Allahabad High Court
Smt.Parveen Bano And Others vs National Insurance Co. Ltd. Lucknow ... on 5 December, 2019
Equivalent citations: AIRONLINE 2019 ALL 2226
Author: Jaspreet Singh
Bench: Jaspreet Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 6 Case :- FIRST APPEAL FROM ORDER No. - 598 of 2006 Appellant :- Smt.Parveen Bano And Others Respondent :- National Insurance Co. Ltd. Lucknow Through D.M.& Others Counsel for Appellant :- Ravindra Pratap Singh,Adnan Ahmad Counsel for Respondent :- Ajeet Srivastav ****** Hon'ble Jaspreet Singh,J.
Heard Shri Adnan Ahmad, learned counsel for the appellants and Shri Ajeet Srivastava, learned counsel appearing for the respondent no.1.
The instant appeal has been preferred under Section 173 of the Motor Vehicles Act against the award dated 22.04.2006 passed by the Additional District Judge, Court No.28, Barabanki, acting as Motor Accident Claims Tribunal in Claim Petition No.282 of 2003 whereby the tribunal has awarded a sum of Rs.1,39,500/- alongwith 5% interest.
Assailing the aforesaid award, leaned counsel for the appellants submits that the tribunal has erred in taking the notional income of the deceased as Rs.15,000/- per annum whereas it was specifically pleaded that the deceased was an expert tailor and was able to earn Rs.4250/- per month. It has further been submitted that even if at all the tribunal has adopted the notional income even then the minimum notional income which ought to have been adopted would be Rs.3000/- per month. It has further been submitted that the tribunal has erred in not taking note of the future prospects since the deceased was an expert tailor was self employed coupled with the fact that he had left behind his widow, three daughters and a son and considering this aspect of the matter, the deduction has also been made excessively whereas in light of the decision rendered by the Apex Court in the case of Sarla Verma (Smt.) & others Vs. Delhi Transport Corporation & others reported in 2009 (6) SCC page 121, the deduction ought to have been 1/5th.
Learned counsel for the appellants has also submitted that in the State of Uttar Pradesh Rules have been formulated whereunder the tribunal ought to have been noticed that future prospect also and considering the age of the deceased which was 45 years, the appellants was entitled to at least 30% addition in the income towards future prospects. Even the interest awarded is on the lower side whereas the Rules prescribed the grant of interest @ 7%, thus, in light of the above, it has been submitted that the award dated 22.04.2006 deserves to be enhanced.
Shri Ajeet Srivastava, learned counsel for the insurance company has submitted that the aforesaid enhancement is not applicable; inasmuch as the Motor Vehicles Act, 1988 has been amended wherein Second Schedule has been replaced by a new schedule which prescribes lump-sum payment which has been made effective from May 2018. It is submitted that in case of fatal accident since the petition of the appellants were under Section 163-A, therefore, the appellants if at all, entitled for enhancement, would be governed by prevalent second schedule which has been made as operative since May 2018 and the appellants cannot be granted the compensation in terms of the bifurcation which has been argued by the learned counsel for the appellants under the heads of income, future prospects and deduction. Accordingly, it has been submitted that the award if at all required to be enhanced, it has to be done in light of the amendment of 2018.
The Court has considered the submission of the learned counsel for the parties and also perused the record.
Certain brief facts giving rise to the aforesaid appeal are being noticed hereinafter.
The claimant-appellants preferred a claim petition bearing No.282 of 2003 there were stopped compensation on account of the accidental death of Mujibur Rahman who is the husband of the appellant no.1 and father of the appellant nos.2 to 5. It was stated that on 01.09.2003 at around 12.30 in the afternoon, the deceased Mujibur Rahman was walking at the side of the road and at the relevant time, a mini truck bearing No. U.P. 41-9449 came from Rajkamal talkies, side, and it was being driven rashly and negligently and hit Mujibur Rahman who received grievous injuries and died on the spot. It was further stated that Mujibur Rahman was an expert tailor and was able to earn Rs.4250 per month. The aforesaid claim petition came to be contested by the owner of the mini truck as well as the insurance company who filed their separate written statements.
Upon the pleadings of the parties, the tribunal framed three issues while dealing with issue no.1 and considering the evidence it came to be conclusion that the accident occurred on 01.09.2003 on account of rash and negligent driving of the driver of mini truck bearing No.U.P. 41-9449 and on account of the said accident Mujibur Rahman lost his life. While dealing with the issue no.2, it found that the said mini truck was duly insured and its driver was also having a valid and effective driving licence. However, while assessing the compensation the tribunal found that since the appellants could not prove the income by any documentary evidence, therefore, it took notional income of the deceased at Rs.15,000/- per annum and thereafter making 1/4th deduction thereof towards personal expenses and applying a multiplayer of 13 considering the age of the deceased as 45 it awarded a sum of Rs.1,30,000/-. It also awarded a sum of Rs.2000/- towards funeral expenses, a sum of Rs.2,500/- towards loss of estate and Rs.5000/- towards loss of consortium and as such a total sum of Rs.1,39,500/- was awarded alongwith in the interest @ 5% per annum by means of the award dated 22.04.2006.
It is the aforesaid award which has been assailed by the appellants by means of the instant appeal on the grounds already noted herein above.
Upon perusal of the record as well as considering the submissions of the learned counsel for the parties, it would be relevant to notice that the Motor Vehicles Act, 1988 has been amended which has become operative from 22nd May 2018. By virtue of the aforesaid amendment, the earlier second schedule abanded to Section 163-A has been scraped whereas a new schedule has been appended. For ready reference, second schedule as amended in 2018 is being reproduced hereinafter for ready reference:-
The Second Schedule (See Section 163-A) Schedule for Compensation for third party fatal accidents/injury cases claims.
1. (a) Fatal Accidents:
Compensation payable in case of Death shall be five lakh rupees.
(b) Accidents resulting in permanent disability.
Compensation payable shall be = [Rs. 5,00,000 x percentage disability as per Schedule 1 of the Employee's Compensation Act, 1923 (8 of 1923)]:
Provided that the minimum compensation in case of permanent disability of any kind shall not be less than twenty five thousand rupees.
(c) Accidents resulting in minor injury:
A fixed compensation of twenty five thousand rupees shall be payable:
2. On and from the date of 1st day of January, 2019 the amount of compensation specified in the clauses (a) to (c) of paragraph (1) shall stand increased by 5 per cent annually.] In view of the above, it would be clear that the scheme of the Act has been drastically changed relating to compensation which is payable in respect of petition under Section 163-A. The Apex Court had already noticed in large number of decisions that the second schedule as operative was with passage of time has become redundant and therefore the legislature in its wisdom taking note of the prevalent circumstance has been able to scrap the earlier second schedule and it has now been replaced with a new scheme which has been quoted herein above.
In light of the aforesaid amendment, the question that requires consideration is whether at the time when the appeal is being heard the amended second schedule would apply or the appellants would be entitled to the enhancement as per Rules framed under Motor Vehicles Rules, 1998. This aspect of the matter has already been considered by this Court in the case of Smt. Poonam Gupta Vs. Arun Kumar Mishra decided on 13.11.2019 in F.A.F.O.No.438 of 2010 and while following the decision of the Apex Court in the case of Union of India Vs. Rina Devi reported in 2019 (3) SCC page 572, the relevant portion reads as under:-
15.(i) Whether the quantum of compensation should be as per the prescribed rate of compensation as on the date of application/incident or on the date of order awarding compensation;
Answering the same, the Apex Court held as under:-
16. In Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] , this Court considered the question whether the compensation to be applied would be as per rules applicable on the date of the order or as per the rules in force at the time of accident or the untoward incident. Reversing the view [Union of India v. Rathi Menon, MFA No. 1292 of 1998, order dated 12-8-1999 (Ker)] taken by the Kerala High Court that the liability to pay compensation arises as soon as accident happens and not when the quantum is determined, this Court held that liability is to pay compensation "as may be prescribed" which means as on the date of the order of the Tribunal. This Court observed that if interpretation placed by the Kerala High Court was to be accepted and the claimant was to get compensation in terms of market value which prevailed on the date of the accident, the money value of the compensation will be reduced value on account of lapse of time. The revision of rate by the Central Government may itself show that the money value has come down. The Tribunal must apply the rate applicable as per the rules at the time of making of the order for payment of compensation. [Rathi Menon v. Union of India, (2001) 3 SCC 714, paras 29 & 30] This Court distinguished the judgments of the larger Bench in Pratap Narain Singh Deo [Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289 : 1976 SCC (L&S) 52] , P.A. Narayanan v. Union of India [P.A. Narayanan v. Union of India, (1998) 3 SCC 67] and Maghar Singh v. Jashwant Singh [Maghar Singh v. Jashwant Singh, (1998) 9 SCC 134] . It was observed that Pratap Narain Singh Deo [Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289 : 1976 SCC (L&S) 52] and Maghar Singh [Maghar Singh v. Jashwant Singh, (1998) 9 SCC 134] were judgments under the Workmen's Compensation Act where the scheme was different as in the said Act there was a provision for interest and penalty if deposit was not made. The judgment in P.A. Narayanan [P.A. Narayanan v. Union of India, (1998) 3 SCC 67] was relied upon to support the view that therein compensation was awarded even though accident was of a date much earlier to the rules providing for compensation.
17. The learned ASG for the appellant submitted that view in Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] stands watered down by subsequent decisions especially in Thazhathe Purayil Sarabi [Thazhathe Purayil Sarabi v. Union of India, (2009) 7 SCC 372 : (2009) 3 SCC (Civ) 133 : (2009) 3 SCC (Cri) 408 : 2010 TAC 420] , Mohamadi [Mohamadi v. Union of India, (2019) 12 SCC 389 : 2010 SCC OnLine SC 19] and Kalandi Charan Sahoo [Kalandi Charan Sahoo v. South-East Central Railways, (2019) 12 SCC 387 : 2017 SCC OnLine SC 1638] . Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] was premised on the basis that there was no law for interest and there will be injustice if compensation was paid at money value which had got reduced by the time the compensation was paid. Factually interest was awarded in Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] . It was on that basis that judgments in the Workmen Compensation cases were held to be distinguishable though the said judgments are of larger Benches [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 33] . Subsequently in Thazhathe Purayil [Thazhathe Purayil Sarabi v. Union of India, (2009) 7 SCC 372 : (2009) 3 SCC (Civ) 133 : (2009) 3 SCC (Cri) 408 : 2010 TAC 420] it has been held by this Court, after referring to Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] , that right to claim compensation accrued on the date of the incident though compensation is computed on the date of the award of the Tribunal. To compensate for loss of money value on account of lapse of time and for the denial of right to utilise the money when due, interest was required to be paid. [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 26] Accordingly, this Court directed payment of interest on the awarded sum from the date of application till the date of recovery. This view was followed in Mohamadi [Mohamadi v. Union of India, (2019) 12 SCC 389 : 2010 SCC OnLine SC 19] . In Kalandi Charan Sahoo [Kalandi Charan Sahoo v. South-East Central Railways, (2019) 12 SCC 387 : 2017 SCC OnLine SC 1638] , without any specific discussion on the legal issue involved, direction was issued for payment of compensation which was applicable at the material time and the same was assumed to be of Rs 4 lakhs. In that case, the accident took place in the year 2005 and the award of the Tribunal was in 2009 i.e. prior to 1-1-2017.
18. The learned Amicus has referred to judgments of this Court in Raman Iron Foundry [Union of India v. Raman Iron Foundry, (1974) 2 SCC 231, para 11] and Kesoram Industries [Kesoram Industries and Cotton Mills Ltd. v. CWT, (1966) 2 SCR 688, para 33 : AIR 1966 SC 1370] to submit that quantum of compensation applicable is to be as on the award of the Tribunal as the amount due is only on that day and not earlier. In Kesoram Industries [Kesoram Industries and Cotton Mills Ltd. v. CWT, (1966) 2 SCR 688, para 33 : AIR 1966 SC 1370] , the question was when for purposes of calculating "net wealth" under the Wealth Tax Act, 1957 provision for payment of tax could be treated as "debt owed" within the meaning of Section 2(m) of the said Act. This Court held that "debt" was obligation to pay. The sum payable on a contingency, however, does not become "debt" until the said contingency happens. The liability to pay tax arises on such tax being quantified. But when the rate of tax is ascertainable, the amount can be treated as debt for the year for which the tax is due for purposes of valuation during the accounting year in question. There is no conflict in the ratio of this judgment with the principle propounded in Thazhathe Purayil Sarabi [Thazhathe Purayil Sarabi v. Union of India, (2009) 7 SCC 372 : (2009) 3 SCC (Civ) 133 : (2009) 3 SCC (Cri) 408 : 2010 TAC 420] that in the present context right to compensation arises on the date of the accident. In Raman Iron Foundry [Union of India v. Raman Iron Foundry, (1974) 2 SCC 231, para 11] , the question was whether a claim for unliquidated damages does not give rise to "a debt" till the liability is determined. It was held that no debt arises from a claim for unliquidated damages until the liability is adjudicated. Even from this judgment it is not possible to hold that the liability for compensation, in the present context, arises only on determination thereof and not on the date of accident. Since it has been held that interest is required to be paid, the premise on which Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] is based has changed. We are of the view that law in the present context should be taken to be that the liability will accrue on the date of the accident and the amount applicable as on that date will be the amount recoverable but the claimant will get interest from the date of accident till the payment at such rate as may be considered just and fair from time to time. In this context, rate of interest applicable in motor accident claim cases can be held to be reasonable and fair. Once concept of interest has been introduced, principles of the Workmen Compensation Act can certainly be applied and judgment of the four-Judge Bench in Pratap Narain Singh Deo [Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289 : 1976 SCC (L&S) 52] will fully apply. Wherever it is found that the revised amount of applicable compensation as on the date of award of the Tribunal is less than the prescribed amount of compensation as on the date of accident with interest, higher of the two amounts ought to be awarded on the principle of beneficial legislation. Present legislation is certainly a piece of beneficent legislation.
19. Accordingly, we conclude that compensation will be payable as applicable on the date of the accident with interest as may be considered reasonable from time to time on the same pattern as in accident claim cases. If the amount so calculated is less than the amount prescribed as on the date of the award of the Tribunal, the claimant will be entitled to higher of the two amounts. This order will not affect the awards which have already become final and where limitation for challenging such awards has expired, this order will not by itself be a ground for condonation of delay. Seeming conflict in Rathi Menon [Rathi Menon v. Union of India, (2001) 3 SCC 714, para 30 : 2001 SCC (Cri) 1311] and Kalandi Charan Sahoo [Kalandi Charan Sahoo v. South-East Central Railways, (2019) 12 SCC 387 : 2017 SCC OnLine SC 1638] stands explained accordingly. The four-Judge Bench judgment in Pratap Narain Singh Deo [Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289 : 1976 SCC (L&S) 52] holds the field on the subject and squarely applies to the present situation. Compensation as applicable on the date of the accident has to be given with reasonable interest and to give effect to the mandate of beneficial legislation, if compensation as provided on the date of award of the Tribunal is higher than unrevised amount with interest, the higher of the two amounts has to be given.
Another Division Bench of Calcutta High Court in the case of Urmila Haider Vs. New India Assurance Co. Ltd. reported in 2018 SCC Online Cal 11751 and the relevant paragraphs thereof reads as under:-
66. However, the Supreme Court in the earlier part of the said decision categorically held: "Once concept of interest has been introduced, principles of Workmen Compensation Act can certainly be applied and judgment of 4-Judge Bench in Pratap Narain Singh Deo (supra) will fully apply".
87. Taking into consideration that interpretation of a beneficent legislation was involved, the Supreme Court evolved a formula for awarding compensation in a manner that would benefit the heirs of a deceased victim.
116. Sub-section (3) of Section 163-A confers power on the Central Government to amend the Second Schedule keeping in view the "cost of living" by notification in the Official Gazette, from time to time. While in a proceeding under Section 166 of the Act interim relief could be claimed under Section 140 on the principle of 'no-fault' liability, the law does not recognise interim relief if a tribunal is approached under Section 263-A. The relief that is granted, if at all the claim case so permits, is a final relief. If the tribunal is approached in early 2008 with a claim for a death occurring in late 2007 and the tribunal decides the claim application following the old schedule after the notification amending the old schedule was issued, say on May 23, 2018, would the compensation that is awarded be sufficient to take care of the cost of living in May, 2018 and onwards? It can never be ignored that the legal heirs of the deceased victim have to live in the future, when the cost of living would increase manifold, and not in the past when it was much on the lower side. In the absence of any interim compensation being payable, the claimants may have survived with whatever little they could manage either by engaging in any avocation or with the blessings of others or even by lending. The compensation that is finally determined to be payable would provide them the means for their sustenance in future. If the legal heirs are made to accept the compensation determined on the basis of the cost of living in late 1994 as per the old schedule, which the Supreme Court as far back as in 1996 while deciding Trilok Chandra (supra) found to be defective and in 2013 has observed in Puttamma (supra) to have become redundant, irrational and unworkable, it would be a cruel joke for them to have compensation determined on the basis of the old schedule, being a pittance, having been left high and dry with the death of possibly the sole bread winner in the family, and not administered justice upon application of the new schedule.
117. We are, thus, of the clear view that while deciding claim applications under the 1988 Act, be it under Section 166 or Section 163-A, the ordinary rule of litigation that the rights of the parties stand crystallized on the date of commencement of litigation and the right to relief should be decided by reference to the date on which the plaintiff entered the portals of the Court, may not apply. The claim applications under Section 166 and Section 163-A, for a limited purpose, form a class of its own in the sense that contrary to other jurisdictions where the Court considering the facts and circumstances proceeds to grant relief to the suitor either wholly or partially but not in excess of what is claimed, the tribunals functioning under Section 165 of the 1988 Act are under no compulsion to award compensation restricted to the claimed amount before it at the instance of the claimants. If any authority is needed, one may profitably refer to the decision in Nagappa v. Gurdayal Singh: (2003) 2 SCC 274, which also arose out of a claim application under Section 163-A of the 1988 Act.
118. The scheme relating to grant of compensation under Chapters XI and XII of the 1988 Act being beneficial legislation, a liberal construction has always been resorted to. Padma Srinivasan (supra) is one decision where, to give effect to an amendment in Section 95 (2) of the 1939 Act, the date of the accident was considered relevant. However, one can hardly overlook that a decision is an authority for what it decides and not what logically follows therefrom. We thoughtfully refuse to consider the date of the accident to be relevant now, in respect of a claim application under Section 163-A. As we have noticed earlier, the age and earning of the victim on the date of his death under the old schedule were relevant considerations for determining compensation based on selection of the appropriate multiplier but the date of death and the earning capacity of the victim presently have lost all relevance with the introduction of the new schedule.
125. Therefore, the conclusion seems to be inescapable that while deciding pending claim applications/appeals post May 22, 2018, the new schedule ought to be applied by the tribunals/this Court for determining compensation payable to the legal heirs of an accident victim or to the victim himself regardless of whether the new schedule is beneficial to them or not. The issue framed in paragraph 12 is, accordingly, answered.
In light of the above, this Court has no hesitation that as of now since the second schedule as amended by 2018 has become prevalent, accordingly the same shall apply and the appellants will only be entitled to a lump-sum payment in terms of the scheme of the aforesaid Act for sum of rupees five lacs alongwith interest.
In the instant case, the interest awarded by the tribunal is only five per cent interest per annum which in estimation of this Court is on the lower side.
Considering the facts and circumstances, this Court finds that the aforesaid sum of rupees five lacs shall be payable to the appellants alongwith the interest at the rate of seven per cent per annum.
In light of the above, the appeal is allowed and the appellants shall be entitled to a sum of rupees five lacs alongwith the interest at the rate of seven per cent per annum from the date of the application till the date of the actual payment after adjusting the amount already deposited and paid by the insurance company.
With the aforesaid, this first appeal from order is allowed and the award dated 22.04.2006 passed by Additional District Judge, Court No.18, Barabanki / M.A.C.T., shall stands modified to the above extent. There shall be no order as to costs. The lower court record of the tribunal shall be remitted to the concerned tribunal within a period of two weeks.
05.12.2019 ank/-