Karnataka High Court
The Manager National Insurance Co. Ltd vs Smt.V Hannamma on 25 August, 2012
Author: B.V.Nagarathna
Bench: B.V. Nagarathna
1
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAD
DATED THIS THE 25TH DAY OF AUGUST 2012
BEFORE
THE HON'BLE MRS. JUSTICE B.V. NAGARATHNA
M.F.A.No.23213/2012 (MV)
BETWEEN:
The Manager,
National Insurance Co. Ltd.
Parvati Nagar, Bellary.
Represented through its
Regional Office,
Arihanta Complex,
Kusugal Road, Hubli.
Represented by its
Assistant Manager. ...Appellant
(By Sri Nagangouda R. Kuppelur, for
Sri B.C. Seetharama Rao Associates, Adv.)
AND:
Smt V. Hannamma,
W/o late V. Pandurangaiah,
Age: 51 years, Occ: Household.
R/o Parvati Nagar,
Bellary. ...Respondent
This MFA is filed under Section 173(1) of the Motor
Vehicles Act, 1988, praying to set-aside the award dated
24.11.2011 in MVC.No.809/2011 on the file of the
MACT-XII, Bellary, and etc.
This appeal coming on for Orders this day, the court.,
delivered the following:
2
JUDGMENT
There is a delay of 107 days in filing the appeal. Nevertheless, I have heard the learned Counsel for the appellant on merits.
2. The insurance company has preferred this appeal seeking reduction in the quantum of compensation awarded by the Motor Accident Claims Tribunal-XII, Bellary, in MVC. No.809/2011, dated 24.11.2011.
3. The relevant facts of the case are that, on 15.12.2010, V. Suresh Kumar, after finishing his duties at State Bank of Mysore, Siruguppa, was returning to Bellary on his motorcycle bearing Reg.No.KA-34/S-3334. When he reached Kolur Cross, near Somasamudra village, at about 6.30 p.m. a Maruti Omni car bearing Reg.No.KA-34M-5484 came from Siruguppa side in a rash and negligent manner and dashed against the motorcycle, as a result Suresh Kumar sustained grievous injuries. He was shifted to VIMS Hospital, Bellary. At about 7.00 p.m. he succumbed to injuries. He was 26 years of age at the time of his death and 3 was working as a Cashier at State Benk of Mysore, Siruguppa, earning about Rs.15,000/- per month. The claimant being his mother and dependent filed claim petition seeking compensation on account of the death of her son.
4. The claim petition was contested by the Insurance Company.
5. In support of her case, she let in her evidence as PW.1 and evidence of one Srinivas as PW.2 and produced fifteen documents which were marked as Ex.P.1 to Ex.P.15. While the Insurance Company did not let in any evidence except getting a copy of the policy of insurance marked as Ex.R.1.
6. On the basis of the said evidence, the Tribunal awarded compensation of Rs.9,91,552/- with interest at the rate of 6% p.a. from the date of claim petition till realisation in the following manner:
1. For funeral and last obsequies.. Rs.5,000/-
2. For the loss of estate.. Rs.5,000/-
3. For the loss of dependency.. Rs.9,81,552/-
Total. Rs.9,91,552/-
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7. Being aggrieved by the quantum of
compensation awarded by the Tribunal, the Insurer has preferred this appeal.
8. I have heard the learned Counsel for appellant.
9. It is contended that the deceased was working as Computer Operator in State Bank of Mysore. His employer i.e. Bank, had insured the life of the deceased under a Group Insurance Scheme and that an amount of Rs.6,00,000/- was paid to the respondent-claimant as the nominee. The said amount had to be deducted from the compensation awarded by the Tribunal. This fact was not in the knowledge of the appellant at the time of the disposal of the claim petition by the Tribunal. It is under these circumstances, that additional evidence is produced by way of a letter written by the State Bank of Mysore, Regional Office, Station Road, Bellary, dated 17.5.2012, to the Administrative Officer of the appellant Insurance Company, which states that under the Group Insurance Policy, a sum of Rs.6,00,000/- was paid to the deceased mother.5
Therefore, that amount has to be deducted from the amount of compensation awarded by the Tribunal.
10. In support of his case, the appellant's Counsel has relied on a judgment of the Division Bench of this Court in MFA.1425/2007 dated 24.1.12, wherein reference has been made to a decision of the Apex Court in the case of Mrs.Helen C. Rebell and others vs. Maharashtra State Road Transport Corporation and another, AIR 1998 S.C. 3191. It is therefore contended that the appeal calls for reduction in the amount of compensation awarded by the Tribunal.
11. Having heard the learned Counsel for the appellant and on perusal of the material on record, it is noted that the respondent-claimant who is mother of the deceased V. Suresh Kumar, has stated that he was 26 years of age and working as a Computer Operator in State Bank of Mysore, Siruguppa, and that his earnings was about Rs.15,000/- per month. The Tribunal has considered the evidence putforth and has noted that the deceased was a 6 MBA Graduate and he had completed MBA after B.Sc. That he was appointed in the Bank as a Computer Operator on 19.7.2010. His salary for the month of November 2010 i.e. a month prior to the date of accident was Rs.15,022.49. Professional Tax was Rs.150/-. The Tribunal has deducted the Professional Tax out of the salary income and has assessed the salary at Rs.14,872/- per month. Though reference is made to the decision of Sarla Verma Vs. Delhi Transport Corporation & Another, 2009 ACJ 1298, for the purpose of considering the age of the deceased's mother with regard to the choice of multiplier, multiplier of 11 is applied and after deducting 50%, as the deceased was a bachelor compensation on the head of loss of dependency has awarded compensation at Rs.9,81,552/-. There is no reference made to the observations of the Apex Court in the very same case with regard to the increase in the income which has to be taken by way of future prospects, particularly, when the deceased is in a permanent job. At para-11 of the said judgment it is stated as follows:
" In view of the imponderables and uncertainties, we are in favour of adopting 7 as a rule of thumb, an addition of 50 per cent of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. [Where the annual income is in the taxable range, the words 'actual salary' should be read as 'actual salary less tax']. The addition should be only 30 per cent if the age of the deceased was 40 to 50 years. There should be no addition where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self- employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances"
12. Since the deceased was aged 26 years, increase in the income towards future prospects must be by 50%. In fact, having regard to the young age of the deceased and considering the retirement age in the Public Sector Banks being 60 years, the increase must be more than 50% having regard to the long length of service that remained as far as deceased is concerned. Even if 50% is taken as increase to 8 be made towards future prospects, then a sum of Rs.7,436/- would have to be added to a sum of Rs.14,872/-, which would make the total income including the future prospects at Rs.22,308/- per month. 50% of the said amount has to be deducted towards personal expenses of the deceased since he was a bachelor. Thus the amount to be considered is Rs.11,154 X 12 X 11= Rs.14,72,328/- which would be the compensation on the head of Loss of Dependency. Whereas in the instant case, what has been awarded is only Rs.09,81,552/-. Further the compensation on the conventional heads are only Rs.10,000/- i.e. Rs.5000/- on the head of funeral expenses and Rs.5,000/- towards loss of estate which is also on the meager side. If Rs.30,000/- which is normally awarded as conventional heads, for death of a bachelor, is added to the compensation on the head of Loss of dependency the total would be Rs.15,02,328/-. That is not what has been awarded in the instant case by the tribunal.
13. On the other hand, the Insurance Company is seeking reduction in the amount awarded on the premise 9 that the respondent-claimant has received Rs.6,00,000/- under Group Insurance Scheme on account of the death of her son. In this context, the Apex Court in Helen C. Rebello's case has stated as follows:
"So far as the general principle of estimating damages under the common law is concerned, it is settled that the pecuniary loss can be ascertained only by balancing on one hand, the loss to the claimant of the future pecuniary benefits that would have accrued to him but for the death with the 'pecuniary advantage' which from whatever source comes to him by reason of the death. In other words, it is the balancing of loss and gain of the claimant occasioned by the death. But this has to change its colour to the extent a statute intends to do. Thus, this has to be interpreted in the light of the provisions of the Motor Vehicles Act, 1939. It is very clear, to which there could be no doubt that Motor Vehicles Act delivers compensation to the claimant only on account of accidental injury or death, not on account of any other death. Thus, the pecuniary advantage accruing under this Act has to be deciphered, correlating with the accidental death. The compensation payable under the Motor Vehicle Act is on account of the pecuniary loss to the claimant by accidental injury or death and not other forms of death. If there is natural death or death by suicide, serious illness, including even death by accident, through train, air flight not involving motor vehicle, would not be covered under the Motor Vehicles Act. Thus, the application of general principle under the common law of loss and gain for the computation of compensation under this Act must co-relate to this type of 10 injury or death, viz., accidental. If the words, 'pecuniary advantage' from whatever source are to be interpreted to mean any form of death under this Act it would dilute all possible benefits conferred on the claimant and would be contrary to the spirit of the law. If the 'pecuniary advantage' resulting from death means pecuniary advantage coming under all forms of death then it will include all the assets movable, immovable, shares, bank accounts, cash and every amount receivable under any contract. In other words, all heritable assets including what is willed by the deceased etc. This would obliterate both, all possible conferment of economic security to the claimant by the deceased and the intentions of the legislature. By such an interpretation the tortfeasor in spite of his wrongful act or negligence, which contributes to the death, would have in many cases no liability or meagre liability. Therefore the general principle of loss and gain takes colour of this stature, viz., the gain has to be interpreted which is as a result of the accidental death and the loss on account of the accidental death. Thus, under the present Act whatever pecuniary advantage is received by the claimant, from whatever source, would only mean which comes to the claimant on account of the accidental death and not other form of death. The receipt of the provident fund is a deferred payment out of the contribution made by an employee during the tenure of his service. Such employee or his heirs are entitled to receive this amount irrespective of the accidental death. This amount is secured, is certain to be received, while the amount under the Motor Vehicles Act is uncertain and is receivable only on the happening of the event, viz., accident, which may not take place at all. Similarly, family pension is also earned by an employee for 11 the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No correlation between the two. Similarly, life insurance policy is received either by the insured or the heirs of the insured on account of the contract with the insurer for which insured contributes in the form of premium. It is receivable even by the insured, if he lives till maturity after paying all the premiums, in the case of death insurer indemnifies to pay the sum to the heirs, again in terms of the contracts for the premium paid. Again, this amount is receivable by the claimant not on account of any accidental death but otherwise on insured's death. Death is only a step or contingency in terms of the contract, to receive the amount. Similarly, any cash, bank balance, shares, fixed deposits, etc. though are all a pecuniary advantage receivable by the heirs on account of one's death but all these have no correlation with the amount receivable under a statute occasioned only on account of accidental death. Such an amount cannot come within the periphery of the Motor Vehicles Act to be termed as 'pecuniary advantage' liable for deduction. When we seek the principle of loss and gain, it has to be on similar and same plane having nexus inter se between them and not to which, there is no semblance of any correlation. The insured (deceased) contributes his own money for which he receives the amount has no correlation to the compensation computed as against tortfeasor for his negligence on account of accident. The amount receivable as compensation under the Act is on account of the injury or death without making any contribution towards it, how can fruits of an amount received 12 through contributions of the insured be deducted out of the amount receivable under the Motor Vehicles Act."
14. In so far as the amounts received under the Life Insurance Policy is concerned, the Supreme Court has stated that the said amount is receivable by the claimants not on account of any accidental death but even otherwise on the insured's death. Death is only an event or contingency in terms of a contract to receive the amount. Therefore, when any amount is received under the Insurance Policy, normally, the same would not be deducted from the compensation that would be awarded under the provisions of the M.V. Act, 1988, since the compensation under the said Act is awarded due to the principles of negligence or strict liability, as the case may be, and not for the death simplicitor. However, the Supreme Court has held that there has to be balancing of loss and gain of claimant occasioned by the death.
15. If these aspects are kept in mind in the instant case, the compensation is awarded without taking into 13 consideration the future prospects and sum of Rs.9,81,552/- has been awarded by the Tribunal. That would not call for any reduction having regard to the amount received by the respondent-claimant from the Bank under the Group Insurance Policy. The reasons are two fold; firstly, that the Group Insurance Policy is not restricted to accidental death or death caused due to the involvement of the motor vehicle. It is in respect of any nature of death, except possibly suicide. Therefore, there is no overlapping of the compensation awarded in the instant case due to the accidental death and the amount received under the Group Insurance Policy. That apart, there is no undue gain or windfall made by the respondent-claimant on account of the non-deduction of the amount received under the Group Insurance Policy having regard to the fact that compensation awarded in the instant case is very meager and without taking into consideration the future prospects as discussed supra. In that view of the matter on the facts of the present case, the deduction of the amount received under the Group Insurance Scheme would not be just and proper. 14
16. As far as the Division Bench decision in MFA.1425/2007 is concerned, the compensation was enhanced by this Court to Rs.46,68,624/- with interest at the rate of 8% p.a. Since the family of the deceased in the said case was receiving a huge amount at one stage which amount the deceased may have earned over a period of time, but not before attaining the age of superannuation provided there was no other eventuality, the Division Bench thought it fit that the amount of Rs.9,00,000/- received from the employer towards the death of deceased through the employer was to be deducted.
But, having regard to the facts of the present case and particularly when a meager compensation has been awarded by the Tribunal, in my view, it is not correct to deduct the amount received by the claimant from the LIC Group Insurance Scheme from the compensation awarded by the Tribunal. Possibly, if a higher compensation as discussed supra was awarded by the tribunal, the deduction of the amount received from the Group 15 Insurance Policy could have been considered having regard to the principles enunciated by the Apex Court.
17. Thus, there is no merit in this appeal. Appeal is dismissed. The amount in deposit to be transmitted to the Tribunal.
In view of the dismissal of the appeal, the applications would not survive for consideration.
Sd/-
JUDGE Sub