Madras High Court
The Managing Director vs Karthammal on 20 March, 2014
Author: S.Manikumar
Bench: S.Manikumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.03.2014 CORAM THE HONOURABLE MR.JUSTICE S.MANIKUMAR C.M.A.No.1024 of 2014 and M.P.No.1 of 2014 The Managing Director, Tamil Nadu State Transport Corporation Limited, Bharathipuram, Dharmapuri. ... Appellant vs. 1.Karthammal 2.K.Chandra 3.Kolandaiammal ... Respondents Civil Miscellaneous Appeal filed under Section 173 Motor Vehicles Act, 1988, against the Award and Decree, dated 02.04.2012 made in M.C.O.P.No.139 of 2009 on the file of Motor Accidents Claims Tribunal (Principal District Judge), Krishnagiri. For Appellant : Mr.D.Venkatachalam J U D G M E N T
For the death of a 18 years old boy, student of II Year Polytechnic in Priyadharshini Polytechnic College, Vaniyambadi, the Tribunal has awarded Rs.4,71,000/- as compensation, with interest @ 7.5% per annum, from the date of claim, till the date of realisation, to the mother and sister of the deceased.
2.Quantum of compensation awarded is assailed, by the Transport Corporation, on the ground that the income fixed by the Tribunal at Rs.20,000/- per annum, for the purpose of computing the loss of contribution to the family, is on the higher side. According to the Transport Corporation, the Claims Tribunal, ought to have taken Rs.15,000/- as the notional income for the non-earning person and computed the quantum of compensation. It is the further contention of the learned counsel for the appellant that Rs.75,000/- each awarded under the heads, future prospects and non-pecuniary loss, is on the higher side. As per Ex.P.3-Transfer Certificate, date of birth of the deceased has been noticed as 14.05.1991. The accident has occurred on 15.09.2008. Thus, on the date of accident, he was 17 years and studying in II Year Polytechnic in Priyadharshini Polytechnic College, Vaniyambadi. Fixing the notional income of the deceased at Rs.20,000/- per annum and by applying '15' multiplier, the Claims Tribunal has awarded Rs.3,00,000/- towards loss of contribution to the family.
3.In R.K.Malik v. Kiran Pal [2009 (1) TNMAC 593 (SC)], the Supreme Court has standardised the payment of compensation for the death of children, upto the age of 18 years, by applying different multiplier, though notional income of Rs.15,000/- per annum, non-pecuniary loss of Rs.75,000/- and a further compensation of Rs.75,000/- for future prospects, remain same, irrespective of the age group. In the reported case, the accident occurred on 18.11.1997, when a School bus, carrying school children, breaking the railing, drowned in Yamuna river at Wazirabad Yamuna Bridge, killing 29 children. Though all the legal representatives of the deceased filed separate claims, the Tribunal, by its common award, dated 06.12.2004, awarded a sum of Rs.1,55,000/- to the dependents of children between the age group of 10 to 15 years and Rs.1,65,000/- between 15 to 18 years. Three of the children, viz., Kailash Rathi, Neena Jain and Jatish Sharma were less than 10 years. In the case of Kailash Rathi, compensation of Rs.1,05,000/- has been awarded and in the cases of Neena Jain and Jatish Sharma, compensation of Rs.1,30,000/- and Rs.1,31,000/- respectively was awarded. In addition to the above, Rs.1,000/- has been awarded in the case of Jatish Sharma, as in some other cases, for loss of books. The Tribunal has awarded Rs.5,000/- each towards funeral and last rites. While computing the dependency compensation, Rs.5,000/- has been deducted towards personal living expenses, after applying '15' multiplier, for children below 15 years and '16' multiplier for children, between 16 and 18 years, respectively.
4.Admittedly, the deceased was aged 17 years, at the time of accident. He was studying in II Year Polytechnic in Priyadharshini Polytechnic College, Vaniyambadi. The contention of the Transport Corporation that the Tribunal ought to have taken Rs.15,000/- as the notional income, as per II Schedule to Section 163-A of the Motor Vehicles Act, is not acceptable to this Court, for the reason that the said amount was fixed, as early as on 14.11.1994, by way of an amendment. It is well known that based on the Consumer Price Index, wages are fixed, for different categories of employment, depending upon the nature and hours of work, for which they are engaged. Orders are periodically issued by the respective District Collectors.
5.Section 163(A) has been introduced on 14.11.1994 to provide relief to the accident victims, on the principle of "No Fault Liability". Second Schedule has been incorporated on the same day, in Motor Vehicles Act, which states that in the case of fatal accident and disability and where the claimant had no income, prior to the accident, a notional income of Rs.15,000/- per annum, can be taken for the purpose of computing the loss of contribution to the bereaved families/disable. Second Schedule provides a table of income ranging from Rs.3,000/- to Rs.40,000/- per annum.
6.Though the principle of "Just Compensation" has been explained and reiterated in many decisions in R.D.Hattangadi v. M/s.Pest Control (India) Pvt. Ltd., reported in AIR 1995 SC 755, Common Cause, A Registered Society v. Union of India reported in 1999 (6) SCC 667, Divisonal Controller, KSRTC v. Mahadeva Shetty and another reported in (2003) 7 SCC 197, Nizam Institute of Medical Sciences v. Prasanth S.Dhananka reported in (2009) 6 SCC 1 = 2010 ACJ 38 (SC) and Reshma Kumari and others v. Madan Mohan reported in (2009) 13 SCC 422, and the grant of compensation is based on the principle of restitutio in integrum, as held in Reshma Kumari v. Madan Dohan reported in 2009 (13) SCC 422 and keeping in view of the cost of living, the earlier order, dated 30.08.2000, the Apex Court issued directions in Oriental Insurance Co. Ltd., v. Hansrajbhai V.Kodala reported in 2001 (5) SCC 175, Deepal Girishbhai Soni v. United India Insurance Co. Ltd., reported in 2004 (5) SCC 385, directing the Central Government to take steps to amend the Schedule to Section 163-A of the Motor Vehicles Act and further directions have been issued in R.K.Malik v. Kiran Pal reported in 2009 (14) SCC 1 and though there is a variation in cost index, inflation, reduction the rate of interest and other factors, inspite of repeated directions issued by the Apex Court, the notional income of Rs.15,000/-, estimated on 14.11.1994, in case of non-earning member, still remains in the Statute book, without revision. Therefore, whenever an application is filed under Section 163-A of the Motor Vehicles Act, 1988, in the case of non-earning member, in case of fatal and disability in non-fatal accidents, invariably the Insurance Companies take a defence to estimate the loss on the basis of the notional income fixed in the Motor Vehicles. For nearly 18 years, since introduction, the sum fixed in the Statute remains the same. Some of the decisions, wherein the Supreme Court has issued directions to the Central Government to amend the Schedule are extracted hereunder:
7.In Oriental Insurance Co. Ltd., v. Hansrajbhai V.Kodala reported in 2001 (5) SCC 175, at Paragraph 26, the Apex Court, held as follows:
"In addition, the learned counsel also pointed out that in case of fatal accident and disability in non-fatal accident, it has been provided that notional income for the claimant who had no income prior to accident shall be Rs.15000/- per annum and still however the Second Schedule provides table of income ranging from Rs.3000/- to Rs.40000/- and the brake-up also does not provide any calculation for Rs.15000/-, as the columns in the Schedule inter alia provide for compensation for a person having income of Rs.12000/-, and thereafter straightway at Rs.18000/-. The learned counsel also submitted that despite the specific provision in Section 163A(3) that the Central Government may, keeping in view the cost of living, by notification in Official Gazette from time to time amend the Schedule, nothing has been done so far. Further, by order dated 30.8.2000, this Court again noticed number of anomalies in the Second Schedule and, therefore, thought it fit to have assistance of either the Attorney General of India or the Solicitor General of India. When the matter was called out on 15.12.2000, Mr. Altaf Ahmad, ASG, stated before the Court that the order passed by this Court on 30.8.2000 has already engaged serious attention of the Ministry of Surface Transport Department and the Government was considering the matter for bringing necessary correction in the Second Schedule of the Motor Vehicles Act. Thereafter, we again sought assistance of the Additional Solicitor General on the interpretation of Section 163A and also to verify whether there are corrections in the Second Schedule. Learned Additional Solicitor General stated that amendment might take some time. In this view of the matter, we think it would be appropriate if the Central Government takes necessary action as early as possible under Section 163A(3)."
8.In Deepal Girishbhai Soni v. United India Insurance Co. Ltd., reported in 2004 (5) SCC 385, at Paragraph 72, held as follows:
"72. Section 163-A was introduced in the year 1994. The executive authority of the Central Government has the requisite jurisdiction to amend the Second Schedule from time to time. Having regard to the inflation and fall in the rate of bank interest; it is desirable that the Central Government bestows serious consideration to this aspect of the matter."
9.In Reshma Kumari v. Madan Dohan reported in 2009 (13) SCC 422, at Paragraph 41, held as follows:
"Grant of compensation in a case involving an accident is within the realm of law of torts. It is based on the principle of restitutio in integrum. The said principle provides that a person entitled to damages should, as nearly as possible, get that sum of money which would put him in the same position as he would have been if he had sustained the wrong."
10.In R.K.Malik v. Kiran Pal reported in 2009 (14) SCC 1, at Paragraphs 14 to 17, held as follows:
"Under the Second Schedule of the Act in case of a non earning person, his income is notionally estimated at Rs. 15,000/- per annum. The Second Schedule is applicable to claim petitions filed under Section 163 A of the Act. The Second Schedule provides for the multiplier to be applied in cases where the age of the victim was less than 15 years and between 15 years but not exceeding 20 years. Even when compensation is payable under Section 166 read with 168 of the Act, deviation from the structured formula as provided in the Second Schedule is not ordinarily permissible, except in exceptional cases. [see Abati Bezbaruah v. Dy. Director General, Geological Survey of India, (2003) 3 SCC 148);United India Insurance Company Ltd. v. Patricia Jean Mahajan, (2002) 6 SCC 281 and UP State Road Transport Corp. v. Trilok Chandra, (1996) 4 SCC 362].
15. Reverting back to the factual position of the present case, the date of accident is 18.11.1997. Prior to this, the Second Schedule of the Act was already introduced w. e. f. 14.11.1994. Thus, the notional income mentioned in the Second Schedule and the multiplier specified therein can form the basis for the pecuniary compensation for the loss of dependency in the present cases. No fact and reason was highlighted during the arguments why the Second Schedule should not apply in the present cases.
16. The Second Schedule also provides for deduction of 1/3rd consideration towards expenses; which the victim would have incurred on himself if he had lived. As compensation for loss of dependency is to be calculated on the basis of notional income because the deceased was a child. It by necessary implication takes into account future prospects, inflation, price rise etc.
17. We must point out here that the learned counsel for the appellants had argued that the notional sum of Rs. 15,000/- should be enhanced and increased as the legislature has not amended the Second Schedule and the same continues to be in existence since it was enacted on 14.11.1994. We are not examining and going into this aspect as the accident had taken place in the present case nearly three years after the enactment of the Second Schedule. The time difference between the date of the enactment and the date of accident is not substantial."
11.Taking note of directions issued, by the Apex Court, Mr.P.Wilson, learned Additional Solicitor General of India was directed to ascertain as to whether any legislation has been brought about. On instructions, learned counsel Additional Solicitor General of India, has informed this Court that no amendment to the Act, but a Bill has been passed, in the Rajya Sabha. The amount fixed in the year 1994, cannot be static and taken as the basis, for computing loss of contribution to the family. Transport Corporation cannot take advantage of the failure of the Central Government, in bringing out an amendment. It cannot be lost sight of the fact that considering the escalation in price, the employees go on strike, and also succeed in revision of pay, and emoluments. If cost price index and other factors can be made applicable for revision of pay, there is no reason as to why the Claims Tribunal or the Courts should not fix a reasonable income, considering the same factors. Any amount of compensation will not bring back, the loss of life. Nobody can fill up the gap, in the house of the bereaved family. Having regard to the realities in life, Courts/Tribunals cannot be heartless in merely taking the notional income fixed in the year 1994. When Officers and employees of the Corporation, enjoy the fruits of periodical pay revision and other emoluments, the approach of the Transport Corporation that the Courts/Tribunals should take Rs.15,000/- fixed as the notional income in the year 1994, alone, should be taken for computing the loss of contribution to the family, cannot be appreciated. Compensation awarded should be just and it should according to conscience. Judicial forums cannot close their eyes and blindly adopt the income fixed in the year 1994. It is not the law which always compels the Court to award compensation to the accident victims, but it is the heart, which decides, what is just.
12.Just and reasonable compensation has to be awarded to the legal representatives of the deceased. Few decisions on this aspect are as follows:
(i) In R.D.Hattangadi v. M/s.Pest Control (India) Pvt. Ltd., reported in AIR 1995 SC 755, wherein, the Apex Court held as follows:
"In its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of disability caused. But all the aforesaid elements have to be viewed with objective standards."
(ii)In yet another decision in Divisonal Controller, KSRTC v. Mahadeva Shetty and another reported in (2003) 7 SCC 197, in Paragraph 12, the Supreme Court has held that, "Broadly speaking, in the case of death the basis of compensation is loss of pecuniary benefits to the dependents of the deceased which includes pecuniary benefits to the dependents of the deceased which includes pecuniary loss, expenses etc. and loss to the estate. The object is to mitigate hardship that has been caused to the legal representatives due to the sudden demise of the deceased in the accident. Compensation awarded should not be inadequate and should neither be unreasonable, excessive, nor deficient. There can be no exact uniform rule for measuring the value of human life and the measure of damage cannot be arrived at by precise mathematical calculation; but amount recoverable depends on broad facts and circumstances of each case. It should neither be punitive against whom claim is decreed nor should it be a source of profit for the person in whose favour it is awarded."
In Paragraph 15 of the said judgment, the Supreme Court has held that, "Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of "just" compensation which is the pivotal consideration. Though by use of the expression "which appears to it to be just", a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness, and non-arbitrariness. If it is not so, it cannot be just."
(iii)In Nizam Institute of Medical Sciences v. Prasanth S.Dhananka reported in (2009) 6 SCC 1 = 2010 ACJ 38 (SC), the three-Judge Bench was dealing with a case arising out of the complaint filed under the Consumer Protection Act, 1986. While enhancing the compensation awarded by the National Consumer Disputes Redressal Commission from Rs.15 lakhs to Rs.1 crore, the Hon'ble Bench made the following observations which can appropriately be applied for deciding the petitions filed under Section 166 of the Act:
We must emphasise that the court has to strike a balance between the inflated and unreasonable demands of a victim and the equally untenable claim of the opposite party saying that nothing is payable. Sympathy for the victim does not, and should not, come in the way of making a correct assessment, but if a case is made out, the court must not be chary of awarding adequate compensation. The adequate compensation that we speak of, must to some extent, be a rule of thumb measure, and as a balance has to be struck, it would be difficult to satisfy all the parties concerned. ...At the same time we often find that a person injured in an accident leaves his family in greater distress vis-`-vis a family in a case of death. In the latter case, the initial shock gives way to a feeling of resignation and acceptance, and in time, compels the family to move on. The case of an injured and disabled person is, however, more pitiable and the feeling of hurt, helplessness, despair and often destitution enures every day. The support that is needed by a severely handicapped person comes at an enormous price, physical, financial and emotional, not only on the victim but even more so on his family and attendants and the stress saps their energy and destroys their equanimity. (emphasis supplied)
(iv) In Reshma Kumari and others v. Madan Mohan reported in (2009) 13 SCC 422, this Court reiterated that the compensation awarded under the Act should be just and also identified the factors which should be kept in mind while determining the amount of compensation. The relevant portions of the judgment are extracted below:
The compensation which is required to be determined must be just. While the claimants are required to be compensated for the loss of their dependency, the same should not be considered to be a windfall. Unjust enrichment should be discouraged. This Court cannot also lose sight of the fact that in given cases, as for example death of the only son to a mother, she can never be compensated in monetary terms.
The question as to the methodology required to be applied for determination of compensation as regards prospective loss of future earnings, however, as far as possible should be based on certain principles. A person may have a bright future prospect; he might have become eligible to promotion immediately; there might have been chances of an immediate pay revision, whereas in another (sic situation) the nature of employment was such that he might not have continued in service; his chance of promotion, having regard to the nature of employment may be distant or remote. It is, therefore, difficult for any court to lay down rigid tests which should be applied in all situations. There are divergent views. In some cases it has been suggested that some sort of hypotheses or guess work may be inevitable. That may be so.
In the Indian context several other factors should be taken into consideration including education of the dependants and the nature of job. In the wake of changed societal conditions and global scenario, future prospects may have to be taken into consideration not only having regard to the status of the employee, his educational qualification; his past performance but also other relevant factors, namely, the higher salaries and perks which are being offered by the private companies these days. In fact while determining the multiplicand this Court in Oriental Insurance Co. Ltd. v. Jashuben, 2008 ACJ 1097 (SC), held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration.
One of the incidental issues which has also to be taken into consideration is inflation. Is the practice of taking inflation into consideration wholly incorrect? Unfortunately, unlike other developed countries in India there has been no scientific study. It is expected that with the rising inflation the rate of interest would go up. In India it does not happen. It, therefore, may be a relevant factor which may be taken into consideration for determining the actual ground reality. No hard-and-fast rule, however, can be laid down therefor. (emphasis supplied).
In the light of the principles of law and the entitlement of just compensation, to be paid to the victims, this Court finds, no infirmity in the quantum of compensation awarded by the Tribunal.
13.A sum of Rs.20,000/- taken by the Claims Tribunal, as annual income for the purpose of computing loss of contribution to the family, cannot be said to be grossly excessive, warranting interference. Reasons given by the Claims Tribunal awarding Rs.4,71,000/- as compensation, with interest @ 7.5% per annum, cannot be said to be arbitrary. Hence, the quantum of compensation awarded to the respondents/claimants, is sustained. The Civil Miscellaneous Appeal is dismissed. No costs. Consequently, the connected Miscellaneous Petition is closed.
Consequent to the dismissal of the appeal, the appellant Transport Corporation, is directed to deposit the award amount, with proportionate accrued interest and costs, less the statutory deposit, to the credit of M.C.O.P.No.139 of 2009 on the file of Motor Accidents Claims Tribunal (Principal District Judge), Krishnagiri, within a period of four weeks from the date of receipt of a copy of this order. On such deposit, the respondents/claimants are permitted to withdraw the award amount, by making necessary applications.
20.03.2014 Index :Yes/No Internet :Yes/No mps To The Motor Accidents Claims Tribunal (Principal District Judge), Krishnagiri.
S. MANIKUMAR, J, mps C.M.A.No.1024 of 2014 and M.P.No.1 of 2014 20.03.2014