Smt. Neelu Chandra and Others vs Faquir Mohd. and Others

Vinod K. Sharma, J.—By way of this appeal, the challenge is to the award dated 12-03-1993 passed by the Motor Claims Tribunal, Gurgaon (hereinafter referred to as the Tribunal'') in M.A.C.T. Case No. 32 of 1992.

The appellant claimants filed a claim petition u/s 166 of the Motor Vehicles Act (for short the ''Act'') claiming themselves to be legal representatives of deceased Anil Chandra, aged 38-1/2 years, who died in a road accident on 25.01.1990 within the area of village Khandsa while going to M/s Sun Beam Casting Factory, Narsinghpur, in a Maruti Car bearing registration No. DIC-5728 due to rash and negligent driving of truck No. GTY-7459 belonging to M/s Delhi Ahmedabad Roadways and driven by Shri Faquir Mohd, the driver. It was claimed that the deceased Anil Chandra was B.E. (Electrical) from Ranchi University and had further obtained diploma in Marketing Management and Public Speaking as well. He was running two companies and was Director of the first company Nachiketa Fluidics Private Limited, Delhi, and Managing Director of second one namely Nivritti Engineers India (Pvt.) Limited. It was further claimed that he used to draw a salary of Rs. 6,000/- (Rs. Six thousands) per month from M/s Nachiketa Fluidics Private Limited, besides house rent of Rs. 1,200/- per month along with other perks. He was also stated to be having additional income from interest, dividends and professional income from the other companies. It was also claimed that in all the deceased was earning Rs. 21,000/- per month. It was also the case of the appellant-claimants that due to untimely death of Anil Chandra, the claimants have suffered a mental agony and torture, which cannot be compensated in any manner. A compensation to the tune of Rs. 62,50,000/- (Rs. Sixty two lacs fifty thousands) was claimed u/s 166 of the Act and interest @ 18% per annum was also claimed.

The claim petition was opposed by the respondents on the plea that the alleged accident had occurred due to rash and negligent driving of the deceased himself. It was claimed that the deceased while overtaking the truck going ahead of him at the culvert having a width of hardly 15 ft. had misconducted himself in not noticing another truck which was approaching from the opposite side. The deceased is alleged to have come on the wrongs side of the road, where he got confused and lost control of his car and hit the right side bumper of the truck. It was claimed that the truck driver tried his best to avoid the accident and applied brakes with full force, but could not avoid the same. It was also claimed that it was a case of composite negligence and accordingly claimed adjudication of the compensation in the proportion way.

The respondents also disputed that the claimants are the legal heirs of the deceased Anil Chandra or that he was the Director and Managing Director of the Nachiketa Fluidies Pvt. Ltd. and Nivriti Engineers India (P) Ltd. respectively. The factum of income from different sources was also denied. It was denied that the deceased paid an income tax of Rs. 8,363/- for the assessment year 1989-90. It was also the case of the respondents that the return relating to income tax had been filed much after his demise and therefore its genuineness and correctness was questioned. The Insurance Company also set up the plea that there was no privity of contract between it and the claimants and, therefore, it was not under obligation of any liability or to pay compensation, except in the circumstances to extent laid down in Chapter VIII of the Act and, therefore, it was claimed that the claim petition be dismissed.

In the rejoinder, the averments made in the written statement were controverted and that of the claim petition were reiterated.

On the pleadings of the parties, the following issues were framed:

Whether Anil Chandra died as a result of the injuries suffered by him in accident caused by truck No. GTY-7459 due to rash and negligent driving of the said vehicle by its driver Faqir Mohd. Respondent.?

Whether Anil Chandra died as a result of rash and negligent driving of Car No. DIC-5728, as alleged?

Whether it was a case of contributory negligence? If so, to what effect?

Whether the petitioners are entitled to any compensation? If so, how much and from whom.

Whether the petition is bad for non-joinder of necessary parties?

Whether the petitioners have locus-standi to file and maintain the petition.

Relief.

On issues Nos. 1 & 2, the learned Tribunal came to the conclusion that Anil Chandra died as a result of injuries suffered by him in the accident caused by truck No. GTY-7459 due to rash and negligent driving of the said vehicle by its driver Faquir Mohd.

Issue No. 3 was answered in favour of the claimants by concluding that no negligence could be attributed to the deceased Anil Chandra and it was held that it was not a case of contributory negligence.

Issue Nos. 5 and 6 were also decided against the respondents and in favour of the claimants. However, in view of the findings recorded on issue No. 4, the compensation to the tune of Rs. 9,60,000/- (Rs. Nine lacs sixty thousands) was awarded to claimants Nos. 1 to 4 in equal proportion with interest @ 12% per annum and the liability of the respondents to pay compensation was held to be joint and several. The share of the minors was directed to be deposited in the nationalized bank till they attain majority. Costs of the petition were also awarded.

In the present appeal, the appellants had only challenged the findings on issue No. 4 on the plea that the compensation awarded was inadequate.

In support of income of the deceased Anil Chandra, the claimants produced Puran Chand Narang, PW-2, who was the accountant in the Company. This witness deposed that the deceased was drawing a salary of Rs. 6,000/- (Rs. Six thousands), besides house rent @ Rs. 1,200/- per month at the time of his death. He further deposed that the deceased was getting tax fee perks namely, medical allowance, telephone at his residence, club expenses, L.T.C. etc. This statement was corroborated by Shri Baljit Singh, PW-6, who used to audit the accounts of both the companies. This witness also stated that the deceased was getting a salary of Rs. 6,000/- (Rs. Six thousands) alongwith other perks. The claimants also placed on record the Income Tax returns and other relevant documents in support of their claim.

The learned Tribunal after examining the material placed on record i.e. Income Tax returns and the Minutes Book of the company, came to the conclusion that the salary of the deceased at the time of his death was Rs. 6,000/- (Rs. Six thousands) per month. The claim with regard to house rent was not accepted by the learned Tribunal on the plea that the same did not find mention in the statements of taxable income for the years 1989-90 and 1990-91. The learned Tribunal also came to the conclusion that all the perks which were available to the deceased, were in fact being enjoyed by the claimant-wife and, therefore, the income by way of house rent was taken out of consideration. As regards the interest income of the deceased, the learned Tribunal came to the conclusion that the same was automatically passed on the claimants after the death of the deceased and, therefore, the same was not to be taken into account to assess the dependency.

The learned Tribunal also rejected the plea of the claimants that besides the income referred to above, the deceased was further earning income from consultancy business. The learned Tribunal took note of the fact that in spite of the claim petition being quite exhaustive, no mention was made therein as to from where the deceased was making the commission/professional income. Therefore, the evidence led with regard to income from M/s Logwell Forge Limited, Gurgaon, was not accepted by the learned Tribunal. Thus, the learned Tribunal took the annual income of the deceased at Rs. 72,000/- per annum i.e. Rs. 6,000/- per month and deducted l/3rd amount out of his income for his personal expenses and, therefore, assessed the annual dependency of the deceased at Rs. 48,000/- per annum. However, keeping in view the age of the deceased a multiplier of 20 was applied and the compensation payable to the claimants was accordingly assessed at Rs. 9,60,000/- (Rs. Nine lacs sixty thousands).

Mr. L.M. Suri, learned senior counsel appearing on behalf of the appellants had challenged the findings of the learned Tribunal on Issue No. 4, on the following grounds:

(i) The learned Tribunal has wrongly assessed the income of the deceased by ignoring the admitted documentary evidence on record.

(ii) That the dependency has been wrongly assessed by not applying the unit system.

(iii) That the Tribunal has failed to take into consideration the future prospects of the deceased.

(iv) That no compensation has been awarded towards loss of consortium and loss of estate.

Learned senior counsel for the appellants next contended that the learned Tribunal gravely erred in law in not taking into consideration the house rent allowance which the deceased was getting in spite of the fact it was duly proved on record. The contention of the learned Counsel was that merely the amount of house rent was not reflected in the Income Tax returns, could not be a ground to reject the same, as the perks were not taxable, therefore were not necessarily to be shown for the purpose of Income Tax. His contention was that documentary evidence had been produced on record by way of Minutes Book which clearly indicated that the deceased was getting house rent of Rs. 1,200/- per month.

Learned senior counsel further referred to the statement of PW-5 to contend that the income from other source i.e. from consultancy services, stood proved. The contention of the learned Counsel for the appellants was that letter Exhibit PW-5/2 was duly exhibited on record which was written by the deceased" accepting the terms and conditions of consultancy." The plea of the learned senior counsel was that this comment could not have been created/fabricated after the death of the deceased and, therefore, the learned Tribunal was in error in rejecting the same. The contention of the learned Counsel was that only the terms and conditions but acceptance thereof was duly exhibited on record. It was established on record that appointment was accepted by the deceased and thereafter payment to the tune of Rs. 54,800/- was received by the wife of the deceased as is evident from Exhibit PW-5/3. The contention of the learned senior counsel, therefore, was that it was not open to the learned Tribunal to have rejected this documentary evidence merely on the ground that the name of the company was not mentioned in the pleadings.

The contention of the learned senior counsel for the appellants was that a specific plea was taken that besides income of salary and other perks, the deceased was also having income from consultancy services and therefore, the documentary evidence duly exhibited on record could not be said to be beyond pleadings and, therefore the learned Tribunal was not justified in rejecting the same.

Learned senior counsel for the appellants also referred to the 8th Annual Report & Accounts for the year 1989-90 of M/s Logwell Forge Limited, wherein payments towards income of the deceased were duly shown. Therefore, it was vehemently contended by the learned senior counsel for the appellants that the income of the deceased has been wrongly assessed.

Learned senior counsel for the appellants also contended that in the present case, there were five claimants i.e. widow, her three minor children and mother of the deceased and, therefore, it was not open to the learned Tribunal to have deducted 1/3 amount out of the assessed income. The argument of the learned Counsel was that the learned Tribunal should have applied unit system. In support of this contention, learned senior counsel for the appellants placed reliance on the judgment of the Hon''ble Supreme Court in the case of U.P. State Road Transport Corporation and Others Vs. Trilok Chandra and Others, , judgments of this Court in the cases of Smt. Saroj Dhir and Others Vs. Vijay Kumar Sharma and Others, , Smt. Usha Rani and Others Vs. Om Parkash Sharma and Others, and the judgment of the Hon''ble Karnataka High Court in the case of Smt. Vijaya Kulkarni and Others Vs. Smt. Rukhmini Bai Kulkarni and Others, . The Hon''ble Supreme Court in the case of U.P. State Transport Corporation (supra) has been pleased to hold as under:

We thought it necessary to reiterate the method of working out ''just'' compensation because, of late, we have noticed from the awards made by Tribunals and Courts that the principle on which the multiplier was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/Court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realized that the Tribunal/Court has to determine a fair amount of compensation awarded to the victim of any accident which must be proportionate to the injury caused. The two English decisions to which we have referred earlier provide the guidelines for assessing the loss occasioned to the victims. Under the formula advocated by Lord Wright in Davies, the loss has to be ascertained by determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus assessing the loss to the dependents of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier. Let us illustrate: X, male, aged about 35 years, dies in an accident. He leaves behind his widow and 3 minor children. His monthly income Rs. 3,500/- First, deduct the amount spend on X every month. The rough and ready method hitherto adopted where no definite evidence was forthcoming, was to break up the family into units, taking two units for adult and one unit for a minor. Thus X and his wife make 2 + 2 = 4 units and each minor one unit i.e. 3 units in all, totaling 7 units. Thus the share per unit works out to Rs. 3,500/7= Rs 500/- per month. It can thus be assumed Rs. 1,000/- was spent on X. Since he was a working member some provision for his transport and out of pocket expense has to be estimated. In the present case, we estimate the out of pocket expenses at Rs. 250/-. Thus the amount spent on the deceased works out to Rs. 1,250/- per month leaving a balance of Rs. 3,500 - 1,250 = Rs. 2,250/- per month. This amount can be taken as the monthly loss to X''s dependents. The annual dependency comes to Rs. 2250 x 12 = Rs. 27,000/-. This annual dependency has to be multiplied by the use of an appropriate multiplier to assess the compensation under the head of loss to the dependents. Take the appropriate multiplier to be 15. The compensation to Rs. 27,000 x 15 = Rs. 4,05,000/-. To this may be added a conventional amount by way of loss of expectation of life. Earlier this conventional amount was pegged down to Rs. 3,000/- but now having regard to the fall in the value of the rupee, it can be raised to a figure of not more than Rs. 10,000/-. Thus the total comes to Rs. 4,05,000 + 10,000 = Rs. 4,15,000/-.

The contention of the learned Counsel for the appellants, therefore, was that if unit system was followed, the deduction for personal expenses out of the assessed income of Rs. 6,000/- per month could be only l/4th. According to the learned Counsel, the evidence on record showed that the deceased was a qualified person and used to derive income from consultancy services also. He, therefore, contended that once it was proved on record that the deceased was successfully running two companies and as an entrepreneur had a bright future, the Court should have taken into consideration the future prospects while assessing the dependency of the deceased. In support of this contention, reliance was placed on the judgments of this Court in the cases of Smt. Usha Rani and Others Vs. Om Parkash Sharma and Others, , Chander Devi and Others Vs. Haryana State and Another, and Harinder Kaur Dhillon and Others Vs. State of Haryana and Others, . The contention of the learned senior counsel for the appellants was that for the purpose of assessment of dependency the learned Tribunal was bound to take into consideration the future prospects and thereafter should have assessed the dependency by following the formula laid down the case of Chander Devi and others (supra). Para 14 of the judgment reads as under:

I am further of the view that by no stretch of imagination the age of the deceased could be considered to be more than 50 years and, therefore, the multiplier of 13 as provided by the Schedule appended to the Act, should have been applied. I am also in agreement with the argument raised by Mr. Arora that the future prospects of enhancing the salary of deceased cyclist were also required to be kept in view. He was working as a driver in the Haryana Roadways at a gross salary of Rs. 1,425/-. The salary of Rs. 1,425/- as a whole has to be taken into account for working out the compensation. In Smt. Sarla Dixit and another Vs. Balwant Yadav and others, it has been held that the projection of future prospects can be reflected by calculating the gross income at the time of death and then to increase the same by double the amount. The average of both the figures would represent approximate loss of income. In the present case, the gross salary of the deceased driver was Rs. 1,425/-. If we look at the revised pay scale on 1.1.1996 then his salary would have gone up almost three times. However, he would not have continued in service upto 1.1.1996 and, therefore, it would be fair to double the salary to Rs. 2,850/-. The total of both figures comes to Rs. 4,275/- and to round it off, it will come to Rs. 4,300/-. The average of total comes to Rs. 2,150/-. The annual dependency of l/3rd comes to Rs. 716/- which is round to Rs. 725/-. Therefore, the annual dependency would work out to be Rs. 17,100/-(Rs. 1,425 x 12 = Rs. 17,100/-). A multiplier of 13 which is required to be applied, would bring the figure of Rs. 2,22,300/-.

It may be mentioned here that I have taken gross salary without deducting the allowances like GPF as has been laid down by Hon''ble Court in Patricia Jean Mahajan (supra).

Learned senior counsel for the appellants also argued that besides this, the claimants were also entitled to payments towards of loss of consortium, love and affection, loss of estate and funeral expenses. In support of this contention, he placed reliance on the judgment of the Hon''ble Karnatka High Court in the case of Vijaya and others (supra).

Besides this, learned senior counsel for the appellants also contended that as no appeal has been filed by the respondents against the impugned award, no interference is called for in respect of the multiplier adopted in this case as well as the rate of interest as awarded by the learned Tribunal.

Mr. N.K. Khosla, learned Counsel appearing on behalf of respondent No. 3 (Insurance Company), has supported the award passed by the learned Tribunal on the plea that the amount awarded is adequate and just compensation has been awarded.

Learned Counsel for the respondents also referred to the findings recorded by the learned Tribunal in para 38 of the award which reads as under:

It is really pity that the petitioners have to adopt such tactics to make their fortunes from this claim petition. They have made every possible efforts to twist and fabricate the evidence just to enhance the income of deceased Anil Chandra which I must deprecate. Our concern is that the widow and The children of the deceased must lead an honorable and dignified life, so that they have not to depend financially others. But it is no way to enrich themselves and in particular, when they belong to a well to do family and have all resources at their disposal. Petitioner Neelu Chandra is admitted a B.Sc. Home Science and is presently Director of Nachiketa Fluidics Pvt. Ltd. Replacing her deceased husband. She is being given a salary of Rs. 3,000/- per month in addition to the perks which her husband was getting. Similarly, her mother-in-law petitioner No. 5 is the wife of the Managing Director of the company, who previously served the Indian Railways in a very senior position. If we believe the petitioners that the deceased was earning Rs. 21,000/- per month, as averred in the petition, then how to believe that such a person had only bank balance of about Rs. 400/- at the time of his death. It all belies the fact that the deceased had a professional income from M/s Logwell Forge Ltd., Gurgaon.

By making reference to the observations made above by the learned Tribunal, the contention of the learned Counsel for the respondent No. 3 was that no further enhancement is called for as just compensation has already been awarded to the appellant-claimajltii.

On a consideration of the matter I find force in the contentions raised by the learned senior counsel for the appellants. In view of the evidence brought on record, especially by way of documentary evidence, the assessment of income of the deceased at Rs. 6,000/- (Rs. six thousands) cannot be said to be justified. Once it is proved on record that besides the salary, the deceased was also getting Rs. 1200/- per month as house rent, there was no justification on the part of the Tribunal to ignore this income, and that amount deserved to be added in the income of the deceased for the purpose of assessing dependency. The evidence brought on record also showed that the deceased as an entrepreneur had the bright future prospects which deserved to be taken into consideration for assessment of compensation. In view of the settled law, the claimants were also entitled to compensation on account of loss of consortium, love and affection, loss of estate and funeral expenses.

Consequently, the monthly income of the deceased Anil Chandra is assessed at Rs. 7,200/- (Rs. Seven thousands two hundred only). Therefore, by applying the formula as laid down in Chancier Devi''s case (supra), the monthly income of the deceased is assessed at Rs. 10,800/-. Out of the said amount, l/4th is required to be deducted towards personal expenses by following the unit system as laid down by the Hon''ble Supreme Court in the case of U.P. State Transport Corporation (supra), Thus, the annual dependency of the claimants comes to Rs. 97,200/- (Rs. Ninety seven thousands two hundred). By applying a multiplier of 20 as adopted by the learned Tribunal, the total dependency come to Rs. 19,44,000/- (Rs. Nineteen lacs forty four thousands). In addition thereto, the claimants are also held entitled to Rs. 10,000/- for loss of consortium, Rs. 20,000/- on account of future prospects, Rs. 5,000/- for loss of estate and Rs. 5,000/- on account of funeral expenses. Thus the total compensation payable to the claimants comes to Rs. 19,84.000/- (Rs. Nineteen lacs eighty four thousands).

Accordingly, the findings on issue No. 4 are modified and it is held that the claimants are entitled to Rs. 19,84,000/- (Rs. Nineteen lacs eighty four thousands). In addition thereto, they shall also be entitled to interest @ 9% per annum on the enhanced compensation from the date of filing of the application till payment. The liability to pay compensation is held to be joint and several.