Himachal Pradesh High Court
Yugal Kishore Sharma & Others vs Sukh Rai Singh And Others on 14 December, 2016
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
.
FAO (MVA) No.326 of 2016 a/w
FAO(MVA) No.364 of 2014 & Cross
Objections No.5 of 2015.
Judgment reserved on: 30.11.2016.
Date of decision: December,14th , 2016.
of
1. FAO(MVA) No.326 of 2016.
Yugal Kishore Sharma & others
rt .....Appellant s.
Versus
Sukh Rai Singh and others .....Respondents.
For the Appellants : Mr.Rajnish Maniktala, Advocate.
For the Respondents : Mr.Jagdish Thakur, Advocate, for
respondents No.1 and 3.
2. FAO(MVA) No.364 of 2014.
Harwinder Singh & another .....Appellants.
Versus
Yugal Kishore Sharma and others .....Respondents.
For the Appellants : Mr.Jagdish Thakur, Advocate.
For the Respondents : Mr.Rajnish Maniktala, Advocate,
for respondents No.1 to 3/Cross-
Objectors.
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. Whether approved for reporting?1No Tarlok Singh Chauhan, Judge .
The appellants in FAO (MVA) No.364 of 2014 are the owners of the offending vehicle, who have been fastened with the entire liability to pay the compensation by the learned Tribunal, have filed Whether the reporters of the local papers may be allowed to see the Judgment?Yes ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 2 instant appeal, whereas, FAO (MVA) No. 326 of 2016 has been preferred by the claimants seeking enhancement of the award amount.
.
2. Briefly stated the case of the claimants was that on 09.05.2009 Dishant Sharma alongwith his college mates Abhldeep Sarkar and Prenoy Bhatt were going to hostel and at about 4.30 p.m., when they reached Rodi Road, a mini bus bearing registration No. of PB-03K-9207 came from Talwandi Sabo side and Dishant Sharma gave a signal to stop the bus which was being driven in a highly rash rt and negligent manner. The bus struck against Dishant Sharma, who was run over by the front tyres of the bus. The driver of the bus ran away from the spot and the college mates of Dishant Sharma took him to Civil Hospital, Talwandi Sabo for treatment, however, he succumbed to his injuries. The post mortem of the deceased was conducted at Civil Hospital Talwandi Sabo on 10.05.2009. A case under Sections 279 and 304-A of IPC was registered against respondent No.1 vide FIR No.43/09 at Police Station, Talwandi Sabo. The petitioners thereafter filed a petition seeking compensation of `80 lacs under Section 166 of the Motor Vehicles Act, alongwith interest on the ground that the accident in question had occurred due to rash and negligent driving of the bus by respondent No.1. It is alleged that the deceased was a student of B.Tech of 2006 batch of Guru Govind Singh College of Engineering and Technology, Talwandi Sabo and at the relevant time was aged about 20 years. It is further alleged that after completion of B.Tech, the deceased would have certainly started earning atleast `50,000/- per month as in the normal case of Computer Engineering. It is alleged that parents of the deceased had spent their entire resources for the studies of the deceased and had a legitimate expectation from ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 3 him in the years to come. The deceased was stated to be a brilliant student and it is claimed that the petitioners had immensely suffered on .
account of mental agony, apart from being put to great financial loss.
3. Respondent No.1 contested the petition by filing replies wherein preliminary objection was taken that the deceased suddenly jumped before the bus, as such, the petition was not maintainable and of even otherwise the same was bad for mis-joinder of necessary parties.
On merits, it is alleged that a false FIR that too in connivance with the rt police had been lodged against the replying respondent simply in order to grab the compensation. It is alleged that the accident had occurred due to the fault of the deceased himself, who suddenly jumped before the bus being driver by the replying respondent in normal speed.
4. Respondent No.2 did not prefer to contest the petition and was proceeded against ex parte.
5. Respondent No.3 contested the petition by filing separate reply taking therein preliminary objections qua mis-joinder and maintainability of the petition. On merits, it is alleged that that the petitioners were not entitled to any compensation from the replying respondent and in any case the compensation as claimed was highly inflated.
6. On the pleadings of the parties, the learned Tribunal on 28.08.2012 framed the following issues:-
"1. Whether the deceased died in a motor vehicle accident allegedly caused by rash and negligent driving of offending vehicle by respondent No.1? OPP.
2. If issue No.1 above is proved in affirmative, what quantum of compensation the petitioners are entitled to, and from whom? OPP.::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 4
3. Whether petition is bad for non-joinder of necessary parties as respondent No.2 was not owner of the offending vehicle .
at the relevant time? OPR-2.
4. Whether the accident occurred on account of fault of deceased Dishant who suddenly jumped before the offending vehicle? OPR-1.
5. Whether petition is not maintainable against the of respondent No.3? OPR-3.
6. Relief."
7. rt The learned Tribunal below after recording the evidence and evaluating the same, allowed the claim petition and awarded a sum of `14,80,600/- as compensation alongwith interest @ 8% from the date of filing of the petition till the realization of the whole amount with interest to be paid by respondents No.1 and 3 jointly and severally.
8. Shri Jagdish Thakur, learned counsel for the appellants in FAO (MVA) No.364 of 2014, has vehemently argued that Ajit Pal Singh, registered owner of the bus has been arrayed as respondent No.2 and Harwinder Singh, the alleged owner of the bus has been arrayed as respondent No.3 before the learned Tribunal below. Harwinder Singh was not the registered owner of the bus and it had been proved on record that it was Ajit Pal Singh, who was owner of the bus and had been exonerated by the learned Tribunal. He would further argue that the award passed is otherwise highly excessive and the learned Tribunal erred in the selection of the multiplier on the basis of the age of the deceased, whereas, the compensation was required to be awarded on the age of the parents as being dependent on the age of the deceased, rather than the same is based on the age of the parents.
Even otherwise, the deductions towards personal expenses have wrongly been carried out at 1/ 3rd of the amount which as per settled law ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 5 ought to have been half of the amount since the deceased was a bachelor.
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9. On the other hand, Shri Rajnish Maniktala, learned counsel for the claimants would vehemently argue that the award passed by the learned Tribunal below is too meagre and, therefore, the same was required to be suitably enhanced.
of I have heard the learned counsel for the parties and gone through the records of the case.
rt
10. Three important questions of law arise for consideration in these appeals. Firstly, as to who is the owner of the vehicle and secondly whether the multiplier applied is to be based on the age of the deceased or age of the claimants and thirdly whether the deductions are to be carried at 1/2 or 1/3rd of the amount from the total income of the deceased towar ds his personal expenses.
Question No.1.
11. Adverting to the first contention raised by Shri Jagdish Thakur, Advocate, with respect to Harwinder Singh not being the owner of the bus in question. It is not in dispute that Harwinder Singh is not the registered owner of the vehicle, however, at the same time, there is no dispute that it was Harwinder Singh, who had been plying the vehicle which was originally owned by Sukh Rai Singh and thereafter transferred to Ajit Pal, respondent No.2 before the learned Tribunal below, on 28.10.2006 and subsequently the offending bus was sold to Harwinder Singh on 12.05.2009 by executing an affidavit to this effect.
12. Therefore, further question which arises for consideration is as to who is the owner of the motor vehicle. Is it the person in whose ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 6 name the vehicle is registered or is it the person whose possession and control the motor vehicle, is as a matter of right?
.
13. This question is no longer res integra and can be considered more settled in view of the repeated pronouncements of the Hon'ble Supreme Court on the subject whereby it has been held that the liability to pay compensation would be that of the purchaser of the of vehicle alone and not the registered owner and I need only refer to the latest judgment of the Hon'ble Supreme Court in Managing Director, rt Karnataka State Road Transport Corporation versus New India Assurance Company Limited and another (2016) 2 SCC 382 wherein it was held as under:-
"8. "Owner" has been defined under Section 2(30) of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act of 1988).
The definition in the Act of 1988 is extracted hereunder :
"2(30) "owner" means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement;"
9. The definition of owner under Section 2(19) of the Motor Vehicles Act, 1939 read as under:-
"2(19) "owner" means, where the person, in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, the person in possession of the vehicle under that agreement."
10. Under the Act of 1988, the owner means a registered owner and where the agreement on hire-purchase or an agreement of hypothecation has been entered into or lease agreement, the person in possession of the vehicle is treated as an owner.
11. Section 146 of the Act of 1988 prescribe the necessity for insurance against third party risk. Motor vehicle cannot be used in a public place without policy of insurance complying with the requirement of Chapter X1. Exemption has been carved out to ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 7 the vehicles owned by the Central or State Governments and used for government purposes. Under sub-Section (3) of .
Section 146, it is open to the appropriate Government to exempt the vehicle owned by the Central or State Governments if it is used for Government purposes or any local authority or any State transport undertaking.
12. Section 147 of the Act of 1988 deals with the requirements of of policy and limits of liability. The statutory requirement under Section 147 is that policy of insurance must be a policy which is issued by authorised Insurer and insures the person or class of rt persons specified in the policy to the extent specified in sub- section (2)(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; and (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.
13. Certain exception have been carved out in the proviso to sub-section (1) of section 147. It is contained in proviso (ii) that the policy shall not be required to cover any contractual liability. Limits of the liability have been provided in Section 147(2). The liability under Section 147(2)(1)(b) is the amount of liability incurred and with respect to any damage to any property of a third party, a limit of Rs.6,000/-. Section 147(5) provides that notwithstanding anything contained in any law for the time being in force, an insurer shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.
14. Section 157 of the Act 1988 deals with the deemed transfer of certificate of insurance. Provisions of Section 157 are as under:
"157. Transfer of certificate of insurance.-- (1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 8 in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to .
have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the of necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."
It is apparent from Section 157(1) of the Act of 1988 that certificate shall be deemed to have been transferred in favour of rt the person to whom the motor vehicle is transferred with effect from the date of its transfer. Section 157(2) of the Act provides that the transferee to apply within 14 days from the date of transfer in the prescribed form to make necessary changes in the certificate of insurance.
15. Before dilating further, we deem it appropriate to advert to the certain clauses in the lease agreement on the basis of which vehicles are plied on hire by the KSRTC. The owner of the private bus has to provide new bus to KSRTC for the purpose of hire.
16. As per clause 6, the owner of the private bus to discharge statutory liability. Clauses 6(i) and (ii) of lease agreement are quoted below:
"6(i) In case the owner of the private bus defaults in the discharge of any of his statutory liability, KSRTC reserves the right to deduct such amounts from the amount payable to the owner as it is sufficient to discharge the liability, and if the liability is more than the amounts payable by KSRTC to the owner, the owner alone shall be liable to discharge the liability and/or to make good the amount to KSRTC, if discharged by KSRTC.
6(ii) If because of any default by the bus owner or by his/her drivers/other employees, agent representative, any liability comes on KSRTC, the KSRTC has the right to recover the amount either from the bills payable or the security deposit and to take further steps to recover the balance from the private owner by any lawful means."
17. The Conductor was to be provided under clause 7(iv) by the KSRTC and was entitled to collect the fare and luggage charges etc. for and on behalf of KSTRC.
::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 918. As per clause 8, Drivers were to be engaged and provided by the owner. Salary etc. was also to be paid by the owner and .
is subject to other conditions such as they should not have been dismissed from the services of the Central Government etc. and should possess requisite licence.
19. Clause 14 of lease agreement with respect to insurance coverage is also relevant which is extracted as under:
of "14. The owner of the private bus shall keep the hired bus duly insured under a Motor Vehicle comprehensive insurance police covering all risks and all such costs shall be born by the rt owner of the private bus. In case of failure to have a valid comprehensive insurance policy. The bus will not be used for KSRTC's operations and it will be deemed that the bus has not been made available to KSRTC for scheduled operations, with all consequent of effects. The insurance shall cover 61 passengers."
20. Clause 16 relating to liability as to accidents is also important for the purpose of decision of the case. Clauses 16(a)
(b) and (c) are extracted as under:-
"(a) The owner of the bus alone shall be solely liable for any claim arising out of any accident, damages or loss or hurt caused during the operation of the bus. The KSRTC shall not be liable for any claims arising out of the use of the buses, including claims made in connection with the impurities or loss of life sustained by passengers, bus crew or any other road user or to any property/person. Besides, all tortuous liability if any, shall be borne by the owner or the insurer of the vehicle themselves. However the accidents should be reported to the KSRTC office/Depot.
(b) KSRTC may make payment of ex-gratia amount to the victims in event of accident of such private hired buses while on KSRTC operations as per the KSRTC's prevailing norms which shall be recovered from any amounts due to the owner of such private buses or from security Deposit etc. Further, the owner of such private bus should make prompt payment of 'no fault liability' or any other claim under the law for such accident victims. In case KSRTC is compelled to make such payment on behalf of the owner of private buses, it shall be recovered from any amount due to the owner by KSRTC or receivable to him from Insurance Company or other debtors etc. In case of non-payment to non-recovery of such amount by KSRTC within 15 days, interest at 15% per annum shall also be recoverable. For delays beyond 30 days KSRTC may amount or adjustment thereof towards hire charges payable.
(c) It shall be the responsibility of the owner of the private bus to produce at his own cost, the driver/bus before the court of ......... and before the police authorities whenever required in case of accident or any other contingencies or on order or directions by the Judicial Or Executive authorities .......
charges shall be payable by KSRTC in such cases."
::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 10It is apparent from clause 16(a) that in case of accident claim, the KSRTC shall not be liable for any claim arising out of use of .
buses including loss of life sustained by passengers or any other user or to any property/person. If KSRTC makes any ex gratia payment in the case of accident, the same shall be recovered from any amount due to the owner in case KSRTC is made liable to make payment of compensation on behalf of private buses it shall be recovered from any amount due to the of owner by KSRTC or receivable to him from Insurance Company etc. rt
21. Clauses 17, 18, 19 and 20 are also relevant they are extracted below:
"17. The KSRTC shall not be liable for any loss caused to the buses hired, at any point of time including during the period of agitations, strikes, accidents, natural calamities etc.
18. The owner of the private bus shall be liable for shall alone discharge or meet all claims including fines and penalties arising out of violation of traffic Rules, and Regulations, Statutes, Acts, Rules and Regulations etc., in force for act of omissions or commissions committed either by his/her drivers or by any other person not authorised to drive. The owner of the private bus shall be liable and shall meet and discharge any claim for compensation or damages on account of tortuous liability.
19(a) The owner of the private bus shall provide and make available bus/buses as per the contract to KSRTC on all days or operation in time as per the schedule departing time and also as so as to cover the entire schedule Kms. Duty.
(b) The owner of the private bus shall not withdraw any bus from the operation except with advance notice before 24 hours and with prior written consent of the depot manager concerned of KSRTC to do so. In case any violation of this clause, the owner shall be liable for imposition of penalties by the KSRTC.
20(1)(a) The KSRTC on its part agrees to pay hire charges to the owner at the rates inculcation in the hiring rate charts at Annexure A1 and A2, subject to the rules, terms and conditions of the contract. The hiring rate applicable shall be based on the schedule Kms. of the route allotted to the hired bus, except as otherwise provided herein."
22. The main question for consideration is whether the registered owner and insurer can escape the liability in view of ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 11 the provisions contained in the Act and in view of the aforesaid terms and conditions of the lease agreement. The question also .
arise whether claimants can also recover the amount from KSRTC.
23. The High Court has held that actual control of the bus was with the KSRTC and the driver was driving the bus under its control. Relying upon the decisions in National Insurance Co.
of Ltd. V. Deepa Devi & Ors., (2008) 1 SCC 414 and Rajasthan State Road Transport Corporation v. Kailash Nath Kothari & Ors., (1997) 7 SCC 481, it was held that KSRTC to be the rt owner under Section 2(30) of the Act. There is no liability of the registered owner as such insurer cannot be saddled with liability to indemnify. Hence, the registered owner and the insurer have been exonerated. The KSRTC has been fastened with the liability.
24.In our opinion, decision of High Court is not sustainable. The provisions contained in the Act are clear. No vehicle can be driven without insurance as provided in Section 147 whereas clause 14 of lease agreement between KSRTC and the owner clearly stipulate that it shall be the liability of the owner to provide the comprehensive insurance covers for all kind of accidental risks to the passengers, other persons/property. The provisions of said clause of the agreement are not shown to be opposed to any provision in the Contract Act or any of the provisions contained under the Act of 1988. Hiring of public service vehicles is not prohibited under any of the provisions of the aforesaid laws. It could not be said to be inconsistent user by KSRTC. The agreement is not shown to be illegal in any manner whatsoever nor shown to be opposed to the public policy.
25. The policy of insurance is contractual obligation between the insured and the insurer. It has not been shown that while entering into the aforesaid agreement of lease for hiring the buses, any of the provisions contained in the insurance policy has been violated. It has not been shown that owner could not have given bus on hire as per any provision of policy. It was the liability of the registered owner to provide the bus regularly, to ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 12 employ a driver, to make the payment of salary to the driver and the driver should be duly licenced and not disqualified as .
provided in the agreement though buses were to be plied on the routes as specified by the KSRTC and hiring charges were required to be paid to the registered owner. In the absence of any stipulation prohibiting such an arrangement in the insurance policy, we find that in view of agreement of lease the registered owner has owned the liability to pay. The insurer cannot also of escape the liability.
26. Apart from that what is provided under Section 157 of the rt Act of 1988 is that the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer. Even if there is a transfer of the vehicle by sale, the insurer cannot escape the liability as there is deemed transfer of the certificate of insurance. In the instant case it is not complete transfer of the vehicle it has been given on hire for which there is no prohibition and no condition/policy of insurance as shown to prohibit plying of vehicle on hire. The vehicle was not used for inconsistent purpose. Thus, in the absence of any legal prohibition and any violation of terms and conditions of the policy, more so, in view of the provisions of Section 157 of the Act of 1988, we are of considered opinion that the insurer cannot escape the liability.
27. Now, we come to the question of exclusion of contractual liability under second proviso to Section 147(1). When we read provisions of Section 147 with Section 157 together, it leaves no room for any doubt that there is deemed transfer of policy in case of transfer of vehicle. Hence, liability of insurer continues notwithstanding the contract of transfer of vehicle, such contractual liability cannot be said to be excluded by virtue of second proviso to Section 147(1) of Act of 1988. Higher purchase agreement, an agreement for lease or an agreement for hypothecation are covered under Section 2(30) of the Act of 1988. A person in possession is considered to be an owner of the vehicle under such agreements. In case such contractual liability is excluded then anomalous results would occur and financer under higher purchase agreement would be held liable ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 13 and so on. In our view, an agreement for lease on hire cannot be said to be contract envisaged for exclusion under contractual .
liability in second proviso to Section 147(1) of the Act of 1988.
The High Court has erred in holding otherwise.
28. The KSRTC can also be treated as owner for the purposes of Section 2(30) of the Act of 1988 plying the buses under lease agreement. The insurance company admittedly has insured the of vehicle and taken the requisite premium and it is not a case set up by the insurer that intimation was not given to the insurance company of the hiring arrangement . Even if the intimation had rt not been given, in our opinion, the insurer cannot escape the liability to indemnify as in the case of hiring of vehicle intimation is not required to be given. It is only in the case of complete transfer of the vehicle when change of registration particulars are required under Section 157 of the Act, an intimation has to be given by the transferee for effecting necessary changes in the policy. Even otherwise, that would be a ministerial act and the insurer cannot escape the liability for that reason. When the KSRTC has become the owner of the vehicle during the period it was on hire with it for the purpose of Section 2(30) of the Act by virtue of provisions contained in Section 157 of the Act, the insurance policy shall be deemed to be transferred. As such, insurer is liable to make indemnification and cannot escape the liability so incurred by the KSRTC.
29. In RSRTC v. Kailash Nath Kothari (supra), question of liability of insurance company did not come up for consideration. The vehicle was taken by RSRTC from its owner Sanjay Kumar and it was being plied on the route by RSRTC. The case arose out of accident date 17.7.1981 under the Act of 1939. The definition of second owner under section 2(19) of Act of 1939 came up for consideration before this Court, and conditions 4 to 7 and 15 of agreement between RSRTC and the owner, this Court held that vehicle in question was in possession and actual control of RSRTC as such it cannot escape from liability. Relevant portion of decision is extracted below: (SCC pp. 487- 89, paras 15-18) "15. Conditions 4 to 7 and 15 of the agreement executed between the RSRTC and the owner read:
::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 14"4. The Corporation shall appoint the conductor for the operation of the bus given on contract by the second party and the conductor of the Corporation shall do the work of issuing .
tickets to the passengers, to receive the fare, to let all the passengers get in and get out of the bus, to help the passengers to load and unload their goods, to stop the bus at the stops fixed by the Corporation and to operate the bus according to time- table.
5. The tickets, waybills and other stationery shall be supplied by the Corporation to the said conductor of the Corporation.
of
6. The driver of the bus shall have to follow all such instructions of the conductor, which shall be necessary under the rules for the operation of the bus.
7. The driver of the bus shall comply with all the orders of the rt Corporation or of the officers appointed by the Corporation.
15. Upon the accident of the bus taking place the owner of the bus shall be liable for the loss, damages and for the liabilities relating to the safety of the passengers. The Corporation shall not be liable for any accident. If the Corporation is required to make any payment or incur any expenses through some court or under some mutual compromise, the Corporation shall be able to recover such amounts from the owner of the bus after deducting the same from the amounts payable to him."
16. The admitted facts unmistakably show that the vehicle in question was in possession and under the actual control of RSRTC for the purpose of running on the specified route and was being used for carrying, on hire, passengers by the RSRTC. The driver was to carry out instructions, orders and directions of the conductor and other officers of the RSRTC for operation of the bus on the route specified by the RSRTC.
17. The definition of owner under Section 2(19) of the Act is not exhaustive. It has, therefore to be construed, in a wider sense, in the facts and circumstances of a given case. The expression owner must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus. To confine the meaning of "owner" to the registered owner only would in a case where the vehicle is in the actual possession and control of the hirer not be proper for the purpose of fastening of liability in case of an accident. The liability of the "owner" is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident. In this case, Shri Sanjay Kumar, the owner of the bus could not ply the bus on the particular route for which he had no permit and he in fact was not plying the bus on that route. The services of the driver were transferred along with complete "control" to RSRTC, under whose directions, instructions and command the driver was to ply or not to ply the ill-fated bus on the fateful day. The passengers were being carried by RSRTC on receiving fare from them. Shri Sanjay Kumar was therefore not concerned with the passengers travelling in that bus on the particular route on payment of fare to RSRTC. Driver of the bus, even though an employee of the owner, was at the relevant time performing his duties under the order and command of the conductor of RSRTC for operation of the bus. So far as the passengers of the ill-fated bus are concerned, ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 15 their privity of contract was only with the RSRTC to whom they had paid the fare for travelling in that bus and their safety therefore became the responsibility of the RSRTC while .
travelling in the bus. They had no privity of contract with Shri Sanjay Kumar, the owner of the bus at all. Had it been a case only of transfer of services of the driver and not of transfer of control of the driver from the owner to RSRTC, the matter may have been somewhat different. But on facts in this case and in view of Conditions 4 to 7 of the agreement (supra), the RSRTC must be held to be vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general proposition of law and the presumption arising therefrom that an employer, that is the of person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the employee concerned during the course of his employment and within the scope of his authority, is a rebuttable presumption. If rt the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability and the temporary employer or the hirer, as the case may be, must be held vicariously liable for the tort committed by the employee concerned in the course of his employment while under the command and control of the hirer notwithstanding the fact that the driver would continue to be on the payroll of the original owner. The proposition based on the general principle as noticed above is adequately rebutted in this case not only on the basis of the evidence led by the parties but also on the basis of Conditions 6 and 7 (supra), which go to show that the owner had not merely transferred the services of the driver to the RSRTC but actual control and the driver was to act under the instructions, control and command of the conductor and other officers of the RSRTC.
18. Reliance placed by learned counsel for the appellant on Condition No. 15 of the agreement (supra) in our view is misconceived. Apart from the fact that this clause in the agreement between the owner and the RSRTC, to the extent it shifts the liability for the accident from the RSRTC to the owner, may be against the public policy as opined by the High Court, though we are not inclined to test the correctness of that proposition of law because on facts, we find that RSRTC cannot escape its liability to pay compensation. The second part of Condition No. 15 makes it abundantly clear that the RSRTC did not completely shift the liability to the owner of the bus because it provided for reimbursement to it in case it has to pay compensation arising out of an accident. The words "if the Corporation is required to make any payment or incur any expenses through some court or under some mutual compromise, the Corporation shall be able to recover such amounts from the owner of the bus after deducting the same from the amounts payable to him" in the later part of Condition No. 15 leave no ambiguity in that behalf and clearly go to show the intention of the parties. Thus, RSRTC cannot escape its liability under Condition No. 15 of the agreement either. Thus, both on facts and in law the liability to pay compensation for the accident must fall on the RSRTC."
(emphasis in original) It is apparent that question of the liability of the insurer did not come up for consideration and also the relevant statutory provisions relating thereto in aforesaid decision. This Court, ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 16 considering clause 16 of the agreement entered into by RSRTC and owner, held that RSRTC did not completely shift the liability .
to the owner of the bus in case it has to pay compensation arising out of an accident. In the instant cases also there are certain clauses referred to above which indicate that if the KSRTC has to make the payment, it can recover the same from the owner out of the amount payable by it or from the amount payable by the insurer to the owner. On the strength of decision of in RSRTC v. Kailash Nath Kothari (supra), the KSRTC being in actual control of the vehicle would also be liable to make the compensation, however, in our opinion it can recover the rt amount from the registered owner or insurer, as the case may be. In fact of the case, vis-à-vis, the claimants' liability would be joint and several upon the KSRTC, registered owner and the insurer.
30. In National Insurance Co. v. Deepa Devi (supra), vehicle was under requisition by the State Government and that possession on requisition was not covered by the definition of the owner under section 2(30) in the Act of 1988 or the Act of 1939. It was held by this Court as the Motor Vehicles Act did not envisage such a situation. Owner in such a case has to be understood from common sense point of view. Thus, the State was held liable to make the payment of compensation. The question was altogether different in the aforesaid case.
31. In Godavari Finance Company v. Degala Satyanarayanamma & Ors., (2008) 5 SCC 107, definition of owner came up for consideration. It was held that the name of the financer was incorporated in the registration book as owner. The respondent was held to be owner of the vehicle which was purchased by him on being financed by Godavari Finance Company. The financer could not be held liable to make the payment of compensation as definition of the owner in the Act of 1939 is a comprehensive one as vehicle which is the subject matter of hire purchase agreement, the person in possession of the vehicle under that agreement shall be the owner. Thus, the name of the financer in the certificate would not be decisive for determination as to who was the owner of the vehicle. In the case of hire purchase agreement, financer cannot ordinarily be ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 17 treated to be the owner and the person in possession is liable to pay damages for the motor accident. This Court has held thus:
.
(SCC pp. 110-11, para 15) "15. An application for payment of compensation is filed before the Tribunal constituted under Section 165 of the Act for adjudicating upon the claim for compensation in respect of accident involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both. Use of the motor vehicle is a sine qua non for entertaining a claim for of compensation. Ordinarily if driver of the vehicle would use the same, he remains in possession or control thereof. Owner of the vehicle, although may not have anything to do with the use of vehicle at the time of the accident, actually he may be held rt to be constructively liable as the employer of the driver. What is, therefore, essential for passing an award is to find out the liabilities of the persons who are involved in the use of the vehicle or the persons who are vicariously liable. The insurance company becomes a necessary party to such claims as in the event the owner of the vehicle is found to be liable, it would have to reimburse the owner inasmuch as a vehicle is compulsorily insurable so far as a third party is concerned, as contemplated under Section 147 thereof. Therefore, there cannot be any doubt whatsoever that the possession or control of a vehicle plays a vital role."
(emphasis supplied ) This Court has observed in Godavari Finance Company (supra) that insurance company in such a case becomes a necessary party as it would have to reimburse the owner.
32. In Uttar Pradesh State Road Transport Corporation v. Kulsum & Ors., (2011) 8 SCC 142, this Court has considered the question of vehicle given on hire by owner of the vehicle to UPSRTC with its existing and running insurance policy. It was held that the UPSRTC have become the owner of the vehicle during the specified period and vehicle having been insured at the instance of the original owner, it would be deemed that vehicle was transferred alongwith insurance policy to UPSRTC. The insurer cannot escape the liability to pay the compensation. The appeal preferred by UPSRTC was allowed. The instant cases are more or less the same and the decision of this Court in UPSRTC v. Kulsum (supra) also buttress the submission raised by KSRTC. This Court has held as under: (SCC p. 152, paras 30-31) "30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. If the Corporation had become the owner even for the specific period and the vehicle having been insured at ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 18 the instance of original owner, it will be deemed that the vehicle was transferred along with the insurance policy in existence to the Corporation and thus the Insurance Company .
would not be able to escape its liability to pay the amount of compensation.
31. The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of of the owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate insurance policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice."
rt
33. In HDFC Bank Limited v. Reshma & Ors., (2015) 3 SCC 679, definition of owner under the provisions of Section 2(30) of the Act of 1988 came up for consideration before a bench of 3 judges of this Court. This Court referred to the decisions of Godavari Finance Company (supra) and Pushpa alias Leela & Ors. v. Shakuntala & Ors., (2011) 2 SCC 240 etc. in which the question arose whether the liability to pay compensation amount as determined by the Tribunal was of the purchaser of the vehicle alone or whether the liability of the recorded owner of the vehicle was co- extensive. This Court in HDFC Bank Limited v. Reshma & Ors.(supra) held thus: (SCC pp.693-94, paras 22-
24) "22. In the present case, as the facts have been unfurled, the appellant Bank had financed the owner for purchase of the vehicle and the owner had entered into a hypothecation agreement with the Bank. The borrower had the initial obligation to insure the vehicle, but without insurance he plied the vehicle on the road and the accident took place. Had the vehicle been insured, the insurance company would have been liable and not the owner. There is no cavil over the fact that the vehicle was the subject of an agreement of hypothecation and was in possession and control of Respondent 2. The High Court has proceeded both in the main judgment as well as in the review that the financier steps into the shoes of the owner. Reliance placed on Mohan Benefit (P) Ltd. V. Kachraji Raymalji (1997) 9 SCC 103, in our considered opinion, was inappropriate because in the instant case all the documents were filed by the Bank. In the said case, the two-Judge Bench of this Court had doubted the relationship between the appellant and the respondent therein from the hire-purchase agreement. Be that as it may, the said case rested on its own facts. In the decision in Rajasthan SRTC v. Kailash Nath Kothari,(1997) 7 SCC 481 the Court fastened the liability on the Corporation regard being had to the definition of the "owner" who was in control and possession of the vehicle. Similar to the effect is the judgment in National Insurance Co. Ltd. V. Deepa Devi, (2008) 1 SCC ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 19
414. Be it stated, in the said case the Court ruled that the State shall be liable to pay the amount of compensation to the claimant and not the registered owner of the vehicle and the .
insurance company. In Pushpa v. Shakuntala case, (2011) 2 SCC 240 the learned Judges distinguished the ratio in Deepa Devi on the ground that it hinged on its special facts and fastened the liability on the insurer. In UPSRTC v. Kulsum, (2011) 8 SCC 142, the principle stated in Kailash Nath Kothari was distinguished and taking note of the fact that at the relevant time, the vehicle in question was insured with it and the policy was very much in force and hence, the insurer was liable to indemnify the owner.
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23. On a careful analysis of the principles stated in the foregoing cases, it is found that there is a common thread that the person in possession of the vehicle under the hypothecation agreement has been treated as the owner. rt Needless to emphasise, if the vehicle is insured, the insurer is bound to indemnify unless there is violation of the terms of the policy under which the insurer can seek exoneration.
24. In Purnya Kala Devi v. State of Assam , (2014) 14 SCC 142, a three-Judge Bench has categorically held that the person in control and possession of the vehicle under an agreement of hypothecation should be construed as the owner and not alone the registered owner and thereafter the Court has adverted to the legislative intention, and ruled that the registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control. There is reference to Section 146 of the Act that no person shall use or cause or allow any other person to use a motor vehicle in a public place without insurance as that is the mandatory statutory requirement under the 1988 Act. In the instant case, the predecessor-in-interest of the appellant, Centurion Bank, was the registered owner along with Respondent 2. Respondent 2 was in control and possession of the vehicle. He had taken the vehicle from the dealer without paying the full premium to the insurance company and thereby getting the vehicle insured. The High Court has erroneously opined that the financier had the responsibility to get the vehicle insured, if the borrower failed to insure it. The said term in the hypothecation agreement does not convey that the appellant financier had become the owner and was in control and possession of the vehicle. It was the absolute fault of Respondent 2 to take the vehicle from the dealer without full payment of the insurance. Nothing has been brought on record that this fact was known to the appellant financier or it was done in collusion with the financier. When the intention of the legislature is quite clear to the effect, a registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control and there is evidence on record that Respondent 2, without the insurance plied the vehicle in violation of the statutory provision contained in Section 146 of the 1988 Act, the High Court could not have mulcted the liability on the financier. The appreciation by the learned Single Judge in appeal, both in fact and law, is wholly unsustainable. "
This Court has held that even when there was an agreement of and vehicle has been insured and agreement holder is treated an owner, the insurer cannot escape the liability to make indemnification."::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 20
.
Question No.2.
14. Coming to the question whether the multiplier is to be applied on the age of the deceased or the age of the claimants, the law laid down by the Hon'ble Supreme Court on this subject does not of appear to be consistent.
15. In General Manager, Kerala State Road Transport Corporation, Trivandrum versus Susamma Thomas and others rt (1994) 2 SCC 176, the Hon'ble Supreme Court evolved and accepted the well established multiplier method of computation of compensation amount by observing that:-
"The multiplier method is logically sound and well established method for ensuring a just compensation which will make for uniformity and certainty of the awards. A departure from this method can only be justified in rare and extraordinary circumstances and very exceptional cases."
It was further held that:
"the multiplier method involves ascertainment of loss of dependency or 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 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".
"According to the Hon'ble Supreme Court, "the multiplier represents the number of years' purchase, on which the loss of dependency is capitalized."::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 21
16. The decision in Susamma Thomas case (supra) was thereafter upheld by a Bench of three Hon'ble Judges in U.P. State .
Road Transport Corporation and others versus Trilok Chandra and others (1996) 4 SCC 362 and it was observed as under:-
"Multiplier method for calculating the amount of compensation is the sound and most reasonable method and it has also been of an accepted method for determining and ensuring payment of just compensation. It is necessary to reiterate that the said method should be applied uniformly so as to bring certainty to rt the awards made all over the country."
18.......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 dependent on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependents 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 emphasize 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."
17. It would be apparent from the perusal of the portion extracted above that the Hon'ble Supreme Court had categorically observed that "selection of multiplier cannot in all cases be solely dependant on the age of the deceased, especially, if the deceased is a bachelor, then as held in this judgment, the age of the parents is also relevant". It is probably here that much confusion has arisen because in the case of Susamma Thomas case (supra), it was unequivocally ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 22 held that choice of multiplier is to be determined by the age of the deceased or that of the claimants, whichever is higher, whereas, in .
Trilok Chandra's case (supra), a different criteria was carved out for a bachelor.
18. In Municipal Corporation of General Bombay versus Laxman Iyer (2003) 8 SCC 731, the Hon'ble Supreme Court reiterated of the observations made in Trilok Chandra's case (supra) and held that where the claimants are the parents of the deceased, it is not the age of rt the deceased alone, but that of the parents/claimants as well, which is relevant.
19. In New India Assurance Company Ltd. versus Charlie and Anr. (2005) 10 SCC 720, the Hon'ble Supreme Court reiterated that the multiplier method involves ascertainment of the loss of dependency and, therefore, the 'Second Schedule' appended with the Act suffers from many defects and cannot, therefore, serve as a 'guide' of 'invariable ready reckoner'. However, it was reiterated that as regards choice of multiplier, the same is to be determined by the age of the deceased or that of the claimants, whichever is higher.
20. In New India Assurance Company Ltd. versus Shanti Pathak and others (2007) 10 SCC 1, the deceased was a bachelor and running the age of 25 years at the time of accident. The Hon'ble Supreme Court took into consideration the age of the claimants/parents which was 65 years and applied the multiplier of '5'. Meaning thereby, the choice of multiplier was based on the age of the claimants and not deceased.
21. In Ramesh Singh and another versus Satbir Singh and another (2008) 2 SCC 667, the deceased was a bachelor at the time ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 23 of the accident and was running the age of 22 years, whereas, father and mother, who alone were claimants were running between the age .
of 55 and 52 years respectively and it was held that the choice of multiplier is determined by the age of the deceased or the claimants whichever is higher.
22. In Sarla Verma and others versus Delhi Transport of Corporation and another (2009) 6 SCC 121, the Hon'ble Supreme Court chose to follow the judgment in Trilok Chandra's case (supra) rt and it was observed as under:-
"17.Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision making process and the decisions.
While it may not be possible to have mathematical precision or identical awards, in assessing compensation, same or similar facts should lead to awards in the same range. When the factors/inputs are the same, and the formula/legal principles are the same, consistency and uniformity, and not divergence and freakiness, should be the result of adjudication to arrive at just compensation. In Susamma Thomas, this Court stated : (SCC p.185, para 16) "16......The proper method of computation is the multiplier method. Any departure, except in exceptional and extra-ordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability, for the assessment of compensation."
18. Basically only three facts need to be established by the claimants for assessing compensation in the case of death :
(a) age of the deceased;
(b) income of the deceased; and
(c) the number of dependents.
The issues to be determined by the Tribunal to arrive at the loss of dependency are
(i) additions/deductions to be made for arriving at the income;
::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 24(ii) the deduction to be made towards the personal living expenses of the deceased; and .
(iii) the multiplier to be applied with reference of the age of the deceased.
If these determinants are standardized, there will be uniformity and consistency in the decisions. There will lesser need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay."
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41. Tribunals/courts adopt and apply different operative multipliers. Some follow the multiplier with reference to Susamma Thomas (set out in column 2 of the table above);
rt some follow the multiplier with reference to Trilok Chandra, (set out in column 3 of the table above); some follow the multiplier with reference to Charlie (Set out in column (4) of the Table above); many follow the multiplier given in second column of the Table in the Second Schedule of MV Act (extracted in column 5 of the table above); and some follow the multiplier actually adopted in the Second Schedule while calculating the quantum of compensation (set out in column 6 of the table above). For example if the deceased is aged 38 years, the multiplier would be 12 as per Susamma Thomas, 14 as per Trilok Chandra, 15 as per Charlie, or 16 as per the multiplier given in column (2) of the Second schedule to the MV Act or 15 as per the multiplier actually adopted in the second Schedule to M V Act. Some Tribunals, as in this case, apply the multiplier of 22 by taking the balance years of service with reference to the retiring age. It is necessary to avoid this kind of inconsistency. We are concerned with cases falling under section 166 and not under section 163A of MV Act. In cases falling under section 166 of the MV Act, Davies method is applicable."
23. Notably, the Hon'ble Apex Court in this decision prepared a "new table" for selection of appropriate multiplier taking into consideration the law laid down in Susamma Thomas's and Trilok Chandra's cases (supra).
24. In Shakti Devi versus New India Insurance Co. Ltd. and another (2010) 14 SCC 575, the Hon'ble Supreme Court held that ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 25 multiplier method should remain the only method as it is once again reiterated that in case where the age of the claimant is higher than the .
age of the deceased, the age of the claimant and not age of the deceased has to be taken into account for the capitalization of the loss of dependency. This is because the choice of multiplier is determined by the age of the deceased or age of the claimant whichever is higher.
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25. In P.S. Somanathan and others versus District Insurance Officer and another (2011) 3 SCC 566, the Hon'ble rt Supreme Court after relying upon the decisions rendered in Susamma Thomas, Trilok Chandra and Sarla Verma's cases (supra) reiterated that the compensation should be computed on the age of the deceased.
26. In National Insurance Company Ltd. versus Shyam Singh and others (2011) 7 SCC 65, the ratio as laid down in Trilok Chandra's case (supra) was followed and it was reiterated that the choice of multiplier is determined by the age of the deceased or the claimants, whichever is higher.
27. In Amrit Bhanu Shali and Ors. versus National Insurance Co. Ltd. and others (2012) 11 SCC 738, the Hon'ble Supreme Court took a different view by holding that "the selection of the multiplier is based on the age of the deceased and not on the basis of the dependants".
28. In Reshma Kumari and Ors. versus Madan Mohan and Anr. (2013) 9 SCC 65, the Hon'ble Supreme Court held that the multiplier is to be used with reference to the age of the deceased.
29. A learned Division Bench of this Court, of which I was one of the member, in CWPIL No.7 of 2014, titled Court on its own motion versus State of Himachal Pradesh and others, reported in ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 26 2016 Latest HLJ (HP) 957, has chosen to strike a balance and bearing in mind the ratio of aforesaid judgments, it was held as under:-
.
"73. The multiplier method, as discussed hereinabove, is the best method to assess the compensation. As per the law laid down by the Apex Court in the latest judgment rendered in the case titled as Munna Lal Jain and another versus Vipin Kumar Sharma and others, reported in 2015 AIR SCW 3105, of the age of the deceased is the criterion for applying the multiplier method.74.
rt Admittedly, all the deceased students were 19 and 20 years of age at the relevant point of time. Thus, keeping in view the Second Schedule appended with the MV Act read with the judgments in Sarla Verma, Reshma Kumari and Munna Lal Jain's cases (supra), multiplier of '15' is just and appropriate.
30. It would be noticed that like in the present case, the students in the aforesaid case were in the age brackets of 19 and 20 and the multiplier of '15' was held to be just and proper. In such circumstances, the award passed by the learned Tribunal applying the multiplier of '18' is not sustainable and the same is accordingly reduced to '15' which is just and proper in the given facts and circumstances.
31. However, further question is whether the learned Tribunal was correct in calculating the dependency of the deceased at `6600/-?
32. PW-1 Sachin Katoch and PW-2 Prenoy Bhatt were the class mates of the deceased. PW-1 in his statement has categorically stated that after completion of B.Tech, he was doing a job in Delhi and was earning a sum of `87,000/- per month. Similarly, Prenoy Bhatt while appearing as PW-2 has stated that he was doing a job in Delhi and getting `55,000/- per month. As per the evident led, the deceased was in the sixth Semester and obviously after completion of B.Tech ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 27 would have earned a reasonably good salary which would have been quite at par with his class mates.
.
33. This Court need not even advert to any precedent on the subject as it is otherwise bound by the judgment rendered in CWPIL No.7 of 2014 (supra). The Court therein had taken suo motu cognizance of an unfortunate incident which had snatched away the of lives of 24 budding engineers, who were aged about 19-20 years and this Court after a comprehensive and indepth study had awarded rt `22,00,000/- as compensation alongwith interest @ 7.5% per annum from the date of incident till its realization and it is apt to reproduce the relevant observations which read thus:-
"47. The question is - how to grant compensation in such cases?
48. The Apex Court in the case titled as Syed Basheer Ahamed and others versus Mohammed Jameel and another, reported in (2009) 2 Supreme Court Cases 225, and Nagar Council, Rajpura versus Tajinder Singh and others, reported in (2012) 12 Supreme Court Cases 273, has discussed the issue.
49.Keeping in view the doctrine of res ipsa loquitor, public law, remedy available to the victims in public law, breach of guidelines, snatching the young Engineering students from their parents, the placements of other similarly situated students and their earning capacity are to be kept in mind while assessing the just compensation.
50.The Courts in the entire world, particularly in USA, UK and India, have tried to evolve the method to award compensation. An aggrieved person can file a civil suit and claim compensation. A workman can invoke the statutory remedy and can approach the Labour Court for compensation. A victim of traffic accident can approach Motor Accident Claims Tribunals (for short "the Tribunals"), which is now developing a new concept and really achieving its aim and object and compensation is being awarded after examining the prima facie negligence.::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 28
51. Now, the question is - what is the method, which is being applied, rather followed in order to grant compensation to the .
persons, who became or are becoming the victims of either the negligence or carelessness of the State, instrumentalities of the State, institutions, colleges, schools and other similarly situated bodies?
52. As discussed hereinabove, the Courts have discussed the strict liability and remedies of public law. In some cases the of Courts have granted lump-sum compensation and in some cases, they have just exercised the guess work.
53.rt It is apt to reproduce para 54 of the judgment in Deep Chand Sood's case (supra) herein:
"54. Question is what compensation should be awarded to the parents of the deceased children, although, the loss sustained by the parents due to the negligence of the school management, Chairman and the staff is of great magnitude and cannot be exactly compensated in terms of money, however, we feel that awarding of reasonable amount of compensation may set off their agony to some extent. Therefore, taking into consideration all the facts and circumstances of this case, submissions of respective parties, the Chairman and management of the school are directed to pay compensation of Rs.5,00,000/- to each parent of 14 students who died in this tragedy due to their sheer negligence and Rs.30,000/- each to the parents of Varun Sharma and Utsav Mehrotra who could be saved but had to suffer tremendously. The amounts of compensation be paid within two months with interest at the rate of 12 per cent per annum from 28.5.1995 by depositing the same in the Registry of this Court."
54. It would also be profitable to reproduce para 12 of the judgment rendered by the Apex Court in M.S. Grewal's case (supra) herein:
12. As noticed above, a large number of decisions were placed before this Court as regards the quantum of compensation varying between Rs.50,000 to one lakh in regard to unfortunate deaths of young children. We do deem it fit to record that while judicial precedents undoubtedly have some relevance as regards the principles of law, but the quantum of assessment stands dependent ::: Downloaded on - 15/04/2017 21:44:19 :::HCHP 29 on the fact-situation of the matter before the Court, than judicial precedents. As regards the quantum no decision as .
such can be taken to be of binding precedent as such, since each case has to be dealt with on its own peculiar facts and thus compensation is also to be assessed on the basis thereof though however the same can act as a guide :
Placement in the society, financial status differ from person to person and as such assessment would also differ. The of whole issue is to be judged on the basis of the fact-situation of the matter concerned though however, not on mathematical nicety.
rt
55.In another case titled as Lata Wadhwa and others versus State of Bihar and others, reported in (2001) 8 Supreme Court Cases 197, the concept was also discussed and it has been held by the Apex Court that the Courts have to intervene. It is apt to reproduce paras 8 and 9 of the judgment herein:
"8. So far as the determination of compensation in death cases are concerned, apart from the three decisions of Andhra Pradesh High Court, which had been mentioned in the order of this Court dated 15-12-1993, this Court in the case of G.M., Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176, exhaustively dealt with the question. It has been held in the aforesaid case that for assessment of damages to compensate the dependants, it has to take into account many imponderables, as to 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. The Court further observed that the manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom 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 ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 30 net income the deceased was accustomed to spend for the benefit of the dependants, and thereafter it should be .
capitalised by multiplying it by a figure representing the proper number of year's purchase. It was also stated that 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 overall picture that of matters," and the Court must try to assess as best as it can, the loss suffered. On the acceptability of the multiplier method, the Court observed :
rt "The multiplier method is logically sound and legally well established method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. A departure from this method can only be justified in rare and extraordinary circumstances and very exceptional cases."
The Court also further observed that the proper method of computation is the multiplier method and any departure, except in exceptional and extraordinary cases, would introduce in consistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. The Court disapproved the contrary views taken by some of the High Courts and explained away the earlier view of the Supreme Court on the point. After considering a series of English decisions, it was held that 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 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. In view of the aforesaid authoritative pronouncement of this Court and having regard to the determination made in the report by Shri Justice ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 31 Chandrachud, on the basis of the aforesaid multiplier method, it is difficult for us to accept the contention of Ms. .
Rani Jethmalani, that the settled principle for determination of compensation, has not been followed in the present case. The further submission of the learned counsel that the determination made is arbitrary, is devoid of any substance, as Shri Justice Chandrachud has correctly applied the multiplier, on consideration of all the relevant factors.
of Damages are awarded on the basis of financial loss and the financial loss is assessed in the same way, as prospective loss of earnings. The basic figure, instead of being the net rt earnings, is the net contribution to the support of the defendants, which would have been derived from the future income of the deceased. When the basic figure is fixed, then an estimate has to be made of the probable length of time for which the earnings or contribution would have continued and then a suitable multiple has to be determined (a number of year's purchase), which will reduce the total loss to its resent value, taking into account the proved risks of rise or fall in the income. In the case of Mallett v. McMonagle, 1970 AC 166, Lord Diplock gave a full analysis of the uncertainties, which arise at various stages in the estimate and the practical ways of dealing with them. In the case of Davies v. Taylor, 1974 AC 207, it was held that the Court, in looking at future uncertain events, does not decide whether on balance one thing is more likely to happen than another, but merely puts a value on the chances. A possibility may be ignored if it is slight and remote. Any method of calculation is subordinate to the nec essity for compensating the real loss. But a practical approach to the calculation of the damages has been stated by Lord Wright, in a passage which is frequently quoted, in Davis v. Powell Duffryn Associated Collieries Ltd. (1942) 1 All ER 657, to the following effect : (All ER p. 665 A-B) "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 ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 32 lump sum by taking a certain number of year' purchase."
.
9. It is not necessary for us to further delve into the matter, as in our opinion, Shri Justice Chandrachud, has correctly arrived at the basic figure as well as in applying the proper multiplier, so far as the employees of the TISCO are concerned, but the addition of conventional figure to the of tune of Rs.25,000/- appears to us to be inadequate and instead, we think the conventional figure to be added should be Rs.50,000/-."
56. rt It would also be profitable to reproduce para 40 of the judgment rendered by the Apex Court in Delhi Jal Board's case (supra) herein:
"40. We shall now consider whether the High Court was justified in issuing interim directions for payment of compensation to the families of the victims. At the outset, we deprecate the attitude of a public authority like the Appellant, who has used the judicial process for frustrating the effort made by Respondent No. 1 for getting compensation to the workers, who died due to negligence of the contractor to whom the work of maintaining sewage system was outsourced. We also express our dismay that the High Court has thought it proper to direct payment of a paltry amount of Rs.1.5 to 2.25 lakhs to the families of the victims."
57. Before we determine what should be the compensation in the instant case, we deem it proper to discuss what are the latest pronouncements made by the Courts relating to granting of the compensation in the Motor Vehicles Act, 1988 (for short "MV Act") which are to be kept in mind while assessing just compensation.
58. Expression "just" has been elaborated by the Apex Court in State of Haryana and another vs. Jasbir Kaur and others, reported in AIR 2003 Supreme Court 3696. It is apt to reproduce para 7 of the said decision hereunder:
"7. It has to be kept in view that the Tribunal constituted under the Act as provided in S. 168 is required to make an award determining the amount of compensation which is to be in the real sense "damages" which in turn appears to it ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 33 to be 'just and reasonable'. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed .
in golden scales. 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 the compensation must be "just" and it cannot be a bonanza; nor a source of profit; but the same should not be a pittance. The Courts and Tribunals have a duty to weigh the of 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 rt all cases for measuring the value of 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 on 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-arbitrary. If it is not so ti cannot be just. (See Helen C. Rebello v. Maharashtra State Road Transport Corporation (AIR 1998 SC 3191)."
59.Similar view has been taken by the Apex Court in a case titled as The Divisional Controller, K.S.R.T.C. versus Mahadeva Shetty and another, reported in AIR 2003 Supreme Court 4172.
60.The Apex Court in the case titled as Oriental Insurance Co. Ltd. versus Mohd. Nasir & Anr., reported in 2009 AIR SCW 3717, laid down the same principle while discussing, in para 27 of the judgment, the ratio laid down in the judgments rendered in the cases titled as Nagappa v. Gurudayal Singh & Ors, (2003) 2 SCC 274; Devki Nandan Bangur and Ors. versus State of Haryana and Ors. 1995 ACJ 1288; Syed Basheer Ahmed & Ors. versus Mohd. Jameel & Anr., (2009) 2 SCC 225; National Insurance Co. Ltd. versus Laxmi Narain Dhut, (2007) 3 SCC 700; Punjab State Electricity Board Ltd. versus Zora Singh and ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 34 Others (2005) 6 SCC 776; A.P. SRTC versus STAT and State of Haryana & Ors. versus Shakuntla Devi, 2008 (13) SCALE .
621.
61.The Apex Court in another case titled as Ningamma & another versus United India Insurance Co. Ltd., reported in 2009 AIR SCW 4916, held that it is the bounden duty of the Court to award "Just Compensation" in favour of the claimants to which they are entitled to, irrespective of the fact whether any of plea in that behalf was raised by the claimants or not. It is profitable to reproduce para 25 of the judgment herein:
rt "25. Undoubtedly, Section 166 of the MVA deals with "Just Compensation" and even if in the pleadings no specific claim was made under section 166 of the MVA, in our considered opinion a party should not be deprived from getting "Just Compensation" in case the claimant is able to make out a case under any provision of law. Needless to say, the MVA is beneficial and welfare legislation. In fact, the Court is duty bound and entitled to award "Just Compensation" irrespective of the fact whether any plea in that behalf was raised by the claimant or not. However, whether or not the claimants would be governed with the terms and conditions of the insurance policy and whether or not the provisions of Section 147 of the MVA would be applicable in the present case and also whether or not there was rash and negligent driving on the part of the deceased, are essentially a matter of fact which was required to be considered and answered at least by the High Court."
62.The Apex Court in the judgments delivered in the cases titled as A.P.S.R.T.C. & another versus M. Ramadevi & others, reported in 2008 AIR SCW 1213 and Sanobanu Nazirbhai Mirza & others versus Ahmedabad Municipal Transport Service, reported in 2013 AIR SCW 5800, has discussed as to what is the 'just compensation' in a Claim Petition filed under the Motor Vehicles Act. It is apt to reproduce para 9 of the judgment rendered in Sanobanu's case (supra) herein:
"9. In view of the aforesaid decision of this Court, we are of the view that the legal representatives of the deceased are entitled to the compensation as mentioned under the various heads in the table as provided above in this judgment even though certain claims were not preferred by ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 35 them as we are of the view that they are legally and legitimately entitled for the said claims. Accordingly we .
award the compensation, more than what was claimed by them as it is the statutory duty of the Tribunal and the appellate court to award just and reasonable compensation to the legal representatives of the deceased to mitigate their hardship and agony as held by this Court in a catena of cases. Therefore, this Court has awarded just and of reasonable compensation in favour of the appellants as they filed application claiming compensation under Section 166 of the M.V. Act. Keeping in view the aforesaid relevant rt facts and legal evidence on record and in the absence of rebuttal evidence adduced by the respondent, we determine just and reasonable compensation by awarding a total sum of Rs.16,96,000/- with interest @ 7.5% from the date of filing the claim petition till the date payment is made to the appellants."
63.The Apex Court in the case titled Santosh Devi versus National Insurance Company Ltd. and others, reported in (2012) 6 SCC 421, discussed the issue of assessing compensation in regard to the salaried employees and the self-
employed persons. It is profitable to reproduce para 11 and 14 to 18 of the said judgment herein:
"11. We have considered the respective arguments. Although, the legal jurisprudence developed in the country in last five decades is somewhat precedent-centric, the judgments which have bearing on socio-economic conditions of the citizens and issues relating to compensation payable to the victims of motor accidents, those who are deprived of their land and similar matters needs to be frequently revisited keeping in view the fast changing societal values, the effect of globalisation on the economy of the nation and their impact on the life of the people.
12. ...........
13. ..........
14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma's case that where the deceased was self- employed or was on a fixed salary without provision for ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 36 annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this .
rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be naïve to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life.
of
15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which rt directly impacts the cost of living is minimal on the rich and maximum on those who are self- employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put extra efforts to generate additional income necessary for sustaining their families.
16. The salaries of those employed under the Central and State Governments and their agencies/ instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lac.
17. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the Government employees and those employed in private sectors but it cannot be denied that there has been incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 37 earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural .
for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc.
18. Therefore, we do not think that while making the observations in the last three lines of paragraph 24 of Sarla of Verma's judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self-employed or who is paid fixed wages. rt Rather, it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he / she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation.
64.It is apt to record herein that the law laid down in the case titled as Sarla Verma (Smt.) and others versus Delhi Transport Corporation and another, reported in AIR 2009 SC 3104, was referred to larger Bench by another co-ordinate Bench and was upheld in the case titled as Reshma Kumari and others vs. Madan Mohan and another, 2013 AIR (SCW) 3120.
65.The Apex Court in case titled National Insurance Co. Ltd. versus Indira Srivastava and others, reported in 2008 ACJ 614, has explained the term 'income', and has held in paragraphs 8, 9, 17 and 18 as under:
"8. The term 'income' has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms.
9. Section 168 of the Act uses the word 'just compensation' which, in our opinion, should be assigned a broad meaning. We cannot, in determining the issue involved in the matter, lose sight of the fact that the private sector companies in ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 38 place of introducing a pension scheme takes recourse to payment of contributory Provident Fund, Gratuity and other .
perks to attract the people who are efficient and hard working. Different offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of the entire family. If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the of purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be rt determined. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased :
"BASIC : 63,400.00 CONVEYANCEALLOWANCE : 12,000.00 RENT CO LEASE : 49,200.00 BONUS (35% OF BASIC) : 21,840.00 TOTAL : 1,45,440.00 In addition to above, his other entitlements were :
Con. to PF 10% Basic Rs. 6,240/- (p.a.) LTA reimbursement Rs. 7,000/- (p.a.) Medical reimbursement Rs. 6,000/- (p.a.) Superannuation 15% of Basic Rs. 9,360/- (p.a.) Gratuity Cont. 5.34% of Basic Rs. 3,332/- (p.a.) Medical Policy-self & Family @ Rs. 55,000/- (p.a.) Education Scholarship @ Rs.500 Rs. 12,000/- (p.a.) Payable to his two children Directly".
10 to 16. ...........
17. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted.
18. The term 'income' in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Ed.) has been defined as under :
::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 39"The value of any benefit or perquisite whether convertible into money or not, obtained from a .
company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from of any profession, trade or calling other than agriculture."
rt It has also been stated :
'INCOME' signifies 'what comes in' (per Selborne, C., Jones v. Ogle, 42 LJ Ch.336). 'It is as large a word as can be used' to denote a person's receipts '(per Jessel, M.R. Re Huggins, 51 LJ Ch.938.) income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. AIR 1921 Mad 427 (SB).
Ref. 124 IC 511 : 1930 MWN 29 : 31 MLW 438 AIR 1930 Mad 626 : 58 MLJ 337."
66.The Apex Court in the cases titled as Oriental Insurance Company Ltd. vs. Jashuben & Ors., reported in 2008 AIR SCW 2393, and V. Subbulakshmi and others versus S. Lakshmi and another, reported in (2008) 4 SCC 224, while taking the similar view, has held that it was not relevant to take into account the fact as to what would have been the income of the deceased at the time of retirement, had he retired on attaining the age of superannuation.
67.The Apex Court in another case titled as Amrit Bhanu Shali and others versus National Insurance Company Ltd. and others, reported in (2012) 11 SCC 738, has laid down the principles how to grant compensation, how to reach the victim of a vehicular accident and granted Rs.9.50 lacs as compensation.
68.The Apex Court in the case titled as Savita versus Bindar Singh & others, reported in 2014 AIR SCW 2053, has held that it is the duty of the Court to award just compensation to the victims of a vehicular accident and while assessing the just compensation, the Court should not succumb to the niceties or ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 40 technicalities of law. It is apt to reproduce paragraph 6 of the said judgment hereunder:
.
"6. After considering the decisions of this Court in Santosh Devi as well as Rajesh v. Rajbir Singh , we are of the opinion that it is the duty of the Court to fix a just compensation. At the time of fixing such compensation, the court should not succumb to the niceties or technicalities to grant just compensation in favour of the claimant. It is the of duty of the court to equate, as far as possible, the misery on account of the accident with the compensation so that the injured or the dependants should not face the vagaries of rt life on account of discontinuance of the income earned by the victim. Therefore, it will be the bounden duty of the Tribunal to award just, equitable, fair and reasonable compensation judging the situation prevailing at that point of time with reference to the settled principles on assessment of damages. In doing so, the Tribunal can also ignore the claim made by the claimant in the application for compensation with the prime object to assess the award based on the principle that the award should be just, equitable, fair and reasonable compensation."
69.The Apex Court has also discussed this issue in the cases titled as Radhakrishna and another versus Gokul and others, reported in 2014 AIR SCW 548, and Kalpanaraj and others versus Tamil Nadu State Transport Corporation, reported in (2015) 2 SCC 764, and held that the Courts, while granting compensation to the victims of a vehicular accident, have to keep in view all factors including income. It was also held that the monthly income of the deceased can be assessed on the basis of income tax returns. It is apt to reproduce para 8 of the judgment in Kalpanaraj's case (supra) herein:
"8. It is pertinent to note that the only available documentary evidence on record of the monthly income of the deceased is the income tax return filed by him with the Income Tax Department. The High Court was correct therefore, to determine the monthly income on the basis of the income tax return. However, the High Court erred in ascertaining the net income of the deceased as the amount to be taken into consideration for calculating compensation, in the light of the principle laid down by this Court in the case of ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 41 National Insurance Company Ltd. v. Indira Srivastava and Ors, (2008) 2 SCC 763. The relevant paragraphs of the .
case read as under:
"14. The question came for consideration before a learned Single Judge of the Madras High Court in National Insurance Co. Ltd. v. Padmavathy and Ors. wherein it was held:
of '7 ..Income tax, Professional tax which are deducted from the salaried person goes to the coffers of the government under specific head and there is no rt return. Whereas, the General Provident Fund, Special Provident Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason.
Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual.
Courts have held that there cannot be any deductions in the statutory compensation, if the Legal Representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 42 income, while computing the dependency compensation.' .
15. Similar view was expressed by a learned Single Judge of Andhra Pradesh High Court in S. Narayanamma and Ors. v. Secretary to Government of India, Ministry of Telecommunications and Ors. holding:
12 .In this background, now we will examine the present deductions made by the tribunal from the salary of the of deceased in fixing the monthly contribution of the deceased to his family. The tribunal has not even taken proper care while deducting the amounts from the salary of the rt deceased, at least the very nature of deductions from the salary of the deceased. My view is that the deductions made by the tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling Allowance, allowance for newspapers / periodicals, telephone, servant, club-fee, car maintenance etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the tribunal that the deceased was getting Rs.1,401/- as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the tribunal is contrary to the principle of 'just compensation' enunciated by the Supreme Court in the judgment in Helen's case. The Supreme Court in Concord of India Insurance Co. v. Nirmaladevi and Ors, 1980 ACJ 55 held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country 'in generous scales'."::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 43
70.In view of the above, just compensation can be granted while keeping in view the status of the parents, the prospects of the .
deceased students and loss of income to the parents, rather loss of source of dependency.
71. Admittedly, as discussed hereinabove, these students, after obtaining Engineering degree from the said reputed College, would have got better placements. It is known to everyone that an Engineer of said discipline and cadre would of have been earning not less than about ` ten lacs per annum.
72. If we take a lenient view by, prima facie, holding that the deceased students, after obtaining the degree, would have rt become Government employees in the cadre of Assistant Engineer, meaning thereby, they would have been earning not less than ` 30,000/- per month as salary. Even if they would have failed to get a better placement or appointment in Government employment, at least, they could have obtained their job in private firms and by guess work, it can be safely said and held that their monthly salary would not have been less than ` 25,000/-.
73. The multiplier method, as discussed hereinabove, is the best method to assess the compensation. As per the law laid down by the Apex Court in the latest judgment rendered in the case titled as Munna Lal Jain and another versus Vipin Kumar Sharma and others, reported in 2015 AIR SCW 3105, the age of the deceased is the criterion for applying the multiplier method.
74. Admittedly, all the deceased students were 19 and 20 years of age at the relevant point of time. Thus, keeping in view the Second Schedule appended with the MV Act read with the judgments in Sarla Verma, Reshma Kumari and Munna Lal Jain's cases (supra), multiplier of '15' is just and appropriate.
75. All the deceased students were unmarried, thus, 50% is to be deducted while keeping in mind the ratio laid down by the Apex Court in the judgments (supra). Viewed thus, it can be safely held that the parents have lost source of income/ dependency to the extent of 50%, i.e. ` 12,500/- per month in each case.
76. In the cases of the like nature, the Apex Court and the other High Courts have granted lump-sum compensation. But ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 44 at that point of time, the method of assessing compensation by applying multiplier method in claim cases under MV Act was in .
its infancy. Applying the same principle, how and what amount of compensation was granted by the Apex Court and other High Courts from 1960 upto 2014 has to be seen and what should be the compensation as on today.
77. This Court in Deep Chand Sood's case (supra) granted ` 5 lacs in lump-sum to the parents of each of the deceased of students in the year 1996 and the same was upheld by the Apex Court in M.S. Grewal's case (supra).
78.rt The Apex Court in Dheeru's case (supra) has awarded ` ten lacs as compensation. In Uphaar Tragedy Victims Association's case (supra), the Apex Court awarded rupees ` ten lacs in case of the persons aged above 20 years, ` 7.5 lacs in case of those who were 20 years or below.
79. In the case titled as Dinesh Singh versus Bajaj Allianz General Insurance Company Limited and another, reported in (2014) 9 Supreme Court Cases 241, where an Engineer suffered permanent disability, the Apex Court awarded compensation to the tune of ` 33 lacs.
80. It is to be kept in mind that the Apex Court in a latest judgment in Sanjay Gupta's case (supra), after discussing all the aspects, granted ` 5 lacs as an interim, then what should be the amount at the final stage.
81.The Courts have to take into view the changing inflation in price rise, the pressing demands, family background of the deceased and other attending factors.
82.The Apex Court in the case titled as Gobald Motor Service Ltd. and another versus R.M.K. Veluswami and others, reported in AIR 1962 SC 1, has held how the compensation is to be granted and what is to be kept in mind. It is apt to reproduce paras 7 and 8 of the judgment herein:
"7. The next question is whether the courts below were right in awarding compensation of Rs.25,200/- for the pecuniary loss sustained by the respondents 2 to 7 by reason of the death of Rajaratnam, under S. 1 of the Act. Section 1 of the Act reads:
"Whenever the death of a person shall be caused by wrongful act, neglect or default, and the act, neglect ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 45 or default is such as would (if death had not ensued) have entitled the party injured to maintain an action .
and recover damages in respect thereof, the party who would have been liable if death had not ensued shall be liable to an action or suit for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony or of other crime.
Every such action or suit shall be for the benefit of the wife, husband, parent and child, if any, of the person whose rt death shall have been so caused, and shall be brought by and in the name of the executor administrator or representative of the person deceased; and in every such action the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought; and the amount so recovered, after deducting all costs and expenses, including the costs not recovered from the Defendant, shall be divided amongst the before mentioned parties, or any of them, in such shares as the Court by its judgment or decree shall direct."
This section is in substance a reproduction of the English Fatal Accidents Acts 9 and 10 Vict. Ch. 93, known as the Lord Campbell's Acts. The scope of the corresponding provisions of the English Fatal Accidents Acts has been discussed by the House of Lords in Davies v. Powell Duffryn Associated Collieries Ltd., 1942 AC 601. There Lord Russell of Killowen stated the general rule at p. 606 thus:
"The general rule which has always prevailed in regard to the assessment of damages under the Fatal Accidents Acts is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account. Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separately."
Lord Wright elaborated the theme further thus at p. 611:
::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 46"The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible to .
money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered . . . .. . .. The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other any of pecuniary advantage which from whatever source comes to him by reason of the death."
The same principle was restated with force and clarity by rt Viscount Simon in Nance v. British Columbia Electric Railway Co. Ltd., 195l AC 601. There, the learned Lord was considering the analogous provisions of the British Columbia legislation, and he put the principle thus at p. 614:
"The claim for damages in the present case falls under two separate heads. First, if the deceased had not been killed, but had eked out the full span of life to which in the absence of the accident he could reasonably have looked forward, what sums during that period would he probably have applied out of his income to the maintenance of his wife and family?".
Viscount Simon then proceeded to lay down the mode of estimating the damages under the first head. According to him, at first the deceased man's expectation of life has to be estimated having regard to his age, bodily health and the possibility of premature determination of his life by later accident; secondly, the amount required for the future provision of his wife shall be estimated having regard to the amounts he used to spend on her during his lifetime, and other circumstances; thirdly, the estimated annual sum is multiplied by the number of years of the man's estimated span of life, and the said amount must be discounted so as to arrive at the equivalent in the form of a lump sum payable on his death; fourthly further deductions must be made for the benefit accruing to the widow from the acceleration of her interest in his estate; and, fifthly, further amounts have to be deducted for the possibility of the wife dying earlier if the husband had lived the full span of life; and it should also be taken into account that there is the possibility of the ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 47 widow remarrying much to the improvement of her financial position. It would be seen from the said mode of estimation .
that many imponderables enter into the calculation.
Therefore, the actual extent of the pecuniary loss to the respondents may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be of ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source rt comes to them by reason of the death that is, the balance of loss and gain to a dependant by the death must be ascertained.
8. The burden is certainly on the plaintiffs to establish the extent of their loss. Both the courts below found, on the evidence, the following facts: (i) The family owned a building worth Rs.2,00,000/- at Palni, and 120 acres of nanja land worth about Rs.1,000/- per acre.(2) It was engaged in the business of manufacturing Indian patent medicines from drugs and had been running a Siddha Vaidyasalai at Palni for a period of 30 years and had also branches in Colombo and Madras. (3) Rajaratnam studied in the Indian School of Medicine for two years and thereafter set up his own practice as a doctor, having registered himself as a practitioner in 1940. (4) He took over the management of the family Vaidyasalai at Palni. (5) Rajaratnam was earning in addition Rs.200/- to Rs.250 per month in his private practice. (6) He had a status in life, being Municipal Councillor of Palni and sometimes its Vice- Chairman, and was maintaining a fairly good standard of life and owned motor cars. (7) He was aged 34 years at the time of his death and, therefore, had a reasonably long span of life before him. If the accident had not taken place. On the said findings the High court summarized the position thus:
"..........the position is that there is here a man of age 34 carrying on business as a Doctor, with reasonable prospects of improving in his business. He was living in comfort and by his early death plaintiffs 2 to 7 have lost their prospects of ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 48 education, position in society and even possible provision in their favour. Under the circumstances, .
the award of Rs.25,000/- as damages must be accepted as quite reasonable."
When the courts below have, on relevant. material placed before them, ascertained the said amount as damages under the first head, we cannot in second appeal disturb the said finding except for compelling reasons. Assuming that of Rajaratnam had not died, he would have spent, having regard to his means and status in life, a minimum of Rs.250/- on respondents 2 to 7; and his income, as rt indicated by the evidence, would certainly be more than that amount. The yearly expenditure he had to incur on the members of the family would have been about Rs.3,000/- and the sum of Rs.25,200/ would represent the said expenditure for just over 8 years."
83.The Apex Court in the case titled as Santosh Devi versus National Insurance Company Ltd. and Ors., reported in 2012 AIR SCW 2892, held that Courts should keep in mind the inflation of price rise, socio-economic conditions and other attending factors, while awarding compensation. It is apt to reproduce para 11 of the judgment herein:
"11. We have considered the respective arguments. Although, the legal jurisprudence developed in the country in last five decades is somewhat precedent-centric, the judgments which have bearing on socio-economic conditions of the citizens and issues relating to compensation payable to the victims of motor accidents, those who are deprived of their land and similar matters needs to be frequently revisited keeping in view the fast changing societal values, the effect of globalisation on the economy of the nation and their impact on the life of the people."
84.The Apex Court in V. Krishnakumar's case (supra) has laid down the same principle. It is apt to reproduce para 24 of the judgment herein:
" 24. This Court has referred to case law from a number of other major common law jurisdictions on the question of accounting for inflation in the computation of awards in ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 49 medical negligence cases. It is unnecessary to discuss it in detail. It is sufficient to note that the principle of apportioning .
for inflationary fluctuations in the final lump sum award for damages has been upheld and applied in numerous cases pertaining to medical negligence. In the United States of America, most states, as in Ireland and the United Kingdom, require awards for future medical costs to be reduced to their present value so that the damages can be of awarded in the form of a one-time lump sum. The leading case in the United States, which acknowledges the impact of inflation while calculating damages for medical rt negligence was Jones & Laughlin Steel Corporation v. Pfeifer,1983 462 US 523, wherein that court recognized the propriety of taking into account the factors of present value and inflation in damage awards. Similarly, in O'Shea v Riverway Towing Co., (1982) 677 F.2d 1194, at 1199 (7th Cir), Posner J., acknowledged the problem of personal injury victims being severely under-compensated as a result of persistently high inflation.
24.1. In Taylor v. OConnor, 1971 AC 115, Lord Reid accepted the importance of apportioning for inflation:
"It will be observed that I have more than once taken note of present day conditions - in particular rising prices, rising remuneration and high rates of interest. I am well aware that there is a school of thought which holds that the law should refuse to have any regard to inflation but that calculations should be based on stable prices, steady or slowly increasing rates of remuneration and low rates of interest. That must, I think, be based either on an expectation of an early return to a period of stability or on a nostalgic reluctance to recognise change. It appears to me that some people fear that inflation will get worse, some think that it will go on much as at present, some hope that it will be slowed down, but comparatively few believe that a return to the old financial stability is likely in the foreseeable future. To take any account of future inflation will no doubt cause complications and make estimates even more uncertain. No doubt we should not assume the worst ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 50 but it would, I think, be quite unrealistic to refuse to take it into account at all."
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24.2. In the same case Lord Morris of Borth-y-Gest also upheld the principle of taking into account future uncertainties. He observed:
"It is to be remembered that the sum which is awarded will be a once-for- all or final amount which of the widow must deploy so that to the extent reasonably possible she gets the equivalent of what she has lost. A learned judge cannot be expected to rt prophesy as to future monetary trends or rates of interest but he need not be unmindful of matters which are common knowledge, such as the uncertainties as to future rates of interest and future levels of taxation. Taking a reasonable and realistic and common- sense view of all aspects of the matter he must try to fix a figure which is neither unfair to the recipient nor to the one who has to pay. A learned judge might well take the view that a recipient would be ill-advised if he entirely ignored all inflationary trends and if he applied the entire sum awarded to him in the purchase of an annuity which over a period of years would give him a fixed and predetermined sum without any provision which protected him against inflationary trends if they developed."
24.3. More recently the Judicial Committee of the UK Privy Council in Simon v. Helmot, 2012 UKPC 5, has unequivocally acknowledged the principle, that the lump sum awarded in medical negligence cases should be adjusted so as to reflect the predicted rate of inflation."
85.Keeping in view the value of money in 1980s, 1990s and as on today, prima facie, it can be safely held that ` 20-25 lacs can be awarded as compensation in favour of the parents of each of the deceased students.
86.It is also to be kept in mind that the unfortunate parents of the said students have relegated themselves to the remedy in hand, have given up, rather have waived off their right to press or lay a claim for seeking compensation by invoking any other remedy ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 51 available to them, in addition to which is to be awarded by this Court. Meaning thereby, they have closed the doors for .
themselves to get compensation from other sources.
87.In the cases discussed hereinabove, the claimants had not given up the other remedies, but in the instant case, the parents of the deceased students have given up their remedies. Thus, this factor is also to be kept in mind, while awarding the compensation.
of
88.This Court, vide order, dated 25.06.2014, awarded interim compensation to the tune of ` five lacs. The College and the Board were saddled with liability in equal shares. They have rt satisfied the same.
89.Having said so, we are of the view that the multiplier method adopted by the Tribunals and the Appellate Courts, i.e. the Apex Court and the High Courts, is the best method to assess the compensation without any ambiguity and on the basis of the prima facie findings, in this case also and award just, reasonable and appropriate compensation.
90.Thus, it can be safely said that the parents of the deceased students are entitled to compensation to the tune of ` 12,500/-
x12x15=`22,50,000/- under the head 'loss of income/dependency'. They are also entitled to `10,000/- each under the heads 'loss of love and affection', 'loss of estate' and 'funeral expenses'.
91.Having said so, the parents of the deceased students are entitled to compensation to the tune of `22,50,000/- + ` 10,000/- + ` 10,000/- + ` 10,000/- =` 22,80,000/- with interest from the date of the accident.
92.But, keeping in view the observations made hereinabove and the amount, which was awarded by the Apex Court and other High Courts in the cases of the like nature, we deem it proper to award ` 20,00,000/- in lump-sum to the parents of each of the students with interest @ 7.5% per annum from the date of the accident till its final realization."
Question No.3.
34. It is vehemently contended by Shri Jagdish Thakur, Advocate, learned counsel for the owner and driver of the bus that the learned Tribunal below erred in carrying out the deduction at 1/3rd when ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 52 admittedly the deceased was a bachelor and in terms of Sarla Verma's case (supra), the deductions were to be carried at half of the amount .
from the total income of the deceased towards his personal expenses.
This issue brooks no controversy as it is settled legal position that the deductions in case of bachelor has to be made at 50% and this has so been reiterated in CWPIL No.7 of 2014 (supra), as would be evident of from para-75 of the judgment extracted above.
35. Though the learned counsel for the claimants would rt vehemently argue that the learned Tribunal ought to have taken into consideration the future prospects of the deceased to suitably enhance the compensation. However, the said compensation cannot be accepted, firstly, for the reason that the deceased was only a student and not gainfully employed and, secondly, there is no evidence led in this behalf by the appellants.
36. The learned counsel for the claimants would then argue that the non-pecuniary damages (general damages) in the interest of justice be suitably modified. Though, this Court would have normally gone into this question in other cases, however, as this lis is being decided on the basis of the judgment rendered by the learned Division Bench of this Court in CWPIL No.7 of 2014 (supra), which virtually dealt with identical question, this Court would rather follow the amounts awarded by the learned Division Bench. Accordingly, this aspect of the impugned award as regards non-pecuniary damages (general damages) and interest calls for no interference.
37. Since the deceased was similarly placed like the deceased students in CWPIL No.7 of 2014 (supra), and in view of the specific evidence otherwise led by the petitioners with regard to the salaries ::: Downloaded on - 15/04/2017 21:44:20 :::HCHP 53 being drawn by the class mates of the deceased, I am of the considered view that the compensation as awarded by this Court in .
CWPIL No.7 of 2014 (supra) would meet the ends of justice.
38. In view of the aforesaid discussion, both the appeals as also Cross-Objections are partly allowed and the award passed by the learned Tribunal below is modified to the extent that the claimants shall of now be entitled to ` 20,00,000/- as compensation alongwith simple interest @ 8% per annum from the date of filing of the petition till the rt realization of the whole amount with interest to be paid by the driver of the bus Sukh Rai Singh and its owner Harwinder Singh, jointly and severally. The reasoning and basis of the claim as awarded in CWPIL No.7 of 2014 shall mutatis mutandis apply to the facts of the instant case. Till and so long, the amount is not paid, the order dated 10th July, 2015 passed by this Court in FAO (MVA) No. 364 of 2014 whereby the driver and owner were restrained from transferring and encumbering the properties as mentioned in Annexures A-1 and A-2 annexed with CMP No.7200 of 2015, shall continue in force and the same shall be reflected in the revenue records and the Collector Talwandi Sabo is directed to have a red entry to this effect incorporated in the revenue records.
39. With these observations, both the appeals as also Cross-
objections are disposed of in the aforesaid terms, leaving the parties to bear their own costs. Pending application(s), if any, also stands disposed of. Registry is directed to place a copy of this judgment on the file of connected matter.
(Tarlok Singh Chauhan), Judge.
December, 14th , 2016.
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