M/s. The New India Assurance Co. Ltd. vs Shabidha and Others

Pushpa Sathyanarayana, J.—The New India Assurance Company is the appellant in the above appeal challenging the award and decree

dated 24.11.2012 passed in M.C.O.P. No. 1059 of 2011 on the file of the Motor Accidents Claims Tribunal (Court of Small Causes), Chennai in

respect of the quantum of compensation. Heard Mr. M.B. Raghavan, learned counsel appearing for the appellant and Mr. M. Sathyan, learned

counsel appearing for the respondents 1 to 4. It is stated that the 5th respondent remained ex parte in the Tribunal and hence notice may be

dispensed with in respect of the 5th respondent.

It is a case of fatal accident. The brief facts of the case are as follows:-The accident in this case happened on 30.8.2010 at 11.50 am. The

deceased Rajaram, aged about 40 years, was riding his motorcycle bearing Registration NO. TN-02-AJ-4932 in Poonamallee High Road near

Nerkundram Murugan Temple. At that time, a trailer lorry bearing Registration No. TN-10-R-9109 driven by its driver came in a rash and

negligent manner from behind and hit the deceased Rajaram. Due to this, the deceased sustained multiple injuries and he was admitted in Apollo

Hospital, Chennai for treatment and he died on 31.8.2010. The fifth respondent is the owner of the trailer lorry. The appellant is the insurer of the

lorry. For the death of the deceased Rajaram, his widow, two minor sons and mother have filed a claim for compensation in a sum of Rs.

19,00,000/- stating that the deceased was earning a sum of Rs. 30,000/- per month at the time of accident.

The said Original Petition was contested by the appellant insurance company contending that the accident was not caused due to rash and

negligent driving of the Van bearing Registration No. TN-10-R-8109 driver. The deceased riding the motorcycle in a rash and negligent manner,

dashed against the van and caused the accident.

Before the Tribunal, Mrs. Shabidha, the wife of the deceased was examined as P.W. 1. One Mr. Srinivasan, an eye witness was examined as

P.W. 2. Exs. P-1 to P-23 were marked. On the side of the respondents, no document was filed and no witness was examined.

Considering the oral and documentary evidence, the Tribunal granted the following amounts as compensation with 7.5% interest:-

Sl. No. Head Amount granted by the Tribunal

Loss of income/loss of Rs. 15,79,500/-

dependency to the claimants

Loss of consortium to the wife Rs. 10,000/-

Loss of love and affection to Rs. 30,000/-

two sons and mother (Rs.

10,000/- each)

Funeral expenses Rs. 10,000/-

Medical expenses Rs. 44,763/-

Total Rs. 16,74,263/-

The finding of negligence on the part of the driver of the trailer lorry bearing Registration No. TN-10-R-8109 insured with the appellant

insurance company, who is responsible for the accident and the death and consequential liability fixed on the appellant insurance company to

compensate the claimants is not seriously disputed by the learned counsel appearing for the appellant. The only point canvassed by the learned

counsel for the appellant is on the quantum of compensation.

The points that arose for consideration are:-

(1) Whether the quantum of compensation arrived at by the Tribunal is correct?

(2) To what relief the claimants, the respondents 1 to 4, are entitled to?

Point No. 1:-. On the death of the deceased, his wife, two minor sons and mother made a claim for Rs. 19,00,000/-. The deceased Rarajam

aged about 40 years on the date of accident was previously working as lorry driver from 1997 to 2007. At the time of accident, he was doing

lorry broker business under the name and style of Shabidha Transport Consultants in Chennai and earning Rs. 30,000/- per month. The Tribunal

considering the statements of bank accounts filed by the claimants, fixed the monthly income of the deceased at Rs. 9,000/- per month.

The Tribunal based on the judgment reported in 2012 AIR SCW 2892 held that the person who is self employed or is engaged on fixed wages

will also get 30% increase in a total income over a period of time and if he/she becomes victim of accident. Accordingly, the Tribunal added 30%

of the income of the deceased (i.e.) Rs. 9,000/- x 30%=Rs. 2,700/-. If so added, it comes to Rs. 11,700/- (Rs. 9,000/-+ Rs. 2,700/-=Rs.

11,700/-). From this > was deducted towards personal expenses of the deceased. Accordingly, the loss of monthly income to the dependents of

the deceased was fixed at Rs. 8,775/- (Rs. 11,700/--Rs. 2,925/-=Rs. 8,775/-).

Applying multiplier of 15, the Tribunal arrived the pecuniary loss at Rs. 15,79,500/- (Rs. 8,775/- x 12 x 15=Rs. 15,79,500/-). In addition, a

sum of Rs. 10,000/- was granted towards consortium to the widow of the deceased. Rs. 10,000/- each was awarded towards loss of love and

affection to the two minor sons and the mother of the deceased. Towards funeral expenses, a sum of Rs. 10,000/- was granted. Rs. 44,763/- was

granted towards medical expenses. In all Rs. 16,74,263/- was awarded with interest at 7.5%.

Aggrieved by the above award, the insurance company has preferred the present appeal. Learned counsel appearing for the appellant

insurance company relied upon the judgment in the case of Reshma Kumari and Others Vs. Madan Mohan and Another, , particularly para 36. In

para 36, the Apex Court held as follows:-

The standardization of addition to income for future prospects shall help in achieving certainty in arriving at appropriate compensation. We

approve the method that an addition of 50 per cent of actual salary be made to the actual salary income of the deceased towards future prospects

where the deceased had a permanent job and was below 40 years and the addition should be only 30 per cent if the age of the deceased was 40

to 50 years and no addition should be made where the age of the deceased is more than 50 years. Where the annual income is in the taxable

range, the actual salary shall mean actual salary less tax. In the cases where the deceased was self-employed or was on a fixed salary without

provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A

departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases.

In para 40 clause (v) of the judgment, in Reshma Kumari''s case, the Apex Court has directed while making addition to income for future

prospects, the Tribunals shall follow para 11 of the judgment in Sarla Verma (supra). Therefore, according to the learned counsel for the appellant

insurance company, the addition of 30% of the income by the Tribunal is incorrect and that amount has to be deducted by calculating the loss of

dependency.

In para 11 of the judgment in the case of Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, , the Apex Court held

as follows:-

(11) In General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, , this court increased

the income by nearly 100 per cent in Smt. Sarla Dixit and another Vs. Balwant Yadav and others, , the income was increased only by 50 per cent

and in Abati Bezbaruah Vs. Dy. Director General Geological Survey of India and Another, , the income was increased by a mere 7 per cent. In

view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50 per cent 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 per cent if the

age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more than 50 years. Though the evidence may

indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different

methods of calculations 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.

The learned counsel for the respondents 1 to 4/claimants has relied upon the judgment in the case of Rajesh and Others Vs. Rajbir Singh and

Others, to state that future prospects adopted for persons with permanent job may also be applied to persons who were self employed or were

engaged on fixed wages.

In the case on hand the future prospects of 30% has been added to the monthly income of the deceased without following the principles laid

down in Sarla Verma case and followed in Reshma Kumari''s case. Hence, the addition of 30% towards future prospects of the deceased is not

justified.

In view of the above, the income of the deceased can be calculated as follows: Rs. 9,000/-minus Rs. 2,250/- being the > deduction towards

personal expenses of the deceased, the loss of income would be Rs. 6,750/- per month. If multiplier 15 is adopted the annual loss of dependency

would be Rs. 12,15,000/- (Rs. 6,750/- x 12 x 15=Rs. 12,15,000/-) which would be the appropriate loss of income that may be awarded.

Since the dependants are wife, two minor sons and mother, we are inclined to increase the loss of consortium to the widow from Rs. 10,000/-

to Rs. 1,00,000/-; the loss of love and affection to the two minor sons and mother from Rs. 10,000/- each to Rs. 50,000/- each and the funeral

expenses from Rs. 10,000/- to Rs. 25,000/- in view of the decision reported in Rajesh and Others Vs. Rajbir Singh and Others, . The learned

counsel for the appearing insurance company fairly conceded that the medical expenses awarded by the Tribunal may be rounded off to Rs.

50,000/- from Rs. 44,763/-.

Accordingly, the award of the Tribunal is modified as follows:-

Sl. No. Head Amount granted by the Amount granted by this

Tribunal Court

Loss of income/loss of Rs. 15,79,500/- Rs. 12,15,000/-

dependency to the

claimants

Loss of consortium to Rs. 10,000/- Rs. 1,00,000/-

the wife

Loss of love and Rs. 30,000/- (Rs. Rs. 1,50,000/- (Rs.

affection to two sons 10,000/- each) 50,000/- each)

and mother

Funeral expenses Rs. 10,000/- Rs. 25,000/-

Medical expenses Rs. 44,763/- Rs. 50,000/-

Total Rs. 16,74,263/- Rs. 15,40,000/-

There is no dispute in respect of the interest granted by the Tribunal at 7.5% per annum. Point No. 2:-In the result, the Civil Miscellaneous

Appeal is allowed in part as follows:-

(i) The award of the Tribunal is reduced to Rs. 15,40,000/- from Rs. 16,74,263/-

(ii) The interest granted by the Tribunal at 7.5% per annum is confirmed.

(iii) The award amount is apportioned to the claimants as follows:-

Widow, the claimant-Rs. 6,00,000/-

Two sons (Rs. 4,00,000/- each), the claimants 2 and 3-Rs. 8,00,000/-

Mother, the 4th claimant-Rs. 1,40,000/-

(iv) In the order dated 11.9.2013 it is recorded that entire award amount has been deposited.

(v) The major claimants are permitted to withdraw the award amount as ordered and apportioned by this Court as above.

(vi) The share of the minor claimant is directed to be invested in a renewable fixed deposit in Indian Bank, High Court, Madras till the minor attains

majority. The mother of the minor claimant is entitled to withdraw the accrued interest once in a year.

(vii) The appellant insurance company is at liberty to withdraw the balance amount after adjusting the award amount.

(viii) Three will be no order as to costs in this appeal.

(ix) Consequently, connected miscellaneous petition is closed.