Kanjibhai Tarsi Koli & Anr vs Kanji Madeva Sodha & Ors on 4 September, 2014

[Cites 18, Cited by 0]

Gujarat High Court

Kanjibhai Tarsi Koli & Anr vs Kanji Madeva Sodha & Ors on 4 September, 2014

1. This appeal under section 173 of the Motor Vehicles Act, 1988, [the Act, hereafter] for enhancement of compensation is at the instance of a claimant in a proceeding under section 163.A of the Act and is directed against an award dated 28th February 2005 by the Motor Accident Claims Tribunal [Main], Kachchh at Bhuj, in M.A.C.P. No. 312 of 2004 thereby awarding a sum of Rs.1,59,600-00 with interest at the rate of 9% per annum from the date of filing of the application till payment.

2. It appears that the victim died due to the injuries caused by an auto rickshaw bearing registration No. GJ.12.W.0039. There is no dispute that the deceased was aged 7 years.

3. The learned Tribunal below followed the Second Schedule of

163.A of the Act but applied the multiplier of 15, and arrived at the figure of Rs.1,59,666/-, whereas according to the appellants, , the amount should come to a figure of Rs.2,04,500/-.

3. The grievance of the learned advocate for the appellant in this appeal, Mr. Mehul Suresh Shah, is that the Tribunal committed a gross error of law in applying the multiplier based on the age of the claimants, and in support of such contention, Mr. Shah has relied upon the decision of the Supreme Court in the case of NATIONAL INSURANCE CO. LTD. v. GURUMALLAMMA reported in 2009 (9) Page 2 of 14 C/FA/177/2006 CAV JUDGMENT SCALE 764: (2009) 16 SCC 43.

5. Mr. Nagesh Sood, the learned advocate appearing on behalf of the respondent-Insurance Company has, on the other hand, opposed the aforesaid contention of Mr. Shah and has submitted that in view of the decision of the Supreme Court in the case of NATIONAL INSURANCE CO. LTD. v. SHYAM SINGH & ORS. reported in AIR 2011 SC 3231, the learned Tribunal was quite justified in taking into consideration the age of the claimants to be the basis for application of multiplier. Mr. Sood also relied upon a decision of the learned Single Judge of this Court in the case of NEW INDIA ASSURANCE CO. LTD. v. DEVJI DEVKARAN CHARANIYA reported in 2012 LAWSUIT [GUJ] 1652.

6. Therefore, the only question that falls for determination in this appeal is whether the learned Tribunal below was justified in applying the Second Schedule of 163.A of the Act by the multiplier based on the age of claimants.

7. 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:-

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"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."

8. 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 Page 4 of 14 C/FA/177/2006 CAV JUDGMENT the constitutional harmony and comity of instrumentalities."

9. On a plain reading of Section 163A read with the Second Schedule thereof, there is no scope of applying the multiplier based on the age of the claimant but the same should be applied based on the age of the victim and the multiplier should be applied only in non- fatal cases. In the case of National Insurance Company Ltd vs. Gurumallamma (supra) relied upon by Mr. Shah, the learned Advocate appearing on behalf of the appellant, a two-judge-bench of the Supreme Court while considering a case arising out of a proceeding under Section 163A of the Act made the following observations:

"5. Section 163-A was inserted by Act 54 of 1994 as a special measure to ameliorate the difficulties of the family members of a deceased who died in the use of a motor vehicle. It contains a non obstante clause. It makes the owner of a motor vehicle or the authorised insurer liable to pay in the case of death, the amount of compensation as indicated in the Second Schedule to his legal heirs.

6. The Second Schedule provides for the amount of compensation for third-party fatal accident/injury cases claims. It provides for the age of the victim and also provides for the multiplier for arriving at the amount of compensation which became payable to the heirs and legal representatives of the deceased depending upon his annual income.

7. The Second Schedule furthermore provides that in a case of fatal accident, the amount of claim shall be reduced by one-

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third in consideration of the expenses which the victim would have incurred upon himself, had he been alive. It provides for the amount of minimum compensation of Rs 50,000. It furthermore provides for payment of general damages as specified in Note 3 thereof.

8. Multiplier stricto sensu is not applicable in the case of fatal accident. The multiplier would be applicable only in case of disability in non-fatal accidents as would appear from Note 5 appended to the Second Schedule. Thus, even if the application of multiplier is ignored in the present case and the income of the deceased is taken to be Rs 3300 per month, the amount of compensation payable would be somewhat between Rs 6,84,000 to Rs 7,60,000.

9. As the Second Schedule provides for a structured formula, the question of determination of payment of compensation by application of judicial mind which is otherwise necessary for a proceeding arising out of a claim petition filed under Section 166 would not arise. The Tribunal in a proceeding under Section 163-A of the Act is required to determine the amount of compensation as specified in the Second Schedule. It is not required to apply the multiplier except in a case of injuries and disabilities.

10. Parliament in laying down the amount of compensation in the Second Schedule, as indicated hereinbefore, in its wisdom, provided for payment of some amount which should be treated to be the minimum. It took into consideration the fact that a person's potentiality to earn is highest when he is aged between 25 and 30 years and that is why in case of permanent disability multiplier of 18 has been specified. The very fact that Page 6 of 14 C/FA/177/2006 CAV JUDGMENT even if the deceased had an income of Rs 3000 per month, he being aged about 15 years would receive a sum of Rs 60,000 but if his income was Rs 40,000 per annum, his legal heirs and representatives would receive a sum of Rs 8,00,000. In the case of any non-earning person, the notional income has been fixed at Rs 15,000 per annum."

(Emphasis supplied).

9.1 In the above decision, the Supreme Court has clearly held that the multiplier in a proceeding under Section 163A is applicable only in cases of non-fatal cases.

10. In the case of NATIONAL INSURANCE CO. LTD. v. SHYAM SINGH & ORS., reported in AIR 2011 SC 3231, relied upon by Mr. Sood, it appears that the victim used to earn Rs. 6000/- a month as would appear from paragraph 4 of the judgment and thus, the proceedings out of which the appeal went before the Supreme Court could not be one under Section 163A of the Act as would also appear from the claims made under different headings which are not provided in Section 163A. The incorrect Head Note given by the AIR mentioning the proceedings as one under Section 163A has created the confusion. Thus, the observations made in the said decision cannot have any application to a proceeding under Section 163A of the Act. Moreover, in the above decision, the earlier decision of the Supreme Court in the case of National Insurance Company Ltd vs. Gurumallamma (supra) has not been noticed. Thus, the decision Page 7 of 14 C/FA/177/2006 CAV JUDGMENT in the case of Shyam Singh and others [supra] cannot have any application to a proceeding under Section 163A of the Act.

11. In the case of NEW INDIA ASSURANCE CO. LTD. v. DEVJI DEVKARAN CHARANIYA reported in 2012 LAWSUIT [GUJ] 1652, a learned Single Judge of this court decided to rely upon the decision of NEW INDIA ASSURANCE CO. LTD. v. SHYAM SINGH AND OTHERS (supra) to a proceeding under Section 163A of the Act without noticing that the said decision was given in a proceeding under Section 166 of the Act. The learned Single judge did not utter a single sentence about the principles laid down in the case of National Insurance Company Ltd vs. Gurumallamma (supra) although the same was specifically referred to by the learned advocate for the Insurance Company. I am thus unable to accept the above decision of the learned Single Judge as a valid precedent.

12. Mr. Sood also relied upon an unreported decision of a division bench of this court in the case of NATIONAL INSURANCE COMPANY LTD VS. LEGAL HEIRS OF DECEASED PANCHSHIL PARASHAR (First Appeal no. 3264 of 2010 disposed of on 17th June, 2014). It appears from the first paragraph of the judgment that the claimants prayed for compensation of a sum of 26,28,576/-. Thus, the proceeding was one under Section 166 of the Act. Therefore, the said decision does not apply to the facts of the present case. Page 8 of 14 C/FA/177/2006 CAV JUDGMENT

13. Lastly, I am quite conscious that in the case of 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, the Bench 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 case.

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 Page 9 of 14 C/FA/177/2006 CAV JUDGMENT 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 case."

(Emphasis supplied).

13.1 However, 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 Page 10 of 14 C/FA/177/2006 CAV JUDGMENT 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. At this stage, we must not overlook the fact that the Supreme Court in the above case was not dealing with a proceeding under Section 163 A of the Act but one under Section 166 of the Act and the observations made above were made in the context of a proceeding under Section 166 of the Act. Thus, the above observations cannot be construed to mean that even in a proceedings under Section 163A of the Act, the Tribunal should ignore the mandate of the legislature that for fatal case under Section 163A, there is no necessity of applying the multiplier as pointed by the Supreme Court in the case of National Insurance Company Ltd vs. Gurumallamma (supra).

14. As pointed out by the Supreme Court in the case of NARMADA BACHAO ANDOLAN VS. STATE OF MADHYA PRADESH reported in AIR 2011 SC 1989, the following factors are relevant for application of the doctrine of precedent:

"59. The Court should not place reliance upon a judgment without discussing how the factual situation fits in with a fact-situation of the decision on which reliance is placed, as it has to be ascertained by analysing all the material facts and the issues involved in the case and argued on both sides. A judgment may not be followed in a given case if it has some Page 11 of 14 C/FA/177/2006 CAV JUDGMENT distinguishing features. A little difference in facts or additional facts may make a lot of difference to the precedential value of a decision. A judgment of the Court is not to be read as a statute, as it is to be remembered that judicial utterances have been made in setting of the facts of a particular case. One additional or different fact may make a world of difference between the conclusions in two cases. Disposal of cases by blindly placing reliance upon a decision is not proper.(Vide:

Municipal Corporation of Delhi v. Gurnam Kaur, AIR 1989 SC 38; Govt. of Karnataka and Ors. v. Gowramma and Ors., AIR 2008 SC 863 : (2008 AIR SCW 182); and State of Haryana and Anr. v. Dharam Singh and Ors. (2009) 4 SCC 340)."

14.1 Thus, the observations made in the case of U.P. State Transport Corporation vs. Trilok Chandra (supra) cannot be applicable while giving effect to the provision of Section 163A of the Act based on structural formula.

15. In a very recent case of PUTTAMMA v. K.L. NARAYANA REDDY reported in AIR 2014 SC 706 the Supreme Court, while dealing with a proceeding under Section 163 A of the Act felt the necessity of the amendment of the above provision by enhancing the amount of compensation and in that context made the following observations:

"56. The Central Government was bestowed with duties to amend the Second Schedule in view of Section 163A (3)m but it Page 12 of 14 C/FA/177/2006 CAV JUDGMENT failed to do so for 19 years in spite of repeated observations of this Court. For the reasons recorded above, we deem it proper to issue specific direction to the Central Government through the Secretary, Ministry of Road Transport and Highways to make the proper amendments to the Second Schedule table keeping in view present cost of living, subject to amendment of Second Schedule as proposed or may be made by the Parliament. Accordingly, we direct the Central Government to do so immediately. Till such amendment is made by the Central Government in exercise of power vested under sub-section (3) of Section 163A of the Act, 1988 or amendment is made by the Parliament, we hold and direct that for children up to the age of 5 years shall be entitled to fixed compensation of Rs.1,00,000/- (rupees one lakh) and persons more than 5 years of age shall be entitled for fixed compensation of Rs.1,50,000/- (rupees one lakh and fifty thousand) or the amount may be determined in terms of Second Schedule whichever is higher. Such amount is to be paid if any application is filed under Section 163A of the Act, 1988.

(Emphasis supplied).

16. I, therefore, hold that the learned tribunal below erred in law in applying the multiplier while deciding a fatal case under Section 163 A of the Act based on the age of the claimants. In the case before us, the age of the victim was 7 years and thus, applying the Second Schedule, the amount will come to Rs. 2,04,500/-.

17. The appeal is thus allowed. The award impugned is modified by enhancing the same to Rs. 2,04,500/- with interest at the rate of 9% Page 13 of 14 C/FA/177/2006 CAV JUDGMENT per annum from the date of filing the claim-application till realization. The Insurance Company is directed to deposit the additional amount with interest before the Tribunal within one month from today. The Tribunal will release the amount in favour of the claimant immediately thereafter. No costs.

17.1 Registry is directed to forthwith return the Record and Proceedings to the Tribunal.

Sd/-

(BHASKAR BHATTACHARYA, CJ.) mathew Page 14 of 14

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Gujarat High Court