Shafi Haji Mohammad Usmanbhai Sabugar and Others vs Batukbhai Jaimanlbhai Chavda and Others

Bhaskar Bhattacharya, C.J.�This appeal under Section 173 of the Motor Vehicles Act (hereinafter referred to as "the Act") is at the instance of the claimants in a proceeding under Section 166 of the Act and is directed against an award dated 23rd December, 2003 passed by the Motor Accident Claims Tribunal (Aux.), District Sabarkantha at Himmatnagar in MAC Petition No. 2181 of 1998 thereby partly allowing the application and awarding a sum of Rs. 3,16,000 with interest at the rate of 9% per annum from the date of filing of the application till realisation. Being dissatisfied, the claimants have come up with the present appeal:

After going through the materials on record, I find that on 13th January, 1994 at 8.30 a.m. when the victim was travelling in an Ambassador Taxi, it had head-on collision with the bus owned by the Gujarat State Road Transport Corporation resulting in the death of the victim. The victim was aged 22 years and was an Electrical Engineer having qualification of B.E. According to the claim-application, he joined service immediately after passing the Engineering on 1st January, 1994 and after 12 days of joining, he died. He was a bachelor. According to the claim-application, he used to earn Rs. 3500 a month during probationary period and the salary would have increased after the period of probation to Rs. 5,000. Thus, the total claim was for Rs. 9,99,999.

The claim-application was opposed by the Gujarat State Road Transport Corporation, the owner of the ST bus.

The learned Tribunal below, on consideration of the evidence on record, came to the conclusion that in the said accident, 100% negligence was of the driver of the ST bus while the driver of the Ambassador car had no negligence. The Tribunal treated the income of the victim to be Rs. 3,000 and consequently, added 50% towards future prospect to arrive at the figure of Rs. 4500 a month as prospective monthly income. Thereafter, the Tribunal has deducted two-third for his personal expenditure and applied the multiplier of 17, to arrive at the figure of compensation.

Being dissatisfied, the surviving claimants, namely, the parents of the victim have come up with the present appeal.

After hearing Mr. Mansuri, the learned Advocate appearing on behalf of the appellant and Mr. Munshaw, the learned Advocate appearing on behalf of the Gujarat State Road Transport Corporation, I find that the victim being a young man of 22 years and having just joined service having salary of Rs. 3500 during probationary period, the Tribunal below quite reasonably assessed his monthly income to Rs. 3,000 and prospective income to be further 50% of that amount.

I find substance in the contention of Mr. Mansuri that there was no justification to deduct two-third of the income towards personal expenditure of the victim because he was a bachelor. The consistent view taken by the Courts in this country is that in such a circumstance, half should be deducted towards personal expenditure. In the facts of the present case, I propose to follow the principles laid down by the Supreme Court in the case of Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, . Thus, by applying the said decision, half should be deducted towards personal expenditure and, therefore, the monthly prospective income should be Rs. 2,250 and the annual prospective income will come to Rs. 27,000. Since the victim was aged 22 years, according to decision of Sarla Verma (supra), the appropriate multiplier should be 18 and, thus, the total future prospective loss would be Rs. 4,86,000 to which a further sum of Rs. 20,000 should be added under the head of conventional amount to arrive at the total figure of Rs. 5,06,000. Thus, the awarded amount should be enhanced by a sum of Rs. 1,90,000.

Although Mr. Munshaw strenuously contended that the interest rate should not be enhanced, I am not impressed by such submission in view of the fact that having regard to the usual rate of interest prevailing in any bank, the claimant should not be deprived of that rate of interest. In this connection, I may profitably refer to the following observations of the Supreme Court in the case of Alok Shanker Pandey Vs. Union of India (UOI) and Others, , where the Supreme Court clarified that interest is not the penalty but it is natural accretion to the principal which has been enjoyed by a party.

"It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal discretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B."

The accident having occurred in the year 1994 when the bank rate of interest on any Fixed Deposit was more than even 12% per annum, in my opinion, the interest should be payable at the rate of 12% per annum from the date of filing of the application till 31st December, 1999 and from 1st January, 2000 till payment, the applicable rate of interest should be 9% per annum. The Gujarat State Road Transport Corporation is directed to deposit the enhanced amount with interest at the rate indicated above before the Tribunal positively within two months from today. On deposit of such amount, the Tribunal will release the amount in favour of the claimants, upon proper verification by account payee cheques.

The appeal is, thus, allowed to the extent indicated above. Registry is directed to return the Record and Proceedings to the Tribunal immediately.