Shriram General Insurance Company Ltd. v. Shree Krishan @ Pappu & Ors.

8. First of all, I would deal with Clause 6 (b) of the second Schedule to the M. V. Act (under Section 163A) which provides that the income of a non-earning spouse, who has died, may be taken as one-third of the income of the surviving spouse. It goes without saying that similar kind of services is rendered by a home maker whether in the middle or in the low income group. Is there any justification to relate the income of the housewife to that of her husband?

9. To give an example there is a senior Clerk „A‟, a Junior level Officer „B‟ and a middle level Officer „C‟ working with the Govt.; A, B and C draw a salary of Rs.15,000/-, Rs.30,000/- and Rs.60,000/- respectively. The wives of all the three are looking after their respective homes and caring for the children. All of them are Graduates. If we apply the criterion as laid down in the second Schedule, the value of services rendered in case of „A‟, „B‟ and „C‟ would be Rs.5,000/-, Rs.10,000/- and Rs.20,000/- per month respectively. The husband and the children would be entitled to compensation on the assumed loss of dependency as mentioned above. There would be wide disparity in the award of compensation.

10. In the three examples quoted above, although the deceased‟s spouse might be rendering the same services for the husband and the children, i.e. to cook food, to buy clothes, wash and iron them, to work as a tutor for the children, to give necessary instructions to the children as to their upbringing, and so on. The compensation awarded in the case of „A‟ would be X amount; in case of „B‟ would be 2X amount and in case of „C‟ would be 4X amount.

11. Similarly, take an example of X, Y and Z who are in their respective enterprises and earning Rs.[5] lacs, Rs.10 lacs and Rs.15 lacs per annum respectively. Not only there would be wide disparity in the grant of compensation in respect of the death of their spouse, the compensation awarded for loss of services rendered by a housewife of a husband in a very high bracket based on this principle may be unjust enrichment. Again there may be cases where if the husband is having a very high income his wife really might not be contributing so much towards the home making. Thus, I am of the view that a readymade formula given in Clause 6 (b) of the second Schedule cannot be adopted to award just and fair compensation which is the very basis of an award passed under Section 168 of the M. V. Act.

12. In the case of General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors. (1994) 2 SCC 176, it was held as under:- “5……The determination of the quantum must answer what contemporary society "would deem to be a fair sum such as would allow the wrongdoer 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.”

13. In Arun Kumar Agrawal, the Supreme Court referred to Kemp and Kemp on Quantum of Damages, (Special Edn., 1986), Berry v. Humm & Co., (1915) 1 KB 627 and Mehmet v. Perry, (1977) 2 All ER 529 (DC). Paras 22, 23, 25 and 26 of the report are extracted hereunder:-

14. The Supreme Court observed that in view of the multifarious services rendered by the housewife, it is difficult to value those services in terms of money. But then some estimate has to be made in terms of money to award compensation. In Para 27 of the report, the Supreme Court said as under:-

15. The Supreme Court referred to the judgment passed by the Madras High Court in National Insurance Company Limited v. Deepika & Ors., 2010 (4) ACJ 2221. Para 54 to 57 of the judgment in Arun Kumar Agrawal are extracted hereunder:-

56. The Madras High Court in its very illuminating judgment in Deepika (supra) has further referred to various methods by which the assessment of work of a homemaker can be made and the relevant portion from para 10 of the said judgment is extracted below: “10…...that there have been efforts to understand the value of a homemaker's unpaid labour by different methods. One is, the opportunity cost which evaluates her wages by assessing what she would have earned had she not remained at home, viz., the opportunity lost. The second is, the partnership method which assumes that a marriage is an equal economic partnership and in this method, the homemaker's salary is valued at half her husband's salary. Yet another method is to evaluate homemaking by determining how much it would cost to replace the homemaker with paid workers. This is called the Replacement Method.”

57. Various aspects of the nature of homemaker's job have been described in para 11 which are very relevant and are extracted below:-

In para 13, the Division Bench of the High Court has observed and, in my view very rightly, that time has come to scientifically assess the value of the unpaid homemaker both in accident claims and in matters of division of matrimonial properties.”

16. In Deepika the value of the services rendered by the housewife was again related to that of the husband. In that case the husband‟s income was found to be Rs.5,500/per month, its 50% i.e. Rs.2750/- was taken towards domestic services in addition to Rs.750/- as income from the work carried out by the wife.

17. Earlier in some cases the High Courts took 50% wages of the unskilled/ skilled workers and in some cases the entire wages of a skilled worker was taken to make an attempt to arrive at a figure to compute the dependency. The Delhi High Court in Amar Singh Thukral v. Sandeed Chhatwal, ILR (2004) 2 Del 1, very reluctantly took the salary of a skilled worker as per the minimum wages applied in Delhi, while observing as under:- “….Since there is no scientific method of assessing the contribution of a housewife to her household, in cases such as the present, resort should be had to the wages of a skilled worker as per the Minimum Rates of Wages in Delhi. Although, this may sound uncharitable, if not demeaning to a housewife, there is hardly any other option available in the absence of any statutory guidelines.”

18. The Supreme Court in Arun Kumar Agrawal did not approve the adoption of the salary of a skilled worker to compute the loss of dependency. In this case, Hon‟ble Mr. Justice A.K. Ganguly while penning a separate concurrent judgment expressed hope that the legislature would come with some better method to arrive at the value of the services of the housewife. In para 65 of the report it was observed:-

19. In Lata Wadhwa (supra) a number of persons including women and children died; the Supreme Court assessed the compensation while taking the value of the services rendered by a housewife between the age group of 22-59 as Rs.3,000/- per month and in the case of women aged 62 years and above at Rs.21,00/- per annum.

20. The minimum wages of a Graduate at the time of the fire accident in Lata Wadhwa (supra) as notified in the State of Delhi were just Rs.898/-. The compensation was awarded in the year 2001 when the minimum wages of a Graduate were Rs.3339/-, of a matriculate were Rs.3027/and that of a skilled worker were Rs.3003/-. It is important to note that no interest on the compensation was awarded from the date of the accident till the date of the payment in Lata Wadhwa (supra). Many Tribunals and High Courts have adopted the compensation granted in case of Lata Wadhwa (supra) to be just and fair in motor accident cases, where the deceased was a house wife. But, the compensation in Lata Wadhwa was awarded because there was loss of life of so many women and children when a fire broke out while they were participating in a function organized by Tata Iron & Steel Company. It was not a statutory compensation under the Motor Vehicles Act. Moreover, difficulty also arises as on account of inflation, the wages and salaries have increased manifold. In this case, the Tribunal held that the compensation in Lata Wadhwa was awarded in the year 2001 and doubled it to Rs.6,000/- to compute the loss of dependency. The Tribunal further deducted one-third of the assumed income towards the personal living expenses and computed the loss of dependency on the income of Rs.4,000/- per month which according to the Appellant is exorbitant and excessive. No deduction was made by the Supreme Court in the assumed value of services rendered at Rs.3,000/- per month while computing the loss of dependency.

21. The services rendered by a housewife cannot be counted; cooking, washing, ironing clothes and stitching clothes (in some cases) for the husband and children, teaching and guiding children, working as a nurse whenever the husband or the child/children are sick, are some of the major activities of a housewife. She has no fixed hours of work; she is always in attendance to take care of each and every need of the whole family at the cost of her personal comfort and health. The services rendered by a housewife may differ from case to case considering her qualification, financial strata and the social status of the family to which she belongs.

22. The Claimants, therefore, must lead evidence to prove the services rendered by a non working female. In the absence of any evidence to the contrary, the value of the services, if I may say so, has to have some relation to the educational qualification of the deceased.

23. Thus, the value of services rendered by a home maker should be taken as the minimum salary of a nonmatriculate, matriculate or a Graduate, (in the absence of any evidence to the contrary). In case of a young mother and a wife there should be an addition of 25% of the minimum salary/ wages as per the educational qualification i.e. Graduate, matriculate or nonmatriculate. There should be addition of 15% in the case of a middle aged mother and a wife and „NIL‟ in case of a wife and a mother beyond the age of 50 years as the children become independent by that time. The value of gratuitous services rendered should be gradually reduced after the age of 55 years, even though mothers take care of their children (irrespective of their ages) and even when they (the children) are married.

24. The next question that falls for consideration is whether there should be any deduction towards the personal living expenses of the deceased (Home maker). While awarding damages there is balancing of the loss to the Claimants of the pecuniary benefits with the gain of the pecuniary advantages which comes to them by reason of death. In Gobald Motor Service Ltd. & Anr. v. R.M.K. Veluswami & Ors., AIR 1962 SC 1, it was observed as under:- “…. The general rule which has always prevailed in regard to the assessment of damages under the Fatal Accidents Acts is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account. Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separately."

25. In A. Rajam v. M. Manikya Reddy & Anr., MANU/AP/0303/1988, the Hon‟ble Mr. Justice M.J. Rao (as he then was) referred to a number of English decisions.

26. In Morris v. Rigby (1966) 110 Sol Jo 834, the husband who was a medical officer, earning £ 2,820 a year, claimed damages for the death of his wife. He had five children aged two to fifteen years. He got his wife's sister to come and take care of them and do the domestic duties, paying her a gross wage of £ 20 a week. The judge awarded £ 8,000 and the award was confirmed.

27. The Learned Judge further referred to Regan v. Williamson 1977 ACJ 331 (QBD England) where the housekeeper employed was a relative. There, the wife was 37 years when she died and she left behind her husband and four sons aged 13, 10, 7 and 2 years respectively. A relative came daily (except weekends) to provide meals and to look after the boys. She was paid £ 16 per week and it cost the Plaintiff further £ 6.50 per week for her food, journeys to and from her home and for national insurance stamp. The Plaintiff estimated that his wife's loss had cost him £ 10 per week to cloth and feed his children and himself. Watkins, J. held that though, according to precedents, £22.50 (£ 16+6.50) per week minus £ 10 per week, would be sufficient as justice required that the term 'services' should be widely construed. Watkins, J. observed:- “I am, with due respect to the other Judges to whom I have been referred, of the view that the word 'services' has been too narrowly construed. It should, at least, include an acknowledgement that a wife and mother does not work to set hours and, still less, to rule. She is in constant attendance, save for those hours when she is, if that is a fact, at work. During some of those hours she may well give the children instructions on essential matters to do with their upbringing and, possibly, with such things as their home work. This sort of attention seems to be as much a service, and probably more valuable to them, than the other kinds of service conventionally so regarded.”.. and hastened to add:- “am aware that there are good mothers and bad mothers. It so happens that I am concerned in the present case with a woman who was a good wife and mother”. On the basis, the figure for dependency was raised from £ 12.50 (£ 22.50 -10.0) per week to £ 20 per week and a further sum of £ 1.50 was added for the deceased's financial contribution to the home, had she eventually gone out to work again. A multiplier of 11 was applied as the Plaintiff was 43 years. The award under the Fatal Accidents Act, was £ 1238.

28. Learned Judge further referred to Mehmet v. Perry 1978 ACJ 112 (QBD, England), wherein the husband had to look after five children aged 14, 11, 7, 6 and 3 years respectively. The two youngest children suffered from a serious hereditary blood disease requiring medication and frequent visits to the hospital. Consequently, the husband had to give up his employment after his wife's death and devoted his full time to care for the family. Between September, 1973 when his wife was killed and the trial that was conducted in October, 1976, his net average loss of earnings were £ 1,500 a year. His future net loss would be at the rate of £ 2,000 a year. It was held by Brain Neill, QC (sitting as a deputy Judge) that, in view of the medical evidence concerning the health of the children his giving up of his job was proper and that damages should be assessed not at the cost of employing a housekeeper but by reference to the Plaintiff's loss of wages, since the loss of wages represented the cost of providing the services of a full time housekeeper in substitution for his wife. In addition, the children were entitled, on the basis of Regan v. Williamson 1977 ACJ 331 (QBD, England), to get £ 1,500 as part of their damages, a sum of £ 1,000 for the loss of 'personal attention' to them by a 'mother' which is distinct from her services as a housekeeper but, that sum must be kept within modest limits as the Plaintiff was at home all the time. The Plaintiff as a husband was also held to be entitled to some damages for his loss of the 'personal care and attention of the wife' but that sum should be quite small to avoid any overlap with the damages awarded for housekeeping services. The last two children require to support for 12 years, as per medical advice. A multiplier of 8 was adopted for the family as a unit and 12 for the Plaintiff and a sum of £ 19,000 was arrived at.

29. While awarding compensation for loss of gratuitous services rendered by a homemaker the Claims Tribunals or the Court simply value the services. It goes without saying that the husband looks after the wife and some amount is definitely spent on her maintenance. But, whether that amount is liable to be deducted from the value of the gratuitous services rendered by her?

30. As held in Gobald Motor Service Ltd. and Helen C. Rebello that while estimating damages, the pecuniary loss has to be arrived at by balancing on the one hand the loss to the Claimants of the future pecuniary benefits that would have accrued to him with the gain of the pecuniary advantages which comes to him from whatever sources by reason of the death.

31. In, Regan v. Williamson, the learned Judge found that the expenditure on the deceased housewife was £10 per week. While the value of gratuitous services rendered by her was £ 22.50 per week. The figure on dependency of £

12.50 (£ 22.50 - £ 10.0) was taken as £21.50 per week. Thus, the amount spent on personal living expenditure was not really deducted in Regan v. Williamson.

32. Even on the basis of Gobald Motor Service Ltd. and Helen C. Rebello, the pecuniary advantages which the Claimant gets on account of accidental death is only liable to be deducted. The amount of money paid on account of death by the Life Insurance Corporation was held to be not deductable in Helen C. Rebello.

33. Thus, if a deceased housewife who lost her life in a motor accident would have died a natural death, the pecuniary advantage on account of savings made of the expenditure required for her maintenance would have otherwise also accrued to the benefit of the Claimants. Since this pecuniary advantage does not become receivable only on account of accidental death, in my view, the portion of the husband‟s income (spent on the deceased‟s maintenance) cannot be deducted.

34. To sum up, the loss of dependency on account of gratuitous services rendered by a housewife shall be:-

(i) Minimum salary of a Graduate where she is a

(ii) Minimum salary of a Matriculate where she is a

(iii) Minimum salary of a non-Matriculate in other cases.

(iv) There will be an addition of 25% in the assumed income in (i), (ii) and (iii) where the age of the homemaker is upto 40 years; the increase will be restricted to 15% where her age is above 40 years but less than 50 years; there will not be any addition in the assumed salary where the age is more than 50 years.

(v) When the deceased home maker is above 55 years but less than 60 years; there will be deduction of 25%; and when the deceased home maker is above 60 years there will be deduction of 50% in the assumed income as the services rendered decrease substantially. Normally, the value of gratuitous services rendered will be NIL (unless there is evidence to the contrary) when the home maker is above 65 years.

(vi) If a housewife dies issueless, the contribution towards the gratuitous services is much less, as there are greater chances of the husband‟s re-marriage. In such cases, the loss of dependency shall be 50% of the income as per the qualification stated in (i), (ii) and

(iii) above and addition and deduction thereon as per

(iv) and (v) above.

(vii) There shall not be any deduction towards the personal and living expenses.

(viii) As an attempt has been made to compensate the loss of dependency, only a notional sum which may be upto Rs.25,000/- (on present scale of the money value) towards loss of love and affection and Rs. 10,000/towards loss of consortium, if the husband is alive, may be awarded.

(ix) Since a homemaker is not working and thus not earning, no amount should be awarded towards loss of estate.”

7. Hence, there will be no addition towards future prospects. The impugned judgment cannot be faulted on this score as well.

8. The appeal is devoid of any merit; the same is dismissed in limini.

9. Pending applications also stand disposed of.

10. Statutory amount of Rs.25,000/-, if any, shall be refunded to the Appellant Insurance Company.

JUDGE JANUARY 27, 2015 vk