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2007 DIGILAW 1646 (PNJ)

Neelu Chandra v. Faquir Mohd.

2007-09-11

VINOD K.SHARMA

body2007
Judgment Vinod K. Sharma, J. 1. By way of this appeal, the challenge is to the award dated 12.3.1993 passed by the Motor Accidents claims Tribunal, Gurgaon (hereinafter referred to as the Tribunal) in M. A. C. T. Case No.32 of 1992. 2. Appellants-claimants filed a claim petition under sec. 166 of the Motor vehicles Act (for short the Act) claiming themselves to be legal representatives of deceased Anil Chandra, aged 38 years, who died in a road accident on 25.1.1990 within the area of village Khandsa while going to Sun Beam Casting Factory, Nar-singhpur in a Maruti car bearing registration No. DIC 5728 due to the rash and negligent driving of truck No. GTY 7459 belonging to Delhi-Ahmedabad Roadways and driven by Faquir Mohd. , the driver. It was claimed that the deceased Anil Chandra was B. E. (Electrical)from Ranchi University and had further obtained Diploma in Marketing Management and Public speaking as well. He was running two companies and was Director of the first company Nachiketa Fluidies Pvt. Ltd. , delhi and Managing Director of second one, namely, Nivritti Engineers India Pvt. Ltd. It was further claimed that he used to draw a salary of Rs.6,000 (rupees six thousand)per month from Nachiketa Fluidies pvt. Ltd. , besides house rent of Rs.1,200 per month along with other perks. He was also stated to be having additional income from interest, dividends and professional income from the other companies. It was also claimed that in all the deceased was earning Rs.21,000 per month. It was also the case of the appellants-claimants that due to untimely death of Anil Chandra, the claimants have suffered a mental agony and torture, which cannot be compensated in any manner. A compensation to the tune of Rs.62,50,000 (rupees sixty-two lakh fifty thousand) was claimed under section 166 of the Act and interest at the rate of 18 per cent per annum was also claimed. 3. The claim petition was opposed by the respondents on the plea that the alleged accident had occurred due to rash and negligent driving of the deceased himself. It was claimed that the deceased while overtaking the truck going ahead of him at the culvert having a width of hardly 15 ft had misconducted himself in not noticing another truck which was approaching from the opposite side. It was claimed that the deceased while overtaking the truck going ahead of him at the culvert having a width of hardly 15 ft had misconducted himself in not noticing another truck which was approaching from the opposite side. Deceased is alleged to have come on the wrong side of the road, where he got confused and lost control of his car and hit the right side bumper of the truck. It was claimed that the truck driver tried his best to avoid the accident and applied brakes with full force, but could not avoid the same. It was also claimed that it was a case of contributory negligence and accordingly claimed adjudication of the compensation in the proportion way. 4. The respondents also disputed that the claimants are the legal heirs of the deceased Anil Chandra or that he was the director and the Managing Director of the nachiketa Fluidies Pvt. Ltd. and Nivritti engineers India Pvt. Ltd. respectively. The factum of income from different sources was also denied. It was also denied that the deceased paid an income tax of Rs.8,363 for the assessment year 1989-90. It was also the case of the respondents that the return relating to income tax had been filed much after his demise and, therefore, its genuineness and correctness was questioned. The insurance company also set up the plea that there was no privity of contract between it and the claimants and, therefore, it was not under obligation of any liability or to pay compensation, except in the circumstances to extent laid down in chapter VIII of the Act and, therefore, it was claimed that the claim petition be dismissed. 5. In the rejoinder, the averments made in the written statement were controverted and that of the claim petition were reiterated. 6. On the pleadings of the parties, the following issues were framed: " (1) Whether Anil Chandra died as a result of the injuries suffered by him in accident caused by truck No. GTY 7459 due to rash and negligent driving of the said vehicle by its driver Faquir Mohd. , respondent? (2) Whether Anil Chandra died as a result of rash and negligent driving of car No. DIG 5728, as alleged? (3) Whether it was a case of contributory negligence? If so, to what effect? (4) Whether the petitioners are entitled to any compensation? If so, how much and from whom? , respondent? (2) Whether Anil Chandra died as a result of rash and negligent driving of car No. DIG 5728, as alleged? (3) Whether it was a case of contributory negligence? If so, to what effect? (4) Whether the petitioners are entitled to any compensation? If so, how much and from whom? (5) Whether the petition is bad for nonjoinder of necessary parties? (6) Whether the petitioners have locus standi to file and maintain the petition? (7) Relief. " On issue Nos.1 and 2, learned Tribunal came to the conclusion that Anil Chandra died as a result of injuries suffered by him in the accident caused by truck No. GTY 7459 due to rash and negligent driving of the said vehicle by its driver Faquir Mohd. Issue No.3 was answered in favour of the claimants by concluding that no negligence could be attributed to the deceased anil Chandra and it was held that it was not a case of contributory negligence. Issue Nos.5 and 6 were also decided against the respondents and in favour of the claimants. However, in view of the findings recorded on the issue No.4, the compensation to the tune of Rs.9,60,000 (rupees nine lakh sixty thousand) was awarded to claimant Nos.1 to 4 in equal proportion with interest at the rate of 12 per cent per annum and the liability of the respondents to pay compensation was held to be joint and several. The share of the minors was directed to be deposited in the nationalised bank till they attain majority. Costs of the petition were also awarded. 7. In the present appeal, the appellants had only challenged the findings on issue no.4 on the plea that the compensation awarded was inadequate. 8. In support of income of the deceased anil Chandra, the claimants had produced puran Chand Narang, PW 2, who was the accountant in the company. This witness deposed that the deceased was drawing a salary of Rs.6,000 (rupees six thousand), besides house rent at the rate of Rs.1,200 per month at the time of his death. He further deposed that the deceased was getting tax-free perks, namely, medical allowance, telephone at his residence, club expenses, l. T. C. , etc. This statement was corroborated by baljit Singh, PW 6, who used to audit the accounts of both the companies. He further deposed that the deceased was getting tax-free perks, namely, medical allowance, telephone at his residence, club expenses, l. T. C. , etc. This statement was corroborated by baljit Singh, PW 6, who used to audit the accounts of both the companies. This witness also stated that the deceased was getting a salary of Rs.6,000 (rupees six thousand) along with other perks. The claimants also placed on record the income tax returns and other relevant documents in support of their claim. 9. The learned Tribunal after examining the material placed on record, i. e. , income tax returns and the Minutes Book of the company, came to the conclusion that the salary of the deceased at the time of his death was Rs.6,000 (rupees six thousand)per month. The claim with regard to house rent was not accepted by learned Tribunal on the plea that the same did not find mention in the statements of taxable income for the years 1989-90 and 1990-91. Learned tribunal also came to the conclusion that all the perks which were available to the deceased, were in fact being enjoyed by the claimant wife and, therefore, the income by way of house rent was taken out of consideration. As regards the interest income of the deceased, the learned Tribunal came to the conclusion that the same was automatically passed on to the claimants after the death of the deceased and, therefore, the same was not to be taken into account to assess the dependency. 10. The learned Tribunal also rejected the plea of the claimants that besides the income referred to above, the deceased was further earning income from consultancy business. The learned Tribunal took note of the fact that in spite of the claim petition being quite exhaustive, no mention was made therein as to from where the deceased was making the commission/ professional income. Therefore, the evidence led with regard to income from Logwell forge Ltd. , Gurgaon, was not accepted by the learned Tribunal. Thus, the learned tribunal took the annual income of the deceased at Rs.72,000, i. e. , Rs.6,000 per month and deducted 1/3rd amount out of his income for his personal expenses and, therefore, assessed the dependency of the deceased at Rs.48,000 per annum. Thus, the learned tribunal took the annual income of the deceased at Rs.72,000, i. e. , Rs.6,000 per month and deducted 1/3rd amount out of his income for his personal expenses and, therefore, assessed the dependency of the deceased at Rs.48,000 per annum. However, keeping in view the age of deceased a multiplier of 20 was applied and the compensation payable to the claimants was accordingly assessed at Rs.9,60,000 (rupees nine lakh sixty thousand ). 11. Mr. L. M. Suri, learned senior counsel appearing on behalf of the appellants had challenged the findings of the learned tribunal on issue No.4, on the following grounds: (i) The learned Tribunal has wrongly assessed the income of the deceased by ignoring the admitted documentary evidence on record. (ii) That dependency has been wrongly assessed by not applying the unit system. (iii) That the Tribunal has failed to take into consideration the future prospects of the deceased. (iv) That no compensation has been awarded towards loss of consortium and loss to estate. 12. The learned senior counsel for the appellants next contended that the learned tribunal gravely erred in law in not taking into consideration the house rent allowance which the deceased was getting in spite of the fact it was duly proved on record. The contention of the learned counsel was that merely the amount of house rent was not reflected in the income tax returns, could not be a ground to reject the same, as the perks were not taxable, therefore were not necessarily to be shown for the purpose of income tax. His contention was that the documentary evidence had been produced on record by way of Minutes Book which clearly indicated that the deceased was getting house rent of Rs.1,200 per month. 13. The learned senior counsel further referred to the statement of PW 5 to contend that the income from other source, i. e. , from consultancy services, stood proved. The contention of the learned counsel for the appellants was that letter Exh. PW5/2 was duly exhibited on record which was written by the deceased accepting the terms and conditions of consultancy. The plea of the learned senior counsel was that this document could not have been created/ fabricated after the death of the deceased and, therefore, the learned Tribunal was in error in rejecting the same. PW5/2 was duly exhibited on record which was written by the deceased accepting the terms and conditions of consultancy. The plea of the learned senior counsel was that this document could not have been created/ fabricated after the death of the deceased and, therefore, the learned Tribunal was in error in rejecting the same. The contention of the learned counsel was that not only the terms and conditions, but acceptance thereof was duly exhibited on record. It was also established on record that the appointment was accepted by the deceased and thereafter the payment to the tune of rs.54,800 was received by the wife of the deceased as is evident from Exh. PW5/3. The contention of learned senior counsel, therefore, was that it was not open to the learned Tribunal to have rejected this documentary evidence merely on the ground that the name of the company was not mentioned in the pleadings. 14. The contention of learned senior counsel for the appellants was that a specific plea was taken that besides income of salary and other perks, the deceased was also having income from the consultancy services and, therefore, the documentary evidence duly exhibited on record could not be said to be beyond pleadings and, therefore, the learned Tribunal was not justified in rejecting the same. 15. Learned senior counsel for the appellants also referred to the Eighth Annual report and Accounts for the year 1989-90 of Logwell Forge Ltd. , wherein payments towards income of the deceased were duly shown. Therefore, it was vehemently contended by learned senior counsel for the appellants that the income of the deceased has been wrongly assessed. 16. Learned senior counsel for appellants also contended that in the present case, there were five claimants, i. e. , widow, her three minor children and mother of the deceased and, therefore, it was not open to the learned Tribunal to have deducted 1/3rd amount out of the assessed income. The argument of learned counsel was that the learned Tribunal should have applied unit system. In support of this contention, the learned senior counsel for the appellants placed reliance on the judgment of the Hon ble Supreme Court in the case of U. P. State Road Trans. Corpn. The argument of learned counsel was that the learned Tribunal should have applied unit system. In support of this contention, the learned senior counsel for the appellants placed reliance on the judgment of the Hon ble Supreme Court in the case of U. P. State Road Trans. Corpn. V/s. Trilok chandra, 1996 ACJ 831 (SC); judgments of this court in the cases of Saroj Dhir V/s. Vijay Kumar Sharma, 1999 ACJ 28 (Pandh); usha Rani V/s. Om Parkash Sharma, 2005 acj 813 (Pandh) and the judgment of the Hon ble Karnataka High Court in the case of Vijay a V/s. Rukhmini Bai, 2007 ACJ 515 (Karnataka ). The Hon ble Supreme Court in the case of U. P. State Road Trans. Corpn. (supra) has been pleased to hold as under: " (15) We thought it necessary to reiterate the method of working out just compensation because, of late, we have noticed from the awards made by the tribunals and courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realised that the Tribunal/court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused. The two English decisions to which we have referred earlier provide the guidelines for assessing the loss occasioned to the victims. Under the formula advocated by Lord Wright in Davies, (1942) AC 601, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased and thus, assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier. Let us illustrate: X, male, aged about 35 years, dies in an accident. He leaves behind his widow and 3 minor children. His monthly income was Rs.3,500. First, deduct the amount spent on X every month. The rough and ready method hitherto adopted where no definite evidence was forthcoming, was to break up the family into units, taking two units for adult and one unit for a minor. He leaves behind his widow and 3 minor children. His monthly income was Rs.3,500. First, deduct the amount spent on X every month. The rough and ready method hitherto adopted where no definite evidence was forthcoming, was to break up the family into units, taking two units for adult and one unit for a minor. Thus X and his wife make 2 + 2 = 4 units and each minor one unit, i. e. , 3 units-in all, totalling 7 units. Thus the share per unit works out to Rs.3,500/7 = Rs.500 per month. It can thus be assumed that Rs.1,000 was spent on X. Since he was a working member some provision for his transport and out-of-pocket expenses has to be estimated. In the present case we estimate the out-of-pocket expense at rs.250. Thus the amount spent on the deceased X works out to Rs.1,250 per month leaving a balance of Rs.3,500 -Rs.1,250 = Rs.2,250 per month. This amount can be taken as the monthly loss to Xs dependants. Annual dependency comes to Rs.2,250 x 12 = Rs.27,000. This annual dependency has then to be multiplied by the use of an appropriate multiplier to assess the compensation under the head of loss to the dependants. Take the appropriate multiplier to be 15. The compensation comes to Rs.27,000 x 15 = Rs.4,05,000. To this may be added a conventional amount by way of loss of expectation of life. Earlier, this conventional amount was pegged down to Rs.3,000 but now having regard to fall in value of rupee, it can be raised to a figure of not more than Rs.10,000. Thus the total comes to Rs.4,05,000 + rs.10,000 = Rs.4,15,000. " 17. The contention of the learned counsel for the appellants, therefore, was that if unit system was followed, the deduction for personal expenses out of the assessed income of Rs.6,000 per month could be only 1/4th. According to the learned counsel, the evidence on record showed that the deceased was a qualified person and used to derive income from consultancy services also. He, therefore, contended that once it was proved on record that the deceased was successfully running two companies and as an entrepreneur had a bright future, the court should have taken into consideration the future prospects while assessing the dependency of the deceased. He, therefore, contended that once it was proved on record that the deceased was successfully running two companies and as an entrepreneur had a bright future, the court should have taken into consideration the future prospects while assessing the dependency of the deceased. In support of this contention, reliance was placed on the judgments of this court in the cases of usha Rani V/s. Om Parkash Sharma, 2005 acj 813 (Pandh); Chander Devi V/s. Haryana state, 2008 ACJ 1049 (Pandh) and Harinder kaur Dhillon V/s. State of Haryana, 2007 ACJ 779 (Pandh ). The contention of learned senior counsel for the appellants was that for the purpose of assessment of dependency learned Tribunal was bound to take into consideration the future prospects and thereafter should have assessed the dependency by following formula laid down in the case of Chander Devi (supra ). Para 14 of the judgment reads as under: "i am further of the view that by no stretch of imagination the age of the deceased could be considered to be more than 50 years and, therefore, the multiplier of 13 as provided by the Schedule appended to the Act, should have been applied. I am also in agreement with the argument raised by Mr. Arora that the future prospects of enhancing the salary of deceased cyclist were also required to be kept in view. He was working as a driver in the Haryana Roadways at a gross salary of Rs.1,425. The salary of rs.1,425 as a whole has to be taken into account for working out the compensation. In Sarla Dixit V/s. Balwant Yadav, 1996 ACJ 581 (SC), it has been held that the projection of future prospects can be reflected by calculating the gross income at the time of death and then to increase the same by double the amount. The average of both the figures would represent approximate loss of income. In the present case, the gross salary of the deceased driver was Rs.1,425. If we look at the revised pay scale on 1.1.1996 then his salary would have gone up by almost three times. However, he would not have continued in service up to 1.1.1996 and, therefore, it would be fair to double the salary to Rs.2,850. Total of both figures comes to Rs.4,275 and to round it off, it will come to Rs.4,300. The average of total comes to Rs.2,150. However, he would not have continued in service up to 1.1.1996 and, therefore, it would be fair to double the salary to Rs.2,850. Total of both figures comes to Rs.4,275 and to round it off, it will come to Rs.4,300. The average of total comes to Rs.2,150. Monthly dependency of 2/3rd comes to rs.1,433 which is rounded to Rs.1,425. Therefore, the annual dependency would work out to be Rs.17,100 (Rs.1,425 x 12 = Rs.17,100 ). A multiplier of 13, which is required to be applied, would bring the figure of Rs.2,22,300. . . " It may be mentioned here that I have taken gross salary without deducting the allowances like GPF as has been laid down by Hon ble Supreme Court in Patricia Jean mahajans case, 2002 ACJ 1441 (SC ). Learned senior counsel for appellants also argued that besides this, the claimants were also entitled to payments towards loss of consortium, love and affection, loss to estate and funeral expenses. In support of this contention, he placed reliance on the judgment of the Hon ble Karnataka high Court in the case of Vijaya, 2007 acj 515 (Karnataka ). 18. Besides this, learned senior counsel for the appellants also contended that as no appeal has been filed by the respondents against the impugned award, no interference is called for in respect of the multiplier adopted in this case as well as the rate of interest as awarded by the learned Tribunal. 19. Mr. N. K. Khosla, learned counsel appearing on behalf of respondent No.3 (insurance company), has supported the award passed by learned Claims Tribunal on the plea that the amount awarded is adequate and just compensation has been awarded. 20. Learned counsel for the respondents also referred to the findings recorded by learned Tribunal in para 38 of the award which reads as under: "it is really pity that the petitioners have to adopt such tactics to make their fortunes from this claim petition. They have made every possible effort to twist and fabricate the evidence just to enhance the income of deceased Anil Chandra which I must deprecate. Our concern is that the widow and the children of the deceased must lead an honourable and dignified life, so that they have not to depend financially on others. They have made every possible effort to twist and fabricate the evidence just to enhance the income of deceased Anil Chandra which I must deprecate. Our concern is that the widow and the children of the deceased must lead an honourable and dignified life, so that they have not to depend financially on others. But it is no way to enrich themselves and in particular, when they belong to a well-to-do family and have all the resources at their disposal. Petitioner Neelu Chandra is admittedly a B. Sc. Home Science and is presently Director of Nachiketa Fluidies pvt. Ltd. replacing her deceased husband. She is being given a salary of rs.3,000 per month in addition to the perks which her husband was getting. Similarly, her mother-in-law petitioner no.5 is the wife of the Managing Director of the company, who previously served the Indian Railways in a very senior position. If we believe the petitioners that the deceased was earning rs.21,000 per month, as averred in the petition, then how to believe that such a person had only bank balance of about rs.400 at the time of his death. It all belies the fact that the deceased had a professional income from Logwell Forge ltd. , Gurgaon. " By making reference to the observations made above by the learned Tribunal, the contention of learned counsel for respondent No.3 was that no further enhancement is called for as just compensation has already been awarded to the appellants-claimants. 21 On a consideration of the matter I find force in the contentions raised by the learned senior counsel for the appellants. In view of the evidence brought on record, especially by way of documentary evidence, the assessment of income of the deceased at Rs.6,000 (rupees six thousand)cannot be said to be justified. Once it is proved on record that besides the salary, the deceased was also getting Rs.1,200 per month as house rent, there was no justification on the part of the Tribunal to ignore this income and that amount deserved to be added in the income of the deceased for the purpose of assessing dependency. The evidence brought on record also snowed that the deceased as an entrepreneur had the right future prospects which deserved to be taken into consideration for assessment of compensation. The evidence brought on record also snowed that the deceased as an entrepreneur had the right future prospects which deserved to be taken into consideration for assessment of compensation. In view of the settled law, the claimants were also entitled to compensation on account of loss of consortium, love and affection, loss to estate and funeral expenses. 22. Consequently, monthly income of the deceased Anil Chandra is assessed at rs.7,200 (rupees seven thousand two hundred ). Thereafter, by applying the formula as laid down in Chander Devis case, 2008 acj 1049 (Pandh), the monthly income of the deceased is assessed at Rs.10,800. Out of the said amount, 1/4th is required to be deducted towards personal expenses by following the unit system as laid down by the Hon ble Supreme Court in the case of u. P. State Road Trans. Corpn. , 1996 ACJ 831 (SC ). Thus, the annual dependency of the claimants comes to Rs.97,200 (rupees ninety-seven thousand two hundred ). By applying a multiplier of 20 as adopted by the learned Tribunal, the total dependency come to Rs.19,44,000 (rupees nineteen lakh forty-four thousand ). In addition thereto, the claimants are also held entitled to Rs.10,000 towards loss of consortium, rs.20,000 on account of future prospects, rs.5,000 for loss to estate and Rs.5,000 on account of funeral expenses. Thus, total compensation payable to the claimants comes to Rs.19,84,000 (rupees nineteen lakh eighty-four thousand ). Accordingly, the findings on issue No.4 are modified and it is held that the claimants are entitled to Rs.19,84,000 (rupees nineteen lakh eighty-four thousand ). In addition thereto, they shall also be entitled to interest at the rate of 9 per cent per annum on the enhanced compensation from the date of filing of the application till payment. The liability to pay compensation is held to be joint and several. Appeal allowed.