Phulbasi Devi and Others vs National Insurance Co. Ltd. and Others

Sudhir Naraln and R.B. Misra, JJ.—The claimant-appellants have filed this appeal for enhancement of the amount of compensation.

Briefly stated the facts are that on 3rd August, 1987 at about 9.15 a.m. Jagat Naraln Verma, husband of appellant No. 1 and father of appellants 2 to 5, while going on foot, was dashed by Truck No. U.T.E. 1327. He succumbed to his injuries. The claimant-appellants filed Claim Petition No. 75 of 1987 with the allegations that the accident was caused due to rash and negligent driving by the driver of the truck in question.

The claim petition was contested by the owner of the truck as well the insurance Company. They denied that the accident was caused due to rash and negligent driving of the driver of the truck. They further pleaded that the amount claimed was excessive.

The Tribunal, on consideration of material evidence placed before it, came to the conclusion that the accident was caused due to rash and negligent driving of the driver of the truck and awarded a sum of Rs. 1,18,655 as compensation along with interest of 7% on the amount so awarded.

The claimant-appellants being dissatisfied with the amount of compensation awarded to them have preferred this appeal.

Sri A.K. Sinha, advocate, has put in appearance on behalf of respondent No. 1. Nobody has put in appearance on behalf of respondent No. 2.

We have heard Sri A. K. Sinha learned counsel for respondent No. 1.

Learned counsel for the appellants submitted that the amount awarded is too meagre and not in accordance with legal principles and the evidence adduced in the case.

The Tribunal has recorded a finding that on the date of accident i.e., 3rd August. 1987, the age of the deceased was 29 years. He was employed with Unani and Ayurvedic Department and was getting salary of Rs. 848 per month. The Tribunal has taken into account the fact of the age and the earning of the deceased and held that he might have spent about 40% of his salary on himself and the rest he might have spent on his family. It calculated total amount of his salary and deducted 40% from such amount. The Tribunal further deducted 1/3 amount as it was being paid in lump sum.

Learned counsel for the appellants urged that the Tribunal, without taking into consideration the total number of family members of the deceased, has held that 40% of his income, the deceased might have spent on himself. It is contended that the Tribunal assumed that the deceased might have spent 40% of his income on himself. The question as to how much amount one has to incur upon his family, depends upon the number of members of the family. If the number of family members is large, the deceased might have incurred less amount of salary upon himself and rest of the amount upon his family.

In General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, , Hon''ble Supreme Court held that the deduction should be made taking into consideration all the factors. The two factors are important, firstly the number of family members of the deceased and secondly, his life style.

The deceased at the time of his death had the family of five members, namely, his widow Smt. Phulbasi Devi aged about 30 years, three sons Jitendra Kumar Verma aged about 13 years, Upendra Kumar Verma aged about 10 years. Veer Bahadur Verma aged about 7 years and one daughter Km. Mandhawati aged about 12 years besides he had his mother Smt. Kalpatia Devi aged about 73 years. In these circumstances, he would not have spent more than 1/3 from his salary on himself. The Tribunal without examining this aspect wrongly deducted 40% of the salary on the ground that the deceased might have spent this amount on himself.

The next question is whether the Tribunal is justified in deducting 33% of the amount of compensation being paid in lump sum to the claimant-appellants. The deceased had joined the service on 5th May. 1987 at the age of 29 years. He was getting salary of Rs. 848 per month at the time of his death on 3rd August, 1987. His salary might have increased annually and he could have also got further promotions. The deduction of the amount on account of payment of the amount in lump sum depends upon the facts of each case. In U. P. State Road Transport Corporation V. Mohammad Moonis. 1987 ACJ 957. a Division Bench of this Court held that it depends upon the facts of each case as to whether the deduction should be made on account of lump sum payment made to the claimants but it is not necessary that in every case the deduction should be made. It was observed as under :

"Learned counsel for the corporation further urged that the Tribunal failed to make any deduction for the lump sum payment which is being made to the claimant. It is true that when lump sum payment is made, some deduction is made, but this is not a right principle. The question whether any deduction on account of lump sum payment should be made or not depends on the facts of each case. In the instant case, the deceased was a young man since he was unmarried, his parents are entitled to compensation. The parents are aged but they are healthy. The compensation has been determined on the basis of their longevity. Having regard to these facts we think, the Tribunal has rightly made no deduction for the lump sum payment. There is, therefore, no merit in the appeal by the corporation and it is liable to be dismissed."

Similar view was expressed by the Supreme Court in Renu Bala Kalita and Ors. v. Dhiren Chakravarty and others 1999 (3) TAG 781.

Learned counsel for the respondent has placed reliance upon the decision in Smt. Neelima Arora Vs. Union of India (UOI) and Others, , wherein the Court took the view that 33% deduction should be made while making payment in lump sum. This decision itself has not laid down the principle that in every case the deduction should be made when the compensation is paid in lump sum. It depends upon facts of each case.

As observed above, the Tribunal has not taken into consideration the fact that the deceased was a young man and was just appointed in service and he could have earned higher amount if he had lived till the age of 60 years or more, the deduction of l/3rd amount on account of lump sum payment, in the facts and circumstances of the case. Is not Justified.

The last question is whether the Tribunal was justified in awarding interest at 7%. The Tribunal has not assigned any reason for awarding interest at 7%. Normally, it should be at 9%.

Learned counsel for the respondent No. 1 submitted that the liability of insurance Company is only up to the extent of Rs. 1,50,000 as provided under sub-section (2) of Section 95 of the Motor Vehicles Act, 1939. It is further contended that under the policy also, the liability is within the said amount. Learned counsel for the appellants has not shown that the liability of respondent No. 1 exceeds either in terms of the policy or in any other law beyond Rs. 1.50,000. It is, however, made clear that the liability is on the principal amount but the insurance Company will be further liable to pay interest on this amount of liability which is fixed by the Tribunal.

In view of the above discussion, the appeal is partly allowed. The Tribunal shall calculate the amount keeping in view the observation made by us above and the award is accordingly modified. The amount which exceeds the liability of respondent No. 1 shall be payable by respondent No. 2 personally.

Considering the facts and circumstances, the parties shall bear their own costs.