Madras High Court
The New India Assurance Co. Ltd vs G.Alagiri on 7 October, 2013
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :07.10.2013 C O R A M : THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR C.M.A. No.2703 of 2010 The New India Assurance Co. Ltd., Chennai-1. .. Appellant vs. 1.G.Alagiri 2.V.M.Baskar .. Respondents PRAYER: Appeal filed under Section 173 of the Motor Vehicles Act, 1988, as against the judgment and decree dated 29.12.2009 made in MACTOP No.3949 of 2005, on the file of the Motor Accident Claims Tribunal [II Judge, Court of Small Causes], Chennai. ----- For appellant : Mr.M.Krishnamoorthy For respondents : Miss.C.Prasannalakshmi for M/s.Senthilsamy Associates for R.1 ----- J U D G M E N T
This Civil Miscellaneous Appeal has been preferred by the New India Assurance Company Limited, which figured as the 2nd respondent in MACTOP No.3949 of 2005 on the file of the Motor Accident Claims Tribunal [II Judge, Court of Small Causes], Chennai.
2. The 1st respondent herein had filed the above said MACTOP before the Tribunal claiming initially a sum of Rs.7 lakhs as compensation for the injuries sustained by him in a road accident, which took place on 21.00 hrs. On 10.8.2005, involving the motor vehicle belonging to the 2nd respondent herein that stood insured with the appellant herein. Subsequently, during the pendency of the MCOP, the Claim Petition was amended and the claim was increased to Rs.12 lakhs from Rs.7 lakhs. The claim was made on the basis of the plea that the Tata Sumo bearing Registration No.TN 23 A 0356 in which the 1st respondent was travelling as a gratuitous passenger, met with an accident due to the rash and negligent driving of its driver as a result of which the 1st respondent herein/claimant sustained multiple injuries; that for the consequences of the rash and negligent driving of the said vehicle by its driver, the 2nd respondent herein, viz., the owner of the vehicle, was liable to pay compensation to the 1st respondent/injured claimant; that since according to the 1st respondent/claimant, the said vehicle was insured with the appellant Company as on the date of the accident, the appellant Insurance Company was liable to indemnify the insurer, viz., the 2nd respondent herein, and that by virtue of the provisions of the Motor Vehicles Act, the said contract of insurance was enforceable by the 1st respondent/claimant. Thus, the claim was made against both the second respondent and the appellant herein.
3. The owner of the vehicle, viz., the 2nd respondent herein, remained ex parte and did not contest the case. The appellant/Insurance Company, which figured as the 2nd respondent before the Tribunal, contested the case not only on the grounds available under Section 149 of the Motor Vehicles Act, but also on all grounds of defence available to the insured, after getting necessary order under Section 170 of the Motor Vehicles Act, permitting it to raise such pleas.
4. During trial, three witness were examined as P.Ws.1 to 3 and 19 documents were marked as Exs.P.1 to P.19 on the side of the claimant. No witness was examined and no document was marked on the side of the respondents in the MACTOP [the 2nd respondent herein and the appellant herein]. It is pertinent to note that the judgment of the Tribunal contains the list of witnesses examined on the side of the petitioner/injured stating that only two witnesses were examined, viz., P.Ws.1 and 2, whereas actually three witnesses were examined.
5. At the conclusion of trial, the Tribunal held that the accident took place due to the rash and negligent driving of the Tata Sumo vehicle by its driver; that the Tata Sumo vehicle involved in the accident was owned by the 2nd respondent herein and it stood covered by an insurance policy issued by the appellant herein and that hence the 2nd respondent and the appellant were jointly and severally liable to pay compensation to the 1st respondent/injured.
6. The Tribunal took the age of the claimant to be 38 years, at the time of the accident and took the income of the injured claimant before the accident to be Rs.5,000/- per month. Arriving at a conclusion that the 1st respondent/injured had suffered 100% partial permanent disability, the Tribunal applied the multiplier method, selected 16 to be the appropriate multiplier and arrived a sum of Rs.9,60,000/- as compensation towards permanent disability and loss of earning power. More amount was awarded on other heads also and ultimately, the Tribunal arrived at the figure of Rs.11,53,000/- to be the reasonable compensation to which the 1st respondent/injured would be entitled. Consequently, the Tribunal directed the 2nd respondent and the appellant herein to jointly and severally pay the above said amount together with interest at the rate of 7.5% per annum from the date of filing of the MCOP, till the date of deposit and also costs.
7. The said award passed by the Tribunal is challenged by the appellant Insurance Company, not on the question of liability to pay compensation, but on the question of reasonableness of the amount awarded as compensation. According to the appellant, the amount awarded by the Tribunal as compensation is highly unreasonable and exorbitant. The point that arises for consideration in the appeal is "whether the amount awarded by the Tribunal as compensation is unreasonably excessive warranting reduction?"
8. Since the 2nd respondent herein [owner of the vehicle] remained ex parte before the Tribunal, notice to the 2nd respondent was dispensed with. The submissions of Mr.M.Krishnamoorthy, learned counsel for the appellant and Miss.C.Prasannalakshmi, learned counsel for the 1st respondent/claimant are heard. Materials available on record are also perused.
9. The learned counsel for the appellant, pointing out the evidence of P.Ws.2 and 3, would contend that P.W.3 has assessed the disability caused to the 1st respondent[injured] comprehensively at 70%, whereas P.W.2 has chosen to assess a particular type of disability alone at 50%. According to his contention, though P.W.3 has given a comprehensive assessment of the disability certifying it to be 70%, the Tribunal wrongly took it to be the assessment of one of kind of disability alone and the disability certified by P.W.2 was another kind and while fusing together both kinds of disabilities, the Tribunal erroneously arrived at the conclusion that the 1st respondent/injured had suffered 100% permanent disability. It is the further contention of the learned counsel for the appellant that apart from the above, the Tribunal failed to consider the contention of the appellant that the case was not a fit one for applying the multiplier method since the appellant was continuing the very same business of running a provision store even after the accident.
10. On the contrary, the learned counsel for the 1st respondent would submit that the assessment of permanent disability at 100% cannot be found fault with; that the total amount arrived at by the Tribunal will show only a conservative approach and that if a liberal approach had been made, the Tribunal itself would have awarded the entire amount claimed by the 1st respondent/injured as compensation. Based on the above said contentions, the learned counsel for the first respondent would submit that the appeal deserves to be rejected, as there is no merit in it.
11. The above said submissions made on either side are taken into consideration. The factum of accident, the ownership of the vehicle involved in the accident and the coverage of insurance policy are not disputed and they are admitted by the parties. The appellant has not chosen to challenge the award on the question of its liability to satisfy the award that may be passed against the owner of the vehicle and the appellant admits that it is liable to satisfy the award to the fullest extent that may be passed against the owner of the vehicle, viz., the 2nd respondent herein.
12. The appellant's grievance is that the method adopted by the Tribunal in assessing the permanent disability and consequently the compensation awarded are not proper and not in tune with the recognised principles of assessment of compensation in injury cases. The main contention of the learned counsel for the appellant are three fold. They are:- [i] the 1st respondent/injured suffered some amount of permanent disability, but the assessment of permanent disability at 100% is highly unreasonable, that too when one of the Doctors examined by the injured himself has certified the total disability suffered by the injured to be 70%; [ii] the Tribunal committed an error in assuming that the 1st respondent/ injured had sustained 100% loss of earning capacity in the absence of any evidence to prove that he had closed down his provision store after the accident; and [iii] the Tribunal has awarded conventional compensations on various heads, which are either inapplicable to the case of the 1st respondent or overlapping with the other.
13. The Tribunal, in arriving at the total figure, has furnished the following split-up particulars:-
Transport expenses : Rs.10,000/-
Extra nourishment charges: Rs.10,000/-
Medical Expenses : Rs.63,000/-
Loss of future matrimonial life : Rs.10,000/-
Mental agony to petitioner: Rs.10,000/-
Mental agony to wife : Rs.10,000/-
Loss of expectation of life: Rs.10,000/-
Physical discomfort : Rs.10,000/-
Loss of amenities & enjoyment of life : Rs.10,000/-
Future medial expenses: Rs.10,000/-
Attending charges Rs.10,000/- Compensation for pain & suffering : Rs.30,000/- Permanent Disability & Loss of earning power : Rs.9,60,000/- ---------------- Rs.11,53,000/- ================
14. Learned counsel for the appellant would fairly concede that the sum of Rs.10,000/= awarded towards transport expenses need not be interfered with. Hence, the same is confirmed. So far as the expenses for extra nourishment is concerned, the Tribunal has awarded a sum of Rs.10,000/-. Though the learned counsel for the appellant would contend that it is on the higher side, this Court does not feel that it needs any interference. Hence, the same is confirmed. Regarding the medial expenses, the Tribunal has awarded a sum of Rs.63,000/- which amount was covered by the bills produced by the 1st respondent/injured. The said amount also deserves to be confirmed and the same is confirmed. The Tribunal, besides awarding a sum of Rs.30,000/- towards pain and suffering, has chosen to award Rs.10,000/- each on six heads, viz., loss of future matrimonial life, mental agony to petitioner, mental agony to wife, loss of expectation of life, physical discomfort and loss of amenities and enjoyment of life. The above said amount of Rs.60,000/- awarded towards loss of future matrimonial life, mental agony to petitioner, mental agony to wife, loss of expectation of life, physical discomfort and loss of amenities and enjoyment of life cannot be justified and the same is liable to be disallowed and it is accordingly disallowed. So far as the future medical expenses are concerned, though there is no evidence, still the Tribunal has awarded a sum of Rs.10,000/-, which needs no interference and the same is confirmed. The 1st respondent/injured might have required an attendant to look after him, for which the Tribunal has fairly awarded a sum of Rs.10,000/- as compensation, which amount also deserves to be confirmed. So far as the compensation awarded towards pain and suffering is concerned, considering the nature of injuries sustained, the nature of treatment and the disability with which the 1st respondent/injured is found at present, Rs.30,000/- awarded by the Tribunal can be viewed as low and it can be increased to Rs.50,000/-.
15. So far as loss of permanent disability is concerned, one Dr.K.J.Mathiyazhagan has deposed as P.W.2. According to his testimony, when he examined the 1st respondent/injured on 10.8.2005, he came to know that the injured sustained fracture of two hip bones and also fracture on left clavicle bone. It is his further testimony that there was injury to the urethra for also he had taken treatment which included a surgical intervention. A consideration of his evidence would show that though certain complications were noticed by him, such as, difficulty in passing urine and restriction in the movement of left shoulder as well as pain in the hip, resulting in difficulty to lean forward, all these disabilities have been comprehensively assessed to be a partial permanent disability of 70%. The certificate issued by P.W.2 has been marked as Ex.P.16. Even according to his own version, plus or minus 5 shall be allowed for calculation error that may be made by a medical officer. Apart from examining P.W.2, the 1st respondent injured has chosen to examine one Dr.G.Saravanabhava as P.W.3, whose chief examination has been produced in the form of a proof affidavit, which contains scribblings, and it cannot be easily read. Doctors are supposed to produce the prescriptions or the certificates with legible handwriting or by using typewriter/computer. P.W.3, apart from having issued a medical certificate marked as Ex.P.18, which also contains scribblings, has chosen to reproduce the same in the proof affidavit. The Tribunal has chosen to fuse the quantum of disability certified by P.W.2 and the quantum of disability certified by P.W.3 together by simply adding the figures quoted by P.Ws.2 and P.W.3. While doing so, based on the principle that if the summation of different disabilities account for more than 100%, the commutative disability should be assessed only at 100%, the Tribunal has assessed the disability at 100%.
16. When we say a person has suffered 100% disability, it shall mean total disability. However, the Tribunal has made an observation that the 1st respondent/injured had suffered a partial permanent disability of 100%. The very fact that P.W.2 has chosen to comprehensively assess the disabilities at a total extent of 70% would show that the disability assessed by P.W.3 in respect of the injury caused to the urethra at 50% shall be definitely on the higher side. Even if it is assumed that the extent of disability certified by P.W.3 could be correct, then the necessary corollaries will be that the other disabilities shall be only minimum, viz., not more than 20%. In this regard, the Tribunal has committed a grave error in totally disregarding the evidence of P.W.2. The witness [P.W.2] examined by the injured himself spoke to the effect that all the three injuries together had resulted in a total functional disability of 70%. After having produced the certificate issued by P.W.2 and having examined him as a witness on the side of the petitioner, there was no necessity and no scope to get a further certificate from P.W.3 and examine him in respect of a particular item of injury alone which had already been covered by the certificate issued by P.W.2. In this regard, the Tribunal should have either accepted the assessment made by P.W.3 to be correct and directed separate assessment of the disability caused by the fractures on the left shoulder and hip, rejecting the certificate issued and the testimony made by P.W.2. altogether. Or else, the Tribunal ought to have accepted the assessment made by P.W.2 to be correct and rejected the certificate issued by P.W.3, viz., Ex.P.18 and the testimony of P.W.3 as superfluous and unnecessary. As rightly pointed out by the learned counsel for the appellant, the Tribunal has committed the above said mistake which has got to be interfered with and corrected by this Court. In view of the fact that there is no contra evidence of the side of the appellant, this Court is of the considered view that the comprehensive assessment made by P.W.2 and the certificate issued by him under Ex.P.16 shall be accepted as correct assessment and compensation should be awarded on the basis that the 1st respondent/injured has suffered permanent disability to the extent of 70%. The said conclusion will take us to the next question as to whether the percentage of disability can be equated with the percentage of loss of earning capacity.
17. According to the learned counsel for the appellant, the 1st respondent/injured was not employed under anyone and he was self-employed running a provision store. The learned counsel for the appellant has submitted further that there is no evidence to show that the provision shop run by the 1st respondent/injured was closed subsequent to the accident and that the 1st respondent/injured suffered any decrease in the quantum of sales and consequently the profit. However, the mere fact that a business man after suffering injuries resulting in 70% of functional disability is able to run the business will not give rise to any inference that he himself is running the business without the aid of others. Before the accident, the 1st respondent/injured would have been in a position to run the business by contributing his physical labour and also his skill in management. A owner of a provision store has to travel for procuring the commodities and arrange the things purchased for retail sale in his provision shop. Such routine acts of the 1st respondent would have been greatly hindered by the disability caused due to the functional disability sustained by him in the accident. Therefore, though the 1st respondent/injured has not produced any evidence to show decline in sales or turnover, we have to take note of the fact that for running the business profitably, he shall have to appoint a person to look after the above said acts, for which he is expected to incur certain expenditure by making payment of wages to the person.
18. The income derived from a business is to be distinguished from the earnings made by a person contributing his physical labour or mental skill. When a business man earns profit, the profit shall be split up into two parts. One part can be related to the return on investment and the other part can be attributed to his contribution of his physical labour and skill. In a case of compensation for death or injury arising out of an accident, only the second part is material and the earlier part mentioned shall be immaterial. To make the point more clear, the following hypothesis shall be helpful:-
A person owning a ginning mill or a spinning mill will be deriving income from the said business in lakhs or in crores. Will it be inferred that the death of the owner of such mill will result in the total loss of income from the said business? Certainly 'not'. The business will be in tact and the legal heirs of the deceased, who own the business, will be able to run it even more profitably, by their management skill and physical labour, provided they are in a position to contribute equally or a little more than what the original owner could have contributed. If they are not having the knowledge or competency, they can engage a person for doing such job. The expenditure incurred in finding out and employing such person shall be the actual loss. In addition, a percentage can be added towards the loss of personal attention with which a owner will be doing the business. Similar is the case of an agriculturist owning several acres of agricultural lands. If such an approach is made, we can easily come to the conclusion that a business man after suffering injuries in the accident resulting in permanent disability would have incurred more expenditure for running the business with the same profit and that part of the additional expenditure alone shall be taken as the loss of earning capacity for the injury sustained by him in the accident.
19. If such an approach is made in this case, we can easily arrive at a conclusion that the compensation awarded by the Tribunal under the head "loss earning capacity due to the permanent disability" is on the higher side. Though the 1st respondent/claimant has stated in his claim petition that he was having a monthly income of Rs.8000/- from his provision store, no document has been produced in support of his claim. Except three receipts issued by the Panchayat President evidencing payment of fee for renewal of licence for the provision shop, no other document has been produced. The said receipts would be enough to establish that the 1st respondent/injured was running the provision store in his village. There is no evidence to show the turnover or the annual profit the 1st respondent was deriving from it. Even as per the evidence of P.W.1, his average income was only Rs.200/- per day. There is no document to show that the 1st respondent was assessed to income tax. Under such circumstances alone, the Tribunal has chosen to assess his income at Rs.5,000/- per month. Such an assessment made by the Tribunal can be accepted to be correct and the same shall be upheld. However, since this Court has come to the conclusion that the 1st respondent [injured] suffered only 70% disability, his contribution to the business by way of physical labour and skill could be taken to have been reduced by 70%. The said percentage of his income assessed above comes to Rs.3,500/-. He can find out a proper helper spending the said amount towards his wages. As such, this Court comes to the conclusion that the Tribunal's preference to apply multiplier method cannot be found fault with. On the other hand, the loss of earning assessed by the Tribunal at Rs.5,000/- has to be slashed down to Rs.3,500/-, representing 70% of the above said sum of Rs.5,000/-. Thus, the annual loss of earning shall be assessed at Rs.42,000/-.
20. So far as the age of the 1st respondent/injured is concerned, it has been furnished as 38 years in the claim petition. When he was examined as P.W.1 before the Tribunal, during cross-examination, he has stated that he was 39 years old as on the date of the accident. Though he has stated that he had studied upto 9th Standard in Arakkonam, he has not chosen to produce the Transfer Certificate or other school records to show his date of birth in proof of his age. No birth certificate has been produced. In this regard, the learned counsel for the appellant draws the attention of the Court to the admissions made by P.W.1 in his cross-examination and contends that he was a person having grand children at the time of his examination before the Tribunal. A scrutiny of his testimony, in the cross-examination, will make it probable that the age stated by P.W.1 in his cross examination could be correct. According to him, he was aged 39 years at the time of the accident. The accident occurred in the year 2005. He was examined before the Tribunal in the year 2009. In the proof affidavit, his age has been stated as 42 years. There is no wonder in a 42 years old man having a married daughter and an unmarried son and grand children through the married daughter. Suppose he has married at the age of 20, he would have given birth to a daughter at the age of 21. At the age of 39, he could have given his daughter in marriage. In a gap of three years, two grand children could have been born. Such a view is strengthened by the further evidence given by P.W.1 that his son was studying Plus Two at time of his examination before the Tribunal. Therefore, this Court is of the view that the Tribunal has committed a small mistake in taking the age of the 1st respondent/injured as 38, as on the date of accident, despite the admission made by P.W.1 that he was aged 39 years as on the date of the accident. Since this Court has held that the proper method to be adopted shall be the multiplier method, it shall make no difference, because for persons in the age group of 36 to 40, the very same multiplier shall be adopted.
21. The Tribunal has chosen to select 16 to be the proper multiplier for assessing compensation for the loss of earning capacity. The same was done on the basis of the Table found in the II Schedule. Time and again, the Apex Court has held that blindly following the Table is not advisable and it could provide only a guideline for selection of multiplier. Even after such pronouncements, there had been wide variations in the selection of multiplier by various Tribunals and High Courts and even in the cases before the Apex Court. Therefore, a Larger Bench of the Apex Court in Uttar Pradesh State Road Transport Corporation v. Trilok Chandra reported in 1996 ACJ 931 chose to provide multipliers for various age groups. In an attempt to achieved uniformity, it was directed therein that the maximum multiplier would be 18 and the minimum multiplier would be 5. Later on, in Reshma Kumari v. Madan Mohan reported in 2013 [2] CTC 680, another Larger Bench of the Apex Court has chosen to issue general directions based on the observations made by the Supreme Court in Sarla Verma v. Delhi Transport Corporation reported in [2009] 6 SCC 121 and also the observation made in Trilok Chandra's case. The Apex Court, in an attempt to achieve uniformity in the selection of multiplier, held in clear terms that the multiplier noted in Column 4 of Reshma Kumari's case and the multiplier suggested by the earlier Bench of the Supreme Court in Trilok Chandra's case are to be adopted in all cases. Following are the multipliers, which are applicable to various age group of persons, as per the above said judgment of the Apex Court in Reshma Kumari's case.
Upto 15 years - 15 15 to 25 years - 18 26 to 30 years - 17 31 to 35 years - 16 36 to 40 years - 15 41 to 45 years - 14 46 to 50 years - 13 51 to 55 years - 11 56 to 60 years - 9 61 to 65 years - 7 Above 65 years - 5
22. As per the guidelines and directions issued by the Apex Court, if the age of the 1st respondent/injured in this case is taken as 39 years, the proper multiplier to have been selected shall be '15' and not '16'. Even if the age of the 1st respondent, as on the date of the accident is taken as 38 years, the proper multiplier shall be 15 and not 16. The product of the multiplicand 42,000 and the proper multiplier '15', is Rs.6,30,000/-. The said amount shall represent the loss of earning capacity due to the disabilities suffered by the 1st respondent/injured in the accident. This amount shall take care of the loss of earning capacity as well as the personal discomforts caused due to the functional disability. Hence, the amount of Rs.9,60,000/- awarded by the Tribunal towards permanent disability and loss of earning power has to be reduced to Rs.6,30,000/- and accordingly reduced.
23.The Tribunal could have awarded a reasonable amount towards loss of total earning for a particular period during which the 1st respondent would have been confined in the hospital. Considering the nature of injuries and the nature of treatment, we can assume that he would have incurred loss of total earning for three months, for which a sum of Rs.5,000/- x 3 months, i.e. Rs.15,000/- is awarded.
24. If the additions and deductions as indicated supra are made from the amount awarded by the Tribunal, we can arrive at the figure of Rs.7,98,000/- as the reasonable amount of compensation to which the 1st respondent/injured is entitled. At the cost of repetition, the split up particulars are furnished hereunder:
Permanent Disability & Loss of earning power : Rs.6,30,000/-
Compensation for pain & suffering : Rs. 50,000/- Transport expenses : Rs. 10,000/- Extra nourishment charges : Rs. 10,000/- Medical Expenses : Rs. 63,000/- Future medial expenses : Rs. 10,000/- Attendant charges : Rs. 10,000/- Loss of earning during accident:Rs. 15,000/- ---------------- Rs.7,98,000/- ================
25. For all the reasons stated above, this Court hereby holds that the amount awarded by the Tribunal is excessive and unreasonable and the same has got to be reduced to Rs.7,98,000/-. The rate of interest awarded by the Tribunal needs no revision. So far as the direction regarding payment of costs of the proceedings before the Tribunal is concerned, it shall be modified by directing payment of proportionate costs.
26. In the result, this appeal is allowed in part and the award of the Tribunal is modified by reducing the award amount from Rs.11,53,000/- to Rs.7,98,000/-, which amount shall be paid jointly and severally by the the appellant and 2nd respondent, together with interest at the rate of 7.5% per annum and proportionate costs of litigation before the Tribunal. So far as the appeal is concerned, the parties shall bear their respective costs. It is brought to the notice of the Court that the appellant has already deposited 50% of the amount awarded by the Tribunal to the credit of MACTOP No.3949 of 2005, on the file of the Motor Accident Claims Tribunal [II Judge, Court of Small Causes], Chennai. Hence, the appellant and the 2nd respondent shall be liable to deposit the balance amount alone.
gs. 07.10.2013
Index:Yes/No.
Internet:Yes/No.
To
The Motor Accident Claims Tribunal
[II Judge, Court of Small Causes], Chennai.
P.R.SHIVAKUMAR, J.
gs.
C.M.A.No.2703 of 2010
7.10.2013