Branch Manager National Insurance Co vs Jito And Ors

On the strength of case set up in the appeal, appellant-Insurance company has prayed for setting aside the impugned award dated 24th of September, 2019 passed by learned Presiding Officer, Motor Accident Claims Tribunal, Tribunal, (hereinafter referred to as „the Tribunal'), mainly on the following grounds:-

"I. That the award impugned is bad on the facts as well as all such principles and rules of the case.

II. That the award has been determined by not taking note that the deceased does not get the job/work for whole of the month and not justified in determining the income of the deceased which was required to be passed by the learned Tribunal as just compensation in light of legal propositions and well established principles of law.

III. That the learned Tribunal has fallen in error by increasing the income of the deceased and should have not determined the compensation towards loss of dependency by increasing the income of the deceased on account of future prospects.

IV. That the alleged deceased was a bachelor, and only the mother, i.e., respondent No.1 herein was required to be considered as dependent, so the deduction of 50 % was required to be made on account of personal and living expenses from the actual income of the deceased as the dependency/contribution to the mother or parents was only to the extent of 50 %, but the learned Tribunal while making the deduction on account of personal and living expenses failed to appreciate the guidelines and law as laid down in "Sarla Verma and ors. Vs. Delhi Transport Corporation", therefore, the compensation towards loss of dependency is determined unjustly.

V. That the appellant has disputed that the age of mother of the deceased is 65 years at the time of death of deceased, whereas the Tribunal has taken multiplier of 11 for age group of 50-55.

The facts in a nutshell are that on 03.09.2004, one Akal Chand was hit by a vehicle bearing registration No.8595/JK02C being driven by respondent No.1, in a rash and negligent manner, while the deceased was standing on road side. The said Akal Chand suffered multiple injuries on account of accident and ultimately he succumbed to those injuries in Government Medical College, Jammu after some time. It was urged before the Tribunal by the claimant that the deceased was a mason and was having an earning of Rs. 7,500/- per month and his death has worked harsh against her because she has lost the sole bread earner. The claimant has prayed for a compensation of Rs. 27.50 lacs from the respondents. It is recorded in the judgment passed by learned Tribunal that only Insurance company has contested the award before it whereas, driver, owner and one insured person, had chosen not to contest the claim petition.

The Tribunal after hearing the parties appeared before it and examining the evidence passed the award dated 24th of September, 2012 whereby claimant-respondent No.1 herein, was held entitled to compensation to the tune of Rs.3,68,000/-(Three lacs sixty eight thousand only), along with interest @ 6 per cent per annum from the date of filing of claim petition till its realization.

Feeling aggrieved of the aforesaid award passed by the Tribunal, the appellant-Insurance Company has challenged the same by filing the present appeal.

I have heard learned counsel for the parties, considered their submissions and gone through the records of the appeal.

Perusal of the claim petition is suggestive of the fact that the Tribunal had fixed the income of the deceased-Akal Chand at Rs. 3900/- per month. Thereafter, deducting 1/3rd of total income towards his personal expenses and by adopting the multiplier of 11, the Tribunal had granted the following compensation under different heads.

Sr.No.

Heading

Amount in Rs

I.

Loss of dependency

Rs.3,43,200/-.

II.

Medical Expenses

Rs. 20,000/-

III.

Funeral Expenses

Rs. 5,000/-.

Total(in round figure):- Rs. 3,68,000/-.

It would be apt to reproduce relevant paragraphs No.51 to 54 of Constitutional Bench Judgment rendered in case titled "National Insurance Co. Ltd vs Pranay Sethi", (2017) 16 SCC 680 hereunder verbatim:-

"51. As far as multiplier or multiplicand is concerned, the same has been put to rest by the judgments of this Court. Para 3 of the Second Schedule also provides for General Damages in case of death. It is as follows:-

"3. General Damages (in case of death): The following General Damages shall be payable in addition to compensation outlined above:-

(i) Funeral expenses - Rs. 2,000/-.

(ii) Loss of Consortium, if beneficiary is the

spouse-Rs. 5,000/-(2013) 15 SCC 45

iii) Loss of Estate - Rs. 2,500/-

(iv) Medical Expenses - actual expenses incurred before death supported by bills/vouchers but not exceeding - Rs. 15,000/-."

On a perusal of various decisions of this Court, it is manifest that the Second Schedule has not been followed starting from the decision in Trilok Chandra (supra) and there has been no amendment to the same. The conventional damage amount needs to be appositely determined. As we notice, in different cases different amounts have been granted. A sum of Rs. 1,00,000/- was granted towards consortium in Rajesh. The justification for grant of consortium, as we find from Rajesh, is founded on the observation as we have reproduced hereinbefore.

On the aforesaid basis, the Court has revisited the practice of awarding compensation under conventional heads.

As far as the conventional heads are concerned, we find it difficult to agree with the view expressed in Rajesh. It has granted Rs. 25,000/- towards funeral expenses, Rs. 1,00,000/- loss of consortium and Rs. 1,00,000/- towards loss of care and guidance for minor children. The head relating to loss of care and minor children does not exist. Though Rajesh refers to Santosh Devi, it does not seem to follow the same. The conventional and traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. There can be no dispute over the fact that price index, fall in bank interest, escalation of rates in many a field have to be noticed. The court cannot remain oblivious to the same. There has been a thumb rule in this aspect. Otherwise, there will be extreme difficulty in determination of the same and unless the thumb rule is applied, there will be immense variation lacking any kind of consistency as a consequence of which, the orders passed by the tribunals and courts are likely to be unguided. Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The principle of revisiting the said heads is an acceptable principle. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years. We are disposed to hold so because that will bring in consistency in respect of those heads."

Learned counsel for the appellant has stated that in case of a bachelor 50% has to be deducted towards the personal expenses of the deceased, whereas in the instant case, 1/3rd has been deducted towards personal expenses of the deceased. He further states that one more error has crept in, while awarding compensation in favour of the claimant is that the Tribunal has taken 30% increase in monthly income of the deceased which should have been taken 40% as per law laid down in sub-paragraph iv) of paragraph No.61 of Pranay Sethi judgment, which for facility of reference is reproduced hereunder:-

"61.

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iv). In case the deceased was self employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component."

The aforesaid contention raised by learned counsel for the appellant requires consideration.

Mr. Ankesh Chandel, learned counsel for the claimant fairly states that he is not averse to the contention raised by Mr. Suneel Malhotra, learned counsel for appellant. He further submits that he has no objection if the award of the Tribunal is modified on the above terms.

The Tribunal has taken monthly income of deceased as Rs.3,900/- by adding 30% in it, whereas it should have been added 40% according to Pranay Sethi's case (supra). In that view of the matter, the income of the deceased is raised by 40% from a sum of Rs.3,000/-, which comes to Rs.4,200/- (Rs.3,000+1,200=Rs.4,200). Secondly, 50% of the income must be deducted towards personal expenses, and as such, deducting the same, monthly income comes to Rs.2100/-(4,200-2100=2100). By adopting the multiplier of 11, the total loss of dependency comes to Rs. 2100×12×11=Rs.2,77,200/- (Two lakh seventy seven thousand and two hundred only). In addition to it, as per the decision rendered in Pranay Sethi's case, the claimant will also be entitled to Rs.15,000/- for funeral expenses instead of Rs. 5,000/- as awarded by the Tribunal and Rs.15,000/- as loss of estate which has not been awarded by the Tribunal.

In view of the above discussion and law laid down by the Apex Court in Pranay Sethi's case, the award of the Tribunal is modified as under:-

Sr. No

Heading

Award of the Tribunal

Modified award

1.

Loss of dependency

Rs.3,43,200/-

Rs.2,77, 200/-

2.

Medical Expenses

Rs.20, 000/-

Rs.20,000/-

3

For Funeral Expenses

Rs. 5,000/-

Rs. 15,000/-

4

For Loss of Estate

Rs. 10,000/-

Rs. 15,000/-

Total:

Rs.3, 27, 200/-

The interest as granted by the Tribunal @ 6 % is confirmed.

The claimant is held entitled to withdraw the modified amount as mentioned above minus the amount already released in her favour and the Registry shall release the same after proper verification/identification in favour of the claimant. Appellant-Insurance Company is at liberty to withdraw the excess amount deposited by it before the Registry.

The appeal is, accordingly, allowed, partly.