Madhya Pradesh High Court
United India Insurance Co. Ltd. vs Mohd. Ashique And Ors. on 2 July, 1997
Equivalent citations: 1998ACJ589
Author: Rajeev Gupta
Bench: Rajeev Gupta
JUDGMENT S.K. Dubey, J.
1. This is an appeal under Section 173 of the Motor Vehicles Act, 1988 (for short' the Act') aggrieved of the common award, dated 15.2.1991, passed in Motor Accident Claim Case Nos. 9 and 10 of 1989, by Motor Accidents Claims Tribunal, Sarda.
2. On 19.2.1989 deceased Jokhilal was going on a motor cycle with two pillion riders, namely, Madanlal and Akhtar. He was dashed by truck No. MPN 5359 as a result of which Jokhilal died at spot and the other two riders of the motor cycle received injuries. On the date of accident the truck was being driven by respondent No. 5 during the course of employment of respondent No. 6, the owner of the truck which was insured with the appellant. The legal representatives of the deceased Jokhilal filed an application under Section 166 of the Act to claim compensation of Rs. 24,60,000/- for the death caused due to negligent act of the truck driver. The injured Madanlal also filed application to claim compensation for the injuries suffered by him in the said accident. The owner and driver remained ex parte, therefore, the appellant company was permitted to contest the claims on all grounds which were available to owner. The Tribunal after appreciation of common evidence adduced by the parties in both the cases held that the accident was caused due to sole negligence of truck driver. To determine compensation in Claim Case No. 9 of 1989 the Tribunal found that deceased was earning Rs. 25,000/- per annum from his 7 acres of agricultural land. The evidence of the respondents/claimants about additional income of Rs. 60/- per day of the deceased by doing the job of mechanic was disbelieved. The Tribunal on the admission of the claimants that after the death of the deceased the land was given on bated, deducted 50 per cent of the amount from Rs. 25,000/- and estimated the dependency at Rs. 13,000/- wherein a multiplier of 18 was applied. Amount of compensation was assessed at Rs. 2,34,000 which was awarded with interest thereon at the rate of 10 per cent per annum from the date of application.
3. Mrs. Sudha Pandit, learned Counsel for the appellant contended that the insurer appellant was not liable to pay any compensation or to indemnify the owner as the driver of the truck was not holding a valid licence which was proved by Sushilendra Rao, NAW 1, the Assistant Officer of the appellant. The award of compensation was also challenged as highly excessive as looking to the age of the deceased and dependants multiplier of 18 could not have been applied. Lastly, it was submitted that the liability of the appellant company in terms of policy Exh. D-1 was limited to Rs. 1,50,000/- as no additional premium was paid to cover the unlimited liability.
4. Mr. Sharad Verma, learned Counsel for the respondents supported the award and submitted that compensation deserves to be enhanced as the Tribunal ought not to have deducted half of the amount from the earnings of the deceased which the claimants were getting by giving the land on bated after the death of the deceased.
5. The contention that the driver was not holding a valid licence has not been established by evidence. The statement of NAW 1 does not establish the plea raised by the appellant. He only stated that after the accident driver of the vehicle or the owner did not produce the licence before the insurance company. This is neither here nor there. The appellant company has not discharged the burden by adducing legal evidence, i.e., by examining R.T.O. or any officer of the R.T.O. that the driver of the vehicle was not issued any licence. In such circumstances relying on the decision of the Supreme Court in Narcinva V. Kamat v. Alfredo Antonio Doe Martins 1985 ACJ 397 (SC) and Suresh Mohan Chopra v. Lakhi Prabhu Dayal 1991 ACJ 1 (SC), we hold that the appellant company has failed to establish the plea, therefore, was rightly held responsible to indemnify the insured and to pay compensation.
6. Regarding compensation: For computing compensation the multiplier method is logically sound and well established which is more scientific for arriving at proper multiplicand and multiplier. The multiplier method involves the ascertainment of loss of dependency or the multiplicand having regard to the circumstances of the case and capitalising 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. The multiplier represents the number of years' purchase on which the loss of dependency is capitalised. [See General Manager, Kerala State Road Transport Corporation v. Susamma Thomas 1994 ACJ 1 (SC), Sarla Dixit v. Balwant Yadav 1996 ACJ 581 (SC) and U.P. State Road Trans. Corporation v. Trilok Chandra 1996 ACJ 831 (SC)].
7. It is also settled that while determining the compensation after estimating the dependency and applying the multiplier into the multiplicand the nature and extent of assets left by the deceased of which the legal representatives or the members of the family get benefit which they were getting during the life time of the deceased the value of such assets has not to be deducted taking into consideration the mitigation of the damage. The accelerated succession to those assets does not bring any additional benefit to the heirs which may be liable to set off against the loss occasioned by the death. Again if the assets are such which were being created by the deceased out of his savings to be utilized for the benefit of the members of the family on various occasions like marriage, higher education of the children, etc., those assets should also be kept out of consideration while determining the just compensation. Such assets cannot be said to confer any undue or untimely benefit on the legal representatives because of the death of the person on whom they were dependent. In every case it has been emphasised that damages have to be determined on the facts of the case and in such calculations, guess work on notional estimation is permissible. Under Section 168 of the Act, Tribunal has been made to judge the amount of compensation which is considered to be just and while determining 'just' compensation, the Tribunal has to take into consideration all the relevant factors concerning the deceased and his legal representatives. [See a recent decision of this Court in Vimla Devi Khemka v. G.M., Madhya Pradesh State Road Trans. Corporation 1996 ACJ 876 (MP)].
8. In our opinion, for estimating the dependency the Tribunal illegally deducted 50 per cent of the amount from the agricultural income received by the claimants from agricultural land given on batai after the death of the deceased. This earning from the assets left by the deceased could not have been deducted from the earnings of the deceased as this earning cannot be said to confer any undue or untimely benefit on the legal representatives because of the death of the deceased on whom they were dependent. In any case a tortfeasor cannot claim advantage of it in mitigation of damages for his tortious act. From evidence it is established that deceased was earning Rs. 25,000/-, hence for estimating the dependency one-third is deducted for the personal living expenses of the deceased the dependency would arrive at Rs. 17,000/-. The deceased was aged 42 years, therefore, applying the multiplier of 12 into the multiplicand of Rs. 17,000/-, as was applied in Susamma Thomas' case 1994 ACJ 1 (SC), where deceased was aged 39 years, the amount would work out to Rs. 2,04,000/-. In that a conventional figure of Rs. 10,000/- for loss of consortium and Rs. 2,000/- for the funeral expenses are added, the total amount of compensation would come to Rs. 2,16,000/- which the respondents/ claimants would be entitled with accrued interest at 12 per cent per annum from the date of application till payment.
9. Re: Liability of insurance company: From the policy Exh. D 1 it is apparent that it is a third party risk policy wherein an extra amount to cover the unlimited liability was not paid. Therefore, the liability of the appellant company shall be to the extent of Rs. 1,50,000/- in accordance with Section 95 (2)(a) of the Motor Vehicles Act, 1939. On this amount the appellant shall pay the interest at the rate of 12 per cent per annum from the date of application, i.e., 21.8.1989 and not at the rate of 10 per cent per annum as awarded by the Tribunal because usually interest is awarded at the rate of 12 per cent per annum from the date of application, that is the view of the Supreme Court, followed by this Court consistently. In appeal the High Court can act without any cross-objection or cross-appeal and can enhance interest to 12 per cent per annum payable from the date of application on the compensation awarded till realisation. [See a Full Bench decision of this Court in Prakramchand v. Chhuttan 1991 ACJ 1051 (MP)]. Accordingly, the appellant company is directed to deposit the amount of Rs. 1,50,000/- with its accrued interest less the amount already deposited within two months from the date of supply of certified copy failing which the interest shall be payable at the rate of 15 per cent per annum till realisation.
10. The balance amount of Rs. 66,000 with interest thereon at the rate of 12 per cent per annum shall be recoverable from the owner and driver of the truck.
11. In the result, the appeal is partly allowed with no order as to costs. The award of the Tribunal stands modified as indicated hereinabove.