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Judgment
Indira Banerjee, J.—1. This appeal filed by the claimants is against a judgment and award dated 2nd June, 2004 passed by the Motor Accident Claims Tribunal, 3rd Court, Burdwan in an application under Section 166 of the Motor Vehicles Act 1988, hereinafter referred to as the ''M.V. Act'' being M.A.C. Case No. 47/249 of 2001, awarding compensation of Rs. 6,45,000/- to be paid in equal share, by the respondent No. 1, New India Assurance Co. Ltd. and the respondent No. 2, United India Insurance Co. Ltd. within three months from the date of the award, failing which the award would carry interest at the rate of 9% per annum from the date of default. No pendente lite interest has been awarded.
The appellants are the wife, daughter, two sons, father and mother of Late Uttam Kumar Roy. It is the case of the appellants that while Uttam Kumar Roy, since deceased was riding his motor cycle and proceeding towards Burdwan, his motor cycle met with an accident as a result of rash and negligent manner in which the trucks bearing the registration number WB53 5278 owned by M/s. Shreekrishna Mercantiles and covered by policy of insurance issued by the respondent No. 1, New India Assurance Co. Ltd. and truck No. WMH-1271 owned by Mr. Abhijit Dutta and covered by a policy of insurance issued by the respondent No. 2, United India Insurance Co. Ltd., were being driven.
According to the petitioner, the said trucks, which were being driven in a rash and negligent manner hit the motor cycle. As a result of the accident, Uttam Kumar Roy was killed on the spot.
Claims for compensation in case of motor accidents are governed by the provisions of Chapters X, XI and XII of the M.V. Act. Some of the relevant provisions of the MV Act of 1988 relating to liability of the owners and/or insurer to pay compensation in case of death or disablement of a victim of a motor accident are set out hereinbelow for convenience:--
"163A. Special provisions as to payment of compensation on structured formula basis. -
(1) Notwithstanding anything contained in this Act or in any other law for the time being in fore or instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.
Explanation. - For the purposes of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen''s Compensation Act, 1923 (8 of 1923). [for permanent disability, see page 200, Schedule 1 of Workmen''s Compensation Act, 1923]
(2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.
Claims Tribunals.--(1) A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereafter in this Chapter referred to as Claims Tribunal) for such area as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both.
Explanation.--For the removal of doubts, it is hereby declared that the expression "claims for compensation in respect of accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles" includes claims for compensation under section 140 [and section 163A]. .....................
Application for compensation.
(1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made-
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) Where death has resulted from the accident, by all or any of the legal representatives of the deceased; or
(d) By any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be:
Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.
[(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits or whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed:
Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.]
[(3) * * *]
[(4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act.]
Award of the Claims Tribunal.--On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:
Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X.
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Section 140 in Chapter X and Section 163A in Chapter XI provide for compensation on the principle of no fault liability in case of death or permanent disablement as a result of an accident in the course of use of the motor vehicle. While Section 140 provides for fixed compensation of Rs. 50,000/- in case of death and Rs. 25,000/- in case of permanent disablement, irrespective of the age or income of the victim of the accident. Section 163A provides for compensation as indicated in the Second Schedule, computable on the basis of the age and income of the victim at the time of the accident.
Thus, under Section 140, fixed compensation is payable in case of death or any permanent disablement in a motor accident. All that the claimants are required to establish is that there has been a motor accident in course of use of a motor vehicle, as a result of which there has been a death or permanent disablement. The claimants are not required to prove any fault or negligence on the part of the motor vehicle. In an application under Section 163A too, the claimant is not required to prove any fault or negligence on the part of the motor vehicle. However, apart from proving that there has been death or permanent disablement as a result of accident in course of use of a motor vehicle, the claimant may have to prove the income of the victim and the age of the victim by adducing cogent oral or documentary evidence, since compensation is computable on the basis of age and income as per the Second Schedule.
Under Section 166 of the MV Act compensation is not restricted only to cases of death or permanent disability, by reason of an accident in course of use of the motor vehicle. An application for compensation under Section 166 may not only be made in case of death, or permanent disability, but also in case of any physical injury, temporary disablement, mental agony, damage to property etc. as a result of an accident in course of use of a motor vehicle, caused by the fault or negligence of the motor vehicle.
In an application under Section 166 for compensation, the claimants are required to prove that the accident was caused due to some fault, laches or lapses on the part of the motor vehicle. The Tribunal is required to hold an enquiry into the claim and make an award determining the amount of compensation, which appears to the Tribunal just, after giving notice of the application to the insurer and after giving the parties, including the insurer, an opportunity of hearing.
Compensation under Section 163A of the MV Act, which is payable in case of death or permanent disablement irrespective of any fault of the motor vehicle is required to be computed in accordance with the Second Schedule to the MV Act. As per the Second Schedule, compensation for pecuniary loss under Section 163A is computed by multiplying the net income of the victim with the multiplier applicable to the age group to which the victim belonged, at the time of the accident and also actual medical expenses incurred by the victim supported by bills and vouchers, but not exceeding Rs. 15,000/-. In case of death, 1/3rd of the aforesaid amount is deducted towards personal and living expenses which the victim would have incurred towards maintaining himself, had he been alive, but subject to minimum of Rs. 50,000/-. In addition to the aforesaid amount the claimants would, in case of death, be entitled to Rs. 2,000/- for funeral expenses, Rs. 2,500/- towards loss of estate, Rs. 5,000/- towards loss of consortium if the beneficiary is the spouse.
So far as applications under Section 166 are concerned, just compensation may be computed as per the established principles for computation of compensation for tort. Compensation need not be computed in accordance with the Second Schedule to the MV Act. However, it is now well settled by judgments of the Supreme Court, that even in an application under Section 166, the Second Schedule to the Motor Vehicles Act may be used as a reasonable guideline for computation of just compensation.
While in computing compensation under Section 163A, the Tribunal is required to restrict itself to the Second Schedule, in an application under Section 166, the Tribunal is not so restricted. The Tribunal may award such compensation which the Tribunal deems just and proper, but taking into account the principles in the Second Schedule and using the Second Schedule as a guideline.
Mr. Banik, appearing on behalf of the appellant claimants submitted that the claim in this case was under Section 166 of the MV Act. The claimants had successfully established before the Tribunal that the accident was caused due to fault and/or negligence on the part of the vehicle in question.
Mr. Banik rightly argued that in an application under Section 166, the learned Tribunal is obliged to award just compensation. Compensation can be said to be just when the persons claiming compensation, are put in more or less the same financial condition that they would have been, but for the accident and the consequential death and/or permanent disability.
However it is difficult to accept Mr. Banik''s argument that if the appellant claimants were to be placed in more or less the same financial position, that they would have been in, but for the accident and the consequential death of the victim, a certain percentage would have to be added to the income of the victim towards future prospects, and the total compensation computed accordingly. The Court would have to ascertain if the victim had a steady income and also examine the chances of a rise in income.
In Sarla Verma v. Delhi Transport Corporation reported in , (2009) 6 SCC 121, a two Judge Bench of the Supreme Court held that compensation in cases of motor accidents have to be adequate, so that the party who had suffered would be put in the same position at least financially if he had not suffered on account of the wrong. Compensation would thus be required to be paid for prospective pecuniary loss, that is future loss of income. In Para 24 of the aforementioned judgment, the Supreme Court held:
"24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words "actual salary" should be read as "actual salary less tax"). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances."
However, in Santosh Devi v. National Insurance Co. Ltd. & Ors. reported in , (2012) 6 SCC 42, the Supreme Court held:
"14. We find it extremely difficult to fathom any rationale for the observation made in para 24 of the judgment in Sarla Verma case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. 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 in extra efforts to generate additional income necessary for sustaining their families.
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Although the wages/income of those employed in unorganised 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 clothes. 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 para 24 of Sarla Verma 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% increase in his total income over a period of time and if he/she becomes the victim of an accident then the same formula deserves to be applied for calculating the amount of compensation."
In Rajesh & Ors. v. Rajbir Singh & Ors. reported in , 11 (2013) ACC 841 (SC), the Supreme Court held:--
"8. Since, the Court in Santosh Devi case actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects. Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years.
In Sarla Verma case, it has been stated that in the case of those above 50 years, there shall be no addition. Having regard to the fact that in the case of those self-employed or on fixed wages, where there is normally no age of superannuation, we are of the view that it will only be just and equitable to provide an addition of 15% in the case where the victim is between the age group of 50 to 60 years so as to make the compensation just, equitable, fair and reasonable. There shall normally be no addition thereafter."
In Sanjay Verma v. Haryana Roadways reported in , 2014 (1) TAC 711 (SC) the Supreme Court considered its earlier judgements in Sarla Verma (supra), Santosh Devi (supra), Rajesh & Ors. v. Rajbir Singh & Ors. (supra) and also held in effect that a self-employed person would also be entitled to addition of 30% of the income towards future prospects if the victim was above 50 but below 50 years of age and addition of 50% if the deceased was below 40 years of age.
The proposition of law which emerges from the judgments referred to above is that under Section 166 of the MV Act, where the victim is found to have had a steady income, with a reasonable possibility of future increase in income, addition of 50% might be made towards future prospects, if the victim was less than 40 years of age, and an addition of 30% if the victim was between 40 and 50 years of age at the time of the accident, irrespective of whether the victim had a permanent job or was self-employed. The judgment in Santosh Devi (supra) and the subsequent judgments, holding that addition toward future prospects might be made in respect of self employed persons in the unorganized sector were rendered having regard to the imminence of rise of wages, remuneration and/or service charges with inflation.
As per the Driving Licence of the victim, his date of birth was 1st January, 1961. Considering the evidence on record, the learned Tribunal arrived at the finding that the victim was 40 years of age at the time of the accident which took place on 29th May, 2001. The applicable multiplier would, therefore, be the multiplier for the age group of 36-40, as per the Second Schedule to the Motor Vehicles Act, 1988 as rectified by the Supreme Court in Sarla Verma v. Delhi Transport Corporation, reported in , (2009) 6 Supreme Court Cases 121, that is, 15.
There is no definite evidence of the income of the deceased who apparently ran a video hall. All that is on record is a licence for running a video hall. No books of accounts have been produced. There is no evidence of rising trend in income.
It is, however, well established that in assessing income, some amount of estimation and some amount of reasonable guesswork is permissible. The learned Tribunal was of the view that the income of Rs. 5,000/-, as claimed by the appellants, should be accepted on the basis of the oral evidence adduced by the appellant No. 1, Smt. Mithu Roy, wife of the deceased victim in the proceedings before the learned Tribunal. We are of the view that the learned Tribunal rightly proceeded on the basis that the deceased victim had income of Rs. 5,000/- per month.
In this case, the income of the victim has been estimated on the basis of the oral evidence of the widow of the victim, devoid of particulars and unsupported by any documents except the licence to run a video hall. There is no evidence of a steady rise in income as observed above. Addition towards future prospects cannot be allowed.
We, however, find that even though the learned Tribunal arrived at the finding that the victim had income of about Rs. 5,000/- per month, that is, Rs. 60,000/- per annum and was 40 years of age at the time of the accident, the learned Tribunal has awarded lumpsum compensation of Rs. 6,45,000/- without giving the breakup of the calculation.
The assessed annual income of Rs. 60,000/- (Rs. 5,000/- X 12) would have to be, as observed above, multiplied by the multiplier applicable to the age of 40 years, which would, as per the judgment of the Supreme Court in Sarla Verma (supra), be "15". From the aforesaid amount, one-fourth might be deducted, considering that there were three minors and two adults, dependent on the deceased. The compensation on account of pecuniary loss would, therefore, be as follows:
To the aforesaid amount, the claimants would be entitled to some general damages. In Sarla Verma (supra), the general damages awarded were Rs. 5,000/- towards funeral expenses, Rs. 5,000/- for loss of estate and Rs. 10,000/- to the widow towards loss of consortium.
The appellant claimants would, therefore, be entitled to Rs. 6,75,000/- + Rs. 5,000/- + Rs. 5,000/- = Rs. 6,85,000/-. The appellant wife, being the widow, would be entitled to additional Rs. 10,000/- towards loss of consortium.
The award shall carry interest @ 9% per annum from the date of filing of the claim application till the date of deposit of the awarded amount in accordance with the direction of the Supreme Court in its Judgment dated 13th January, 2015 in Civil Appeal Nos. 348-349 of 2015 arising out of SLP (C) Nos. 4897-4898 of 2014 (Smt. Neeta W/O Kallappa Kadolkar and others v. The Divisional Manager, MSRTC, Kolhapur) and Surti Gupta v. United India Assurance Co. and another, reported in , 2015 SAR (Civil) 571, where the Supreme Court held that the High Court had erred in awarding interest at a rate less than 9% per annum on the compensation amount, in disregard of the principles laid by the Supreme Court in the case of Municipal Corporation of Delhi v. Association of Victims of Uphaar Tragedy. Needless to mention, interest shall be computed as per reducing balance.
It is not in dispute that Rs. 6,45,000/- has already been paid. The balance shall be shared by the respective insurers in equal share. The balance amount, including interest, shall be deposited in the learned Tribunal within sixty days from the date of receipt of a certified copy of this judgment.
The appeal and the cross-appeal are disposed of.
Urgent certified photostat copies of this order, if applied for, be supplied to the parties subject to compliance of all requisite formalities.