Sriram General Insurance Company Limited vs Farida Begum

Indira Banerjee, J. - There is a delay of about 140 days in filing the appeal. The delay is condoned as we are of the view that there was sufficient cause for the delay.

The application being CAN 1743 of 2015 is disposed of.

This appeal is against a judgment and award dated 26th June, 2014, as modified upon review by an order dated 27th August, 2014, passed by the Motor Accident Claims Tribunal, Murshidabad/Court of Judge, 1st Court, in a claim case for compensation under Section 166 of the Motor Vehicles Act, 1988.

The respondent claimants filed an application for compensation claiming that on 11th April, 2010, the victim, Fazle Rabbi, had been travelling in a Maruti Van bearing number WB-02P 0597 from Domkal to Salar through Berhampore Salar State Highway. When the said vehicle (Maruti Van) reached Purandarpur, a vehicle bearing no.WB 23/9656, insured by the appellant insurer, hit the Maruti Van causing serious injury to its passengers as well as its driver. The injured were taken to Kandi Sub-Divisional Hospital where the victim, Fazle Rabbi, died.

Before the learned Tribunal, it was established by evidence that the accident was caused due to the fault and negligence of the driver of the offending vehicle.

The claim application was disposed of by awarding the respondent claimants compensation of Rs.12,63,412/- with simple interest @4% per annum.

The learned Tribunal proceeded on the basis that the age of the victim being 58 years as per the Postmortem Report, the applicable multiplier would be ''5''. The compensation was computed at Rs.8,92,080/-. In addition, future salary of two years, that is, the remaining part of his service prior to retirement was added to the compensation. The respondent claimants were also awarded Rs.5,000/- towards medical treatment and Rs.4,500/- more towards funeral expenses and loss of estate. The respondent spouse was allowed additional Rs.5,000/- for loss of consortium.

The respondent claimants applied for review of the judgment and award contending that the multiplier applicable to the age group to which the deceased belonged, that is the age group of 56-60 years, should be "8" and not "5".

On review, the learned Tribunal accepted that an erroneous multiplier had been applied and decided to apply the multiplier of "8", applicable to the age group of 56-60 years, as per the judgment of the Supreme Court in Sarla Verma v. Delhi Transport Corporation, reported in 2009 (6) Supreme Court Cases 121. The learned Tribunal also computed two years'' salary, which was added to the compensation amount.

There is substance in the contention of the Mr. Singh, learned Counsel for the appellant insurer, that the learned Tribunal has, in effect and substance, applied higher multiplier, that is, applicable multiplier "8" plus a further "2", being the period of remaining service prior to retirement.

In our view, the learned Tribunal ought to have considered the last salary drawn, multiplied the same by "12" to arrive at the annual salary last drawn, multiplied the aforesaid figure by "8", being the multiplier applicable to the age group of 58, to which the victim belonged, deducted one-third therefrom towards personal and living expenses and computed compensation on account of pecuniary loss. The award of Rs.5,000/- towards loss of consortium to the respondent widow, Rs.2,000/- towards funeral expenses and Rs.2,500/- towards loss of estate, which is as per the Second Schedule to the Motor Vehicles Act, 1988, does not require interference.

Learned Counsel, appearing on behalf of the respondent claimants, referred to the judgment of the Supreme Court in Rajesh & Ors. v. Rajbir Singh & Ors., reported in 2014 (1) WBLR (SC) 23. In the aforesaid case, the Supreme Court had awarded Rs.1,00,000/- to the wife of the victim for loss of consortium.

The judgment was rendered in the particular facts of the case where the victim was only 33 years of age and the widow possibly even younger. A judgment is a precedent for the authority of law, which is raised and decided. A lumpsum payment in the particular facts of a case would not operate as a binding precedent in all future cases. Moreover, in Sarla Verma (supra), the Supreme Court laid down the norms for computation of compensation on account of pecuniary loss and also under other heads. The Supreme Court categorically held that in all cases, as a rule of thumb and for the sake of uniformity, the applicable multiplier would be as follows:

Age

-

Multiplier

15-20

-

18

21-25

-

18

26-30

-

17

31-35

-

16

36-40

-

15

41-45

-

14

46-50

-

13

51-55

-

11

56-60

-

9

61-65

-

7

Above 65

-

5

The Supreme Court also propounded the concept of an addition to the last drawn salary towards future prospects in case of victim''s less than 50 years of age. In case of victims with permanent jobs, less than 40 years of age, the addition was to be 50% and in case of victims between the age of 40 and 50 years, with permanent jobs, the addition was to be 30% and beyond 50 years, there was to be no addition at all. In Rajesh & Ors. v. Rajbir Singh & Ors. (supra), the Supreme Court approved the principles for computation of compensation laid down in Sarla Verma (supra), but, differed from Sarla Verma (supra) to the extent that Sarla Verma (supra) restricted addition towards future prospects only in case of salaried employees with permanent jobs. In Rajesh & Ors. v. Rajbir Singh & Ors. (supra), the Supreme Court held that there was no reason why addition should not be made in case of self-employed persons as well.

In K.R. Madhusudhan and Ors. v. Administrative Officer and Anr., reported in (2011) 4 Supreme Court Cases 689, however, the Supreme Court held that even if the deceased was over 50 years of age, he would still be entitled to addition due to future prospects if there was evidence. Of course, K.R. Madhusudhan and Ors. (supra) was decided having regard to the particular facts of that case.

On analysis of the various judgments cited by the respective parties, particularly, the judgments in Sarla Verma (supra), Rajesh & Ors. v. Rajbir Singh & Ors. (supra), Puttamma and Ors. v. K.L. Narayana Reddy and Anr., reported in 2014 (1) T.A.C. 926 (S.C.), the proposition of law which evolves as a whole is that there is a need to standardise the compensation in cases under Section 166 of the Motor Vehicles Act. For such standardization, the applicable multiplier would be as per column 4 of paragraph 40 read with paragraph 42 of the judgment in Sarla Verma (supra).

Similarly, it is the last salary drawn which is to be taken into account for the purpose of computation of pecuniary loss, subject to additions towards future prospects in appropriate cases where the victim was less than 50 years of age at the time of death.

The last income is to be taken into account irrespective of any other payments that might be made by the employer on account of the death of the employee and irrespective of any insurance amount that may be payable on account of the death, as enunciated by the Supreme Court in Lal Dei & Ors. v. Himachal Road Transport Corporation & Anr., reported in 2008 ACJ 1107 and Helen C. Rebello & Ors. v. Maharashtra State Road Transport Corporation & Anr., reported in 1999 ACJ 10 (SC).

In this case, the learned Tribunal has clearly erred in applying multiplier of "8" plus "2". The multiplier should have been "9" and the multiplicand should have been the last annual income prior to the accident of the victim less his personal and living expenses.

The respondent claimants shall, therefore, be entitled to compensation as follows:

Monthly Income =

Rs. 22,302/-

Less: one-third towards personal expenses, i.e., (Rs.22,302/- � 3) = (-)

Rs. 7,434/-

Rs. 14,868/-

Add : Annual Income (Rs.14868/- X 12) =

Rs. 1,78,416/-

Add: Multiplier ''9'', applicable to age group of 56-60 (Rs.1,78,416/- X 9) =

Rs. 16,05,744/-

Add: Funeral expenses etc. = (+)

Rs. 2,000/-

Add: Loss of estates = (+)

Rs. 2,500/-

Add: Medical Expenses = (+)

Rs. 5,000/-

Total =

Rs.16,15,244/-

The respondent spouse, being the respondent no.1, shall be entitled to an additional Rs.5,000/- towards loss of consortium.

The award is modified accordingly.

The award shall carry interest @ 9% per annum from the date of filing of the claim application till the date of deposit of the awarded amount in accordance with the direction of the Supreme Court in Surti Gupta v. United India Insurance Co. & Anr., reported in 2015 SAR (Civil) 571 and Civil Appeal Nos.348-349 of 2015, arising out of SLP (C) Nos.4897-4898 of 2014 (Smt. Neeta w/o Kallappa & Ors. etc. v. the Div. Manager, MSRTC, Kolhapur), where the Supreme Court deprecated the High Court and the Tribunal for awarding interest at a rate less than 9% per annum.

It will be open to the appellant insurer to withdraw the statutory deposit made in this Court. The awarded amount shall be deposited in the learned Tribunal within 45 days from the date of receipt of a certified copy of this judgment and order along with interest accrued thereon, if any.

The appeal and all connected applications are disposed of.

Urgent photostat certified copies of this judgment, if applied for, be supplied to the parties, subject to compliance of all requisite formalities.

Sahidullah Munshi, J. - I agree.