The New India Assurance Co. Ltd v. Sattan Khan & Ors.

1. Mustakeem, an 18 year old bachelor, died in a motor vehicular accident that occurred at about 9.30 p.m. on 20.09.2006 involving rash driving of motor vehicle described as Canter bearing registration No. DL 1LD 6386 (the offending vehicle). His parents (first and second respondents) brought an accident claim case (Suit No. 05/2012) under Sections 166 & 140 of Motor Vehicles Act, 1988 (MV Act) on 23.11.2006 before the motor accident claims tribunal (the tribunal). The offending vehicle was admittedly insured against third party risk with the appellant insurance company (insurer) which was impleaded as party before the tribunal, in addition to driver and owner of the vehicle. The tribunal awarded compensation in the total sum of Rs. 6,11,008/- with 2016:DHC:2880 interest @ 12 % per annum, apportioning it amongst the claimants, directing the insurer to pay. The award included Rs. 4,51,008/- towards loss of dependency besides Rs. 1,10,000/- under the non-pecuniary heads of damages.

2. By the appeal at hand, the insurer questions the calculation of loss of dependency on the grounds that addition of 30% towards future prospects of increase was added and the multiplier of 18 was wrongly adopted ignoring the fact that the claimants were aged parents. The insurer is also aggrieved with the rate of interest levied.

3. 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.,

4. 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.

5. It is noted that the claimants were unable to muster any clear evidence as to the nature of employment or income of the deceased. Thus, the tribunal assumed the income on the basis of minimum wages of unskilled worker, wrongly taking it as Rs. 3,212/-. The rate applicable at the relevant point of time was Rs. 3,312/-. Since the deceased was a bachelor the monthly loss of dependency is calculated as (3312÷2) Rs. 1656/-.

6. The record of the tribunal shows that the claimant father (first respondent) was 45 years old while the claimant mother (second respondent) was 40 years at the relevant point of time. Therefore, the average age being 42 years, the loss of dependency had to be worked out on the multiplier of 14 rather than 18. The loss of dependency is, thus, calculated at (1656 x 12 x 14) Rs. 2,78,208/-. Adding the non-pecuniary heads of damages, the total compensation payable in the case comes to (2,80,000 + 1,10,000) Rs. 3,90,000/-.

7. The compensation is reduced accordingly. 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 reduced to 9% per annum from the date of filing of the petition till realization.

8. By order dated 06.11.2013, the insurance company had been directed to deposit the entire awarded compensation out of which 70% was allowed to be released. The Registrar General shall calculate the amounts now payable to the claimants in terms of the award modified as above and release the same in terms of the impugned judgment. The excess lying in deposit with statutory deposit, if made, shall be refunded.

9. The appeal is disposed of in above terms.

R.K. GAUBA (JUDGE) APRIL 06, 2016 nk