Full Text
HIGH COURT OF DELHI
RAM CHARAN & ORS ..... Appellants
Through: Mr. Anshuman Bal, Advocate.
Through: Mr. D.K. Sharma, Advocate for respondent No. 1.
JUDGMENT
1. The Appellants (legal heirs of the deceased) in the present Appeal are assailing the Award dated 19.01.2013 passed by the learned Presiding Officer, Motor Accidents Claims Tribunal, East District, Delhi, seeking an enhancement of the awarded compensation.
2. On the unfortunate day, the deceased and her son, Vinod Kumar were crossing the road when the former got hit by an Indica bearing number DL3CAF 8508. The accident resulted in the instant death of Smt. Kalawati Devi, who was survived by her husband, Mr. Ram Charan and five children (one major son and four married daughters).
3. Accepting the argument of the Insurance Company, learned Claims Tribunal held that the Appellants were not financially dependent on the deceased. Hence the learned Claims Tribunal, based on the law laid down by the Hon’ble Apex Court in National Insurance Company Ltd Vs Meghji Narn Sortiya reported as II 2009 ACC 289 (SC), held that the Appellants are not entitled for the compensation under the head ‘Loss of dependency’. Instead they were granted the compensation under the head ‘Loss of Estate’. The learned Claims Tribunal assessed the compensation under the head ‘Loss of Estate’ by applying the same calculation method as that for calculating the compensation under the head ‘Loss of Dependency’. Learned Claims Tribunal has taken the age of the deceased as 56 and based on the Judgement of the Hon’ble Apex Court in Sarla Verma & Ors. Vs DTC & Anr. reported as (2009) 6 SCC 121, applied the multiplying factor as ‘9’. Further, the salary of the deceased was taken as Rs. 16,335/- (after deducting the TA and washing allowance). 50% of her salary was deducted towards her personal expenses. Since she was above 56 years old, no future prospects have been granted. Hence based on these figures, learned Claims Tribunal calculated the compensation under the head ‘Loss of Estate’ as Rs. 8,82,144/. In addition, Rs.10,000/- was granted towards Loss of Consortium, Rs. 25,000/- was granted towards loss of love and affection, Rs. 10,000/- was granted towards funeral expenses. Hence the learned Claims Tribunal granted a total compensation of Rs. 9,27,144/- at an interest rate of 7.5% per annum from the date of filing the claim till its realisation.
4. Before delving into the particulars of the computation, it is imperative to determine the customary heads under which compensation can be awarded. The Hon’ble Supreme Court in National Insurance Company Limited vs Pranay Sethi reported as (2017) 16 SCC 680 has ascertained the conventional heads and the standard compensation to be awarded under such heads. The following was held in judgment:- “The conventional and traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. There can be no dispute over the fact that price index, fall in bank interest, escalation of rates in many a field have to be noticed. The court cannot remain oblivious to the same. There has been a thumb rule in this aspect. Otherwise, there will be extreme difficulty in determination of the same and unless the thumb rule is applied, there will be immense variation lacking any kind of consistency as a consequence of which, the orders passed by the tribunals and courts are likely to be unguided. Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The principle of revisiting the said heads is an acceptable principle. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years. We are disposed to hold so because that will bring in consistency in respect of those heads.”
5. From the perusal of the judgment of Pranay Sethi (Supra), it is emphatically clear that for the conventional heads, namely, ‘Loss of Estate’, Loss of Consortium’ and ‘Funeral Expenses’ the amount of compensation is fixed at Rs. 15,000/-, Rs. 40,000/and Rs. 15,000/-, respectively with an increase of 10% after a period of 3 years.
6. The learned Claims Tribunal in the present case has misconstrued ‘Loss of Dependency‟ with ‘Loss of Estate‟. From the dicta in Pranay Sethi (Supra), it is unequivocally clear that the ‘Loss of Estate‟ cannot be calculated based on the income of the deceased. Hence, this Court is of the view that the compensation towards ‘Loss of Estate‟ must be awarded in consonance with the law laid down by the Hon’ble Supreme Court in Pranay Sethi (Supra) as opposed to the calculation made by the learned Claims Tribunal.
7. The learned Claims Tribunal held that the Appellants would not be entitled to any compensation under the head of ‘Loss of Dependency‟. The underlying reason for the said finding was that the legal heirs of the deceased were not financially dependent on the deceased. Hence, the germane question to be addressed is whether the Appellants are entitled for the compensation under the head ‘Loss of Dependency’.
8. The learned counsel for the Appellants heavily relied on National Insurance Company Limited v. Birender and Ors reported as (2020) 11 SCC 356 to establish that they are the legal representatives of the deceased and hence entitled for the compensation under the head ‘Loss of Dependency”. The Hon’ble Supreme court in Birender (Supra) was examining the legal issue „Whether the major sons of the deceased who are married and gainfully employed or earning can claim compensation under the Motor Vehicles Act, 1988‟, and held as follows:
9. In the present case, PW-2 during his evidence stated that the deceased was contributing her entire salary for the household expenses. Since the Respondents have not presented any proof to the contrary, there is no reason to disregard the statement of PW[2]. The deceased was an earning member of the family. Hence, it is concomitant to presume that she was contributing her earnings towards the family expenses. Hence applying the law laid down by the Hon’ble Apex Court in Birender (supra), one can presume that her family was financially dependent on the deceased.
10. The deceased had one major son and 4 married daughters. It was argued on behalf of the Respondent/Insurance Company that the married daughters cannot be treated as dependents of the deceased.
11. In this regard, parallels can be drawn from the judgement passed by the Hon’ble Kerala High Court in United India Insurance Co. Ltd v. Shalumol in MACA No. 1768 of 2021. This case dealt with the entitlement of married daughters and the parents of the deceased to claim under the head of ‘Loss of Dependency‟. It provides a more vocal stance on the holding in Birender (Supra). The Hon’ble High Court, while examining the contours of ‘Loss of Dependency‟, had held the following:-
50. It would be preposterous to accept the contention of the learned counsel for the Appellant that a 25 year old daughter would be no longer dependent on her 49 year old mother because she was given in marriage. The bond between a mother and a daughter is eternal. I reminisce the quotation of Cardinal Mermillod ‒ “No matter how old she may be, sometimes a girl just needs her mom.”
51. Even if dependency is a relevant criterion to claim compensation for loss of dependency, it does not mean financial dependency is the „ark of the covenant‟. Dependency includes gratuitous service dependency, physical dependency, emotional dependency, psychological dependency, and so on and so forth, which can never be equated in terms of money”
12. The Karnataka High Court vide order dated 04.08.2022 in MFA No.102868/2014 titled as Reliance General Insurance Company Ltd Vs Gangappa & Ors also had an occasion to examine whether the major married daughters can be treated as dependents of the deceased mother. Relying upon Birender (Supra), the Hon’ble Karnataka High Court held as follows:
13. This Court is in respectful agreement with the view expressed by the Kerala High Court and Karnataka High Court in this regard. Nevertheless, it cannot be denied that the loss of other forms of support endured by the Appellants is immeasurable. By virtue of the Motor Vehicles Act, 1988, being a welfare legislation, there is no cogent reason to deny the Appellants from obtaining compensation for their loss of dependence, regardless of the nature or form of the dependence. There cannot be any discrimination between married sons and married daughters and hence both of them are entitled for the compensation under the head „Loss of Dependency‟. Based on the above findings, this court is of the view that the Appellants are entitled to receive compensation under the head of ‘Loss of Dependency‟.
14. The learned counsel for the Appellants made a threefold submission towards the enhancement of the sum to be awarded against the head of ‘Loss of Dependency‟: (i) Inclusion of allowances to the actual income of the deceased, (ii) Calculation of future profits, (iii) deduction of personal expenses.
15. It was submitted on behalf of the Appellant that the learned Claims Tribunal erred in appreciating the income of the deceased by excluding the Travel Allowances and Washing Allowances that were conferred to her as a Safai Karamchari. The income of the deceased, excluding the allowances, amounted to Rs.16,335/as opposed to the income of Rs.19,095/- asserted by the counsel for the Appellant. It was their case that such allowances constitute a part of the income of the deceased and placed reliance on the case of Meenakshi Mishra & Ors vs Tarsem Singh & Ors reported as 2012 ACJ 1006.
16. Allowances are special benefits accorded to employees, the benefits of which are reaped either by employees alone or by their families as well. Including all incentives, bonuses or allowances to the income would be of inconsistent logic as the legal heirs would reap the benefits of certain allowances regardless of whether they enjoyed the same status prior to the demise of the deceased or not. Thus, evaluating the nature of the allowance/incentive must be the clincher in determining if such allowance/incentive must be considered a part of the actual income of the deceased.
17. The court in the case of Meenakshi Mishra (Supra) nowhere implies a blanket inclusion of all allowances or benefits. In fact, the allowances that were included as a part of the salary in the case are ones that the family of the deceased were also enjoying when he was alive.
18. It can be observed that the Hon’ble Supreme Court in the case of Oriental Insurance Company vs Jashuben and Ors reported as (2008) 4 SCC 162 had critically examined the conundrum of inclusion of allowances. The deceased, in the said case, was entitled to several allowances, including washing and conveyance allowance, albeit all such allowances were not included while calculating the income of the deceased. Adverting to the portion on the inclusion of allowances alone, the following was held:-
19. Reckoning Jashuben (Supra), the holding in Meenakshi Mishra (Supra) can thus be distinguished from the facts of the present case. Since the benefits granted to the deceased were Travel and Washing Allowances which solely satisfied the purpose of ameliorating the hassles faced by employees during their employment, the Appellants cannot gain from such allowances that the deceased had enjoyed during his employment. In fact, a perusal of the salary slip of the deceased, Smt. Kalawati Devi, shows that the salary of the deceased is inclusive of Dearness Allowance and House Rent Allowance, which has not been deducted by the learned Claims Tribunal. From this, it is evident that the learned Claims Tribunal has only deducted the allowances that were solely for the personal benefit of the deceased. This court thus concurs with the findings of the learned Claims Tribunal on the exclusion of Travel and Washing allowance from the income of the deceased.
20. It was the submission of the counsel for the Appellant that the learned Claims Tribunal erred by not taking into account the ‘future prospects’ of the deceased while computing her income. It was their case that the deceased was a permanent government employee who was entitled to future prospects. Learned counsel had relied on the dicta in Pranay Sethi (Supra) to state that future prospects @ 15% were applicable on the income of the deceased. The following was the holding in the case:-
21. The deceased in the present case was between the age of 56 and 57 at the time of her demise. On 22.08.1984, the deceased was a permanent/regular Safai Karamchari which entitles her to future prospects @ 15%. This court disagrees with the findings of the learned Claims Tribunal on this issue. As per the dicta of Pranay Sethi (Supra), the Appellants are entitled to add 15% of her salary towards the future prospects.
22. It was the case of the counsel for the Appellants that the deduction of the personal expenses of the deceased must be 1/4th rather than 1/2. Counsel refers to paragraphs from the case of Sarla Verma (Supra) which were upheld in Pranay Sethi (Supra) as well. The following was held in the case:-
23. This Court already held that all the Appellants are the dependents of the deceased. Hence this court is of the view that an amount equal to 1/4th her income can be deducted towards her personal expenses. The rationale being, through the expansive view on dependency taken in Birender (Supra) and Shalumol (Supra), the courts do not discredit the standards for the fraction of deductions arrived at in Pranay Sethi (Supra). In fact, the courts in the latter case (Shalumol (Supra)) have relied on the standard established in Pranay Sethi (Supra) while adopting a broad perspective on dependency.
24. It was averred by the counsel for the Appellants that the rate of interest awarded by the learned Claims Tribunal should have been at 9% per annum instead of 7.5% per annum. To substantiate the same, the counsel had cited several judgements where the courts have modified the rate of interest granted by the Tribunals to 9% per annum, such as Erudhaya Priya vs Express Transport Corporation Ltd reported as 2020 SCC OnLine SC 601 and Kirti and Anr vs Oriental Insurance Co Ltd, reported as (2021) 2 SCC 166. The courts in these cases have provided no reasoning or rationale behind granting such a percentage.
25. To evaluate the submission made by counsel for the Appellants, it is imperative to examine the guiding principles for the grant of interest. In Abati Bezbaruah v. Geological Survey of India, (2003) 3 SCC 148, the following was held while interpreting section 171 of the Motor Vehicles Act, 1988:- “Three decisions were cited before us by Mr A.P. Mohanty, learned counsel appearing on behalf of the Appellant, in support of his contentions. No ratio has been laid down in any of the decisions in regard to the rate of interest and the rate of interest was awarded on the amount of compensation as a matter of judicial discretion. The rate of interest must be just and reasonable depending upon the facts and circumstances of each case and taking all relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. No rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if a claimant does not specifically plead for the same as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money which ought to have been paid to him. No principle could be deduced nor can any rate of interest be fixed to have a general application in motor accident claim cases having regard to the nature of provision under Section 171 giving discretion to the Tribunal in such matter. In other matters, awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity. Neither Section 34 CPC nor Section 4- A(3) of the Workmen's Compensation Act are applicable in the matter of fixing rate of interest in a claim under the Motor Vehicles Act. The courts have awarded the interest at different rates depending upon the facts and circumstances of each case. Therefore, in my opinion, there cannot be any hard-and-fast rule in awarding interest and the award of interest is solely on the discretion of the Tribunal or the High Court as indicated above.”
26. The learned Claims Tribunal granted interest @ 7.5% per annum while exercising its discretion. This Court finds no error in exercising such a discretion and hence this court is not inclined to interfere with the rate of interest as granted by the learned Claims Tribunal.
27. Learned counsel for the Appellants has relied on United India Insurance Co. Ltd. vs Satinder Kaur, reported as (2021) 11 SCC 780, which affirmed the ruling on the conventional heads in Pranay Sethi (Supra) for an enhancement of the sum awarded under the said heads. In the light of the submissions made by the counsel for the Appellants and a perusal of Pranay Sethi (Supra), it can be ascertained that not only the quantum of compensation awarded by the learned Claims Tribunal ought to be enhanced/modified, but the heads under which such compensations have been awarded also require modification. Apart from the conventional heads, no separate compensation can be awarded under the head ‘loss of love and affection’ as the same has to be construed under ‘Loss of Consortium‟. The compensation for ‘Loss of Consortium‟ that each of the Appellants is entitled to is Rs. 44,000/- after taking into account the enhancement in a span of three years.
28. The amount awarded towards ‘Funeral Expenses‟ is Rs. 10,000/which is extremely marginal in comparison to the standard set in Pranay Sethi (supra). Hence the sum ought to be enhanced in consonance with the prevailing law.
29. In view of the above discussion, the impugned Award dated 19.01.2013 is modified to the following extent: S.No Head Compensation awarded
1. Loss of Dependency (Rs.16,335 + 2450 = Rs.18,785) (Rs.18,785 – Rs. 4696 = Rs.14,089) ( Rs 14,089 x 12 x 9) Rs. 15,21,612/-
2. Funeral charges Rs.16,500/-
3. Loss of estate Rs.16,500/-
4. Loss of Consortium ( Rs. 44,000 x 6) Rs.2,64,000/-
30. Accordingly, the computation of compensation by the learned Tribunal is enhanced from Rs.9,27,144/- to Rs. 18,18,612/-.
31. The Respondent/Insurance Company is directed to deposit the entire differential amount with the Registrar General of this Court within a period of 4 weeks. On deposit of the entire differential amount, the same may be released to the Appellants as per the proportion as indicated by the learned Claims Tribunal within a period of two weeks thereafter. The Statutory amount, if deposited, be released to the appellant.
32. Appeal stands disposed of. No order as to costs.
GAURANG KANTH (JUDGE) OCTOBER 18, 2022