Full Text
$-7 HIGH COURT OF DELHI
Date of Decision: 28th May, 2015
BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. ..... Appellant
Through: Mr. Rajat Brar, Advocate
Through: Mr. S.N. Parashar, Advocate for R-1.
JUDGMENT
1. The appeal is for reduction of compensation of Rs. 3,33,698/awarded by the Motor Accident Claims Tribunal (the Claims Tribunal) in favour of Respondent no.1 for having suffered grievous injuries resulting in 20% permanent disability of right lower limb in a motor vehicular accident which occurred on 29.12.2006.
2. The finding on negligence is not challenged by the Appellant Insurance Company.
3. The following contentions are raised on behalf of the Appellant Insurance Company:
(i) The Claims Tribunal made an addition of 50% towards
2015:DHC:4906 future prospects while computing the loss of future earning capacity. The same is not permissible in view of the three Judge Bench decision of the Supreme Court in Reshma Kumari Aand Ors. v. Madan Mohan and Anr., (2013) 9 SCC 65 and the judgment of this Court in HDFC Ergo General Insurance Co. Ltd. v. Smt. Lalta Devi and Ors., MAC APP No. 189/2014, decided on 12.01.2015;
(ii) Respondent no.1 was claimed to be running a milk dairy and also working as an agriculturist. His income was assessed on the basis of minimum wages of a semi-skilled worker and the loss of earning capacity was taken to the extent of 20%. However, considering the permanent disability, the functional disability assessed was much less. The Claims Tribunal was not justified in awarding a sum of Rs. 1,87,812/- towards loss of future income; and
(iii) The counsel’s fee of Rs. 25,000/- was directly awarded to the counsel, which is not in accordance with the Delhi High Court Rules and Orders. Reliance is placed on the judgment of this Court in ICICI Lombard General Insurance Co. Ltd. v. Kanti Devi and Ors., MAC APP NO. 645/2012, decided on 30.07.2012.
4. On the other hand, the learned counsel for Respondent no.1 supports the impugned judgment. He states that the compensation awarded is just and reasonable as the compensation awarded towards non-pecuniary damages is on the lower side. The learned counsel for Respondent no.1, however, states that the counsel’s fee in the manner as done by the Claims Tribunal was not permissible.
5. The compensation awarded under various heads is extracted hereunder:
┌────────────────────────────────────────────────────────────────────────────┐ │
┌───────────────────────────────────────────────────────────────────────────────────────────────┐ │ Sl. Compensation under Awarded by the Awarded by │ │ No. various Heads Claims Tribunal this Court │ │ (in Rs.) (in Rs.) │ ├───────────────────────────────────────────────────────────────────────────────────────────────┤ │ 1. Medical Expenses 31,572/- 31,572/- │ │ 2. Future Medical Expenses 10,000/- 10,000/- │ │ 3. Special Diet 7,000/- 20,000/- │ │ 4. Conveyance Charges 7,000/- 20,000/- │ │ 5. Loss of Income 10,434/- 10,434/- │ │ 6. Loss of Future Income 1,87,812/- 1,33,555/- │ │ 7. Loss of Amenities and 40,000/- 50,000/- │ │ Shortening of Life │ │ 8. Pain, Suffering & 40,000/- 50,000/- │ │ Inconvenience etc. │ │ TOTAL 3,33,818/- 3,25,561/- │ │ MAC. APP. 591/2012 Page 16 of 19 │ │ 2015:DHC:4906 │ │ 13. Thus, the compensation of Rs. 3,33,698/- as awarded by the │ │ Claims Tribunal, in my opinion, cannot be said to be excessive │ │ or exorbitant in view of the circumstances detailed earlier. │ │ COUNSEL’S FEE │ │ 14. As far as award of Counsel’s Fee of Rs. 25,000/- is concerned, │ │ this Court in ICICI Lombard General Insurance Co. Ltd. v. │ │ Kanti Devi and Ors., MAC APP No. 645/ 2012, decided on │ │ 30.07.2012 had gone into the question of granting counsel’s fee │ │ and concluded in Para 32 as under: │ │ “32. To sum up, it is directed:- │ │ i. The Claims Tribunal is empowered to award │ │ costs in a Claim Petition in terms of Section 35 │ │ read with Order XXA of the Code. │ │ ii. The Claims Tribunal is entitled to award the │ │ Counsel‟s fee in accordance with Rule 1 read │ │ with Rule 1A and Rule 9 of Chapter 16 Volume │ │ I of the Rules extracted earlier. │ │ iii. In case of compromise/settlement of the │ │ claims, the Claims Tribunal is not entitled to │ │ go beyond the settlement reached between the │ │ parties. If the settlement does not provide for │ │ payment of any Counsel‟s fee, it shall not be │ │ within the domain of the Claims Tribunal to │ │ award the Counsel‟s fee. │ │ iv. If the compensation is awarded on the basis of │ │ DAR in pursuance of the legal offer made by │ │ the Insurer, the Claims Tribunal is not │ │ MAC. APP. 591/2012 Page 17 of 19 │ │ 2015:DHC:4906 │ │ empowered to award any costs unless it forms │ │ part of the legal offer. │ │ v. The counsel fee can be directly paid to the │ │ counsel only when a specific agreement is filed │ │ and the Claimant requires payment of fee │ │ directly to the counsel because only then the │ │ Claimant would be liable to reimburse the fee │ │ or part thereof in case the award is set aside │ │ or varied.‟‟ │ │ 15. It was thus, concluded that instead of awarding counsel’s fee, │ │ the claim petition ought to be allowed with costs and counsel’s │ │ fee be paid only in accordance with Rules 1, 1A and 9 of │ │ Chapter 16 Vol. I of the Delhi High Court Rules and Orders. │ │ 16. The learned counsel for Respondent no.1 as stated above, does │ │ not dispute that the Counsel’s Fee in the manner awarded by the │ │ Claims Tribunal was not permissible. At the most, the petition │ │ could have been allowed with costs. The award of Counsel’s │ │ Fee is accordingly set aside. │ │ 17. By an order dated 25.05.2012, the execution of the award was │ │ deposited with UCO Bank, Delhi High Court Branch, New │ │ Delhi within six weeks, failing which Respondent no.1 will be │ │ entitled to interest @ 12% per annum from the date of this │ │ order. │ │ 18. By the order dated 25.05.2012, 50% of the award amount was │ │ ordered to be released in favour of Respondent no.1. The entire │ │ balance amount already deposited shall be released in favour of │ │ MAC. APP. 591/2012 Page 18 of 19 │ │ 2015:DHC:4906 │ │ Respondent no.1. │ │ 19. The remaining 40% of the amount along with interest which is │ │ to be deposited by the Appellant shall be held in Fixed Deposits │ │ for a period of two, four, and six years in equal proportion. On │ │ this amount, Respondent no.1 shall be entitled to claim │ │ quarterly interest. The FDRs shall be released to Respondent │ │ no.1 on maturity of their earlier said period. │ │ 20. The appeal is disposed of in above terms. │ │ 21. The statutory amount, if any, deposited shall be refunded to the │ │ Appellant Insurance Company. │ │ 22. Pending applications, if any, stand disposed of. │ │ (G.P. MITTAL) │ │ JUDGE │ │ MAY 28, 2015 │ │ pst │ │ MAC. APP. 591/2012 Page 19 of 19 │ └───────────────────────────────────────────────────────────────────────────────────────────────┘
39. The standardization of addition to income for future prospects shall help in achieving certainty in arriving at appropriate compensation. We approve the method that an addition of 50% of actual salary be made to the actual salary income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years and the addition should be only 30% if the age of the deceased was 40 to 50 years and no addition should be made where the age of the deceased is more than 50 years. Where the annual income is in the taxable range, the actual salary shall mean actual salary less tax. In the cases where the deceased was self-employed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases.”
12. The learned counsel for the Insurance Company relies upon a Constitutional Bench judgment of the Supreme Court in Central Board of Dawoodi Bohra Community & Anr. v. State of Maharashtra & Anr., (2005) 2 SCC 673; Safiya Bee v. Mohd. Vajahath Hussain @ Fasi, (2011) 2 SCC 94; and Union of India & Ors. v. S.K. Kapoor, (2011) 4 SCC 589 to contend that in case of divergence of opinion in judgments of benches of co-equal strength, earlier judgment will be taken as a binding precedent.
13. It may be noted that in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65; the three Judge Bench was dealing with a reference made by a two Judge Bench (S.B. Sinha and Cyriac Joseph, J.J.). The two Hon‟ble Judges wanted an authoritative pronouncement from a Larger Bench on the question of applicability of the multiplier and whether the inflation was built in the multiplier. The three Judge Bench approved the two Judge Bench decision of the Supreme Court in Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 with regard to the selection of multiplier. It further laid down that addition towards future prospects to the extent of 50% of the actual salary shall be made towards future prospects when the deceased had a permanent job and was below 40 years and addition of 30% should be made if the age of the deceased was between 40-50 years. No addition towards future prospects shall be made where the deceased was self-employed or was getting a fixed salary without any provision of annual increment.
14. Of course, three Judge Bench of the Supreme Court in its later judgment in Rajesh relying on Santosh Devi v. National Insurance Company Ltd. & Ors., 2012 (6) SCC 421 observed that there would be addition of 30% and 50%, depending upon the age of the deceased, towards future prospects even in the case of self-employed persons. It may, however, be noted that in Rajesh, the three Judge Bench decision in Reshma Kumari (supra) was not brought to the notice of their Lordships.
15. The divergence of opinion was noted by another three Judge Bench of the Supreme Court in Sanjay Verma v. Haryana Roadways, (2014) 3 SCC 210. In paras 14 and 15, the Supreme Court observed as under:-
15. Answering the above reference a three- Judge Bench of this Court in Reshma Kumari v. Madan Mohan [(2013) 9 SCC 65: (2013) 4 SCC (Civ) 191: (2013) 3 SCC (Cri) 826] (SCC p. 88, para 36) reiterated the view taken in Sarla Verma [Sarla SCC (Civ) 770: (2009) 2 SCC (Cri) 1002] to the effect that in respect of a person who was on a fixed salary without provision for annual increments or who was self-employed the actual income at the time of death should be taken into account for determining the loss of income unless there are extraordinary and exceptional circumstances. Though the expression “exceptional and extraordinary circumstances” is not capable of any precise definition, in Shakti Devi v. New India Insurance Co. Ltd. [(2010) 14 SCC 575:
(Cri) 848] there is a practical application of the aforesaid principle. The near certainty of the regular employment of the deceased in a government department following the retirement of his father was held to be a valid ground to compute the loss of income by taking into account the possible future earnings. The said loss of income, accordingly, was quantified at double the amount that the deceased was earning at the time of his death.”
16. Further, the divergence of opinion in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65 and Rajesh & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 was noticed by the Supreme Court in another latest judgment in National Insurance Company Ltd. v. Pushpa & Ors., CC No.8058/2014, decided on 02.07.2014 and in concluding paragraph while making reference to the Larger Bench, the Supreme Court held as under:- “Be it noted, though the decision in Reshma (supra) was rendered at earlier point of time, as is clear, the same has not been noticed in Rajesh (supra) and that is why divergent opinions have been expressed. We are of the considered opinion that as regards the manner of addition of income of future prospects there should be an authoritative pronouncement. Therefore, we think it appropriate to refer the matter to a larger Bench.”
17. Now, the question is which of the judgments ought to be followed awaiting answer to the reference made by the Supreme Court in Pushpa & Ors. (supra).
18. In Central Board of Dawoodi Bohra Community & Anr. v. State of Maharashtra & Anr., (2005) 2 SCC 673 in para 12, the Supreme Court observed as under:-
19. Similarly, in Safiya Bee v. Mohd. Vajahath Hussain @ Fasi, (2011) 2 SCC 94 in para 27, the Supreme Court observed as under:-
20. In Union of India & Ors. v. S.K. Kapoor, (2011) 4 SCC 589 while holding that the decision of the Coordinate Bench is binding on the subsequent Bench of equal strength, held that the Bench of Co-ordinate strength can only make a reference to a larger Bench. In para 9 of the report, the Supreme Court held as under:-
21. This Court in New India Assurance Co. Ltd. v. Harpal Singh & Ors., MAC APP.138/2011, decided on 06.09.2013, went into this question and held that in view of the report in S.K. Kapoor (supra), the three Judge Bench decision in Reshma Kumari & Ors. (supra) shall be taken as a binding precedent.”
9. As stated above, in the absence of any evidence of good future prospects, addition of 50% was not permissible. Thus, no addition towards future prospects ought to have been made by the Claims Tribunal.
FUNCTIONAL DISABILITY
10. Respondent no.1, Virender examined himself before the Claims Tribunal as PW[1]. He testified that he received serious and grievous injuries in the accident on various parts of body i.e. compound fracture on right leg, injuries on back side, abrasions and blunt injuries all over the body. The disability certificate Ex. PW1/3 which was proved by Dr. S.P. Sharma (PW[2]) states that on account of malunited fracture of lower end of right femur with stiffness of right knee joint, Respondent no.1 suffered 20% permanent disability in respect of right lower limb. Respondent no.1’s profession of running a milk dairy and of an agriculturist was not disputed. It is therefore, evident that Respondent no.1 in connection with carrying out his duties, has to walk, kneel and walk to various places. PW[2] testified that on account of permanent disability, though Respondent no.1 can do sitting job properly, but his earning capacity will be effected if he is given the job of moving from one place to another or to carry heavy weight. Thus, taking into consideration Respondent no.1’s profession, the Claims Tribunal was justified in taking 20% as functional disability. The loss of earning capacity therefore, in view of the observations made earlier would come to Rs. 1,33,555/- (Rs.3,478 x 12 x 16 x 20%).
11. Respondent no.1 was aged 35 years. As stated earlier, he was running a milk dairy and was also doing agriculture. He will have difficulty in running, squatting, kneeling. His job will be hampered badly due to the injuries suffered. Thus, the compensation of Rs. 7,000/- each towards Special Diet and conveyance charges and Rs. 40,000/- each towards loss of amenities and pain and suffering seems to be on the lower side. The same is hence, raised to Rs. 20,000 each and 50,000/- each respectively.
12. The overall compensation is thus, recomputed as under: Sl. No. Compensation under various Heads Awarded by the Claims Tribunal (in Rs.) Awarded by this Court (in Rs.)
1. Medical Expenses 31,572/- 31,572/-
2. Future Medical Expenses 10,000/- 10,000/-
3. Special Diet 7,000/- 20,000/-
4. Conveyance Charges 7,000/- 20,000/-
5. Loss of Income 10,434/- 10,434/-
6. Loss of Future Income 1,87,812/- 1,33,555/-
7. Loss of Amenities and Shortening of Life 40,000/- 50,000/-
8. Pain, Suffering & Inconvenience etc. 40,000/- 50,000/- TOTAL 3,33,818/- 3,25,561/-
13. Thus, the compensation of Rs. 3,33,698/- as awarded by the Claims Tribunal, in my opinion, cannot be said to be excessive or exorbitant in view of the circumstances detailed earlier. COUNSEL’S FEE
14. As far as award of Counsel’s Fee of Rs. 25,000/- is concerned, this Court in ICICI Lombard General Insurance Co. Ltd. v. Kanti Devi and Ors., MAC APP No. 645/ 2012, decided on 30.07.2012 had gone into the question of granting counsel’s fee and concluded in Para 32 as under: “32. To sum up, it is directed:i. The Claims Tribunal is empowered to award costs in a Claim Petition in terms of Section 35 read with Order XXA of the Code. ii. The Claims Tribunal is entitled to award the Counsel‟s fee in accordance with Rule 1 read with Rule 1A and Rule 9 of Chapter 16 Volume I of the Rules extracted earlier. iii. In case of compromise/settlement of the claims, the Claims Tribunal is not entitled to go beyond the settlement reached between the parties. If the settlement does not provide for payment of any Counsel‟s fee, it shall not be within the domain of the Claims Tribunal to award the Counsel‟s fee. iv. If the compensation is awarded on the basis of DAR in pursuance of the legal offer made by the Insurer, the Claims Tribunal is not empowered to award any costs unless it forms part of the legal offer. v. The counsel fee can be directly paid to the counsel only when a specific agreement is filed and the Claimant requires payment of fee directly to the counsel because only then the Claimant would be liable to reimburse the fee or part thereof in case the award is set aside or varied.‟‟
15. It was thus, concluded that instead of awarding counsel’s fee, the claim petition ought to be allowed with costs and counsel’s fee be paid only in accordance with Rules 1, 1A and 9 of Chapter 16 Vol. I of the Delhi High Court Rules and Orders.
16. The learned counsel for Respondent no.1 as stated above, does not dispute that the Counsel’s Fee in the manner awarded by the Claims Tribunal was not permissible. At the most, the petition could have been allowed with costs. The award of Counsel’s Fee is accordingly set aside.
17. By an order dated 25.05.2012, the execution of the award was stayed, subject to deposit of 60% of the award amount. The balance 40% of the award amount along with interest shall be deposited with UCO Bank, Delhi High Court Branch, New Delhi within six weeks, failing which Respondent no.1 will be entitled to interest @ 12% per annum from the date of this order.
18. By the order dated 25.05.2012, 50% of the award amount was ordered to be released in favour of Respondent no.1. The entire balance amount already deposited shall be released in favour of Respondent no.1.
19. The remaining 40% of the amount along with interest which is to be deposited by the Appellant shall be held in Fixed Deposits for a period of two, four, and six years in equal proportion. On this amount, Respondent no.1 shall be entitled to claim quarterly interest. The FDRs shall be released to Respondent no.1 on maturity of their earlier said period.
20. The appeal is disposed of in above terms.
21. The statutory amount, if any, deposited shall be refunded to the Appellant Insurance Company.
22. Pending applications, if any, stand disposed of.
JUDGE MAY 28, 2015 pst