Allahabad High Court
The Oriental Insurance Co. Ltd vs Ashok Kumar & Others on 16 August, 2017
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 34 Case :- FIRST APPEAL FROM ORDER No. - 2780 of 2009 Appellant :- The Oriental Insurance Co. Ltd Respondent :- Ashok Kumar & Others Counsel for Appellant :- A.A. Khan Counsel for Respondent :- Atul Trj Kulshrestha Hon'ble Saumitra Dayal Singh,J.
This appeal has been filed by the insurer against the award dated 29.05.2009 passed by Motor Accident Claims Tribunal/Additional District Judge, Court No. 5, Muzaffar Nagar in M.A.C.P. No. 470 of 2008.
It is a death case. Briefly, according to the claim case, on 17.08.2008 the deceased Arjun Singh was riding a motorcycle bearing registration no. UP 12 K - 1899 with one Shiv Kumar, when at about 3:00 p.m. a car bearing registration no. RJ 14 CD - 0123 coming from Jaipur hit the motorcycle from behind resulting in grievous injuries to the deceased Arjun Singh who later died at a hospital. Before the Tribunal, various issues were framed including one as to the negligence etc. The Tribunal recorded a finding, the aforesaid accident was caused due to rash and negligent conduct of the driver of the car bearing registration no. RJ 14 CD - 0123 and it accordingly held insurer liable for compensation. Also, while making the computation, the Tribunal considered the age of the deceased being 20 years and applied a multiplier of 16.
As to the loss of dependency the Tribunal noted it had been claimed, the deceased was holding various diplomas and was earning Rs. 9,000/- per month. Thereafter, the Tribunal computed loss of income on notional basis at Rs. 36,000/- per annum and further in view of the fact, the deceased was bachelor it allowed deduction of Rs. 18,000/- per annum (50%) towards personal expenses.
Thereupon the Tribunal has applied multiplier of 16 and determined total loss of dependency at RS. 2,88,000/-.
In the present appeal the solitary ground challenge raised by learned counsel for the appellant is the multiplier has been wrongly applied. According to learned counsel for the appellant relying on a judgment of the Supreme Court in the case of New India Assurance Company Ltd. Vs. Smt. Shanti Pathak reported in 2007 (4) TAC 17 (SC), it has been submitted, the multiplier should have been applied considering the age of the claimants and not that of the age of the deceased.
In this regard, it is noted, in the aforesaid case the age of the deceased was 25 years while that of claimant was 65 years, also, total compensation awarded by the Tribunal was Rs. 4,10,000/-.
In the aforesaid factual background the Supreme Court in paragraph 7 has held as below:-
"7. Considering the income that was taken, the foundation for working out the compensation cannot be faulted. The monthly contribution was fixed at Rs.3,500/-. In the normal course we would have remitted the matter to the High Court for consideration on the materials placed before it. But considering the fact that the matter is pending since long, it would be appropriate to take the multiplier of 5 considering the fact that the mother of the deceased is about 65 years at the time of the accident and age of the father is more than 65 years. Taking into account the monthly contribution at Rs.3,500/- as held by the Tribunal and the High Court, the entitlement of the claim would be Rs.2,10,000/-. The same shall bear interest @ 7.5% p.a. from the date of the application for compensation. Payment already made shall be adjusted from the amount due."
While similar view has been taken by the Supreme Court in the case is Shakti Devi Vs. New India Insurance Company Ltd. and Anr reported in 2010 (14) SCC 575 and also, in the case of National Insurance Company Ltd. Vs. Shyam Singh and Ors. reported in 2011 (7) SCC 65.
At the same time it is noted, the Supreme Court in the case of Smt. Sarla Verma and Ors Vs. Delhi Transport Corporation and Anr reported in AIR 2009 SC 3104 had made a detailed discussion on the application of correct multiplier and had observed as below:-
"19. In New India Assurance Co. Ltd. Vs. Charlie [2005 (10) SCC 720], this Court noticed that in respect of claims under section 166 of the MV Act, the highest multiplier applicable was 18 and that the said multiplier should be applied to the age group of 21 to 25 years (commencement of normal productive years) and the lowest multiplier would be in respect of persons in the age group of 60 to 70 years (normal retiring age). This was reiterated in TN State Road Transport Corporation Ltd. vs. Rajapriya [2005 (6) SCC 236] and UP State Road Transport Corporation vs. Krishna Bala [2006 (6) SCC 249]. The multipliers indicated in Susamma Thomas, Trilok Chandra and Charlie (for claims under section 166 of MV Act) is given below in juxtaposition with the multiplier mentioned in the Second Schedule for claims under section 163A of MV Act (with appropriate deceleration after 50 years) :
Age of the deceased Multiplier scale as envisaged in Susamma Thomas Multiplier scale as adopted by Trilok Chandra Multiplier scale in Trilok Chandra as clarified in Charlie Multiplier specified in second column in the Table in II Schedule to MV Act Multiplier actually used in Second Schedule to MV Act (as seen from the quantum of compensation) (1) (2) (3) (4) (5) (6) Upto 15 yrs.
-
-
-15 20
15 to 20 yrs.16 18 18 16 19
21 to 25 yrs.15 17 18 17 18
26 to 30 yrs.14 16 17 18 17
31 to 35 yrs.13 15 16 17 16
36 to 40 yrs.12 14 15 16 15
41 to 45 yrs.11 13 14 15 14
46 to 50 yrs.10 12 13 13 12
51 to 55 yrs.9 11 11 11 10
56 to 60 yrs.8 10 09 8 8
61 to 65 yrs.6 08 07 5 6
Above 65 yrs.
5 05 05 5 520. 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); 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 MV 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.
21. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years."
Similar view was taken by the Supreme Court in the case of Amrit Bhanu Shali and Ors Vs. National Insurance Company Ltd. and Ors reported in 2012 (11) SCC 738 wherein the Supreme Court has held as below:-
"15. The selection of multiplier is based on the age of the deceased and not on the basis of the age of dependent. There may be a number of dependents of the deceased whose age may be different and, therefore, the age of dependents has no nexus with the computation of compensation."
Then again in the case of Munna Lal Jain and Anr Vs. Vipin Kumar Sharma and Ors. in 2015 (3) TAC 1 (SC) relied on a three judges bench decision in the case of Reshma Kumari and Ors. Vs. Madan Mohan and Anr. reported in 2013 (9) SCC 65. In Munna Lal Jain (supra) the Supreme Court again considering the issue of correctness of application of multiplier and after considering the judgment of Sarla Verma (supra) observed as under:-
"9. The remaining question is only on multiplier. The High Court following Santosh Devi (supra), has taken 13 as the multiplier. Whether the multiplier should depend on the age of the dependants or that of the deceased, has been hanging fire for sometime; but that has been given a quietus by another three-Judge Bench decision in Reshma Kumari (supra). It was held that the multiplier is to be used with reference to the age of the deceased. One reason 5 Page 6 appears to be that there is certainty with regard to the age of the deceased but as far as that of dependants is concerned, there will always be room for dispute as to whether the age of the eldest or youngest or even the average, etc., is to be taken. To quote:
"36. In Sarla Verma, this Court has endeavoured to simplify the otherwise complexexercise of assessment of loss of dependency and determination of compensation in a claim made under Section 166. It has been rightly stated in Sarla Verma that the claimants in case of death claim for the purposes of compensation must establish (a) age of the deceased; (b) income of the deceased; and (c) the number of dependants. To arrive at the loss of dependency, the Tribunal must consider (i) additions/deductions to be made for arriving at the income; (ii) the deductions to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased. We do not think it is necessary for us to revisit the law on the point as we are in full agreement with the view in Sarla Verma."
10. In Sarla Verma (supra), at paragraph-19, a two-Judge Bench dealt with this aspect in Step 2. To quote:
"19. xxxxxx xxx Step 2 (Ascertaining the multiplier) Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age 6 Page 7 of the deceased."
11. The multiplier, in the case of the age of the deceased between 26 to 30 years is 17. There is no dispute or grievance on fixation of monthly income as Rs.12,000.00 by the High Court."
In this regard in the case of Reshma Kumari (supra) the three judges bench of the Supreme Court has held as below:-
"35. We have already noticed the table prepared in Sarla Verma19 for the selection of multiplier. The table has been prepared in Sarla Verma19 having regard to the three decisions of this Court, namely, Susamma Thomas2, Trilok Chandra4 and Charlie20 for the claims made under Section 166 of the 1988 Act. The Court said that multiplier shown in Column (4) of the table must be used having regard to the age of the deceased. Perhaps the biggest advantage by employing the table prepared in Sarla Verma19 is that the uniformity and consistency in selection of the multiplier can be achieved. The assessment of extent of dependency depends on examination of the unique situation of the individual case. Valuing the dependency or the multiplicand is to some extent an arithmetical exercise. The multiplicand is normally based on the net annual value of the dependency on the date of the deceased's death. Once the net annual loss (multiplicand) is assessed, taking into account the age of the deceased, such amount is to be multiplied by a ''multiplier' to arrive at the loss of dependency. (37) If the multiplier as indicated in Column (4) of the table read with paragraph 42 of the Report in Sarla Verma19 is followed, the wide variations in the selection of multiplier in the claims of compensation in fatal accident cases can be avoided. A standard method for selection of multiplier is surely better than a criss-cross of varying methods. It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the table in Sarla Verma19 for the selection of multiplier in claim applications made under section 166 in the cases of death."
(emphasis supplied) In view of the above, while it may be true, there are certain decisions of the Supreme Court wherein the age of the claimant has been considered for application of the correct multiplier, at the same time the chart of applicable multiplier provided under the judgment of the Supreme Court in the case of Sarla Verma (supra) is clearly with reference to the age of the deceased as same has been applied by that Court in subsequent judgments as well.
However, in view of the later pronouncement in the case of Munna Lal Jain (supra) wherein reliance has been placed on the larger bench of three Judges Bench in the case of Reshma Kumari (supra) there remains no doubt, the multiplier to be applied in such cases is to be seen with reference to the age of the deceased and not the age of the claimants.
Then, learned counsel for the respondents states, the correct multiplier as per Sarla Verma in the instant case would be 18 and not 16.
Though application of higher multiplier will certainly lead to enhancement and at present there is no cross appeal for enhancement, yet, the issue of correct multiplier cannot be refused in this case especially because the matter involved in present appeal in essence is to determine fair, reasonable, equitable and just compensation to be awarded in case of death arising from motor accident.
Also, in view of the categorical pronouncement of the Supreme Court, there is no dispute as to any fact and no evidence is required to be led in this regard inasmuch as it admitted, the age of the deceased was 20 years.
In this regard a division bench of this Court in the case of National Insurance Co. Ltd. Vs. Smt. Vidyawati Devi & Ors FAFO No. 2389 of 2016 decided on 27.07.2016 had the occasion to consider this precise objection raised by learned counsel for the appellant-insurer and it was held, as below:-
"We are of the considered view that the conditions as laid down in provisions of Order XLI Rule 33 are satisfied in the present case. In Delhi Electric Supply Undertaking (Supra) the Hon'ble Apex Court has observed that when circumstances exist which necessitate the exercise of discretion conferred by Rule 33, the court cannot be found wanting when it comes to exercise its powers.
Thus the argument in this regard made by the learned counsel for the appellant has no legs to stand and is not liable to be sustained.
Hon'ble Apex Court has laid down the principles to be followed while awarding compensation under non-pecuniary damages, such as loss of consortium, loss of love, care and guidance to children and funeral expenses. In the case of Rajesh and others v. Rajbir Singh and others, (2013) 9 SCC 54 and Kalpanaraj and others vs. Tamil Nadu State Transport Corporation, 2014(3) TAC 707(SC) Hon'ble Apex Court has held that guiding principle for determining compensation is that it must be just and reasonable and the Court should not succumb to niceties or technicalities, in such matters while considering the issue of award of compensation under non-pecuniary damages such as loss of consortium, loss of love, care and guidance to children and funeral expenses. It has been observed in paragraph 17 as under :
"17. The ratio of a decision of this Court, on a legal issue is a precedent. But an observation made by this Court, mainly to achieve uniformity and consistency on a socio-economic issue, as contrasted from a legal principle, though a precedent, can be, and in fact ought to be periodically revisited, as observed in Santosh Devi. We may therefore, revisit the practise of awarding compensation under conventional heads: loss of consortium to thee spouse, loss of love, care and guidance to children and funeral expenses. It may be noted that the sum of Rs. 2500 to Rs. 10,000 in those heads was fixed several decades ago and having regard to inflation factor, the same needs to be increased. In Sarla Verma case, it was held that compensation for loss of consortium should be in the range of Rs. 5000 to 10,000. In legal parlance. "consortium" is the right of the spouse to the company, care, help, comfort, guidance, society, solace, affection and sexual relations with his or her mate. That non-pecuniary head of damages has not been properly understood by our courts. The loss of companionship, love, care and protection. etc., the spouse is entitled to get, has to be compensated appropriately. The concept of non-pecuniary damage for loss of consortium is one of the major heads of award of compensation in other parts of the world more particularly in the United State of America, Australia, etc. English courts have also recognized the right of a spouse to get compensation even during the period of temporary disablement. By loss of consortium, the courts have made an attempt to compensate the loss of spouse's affection, comfort, solace, companionship, society, assistance, protection, care and sexual relations during the future years. Unlike the compensation awarded in other countries and other jurisdictions, since the legal heirs are otherwise adequately compensated for the pecuniary loss, it would not be proper to award a major amount under this head. Hence, we are of the view that it would only be just and reasonable that the court awards at least rupees one lakh for loss of consortium."
The same view has been reaffirmed in the case of Kalpanaraj and others (supra). In the said case, Hon'ble Apex Court raised compensation of Rs.30,000/- awarded towards loss of consortium and Rs.20,000/- towards loss of love and affection of the minor children to Rs.1,00,000/- each under the said heads finding the sum awarded to be on the lower side in the light of principles laid down in the case of Rajesh (supra)."
The above, reasoning of the division bench of this Court appears to be consistent with the decision of the Supreme Court in Jitendra Khimshankar Trivedi & Ors Vs. Kasam Daud Kumbhar & Ors reported in 2015 (4) SCC 237 wherein the Supreme Court has held as below:-
"13. The tribunal has awarded Rs. 2,24,000/- as against the same, claimants have not filed any appeal. As against the award passed by the tribunal when the claimants have not filed any appeal, the question arises whether the income of the deceased could be increased and compensation could be enhanced. In terms of Section 168 of the Motor Vehicles Act, the courts/tribunals are to pass awards determining the amount of compensation as to be fair and reasonable and accepted by the legal standards. The power of the courts in awarding reasonable compensation was emphasized by this Court in Nagappa vs. Gurudayal Singh & Ors. 2003 2 SCC 274, Oriental Insurance Company Ltd. vs. Mohd. Nasir & Anr. 2009 6 SCC 280 and Ningamma & Anr. vs. United India Insurance Compnay Ltd. 2009 13 SCC 710. As against the award passed by the tribunal even though the claimants have not filed any appeal, as it is obligatory on the part of courts/tribunals to award just and reasonable compensation, it is appropriate to increase the compensation."
Accordingly, the award of the Tribunal is modified to the extent, the correct multiplier to be applied in the present case is taken to be 18 in place of 16 as has been applied by the Tribunal. Thus, the total balance amount would be deposited Rs. 18,000 X 18 = 3,24,000/- together with interest as awarded by the Tribunal.
Under the interim order passed by this Court, the entire decretal amount (as per award of Tribunal) stands deposited and no part of the amount has been released in favour of the claimant-respondents. The appellant-insurer shall now proceed to deposit the differential amount of compensation awarded i.e. award as enhanced by this Court within a period of two months from today. The entire decretal amount for compensation shall now be released in favour of the claimant-respondents as expeditiously as possible, preferably within a period of two months therefrom.
Accordingly, the appeal lacks merit and is dismissed though the award stands modified.
Order Date :- 16.8.2017 A. Singh