Full Text
Date of Decision: 20th March, 2015
SHRIRAM GENERAL INSURANCE CO. LTD...... Appellant
Through: Mr. K.L. Nandwani, Adv. with Mr. Sameer Nandwani, Adv. and
Mr. Manish Kaushik, Adv.
Through: Mr. Harsh Vardhan, Adv.
JUDGMENT
1. The appeal is directed against the judgment dated 20.05.2014 passed by the Motor Accident Claims Tribunal (the Claims Tribunal) whereby compensation of `29,70,000/- was awarded in favour of Respondents No.1 and 2 for the death of Saurabh Karnatak, a bachelor who suffered fatal injuries in a motor vehicular accident which occurred on 28.07.2012.
2. The following contentions are raised by the learned counsel for the 2015:DHC:2698 Appellant Shriram General Insurance Company Limited:-
(i) The Claims Tribunal found contributory negligence on the part of the driver of the Alto car; in spite of this, the entire liability was fastened on the owner and insurer of the other vehicle i.e. the truck bearing registration no. HR-38J-7610;
(ii) There was no evidence with regard to deceased’s future prospects; in spite of this, addition of 50% was made towards the same which was not permissible. Reliance is placed upon Reshma Kumari and Ors. v. Madan Mohan and Anr., (2013) 9 SCC 65; and
(iii) The appropriate multiplier is always as per the age of the deceased or the Claimant whichever is higher. In the instant case, the multiplier ought to have been adopted as per the age of the Claimants. The Claims Tribunal erred in adopting the multiplier as per the age of the deceased.
3. On the other hand, learned counsel for Respondents No. 1 and 2 supports the impugned judgment. He states that the compensation awarded is just and reasonable. It is urged that it was not a case of contributory negligence but rather of composite negligence on the part of the driver of the Alto car bearing registration no. UP-16-AH-4879 and the truck bearing registration no. HR-38J-7610. He states that in case of composite negligence, the victim can recover the compensation from either or any of the tortfeasors.
NEGLIGENCE
4. The Claims Tribunal found negligence on part of the drivers of both the vehicles which is not challenged by the Appellant. The victim was a third party travelling in the Alto car. In Bherlal v. Kamal Singh, (2005) 2 TN MAC 39 (Mad), it was held by the Madras High Court that in case of composite negligence, a third party travelling in one of the vehicles will not be guilty of contributory negligence.
5. Further, in T.O. Anthony v. Karvarnani, (2008) 3 SCC 748, it was held that where a person is injured on account of negligence on the part of two or more wrongdoers, each wrongdoer will be jointly and severally liable to the injured for payment of the entire damages and the injured person has the choice of proceeding against all or any of the wrongdoers. In para 6, the Supreme Court held as under:-
damages and the injured person has choice of proceeding against all or any of them. In such a case, the injured need not establish the extent of responsibility of each wrong-doer separately, nor is it necessary for the court to determine the extent of liability of each wrong-doer separately. On the other hand where a person suffers injury, partly due to the negligence on the part of another person or persons, and partly as a result of his own negligence, then the negligence of the part of the injured which contributed to the accident is referred to as his contributory negligence. Where the injured is guilty of some negligence, his claim for damages is not defeated merely by reason of the negligence on his part but the damages recoverable by him in respect of the injuries stands reduced in proportion to his contributory negligence.”
6. Thus, the Claims Tribunal’s finding making the insurer of truck bearing registration no. HR-38J-7610 liable to pay the entire compensation cannot be faulted.
COMPENSATION
7. Deceased Saurabh Karnatak had obtained a degree in Bachelor of Science (Hospitality and Hotel Administration) from Indira Gandhi National Open University. He thereafter joined Barclays Services Pvt. Ltd. In pursuance of the appointment letter dated 08.02.2010, he was given a salary of `17,500/- per month or `2,10,000/- per annum which included certain allowances like HRA, special allowance, voice allowance, medical allowance, provident fund and performance incentives. The Claims Tribunal relying on National Insurance Co. Ltd. v. Indira Srivastava & Ors., 2008 (2) SCC 763, held that all the allowances beneficial to the family have to be taken into consideration for computation of income of the deceased. The reasoning in taking the entire income of the deceased which was for the benefit of his family to compute the loss of dependency, to my mind, cannot be faulted.
FUTURE PROSPECTS
8. As far as grant of future prospects is concerned, the deceased joined on the salary of `17,500/- per month in the year 2010. His salary remained the same even after two years when this accident took place. There is no evidence whatsoever produced by Respondents No. 1 and 2 to show that the deceased had bright future prospects. In the absence of any increment for two years and in the absence of any evidence that the deceased had bright future prospects, addition towards future prospects was not permissible. The law laid down in Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 was affirmed by a three Judge Bench decision of the Supreme Court in Reshma Kumari and Ors. v. Madan Mohan and Anr., (2013) 9 SCC 65. The question was gone into at great length by this Court in HDFC ERGO General Insurance Co. Ltd. v. Smt. Lalta Devi & Ors., MAC. APP. 189/2014 decided on 12.01.2015, wherein it was held that in the absence of any evidence with regard to bright future prospects, addition towards future prospects is not permissible.
9. In view of this, addition of 50% towards future prospects was not permissible.
MULTIPLIER
10. Coming to the question of multiplier to be selected, the question of selection of multiplier was dealt with at great length by me in Vijay Laxmi & Anr. v. Binod Kumar Yadav & Ors., ILR (2012) 6 Del 447. In that case, the learned counsel for the Appellant had relied on the following judgments (i) Smt. Sarla Verma & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121; (ii) Mohd. Ameeruddin v. United India Insurance Co. Ltd., 2010 (12) SCALE 155; (iii) P.S. Somanathan v. District Insurance Officer, I (2011) ACC 659 (SC);
(iv) Bilkish v. United India Insurance Co. Ltd. & Anr., 2008 (4)
SCALE 25; (v) National Insurance Co. Ltd. v. Azad Singh & Ors., 2010 ACJ 2384 (SC); (vi) Oriental Insurance Co. Ltd. v. Deo Patodi & Ors., 2009 ACJ 2359 (SC) and (vii) Divisional Manager, New India Assurance Co. Ltd. v. T. Chelladurai & Ors., 2010 ACJ 382 (SC).
11. I had discussed the law laid down in the earlier stated judgments and had further referred to the judgments in General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors., (1994) 2 SCC 176; U.P. SRTC v. Trilok Chandara, (1996) 4 SCC 362; Fakeerappa v. Karanataka Cement Pipe Factory, (2004) 2 SCC 473 and New India Assurance Company Limited v. Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 to hold that the multiplier has to be selected as per the age of the deceased or the Claimant whichever is higher.
12. The learned counsel for Respondents No. 1 and 2 has submitted that in view of the three Judge Bench decision in Reshma Kumari v. Madan Mohan & Anr., (2009) 13 SCC 422 and a later judgment of the Supreme Court in M. Mansoor & Anr. v. United India Insurance Company Limited & Anr., (2013) 15 SCC 603, the judgment in Vijay Laxmi (supra) of this Court needs to be revisited and the multiplier has to be as per the age of the deceased and age of the Claimant is not at all relevant for selection of the multiplier.
13. Section 168 of the Motor Vehicles Act, 1988 (the Act) enjoins a Claims Tribunal to determine the amount of compensation which is just and reasonable. It can neither be a source of profit nor should be a pittance. In other words, it should not be meager nor should be a windfall. In this connection, a reference may be made to the report of the Supreme Court in State of Haryana v. Jasbir Kaur, (2003) 7 SCC 484, which dealt with the grant of compensation in case of injury which principles equally apply in case of award of compensation in fatal accident cases. In Para 7, the Supreme Court held as under:
14. Initially, the trend of the Courts was to ascertain the life expectancy, deduct the age of the deceased and to award the compensation on the basis of the residual life span. The Courts started deducting certain sums out of the sum as arrived above on account of lump sum payment.
15. However, in General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors., (1994) 2 SCC 176, an attempt was made for the first time to award just and reasonable compensation on the basis of the multiplier method. The Supreme Court referred to the report in Gobald Motor Service Ltd. & Anr. v. R.M.K. Veluswami & Ors., AIR 1962 SC 1 and observed that actual pecuniary loss can be ascertained only by balancing, on one hand, the loss to the Claimant of the future pecuniary benefits and on the other hand, any pecuniary advantage which from whatever sources comes to them by reason of death. Paras 8 and 9 of the report in Susamma Thomas (Mrs.) (supra) are extracted hereunder:- “8. The measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant. Thus “except where there is express statutory direction to the contrary, the damages to be awarded to a dependant of a deceased person under the Fatal Accidents Acts must take into account any pecuniary benefit accruing to that dependant in consequence of the death of the deceased. It is the net loss on balance which constitutes the measure of damages.” (Per Lord Macmillan in Davies v. Powell [(1942) AC 601, 617: (1942) 1 All ER 657 (HL)].) Lord Wright in the same case said, “The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing on the one hand the loss to him of the future pecuniary benefit, and on the other any pecuniary advantage which from whatever source comes to him by reason of the death”. These words of Lord Wright were adopted as the principle applicable also under the Indian Act in Gobald Motor Service Ltd. v. R.M.K. Veluswami [AIR 1962 SC 1: (1962) 1 SCR 929: 1962 MLJ (Cri) 120] where the Supreme Court stated that the general principle is that the actual pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death, must be ascertained.
9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether.”
16. The Supreme Court referred to Davies v. Powell, (1942) AC 601 and Nance v. British Columbia Electric Railway Company Limited, (1951) AC 601 and in Paras 13 and 14 of the report in Susamma Thomas (Mrs.) (supra), the Supreme Court observed as under:-
17. The purpose of adopting the multiplier as per the age of the deceased or as per the age of the Claimant whichever is higher was that if the Claimant is of much higher age, particularly in case of death of a bachelor where the mother or for that matter the parents may be double the age of the deceased, the dependency is to come to an end in a much lesser period as against the dependency of a widow or minor children of a deceased. In any case, the deceased was not to support more than his own life span and thus, by providing the dependency to the Claimants, it was held that the dependency has to be as per the age of the deceased or the Claimant whichever is higher.
18. The law laid down in Susamma Thomas (Mrs.) (supra) with regard to adoption of multiplier method and selection of multiplier according to the age of the deceased or the Claimant whichever is higher was affirmed by a three Judge Bench decision in U.P. SRTC v. Trilok Chandra, (1996) 4 SCC 362. The three Judge Bench laid down that the multiplier cannot in all cases be solely dependant on the age of the deceased and the age of the parents would also be relevant in case of death of a bachelor in the choice of multiplier. In para 18 of the report of the Supreme Court in Trilok Chandra (supra), it was observed as under:- “18.…… Besides, the selection of multiplier cannot in all cases be solely dependant on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier………”
19. There was some confusion as to the selection of the multiplier because of the multiplier table as given in the Second Schedule of the Act under Section 163-A which was inserted w.e.f. 14.11.1994. Some of the cases had adopted the multiplier as given in the Second Schedule. Although, the three Judge Bench in Trilok Chandra (supra) had noticed some clerical mistakes in the multiplier table as given in the Second Schedule, it stated that the said table can be taken as a guide. Noticing the wide variations in the selection of multiplier, a two Judge Bench of the Supreme Court in Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 noted the multiplier as adopted in Susamma Thomas, Trilok Chandra and New India Assurance Company Limited v. Charlie & Anr. (2005) 10 SCC 720 and in the Second Schedule and in Para 40 of the report, it compared the same in a tabulated form which is extracted hereunder:- Age of the dece-ased Multiplier scale as envisaged in Susamma Thomas [(1994) 2 SCC 176: 1994 SCC (Cri) 335] Multiplier scale as adopted by Trilok Chandra [(199 6) 4 SCC 362] Multiplier scale in Trilok Chandra4as clarified in Charlie [(2005) 10 SCC 720: 2005 SCC (Cri) 1657] Multiplier specified in Second Column in the Table in Second Schedule to the MV Act Multiplier actually used in Second Schedule to the MV Act (as seen from the quantum of compensation) (1) (2) (3) (4) (5) (6) Up to 15 yrs - - - 15 20 15 to 20 yrs 16 18 18 16 19 21 to 25 yrs 15 17 18 17 18 26 to 30 yrs 14 16 17 18 17 31 to 35 yrs 13 15 16 17 16 36 to 40 yrs 12 14 15 16 15 41 to 45 yrs 11 13 14 15 14 46 to 50 yrs 10 12 13 13 12 51 to 55 yrs 9 11 11 11 10 56 to 60 yrs 8 10 09 8 8 61 to 65 yrs 6 08 07 5 6 Above 65 yrs 5 05 05 5 5
20. The Supreme Court with a view to having a uniform multiplier held that the multiplier as given in Column (4) of the above table should be usually followed. In Paras 41 and 42 of the report in Sarla Verma (Smt.), the Supreme Court observed:-
21. It may be noted that the Supreme Court had gone into the history of adoption of multiplier method and referred to Nance v. British Columbia Electric Railway Company Limited, (1951) AC 601 and Davies v. Powell, (1942) AC 601.
22. Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 related to the death of a Scientist who died leaving behind his widow, three minor children, parents and grandfather. Thus, the Supreme Court while laying down that the multiplier has to be adopted as per Column 4 of the table as per the age of the deceased, was generally referring to the award of compensation in cases of death of a person who had a family consisting of widow, children and parents. Of course, general principles with regard to award of compensation in case of death of a bachelor were also laid down by the Supreme Court in Sarla Verma (Smt.), but it was not specifically laid down that even in the case of death of a bachelor, the age of the Claimants who may be aged parents will be totally irrelevant.
23. However, in Amrit Bhanu Shali v. National Insurance Company Limited, (2012) 11 SCC 738, the Supreme Court stated that the selection of the multiplier has to be as per the age of the deceased and not on the basis of the age of the dependants. It was a case which related to the death of a bachelor.
24. On account of divergence of opinion in the earlier cases, a reference to a larger Bench was made by a two Judge Bench in Reshma Kumari v. Madan Mohan & Anr., (2009) 13 SCC 422. The question of award of compensation in relation to multiplier and future prospects was gone into at great length by a three Judge Bench of the Supreme Court in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65. The two referred questions by Reshma Kumari v. Madan Mohan & Anr., (2009) 13 SCC 422 were:- “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?”
25. While answering the points, in Para 43, the Supreme Court observed as under:-
26. In Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65, these were general observations that the steps and guidelines stated in para 19 of Sarla Verma (Smt.) have to be followed. In Sarla Verma (Smt.), it was laid down that having regard to the age of the deceased and period of active career, the active multiplier should be selected and the multiplier should be chosen from the table with reference to the age of the deceased. As I have observed above, it was not the intention in Sarla Verma (Smt.) to apply the multiplier of 18 in case of death of a bachelor aged 25 years where the dependants may only be the aged parents. Thus, in Reshma Kumari also, it was not laid down that the multiplier has to be according to the age of the deceased even when the deceased is a bachelor having dependency of the parents only.
27. Of course, in M. Mansoor & Anr. v. United India Insurance Company Limited & Anr., (2013) 15 SCC 603, the two Judge Bench observed that the multiplier has to be as per the age of the deceased and even in case of death of a bachelor aged 24 years, the multiplier will be 18.
28. However, there is a three Judge Bench decision of the Supreme Court in New India Assurance Company Limited v. Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 wherein a bachelor aged 25 years lost his life in a motor vehicular accident which occurred on 11.11.2002. The Claims Tribunal adopted a multiplier of 17, as per the age of the deceased (25 years). On appeal filed by the New India Assurance Company Limited before the High Court, it was contented that the multiplier has to be as per the age of the Claimants (in that case) and not as per the age of the deceased. The Division Bench of High Court of Uttarakhand declined to accept the contention and dismissed the appeal. In the SLP filed by the Insurance Company, the multiplier of 17 was reduced to ‘5’ on the age of the mother of the deceased being 65 years.
29. Also, in the latest judgment of the Supreme Court in Ashvinbhai Jayantilal Modi v. Ramkaran Ramchandra Sharma & Anr., (2015)2 SCC 180, a two Judge Bench of the Supreme Court dealt with the questions of multiplier and the appropriate multiplier in case of death of a bachelor in the said case was taken as 13, keeping in mind the age of the parents of the deceased. Para 11 of the report is extracted hereunder:-
30. Thus, right from the two Judge Bench decision in General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors., (1994) 2 SCC 176, which for the first time held that the multiplier method is the best way of awarding just compensation, which was approved in U.P. SRTC v. Trilok Chandara, (1996) 4 SCC 362, wherein it was held that the multiplier has to be as per the age of the deceased or the Claimant whichever is higher, which is reiterated in New India Assurance Company Limited v. Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 by applying the multiplier as per the age of the mother of the deceased (bachelor), the consensus of the larger Bench decisions seems to be that the multiplier has to be selected as per the age of the deceased or the Claimant whichever is higher. The judgment in Vijay Laxmi & Anr. v. Binod Kumar Yadav & Ors., ILR (2012) 6 DEL 447 has thus, correctly interpreted the law. Three Judge Bench decision in U.P. SRTC v. Trilok Chandara, (1996) 4 SCC 362 shall be taken as a binding precedent in the matter of selection of multiplier as per the age of the deceased or the Claimants.
31. Moreover, even if there is divergence of opinion in subsequent two Judge Bench decisions or three Judge Bench decisions (although there is no divergence by three Judge Bench decisions), the law laid down by three Judge Bench in Trilok Chandra (supra) shall be taken as a binding precedent. In this connection, a reference may be made to Central Board of Dawoodi Bohra Community and Anr. v. State of Maharashtra & Anr., (2005) 2 SCC 673, wherein, in para 12, the Supreme Court observed as under:-
32. Similarly, in Safiya Bee v. Mohd. Vajahath Hussain @ Fasi, (2011) 2 SCC 94, in para 27, the Supreme Court observed as under:-
33. Also, in Union of India and Ors. v. S.K. Kapoor, (2011) 4 SCC 589, while holding that the decision of the Co-ordinate Bench is binding on the subsequent Bench of equal strength, it was 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:-
34. Thus, in view of this, the three Judge Bench decision in Trilok Chandra (supra), later reiterated in the three Judge Bench decision of New India Assurance Co. Ltd. v. Shanti Pathak (supra) shall be taken as a binding precedent. The multiplier will be as per the age of the deceased or the Claimant whichever is higher.
35. In the instant case, the dependants are the mother of the deceased and the younger sibling, sister of the deceased. Respondent No. 2, although major was still dependant upon the deceased till she settled in life. In fact, the deceased was himself just 23 years old at the time of his death. In view of this, the deduction towards personal and living expenses ought to have been 1/3 as against 1/2 taken by the Claims Tribunal. But at the same time, the multiplier will be as per the age of the mother of the deceased as the sister was to settle in a couple of years.
36. Learned counsel for Respondents No. 1 and 2 has produced High School Certificate of Munni Kandpal, which states the date of birth of Respondent No. 1 as 10.06.1960. The age of the mother of the deceased, therefore, comes to about 52 years at the time of the death. This is also corroborated from the ration card which has been placed on record.
37. In the monthly salary of ` 17,500/-, there was payment of ` 2,000/towards HRA. HRA being tax free, there was no liability of income tax.
38. The loss of dependency will therefore, come to ` 15,40,000/- (`17,500/- x 12 x 2/3 x 11).
39. In addition, Respondents No. 1 and 2 are entitled to a sum of `1,00,000/- towards loss of love and affection, `25,000/- towards funeral expenses and `10,000/- towards loss to estate in view of the three Judge Bench decision of the Supreme Court in Rajesh and Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54.
40. The overall compensation thus, comes to `16,75,000/-.
41. The excess compensation of `12,95,000/- along with interest shall be refunded to the Appellant Insurance Company.
42. Statutory amount, if any, deposited shall also be refunded to the Appellant Insurance Company.
43. Pending applications, if any, also stand disposed of.
JUDGE MARCH 20, 2015 vk