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Madhya Pradesh High Court · body

2019 DIGILAW 362 (MP)

Kiran Devi (Smt. ) v. Anil Kumar Dubey

2019-05-04

G.S.AHLUWALIA

body2019
ORDER 1. Heard finally. 2. This misc. appeal under section 173 of Motor Vehicles Act, 1988 has been filed against the award dated 1.7.2015 passed by Motor Accident Claims Tribunal, Gwalior in Claim Case No. 134/2014 for enhancement of compensation amount. 3. As the factum of accident and the liability of the Insurance Company has not been challenged, therefore, it is not necessary to mention the facts in detail, however, it is sufficient to mention here that deceased Kailash Prasad Shakya had died in a road accident caused by offending car bearing registration No. MP07CB5718. 4. The Claims Tribunal has awarded the compensation amount as under: 1. Age of the deceased Between 33 to 35 years 2. Multiplier 16 3. No. of dependants 5 (father has not been treated as dependant) 4. Profession Porter (Hammal) 5. Income Rs. 5,000/- per month 6. Personal expenses ¼ 7. Loss of yearly income Rs. 45,000/- 8. Loss of income Rs. 45,000 x 16 = 7,20,000/- 9. Loss of consortium Rs. 1,00,000/- 10. Funeral expenses Rs. 25,000/- Total Rs. 8,45,000/- 5. It is submitted by the counsel for the appellants, that since, the deceased was earning his livelihood by working as a porter, therefore, he was a self employed person, therefore, the appellants are entitled for "ruture prospects" as held by the Supreme Court in the case of National Insurance Company Limited v. Pranay Sethi reported in (2017) 16 SCC 680 . On the contrary, it is submitted by the counsel for the Insurance Company, that earlier the Supreme Court in the case of Sarla Verma v. DTC reported in (2009) 6 SCC 121 had awarded "future prospects" only in those cases where the deceased had a permanent job, and now the Supreme Court in the case of Pranay Sethi (supra) has awarded "future prospects" only in those cases where the deceased was a "self- employed person", and therefore, the law laid down by the Supreme Court in the case of Pranay Sethi (supra) cannot be made applicable to the case where the deceased was an employee or unemployed, but it is applicable to the cases where the deceased was self-employed. 6. Considered the submissions made by the parties. 7. The Supreme Court in the case of Sarla Verma (supra) has held as under: "20. Generally the actual income of the deceased less income tax should be the starting point for calculating the compensation. 6. Considered the submissions made by the parties. 7. The Supreme Court in the case of Sarla Verma (supra) has held as under: "20. Generally the actual income of the deceased less income tax should be the starting point for calculating the compensation. The question is whether actual income at the time of death should be taken as the income or whether any addition should be made by taking note of future prospects. 21. In Susamma Thomas this Court held that the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand (annual contribution to the depend-ants); and that where the deceased had a stable job, the Court can take note of the prospects of the future and it will be unreasonable to estimate the loss of dependency on the actual income of the deceased at the time of death. In that case, the salary of the deceased, aged 39 years at the time of death, was Rs. 1,032/- per month. Having regard to the evidence in regard to future prospects, this Court was of the view that the higher estimate of monthly income could be made at Rs. 2,000/- as gross income before deducting the personal living expenses. 22. The decision in Susamma Thomas was followed in Sarla Dixit v. Balwant Yadav where the deceased was getting a gross salary of Rs. 1,543/- per month. Having regard to the future prospects of promotions and increases, this Court assumed that by the time he retired, his earning would have nearly doubled, say Rs. 3,000/- This Court took the average of the actual income at the time of death and the projected income if he had lived a normal life period, and determined the monthly income as Rs. 2,200/- per month. 23. In Abati Bezbaruah v. Geological Survey of India, as against the actual salary income of Rs. 42,000/- per annum (Rs. 3,500/- per month) at the time of the accident, this Court assumed the income as Rs. 45,000 per annum, having regard to the future prospects and career advancement of the deceased who was 40 years of age. 24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. 45,000 per annum, having regard to the future prospects and career advancement of the deceased who was 40 years of age. 24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words “actual salary” should be read as “actual salary less tax”). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the Courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances." Thereafter, the Supreme Court in the case of Pranay Sethi (supra) has held as under: "55. Section 168 of the Act deals with the concept of “just compensa-tion” and the same has to be determi-ned 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. 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 determina-tion 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 and it has been approved in Reshma Kumari. 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 standardisation 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 standardisation keeping in view the principle of certainty, stability and consistency. We approve the principle of “standardisation” so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age. 56. The seminal issue is the fixation of future prospects in cases of deceased who are self-employed or on a fixed salary. Sarla Verma 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. 57. Sarla Verma 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. 57. Having bestowed our anxious consideration, we are disposed to think, when we accept the principle of standardisation, 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 determina-tion 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. 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. 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 standardisation 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. 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 where the deceased was below 40 years and addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable. 58. 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 thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. 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. 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." 8. Thus, the Claims Tribunal must strike a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. Thus, it is clear that the Supreme Court in the case of Pranay Sethi (Supra) has held that where the deceased was a "self employed person", then his dependants are entitled for compensation under the head of “future prospects”. 9. Thus, the core question is that what is the meaning of “self-employed”? 10. A “self-employed” is a person who is working for himself and is earning money from his own business. There is a difference between an employer and employee. Self-employment is a state of working for oneself rather than working for an employer. A self-employed person is a person who earns income by contracting with a trade or business directly. A professional is a self-employed person. A person who, apart from earning himself, is also providing employment to others, can also be said to be a self-employed person. However, where the deceased is working as a labourer cannot be said to be a self-employed person, because he is working for an employer. Employment is an agreement between an employer and an employee that the employee will provide certain services on the job to accomplish the employer organization's goal and mission and in exchange for work performed, the employee receives salary. Employment is an agreement between an employer and an employee that the employee will provide certain services on the job to accomplish the employer organization's goal and mission and in exchange for work performed, the employee receives salary. The Supreme Court in the case of Sarla Verma (supra) has held that where the deceased had a stable job, the court can take note of the prospects of the future and it will be unreasonable to estimate the loss of dependency on the actual income of the deceased at the time of death. Thus, in the case of employment, stability of job is the only criteria and where a person is working as a labourer and is not in a stable employment, then it cannot be said that he is also entitled for future prospects. A labourer can never be treated as a self- employed person or a person with stable job. The Supreme Court in the case of Sarla Verma or Pranay Sethi (supra) has not held that even a person, who is not in a stable job would also be entitled for future prospects. While granting future prospects, the Claims Tribunal are required to see that whether the deceased was a "self employed person" or was "in stable job". This Court in the light of judgment passed in the case of Pranay Sethi (supra) cannot grant “future prospects” to an “unemployed” or a “labourer/employee who is not having a stable job”. This Court cannot create third category of persons, which are not covered by the category of "employee" or "self-employed person". This Court while calculating the compensation has to assess the “just compensation” as provided under section 168 of Motor Vehicles Act, and the dependants are not entitled for a windfall. 11. Thus, this Court is of the considered opinion that since the deceased was working as a porter and was not having any stable job, and he cannot be termed as self employed, therefore, the appellants are not entitled for compensation under the head of “future prospects”. Accordingly, the claim of the appellants under the head of “future prospects” is hereby rejected. 12. It is submitted by the Counsel for the appellants that the monthly income assessed by the Claims Tribunal is on lower side, and at least it should have been assessed as Rs. 6,125/- per month on the basis of the minimum wages which were prescribed. 12. It is submitted by the Counsel for the appellants that the monthly income assessed by the Claims Tribunal is on lower side, and at least it should have been assessed as Rs. 6,125/- per month on the basis of the minimum wages which were prescribed. 13. Considered the submissions made by the counsel for the appellants. 14. It is clear that the deceased was a labourer and was a porter. It is also clear that he must not be getting work on every day. Thus, if the minimum wages prescribed under the Workmen's Compensation Act was 6,125/- per month, then the actual income assessed by the Claims Tribunal as Rs. 5,000/- per month cannot be said to be on lower side. 15. It is next contended by the counsel for the Insurance Company that the Supreme Court in the case of Pranay Sethi (supra) has held that the claimants are entitled for Rs. 15,000/- by way of loss of Estate, Rs. 40,000/- by way of loss of consortium and Rs. 15,000/- by way of funeral expenses. However, the Claims Tribunal has awarded Rs. 10,00,000/- towards loss of consortium and Rs. 25,000/- by way of funeral expenses which are excessive in the light of the judgment passed in the case of Pranay Sethi (supra), therefore, the amount of Rs. 1,25,000/- awarded under misc. heads may be reduced to Rs. 70,000/-. It is submitted by the counsel for the Insurance Company that since the principle of prospective overruling has no application in India, and the judgment passed in the case of Pranay Sethi (supra) has not been made prospective, therefore, the amount awarded under the Misc. heads should be reduced as per the directions of the Supreme Court in the case of Pranay Sethi (supra). 16. Considered the submissions made by the counsel for the Insurance Company. 17. The counsel for the Insurance Company is right in submitting that the principle of prospective overruling has no application, however, the question is that, in absence of any appeal by the owner, driver or the Insurance Company, whether this Court can reduce the compensation amount in an appeal filed by the claimants? 18. The question is no more res integra. 19. 18. The question is no more res integra. 19. This Court in the case of Smt. Gurkho bai and others v. Kuver Singh and others, by order dated 22.1.2019 passed in M. A. No. 759/2016 has held as under: "Accordingly, it is held that in absence of any appeal or cross-objection by the respondents, no order adverse to the interest of appellants can be passed." 20. Accordingly, it is held that the amount awarded under misc. head of loss of consortium and Funeral expenses cannot be reduced and is hereby maintained. 21. No further arguments are advanced. 22. As no fault could be found in the award granted by the Claims Tribunal, therefore, this appeal is hereby dismissed.