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2024 DIGILAW 368 (GUJ)

Ranjanben, Wd/o. Ramsing B. Rathod v. Bhupendra Govindbhai Thakorbhupendra Govindbhai Thakor

2024-02-21

BIREN VAISHNAV, NISHA M.THAKORE

body2024
JUDGMENT : (Nisha M. Thakore, J.) 1. This appeal is filed under Section 173 of the Motor Vehicles Act, against the judgment and award dated 29.04.2015 passed by the Motor Accident Claims Tribunal, Ahmedabad, in MACP No.94 of 2011. The appellants are the original claimants, who have approached this Court seeking enhancement of the award amount as against the aforesaid impugned award by which the learned Tribunal has partly allowed the claim petition preferred by the appellants – original claimants for the sum of Rs.9,61,640/- as against the claim put forward for a sum of Rs.50 Lakhs. 2. In nutshell, the case contended by the original claimants before the Tribunal is: 2.1 On 30.09.2010, at around 10:30 p.m. the husband of the appellant No.1 – Ramsinh Bhaijibhai Rathod (hereinafter referred to as “deceased”) was moving back to his home on motorcycle bearing registration No. GJ-17P-2478 from Airport to Nobalnagar. On way, when the deceased had arrived near Kotarpur turning the respondent No.1 – driver of the vehicle Chota Hathi bearing registration No.GJ-1-BX-6494 came from behind in rash, negligent and excessive speed and dashed with the motorcycle of the deceased. In the accident, the deceased sustained serious injuries. Though he was shifted to the hospital, on the next day, he succumbed to the injuries. The FIR was registered late i.e. after 2 days against the original opponent No. 1. 2.2 At the time of accident, the deceased was serving as a Wireman in the Airport and was also simultaneously engaged in the miscellaneous work of pipe fittings and was thereby earning total income of Rs.15,000/- per month. Due to sudden death of the deceased, the original claimant No.1 has lost her husband, the original claimant Nos.2 and 3 have lost their father, whereas the claimant No.4, who was father of the deceased, has lost his son. The claimants have preferred the claim petition before the Motor Accident Claims Tribunal against the opponent No.1, who was driving the offending vehicle. The opponent No.2 is owner of the said vehicle and was vicariously liable for the wrong act of the opponent No.1 and the opponent No.3, was the Insurance Co. of the offending vehicle. The original claimants have preferred claim petition under Section 166 of the Act seeking an amount of Rs.50 Lakhs as compensation along with interest and cost from the said opponents. of the offending vehicle. The original claimants have preferred claim petition under Section 166 of the Act seeking an amount of Rs.50 Lakhs as compensation along with interest and cost from the said opponents. 2.3 The Tribunal upon appreciation of evidence brought on record, though being convinced about the negligence of the opponent No.1 driver and consequential liability of the opponent Nos. 2 and 3, has partly allowed the claim petition, holding the opponents jointly and severally liable to pay Rs.9,61,640/- as compensation with interest thereof at the rate of 9% p.a. till the date of realization with proportionate cost. Hence, this appeal at the instance of the original claimants praying for enhancement of the award amount. 3. We have heard Mr. Hiren Modi, learned advocate on record for the appellants – original claimants and Mr. Rathin Raval, learned advocate for the respondent No.3 – Insurance Co. Though notice has been duly served upon the respondent Nos.1 and 2, they have not contested the present appeal. 4. In absence of any challenge to the impugned judgment and award of the Tribunal at the instance of the respondents – original opponents, the only question, which arises for consideration in the present appeal is whether the Tribunal committed any error in determining the compensation as awarded to the original claimants, in the facts of the case. 5. Learned advocate Mr. Modi for the appellants has restricted his submissions praying for enhancement of compensation mainly under four heads. Heavy reliance is placed on guidelines of the Hon’ble Supreme Court in the case of Sarla Verma Vs. Delhi Transport Corporation & Anr. reported in (2009) 6 SCC 121 and in the case of National Insurance Co. Ltd. Vs. Pranay Sethi reported in (2017)16 SCC 680 . According to the learned advocate, the award passed by the Tribunal is required to be re-determined in light of the aforesaid guidelines issued by the Hon’ble Supreme Court, more particularly, in regard to the determination of prospective income and loss of consortium in fatal cases. Learned advocate has further urged this Court to reconsider compensation under the head of loss of estate and funeral expenses, in light of of the aforesaid guidelines of the Hon’ble Supreme Court and has accordingly, urged to modify the award for an amount of Rs.14,47,290/-. 6. Learned advocate Mr. Raval for the Insurance Co. Learned advocate has further urged this Court to reconsider compensation under the head of loss of estate and funeral expenses, in light of of the aforesaid guidelines of the Hon’ble Supreme Court and has accordingly, urged to modify the award for an amount of Rs.14,47,290/-. 6. Learned advocate Mr. Raval for the Insurance Co. has assisted the Court and is unable to dispute applicability of the aforesaid guidelines of the Hon’ble Supreme Court in the facts of the present case and has urged this Court to pass an appropriate order. 7. It is settled legal position as far as different criteria, which are taken into consideration for assessing the compensation in the case pertaining to motor accident are concerned. These criteria mainly deals with the age of the deceased at the time of accident, number of dependents left behind by the deceased and income of the deceased at the time of accident. To appreciate the submissions made by the learned advocate with regard to the grant of benefit in respect of addition of income for future prospect is concerned, it would be appropriate to refer to the decision in the case of Sarla Verma (Supra) where prospect in case of salaried person also examined. The Hon’ble Supreme Court while dealing with the issue of addition of income for future prospect took note of the earlier decisions viz. in the case of (1) Kerala SRTC Vs. Susamma Thomas reported in (1994) 2 SCC 176 , (2) Sarla Dixit Vs. Balwant Yadav reported in (1996) 3 SCC 179 and (3) Abati Bezbaruah Vs. Geological Survey of India reported in (2003) 2 SCC 148. In the case of Sarla Verma (Supra), in para 24 the Hon’ble Supreme Court has opined, thus: “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 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']. [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 deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations 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.” 8. Later on, in the case of Santosh Devi Vs. National Insurance Co. Ltd. reported in (2012) 6 SCC 421 , while dealing with the addition of income for future prospect in case where the deceased was neither Government servant nor a permanent employee of the Corporation or the Company in which cases, there may have been increased in income from time to time, referred to the aforesaid observations of the Hon’ble Supreme Court in the case of Sarla Verma (Supra) and in order to bring uniformity and considering in-applicability of standard approaches for determination of compensation among different classes of victims from the society, held as under: “14. The lack of uniformity and consistency in awarding compensation has been a matter of grave concern. Every district has one or more Motor Accident Claims Tribunal/s. If different Tribunals calculate compensation differently on the same facts, the claimant, the litigant, the common man will be confused, perplexed and bewildered. If there is significant divergence among Tribunals in determining the quantum of compensation on similar facts, it will lead to dissatisfaction and distrust in the system. 15. We may refer to the following observations in Trilok Chandra : "We thought it necessary to reiterate the method of working out `just' compensation because, of late, we have noticed from the awards made by Tribunals and Courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/Court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realized that the Tribunal/ Court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused." 16. Compensation awarded does not become `just compensation' merely because the Tribunal considers it to be just. For example, if on the same or similar facts (say deceased aged 40 years having annual income of 45,000/- leaving him surviving wife and child), one Tribunal awards Rs.10,00,000/- another awards Rs.5,00,000/-, and yet another awards Rs.1,00,000/-, all believing that the amount is just, it cannot be said that what is awarded in the first case and last case, is just compensation. Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit. 17. Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision making process and the decisions. While it may not be possible to have mathematical precision or identical awards, in assessing compensation, same or similar facts should lead to awards in the same range. When the factors/inputs are the same, and the formula/legal principles are the same, consistency and uniformity, and not divergence and freakiness, should be the result of adjudication to arrive at just compensation. In Susamma Thomas, this Court stated : "16 …….. the proper method of computation is the multiplier method. Any departure, except in exceptional and extra-ordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability, for the assessment of compensation." 18. 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. 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.” 9. In light of the relevant observations of the Hon’ble Supreme Court in case of Sarla Verma (Supra) and in case of Santosh Devi (Supra), it would be reasonable even in case of self employed or person engaged on fixed wages are concerned, 30% increase in his total income over a period of time can be considered for the purpose of calculating the amount of compensation. 10. The aforesaid decisions were revisited by the Hon’ble Supreme Court in the case of Rajesh and Ors. Vs. Rajbir Singh reported in (2013) 9 SCC 54 , wherein three judges bench delivered judgment on 12.04.2013 and opined that: “8. Since, the Court in Santosh Devi case actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects. Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years. 9. In Sarla Verma case, it has been stated that in the case of those above 50 years, there shall be no addition. Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years. 9. In Sarla Verma case, it has been stated that in the case of those above 50 years, there shall be no addition. Having regard to the fact that in the case of those self-employed or on fixed wages, where there is normally no age of superannuation, we are of the view that it will only be just and equitable to provide an addition of 15% in the case where the victim is between the age group of 50 to 60 years so as to make the compensation just, equitable, fair and reasonable. There shall normally be no addition thereafter.” 11. Interestingly, on the same date i.e. on 02.04.2013, another three judges bench, while dealing with the reference on the issue where one of the question was referred as to whether for determination of multiplicand, the Act provides for any criteria, particularly as regards determination of future prospects. The Bench in the case of Reshma Kumari Vs. Madan Manohar reported in (2013) 9 SCC 65 , while answering the aforesaid question held as under: “39. The standardisation of addition to income for future prospects shall help in achieving certainty in arriving at appropriate compensation. We approve the method that an addition of 50% of actual salary be made to the actual salary income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years and the addition should be only 30% if the age of the deceased was 40 to 50 years and no addition should be made where the age of the deceased is more than 50 years. Where the annual income is in the taxable range, the actual salary shall mean actual salary less tax. In the cases where the deceased was self-employed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases.” 12. In the cases where the deceased was self-employed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases.” 12. The aforesaid diversion view taken by the different Bench of the Hon’ble Supreme Court in the case of Rajesh (Supra) and Reshma Kumari, the Court thought it fit to refer the issue of addition of income for future prospects to the larger Bench. Later on, the Constitutional Bench in the case of National Insurance Co. Ltd. Vs. Pranay Sethi and Ors. reported in 2017 (16) SCC 680 evaluated all the aforesaid judicial precedents on the issue of future prospects including the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Supra) and laid down fixed standard for granting future prospects. The Constitutional Bench held as under: “57.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. One may perceive that the comparative measure is certaintIn 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. One may perceive that the comparative measure is certaintIn 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.y 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, degreetest 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, degreetest 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. 59. In view of the aforesaid analysis, we proceed to record our conclusions:- 59.3 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. 59.4 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.” In light of the aforesaid decision of the Constitutional Bench, the issue of the future prospects of income in the case of fatal accident stands finally settled. 13. As regards enhancement of compensation urged under three conventional heads; loss of estate, loss of consortium and funeral expenses is concerned, the same is also required to be examined as per the principle laid down by the Constitutional Bench in the case of Pranay Sethi (Supra). PROSPECTIVE INCOME: 14. The Tribunal has believed the age of the deceased as 37 years at the time of accident. PROSPECTIVE INCOME: 14. The Tribunal has believed the age of the deceased as 37 years at the time of accident. The original claimants have produced on record the salary slip of the deceased at Exhibit 37, wherein the income of the deceased is reflected as Rs.7,722/-. Though the original claimants have claimed that the deceased was earning additional income of Rs.5,000/- and total Rs.12,000/- per month, however, in absence of any corroborative material being produced on record, the Tribunal has rightly applied the income of the deceased at Rs.7,722/- per month. The Tribunal has arrived at conclusion that since the deceased was serving as a Wireman at Airport, his case can be treated in the category of daily wager and has therefore, thought it fit to not to consider his case for prospective income. However, in light of the authorative pronouncement of the Constitutional Bench in the case of Pranay Sethi (Supra), we are of the view that addition of 40% of the income determined is required to be considered under the head of prospective income, more particularly, when the deceased was below the age of 40 years. We therefore, hold the prospective income of the deceased as Rs.37,065/- (Rs.92,664/- x 40%). DEPENDENCY LOSS: 15. Having held so, the dependency loss is required to be recomputed and is determined as Rs.1,29,729/- (Rs.92,664/- + Rs.37,065/-). In view of the decision of the Hon’ble Supreme Court in the case of Sarla Verma, considering the fact that the deceased was survived by family consisting of four members, appropriate deduction of 1/3rd is applied. It would be worth to mention that father of the deceased though was joined as claimant has been subsequently deleted, pending the proceedings before the Tribunal, reported to have expired. Thus, the deduction of 1/3rd towards personal expenses of deceased would come to Rs.43,243/- (Rs.1,29,729/- x 1/3rd). Having held so, the dependency loss of the claimants comes to Rs.86,486/- x 15 = Rs.12,97,290/-. LOSS OF CONSORTIUM: 16. In Magma General Insurance Co. Ltd. Vs. Nanu Ram and Ors. reported in (2018) 18 SCC 130 , the Hon’ble Supreme Court after taking into consideration the Constitutional Bench’s decision in the case of Pranay Sethi (Supra) interpreted the term “consortium” to include spousal consortium, parental consortium, and filial consortium and has thereby held that each of the claimants shall be entitled to the amount of consortium at the rate of Rs.40,000/. Applying the aforesaid principle of the Hon’ble Supreme Court in the case of Magma General Insurance Co. Ltd. (Supra), the original claimants, who are widow of deceased and two minor children of the deceased are held entitled to a sum of Rs.1,20,000/- (Rs.40,000/- x 3). LOSS UNDER CONVENTIONAL: 17. The enhancement of compensation under the conventional head is also recomputed in light of the decision of the Hon’ble Supreme Court in the case of Pranay Sethi (Supra). Accordingly, the original claimants are held entitled to compensation of Rs.15,000/- under the head of loss of estate and also Rs.15,000/- under the head of funeral expenses. 18. In light of the above discussions, the amount of compensation is modified as under: Sr. No. Heads Amount Rs. 1. Loss of dependency 12,97,290.00 2. Loss of Consortium 1,20,000.00 3. Loss of Conventional 15,000.00 4. Funeral expenses 15,000.00 Total 14,47,290.00 19. Thus, the appellants – original claimants are held entitled to total compensation of Rs.14,47,290/-. In light of the fact that the Tribunal has already awarded a sum of Rs.9,61,640/- as total compensation, the appellants – original claimants are held entitled to enhance amount of compensation of Rs.4,85,650/- (Rs.14,47,290 – Rs.9,61,640/-). Considering the fact that the accident relates to year 2010, the interest at the rate of 7.5% is awarded on such enhanced amount of compensation from the date of filing of the original claim petition till the date of actual realization. 20. The aforesaid amount of compensation along with interest is directed to be realized from the respondent Nos.1 to 3 herein jointly and severally. The respondents are further directed to deposit above amount of enhanced compensation as early as possible preferably within a period of eight weeks from the date of receipt of this order. Needless to clarify that the Tribunal is required to follow the directions issued by the Hon’ble Supreme Court in the case of Bajaj Allianz General Insurance Co. Pvt. Ltd. Vs. Union of India reported in (2021) 17 Supreme Court Cases 530. 21. The Nazir of the concerned Tribunal is directed to release and disburse the amount of compensation in favour of the original claimants subject to verification. With this observations, the present First Appeal stands partly allowed with no order as to cost.