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2012 DIGILAW 1183 (BOM)

New India Assurance Co. v. Jigna Dinesh Bhatt

2012-07-03

A.S.OKA, SHRIHARI P.DAVARE

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Judgment : (A.S. Oka, J.) Heard learned counsel appearing for the Appellant and the learned counsel appearing for the first and second Respondents. 2. By the judgment and order dated 1st July, 2010, this Appeal was finally decided. On an Application made by the first and the second Respondents, the judgment in the Appeal has been recalled and, therefore, we are hearing the Appeal afresh. 3. The first and the second Respondents are the original Claimants who filed an Application under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as "the said Act") seeking compensation on account of death of one Dr. Dinesh Mahashanker Bhatt. The first Respondent is the widow of the deceased and the second Respondent is his minor son. The accident occurred on 6th April, 1995 when the deceased was plying a motor-cycle on LBS Marg, Kurla. He was proceeding in the direction of Sion. A truck, which was insured with the Appellant at the relevant time, gave a dash to the motor-cycle. As a result of injuries sustained, the deceased died. The age of the deceased at the time of accident was about 34 years. He was M.B.B.S and M.S in General Surgery. The owner of the vehicle did not contest the claim and the only contest was by the Appellant. The truck was insured with the Appellant at the relevant time. The third and fourth Respondents are the parents of the deceased who were also dependents on the deceased. 4. The Tribunal held that the accident occurred due to rash and negligent driving on the part of the driver of the truck. The Tribunal accepted the case of the first and the second Respondents that the yearly income of the deceased at the time of his death was Rs.1,50,000/-and considering the future prospects of increase in the earnings, for the purposes of calculating multiplicand, the income was taken by the learned Judge at the rate of Rs.50,000/-per month. The learned Judge applied multiplier of 13. The learned Judge deducted 1/3rd amount from the income on account of personal expenditure of the deceased. The learned Judge, therefore, granted a sum of Rs.52,00,000/-on account of loss of dependency. The learned Judge applied multiplier of 13. The learned Judge deducted 1/3rd amount from the income on account of personal expenditure of the deceased. The learned Judge, therefore, granted a sum of Rs.52,00,000/-on account of loss of dependency. A sum of Rs.50,000/-each was granted on account of loss of expectation of life and the loss of consortium, and the total amount of compensation of Rs.53,00,000/-was granted inclusive of no fault liability with interest thereon at the rate of 7.5% per annum from the date of filing of the Claim Petition. 5. Learned counsel appearing for the Appellant has taken us through the record of the case. The learned counsel appearing for the Appellant pointed out that from the income tax returns filed on record, it appears that the income of the deceased for the year 1st April, 1994 to 31st March, 1995 was Rs.1,50,118/-. The learned counsel appearing for the Appellant invited our attention to the fact that the last return showing the income of Rs.1,50,000/-and more was filed on 10th January, 1996 i.e. about 8 months after the death. She pointed out that the acknowledgment of the income tax return shows that the advance tax of only Rs.7,000/-was paid by the deceased during the relevant year. She pointed out that the tax of more than Rs.40,000/-was payable on the income of Rs.1,50,000/-. Her submission is that higher and exorbitant income was deliberately shown in the Income Tax Return which was filed after the demise of the deceased only for the purposes of getting higher compensation. Her submission is that apart from the compensation on account of loss of dependency, only an amount of Rs.25,000/-could have been granted on account of loss of consortium etc. Therefore, her submission is that the income shown under the said income tax return is exorbitant. Moreover, she submitted that in any event there was no reason to take the income of the deceased at Rs.6,00,000/-per year for the purposes of calculating the multiplicand. She submitted that there is no evidence adduced to prove that there were future prospects of increase in the earnings of the deceased. She submitted that the amount of compensation awarded is exorbitant and excessive. 6. She submitted that there is no evidence adduced to prove that there were future prospects of increase in the earnings of the deceased. She submitted that the amount of compensation awarded is exorbitant and excessive. 6. Learned counsel appearing for the first and second Respondents submitted that the deceased was highly qualified and there are documents on record to show that he was attached to six different hospitals and nursing homes from which the deceased was getting regular income. Her submission is that there is nothing exorbitant in the income shown in the last income tax return. She submitted that looking to the qualifications of the deceased, it is reasonable to assume that there would have been a very steady increase in the income of the deceased in the years to come and therefore, income taken by the learned Member of the Tribunal for computing the multiplicand is not at all on the higher side. 7. We have carefully considered the submissions. We have perused the record of the case. We have perused the deposition of the first Respondent. The only dispute is regarding quantum of compensation. The first Respondent -Widow herself is a Doctor. She deposed that after MBBS degree, the deceased obtained MS in General Surgery in 1990-91. Copies of the degree certificates have been placed on record which show that the deceased obtained M.S (General) Degree on 18th January, 1991. The first Respondent deposed that initially the deceased started his own practice in Ruby Hospital at Ghatkopar and thereafter, he was attached to Kurla Nursing Home, Kurla, Rushabh Hospital, Maneck Hospital, Sunny Hospital at Chembur and Surendra Nursing Home at Ghatkopar. The Respondent No.1 was cross-examined by the Advocate for the Appellant. A suggestion was given that in the last income tax return which was filed after the death, the income has been falsely shown. The said suggestion was denied and the first Respondent stated that in the year 1994-95, there was a increase in the income of the deceased. She denied the correctness of the suggestion that the deceased was not attached to six hospitals. She stated that during the financial year 1994-95, the total payment of Rs.67,000/-was received by the deceased as remuneration towards the surgeries performed by him in the aforesaid hospitals. On this aspect, we have perused the letters on record which are at Exhibits -24, 25, 26, 27 and 28. She stated that during the financial year 1994-95, the total payment of Rs.67,000/-was received by the deceased as remuneration towards the surgeries performed by him in the aforesaid hospitals. On this aspect, we have perused the letters on record which are at Exhibits -24, 25, 26, 27 and 28. These letters show that in the financial year 1994-95, the deceased received remuneration by way of fees from R.C. Maneck Polyclinic and Pathology Laboratory, Rushabh Nursing Home, Surendra Nursing Home, etc. Considering the qualifications of the deceased and considering the fact that he was practicing in Mumbai, we are unable to accept the submission that the yearly income of Rs.1,50,000/-shown in the last income tax returns of 1994-95 is exorbitant or is on a higher side. We may also note here that the other income tax returns filed on record show that from the year 1991-92 till 1993-94, there is a steady increase in the yearly income of the deceased from Rs.32,580/-to Rs.50,827/-. Therefore, we find no error in the approach of the learned Judge of taking the income of the deceased at Rs.1,50,000/-at the time of his death. 8. The other question which survives for consideration is whether any further amount can be added on account of future prospects of increase in the earnings of the deceased. As far as persons in the permanent employment are concerned, the Apex Court in the case of Sarla Verma (Smt.) & Others Vs Delhi Transport Corporation and Others, [(2009)6 SCC 121] has laid down that in a case where the deceased was in the age group of 30 to 40, addition of 50% will have to be made on account of future prospects of increase in the earnings and for the age group of 40 to 50 years, addition of 30% will have to be made. The learned counsel appearing for the first and the second Respondents relied upon the subsequent decision of the Apex Court in the case of K.R. Madhusudan & Ors. Vs. Administrative Officer & Another, ( 2011 ACJ 743 ). In the said decision, in the facts of the case, in case of a deceased of 52 years of age, the Apex Court made a departure from the Rule and granted an amount towards future prospects of increase in the earnings. 9. In the present case, the deceased was a qualified General Surgeon practicing in Mumbai. In the said decision, in the facts of the case, in case of a deceased of 52 years of age, the Apex Court made a departure from the Rule and granted an amount towards future prospects of increase in the earnings. 9. In the present case, the deceased was a qualified General Surgeon practicing in Mumbai. Even the first Respondent-widow is a Doctor. Considering the trend of income reflected from the income tax returns on record, it can be safely said that the income of the deceased would have steadily increased with the passage of time. 10. It is well settled that the strict rules of evidence are not applicable to the Tribunal under the said Act. It is also equally well settled that the computation of compensation payable in case of fatal accident involves many imponderables and some guess work is always inherent in the exercise. Considering all these aspects and considering the fact that the age of the deceased was only 34 years, this is a case where an amount equivalent to 50% of the last income will have to be added to the income of the deceased for the purposes of calculating multiplicand. This addition will be on account of future prospects of increase in the earnings. Thus, the yearly income will have to be taken at Rs.2,25,000/-(Rs. 1,50,000/-+ Rs.75,000/-). The age of the deceased was 34 years. Therefore, as held by the Apex Court in Paragraph 42 in the decision in the case of Sarla Verma (supra), the multiplier 16 will have to be applied. 11. The total number of dependents on the deceased were four, viz. widow, minor son and the parents. As laid down by the Apex Court in the case of Sarla Verma (supra), as the number of dependents are four or more, deduction of 1/4th will have to be made on account of personal expenditure of the deceased. After deducting 1/4th from Rs.2,25,000/-, the dependency comes to Rs.1,68,750/-(Rs.2,25,000/-Rs. 56,250/-). After rounding off, the amount of dependency comes to Rs.1,69,000/-. After applying multiplier of 16, the total loss of dependency comes to Rs.27,04,000/-. 12. The learned Member of the Tribunal has granted a sum of Rs.50,000/-on account of loss of expectancy of life. Once the multiplier method is adopted, no compensation can be granted under the heading of loss of expectancy of life. After applying multiplier of 16, the total loss of dependency comes to Rs.27,04,000/-. 12. The learned Member of the Tribunal has granted a sum of Rs.50,000/-on account of loss of expectancy of life. Once the multiplier method is adopted, no compensation can be granted under the heading of loss of expectancy of life. As far as the loss of consortium and funeral expenses are concerned, the amount of Rs.25,000/-deserves to be granted. Thus, the compensation payable Rs.27,29,000/-which can be rounded off to Rs.27,30,000/-. Thus, the compensation of Rs.53,00,000/-granted by the Tribunal by taking income at Rs.6,00,000/-per year is exorbitant and is required to be brought down to Rs.27,30,000/-. 13. At this stage, the learned counsel appearing for the first and the second Respondents submitted that interest fixed at the rate of Rs.7.5% by the Tribunal is on the lower side. Moreover, she submitted that though the claim application was filed on 1st February, 1996, the interest has been awarded from 1st January, 2001 and there was no cogent reason to deny interest from the date of the filing of the claim application. She submitted that consistently this Court as well as the Apex Court has granted the interest at a minimum rate of 8% extending upto 9%. She submitted that the provisions of the said Act itself provide for grant of interest, and therefore, this is a fit case where, though there is no cross objection or cross appeal filed, by exercising the power under Rule 33 of Order XLI of the Code of Civil Procedure, 1908, interest may be enhanced upto 8.5%. 14. We find that the date of accident is 6th April, 1995. The Claim Application appears to have been filed on 1st February, 1996. However, the Tribunal has granted interest from 1st January, 2001. The Tribunal has noted that in the Claim Petition filed on 1st February, 1996, written statement was filed by the Appellant on 4th July, 2000. The Tribunal has noted that on 12th March, 2001, the Claimants were absent and on some of the subsequent dates also, the Claimants were absent. It is pointed out that the Application for amendment which was filed on 28th January, 2004 was allowed by the Tribunal on 9th August, 2004. The Tribunal has observed that there was some delay on the part of the Claimants in filing affidavit in lieu of examination-in-chief. It is pointed out that the Application for amendment which was filed on 28th January, 2004 was allowed by the Tribunal on 9th August, 2004. The Tribunal has observed that there was some delay on the part of the Claimants in filing affidavit in lieu of examination-in-chief. It is pertinent to note that even written statement was filed by the Appellant four years after the claim was filed. Even assuming that there were few adjournments at the instance of the Claimants, there was no reason to pass such a harsh order directing payment of compensation only from the year 2001 especially when the Claim Application was filed in February, 1996 and was decided on 14th June, 2007. In our considered view, this was a case where interest on compensation ought to have been granted from the date of the filing of the Claim Application. In the facts of the case, we find that during the course of the trial, there was no serious contest by the Applicant-insurer on the issue of negligence and infact, there was no attempt made to examine the Driver of the offending truck and other witnesses. In the circumstances, in fact, the Appellant insurer on its own could have offered reasonable amount at the outset. There are certain decisions of the Apex Court which grant interest at the rate of 9% per annum. This is a case of fatal accident. There is a power vesting in the Tribunal by virtue of Section 171 of the Motor Vehicles Act, 1988 to grant interest on the compensation from the date of filing of the claim petition. This is fit case to exercise the power under Rule 33 of Order XLI of the Code of Civil Procedure, 1908. The Tribunal has always a power to grant just compensation. The said power can be exercised, in a given case, in the Appeal as the same is the continuation of the original proceedings. Therefore, we are proposing to grant interest from the date of filing of the Claim Application and considering the rates of interest prevailing in the year 1996, we propose to fix rate of interest at 8% per annum. 15. After hearing the parties, the Tribunal will have to pass an appropriate order regarding disbursement and investment of the compensation amount. Therefore, we are proposing to grant interest from the date of filing of the Claim Application and considering the rates of interest prevailing in the year 1996, we propose to fix rate of interest at 8% per annum. 15. After hearing the parties, the Tribunal will have to pass an appropriate order regarding disbursement and investment of the compensation amount. It is pointed out that the Claimants have withdrawn the sum of Rs.13,00,000/-out of the amount deposited by the Appellant in the Tribunal under the order of this Court dated 14th February, 2008 passed on Civil Application No.571 of 2008. The said amount will have to be taken into consideration by the Tribunal. 16. Hence, we pass the following order:- (a) The impugned Judgment and Award is modified to the extent that the total compensation payable to the first to fourth Respondents shall be Rs.27,30,000/-(Rupees Twenty Seven Lakhs Thirty Thousand Only) inclusive of no fault liability under Section 140 of the said Act with interest thereon at the rate of 8% per annum from the date of filing of the claim petition before the Tribunal till the date of deposit of the amount with the Tribunal. (b) In view of the modification of the Award, directions issued by the Tribunal regarding disbursement/investment stands set aside and we direct the Tribunal to issue fresh directions in that behalf after hearing the parties; (c) The Tribunal shall determine the amount payable in terms of the modified award before passing the orders of disbursement/investment; (d) The Tribunal shall take into consideration the amount of Rs.13,00,000/-(Rupees Thirteen Lakhs) withdrawn by the Claimants under the orders passed by this Court; (e) Out of the amount deposited by the Appellant, if any amount is found to be excess, the same shall be refunded to the Appellant; (f) The Claimants shall be entitled to proportionate the costs of the Claim Application; (g) The Appeal is partly allowed in the above terms with no orders as to costs.