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Judgment
U.K. Dhaon, J.—These are the two First Appeals from Order u/s 173 of the Motor Vehicles Act, 1988 directed against the judgment and award dated 7th August, 2001, passed by Motor Accident Claims Tribunal/II Additional District Judge, Faizabad, directing the appellant-Assurance Company to pay a sum '' of Rs. 16,09,000, as compensation with interest @ 9% per annum from the date of filing of the petition till the date of actual payment.
F.A.F.O. No. 510 of 2001 has been filed by the New India Assurance Company Ltd. challenging the legality and correctness of the award directing the payment of the aforesaid sum, whereas F.A.F.O. No. 509 of 2001 has been filed by the claimants for enhancement of the amount of compensation.
Both the appeals having arisen out of the same judgment and award and common questions of law and fact being involved, we propose to dispose of both the appeals by this common judgment.
Briefly stated facts giving rise to these appeals are that Dr. Kamlesh Kumar, who was an Eye Surgeon, aged about 43 years, while moving on his Scooter No. U.P. 42/1395 was knocked down by a Jeep, bearing registration No. P. 42-A 0174. He sustained serious injuries. A vehicle belonging to the Health Department of the district, was coming from the opposite side, wherefrom Dr. Kamlesh Kumar was taken to the hospital by eye-witnesses, where he was declared "brought dead".
The report of the incident was lodged by one Shri Ram Prasad at Police Station, Ayodhya, who along with Shri Hari Kishan PW 2 had allegedly seen the accident.
It is undisputed that the said jeep was insured with the appellant, the New India Assurance Company Ltd. and driver, Shri Gaya Prasad, who was driving the vehicle at the relevant time under the direction of the owner, Shri Madan Mohan Sonkar, DW 1, was having a valid driving licence. The widow of the deceased, Smt. Suman Lata, his children and father preferred a claim petition before the Tribunal on the allegations that the accident took place due to rash and negligent driving of the said jeep, which had hit the deceased from behind.
The appellant Assurance Company as well as the owner of the vehicle in question contested the claim. They denied the accident with the said jeep and pleaded that the claimant respondents were not entitled to any compensation.
On behalf of the claimant respondents, Smt. Sumanlata PW 1, Shri Harikishan, PW 2 and Shri Devendra Nath Singh PW 3 were examined, whereas the owner of the vehicle examined himself as DW 1 and one Shri Ram Sunder Maurya, DW 2.
The learned Tribunal considered the entire evidence and arrived at the conclusion that the accident took place due to rash and negligent driving of the jeep and that at the relevant time, salary of Dr. Kamlesh Kumar was Rs. 9,776 per month and his dependents were entitled to a compensation of Rs. 15,92,000 on the principles laid down in the case of General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, . He further held that the claimant-respondents were entitled for Rs. 15,000 for loss of consortium, love and affection and a sum of Rs. 2,000 for funeral expenses. The Tribunal holding the appellant Company liable to make the payment under the terms and conditions of the policy held that the liability to make the entire payment was on the appellant. The Tribunal, accordingly, mulcted the liability for the payment of Rs. 16,09,000 on the Assurance Company along with interest thereon as said above.
Feeling aggrieved, the Assurance Company and also claimants respondents have preferred these appeals.
We have heard Mr. M.S. Kotwal for the appellant and Shri S.M. Nasir and Mr. Kamlesh Singh for the claimant-respondents.
It is submitted by the learned Counsel for the appellant Assurance Company that the accident had occurred due to collision of jeep and scooter, whereon the deceased has been travelling at the time of the accident and that a plea of contributory negligence has been raised in the written statement but the learned Tribunal had recorded no findings at all nor has even discussed the plea of contributory negligence raised by the appellant-Assurance Company.
A perusal of the judgment impugned in the appeal shows that a categorical finding has been recorded by the Tribunal that the deceased was going on his scooter while the jeep, which had been running with a high speed and in negligent and careless manner, hit the scooterist from behind. The finding, which is based on correct and proper appraisal of the evidence makes the maxim of res ipsa loquitur applicable to the facts of the present case because the things are so apparent that the question of contributory negligence does not arise. The plea of contributory negligence can be raised only, where both the parties were in some respects negligent, when there are the findings in unambiguous and clear terms that the deceased was hit by the jeep from behind, then no question of contributory negligence on the part of the deceased arises and the things being obvious, apparent '' and self-speaking, there was no question of any contributory negligence on the part of the deceased. It is true that no specific finding has been recorded by the learned Tribunal on the plea of the contributory negligence but as said above, the facts being clear and self-speaking, there was no need to consider such a plea which was evidently unsustainable and not recording any finding thereon does not in any way affect or legally vitiate the final judgment. Affirmative findings recorded by the Tribunal may be taken as negating the case of contributory negligence set up by the appellant.
The learned Counsel could not place or point out any material on record to justify or substantiate his plea of contributory negligence on the part of the deceased. The argument raised by the learned Counsel for the appellant Assurance '' Company has no substance and absence of any finding that there was no contributory negligence on the part of the deceased specially when there are findings that the accident took place due to rash and negligent driving of the jeep, cannot in any way invalidate the judgment/award of the Tribunal.
It is, next, submitted by the learned Counsel for the appellant Assurance '' Company that the learned Tribunal has adopted a wrong formula in determining the quantum of compensation. According to him the compensation is not a windfall or a bonanza for the victims of the accident but it has to be just, reasonable and proper as held in the case of the Divisional Controller, K.S.R.T.C. v. Mahadeva Shetty 111 (2003) ACC 57, that "it has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which to it appears to be just. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales.... the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be "just" and it cannot be a bonanza; and a source of profit but the same should not be a pittance; The Courts and Tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be "just" compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of just compensation, which is the pivotal consideration. Though by use of the expression "which appears to it to be just" a I wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression "just" denotes equitability, fairness and reasonableness, and non-arbitrary. If it is not so it cannot be just see Helen C. Rebello v. Maharashtra State Road Transport Corporation 2 (1998) ACC 512 (SC).
The learned Counsel for the claimant-respondents did not dispute this legal position that the compensation awarded must be just, fair and reasonable.
It was next urged on behalf of the appellant that the monthly salary of Dr. Kamlesh Kumar was Rs. 9,776 and an arbitrary amount was fixed by the Tribunal as Rs. 13,962 and the multiplier of 10 was applied for arriving at the just compensation and the deduction of 1/3rd for the own expenses of the deceased was not made. The learned Counsel has further submitted that the aforesaid conclusion was not only imaginary but arbitrary, wrong and erroneous and the compensation could not be determined without having deducted 1/3rd of the salary for the personal expenses of the deceased. A reference was made to the case of Asha and Ors. v. United India Insurance Co. Ltd. and Anr. 1 (2004) ACC 533 . It was held in this case that the loss suffered by the dependents is the amount which they would have been receiving at the time when the deceased was alive. There can be no doubt that the dependents should only be receiving the net amount less 1/3rd for his personal expenses. On behalf of the claimant/respondents, it is submitted that the pay of the deceased, Dr. Kamlesh Kumar was revised w.e.f. 1st January, 1996 and his monthly salary was fixed at Rs. 12,593 and that had the deceased not died a premature death on account of this accident, he had the chances of better future prospects of advancement in service career including the promotion on the higher post and in higher scale and that the principles laid down in the case of Smt. Sarla Dixit and another Vs. Balwant Yadav and others, , ought to have been adopted and the monthly dependency of the claimant-respondents sought to have been fixed at Rs. 25,000 per month just double of Rs. 12,593. It was further submitted that the learned Tribunal was wrong in applying the principles of Susamma Thomas case without taking into consideration the revised pay scale and the future prospects of advancement in service career and it has also erred in applying the multiplier of 10 instead of 12.
Lastly, it was submitted that the appellant had no permission u/s 170 of the Motor Vehicles Act, 1980 so it cannot challenge the quantum of compensation. Reliance was placed on the case of Chinnama George and Ors. v. N.K. Raju and Anr. reported in 1 (2000) ACC 577 (SC) : 2000 (2) TAC 207. The Hon''ble Apex Court had ruled in this case that Sections 146, 147, 149 and 173 are in the scheme of the Act and when read together mean: (1) it is legally obligatory to ensure the Motor Vehicle against third party risk. Driving an uninsured vehicle is an offence punishable with an imprisonment extending up to three months or the fine which may extend to Rs. 1,000 or both; (2) policy of insurance must comply with the requirement as contained in Section 147 of the Act; (3) it is obligatory for the insurer to satisfy the judgment and awards against the person insured in respect of third party risks. These are Sub-sections (1) and (7) of Section 149. Grounds on which insurer can avoid his liability are given in Sub-section (2) of Section 149.
If none of the conditions as contained in Sub-section (2) of Section 149 exist for the insurer to avoid the policy of insurance, he is legally bound to satisfy the award, he cannot be a person aggrieved by the award. In that case, insurer will be barred from filing any appeal against the award of the Claims Tribunal.
We have considered over the submissions made by the learned Counsel for the parties.
In Susamma Thomas case the Hon''ble Apex Court has held that the determination of quantum of compensation must answer what contemporary society "would deem to be a fair sum such as would allow the wrong-doer to hold up his head among his neighbours and say with their approval that he has done the fair thing". The amount awarded must not be niggardly since the "law values life and limb in a free society in generous scales". All this means that the sum awarded must be fair and reasonable by accepted legal standards.
In Divisional Controller K.S.R.T.C. v. Mahadeva Shetty and Ors. (supra), the Hon''ble Apex Court dealing with the question of just compensation held that the term ''compensation'' as stated in the Oxford Dictionary, signifies that which is given in recompense, and equivalent rendered. ''Damages'' on the other hand constitute the sum of money claimed are adjudged to be paid in compensation for loss or injury sustained, the value estimated in money, of something lost or withheld. The term ''compensation'' etymologically suggests the image of balancing one thing against another, its primary signification is equivalence, and the secondary and more common meaning is something given or obtained as an equivalent. Pecuniary damages are to be valued on the basis of full compensation''. That concept was first stated by Lord Blackborn in Livingstone v. Raywards Coal Co. 1980 AC 25.
The damages for vehicular accidents are in the nature of compensation in money for loss of any kind caused to any person. In case of personal injury the position is different from loss of property. In the later case, there is possibility of repair or restoration. But in the case of personal injury, the possibility of repair or restoration is practically non-existent. In Parry v. Cleaver 1969 (1) ALLER 555 Lord Morris stated as follows:
To compensate in money for pain and for physical consequences is invariably difficult, but...no other process can be devised than that of making monetary assessment.
The main principles of law on compensation for injuries worked out in 19th Century, where railways accidents were becoming common and all actions were tried by Jury. Though the cases have antiquated air it is still useful to refer to them. The necessity that damages should be ''full'' and ''adequate'' was stressed by the Court by Queen''s Bench in Fair v. London and North Western Railway Co. (1869) 21 LT 326. The word ''compensation'' is derived from Latin word "compensare" meaning "weigh together" or "balance". In Rushton v. National Coal Board 1953 (1) AIIER 314, it was observed:
Every member of this Court is anxious to do all he can to ensure that the damages for an injury and to help the parties and others to arrive at a fair and just figure.
This Court in R.D. Hattangadi Vs. M/s. Pest Control (India) Pvt. Ltd. and Others, laying the principles posited:
Broadly speaking, while fixing the amount of compensation payable to a victim of an accident the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money; whereas non-pecuniary damages are those which are capable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant, (i) medical attendance; (ii) loss of earning or profit up to the date of trial; (iii) other material loss. So far as non-pecuniary damages are concerned, they may include, (i) damages for mental and physical shock, pain and suffering already suffered or likely to be suffered in future; (ii) damages to compensate for the loss of amenities of life which may include a variety of matters, i.e., on account of injury the claimant may not be able to walk, run or sit; (iii) damages for the loss of expectation of life, i.e., on account of injury the normal longevity of the person concerned is shortened, (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.
It is the light of the aforesaid authorities that the question of just compensation will have to be determined and it has to be seen as to whether the Tribunal was right in awarding the sum in question.
Dr. Kamlesh Kumar, who was an Eye Surgeon and having bright chances of promotion and higher pay scales in future died on account of this accident on 12th August, 1996. At the time of his death, he was aged 43 years and getting salary of Rs. 9,776 in the old scale. Judicial notice can be taken of this fact that the pay scales of all the Government servants including the Medical Officers were revised w.e.f. 1st January, 1996 pursuant to the recommendation of the V Pay Commission. In the revised pay scale, his salary on the date of this accident was Rs. 12,593. Copy of relevant Government order sanctioning new pay scales to the employees of the State has been brought on record.
The learned Tribunal has applied the principles laid down in Susamma Thomas case, where the deceased getting monthly salary of Rs. 1,032, aged about 38 years died in a motor accident. The Hon''ble Apex Court keeping in view the future prospects of advancement in career fixed his monthly salary at Rs. 2,000 and for the purpose of dependency determined the monthly income at Rs. 1,400 per month as the dependency.
In Sarla Dixit''s case, the deceased, who was the soul bread winner in the family had died at the age of 27 years by motor accident. His gross salary at the time of his death was Rs. 1,543. The Hon''ble Supreme Court keeping in view the future prospects, which the deceased had in military service in the light of his brilliant academic record and performance in the military service spread over seven years and also keeping in view the other imponderables like accidental deaths while discharging military service, considered it to be reasonable to predicate that his gross monthly income would have shot up to at least double than what he was earning at the time of his death, but for working out the amount of compensation, added a similar amount of Rs. 1,500 and divided the same by 2 and assessed his salary at Rs. 2,200 per month and computed the compensation accordingly.
The learned Tribunal while determining the compensation payable to claimant-respondents has adopted the principles laid down in Susammia Thomas case and it was on that basis that it has worked out the amount of compensation, while doing so it has applied the multiplier of 10 only, whereas in Schedule II u/s 163A of the Motor Vehicles Act, which provides for the structured formula, the multiplier at the age of 43 years should have been 12 but looking to the fact that if we take the revised monthly salary of the deceased into consideration as it was fixed on the date of accident under the revised pay scale and adding there to the promotional chances and then applying the multiplier of 12 the amount will almost will remain the same, as has been awarded by the Tribunal. No much difference is likely to be caused in amount awarded by the Tribunal, therefore, although we find that multiplier has not been correctly applied but the principles of Susamma Thomas case having been adopted by the learned Tribunal and the amount to which it has arrived at being just and reasonable, we are not inclined to interfere with the amount of compensation and also for the reason that the Assurance Company cannot challenge the quantum of compensation without having permission u/s 170 of the Act. Deduction of 1/3rd was also not required to be made because the Tribunal while applying aforesaid formula of the case of Susamma Thomas straightaway fixed the amount of compensation at 9,776 x 1400/1032=13262 per month instead of calculating it on the principle of 9,776 X2000/1032.
This shows that the amount of monthly income was fixed after deducting more than 1/3rd amount, so, no illegality was committed by the Tribunal in awarding the aforesaid sum of compensation to the claimant-respondents without making any further deduction.
In a similar case of New India Assurance Co. Ltd. Vs. Kiran Singh and Others, where wrong multiplier was applied. The Hon''ble Apex Court held as follows:
It is contended that the multiplier of 43 applied by the Tribunal is erroneous. In this connection, the learned Counsel for the appellant had referred to the decision of this Court in U.P. State Road Transport Corporation and Others Vs. Trilok Chandra and Others, wherein this Court has held that the multiplier should not be more than 18. The Tribunal while applying the 43 multiplier had considered the age of the deceased being 27 years and if he had not died in the accident he would have lived up to the age of 70 years and one day he would have been promoted to the post of Chief Engineer. Keeping the aforesaid background in view, the High Court was of the view, that if the multiplier is reduced and multiplicand is enhanced not much difference would be caused to the amount fixed by the Tribunal. Even otherwise it is trite law that the Insurance Company is not capable to challenge the quantum of compensation. Insurance is a covenant of good faith, where both parties are covenanted to abide by the terms and conditions of the policy. In the premises aforesaid, it is clear that the Company has made a deliberate attempt to escape the liability by introducing a copy of the policy other than the insured. Often, the terms and conditions are being accepted more in breach than observance. Insurance Company must bear in mind that they are the trustees of the public. Keeper of the public coffer. Often, even genuine claims are being hotly contested in a routine manner by dragging the parties to Courts, wasting enormous time and money for the claimants to get their claims settled. The act like Motor Vehicles Act being beneficial legislation aimed at quick redressal of the victims of accident arising out of the use of motor vehicles, the attitude routinely adopted by the Insurance Company would render the object of the Act frustrated. If such instances are brought to the Court, the Court would be obliged to dismiss the appeal with heavy costs, apart from deprecating such practices.
So far as the question of enhancement is concerned, we after calculating the amount in the revised pay scale also find that there will be no material change in the total sum awarded by the learned Tribunal, therefore, there is no good ground for enhancement of compensation awarded by the learned Tribunal. Even formula adopted in the case of Satla Dixit''s case (supra) will not help the claimant-respondents in any way in getting any additional sum of compensation than that has already been awarded.
The Tribunal has awarded the interest on the aforesaid amount of compensation @ 9% per annum. It is submitted that the said amount is highly excessive. In New India Assurance Co. Ltd. v. Charlie 2 (2005) ACC 74 (SC) : 2005 (2) TAC 257 and Tamil Nadu State Road Transport Corporation ltd. v. Section Raj Priya and Ors. 2 (2005) ACC 476 (SC) : 2005 (2) TAC 305, keeping in view the Bank rate the interest was allowed @ 7.5% per annum only. In view of the above, we are of the view that the interest should be reduced to 7.5% per annum.
Before parting with the judgment, we would like to note that one of the claimant-respondents was a woman, whereas other four were the minors and one of them the father of the deceased was old and aged about 70 years but the learned Tribunal has not issued any direction for protecting their interest from the amount of compensation being frittered away by indiscreet expenditure without realizing that the money will be needed to be preserved for their future maintenance and upkeep and did not follow the guidelines issued by the Hon''ble Supreme Court in Susamma Thomas case wherein the Hon''ble Supreme Court referring to guidelines issued earlier observed that "the Tribunal will take into account what measures of safety are required to be adopted to protect the interests of the minors. Even in respect of the claimants who are sui juris, their interests, if they are illiterate or semi-literate, must also be protected from possible exploitation.
In a case of compensation for death in accident cases it is appropriate that the Tribunals do keep in mind the principles enunciated by the Gujarat High Court in (1982) 1 Guj. L.R. 756 , as approved by the Supreme Court in Union Carbide Corporation, etc., etc. Vs. Union of India, etc. etc., , in the matter of appropriate investments to safeguard the feed from being frittered away by the beneficiaries owing to ignorance, illiteracy and susceptibility to exploitation.
(i) The Claims Tribunal should, in the case of minors, invariable order the amount of compensation awarded to the minor be invested in long term fixed deposits at least till the date of the minor attaining majority. The expenses incurred by the guardian or next friend may, however, be allowed to be withdrawn;
(ii) In the case of illiterate claimants also the Claims Tribunal should follow the procedure set out in (i) above, but if lump sum payment is required for effecting purchases of any movable or immovable property such as, agricultural implements, rickshaw, etc. to earn a living, the Tribunal may consider such a request after making sure that the amount is actually spent for the purpose and the demand is not a ruse to withdraw money.
(iii) In the case of semi-literate persons the Tribunal should ordinarily resort to the procedure set out at (i) above unless it is satisfied, for reasons to be stated in writing, that the whole or part of the amount is required for expending and existing business or for purchasing some property as mentioned in (ii) above for earning his livelihood, in which case the Tribunal will ensure that the amount is invested for the purpose for which it its demanded and paid;
(iv) In the case of literate persons also the Tribunal may resort to the procedure indicated in (i) above subject to the relaxation set out in (ii) and (iii) above, if having regard to the age, fiscal background and strata of society to which the claimant belongs and such other considerations, the Tribunal in the large interest of the claimant and with a view to ensuring the safety of the compensation awarded to him thinks it necessary to do order.
(v) In the case of widows the Claims Tribunal Should invariably follow the procedure set out in (i) above.
While expection that the aforesaid guidelines will be followed by the Tribunals while making an award in favour of the minors, illiterates, aged and old persons, we feel that a direction should be issued that the amount awarded to the minors should be deposited in some filed deposit yielding high returns/dividends.
In view of the conclusions aforestated, both the appeals are dismissed except with a modification in the rate of interest which we reduce and allow @7.5% only instead 9% per annum.
The amount of the share of the minors shall be deposited in some nationalized bank or Government security yielding high returns, initially for a period of three years, which shall be renewed from time-to-time till the minor-claimants attain the majority. However, the interests payable thereon shall be permitted to be withdrawn by their mother for their maintenance.
No order as to costs.