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2017 DIGILAW 1454 (GAU)

New India Assurance Co. Ltd. v. S. Muana

2017-11-17

MICHAEL ZOTHANKHUMA

body2017
JUDGMENT : Michael Zothankhuma, J. 1. Heard Mr. Lalfakawma, learned counsel for the appellant New India Assurance Company Limited. Also heard Mr. Lalchhanliana Khiangte, learned counsel for the respondent/claimant The question that has to be decided in this appeal is whether compensation can be awarded under conventional heads under an application made under Section 163-A of the Motor Vehicles Act, 1988. 2. The brief facts of the case is that the deceased Lalchhanhima, 31 years of age died in a motor accident when the vehicle he was driving rolled down a hill. The deceased was driving an LPT 3118TC, bearing registration No. MZ-01 J/7379 on 23.06.2015. Thereafter, his father made a claim for payment of compensation under Section 163A of the Motor Vehicle Act, 1988. 3. The learned MACT, Aizawl, vide Judgment & Award dated 03.10.2016, passed in MACT Case No. 3 of 2016, awarded compensation amount of Rs. 9,62,000/- along with interest @ 9% per annum from the date of filing of the claim petition i.e., 12.02.2016 till final payment to the claimant 4. The amount of compensation arrived at by the learned MACT, Aizawl, as reflected in para 12 of the Judgment & Award dated 03.10.2016, is reproduced below : “(1) Annual Income Rs.3000x12=36,000 (2) Addition of 50% for future prospects Rs.36,000 x 50 = 18,000 100 (3) Loss of Income 36000+18000x17x2=6,12,000 3 (4) Loss of love & affection for father Rs.1,00,000 (5) Funeral Expenses Rs.50,000 (6) Loss of Estate Rs.1,00,000 (7) Loss of expectation of life Rs.1,00,000 Total Compensation Awarded Rs.9,62,000.00” 5. The learned counsel for the appellant submits that there are no disputed questions of fact in the present appeal and the only dispute is with regard to; whether the conventional heads, which are not reflected in the 2nd Schedule, can be awarded to the claimant, who has made a claim under Section 163-A of the MV Act, 1988. He submits that in the 2nd Schedule of the M.V. Act, 1988, the heads under future prospects, loss of love & affection and loss of expectation of life do not find mention. However, compensation has been awarded under those heads. 6. The appellant's counsel submits that the principles that have evolved with regard to payment of compensation for future prospects, loss of love & affection and loss of expectation of life are recent and involve claims under Section 166 of the MV Act. However, compensation has been awarded under those heads. 6. The appellant's counsel submits that the principles that have evolved with regard to payment of compensation for future prospects, loss of love & affection and loss of expectation of life are recent and involve claims under Section 166 of the MV Act. However, as the same are not mentioned in the 2nd Schedule, the learned MACT could not have awarded the amounts under those conventional heads, which are not included under the 2nd Schedule. In support of his submission, the learned counsel for the appellant has relied upon the judgments of the Apex Court in Deepal Girishbai Soni & Ors. v. United Insurance Co. Ltd., reported in 2004 (5) SCC 385 , Puttamma & Ors. v. K.L Narayana Reddy & Anr,. reported in 2013 (15) SCC 45 and Para 9 of the judgment of the constitutional bench of the Supreme Court decided on 31.10.2017 in Special Leave Petition (Civil) No. 25590 of 2014, National Insurance Company Limited v. Pranay Sethi & Ors. 7. The appellant's counsel also submits that the deceased was a bachelor at the time of his death and as such, the claimant, who was the father, only entitled to 50% of the income, i.e., loss of dependency would be 50% of the actual income of the deceased. In support of above, he relied upon the judgment of the Apex Court in Reshma Kumari & Ors. v. Madan Mohan & Anr., reported in (2013)9 SCC 65 . 8. Mr. Lalchhanliana Khiangte, learned counsel for the respondent/claimant submits that even though the conventional heads under future prospects, loss of love & affection and loss of expectation of life are not specifically mentioned in the 2nd Schedule of the MV Act, 1988, the award of compensation under those conventional heads is not prohibited. He further submits that besides the above issue, this Court should also look into the legality of the learned MACT in coming to a finding that the monthly income of the deceased was only Rs. 3,000/-, as the admitted evidence of the parties was that the monthly income of the deceased was Rs. 3,300/-. He submits that this Court can award just compensation and re-fix the monthly income of the deceased under Section 168 of the MV Act, 1988, even when no appeal has been filed by the respondent/claimant. 3,000/-, as the admitted evidence of the parties was that the monthly income of the deceased was Rs. 3,300/-. He submits that this Court can award just compensation and re-fix the monthly income of the deceased under Section 168 of the MV Act, 1988, even when no appeal has been filed by the respondent/claimant. In this regard, he has relied upon the judgments of the Apex Court in the case of Naggapa v. Gurudayal Singh, reported in 2003 (2) SCC 274 and A.P.S.R.T.C v. M. Ramadevi & Ors., reported in 2008 (1) TAC 714. 9. I have heard the learned counsels for the parties. 10. In the case of R.K. Malik & Anr. v. Kiran Pal, reported in 2009 (3) TAC 1 (SC), the Apex Court has held at para 32 that denying compensation towards future prospects seems to be unjustified. Accordingly, the Apex Court had awarded compensation for future prospects on a claim made under Section 163-A of the MV Act, 1988. 11. In the above case of R.K Malik (Supra), I find that the Apex Court has held that there was no infirmity in the High Court granting Rs. 75,000/- for non-pecuniary damages. 12. In the case of J. Evelyn & Ors. v. K. Lalbiakthuami & Anr., reported in 2016 (2) TAC 346 (Gau), this Court has granted future prospects with regard to a claim made under Section 163-A of the M.V. Act, 1988. Thus, a reading of the judgments of the Apex Court and this Court goes to show that compensation under conventional heads can also be awarded to a claimant, who makes a claim under Section 163-A of the MV Act, 1988. 13. It is settled law that even if no appeal is filed by either of the parties in a proceeding under the MV Act, 1988, the Court under Section 168 of the MV Act, 1988 has to award just compensation. In the present case, the evidence of the claimant is to the effect that the deceased was earning Rs. 3,300/- per month and the same has not been denied by the respondent. The learned Tribunal has held that the income of the deceased was not proved and has accordingly calculated the compensation on the basis of notional income. 14. I find that the alleged employer of the deceased who had given a certificate that the deceased was earning Rs. 3,300/- per month and the same has not been denied by the respondent. The learned Tribunal has held that the income of the deceased was not proved and has accordingly calculated the compensation on the basis of notional income. 14. I find that the alleged employer of the deceased who had given a certificate that the deceased was earning Rs. 3,300/- per month has not given any evidence. Accordingly, this Court finds no infirmity with the finding of the learned MACT that the income of the deceased was not proved. 15. In the case of Reshma Kumari (Supra) and Sarla Verma & Ors. v. Delhi Transport Corporation & Anr., reported in 2009 (6) SCC 121 , the Apex Court has held that when the deceased was a bachelor and the claimants are the parents, normally, 50% is deducted as personal and living expenses of the deceased, because it is assumed that a bachelor would tend to spend more in himself. In the present case, the learned MACT has deducted only one third of the income of the deceased and not 50%. The same not being in consonance with the law laid down by the Apex Court, 50% of the income of the deceased will have to be deducted while computing compensation payable to the claimant. Further, the interest awarded by the learned MACT could not have been 9% per annum as on the date of the judgment & award, the applicable Bank interest rate was around 7% per annum. 16. As per the law laid down by the Constitution Bench in National Insurance Company Limited v. Pranay Sethi & Ors., Special Leave Petition (Civil) No. 25590 of 2014, the deceased being 31 years at the time of his death, the future prospects of the deceased would have to be calculated on the basis of 40% of his established income as he was on a fixed salary on the date of his death. Further, in the above case, the Constitution Bench has also fixed the compensation payable for loss of estate and funeral expense at Rs. 15,000/- each. 17. Further, in the above case, the Constitution Bench has also fixed the compensation payable for loss of estate and funeral expense at Rs. 15,000/- each. 17. In the case of Deepal Girishbai Soni (Supra), Puttamma (Supra) and in National Insurance Company Limited v. Pranay Sethi & Ors., Special Leave Petition (Civil) No. 25590 of 2014, the Apex Court has held that the principles relating to determination of liability of quantum of compensation, were different for claims made under Section 163-A and claims made under Section 166. There is no specific observation in the above cases that compensation cannot be given with regard to conventional heads in respect of a claim made under Section 163-A. The Apex Court basically held that a claimant cannot pursue his remedies simultaneously under Section 163-A and under Section 166 of the MV Act. 18. With regard to the concept of just compensation, the Constitution Bench of the Supreme Court in National Insurance Company Limited v. Pranay Sethi & Ors. (Supra), has held at Para-57 as follows:- "57. Section 168 of the Act deals with the concept of "just compensation" and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of "just compensation" has to be viewed through the prism of fairness, reasonableness and non violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, "just compensation". The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (Supra) and it has been approved in Reshma Kumari (Supra). The age and income, as stated earlier, have to be established by adducing evidence. The formula relating to multiplier has been clearly stated in Sarla Verma (Supra) and it has been approved in Reshma Kumari (Supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of "standardization" so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age." 19. The Constitution Bench thereafter passed conclusion Nos. (iii) to (viii) in Para 61 of the above case as follows :- "(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30% if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15% Actual salary should be read as actual salary less tax. (iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. (v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore. (vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment. (vii) The age of the deceased should be the basis for applying the multiplier. (viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years". 20. The concept of just compensation having been explained by the Constitution Bench and keeping in view the Judgment of the Apex Court in R.K Malik (Supra), this Court is of the view that just compensation would include payment of compensation for future prospects, loss of love & affection and loss of expectation of life in a claim made under Section 163-A of the MV Act. 21. In view of the reasons stated above, the income of the deceased was rightly taken by the learned MACT at Rs. 3000/- per month. However, 50% of the income of the deceased would have to be deducted as personal and living expenses of the deceased. As per the law laid down by the Constitution Bench in National Insurance Company Limited v. Pranay Sethi & Ors. (Supra), the future prospects of the deceased would have to be calculated on the basis of 40% of Rs. 3000/-. The compensation given by the learned MACT for loss of estate and funeral expenses would have to be brought down to Rs. 15,000/- each. (Supra), the future prospects of the deceased would have to be calculated on the basis of 40% of Rs. 3000/-. The compensation given by the learned MACT for loss of estate and funeral expenses would have to be brought down to Rs. 15,000/- each. Accordingly, the amount of compensation payable to the claimant will be as follows :- “(1) Annual Income Rs.3000x12=36,000 (2) Addition of 40% for future prospects Rs.36,000 x 40 = 14,400 100 (3) Loss of Income 36000+14,400x17x1=4,28,400 3 (4) Loss of love & affection for father Rs.1,00,000 (5) Funeral Expenses Rs.15,000 (6) Loss of Estate Rs.15,000 (7) Loss of expectation of life Rs.1,00,000 Total Compensation Awarded Rs.6,58,400.00” 22. This Court finds that the interest @ 9% awarded by the learned MACT is on the high side as the Bank interest rates for fixed deposits in the year 2016 was around 6.5%. 23. In the case of Abati Bezbaruah v. Dy. Director General, Geological Survey of India & Anr. reported in 2003 (3) SCC 148 , the Apex Court has held at para 6 as follows: "6. The question as to what should be rate of interest, in the opinion of this Court, would depend upon the facts and circumstances of each case. Award of interest would normally depend upon the bank rate prevailing at the relevant time." In the above decision, the concurring judgment passed by Justice A.R Lakshmanan is as follows: "While concurring with the conclusion arrived at by my esteemed Brother, I would like to add the following few lines. 18. Three decisions were cited before us by Mr. A.P. Mohanty, learned counsel appearing on behalf of the appellant, in support of his contentions. No ratio has been laid down in any of the decisions in regard to the rate of interest and the rate of interest was awarded on the amount of compensation as a matter of judicial discretion. The rate of interest must be just and reasonable depending upon the facts and circumstances of each case and taking all relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. No rate of interest is fixed under Section 171 of the Motor Vehicle Act, 1988. No rate of interest is fixed under Section 171 of the Motor Vehicle Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if a claimant does not specifically plead for the same as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money which ought to have been paid to him. No principle could be deduced nor can any rate of interest be fixed to have a general application in Motor Accident Claim cases having regards to the nature of provision under Section 171 giving discretion to the Tribunal in such matter." 24. In the case of Kaushnuma Begum (SMT) & Ors. v. New India Assurance Co. Ltd& Ors., reported in 2001 (2) SCC 9 , the Apex Court has held at para 24 as follows: "24. Now, we have to fix up the rate of interest. Section 171 of the MV Act empowers the Tribunal to direct that "in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf. Earlier, 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants." In the case of United India Insurance Co. Ltd & Ors. v. Patricia Jean Mahajan, reported in 2002 (6) SCC 281 , the Apex Court has followed the decision passed in Kaushnuma Begum (Supra) on the applicable rate of interest to be fixed on the compensation amount. 25. Accordingly, in view of the reasons stated above, the appellant is directed to deposit the amount of Rs. 6,58,400/- along with interest @ 7% per annum from the date of filing of the claim petition till final payment, before the learned MACT Aizawl. 25. Accordingly, in view of the reasons stated above, the appellant is directed to deposit the amount of Rs. 6,58,400/- along with interest @ 7% per annum from the date of filing of the claim petition till final payment, before the learned MACT Aizawl. The same should be done within a period of 4 (four) months from today. 26. Consequently, the impugned Judgment & Award dated 03.10.2016 passed in MACT Case No. 3/2016 is modified to the extent indicated above. The Appeal is accordingly disposed of. Send back the LCRs.