National Insurance Co Ltd v. Sheela

1. By judgment dated 17.07.2013, in accident claim case (MACP no.359/2011), instituted by first to fourth respondents herein (the claimants), the motor accident claims tribunal (the tribunal) awarded compensation in the sum of `18,29,765/- with interest at the rate of seven & half percent (7.5%) in their favour on account of death of Sheshmani in a motor vehicular accident that occurred on 12.07.2011, involving negligent driving of car bearing registration no.DL-6CL-2107 (the car), admittedly insured against third party risk with appellant/insurance company (the insurer) which was fastened with the liability to pay.

2. The tribunal computed compensation as under:- 2016:DHC:3215 “Loss of dependency (8,804.25 X12X15) = Rs. 15,84,765/- Loss of Love and affection* = Rs. 1,00,000/- For funeral expenses** = Rs. 25,000/- Loss of estate = Rs. 10,000/- Loss of consortium*** = Rs. 1,00,000/- Total Rs. 18,29,765/- (Rupees Eighteen LacsTwenty Nine Thousand Seven Hundred and Sixty Five only)”

3. The insurer questions the computation of loss of dependency on the ground that the future prospects were wrongly added to the extent of 50% over and above minimum wages (`7826/-) on which the income of the deceased was computed, in absence of better proof.

4. Per contra, the claimants submitted that the award on loss of estate `10,000/- and the rate of interest levied are inadequate.

5. In the case reported as Sarla Verma & Ors. vs. Delhi Transport Corporation & Anr., (2009) 6 SCC 121, Supreme Court, inter-alia, ruled that the element of future prospects of increase in income will not be granted in cases where the deceased was “self employed” or was working on a “fixed salary”. Though this view was affirmed by a bench of three Hon’ble Judges in Reshma Kumari & Ors. Vs. Madan Mohan & Anr., (2013) 9 SCC 65, on account of divergence of views, as arising from the ruling in Rajesh & Ors. vs. Rajbir & Ors., (2013) 9 SCC 54, the issue was later referred to a larger bench, inter-alia, by order dated 02.07.2014 in National Insurance Company Ltd. vs. Pushpa & Ors., (2015) 9 SCC 166.

6. Against the above backdrop, by judgment dated 22.01.2016 passed in MAC Appeal No. 956/2012 (Sunil Kumar v. Pyar Mohd.), this Court has found it proper to follow the view taken earlier by a learned single judge in MAC Appeal No. 189/2014 (HDFC Ergo General Insurance Co. Ltd. v. Smt. Lalta Devi & Ors.) decided on 12.1.2015, presently taking the decision in Reshma Kumari (Supra) as the binding precedent, till such time the law on the subject of future prospects for those who are “self-employed” or engaged in gainful employment at a “fixed salary” is clarified by a larger bench of the Supreme Court.

7. In absence of proof of progressive rise in the income, loss of dependency has to be calculated without adding the element of future prospects, though after deducting one fourth towards personal and living expenses and on the basis of multiplier of 15, as rightly done by the tribunal in view of the age of the deceased (36 years). The loss of dependency thus comes to (7826x3/4x12x15) `10,65,510/-.

8. Following the view taken in Rajesh & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 and Shashikala V. Gangalakshmamma (2015) 9 SCC 150, the award under the head of loss of estate is increased to `25,000/-. Thus, the total compensation payable in the case comes to (10,65,510+2,50,000) `13,06,510/-, rounded off to `13,07,000/-.

9. Following the consistent view taken by this Court [see judgment dated 22.02.2016 in MAC.APP. 165/2011 Oriental Insurance Co Ltd v. Sangeeta Devi & Ors.], the rate of interest is increased to 9% per annum from the date of filing of the petition till realization.

10. The tribunal had apportioned `2,00,000/- each in favour of the second and third respondents (children of the deceased), leaving the balance in the hands of the widow (first respondent).

11. By order dated 08.10.2013, while insurance company was directed to deposit entire awarded amount with up-to-date interest with the Registrar General within the period specified and 80% was allowed to be released to the claimants, balance kept in FDR with UCO Bank, High Court of Delhi branch.

12. Since the liability of the insurance company on account of modified award and increased rate of interest will result in the amounts payable to be recomputed, it is directed that the amount already released in favour of the second to fourth respondents shall be restricted to what has already been received by them in terms of the order dated 08.10.2013 and the balance, if any, shall go to the first respondent (Smt. Sheela).

13. The Registrar General shall release the amount payable in terms of the award modified as above and refund the balance, if any, to the insurance company with statutory deposit, if made.

14. The appeal is disposed of in above terms.

R.K. GAUBA (JUDGE) APRIL 26, 2016 ssc