HDFC ERGO General Insurance Co. Ltd. vs Preeti and Others

G.P. Mittal, J.—The Appeal is for reduction of compensation of Rs. 10,75,532/-awarded by the Motor Accident Claims Tribunal(the

Claims Tribunal) for the death of Ramesh Kumar who died in a motor vehicle accident which occurred on 14.11.2009. The learned counsel for the

Appellant urges that in the absence of any cogent evidence that the deceased was working as a tailor, the Claims Tribunal could not have awarded

compensation on the basis of minimum wages of a skilled worker. It is stated that in the absence of any evidence with regard to the future

prospects, the Claims Tribunal erred in making addition of 50% in the deceased''s income and that the compensation awarded towards non-

pecuniary damages is on the higher side.

On the other hand, the learned counsel for the Claimants argues that the compensation awarded is just and reasonable as even the minimum

wages are increased on account of inflation and gets doubled in a period of ten years.

During the inquiry before the Claims Tribunal, the First Respondent appeared as PW2. Her testimony that her deceased husband was working

as a tailor was not challenged in cross-examination. Although, the deceased''s income was not proved, yet in view of PW2''s unchallenged

testimony, minimum wages of a skilled worked was rightly adopted by the Claims Tribunal for computation of loss of dependency.

This Court in Rakhi v. Satish Kumar & Ors. (MAC.APP.390/2011) decided on 16.07.2012, referred to the reports of the Supreme Court in

General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, , Smt. Sarla Dixit and another

Vs. Balwant Yadav and others, , Bijoy Kumar Dugar Vs. Bidyadhar Dutta and Others, , Smt. Sarla Verma and Others Vs. Delhi Transport

Corporation and Another, and Santosh Devi Vs. National Insurance Company Ltd. and Others, and held that as per Santosh Devi even in the

absence of any evidence as to future prospects an increase of 30% in the income has to be provided where the victim had fixed income or was a

self employed person. Relevant portion of Santosh Devi is extracted hereunder:-

14.....In our view, it will be naive to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a

fixed salary without provision for annual increment, etc., would remain the same throughout his life. The rise in the cost of living affects everyone

across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the

cost of living is minimal on the rich and maximum on those who are self- employed or who get fixed income/emoluments. They are the worst

affected people. Therefore, they put extra efforts to generate additional income necessary for sustaining their families. The salaries of those

employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion

against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those

employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV

employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one

lac. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with

the increase in the salaries of the Government employees and those employed in private sectors but it cannot be denied that there has been

incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal

basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter

category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by

stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be

the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc. Therefore, we do not think that while making the

observations in the last three lines of paragraph 24 of Sarla Verma''s judgment, the Court had intended to lay down an absolute rule that there will

be no addition in the income of a person who is self-employed or who is paid fixed wages. Rather, it would be reasonable to say that a person

who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he/she

becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation.

Thus, the loss of dependency comes to Rs. 7,73,853/- ( Rs. 4,377/- + 30% x 2/3 x 12 x 17).

Loss of love and affection can never be measured in terms of money. Thus, uniformity has to be adopted by the Courts while granting non-

pecuniary damages. The Supreme Court in Sunil Sharma and Others Vs. Bachitar Singh and Others, and in Baby Radhika Gupta and Others Vs.

Oriental Insurance Co. Ltd. and Others, granted Rs. 25,000/- (in total to all the claimants) only under the head of loss of love and affection. Thus,

I would reduce the compensation under this head to Rs. 25,000/- only.

No evidence with regard to expenditure on last rites was produced. In the absence of any evidence, only a sum of Rs. 10,000/- can be

awarded ( Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, ). The sum of Rs. 30,000/- awarded towards last rites is

reduced to Rs. 10,000/-.

The overall compensation thus comes to Rs. 8,28,853/-.

The excess amount of Rs. 2,46,679/- along with proportionate interest shall be refunded to the Appellant Insurance Company.

The compensation payable to the Claimants shall be disbursed in terms of the order passed by the Claims Tribunal.

Statutory amount of Rs. 25,000/-, if any, shall be refunded to the Appellant Insurance Company. Pending Applications stand disposed of.