Oriental Insurance Company Ltd. vs Mohan Lal & three others

J.P. Singh, J.—Mohan Lal, a Naik in the Indian Army, was travelling on his Motor Cycle along with his wife from Udhampur to Jammu on

11122000, when Amarjit Sharma, the driver of vehicle No. JKO2J7387, while driving the vehicle rashly and negligently, lost control of the vehicle

and hit the petitioner and his wife on the Motor Cycle. This accident resulted in severe head injury besides fracture of both bones of right forearms.

This accident disabled Mohan Lal to such an extent that he had to lose his service on disability pension as a case of permanent disability of 100%.

He claimed an amount of Rs. 71 lacs as compensation for his mental and physical sufferings for rest of his life and for incurring expenses, which

were required to be met in engaging servants and requisite infrastructure needed in sustaining such type of patient who was diagnosed as a case of

paraplegia.

AppellantInsurance Company, contested the claim of Mohan Lal on merits, but did not lead any evidence as against the one led by the claimant.

On the basis of evidence led by the claimant, the Motor Accidents Claims Tribunal, Jammu, awarded an amount of Rs. 13,80,400/ in favour of the

claimant.

The AppellantInsurance Company has come up in appeal to this Court.

Shri Vishnu Gupta, learned counsel for the Appellant, has questioned the quantum of compensation awarded by the Tribunal, relying on 1994

ACJ 505, Sujit Singh vs. Won/am Singh and another, 1995 ACJ 366, R.D. Hattangadi vs. Pest Contra (India) Pvt. Ltd. and others; and 2005

ACJ 1131, New India Assurance Co. Ltd. vs. Charlie and another.

Shri N.A. Choudhary, learned Advocate for the claimant, on the other hand, justified the award of the Tribunal by canvassing that a young

soldier, besides being deprived of his aspirations and future career in the Army, has been placed in such a position that throughout his life, he has to

remain dependent on others and unless substantial amount of compensation is awarded to such type of persons, they cannot be said to have been

duly compensated. He submitted that suffering of 100% disability because of the accident has deprived the claimant of the amenities of life besides

putting him to immense suffering in body, mind and soul. He supports the quantum of compensation awarded by the learned Tribunal.

During the course of hearing, the learned counsel for the parties were not at variance in taking Rs. 7.000/ as the average monthly income of the

injured, keeping in view the future prospects of his Army life, for determining his LOSS OF EARNINGS.

The only bone of contention between the parties appeared to be nondeduction of requisite I/3rd income from the average income of the claimant

determined as such by the Tribunal. Law laid down by Hon'ble Supreme Court of India in the judgments cited by the learned counsel for the

Appellant, regarding deductions, mandates that there cannot be any rigid rule or formula of universal application for determining the percentage of

deduction for personal expenditure, yet deductions have to be made in the facts and circumstances of the case and broadly speaking, l/3rd

deduction could be treated as just deduction for the personal expenditure of the individual, which he would have spent on him had he not met with

the accident.

While determining JUST & PROPER compensation in case of the victim of a motor vehicular accident resulting in 100 per cent disability, short

of taking his life, a suitable multiplier prescribed for cases of death is required to be selected for determining loss of earnings of the victim plus the

amount which such victim suffering from paraplegia, etc., would need for his pain and sufferings, loss of amenities and pleasures of life, expenses to

be incurred by him on special diet, engaging attendants and purchasing material required for him to sustain himself in body, mind and soul.

I have considered various judgments of Hon'ble Supreme Court of India including latest law laid down on the question of determining just

compensation payable to claimants under the Motor Vehicles Act, 1988. The law laid down by Hon'ble Supreme Court of India may be

summarized thus:

In order to arrive at an amount of compensation, which may be considered just and proper, a Motor Accidents Claims Tribunal is required to

keep the facts and circumstances of each case in view while determining such compensation. The structured formula, as provided under the

Second Schedule of Motor Vehicles Act, 1988, would serve as a safe guide to calculate the amount of just compensation. Deviation in selection of

multiplier from the one prescribed in the Schedule, though permissible, may be resorted to only for some special reasons to do so. The application

of the multiplier would depend upon the age of the deceased, age of the dependents, number of dependents and the amount of dependency.

Setting apart of l/3rd of the income, calculated on the basis of the selected multiplier, on account of expenditure on the self of the deceased, is

acceptable way of determining appropriate multiplicand.

After determining the capital sum so payable, the Tribunal is required to keep in view that if such sum, as may be awarded as just compensation, is

invested at the prevalent rate of interest, it would yield the multiplicand by way of annual/monthly interest, such sum which would place the

dependents in such a position as they were before the death of their breadwinner, regard, of course, to be had to the fact that ultimately the capital

sum may also have to be consumed up over the period for which the dependency is expected to last.

The Tribunal is required to ensure that the compensation need not go much higher than the amount needed for providing the same amenities,

comforts and facilities and also the way of life to the dependents of the deceased. There may be cases where while applying the multiplier system,

the less or higher multiplier may be applied to ensure that no loss is caused to the dependents because of the selection of a multiplier provided in

the Second Schedule. The Tribunal is required to keep in view the intention of the Parliament neither to over compensate nor to under compensate

the aggrieved who are deprived of the earnings of their breadwinner because of the tortious act of the wrong doer.

Applying the above principle and the one summarized in para 9, deduction of I/3rd was required to be made in the annual dependency

determined as such by the Tribunal. The Tribunal, in this case, has, however, adopted 12 as the multiplier, which in the given facts and

circumstances, does not appear to be the suitable multiplier. If we go by the multiplier suggested in the Second Schedule, the case of the claimant

warranted adopting 16 as the multiplier. Keeping in view the uncertainties of life and in ensuring that the assessment of compensation does not go

on the higher side than the one which may be just and proper, 14, in my opinion, would be the just multiplier, which was required to be adopted in

the present case when the admitted age of the young soldier was 35 years. Applying 14 as the multiplier, the annual dependency would come to

Rs. 11,76,000/. Making l/3rd deduction, the annual dependency would come to Rs. 7,84,000/. The claim awarded by the Tribunal under the head

Loss of future income"", which, in fact, should have been under the head ""Loss of dependency"", would now read as Rs. 7,84,000/. Rest of the

heads of claim awarded by the Tribunal do not suffer from any error of law and are found to be justified. Learned counsel for the

AppellantInsurance Company too did not seriously dispute compensation awarded under rest of the heads realizing that a soldier, having been

rendered invalid throughout his life, would have to spend the amount, which has been awarded to him by the Tribunal. The total compensation,

which would, thus, be payable by the Appellant to the Respondent/Claimant is quantified at Rs. 11,56,400/ under the following heads:

1) Loss of Income Rs. 07,84,000/

2) Loss of Special diet Rs. 00.10.000/

3) Expenses on attendant Rs. 02.88.000/

4) Cost of wheel chair Rs. 00.14.400/

5) Pain and suffering Rs. 00.20.000/

6) Loss of amenities & pleasures of life Rs. 00,40,000/

,Rs. 11.56.400/

Accordingly, the award of the Tribunal is modified to read as award for an amount of Rs. 11.56.400/ in favour of the Respondent/Claimant

and against the Appellant. The Appellant shall be liable to pay interest on the awarded amount @ 9% per annum, except on the amounts

mentioned in Items No. 1,2 and 3 pendente lite.