Shriram General Insurance Co Ltd v. Smt Roopwati & Ors.

Delhi High Court · 29 Jan 2015 · 2015:DHC:900

G. P. Mittal

MAC APP No.1021/2013

2015:DHC:900

civil appeal_dismissed Significant

AI Summary

The Delhi High Court dismissed the insurer's appeal, upholding the motor accident compensation award while clarifying that future prospects cannot be added without evidence, following binding Supreme Court precedents.

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MAC APP No.1021/2013 $- 5 HIGH COURT OF DELHI
Date of Decision: 29th January, 2015

MAC.APP. 1021/2013
SHRIRAM GENERAL INSURANCE CO LTD ..... Appellant
Through: Mr. Manish Kaushik with Mr. K.L.
Nandwani and Mr. Sameer Nandwani, Advocates.

VERSUS

SMT ROOPWATI & ORS ..... Respondents
Through: Mr. Navneet Goyal, Advocate for R-1 to 7.

CORAM:

HON'BLE MR. JUSTICE G.P.MITTAL G. P. MITTAL, J. (ORAL)

JUDGMENT

1. The appeal is directed against the judgment dated 19.09.2013 passed by the Motor Accidents Claims Tribunal (the Claims Tribunal) whereby compensation of Rs.13,88,333/- was granted in favour of the Respondents/Claimants for the death of Amar Singh who died in a motor vehicular accident which occurred on 30.11.2012.

2. During inquiry before the Claims Tribunal, it was claimed that the deceased was working as a mason and was earning Rs.15,000/- per month. In the absence of any documentary evidence with regard to the deceased’s income, the Claims Tribunal took minimum wages of a skilled worker, added 50% towards inflation, deducted 1/4th towards personal and 2015:DHC:900 living expenses and applied multiplier of 13 to compute the loss of dependency as Rs.11,03,333/-. The overall compensation awarded in para 21 of the award is tabulated hereunder:- Pecuniary Damages:

1. Loss of Dependency Rs.11,03,333/-

2. Funeral expenses Rs.25,000/-

3. Loss of Estate Rs.10,000/-

4. Loss of Consortium Rs.1,00,000/- Non Pecuniary Damages:

5. Loss of love, company and affection etc. Rs.1,00,000/-

6. Loss of gratuitous services Rs.50,000/- Total: Rs.13,88,333/-

3. It is urged by the learned counsel for the Appellant that in view of the judgment in HDFC ERGO General Insurance Co. Ltd. v. Smt. Lalta Devi & Ors., MAC. APP. 189/2014 decided on 12.01.2015, it was not permissible to grant future prospects in the absence of any evidence with regard to future prospects. It is further urged that a sum of Rs.50,000/- awarded towards gratuitous services was not tenable.

4. On the other hand, Mr. Navneet Goyal, Advocate appearing on behalf of the Respondents (claimants) submits that the compensation awarded is just and reasonable.

5. I have the trial court record before me. In the Affidavit filed by Roopwati, widow of the deceased, she claimed that her deceased husband was working as a mason (Rajmistri) and was earning Rs.15,000/- per month. Admittedly, the claimants could not produce any evidence with regard to the income of the deceased Amar Singh, but at the same time, the factum of his employment as a mason was not challenged by the Appellant in cross-examination of PW-1. The only suggestion that was given was that income of the deceased was not Rs.15,000/- per month.

6. The accident took place on 30.11.2012. Since it is established that deceased Amar Singh was working as a mason, I am inclined to assess his daily income to be Rs.400/- per day and even if the deceased had 25 working days in a month, his monthly income can be taken as Rs.10,000/- per month.

7. As far as addition towards future prospects is concerned, the issue has been examined at great length by this Court in HDFC ERGO General Insurance Co. Ltd. v. Smt. Lalta Devi & Ors. (supra). Paras 9 to 21 of the report in Lalta Devi are extracted hereunder:-

“9. The learned counsel for the Claimants has referred to a three Judge Bench decision of the Supreme Court in Rajesh & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 to contend that the future prospects have to be added in all cases where a person is getting fixed wages or is a seasonal employee or is a student. 10. It is urged by the learned counsel for the Claimants that the law laid down in Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 was extended in Rajesh & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 to hold that future prospects ought to be extended in all cases. 11. On the other hand, the learned counsel for the Insurance Company refers to a three Judge Bench decision of the Supreme Court in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65 wherein while approving the ratio with regard to future prospects in Sarla Verma (Smt.) & Ors. (supra) and relying on General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors. (1994) 2 SCC 176; Sarla Dixit v. Balwant Yadav, (1996) 3 SCC 179 and Abati Bezbaruah v. Dy. Director General, Geological Survey of India & Anr., 2003 (3) SCC 148, the Supreme Court held as under:- “38. With regard to the addition to income for future prospects, in Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002] , this Court has noted the earlier decisions in Susamma Thomas [Kerala SRTC v. Susamma Thomas, (1994) 2

SCC 176: 1994 SCC (Cri) 335], Sarla Dixit[(1996) 3 SCC 179] and Abati Bezbaruah [Abati Bezbaruah v. Geological Survey of India, (2003) 3 SCC 148: 2003 SCC (Cri) 746] and in para 24 of the Report held as under: (Sarla Verma case [Sarla Verma v. DTC, (2009) 6 SCC 121: (2009) 2 SCC (Civ) 770:

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134)

“24. … In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words „actual salary‟ should be read as „actual salary less tax‟). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A

departure therefrom should be made only in rare and exceptional cases involving special circumstances.”

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:-

“14. Certain parallel developments will now

have to be taken note of. In Reshma

Kumari v. Madan Mohan [(2009) 13 SCC

422 : (2009) 5 SCC (Civ) 143 : (2010) 1

SCC (Cri) 1044] , a two-Judge Bench of this

Court while considering the following

questions took the view that the issue(s)

needed resolution by a larger Bench: (SCC

p. 425, para 10) “(1) Whether the multiplier specified in the Second Schedule appended to the Act should be scrupulously applied in all the cases? (2) Whether for determination of the multiplicand, the Act provides for any criterion, particularly as regards determination of future prospects?” 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 Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 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 selfemployed 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:-

“12. Having carefully considered the submissions made by the learned Senior Counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms: (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength. (2) [Ed.: Para 12(2) corrected vide Official Corrigendum No. F.3/Ed.B.J./21/2005 dated 3-3-2005.] A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has

come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. (3) [Ed.: Para 12(3) corrected vide Official Corrigendum No. F.3/Ed.B.J./7/2005 dated 17-1-2005.] The above rules are subject to two exceptions: (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and (ii) in spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of the Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh [(1989) 2 SCC 754] and Hansoli Devi [(2002) 7 SCC 273].”

19. Similarly, in Safiya Bee v. Mohd. Vajahath Hussain @ Fasi, (2011) 2 SCC 94 in para 27, the Supreme Court observed as under:-

“27. However, even assuming that the decision in WP No. 35561 of 1998 did not operate as res judicata, we are constrained to observe that even if the learned Judges who decided WP No. 304 of 2001 did not agree with the view taken by a coordinate Bench of equal strength in the earlier WP No. 35561 of 1998 regarding the interpretation of Section 2(c) of the Act and its application to the petition schedule property, judicial discipline and practice required them to refer the issue to a larger Bench. The learned Judges were not right in overruling the statement of the law by a coordinate Bench of equal strength. It is an accepted rule or principle that the statement of the law by a Bench is considered binding on a Bench of the same or lesser number of Judges. In case of doubt or disagreement about the decision of the earlier Bench, the well-accepted and desirable practice is that the later Bench would refer the case to a larger Bench.”

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:- “9. It may be noted that the decision in S.N. Narula case [(2011) 4 SCC 591] was prior to the decision in T.V. Patel case [(2007) 4 SCC 785: (2007) 2 SCC (L&S) 98]. It is well settled that if a subsequent coordinate Bench of equal strength wants to take a different view, it can only refer the matter to a larger Bench, otherwise the prior decision of a coordinate Bench is binding on the subsequent Bench of equal strength. Since, the decision in S.N. Narula case [(2011) 4 SCC 591] was not noticed in T.V. Patel case [(2007) 4 SCC 785: (2007) 2 SCC (L&S) 98], the latter decision is a judgment per incuriam. The decision in S.N. Narula case [(2011) 4 SCC 591] was binding on the subsequent Bench of equal strength and hence, it could not take a contrary view, as is settled by a series of judgments of this Court.”

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. (surpa) shall be taken as a binding precedent.”

8. Thus, in the absence of any evidence, addition towards future prospects was not permissible. The loss of dependency would thus, come to Rs.11,70,000/- (10,000/- x ¾ x 12 x 13).

9. The Claims Tribunal granted compensation towards loss of gratuitous services under which head compensation is normally not granted. In terms of the judgment of Supreme Court in Rajesh & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54, the Respondents were entitled to a compensation of Rs.[1] lakh each towards loss of love and affection and loss of consortium, Rs.25,000/- towards funeral expenses and Rs.10,000/- towards loss to estate. The overall compensation, thus, comes to Rs.14,05,000/-. The compensation awarded to the Respondents of Rs.13,88,333/therefore, cannot be said to be exorbitant or excessive. I am not inclined to interfere with the award.

10. The appeal is accordingly dismissed.

11. The amount awarded by the Claims Tribunal shall be released/held in Fixed Deposit as directed by the Claims Tribunal in accordance with the impugned judgment.

12. Statutory amount, if any, deposited shall be refunded to the Appellant Insurance Company.

13. Pending applications stand disposed of.

JUDGE JANUARY 29th, 2015 srb

Shriram General Insurance Co Ltd v. Smt Roopwati & Ors.

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