ICICI Lombard General Insurance Co. Ltd. vs Monu and Others

G.P. Mittal, J.—The Appeal is for reduction of compensation of Rs. 20,36,980/- awarded by the Motor Accident Claims Tribunal (the Claims Tribunal) in favour of Respondents No. 1 to 5 for the death of Anil who died in a motor vehicle accident which occurred on 05.02.2009. The only ground of challenge raised during hearing of the Appeal is that that there was no evidence with regard to the deceased''s future prospects yet, the Claims Tribunal made an addition of 50% towards future prospects which was not permissible. Reliance is placed on Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, .

I have before me the Salary Certificate Ex.PW-3/1 and Ex.PW-3/2. The deceased''s gross salary was Rs. 8591/- which included the deduction of Rs. 151/- towards ESI benefit. The Claims Tribunal deduced this amount without any justification. The ESI contribution was towards benefit of the deceased and his family members. In the circumstances, the entire salary i.e. Rs. 8591/- should have been taken into consideration to award 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, there would be an addition of 30% in the deceased''s income to compute the loss of dependency instead of 50% granted by the Claims Tribunal.

The loss of dependency thus comes to Rs. 17,08,749/- (8591/- + 30% x 3/4 x 12 x 17) as against Rs. 19,36,980/- awarded by the Claims Tribunal.

The Claims Tribunal further awarded a sum of Rs. 1,00,000/- towards pecuniary/non-pecuniary damages which has not been challenged by the Appellant Insurance Company.

The overall compensation thus comes to Rs. 18,08,749/-.

The compensation is reduced from Rs. 20,36,980/- to Rs. 18,08,749/-. The excess amount of Rs. 2,28,231/- along with proportionate interest and the interest accrued, if any, during the pendency of the Appeal shall be refunded to the Appellant Insurance Company.

On account of reduction in the compensation awarded, there shall be consequent reduction in the share of the Respondent No. 1.

The statutory deposit of Rs. 25,000/- be refunded to the Appellant Insurance Company.

The Appeal is allowed in above terms. Pending Applications also stand disposed of.