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2014 DIGILAW 152 (CAL)

National Insurance Co. Ltd. v. Chhabirani Samanta

2014-02-24

JAYANTA KUMAR BISWAS, SAHIDULLAH MUNSHI

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JUDGMENT : Jayanta Kumar Biswas, J. The insurance company is the appellant. It is aggrieved by an award of the Motor Accidents Claims Tribunal, Purba Medinipur dated April 19, 2006 in MACC No. 809 of 2004. 2. The mother of a 21-year old bachelor victim killed in a motor vehicle accident on April 2, 2004 filed the application claiming compensation under s. 163A of the Motor Vehicles Act, 1988. The claims tribunal granting compensation did not deduct any amount from the victim's income towards his personal and living expenses. 3. Mr. Das appearing for the insurance company has submitted that the claims tribunal ought to have deducted 50% from the victim's income towards his personal and living expenses. He has relied on New India Assurance Co. Ltd. Vs. Charlie and Another, (2005) 10 SCC 720 ; Syed Basheer Ahamed and Others Vs. Mohd. Jameel and Another, (2009) 2 SCC 225 ; and Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 . 4. Mr. Dey appearing for the claimant has defended the award saying that the law referred to by the insurance company was not in existence at the date the claims tribunal passed the award; and that the decisions relied on were given in connection with accidents which had happened before s. 163A was inserted. He is, however, unable to say what empowered the clams tribunal not to deduct one-third specified in the Second Schedule. 5. The claim was under s. 163A. hence the compensation found payable was to be assessed following the provisions of the Second Schedule to the Act. The provisions provided for deduction of one-third towards the victim's personal and living expenses. Nothing empowered the tribunal not to deduct any amount or to deduct less than one-third. Hence the award is vitiated by a patent error of law. The claims tribunal ought to have deducted one-third. 6. But, according to the insurance company, since the victim was a bachelor and his mother was the claimant, in view of the law on deduction laid down by the Supreme Court, the claims tribunal was required to deduct 50%, not one-third. Hence it is to be examined whether the Supreme Court has laid down any such law. 7. In New India Assurance Co. Ltd. Vs. Hence it is to be examined whether the Supreme Court has laid down any such law. 7. In New India Assurance Co. Ltd. Vs. Charlie and Another, (2005) 10 SCC 720 the Supreme Court said:-- "what would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula by universal application. It would depend upon circumstances of each case." 8. Syed Basheer Ahamed and Others Vs. Mohd. Jameel and Another, (2009) 2 SCC 225 was a fault liability claim case filed by the parents and three sisters of a 20-year old bachelor victim. The claims tribunal granting compensation deducted 50% from the victim's income towards his personal and living expenses. It was contended that the deduction should have been one-third. 9. The Supreme Court upheld the 50% deduction saying as follows:-- "17. On the question of deduction on account of personal expenses by the deceased, there is no set formula which could be applied in every case to determine as to what should be the deduction on this account. The contention that deduction on that count cannot exceed one-third on the ground that there is some statutory recognition in the Second Schedule to the Act for such deduction, is untenable. The said deduction would depend upon the facts and circumstances of each case. In the present case, no evidence was led on this point as well. In the absence of any evidence to the contrary, the practice is to deduct towards personal and living expenses of the deceased, one-third of the income in case he was married and one-half (50%) if he was a bachelor." 10. Mr. Das has heavily relied on Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 . His contention is that in a claim case arising out of the accidental death of a bachelor the general rule is to deduct 50% towards the victim's personal and living expenses. He has relied on para. 15 of the report. 11. Paragraph 15 of Sarla Verma report is quoted below:-- "15. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelor, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. 15 of the report. 11. Paragraph 15 of Sarla Verma report is quoted below:-- "15. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelor, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant on the father. Thus, even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third." 12. Therefore, the law on deduction towards the victim's personal and living expenses, laid down by the Supreme Court, is as follows:-- "What will be the percentage of deduction for personal and living expenses cannot be decided by any rigid rule or formula of universal application. It will depend upon the circumstances of each case. The general practice is to deduct from one-third to half. Where the victim was a bachelor and the claimants are the parents, the deduction follows a different principle. Normally 50% is deducted. But it is always a matter of evidence. If evidence proves that the victim left a large number of dependants, then the deduction should be restricted to one-third." 13. There is no dispute that the above-noted law on deduction laid down by the Supreme Court applies to a fault liability claim case for compensation. Normally 50% is deducted. But it is always a matter of evidence. If evidence proves that the victim left a large number of dependants, then the deduction should be restricted to one-third." 13. There is no dispute that the above-noted law on deduction laid down by the Supreme Court applies to a fault liability claim case for compensation. The question is whether the law applies also to a claim for compensation under s. 163A. 14. In none of the decisions the Supreme Court has said or held that the above-noted law on deduction is applicable also to a claim under s. 163A. On the contrary, in paras. 12 & 25 of Sarla Verma report the Supreme Court said as follows:-- "12. In fact one-third deduction, got statutory recognition under Second Schedule to the Act, in respect of claims under Section 163-A of the Motor Vehicles Act, 1988." ............................................................................................................................... "25. We agree with the contention that the deduction on account of personal living expenses cannot be at a fixed one-third in all cases (unless the calculation is under Section 163-A read with Second Schedule to the M.V. Act)." 15. The opinion of the Supreme Court stated in passing in para. 25 of Sarla Verma report is very important, and it leads to the conclusion that to a claim for compensation under s. 163A by the parents of a bachelor victim the general principle permitting deduction upto a maximum of 50% in a fault liability claim case cannot be applied; and that in such a case the deduction cannot exceed the statutorily fixed one-third limit. Hence we are unable to accept the case of the insurance company that the claims tribunal ought to have deducted 50%. 16. We, therefore, hold that the claimant was entitled to the following compensation:-- Rs. 2,000 (the victim's monthly income) x 12 = Rs. 24,000 (annual income) - Rs. 8,000 (one-third for personal expenses) = Rs. 16,000 x 15 (multiplier) = Rs. 2,40,000 + Rs. 2,000 funeral expenses + Rs. 2500 loss of estate = Rs. 2,44,500 + 8% p.a. interest on the amount from July 3, 2004, when the application was filed, till the respective payment dates. 17. For these reasons, we allow the appeal without costs and order as follows. The award of the claims tribunal is modified substituting Rs. 2,44,500 for Rs. 3,65,000 compensation and allowing 8% p.a. interest. 2,44,500 + 8% p.a. interest on the amount from July 3, 2004, when the application was filed, till the respective payment dates. 17. For these reasons, we allow the appeal without costs and order as follows. The award of the claims tribunal is modified substituting Rs. 2,44,500 for Rs. 3,65,000 compensation and allowing 8% p.a. interest. The Registrar General shall pay the claimant from the deposit and the balance, if any, with accrued interest to the insurance company, within four weeks from the date the records are sent to the department. Certified xerox.