discouraged. This Court cannot also lose sight of the fact that in given cases, as for example death of the only son to a mother, she can never be compensated in monetary terms.
The question as to the methodology required to be applied for determination of compensation as regards prospective loss of future earnings, however, as far as possible should be based on certain principles. A person may have a bright future prospect; he might have become eligible to promotion immediately; there might have been chances of an immediate pay revision, whereas in another (sic situation) the nature of employment was such that he might not have continued in service; his chance of promotion, having regard to the nature of employment may be distant or remote. It is, therefore, difficult for any court to lay down rigid tests which should be applied in all situations. There are divergent views. In some cases it has been suggested that some sort of hypotheses or guess work may be inevitable. That may be so.
In the Indian context several other factors should be taken into consideration including education of the dependants and the nature of job. In the wake of changed societal conditions and global scenario, future prospects may have to be taken into consideration not only having regard to the status of the employee, his educational qualification; his past performance but also other relevant factors, namely, the higher salaries and perks which are being offered by the private companies these days. In fact while determining the multiplicand this Court in Oriental Insurance Co. Ltd. v. Jashuben, 2008 ACJ 1097 (SC), held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration.
One of the incidental issues which has also to be taken into consideration is inflation. Is the practice of taking inflation into consideration wholly incorrect? Unfortunately, unlike other developed countries in India there has been no scientific study. It is expected that with the rising inflation the rate of interest would go up. In India it does not happen. It, therefore, may be a relevant factor which may be taken into consideration for determining the actual ground reality. No hard-and-fast rule, however, can be laid down therefor.?
(emphasis supplied)
4.The age of the deceased has been fixed as 29 years, based on the entry in Ex.P2-Postmortem Certificate of the deceased, which cannot be found fault with in view of the judgments in Fakeerappa v. Karnataka Cement Pipe Factory [2004 (4) LW 20] and The Managing Director, Tamilnadu State Transport Corporation, Madurai v. Mary [2005 (5) CTC 515].
5.At the time of accident, the deceased was working as a Lecturer in Udaya Polytechnic College, Kanyakumari District. Placing reliance on Ex.P4 dated 20.04.2001 course certificate of the deceased, Ex.P5 dated 26.05.2009 B.E. Degree certificate of the deceased and Ex.P7 dated 29.01.2009 salary certificate of the deceased, the Tribunal fixed the monthly income of the deceased as Rs.12,150/-. Since the deceased was a bachelor, the Tribunal deducted 50% of the income and applied 17 multiplier applicable to the age of the deceased and quantified the compensation towards loss of income as Rs.12,39,300/-(Rs.6075X12X17). Apart from the above, the Tribunal has awarded Rs.2,00,000/- towards loss of love and affection, Rs.25,000/- towards funeral expenses, Rs.5,000/- towards transportation and Rs.2,500/- towards damage to clothes and articles. Altogether, the Tribunal awarded compensation of Rs.14,71,800/- with interest @ 7.5% per annum.
6.Though the learned counsel for the appellant had contended that that Tribunal ought to have applied multiplier, applicable to the age of the parents/claimants and accordingly computed the loss of dependency, this Court is not inclined to accept the same, for the reason that even if such application is made, it would not represent the just compensation.
7.Perusal of the award shows that the Tribunal has failed to award compensation for future prospects. In the instant case, evidence has been adduced by the respondents/claimants that the deceased was working as a Lecturer in Udaya Polytechnic College, Kanyakumari District. In such a view of the matter, the Tribunal ought to have considered as to whether the claimants would be entitled to a just and reasonable compensation under the head ''future prospects'' also. In a recent judgment in M/s.Royal Sundaram Alliance Insurance Co. Ltd., Salem vs. Tmt.Vennila (C.M.A.Nos.3273 of 2014, 723 and 2386 of 2015, dated 13.10.2015), in the case of a victim in unorganised sector, a Hon'ble Division Bench of this Court, to which, one of us (SMKJ), is a party, after considering the ''Per Capita Income'', ''Gross Domestic Product'' and ''Consumer Price Index'' etc., at paragraphs 54 to 68, held as follows:-
54.Taking into consideration the above illustrative cases of some of the employees, engaged by the Government, on daily rated basis and being revised periodically, we wish to state that the factors taken into consideration or the reasons stated by the Central Government or the District Collector, as the case may be, while revising the wages, from time to time, whether a person is employed in an organised or unorganised sector, would remain the same and consequently, decide the living conditions of different classes of persons, whether engaged in organised or unorganised sectors, as the case may be, to meet out the day to day expenditure and basic amenities.
The difference in the rates of wages between the persons employed in a salaried structure, revisable periodically, though not, in strict sense, be applied with the same percentage to those, engaged in unorganised sectors, but it cannot be contended that there will not be any change in the earning or income.
55.The government servants have an expectation of periodical revision. So also, the employees working in Public Sector, Boards, Corporation, Companies owned and controlled by the Government. In respect of Private Limited Companies, it is more on the basis of terms and conditions of the contract, in which, they are governed. But in the case of self-employed or those, engaged in unorganised sectors, revision of wages or salary or in the case of self-employed, though may not be on par with the salaried structure in organised sectors or on the terms and conditions of the contracts in limited companies, still the important factor, Consumer Price Index, the deciding factor, would be the same, for a change in the earning of the self- employed or revision of salary or wage, even in unorganized sectors and that the expectation of a future event, ie., possibility of a change in wage or financial expectation, cannot be ruled out, for the simple reason that nothing has remained static, in this country.
56.As tabulated in the foregoing paragraphs, it should be noted that Consumer Price Index, Gross Domestic Product and Per Capita Income, have increased. One cannot disown the fact that the percentage of those in unorganized sectors is more than the organised sectors. While that be so, would it be appropriate for the Insurance Companies and Transport Corporations, to contend that there is absolutely no chance of any upward revision in wages or salary of those, employed in unorganised sectors or for that matter in the earnings of self-employed. If the contentions of the Insurance Companies and Transport Corporations have to be accepted, whether the self-employed or those engaged in unorganised sectors, can never have any expectation of an event in future, ie., increase in earnings or wages? With the basic study of the statistics, we are of the considered view that the answer should be a clear 'No'. When the Consumer Price Index is applicable uniformally to rich or raff, it cannot be contended that those who are engaged in unorganized sectors or self-employed, would continue to earn the same income, for years together.
57.For the abovesaid reasons, we are of the considered view that the word, ?prospects? should not be read and understood, only in plural sense, meaning thereby, its prospects or an apparent probability of advancement in employment, in organised sectors alone. Narrowing down the meaning of the words, ?future prospects? only to the employment prospects and consequently, more possibility of earning income, only in the case of organised sector and not in unorganised sector or selfemployed, would affect the majority and therefore, the meaning of the word, ?prospect? used in singular, meaning thereby, expectation, possibility or probability, chances of earning more income in future, depending upon the factors, stated supra, should also be considered.
58.Thus, from the above particulars, extracted supra, it is evident that both the Central and State Governments have periodically revised the minimum wages across the country. It has been raised taking into consideration the Consumer Price Index. In respect of scheduled employments, for skilled, semi-skilled, unskilled, construction workers, labourers, etc., wages, are fixed in various scheduled employments, right from Agarbathi Industry to Woolen Carpet and Shawl wearing machinery.
59.While that be the position in organised sectors, it cannot be contended that insofar as unorganised sectors or self-employed, is concerned, there would not be any revision in the wages or salary or earning. When the minimum wages of an employee in the organised sector, is revised periodically, taking into consideration the Consumer Price Index and Variable Dearness Allowance, the living conditions, then the others, in a unorganised sector may expect more or less the same wage, and if there are more number of persons, there may be chances of lesser wage, on account of surplus human resources and in such cases, the bargaining power of certain class of employees, depending upon the field, for revision of wages or earning, may be less.
60. If a non-salaried domestic worker sells a piece of any article, which he or she manufacturers and if the customer bargains the rate, he or she would immediately reply, as to how much amount, he/she has to spend for buying the basic materials, other materials used, compare the erstwhile travel expenses and the cost of labour. Can anyone in this Country can say that the electricity charges, water charges, rent, fee received by the Government, cost of education, price of commodities, etc., have remained the same, without any change. Cost of tea sold in a ordinary tea stall is the same for any person, whether engaged in organised or unorganised. Contenting inter alia that there would not be any increase in wages or earning for those engaged in unorganised sectors, for years to come, can it be said that he would never take a cup of tea, outside?
61. At this juncture, it should be borne in mind that Consumer Price Index is fixed, taking into consideration that the majority consumers are from unorganised sectors. Thus, with reference to Gross Domestic Product, Per Capita Income, Consumer Price Index and such other economic factors, determined on the basis of participation and contribution of both organised and unorganised sectors, the classification that those engaged in unorganised sectors, should be totally denied of any addition of income under the head, future prospects, would in our humble view, would affect Article 14 of the Constitution of India. When the majority of persons, in unorganised sectors, also decide the economic factors, stated supra, it would be unjust and unreasonable to contend that there would not any prospect or addition in the earning of those engaged in unorganised sector, forever. If there is addition of Variable Dearness Allowance to the basic wages, in the case of organised sector, depending upon the Consumer Price Index, applicable for a particular period, one would reasonably expect the same factor of variable Dearness Allowance, to be a relevant factor, for determining the variation in the wage in case of unorganised sector also, as Consumer Price Index is common to all, whether engaged in organised or unorganised sector.
62. At this juncture, we deem it fit to consider, what ?Dearness Allowance? means? ?Dearness Allowance? is a cost of living adjustment allowance paid to Government employees, Public sector employees (PSU)and pensioners. Dearness Allowance is calculated as a percentage of an Indian's basic salary to mitigate the impact of inflation. Variable Dearness Allowance is always linked to Consumer Prince Index. The notifications of Minimum wages by the Central and State Government reflects how much is the Variable Dearness in each field.
63. In the light of what we have tabulated above, judicial notice can also be taken that the cost of labour, whether it is in agricultural field or manufacturing or services, has increased. Thus, focusing on the increase in wages or earning, in almost all the fields of operation, right from agricultural or industrial or manual labourers, tea shop or road side vendor, the Consumer Price Index, being the same to rich or raff and therefore, correspondingly to meet out the living conditions, atleast for providing the basic amenities, like food, shelter and clothing, and not to add up the expenditure towards health, education, certainly, there would be revision of wages or earning, even in unorganised sectors also. Future is the period of time that will come after the present or things that will happen. Having regard to the consistent and periodical revision of wages by the Governments, it cannot be contended by the Insurers or Transport Corporations that a person in unorganised sector, has no future at all, in the matter of revision of wages or earning.
64. In R.K.Malik's case (cited supra), the Hon'ble Supreme Court considered the quantum of compensation, payable to the legal representatives of the deceased children, aged between 10 and 18 years. Referring to the inflation, price rise, etc., the Hon'ble Supreme Court, by observing that the there would be a future prospects, for the children also, granted a sum of Rs.75,000/- under the head, future prospects, though as on the date of accident, they were children, studying in a school. In V.Mekala's case (cited supra), the injured was a student studying in 11th Standard. While determining the monthly income of the injured as Rs.10,000/-, the Hon'ble Supreme Court added 50% of the income, under the head, future prospects. In the recent decision in Munna Lal Jain's case (cited supra), the Hon'ble Supreme Court added 50% under the head, future prospects.
65. Thus, from the line of judgments, it could be noticed that the Hon'ble Supreme Court has considered the addition of a quantified sum, under the head, future prospects, in effect, indicating that there is a prospect or chance or possibility of earning more income, after a passage of time, though not periodically, as done in the case of Government or Public Sector Undertakings or Boards or Corporations, Companies owned and controlled by the Government or Limited Companies.
66. We have already extracted the orders of the Chief Labour Commissioner, Ministry of Labour and Employment, Government of India, New Delhi and taken into consideration a sample case, City of Chennai. Wage revision may vary in rural or urban areas or metropolitan cities. At the risk of repetition, as observed earlier, the number of persons, engaged in unorganized sectors, agriculture or industrial, or home based or self- employment, etc., are more in number, than those employed in organised sectors.
67. Income from the organised sector alone, is not the deciding factor, for determining Gross Domestic Product, Consumer Price Index or Per Capita Income. Thus, from a basic study of the factors, taken into consideration by the Governments for revision of wages, to the enumerated categories of employees, one cannot lose sight of the fact that the said factors, would also have an indeligible effect on those, engaged in unorganized sectors also. In the light of our discussion and the details considered, we are of the considered view that addition of certain percentage of income under the head, future prospects, has to be done in the case of those engaged in unorganized sector or self-employed also, otherwise, they would be deprived of just compensation. Addition of income under the head,future prospects, should not be restricted to only salaried persons, with stable jobs.
68. Though it is the case of the Insurance Companies and Transport Corporation that in the case of persons engaged in unorganised sector or salaried or persons, who do not have any permanent job, addition of certain percentage of income, under the head, ?future prospects?, to the income drawn, at the time of death, should not be made, for computation loss of dependency compensation, we are not inclined to accept the same, for the reason that the expression ?future prospects? should not be confined only to the prospects of the deceased in the career, progress or upgradation of position, in which, he was engaged, prior to death, but the expression ?future prospects? should also be extended to the likelihood of increase in wages/salary, earned by either a skilled or semi-skilled person, clerical and others, considering the upward increase in the cost price, inflation and such other factors.''
8.The overall quantum of compensation of Rs.14,71,800/- with interest @ 7.5% per annum, awarded to the legal representatives of the deceased cannot be said to be excessive, warranting interference. Accordingly, the Civil Miscellaneous Appeal is dismissed. No costs.
9.The appellant is directed to deposit the entire award amount with proportionate accrued interest and costs, to the credit of MCOP.No.30 of 2009 on the file of the Motor Accident Claims Tribunal, Special Court for Forest Offence Cases, Nagercoil, within a period of eight weeks from the date of receipt of a copy of this order, if not done already. In view of the dismissal of the appeal, the respondents/claimants are permitted to withdraw their respective shares with proportionate accrued interest and costs, by making necessary applications before the Tribunal. Consequently, C.M.P(MD)No.3310 of 2016 is closed.
To The Judge, Special Court for Forest Offence Cases, Motor Accident Claims Tribunal, Nagercoil..