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Himachal Pradesh High Court · body

2018 DIGILAW 1636 (HP)

Reliance General Insurance Company v. Pushpa Devi

2018-09-12

CHANDER BHUSAN BAROWALIA

body2018
JUDGMENT : Chander Bhusan Barowalia, J. 1. The present appeal under Section 173 of the Motor Vehicles Act, 1988, is maintained by the appellant/respondent No. 4 (hereinafter referred to as respondent No. 4) for quashing and setting aside the impugned award, dated 26.6.2015, passed by the learned Motor Accident Claims Tribunal, Bilaspur, District Bilaspur, H.P. in MAC Petition No. 10/2 of 2012. 2. Brief facts giving rise to the present appeal are that on 29.11.2011 at about 12:30 PM, Onkar Chauhan-deceased was going on his scooter bearing No. HP-24A-0576 from Ghumarwin towards Bhager side near Petrol Pump, Ghumarwin, Ambulance vehicle (108) bearing No. HP-63-4239, which came from the opposite side, hit the scooter and dragged the deceased upto 20 feet on the road. Onkar Chauhan-deceased received multiple injuries and he was taken to Civil Hospital, Ghumarwin, where he died. At the time of accident, Onkar Chauhan, was serving as Senior Assistant in H.P.S.E.B and getting salary of Rs. 35,000/- besides earning Rs. 5,000/- by doing agricultural work. 3. Respondents No. 1 to 6 by filing separate replies have submitted that the ambulance service in the name of Atal Swasthya Sewa (108) is being run by the State of Himachal Pradesh, in the interest of public at large under the public-private partnership mode through respondent No. 5. Respondent No. 5 entered into an agreement with respondent No. 6 for hiring the manpower and staff to run the ambulance services. The vehicle was insured with respondent No. 4. It has been claimed that when the accident took place, respondent No. 3 was not employee and therefore, there is no liability and moreover, if there is any liability, it is to be indemnified by respondent No. 6. Respondent No. 3 has denied that the accident took place due to his rash and negligent driving. It has been alleged that it was the fault of the deceased, as he turned his scooter to fill in the petrol on the right hand side without seeing the vehicle coming from the opposite direction. Respondent No. 4 has stated that the accident was due to contributory negligence and the Insurance Company is not liable. The stand of respondent No. 6 is also of total denial about the negligence of respondent No. 3, who was stated to be trained and qualified driver and was working on contract basis. Respondent No. 4 has stated that the accident was due to contributory negligence and the Insurance Company is not liable. The stand of respondent No. 6 is also of total denial about the negligence of respondent No. 3, who was stated to be trained and qualified driver and was working on contract basis. It has been specifically stated that respondent No. 5 has provided manpower to respondent No. 2, as per MOU signed between respondent No. 2 and respondent No. 5. 4. From the pleadings of parties, the learned Tribunal below framed following issues: “1. Whether on 29.11.2011 at about 12:30 p.m. near Petrol Pump, Dakri Chowk, Onkar Chauhan died on account of rash and negligent driving of respondent No. 2 while driving Ambulance (108) bearing No. HP-63-4239? OPP. 2. If issue No. 1 above is proved in affirmative, whether the petitioner is entitled for compensation and if so, to which amount from whom? OPP. 3. Whether the petition is not maintainable? OPR- 1 to 6. 4. Whether the petition is bad for non-joinder of necessary parties? OPR-1, 2 & 6. 5. Whether the petitioners are estopped to file the claim petition by their own acts, conducts, commission and omissions? OPR-3. 6. Whether the accident was result of rash and negligent driving of deceased Onkar Chauhan, driver of Scooter No. HP-24-0576? OPR-3, 5 & 6. 7. Whether the vehicle bearing No. HP-63-4239 was being driven by the driver without valid documents? OPR-4. 8. Whether the vehicle No. HP-63-4239 was being driven by an unauthorized person? OPR-4. 9. Whether the accident was result of contributory negligence of both the drivers i.e. respondent No. 3 and deceased Onkar Chauhan? OPR-4. 10. Whether the petitioners have no locus standi to file the present petition? OPR-6. 11. Relief.” 5. The learned trial Court after deciding Issues No. 1, 2 in affirmative, Issues No. 3, 4, 5 in negative, Issues No. 6 partly yes, Issue No. 7, 8 in negative, Issue No. 9 in affirmative, Issue No. 10 in negative, allowed the petition. 6. Learned counsel appearing on behalf of the appellant has argued that the amount as awarded under the head of love and affection, loss of expectation of life is not required to be granted and the same is required to be reduced as well as the award amount of loss of estate is required to be reduced to Rs. 6. Learned counsel appearing on behalf of the appellant has argued that the amount as awarded under the head of love and affection, loss of expectation of life is not required to be granted and the same is required to be reduced as well as the award amount of loss of estate is required to be reduced to Rs. 15,000/- and the amount of funeral expenses required to be reduced to Rs. 15,000/- and loss of consortium required to be reduced to Rs. 40,000/- and in this way the compensation award is required to be reduced to Rs. 3,80,000/-. No other points are argued by the learned counsel appearing on behalf of the appellant. On the other hand, learned counsel appearing on behalf of the respondent has argued that as per the latest law laid down by the Hon’ble Apex Court is concerned, the amount, as submitted by the learned counsel appearing on behalf of the appellant is required to be reduced, but they have stated that the appellant has no right to maintain the appeal against the quantum of award. 7. To appreciate the arguments of learned counsel appearing on behalf of the parties, I have gone through the record of the case carefully. 8. In order to prove its case, PW-2, Abhishek Chandel, has stated that he was getting his vehicle repaired in workshop, when ambulance vehicle bearing No. HP-63-4239 collided with scooter No. HP-24A-0576 and due to this scooter was dragged upto 25 feet. However, he has not stated in his examination-in-chief that the accident was due to rash and negligent driving on the part of respondent No. 3. In his cross-examination, he has stated that he is not aware as to who was at fault. PW-2 has denied about the rash and negligent driving on the part of respondent No. 3. 9. In case of death, the compensation is determined on the basis of earning of the deceased at the time of the accident and the amount which the deceased was earning for the dependents as a resultant figure is then multiplied by the multiplier. The Hon’ble Apex Court has standardized the parameter for determining the compensation payable by the insurer or the owner of the offending vehicle in Sarla Verma vs. Delhi Transport Corporation, 2009 (6) SCC 121 . In this case, this issue was elaborately dealt with step by step. The Hon’ble Apex Court has standardized the parameter for determining the compensation payable by the insurer or the owner of the offending vehicle in Sarla Verma vs. Delhi Transport Corporation, 2009 (6) SCC 121 . In this case, this issue was elaborately dealt with step by step. Relevant para-9 of the judgment as follows: “9. Basically only three facts need to be established by the claimants for assessing compensation in the case of death: (a) age of the deceased; (b) income of the deceased and the (c) the number of dependents. The issues to be determined by the Tribunal to arrive at the loss of dependency are (i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased and (iii) the multiplier to be applied with reference of the age of the deceased. If these determinants are standardized, there will be uniformity and consistency in the decisions. There will lesser need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay. To have uniformity and consistency, Tribunals should determine compensation in cases of death, by the following well settled steps: Step 1 (Ascertaining the multiplicand) The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand. Step 2 (Ascertaining the multiplier) Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased. Step 3 (Actual calculation) The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the loss of dependency to the family. Thereafter, a conventional amount in the range of Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate. Step 3 (Actual calculation) The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the loss of dependency to the family. Thereafter, a conventional amount in the range of Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of Rs. 5,000/- to Rs. 10,000/- should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased. The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also added.” 10. Hon’ble Apex Court in National Insurance Company Limited vs. Pranay Sethi and Others, AIR 2017 SC 5157 , has held as under: “47. In our considered opinion, if the same is followed, it shall sub-serve the cause of justice and the unnecessary contest before the tribunals and the courts would be avoided. 48. Another aspect which has created confusion pertains to grant of loss of estate, loss of consortium and funeral expenses. In Santosh Devi, AIR 2012 SC 2185 (supra), the two- Judge Bench followed the traditional method and granted Rs. 5,000/- for transportation of the body, Rs. 10,000/- as funeral expenses and Rs. 10,000/- as regards the loss of consortium. In Sarla Verma, AIR 2009 SC 3104 , the Court granted Rs. 5,000/- under the head of loss of estate, Rs. 5,000/- towards funeral expenses and Rs. 10,000/- towards loss of Consortium. In Rajesh, the Court granted Rs. 1,00,000/- towards loss of consortium and Rs. 25,000/- towards funeral expenses. It also granted Rs. 1,00,000/- towards loss of care and guidance for minor children. The Court enhanced the same on the principle that a formula framed to achieve uniformity and consistency on a socio-economic issue has to be contrasted from a legal principle and ought to be periodically revisited as has been held in Santosh Devi (supra). On the principle of revisit, it fixed different amount on conventional heads. What weighed with the Court is factum of inflation and the price index. It has also been moved by the concept of loss of consortium. We are inclined to think so, for what it states in that regard. We quote:- "17. On the principle of revisit, it fixed different amount on conventional heads. What weighed with the Court is factum of inflation and the price index. It has also been moved by the concept of loss of consortium. We are inclined to think so, for what it states in that regard. We quote:- "17. In legal parlance "consortium" is the right of the spouse to the company, care, help, comfort, guidance, society, solace, affection and sexual relations with his or her mate. That non-pecuniary head of damages has not been properly understood by our courts. The loss of companionship, love, care and protection, etc. the spouse is entitled to get, has to be compensated appropriately. The concept of non-pecuniary damage for loss of consortium is one of the major heads of award of compensation in other parts of the world more particularly in the United States of America, Australia, etc. English courts have also recognised the right of a spouse to get compensation even during the period of temporary disablement. By loss of consortium, the courts have made an attempt to compensate the loss of spouse's affection, comfort, solace, companionship, society, assistance, protection, care and sexual relations during the future years. Unlike the compensation awarded in other countries and other jurisdictions, since the legal heirs are otherwise adequately compensated for the pecuniary loss, it would not be proper to award a major amount under this head. Hence, we are of the view that it would only be just and reasonable that the courts award at least rupees one lakh for loss of consortium." 49. Be it noted, Munna Lal Jain, 2015 AIR SCW 3105 (supra) did not deal with the same as the notice was confined to the issue of application of correct multiplier and deduction of the amount. 50. This aspect needs to be clarified and appositely stated. The conventional sum has been provided in the Second Schedule of the Act. The said Schedule has been found to be defective as stated by the Court in Trilok Chandra (supra). Recently in Puttamma and Others vs. K.L. Narayana Reddy and Another, it has been reiterated by stating:- "We hold that the Second Schedule as was enacted in 1994 has now become redundant, irrational and unworkable due to changed scenario including the present cost of living and current rate of inflation and increased life expectancy." 51. Recently in Puttamma and Others vs. K.L. Narayana Reddy and Another, it has been reiterated by stating:- "We hold that the Second Schedule as was enacted in 1994 has now become redundant, irrational and unworkable due to changed scenario including the present cost of living and current rate of inflation and increased life expectancy." 51. As far as multiplier or multiplicand is concerned, the same has been put to rest by the judgments of this Court. Para 3 of the Second Schedule also provides for General Damages in case of death. It is as follows:- "3. General Damages (in case of death) - The following General Damages shall be payable in addition to compensation outlined above:- (i) Funeral expenses Rs. 2,000/- (ii) Loss of Consortium, if beneficiary is the spouse Rs. 5,000/- (iii) Loss of Estate Rs. 2,500/- (iv) Medical Expenses actual expenses incurred before death supported by bills/vouchers but not exceeding Rs. 15,000/- 52. On a perusal of various decisions of this Court, it is manifest that the Second Schedule has not been followed starting from the decision in Trilok Chandra (supra) and there has been no amendment to the same. The conventional damage amount needs to be appositely determined. As we notice, in different cases different amounts have been granted. A sum of Rs. 1,00,000/- was granted towards consortium in Rajesh. The justification for grant of consortium, as we find from Rajesh, is founded on the observation as we have reproduced hereinbefore. 53. On the aforesaid basis, the Court has revisited the practice of awarding compensation under conventional heads. 54. As far as the conventional heads are concerned, we find it difficult to agree with the view expressed in Rajesh. It has granted Rs. 25,000/- towards funeral expenses, Rs. 1,00,000/- loss of consortium and Rs. 1,00,000/- towards loss of care and guidance for minor children. The head relating to loss of care and minor children does not exist. Though Rajesh refers to Santosh Devi, AIR 2012 SC 2185 , it does not seem to follow the same. The conventional and traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. Though Rajesh refers to Santosh Devi, AIR 2012 SC 2185 , it does not seem to follow the same. The conventional and traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. There can be no dispute over the fact that price index, fall in bank interest, escalation of rates in many a field have to be noticed. The court cannot remain oblivious to the same. There has been a thumb rule in this aspect. Otherwise, there will be extreme difficulty in determination of the same and unless the thumb rule is applied, there will be immense variation lacking any kind of consistency as a consequence of which, the orders passed by the tribunals and courts are likely to be unguided. Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/- and Rs. 40,000/- and Rs. 15,000/- respectively. The principle of revisiting the said heads is an acceptable principle. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years. We are disposed to hold so because that will bring in consistency in respect of those heads. 55. Presently, we come to the issue of addition of future prospects to determine the multiplicand. 56. In Santosh Devi, AIR 2012 SC 2185 the Court has not accepted as a principle that a self-employed person remains on a fixed salary throughout his life. It has taken note of the rise in the cost of living which affects everyone without making any distinction between the rich and the poor. Emphasis has been laid on the extra efforts made by this category of persons to generate additional income. That apart, judicial notice has been taken of the fact that the salaries of those who are employed in private sectors also with the passage of time increase manifold. Emphasis has been laid on the extra efforts made by this category of persons to generate additional income. That apart, judicial notice has been taken of the fact that the salaries of those who are employed in private sectors also with the passage of time increase manifold. In Rajesh's case, the Court had added 15% in the case where the victim is between the age group of 15 to 60 years so as to make the compensation just, equitable, fair and reasonable. This addition has been made in respect of self-employed or engaged on fixed wages. 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, AIR 2009 SC 3104 (supra) and it has been approved in Reshma Kumari, AIR 2013 SC (Supp.) 474 (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. 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 principle of "standardization" so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age. 58. The seminal issue is the fixation of future prospects in cases of deceased who is self-employed or on a fixed salary. Sarla Verma, AIR 2009 SC 3104 (supra) has carved out an exception permitting the claimants to bring materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any future prospects in respect of the said category. 59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable. 60. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma, AIR 2009 SC 3104 thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari, AIR 2013 SC (Supp.) 474. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts. 61. In view of the aforesaid analysis, we proceed to record our conclusions:- (i) The two-Judge Bench in Santosh Devi, AIR 2012 SC 2185 should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, AIR 2009 SC 3104 , a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench. (ii) As Rajesh has not taken note of the decision in Reshma Kumari, AIR 2013 SC (Supp.) 474), which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent. (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. (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/- and Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.” 11. While applying the ratio of aforesaid law laid down by the Hon’ble Apex Court in Pranay Sethi’s case supra, amounts awarded under the various heads i.e. loss of consortium, loss of estate and funeral expenses, need to be re-assessed. Accordingly, the amount awarded qua the loss of consortium, loss of estate and funeral expenses are modified as Rs. 40,000/- and Rs. Accordingly, the amount awarded qua the loss of consortium, loss of estate and funeral expenses are modified as Rs. 40,000/- and Rs. 15,000/- and Rs. 15,000/- respectively, instead of Rs. 1,00,000/- and Rs. 1,00,000/- and Rs. 50,000/- as awarded by the learned Tribunal below. As has been observed above, no amount could be awarded under the head “love and affection” and “loss of expectation of life” and as such, amount awarded qua the same is quashed and set aside. 12. As a result of the above discussion, the impugned award, passed by the learned Motor Accident Claims Tribunal, Bilaspur, District Bilaspur, dated 26.6.2015 and compensation is reduced by Rs. 3,80,000/- and rest of the award will remain as it is. No order as to costs. The appeal stands disposed of so also miscellaneous applications, if any.