Smt. Phulmaya Tamang vs The Oriental Insurance Co. Ltd.

This appeal is against a Judgment and Award dated 1st April, 2003 passed by the Motor Accident Claims Tribunal, Jalpaiguri in Motor Accident Claim Case No. 418 of 2001 being an application for compensation under Section 166 of the Motor Vehicles Act, 1988 filed by the appellant-claimants, claiming compensation on account of the death of one Maila Tamang in an accident caused by a truck bearing Registration No. AP-16U-8599 owned by the respondent no.2 and covered by a policy of insurance issued by respondent no.1 (hereinafter referred to as the respondent-insurer).

By the judgment and award under appeal the learned Tribunal awarded compensation to the appellant-claimants. It appears that the learned Tribunal directed the respondent-insurer to issue two separate cheques one for Rs.3,00,000/- in favour of the appellant claimant no.1 and another cheque for Rs.84,000/- in favour of the appellant-claimant no.2.

The appellant-claimant no.1 is the widow of the deceased victim and the claimant appellant no.2 is the daughter of the deceased victim.

We are at a loss to understand why the learned Tribunal awarded Rs.3,00,000/- to the claimant-appellant no.1 but only Rs.84,000/- to the appellant-claimant no.2. However, the appellant-claimants have not questioned the apportionment possibly because there is no dispute between them in this regard.

Mr. Jayanta Banerjee, learned Counsel appearing on behalf of the appellant-claimants submits that compensation of Rs.3,84,000/- was too low and was not just and proper compensation. Mr. Banerjee pointed out that the gross salary of the deceased victim was Rs.10,342/- per month at the time of his death. There is evidence that the deceased victim was an employee of the West Bengal State Electricity Board. A certificate issued by the West Bengal State Electricity Board reveals that the gross pay of the deceased victim at the time of his death was Rs.10,342/- and his total take home pay was Rs.6,658/- after deduction of Rs.1,074/-and Rs.2,500/- towards repayment of provident fund loan. In addition a sum of Rs.110/- was deducted towards professional tax.

Mr. Banerjee argued and in our view rightly assessed the salary less professional tax ought to have been taken into account for the purpose of computation of pecuniary loss. The deduction towards contributory provident fund could not have been deducted as the same constituted savings of the deceased victim, which would enure to the benefit of the family of the deceased similarly the provident fund loan was taken for the benefit of the family. Deduction of Rs.2,500/- on account of instalment for repayment of provident fund loan cannot also be deducted. The income of the deceased should have been computed at Rs.10,232/- per month for the purpose of computation of compensation on account of pecuniary loss.

The respondent-insurer has not appeared against the judgment and award of the learned Tribunal. However, at the hearing of the appeal it was contended that the deceased victim being 58 years of age at the time of his death, he had only two years left for superannuation upon attainment of the age of 60 years. The multiplier should therefore be 2.

The question of whether the applicable multiplier should be equivalent to remaining years of service or the multiplier applicable to age of the deceased victim was referred to a Larger Bench of this Court. The Larger Bench rightly held that the reference was not maintainable in view of judgments of the Supreme Court in this regard which were binding on all High Courts irrespective of any contradictory decision of the Division Bench of the High Court. It would be pertinent to quote the decision of the Division Bench:

"The questions raised in the above reference to be answered by a Larger Bench are as follows:-

" 1. What would be the basis of fixing the multiplier for the purpose of deciding the amount of compensation in a proceeding under Section 166 of the Motor Vehicles Act, 1988? and

Whether or not it would be proper to fix such multiplier on the basis of the remaining period of service of the victim and/or the deceased in a case where the victim and/or the deceased had died after fifty years of age?"

This reference is made in the year 2012 and the matter is kept pending till date. Me 3 an while, several decisions of the Apex Court touching the issues have come and the latest judgment of the Apex Court is in the case of Reshma Kumari & Ors. v. Madan Mohan & Anr., reported in (2013) 9 SCC 65. Further this is a judgment by a Bench consisting of three Judges. On perusal of the judgment, at paras 1.1 and 1.2, the two common questions which fell for consideration before the Bench read as under :-

"1.1. Whether the multiplier specified in the Second Schedule appended to the Motor Vehicles Act, 1988 (for short ''the 1988 Act'') should be scrupulously applied in all cases? And

1.2. Whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as regards determination of future prospects?" Reading of these two common questions under reference in the above appeal clearly indicate with reference to the same controversy arisen for our consideration in the above reference. After referring to various earlier decisions of the Apex Court which are referred to in paragraph 2 of the judgment of the Apex Court, from paragraph 43.2 onwards, the summary of the discussion and the opinion of the Apex Court is expressed which reads as under :-

"43.2. In cases where the age of the deceased is up to 15 years, irrespective of Section 166 or Section 163-A under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) OF THE Table in Sarla Verma should be followed.

43.3. As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act.

43.4. The Claims Tribunals shall follow the steps and guidelines stated in para 19 of Sarala Verma for determination of compensation in cases of death.

43.5. While making addition to income for future prospects, the Tribunals shall follow para 24 of the judgment in Sarala Verma.

43.6. Insofar as deduction for personal and living expenses is concerned, it is directed that the Tribunals shall ordinarily follow the standards prescribed in paras 30, 31 and 32 of the judgment in Sarala Verma subject to the observations made by us in para 41 above.

43.7. The above propositions mutatis mutandis shall apply to all pending matters where above aspects are under consideration."

In the light of above decision nothing needs to be answered with regard to the instant reference. Fresh consideration of the matter under reference does not arise, as it stands answered in the above judgment of the Apex Court."

9.The judgment of the Supreme Court in Reshma Kumari & Ors.. v. Madan Mohan & Anr., reported in (2013) 9 SCC 65 has been extracted in the judgment of the Larger Bench referred to herein above.

The Supreme Court has reiterated and followed the judgment of the Supreme Court in Sarala Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr. reported in (2009) 3 WBLR (SC) 700 = (2009) 6 S.C.C. 121.

In Sarla Verma (Smt.) & Ors. (supra) the Supreme Court emphasized the need for standardization of compensation having regard to future uncertainties and held -

"19. To have uniformity and consistency, the Tribunals should determine compensation in cases of death, by the following well-settled steps :

Step 1 (Ascertaining the multiplicand)

The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.

Step 2 (Ascertaining the multiplier)

Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased.

Step 3 (Actual calculation)

The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the "loss of dependency" to the family.

Thereafter, a conventional amount in the range of Rs.5000 to Rs.10,000 may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5000 to 10,000 should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased. The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also be added.

Re Question (ii) - Deduction for personal and living expenses

We have already noticed that the personal and living expenses of the deceased should be deducted from the income, to arrive at the contribution to the dependants. No evidence need be led to show the actual expenses of the deceased. In fact, any evidence in that behalf will be wholly unverifiable and likely to be unreliable. The claimants will obviously tend to claim that the deceased was very frugal and did not have any expensive habits and was spending virtually the entire income on the family. In some cases, it may be so. No claimant would admit that the deceased was a spendthrift, even if he was one.

It is also very difficult for the respondents in a claim petition to produce evidence to show that the deceased was spending a considerable part of the income on himself or that he was contributing only a small part of the income on his family. Therefore, it became necessary to standardise the deductions to be made under the head of personal and living expenses of the deceased. This lead to the practise of deducting towards personal and living expenses of the deceased, one-third of the income if the deceased was married, and one-half (50%) of the income if the deceased was a bachelor. This practise was evolved out of experience, logic and convenience. In fact one-third deduction got statutory recognition under the Second Schedule to the Act, in respect of claims under Section 163-A of the Motor Vehicles Act, 1988 ("The MV Act", for short). But, such percentage of deduction is not an inflexible rule and offers merely a guideline.

Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father.

Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where the family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third."

In Sarla Verma (supra) the Supreme Court also held that as a rule of thumb in case of permanent salaried employee an addition of 50% towards future prospect would have to be made in case of victim less than 40 years of age and addition of 30% in case of victim''s aged between 40 and 50 years and there would be no addition in case of victims more than 50 years of age at the time of the accident.

As per Sarla Verma (supra) read with Reshma Kumari & Ors. (supra) applicable multiplier in case of victims upto 15 years of age would be 20. In other cases the multiplier would be as follows :-

15 to 20 years - 19

21 to 25 years - 18

26 to 30 years - 17

31 to 35 years - 16

36 to 40 years - 15

41 to 45 years - 14

46 to 50 years - 12

51 to 55 years - 10

56 to 60 years - 8

61 to 65 years - 6

Above 65 years - 5

The victim in this case being 58 years, the applicable multiplier necessarily ought to be 9. The appellant claimants would, therefore, be entitled to compensation as computed herein below :

Monthly income

Rs. 10,342/-

Less: Professional Tax

Rs. 110/-

Rs.10,232/-

Annual income

(Rs.10,232/- x 12)

Rs.1,22,784/-

Less: 1/3rd personal expenses

Rs. 40,928/-

Rs. 81,856/-

Multiplied by 9 i.e. Rs.81,856/- x 9

Rs.7,36,704/-

Add: Funeral expenses & loss of estate

Rs. 4,500/-

An additional Rs.5000/- would be payable to the claimant-appellant no.1 towards loss of consortium.

The appellant-claimants shall be entitled to interest at the rate of 9% per annum to be paid from the date of filing of the claim application till full satisfaction of the awarded amount. Needless to mention that interest shall be computed as per reducing balance, if applicable. The appellant-insurer would be entitled adjustment of amount already paid. The balance amount shall be released to the claimants within forty-five days from the date of receipt of a certified copy of this order.

The appeal is, thus, disposed of.

Tribunal/Lower Court records shall forthwith be sent down to the court below.

Photostat certified copy of this order, if applied for, be expeditiously supplied to the learned Advocates appearing for the parties subject to compliance of requisite formalities.