Delhi High Court
National Insurance Co. Ltd. vs Smt. Sushila Devi & Ors. on 27 August, 2008
Author: V.B.Gupta
Bench: V.B. Gupta
* HIGH COURT OF DELHI : NEW DELHI
MAC App. No.925 of 2006
% Judgment reserved on: 20th August, 2008
Judgment delivered on: 27th August, 2008
National Insurance Co.Ltd.
Regional Office-II,
2-E/9, Jhandewalan Extension
New Delhi-110055. ....Appellant
Through: Mr.L.K.Tyagi, Adv.
Versus
1. Smt.Sushila Devi
W/o Late Sh.Sandeep Kumar
2.Master Puneet
S/o Late Sh.Sandeep Kumar
3.Baby Meghna
D/o Late Sh.Sandeep Kumar
4.Sh.Santosh Kumar
S/oSh.Shiv Kumar
5.Smt.Kamlesh
W/o Sh.Santosh Kumar
(Respondents No.2 and 3
Being minors are represented
Through their mother and natural
Guardian respondent No.1)
All residents of:
Village Bhagot,
MAC App.No.925 of 2006 Page 1 of 22
Distt. Mohinder Garh.
Also at:
H.No.392, Main Road,
Near Subzi Mandi,
Mauzpur, Delhi.
6.Pala Ram
S/o Sh.Norata Ram Gadriya
r/o Village Khor Shama
P.S.Jhijhana
Distt. Muzaffar Nagar. (U.P.)
7. Sh.Ved Pal
S/o Sh.Amar Singh
8.Sh.Rattan Singh
S/o Sh.Amar Singh
9.Sh.Randhir Singh
S/o Sh.Amar Singh
All residents of
Sarafa Bad
Karnal
Distt. Karnal.
(Haryana) ...Respondents.
Through: Mr.R.N.Sharma, Adv.
Coram:
HON'BLE MR. JUSTICE V.B. GUPTA
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
MAC App.No.925 of 2006 Page 2 of 22
V.B.Gupta, J.
Present appeal under Section 173 of the Motor Vehicles Act, 1988 (for short as „Act‟) filed by the Insurance Company challenges the impugned award dated 18th September, 2006 passed by Sh.A.S. Jayachandra, Judge, MACT, Delhi.
2. The brief facts of this case are that on 15th April, 2004, deceased Sandeep Kumar aged, about 28½ years along with one Kulvir left his office Madhuban (Karnal) for some official work on Motorcycle No.HR-MB-1230. The Motorcycle was being driven by the deceased and the said Kulvir was sitting as a pillion rider. When they reached near Anaz Mandi, GT Karnal Gate, an Eicher tractor being No.HR05-E-4929 came from the side of the Karnal City and suddenly took a sharp turn towards Anaz Mandi Gate and stuck against the motorcycle of the deceased. Due to the strong impact, they fell down on the road. The deceased was crushed MAC App.No.925 of 2006 Page 3 of 22 under the wheels of the said tractor and pillion rider also sustained grievous injuries.
3. Respondent No.6, Pala Ram is the driver of the offending truck, while respondents 7 to 9 herein, are the owners of the offending tractor and the appellant is the insurer of the tractor.
4. Respondent/driver in his written statement has denied the rash and negligent act on his part and has taken a plea that no accident took place.
5. Similarly, the owners of the offending tractor have denied the factum of accident, whereas the appellant-Insurance Company in its written statement admitted that the vehicle was insured with it for the period 23rd September, 2003 to 22nd September, 2004, covering the date of accident.
6. Vide impugned judgment, the Tribunal granted compensation of Rs.13,08,656/- along with the interest @ 7.5 per annum from the date of petition till the date of award.
MAC App.No.925 of 2006 Page 4 of 22
7. Being dissatisfied with the order of the Tribunal, the Insurance Company has filed the present appeal.
8. It is contended by learned counsel for the appellant that the compensation awarded in this case is not only excessive but also not justified. The Tribunal wrongly assessed the compensation on the basis of gross salary of Rs.5,966/- p.m. and did not take certain allowances such as KMA, CA, Ration Money, FMA, H. Allowance and Special Allowance amounting to Rs.746/- for deduction.
9. It is further contended that the Tribunal wrongly considered the future prospects of the income of the deceased to the extent of double in the absence of any evidence on record and on this point, learned counsel for the appellant in support of his contention has cited Bijoy Kumar Dugar v.Bidyadhar Dutta & Ors. II (2006) ACC 36 (SC). Though, the Tribunal has observed that there is no evidence with regard to the promotion of the deceased but still it considered the MAC App.No.925 of 2006 Page 5 of 22 future prospects arbitrarily and without any basis. Moreover, the deceased was working as temporary driver in the Police and it was uncertain as to whether he would continue in the service or not and as such there was no question of considering his future income by recording future prospects.
10. It is also contended that the Tribunal has wrongly applied the multiplier of 18 as per Second Schedule of the Act, which is against the judgment of the Apex Court in Sarla Dixit v.Balwant Yadav, AIR 1996 SC 1274, where the Apex Court has applied the multiplier of 15 only when the deceased was 27 years old.
11. Learned counsel for the appellant has also cited decision of Apex Court reported as Tamil Nadu State Transport Corporation Ltd. v. S.Rajapriya & Ors. II (2005) ACC 476 (SC), contending that the choice of multiplier is determined by age of deceased (or that of the claimants whichever is higher) and by calculation as to what capital sum, if invested at a rate MAC App.No.925 of 2006 Page 6 of 22 of interest appropriate to stable economy, would yield the multiplicand by way of annual interest.
12. On the other hand, it has been argued by learned counsel for respondents 1 to 5 who are the claimants, that the widow of the deceased in her statement has stated that deceased with the passage of the time would have reached to the rank of Deputy Superintendent of Police and, thus, she has stated about the future prospect of the deceased.
13. This witness was not cross-examined at all on behalf of the Insurance Company. Further, there has been no cross-examination of any claimants witnesses with regard to the income, age and multiplier and no question was asked that deceased being a temporary employee would not have continued in the service.
14. Lastly, it is contended that since the deceased was in Government Service and every Government servant got promotions in his career, so, the Tribunal has rightly considered the future prospects. MAC App.No.925 of 2006 Page 7 of 22
15. Under the circumstances, there is no illegality in the impugned judgment and the present appeal should be dismissed.
16. As regards the quantum of compensation, the Tribunal held;
"The evidence of PW1 is the wife of the deceased and she had also given the relationship of the other petitioners in the petition. Further her evidence shows that the deceased was working as Constable in Haryana Armed Police and was getting a monthly salary of Rs.6,000/- p.m. The Ex.PW1/C shows that he was getting a monthly salary for a sum of Rs.5,966/- in total. The evidence of PW2 shows that he was Constable/Driver. There is no evidence to believe that he would have risen to the rank of DSP as contended by PW1. However, from the evidence of PW 2, I see that deceased was appointed on 10.03.2003, as a driver and was given an increment of Rs.85/- with effect from 01.03.04 as per the Service Rules. The copy of the pay certificate is at Ex.PW2/A. Hence, the future prospects can not be denied as the deceased was on a definite job having definite chances for increments had he lived. Accordingly, for the purposes of calculating the loss of income, the future prospects are also taken note of under the settled principles of law. I take the mean MAC App.No.925 of 2006 Page 8 of 22 average of the salary of deceased at Rs.8,949/- p.m. (5,966 + 11,932 / 2). The date of birth of the deceased as is seen from the photocopy of the driving licence of the deceased as 15.11.75. Hence, I take the multiplier at 18. Accordingly, the loss of income comes to Rs. 12,88,656/- (8,949 x 12 x 18 = 19,32,984/- MINUS ONE THIRD TOWARDS THE PERSONAL EXPENSES OF THE DECEASED)."
17. The Apex Court in the case of U.P. State Road Transport Corpn. v. Krishna Bala & Ors., III (2006) ACC 361 (SC), has highlighted the manner of fixing the appropriate multiplier and computation of compensation and has observed as under:
"6. Certain principles were highlighted by this Court in the case of Municipal Corporation of Delhi v. Subhagwanti, 1966 (3) SCR 649 in the matter of fixing the appropriate multiplier and computation of compensation. In a fatal accident action, the accepted measure of damages awarded to the dependents is the pecuniary loss suffered by them as a result of the death.
"How much has the widow and family lost by the father's death?" The answer to this lies in the oft-quoted passage from the opinion of Lord Wright in Davies v. Powell Duffryn Associated Collieries Ltd., All ER p.665 A-B, which says:-MAC App.No.925 of 2006 Page 9 of 22
"The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow might have again married and thus ceased to be dependent, and other like matters of speculation and doubt."
7. There were two methods adopted to determine and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case (supra) and the second in Nance v. British Columbia Electric Railway Co. Ltd., 1951 (2) All ER 448.
8. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would MAC App.No.925 of 2006 Page 10 of 22 yield the multiplicand by way of annual interest. In, ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last."
Further Court held that;
"10. In regard to the choice of the multiplicand the Halsbury's Laws of England in Vol. 34, Para 98 states the principle thus:
"98. Assessment of damages under the Fatal Accidents Act 1976- The courts have evolved a method for calculating the amount of pecuniary benefit that dependants could reasonably expect to have received from the deceased in the future. First the annual value to the dependants of those benefits (the multiplicand) is assessed. In the ordinary case of the death of a wage-earner that figure is arrived at by deducting from the wages the estimated amount of his own personal and living expenses.
The assessment is split into two parts. The first part comprises damages for the period between death and trial. The multiplicand is multiplied by the number of years which have elapsed between those two dates. Interest at one-half the short-term investment rate is also awarded on that multiplicand. The MAC App.No.925 of 2006 Page 11 of 22 second part is damages for the period from the trial onwards. For that period, the number of years which have elapsed between the death and the trial is deducted from a multiplier based on the number of years that the expectancy would probably have lasted; central to that calculation is the probable length of the deceased's working life at the date of death."
11. As to the multiplier, Halsbury states:
"However, the multiplier is a figure considerably less than the number of years taken as the duration of the expectancy. Since the dependants can invest their damages, the lump sum award in respect of future loss must be discounted to reflect their receipt of interest on invested funds, the intention being that the dependants will each year draw interest and some capital (the interest element decreasing and the capital drawings increasing with the passage of years), so that they are compensated each year for their annual loss, and the fund will be exhausted at the age which the court assesses to be the correct age, having regard to all contingencies. The contingencies of life such as illness, disability and unemployment have to be taken into account. Actuarial evidence is admissible, but the courts do not encourage such evidence. The calculation depends on selecting an assumed rate of interest. In practice MAC App.No.925 of 2006 Page 12 of 22 about 4 or 5 per cent is selected, and inflation is disregarded. It is assumed that the return on fixed interest bearing securities is so much higher than 4 to 5 per cent that rough and ready allowance for inflation is thereby made. The multiplier may be increased where the plaintiff is a high tax payer. The multiplicand is based on the rate of wages at the date of trial. No interest is allowed on the total figure."
18. The Apex Court in Tamil Nadu State Transport Corporation Ltd. v. S. Rajapriya & Ors.(supra),has observed as under;
"8. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether.
9. The manner of arriving at the damages is to ascertain the net income of the deceased MAC App.No.925 of 2006 Page 13 of 22 available for the support of himself and his dependants, and to deduct there from such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalized by multiplying it by a figure representing the proper number of years‟ purchase.
10. Much of the calculation necessarily remains in the realm of hypothesis "and in that region arithmetic is a good servant but a bad master" since there are so often many imponderables. In every case "it is the over- all picture that matters" and the court must try to assess as best as it can the loss suffered."
19. In Smt. Sarla Dixit and Anr. v. Balwant Yadav & Ors., AIR 1996 SC 1272, the Apex Court has observed;
"So far as the adoption of the proper multiplier is concerned, it was observed that the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand. While the chance of the multiplier is determined by two factors, namely, the rate of interest appropriate to a stable economy and the age of the deceased or of the claimant whichever is higher, the ascertainment of the multiplicand is a more difficult exercise. The average gross future monthly income could be arrived at by adding the actual gross income at the time MAC App.No.925 of 2006 Page 14 of 22 of death to the maximum which he would have otherwise got had he not died a premature death and dividing that figure by two. Thus the average gross monthly income spread over his entire future career, had it been available, would have been the gross monthly average income available to the family of the deceased had he survived as a bread winner."
20. The deceased was 28 ½ years of age at the time of occurrence of the accident. The appropriate multiplier for the age group of 25 years but not exceeding 30 years is 18 as per the Second Schedule of the Act. Thus, the Tribunal has rightly applied the multiplier of 18.
21. As regards the contention of allowances, Andhra Pradesh High Court in S.Narayanamma and Ors. v. Secretary to Government of India and Ors. [II (2002) ACC 582], following Helen C. Rebello (Mrs.) and others v. Maharashtra State Road transport Corporation and another, II (1998) ACC 512, held that;
"The contributions made by the deceased- employee towards Employees' Provident MAC App.No.925 of 2006 Page 15 of 22 Fund, Life Insurance (LIC), Group Insurance and the deductions shown in the salary certificate of the deceased- employee towards the vehicle loan instalment, benefit fund, and also the amounts received by the deceased- employee towards interim Relief, Special Pay, Dearness Allownce, House Rent Allowance, need not be deducted from the gross salary of the deceased for ascertaining the income, because the contributions/deductions made towards, E.P.F., L.I.C., Group Insurance and Benefit Fund would be beneficial to the family of the deceased-employee and it would be the estate of the deceased."
22. In view of the principles laid down in above case, it is clear that there cannot be any deductions of amount received towards such allowances. Thus, I do find myself in agreement with the Tribunal in this regard.
23. In a recent decision of this Court Sh. Narinder Bishal and Anr. v. Sh. Rambir Singh and Ors., MAC App. 1007-08/2006, decided on 20.02.08 by Kailash Gambhir, J., it has been observed as under;
"For determining the earning of the deceased or victim of the accident, the MAC App.No.925 of 2006 Page 16 of 22 claimants are supposed to prove the exact income of the deceased by leading some cogent and reliable documentary evidence as to the nature of his employment or trade or business or in any other activity he was involved in and then the said income can be taken into consideration for determining the quantum of compensation and if in such a case, the claimants are further able to establish the future prospects as well, then the criteria laid down in Sarla Dixit's case would get attracted. There can be another category of cases where the claimants are able to establish the future prospects of the deceased by quantifying the amount to be earned by the deceased in future with the help of cogent, reliable and convincing evidence and in all such cases the tribunal can take into consideration such future increase as has been established by the claimants on record. The difficulty however, would arise in all those cases where although the claimants are able to sufficiently establish on record the educational qualification of the deceased or the nature of his employment whether skilled, semi-skilled or unskilled but fail to establish by any reliable evidence to prove the exact income of the deceased. In such cases, question arises whether the Tribunal can take into consideration the minimum wages and the periodical revision of minimum wages as are fixed by the Government under the Minimum Wages Act. To MAC App.No.925 of 2006 Page 17 of 22 examine this question, it will have to be considered whether the revision which takes place under the Minimum Wages Act can be equated with the future prospects of a deceased. As would be evident from catena of judgments of the Supreme Court, the future prospects have no correlation with the price index, inflation or denunciation of currency value.
The future prospects would necessarily mean advancement in future career, earnings and progression in one's life. It could be considered by seeing, from which post a person began his career, what avenues or prospects he has while being in a particular avocation and what targets he/she would finally achieve at the end of his career. The promotional avenues, career progression, grant of selection grades etc. are some of the broad features for considering one's future prospects in one's career.
The minimum wage, in the very context of economy has a correlation with the growth and development of the nation's economy, postulating increase in the price index, reduction of purchasing power with the denunciation of currency value and consequent fixation of minimum wages giving some periodical increase so as to ensure sustenance and survival of the workman class. Keeping this in view, under no circumstance the revision of minimum wages can be treated on the same MAC App.No.925 of 2006 Page 18 of 22 footing with the factor of future prospects."
24. A perusal of the evidence of PW2 shows that the deceased was getting increment of Rs.85/- as per Service Rules. The copy of the pay certificate is Ex.PW2/A. Thus, the future prospects of the deceased cannot be denied.
25. Hence, the Tribunal has rightly considered the future prospects of the deceased while awarding the compensation.
26. The Appellant/Insurance Company is taking all the contentions relating to the multiplier, future prospects and that the deceased was temporary in service, for the first time in appeal and thus, the same cannot be allowed at this stage.
27. The above finding of the tribunal is according to the principle of 'just compensation' enunciated by the Supreme Court in the judgment in Divisional MAC App.No.925 of 2006 Page 19 of 22 Controller, KSRTC v. Mahadeva Shetty, AIR 2003 SC 4172 where the Apex Court has observed as under;
"It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which to it appears to be "just". It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. Bodily injury is nothing but a deprivation which entitles the claimant to damages. The quantum of damages fixed should be in accordance with the injury. An injury may bring about many consequences like loss of earning capacity, loss of mental pleasure and many such consequential losses. A person becomes entitled to damages for mental and physical loss, his or her life may have been shortened or that he or she cannot enjoy life, which has been curtailed because of physical handicap. The normal expectation of life is impaired. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be "just" and it cannot be a bonanza; not a source of profit but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be "just" compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of MAC App.No.925 of 2006 Page 20 of 22 human life or a limb. 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. The expression "just" denotes equitability, fairness and reasonableness, and non- arbitrariness. If it is not so, it cannot be just. (See Helen C. Rebello v. Maharashtra State Road Transport Corporation & another, II (1998) ACC
512.)"
28. Thus, the judgments cited by the appellant Counsel are not applicable to the facts of the present case.
29. Under these circumstances, no infirmity can be found with the impugned judgment of the Tribunal and thus, there is no merit in this appeal and the same is MAC App.No.925 of 2006 Page 21 of 22 dismissed with costs. Costs are assessed at Rs.10,000/-.
30. Appellant is directed to deposit the costs within four weeks from today by way of cheque in the name of Registrar General of this Court.
31. Trial court record be sent back.
32. List on 29th September, 2008 for compliance.
August 27, 2008 V.B.GUPTA, J.
Bisht
MAC App.No.925 of 2006 Page 22 of 22