United India Fire and General Insurance Co. Ltd. vs Lakkavajjula Anuradha and Another

Madhava Reddy, J.—This appeal by the United India Fire and General Insurance Co. Ltd., (Unit) All India Divisional Office Andhra Pradesh, Hyderabad, is directed against the award of the Accidents Claims Tribunal, Krishna at Machilipatnam in O.P. 96/73 awarding a sum of Rs. 1,00,000/- by way of compensation to Respondents 1, 2 and 3 the Petitioners herein u/s 110-A of the Motor Vehicles Act.

On 10.6.1973 at about 5.00 a.m. Sripada Srirama Narasimha Ghanapati, Challa Venkata Annapurnayya Sastri, Lakkavajjula Satya Venkata Rama Sastry, Lakkavajjula Adi Lakshmi, Lakkavajjula Sailaja and Lakkavajjula Krishna Sastry were travelling from Vijayawada to Tanuku in an Ambassador car A.P.U. 5432 driven by the 4th Respondent herein. The 5th Respondent is the owner of the said car. While it was crossing Ramileru Vagu, a lorry, APK 8514 driven by the 6th Respondent herein rashly and negligently and at a very high speed suddenly dashed against the Ambassador car. Even after the collision, the car did not slow down and dashed against a "Nidra Ganneru" tree on the left side of the road margin. The lorry proceeded to short distance after the collision and stopped. As a result of this accident the chassis of the Ambassador car split into two and four persons, viz, Venkatrama Sastry, his wife Adi Lakshmi and their two children Sailaja and Rama Krishna Sastry died on the spot instantaneously and two other occupants of the car received injuries. The 7th Respondent is the owner of the lorry. It is unnecessary for the purpose of this appeal preferred by the insurance company questioning only the quantum of compensation awarded to refer to the other facts. The finding of the Tribunal that both the vehicles were driven rashly and negligently by the respective drivers and that the liability should be apportioned between them equally is also not questioned.

Though the car and the lorry were respectively insured with the Madras Motor and General Insurance Co. Ltd., Madras an All India General Insurance Co. Ltd., Hyderabad both the General Insurance Companies were merged with the United India Fire and General Insurance Co. Ltd., (Ur. it), the Appellant herein. It is also unnecessary for the purpose of this appeal to go even into the question as to how far this apportionment is justified in the circumstances of the case. The Appellant does not question this appointment either. There is no appeal or cross-appeal by either the owners of the said vehicles or by the drivers thereof or by the legal representatives of the victims of the accident.

The 1st Respondent-claimant is the daughter of Lakkavajjula Satya Venkata Rama Sastry and Adi Lakshmi deceased 1 and 2 respectively while Respondents 2 and 3 are the parents of the 1st deceased. Among the claimants were also the daughters of the second Petitioner, i.e., the sisters of the 1st deceased but they were not awarded any compensation. The compensation awarded was apportioned only between Respondents 1 to 3. Respondent No. 1, the daughter of deceased 1 and 2 being granted Rs. 66,670/- and Respondents 2 and 3 being granted 33,330/-. This apportionment is also not questioned in this appeal.

The only question therefore that falls for consideration in "whether the Tribunal was justified in the circumstances of the case in awarding compensation of Rs. 1,00,000/- to the claimants ?"

In claiming the compensation, the Petitioners stated that the 1st deceased was aged 29 years and his wife the second deceased was aged 25 years. The 1st deceased was the Managing Partner of the firm M/s. Gopalakrishna Ayurveda Pharmacy, Vijayawada. He was a Vaidya Vidwan and a brilliant Ayurvedic Practitioner holding valid licence under Excise and Drugs Act. He was also a Graduate in Commerce from the Andhra University. He was earning a net income of Rs. 750/-p.m. He was hale and healthy and had a very bright future. Respondent No. 1, the sole surviving daughter and Respondents 2 and 3 his parents are his dependants. The marriage of his two sisters, maintenance of his parents and the education and marriage of his daughter aged 4 years were the responsibilities of the deceased No. 1. The deceased belonged to a family whose members lived upto ripe old age. Respondent No. 2, the father of the 1st deceased was aged 58 years and Respondent No. 3, the mother of the 1st deceased was aged 54 years. It is unnecessary to traverse for the purpose of this appeal what is averred in the counter in this behalf, for the Appellant stated that he is not challenging the finding of the lower court that the 1st deceased was earning a sum of Rs. 750/- per mensem and that he was spending on himself Rs. 300/-for his expenses and using the balance of Rs. 450/- p.m. for the dependent members of his family. Even otherwise the fact that the 1st deceased was earning Rs. 750/- p.m. is established unequivocally by the income tax returns, by the Assessment Orders Exs. A-24, dated 10 8.1970, Ex. A-25 dated 21.9.1971, Ex A-26, dated 23.6 1971, Ex. A-27, dated 25.9.1972 and Ex. A-28 dated 22.12 1973 and the demand notice Ex. A-23 dated 17.7.1967 issued by the income tax Officer.

It is contended that the method adopted by the lower court in arriving at the amount of compensation payable to the claimants is erroneous and is to be set aside in appeal.

Mr. S. Venkata Reddy, learned Counsel for the Appellant contended that in arriving at the amount of compensation payable to the legal representatives of the deceased, the age of the claimants has to be considered and the claim of the legal representatives must be decided with a view to compensate for the loss of dependency and not compensate the loss to the estate. For this purpose the life span of the dependents must be taken into account and the amount which the deceased would have contributed for them during the remaining part of their life should be compensated. In this behalf, he placed very strong reliance upon the decision of the Supreme Court in C.K.S. Iyer v. T.K. Nair 1970 A C.3 110 (S.C.) . That was a case in which an eight year old boy was knocked down by a bus and the only claimants for compensation were the parents of that boy. Dealing with their claim, the Supreme Court held:

Compulsory damages u/s 1-A of the Fatal Accidents Act (Fatal Accidents Act, 1855) for wrongful death must be limited strictly to the pecuniary loss to beneficiaries and that u/s 2, the measure of damages is the economic loss sustained by the estate. There can be no exact uniform rule for measuring the value of the human life and the measure of damages cannot be arrived at by precise mathematical calculation, but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor. Since the elements which go to make up the value of the life of the deceased to the designated beneficiaries are necessarily personal to each case in the very nature of things, there can be no exact or uniform rule for measuring the value of human life. In assessing damages, the court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable. As a general rule parents are entitled to recover the present cash value of the prospective service of the deceased minor child....

It would be seen from the above decision that the life expectancy of the beneficiaries was stated to be only an important factor and not the sole determining factor in awarding compensation under Fatal Accidents Act, 1855. That was stated in the context of the compensation claimed by the parents and not in the context of a claim made by the children of the deceased. The life expectancy of the parents in the case of their children would undoubtedly be shorter than the life expectancy of the deceased himself and in the case of a claim by the children, the life expectancy of the deceased would be shorter than that; of claimants. In this case, the 1st Respondent claimant is the daughter of the deceased 1 and 2 and hence as held by the Supreme Court in the above decision the life expectancy of the deceased which is shorter is rightly taken into account.

The learned Counsel for the Appellant also relied upon the decision of a Division Bench of this Court in The Hindustan Ideal Insurance Company Ltd. v. Pokanti Ankiah 1969 A.C.J. 60 (A.P.) in which it was laid down that "the compensation must be equivalent to the loss of dependency and that it is necessary to take a reasonable, realistic and commonsense view of all aspects of the matter and the Court must try to fix a figure which is neither unfair to recipient nor to the one who has to pay compensation." In that case it was found that the deceased would have assisted the members of the family to the extent of Rs. 40/-p.m. In view of that the Tribunal determined the annual dependency to be Rs. 480/- and calculating the life expectancy of the deceased who was aged 19 years to be 55 years multiplied the annual dependency of Rs. 480/- with 36, i.e., the balance of the life expectancy and awarded 17,280/-. On appeal the High Court held that only so much amount as would be sufficient to earn a sum of Rs. 480/- per annum by way of interest at 6 per cent per annum should be awarded and accordingly reduced the amount of compensation to Rs. 7,200/-. The decision relied upon by the learned Counsel does not categorically lay down that the loss to the estate should not be compensated but only loss of dependency should be compensated.

In Gobald Motor Service Ltd. v. R.M. K. Veluswami 1958 A.G.J. 179 (S.C) it was pointed out that ''while u/s 1, Fatal Accidents Act, 1855, damages are recoverable for the benefit of the persons mentioned therein, u/s 2 compensation goes to the benefit of the estate ; whereas u/s 1 damages are payable in respect of loss sustained by the persons mentioned therein, u/s 2 damages can be claimed inter alia for loss of expectation of life." In that case dealing with the question "Whether the Courts below were right in awarding compensation of Rs. 25,200/- for the pecuniary loss sustained by the Respondents by the reason of the death of Rajaratnam". Their Lordships of the Supreme Court referred to the observations of Lord Russell in Davies v. Powell Duffryn Associated Collieries Ltd. 1942 A.C. 601 "that the benefit accruing to a dependent by the reason of the relevant death must be taken into account". They also referred to the decision in Nance v. British Columbia Electric Rly. Co. Ltd. 1951 A.C. 601. If the loss to the estate is to be calculated, there is no reason to take into account only the life expectancy of the parents of deceased and ignore the life expectancy of the deceased. Even though the life expectancy of the parents would be shorter than that of the deceased the entire savings of the deceased on the death of his parents would go to the children. In other words, the loss to the estate of the deceased would be the amount of savings of the deceased during his life time for the benefit of his family irrespective of to whom it would go on his death, for what is awarded is by way of compensation. While the loss to the estate would be the same in both the cases, as the life expectancy of the parents of the deceased is normally shorter than that of the deceased, where the claimants are the parents the shorter period of the life expectancy of the parents is taken into account but where the children are the claimants the life expectancy of the deceased which would be shorter than that of his children, must be taken into account. Whatever may be the position, where the claimants for compensation are only the parents of the deceased, in a case where the claimants include the children of the deceased, there is no reason why the loss to the estate should be ignored and the compensation determined only on the basis of the life expectancy of the parents who are the other claimants and not life expectancy of the deceased. The children would be entitled to the estate of the deceased and the estate of the deceased would be what he would have spent on the children during his life time and also whatever he would have saved which would pass on to the children on his death. In our view, the loss to the estate that has to be compensated has to be calculated on the basis of the expectancy of the deceased where the children of the deceased are among the claimants.

The Claims Tribunal, as already noticed has held that the monthly income of the 1st deceased was Rs. 750/- p.m. and that after spending Rs. 300/- on himself he was using Rs. 450/- for the family expenses. It also found that the average life expectancy of the members of the family was at least 65, if not 70. The deceased was aged 29 and, therefore, it was calculated that he would have lived for at least 36 years. Capitalizing the income that would have been earned by him during this period, the Tribunal determined the loss to the estate at Rs. 1,94,000/- and purporting to follow the judgment of the Supreme Court in C.K.S. Iyer v. T. K. Nair 1970 A.C.J. 110 (S.C) since the amount was being paid lump sum, deducted 20% from out of the said sum and fixed the compensation payable at Rs. 1,48,520/-. But since the Petitioner-claimants had restricted their claim to Rs. 1,00,000/- the Tribunal awarded Rs. 1,00,000/- only. The question is whether this amount has to be further reduced in this appeal. The Supreme Court in a later decision in Manjushri Raha v. B.L. Gupta 1977 A.C.J. 134 (S.C) dealing with the case of a deceased employee in the time scale of Rs. 590-30-830-35-900 drawing a salary of Rs. 620/-p.m. calculated the total salary which the deceased would have drawn until retirement and also the amount of pension he would have drawn for at least ten years thereafter and after excluding the entire amount of pension therefrom on the ground that it would be just sufficient for maintaining himself, assessed the earnings for the balance of his life span, which was found to be 37 years the deceased having died at the age of 28 at Rs. 1,88,000/- and after deducting the amount spent on himself and towards the income tax and other charges determined the value of the estate and loss to the dependents to be Rs. 94,000/-. To that it added Rs. 13,500/-which the deceased would have got by way of death-cum-gratuity and awarded Rs. 1,07,500/- by way of compensation. In view of that judgment even the deduction of 20% made by the Claims Tribunal in this case does not appear to be justified. If the method adopted by the Supreme Court in the above case is adopted in this appeal, the loss to the estate and loss to the dependents would be Rs. 450/- per month for 36 years, i.e., Rs. 1,94,400/-which is more than what the Tribunal has awarded.

Mr. S. Venkat Reddy, learned Counsel for the Appellants, however contended that since a monthly income of Rs. 450/- has to be compensated at the present rate of interest at 9% per annum only that much amount as would earn Rs. 450/- p.m. or Rs. 5,400/- per annum by way of interest should be awarded and hence not more than Rs. 60,000/-which would earn Rs. 5,400/- interest per annum should be awarded. He contends that in fact a further deduction should be made from out of the said amount as the amount of Rs. 60,000/- would be paid in lump sum and that would remain in the Bank in tact even after earning a regular income of Rs. 5,400/- per annum. This contention, no doubt, has received acceptance of this Court in the Hindustan Ideal Insurance Company Ltd. v. Pokanti Ankiah 1969 A.C.J. 60 (A P.). No doubt in Sheikhupura Transport Co. v. Northern India Transporters Ins. Co. 1971 A.C.J. 2 C6 (S.C.) also 15 years totaliser of the annual income was adopted for determining the compensation and in Lakshmiammal and Others Vs. State of Tamil Nadu, he amount of compensation awarded on the basis of 34 years purchase was reduced to 12 years purchase and fixed at Rs. 22,000/-. That was a case in which a person aged 31 years and earning Rs. 150/-p.m. had died. In determining the compensation at 12 years purchase, the Court observed:

The Tribunal below has not realised that if the total compensation is fixed at Rs. 43,000/- and the interest income alone would be far in excess of the benefit that is lost and still the entire capital, would be in tact for ever. That is why in making lump sum payment as compensation Courts fix the quantum at 10 to 15 years annual purchase. There may be cases in which compensation has to be fixed at much lower than ten years annual purchase taking into account the age of the deceased, the age of the dependants and the various other circumstances. In the present case considering the fact that the deceased was aged 31 years and the other circumstances, we think that about 12 years annual purchase would be just and adequate compensation.

But in our view, that cannot be correct position having regard to what the Supreme Court has laid down in Manjushri Raha v. B.L. Gupta 1977 A.C.J. 134 (S.C.). We are bound by the later decision of the Supreme Court in Manjushri Raha v. B.L. Gupta 1977 A.C.J. 134 (S.C.) referred to above. Further by a judgment dated 1 8.1979 in CM. As. Nos. 195 & 495/76 to which one of us (Madhava Reddy, J.) was a party, following the above decision of the Supreme Court awarded compensation by multiplying the net income spent on the family every month with the number of years of life expectancy without making any deduction. We, therefore, do not see any reason to reduce the amount of compensation any further when in fact the amount of compensation payable to the claimants in accordance with the decision of the Supreme Court in Manjushri Raha v. B.L. Gupta 1977 A.C.J. 134 (S.C.) would be much higher than what is actually claimed by them.

In C.K.S. Iyer v. T.K. Nair 1970 A.C.J. 110 (S.C.) the Supreme Court laid down that "in the matter of ascertainment of damages the Appellate Court should be slow in disturbing the findings reached by the Courts below, if they have taken all the relevant facts into consideration". We are unable to hold that the Tribunal has not taken all the relevant factors into account or that it was weighed by any irrelevant considerations, calling for interference in appeal.

This appeal therefore fails and is accordingly dismissed with costs.