1. Heard Mr. N. K. Seth, Senior Advocate assisted by Mr. Ashish Chaturvedi, learned counsel for claimant-appellant and Mr. Anil Srivastava, learned counsel appearing on behalf of respondent no.3, the Oriental Insurance Company. The other respondents being clearly proforma in nature have not put in appearance.
2. First Appeal from Order has been filed under Section 110-B of the Motor Vehicles Act, 1939 against the judgment and award dated 07.09.2000 passed in Motor Accident Claim Petition No.83 of 1987 whereby the claim arising out of death of the accident victim has been allowed awarding a sum of Rs.6,89,500/-.
3. From a perusal of the impugned judgment, it is apparent that the claim petition had been filed for awarding a sum of Rs.30,00,000/- along with interest at the rate of 18% per annum as compensation. The accident is said to have occurred on 26.04.1987 at about 1:00 a.m. when the deceased Rakesh Gupta along with others was travelling in an Ambassador car and met with an accident with a petrol tanker coming from the opposite direction resulting in fatal injuries to Rakesh Gupta who subsequently succumbed to the injuries while admitted in the hospital. Initially, a claim petition had been filed by the parents of the deceased but the same was dismissed as not pressed. Subsequently, the present claimants/appellants being the widow and daughter of the deceased have filed the claim petition.
4. Learned counsel appearing on behalf of appellant at the very outset restricts his challenge to the impugned judgment and award only with regard to the factum of increase in the future income and for enhancement under conventional heads. It is submitted that although the claim petition had been filed indicating monthly income of deceased as Rs.25,000/- per month but the Tribunal has held that the aforesaid monthly income could not be proved by the claimants and has thereafter held an income of Rs.5,000/- per month to be established with regard to the deceased. Although it has been submitted that the deceased was a jeweller by profession and had purchased his own shop and had a vehicle of his own, therefore, the income assessed by the Tribunal is towards the lower side but no challenge thereto is being raised. Learned counsel for appellant has submitted that in view of subsequent judgment of Hon'ble the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi and others reported in (2017) 16 SCC 680, Hon'ble the Supreme Court has held that in case a deceased was self-employed or was on a fixed salary, an addition of 40% of the established income is warranted where the deceased was below the age of 40 years. It is submitted that since in the present case, age of the deceased was 31 years, the addition of 40% to the established income was required. Similarly, basing his claim on the aforesaid judgment, it is submitted that reasonable figures with regard to conventional heads, namely, loss of estate, loss of consortium and funeral expenses with enhancement at the rate of 10 per cent in every three years was also required to be made.
5. Learned counsel appearing on behalf of respondent-insurance company per contra has submitted that it is evident from a reading of the impugned judgment that the Tribunal has recorded that the parents of the deceased had claimed the income of the deceased as Rs.3,000/- per month and since despite the said claim, the income of the deceased has been assessed at Rs.5,000/- per month, the prospects of future increase in income has already been taken care of by the Tribunal. It has also been submitted that 'just compensation' as indicated in the old Act of 1939 and the new Act of 1988 has to be seen as on the date of accident and not subsequently. In view of aforesaid, it is submitted that the Tribunal has already provided just compensation as was required to be given to the claimants and there is no error whatsoever in the impugned judgment and award on that score. It has also been submitted that as per judgment of Hon'ble the Supreme Court in the case of Sarla Verma (Smt.) and others v. Delhi Transport Corporation and another reported in (2009) 6 SCC 121, interest at the rate of 6 per cent per annum has been awarded and even in the Rules framed in terms of the Act of 1988, interest is required to be awarded at the rate of 7 per cent although the Tribunal has awarded interest at the rate of 12 per cent per annum, which is more than the just compensation as required to be made and, therefore, there is no requirement of enhancement on that sore as well.
6. Learned counsel has further more submitted that even as per judgment in the case of National Insurance Company Ltd. v. Pranay Sethi (supra), the increase in future prospects of income is required to be calculated only in case of established income and since in the present case, the income of the deceased was not established but was only arrived at by the Tribunal on notional basis, the future prospects of increase in income was not required to be taken care of.
7. Upon consideration of material on record and submissions advanced by learned counsel for the parties, particularly by learned counsel for answering respondent it is evident that earlier the insurance company had filed First Appeal From Order No.633 of 2005 against the impugned judgment and award which was dismissed vide order dated 23.08.2005 on the ground of limitation. Prior to that, the Insurance Company had also filed Writ Petition No.2930(M/S) of 2000 against the impugned judgment and award in which vide order dated 16.12.2004, the petitioner Insurance Company was required to deposit the entire amount of compensation including interest under the judgment and award. It is submitted that in terms thereof, deposit was made before the Tribunal. It is further submitted that in pursuance to the directions passed by this Court in First Appeal From Order No.633 of 2005, the balance amount was deposed by the Insurance Company and further more an amount of 25,000/- as statutory deposit has also been made at the time of filing of the present appeal.
8. Upon a perusal of impugned judgment and award, it appears that the present claimants being the widow and daughter of the deceased had filed the claim petition indicating the income of the deceased as Rs.25,000/- per month claiming that he was engaged in the profession of a jeweller. However, the Tribunal has disbelieved the income of the deceased as claimed with specific recording of a finding that the claimants were unable to prove the aforesaid income by any documentary or oral evidence. Learned counsel for appellant submits that he is not challenging the income taken by the Tribunal as Rs.5,000/- per month with regard to the deceased and is pressing the appeal only on the ground of increase in the future income as well as under the head of conventional loss of income.
9. With regard to the submissions pertaining to increase in future prospects of income, learned counsel has placed reliance on the decision in National Insurance Company Ltd. v. Pranay Sethi(supra). It is evident from a reading of the aforesaid judgment that the same pertained to an accident that had taken place after the advent of the Motor Vehicles Act, 1988 whereas in the present case, the accident had taken place at the time when the Motor Vehicles Act, 1939 was prevailing.
10. Regarding the two enactments, it is seen that the concept of payment of compensation in the old Act of 1939 was covered under Section 110-B, which is as follows:-
"110-B. Award of the Claims Tribunal. - On receipt of an application for compensation made under section 110-A, the Claims Tribunal shall, after giving the parties an opportunity of being heard, hold an inquiry into the claim and may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid; and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be"
11. With the advent of new Motor Vehicles Act, 1988, the procedure for award of Claims Tribunal and award of compensation has been dealt with under Section 168, which is as follows:-
"168 : Award of the Claims Tribunal. - On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 163 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:
"Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X."
(2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.
(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct. "
The proviso to Section 168(1) of the Act of 1988 has been omitted with effect from 01.09.2019.
12. Upon a comparison of aforesaid two provisions, it is clear that the Claims Tribunal on receipt of an application for compensation is required to make an award after holding an enquiry and determining the amount of compensation which appears to it to be 'just'. Both under Section 110-B of the old Act and Section 168 of the new Act, it is the duty of the Claims Tribunal in case of awarding compensation, to ascertain that the compensation awarded is 'just'. From a comparison of the aforesaid two provisions, it is apparent that the Claims Tribunal while making award of compensation is required to determine the amount which appears to it to be just. As such both the provisions with regard to aforesaid fact appear to be pari materia.
13. Hon'ble the Supreme Court in the case of National Insurance Company Ltd. v. Pranay Sethi (supra) has explained the concept of increase in future prospects of income which is relatable to the concept of the term 'just compensation'. It has been held that to follow the doctrine of annual 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 and the computation of 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. The relevant portion of the judgment in the case of National Insurance Company Ltd. v. Pranay Sethi (supra) is as follows:-
"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 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 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 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 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."
14. It is a relevant factor that the judgment in National Insurance Company Ltd. v. Pranay Sethi (supra) has been rendered in the year 2017 whereas the accident in the present case had taken place in the year 1987 at the time when the old Act of 1939 was prevailing. However, as has already been noticed herein above, the provisions pertaining to award of just compensation as indicated in Section 110-B of the Act of 1939 and Section 168 of the Act of 1988 are pari materia and since the judgment in National Insurance Company Ltd. v. Pranay Sethi (supra) with regard to increase in future prospects of income is based on the concept of just compensation, it is held that the judgment in National Insurance Company Ltd. v. Pranay Sethi (supra) although passed under the new Act of 1988 in the year 2017, would have retrospective application with regard to accidents having taken place under the old Act of 1939 particularly in view of the term 'just compensation' as indicated in Section 110-B of the Act of 1939. As such, it is held that the judgment rendered by Hon'ble the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi (supra) would have retrospective application with regard to just compensation and consequences following there from.
15. Learned counsel for answering-respondent has submitted that since the Tribunal has already taken the income of deceased as Rs.5000/- per month instead of Rs.3,000/- per month claimed by the parents of the deceased, it would necessarily imply that increase in future prospects of income has been taken care of by the Tribunal. Regarding the aforesaid submission, it is apparent that it was the parents of the deceased who had claimed an income of Rs.3,000/- per month pertaining to the deceased but the present claimants had always claimed an income of Rs.25,000/- per month of the deceased who was alleged to be engaged in the profession of a jeweller. The Tribunal has recorded a finding that the claimants were unable to prove income of Rs.25,000/- per month either by any documentary or oral evidence and has thereafter recorded the income of the deceased as Rs.5,000/- per month. In such circumstances, it is evident that the Tribunal has considerably scaled down the income of the deceased from Rs.25,000/- per month to Rs.5,000/- per month and there is in fact no increase in the income of the deceased recorded by the Tribunal. The income claimed by the parents of the deceased would be completely irrelevant in the present circumstances considering the fact that the claim petition filed by the parents of the deceased earlier had already been dismissed as not pressed. The claim petition filed by the claimants herein has to be taken as per the pleadings indicated in the present claim petition and not of any other claim petition. As such, the submission of learned counsel for answering respondent that the Tribunal has increased the income of the deceased over and above that has been claimed, does not appear from the record and the argument therefore is rejected.
16. It has also been submitted by learned counsel appearing on behalf of respondent insurance company that excessive interest has been granted by the Tribunal which, therefore also indicates that just compensation over and above which was required has already been granted. It has been submitted that in Sarla Verma(supra), interest has been granted at the rate of 6% per annum while in the present case, interest has been granted at the rate of 12% per annum. It is noticeable that the appeal filed by the answering respondent has already been dismissed vide judgment and order dated 23.08.2005 as noticed herein above and there is no other challenge to the impugned judgment and award. In the absence of any challenge to the impugned judgment and award at present at the instance of the answering respondent insurance company, no exception can be taken to the interest awarded by the Tribunal.
17. Learned counsel for the answering respondent has also submitted that even as per judgment rendered in National Insurance Company Ltd. v. Pranay Sethi(supra), increase in future prospects of income has been taken only in case of established income and not on the basis of notional income and therefore since in the present case, the income taken by the Tribunal is only notional and not established, there cannot be any increase with regard to future prospects.
18. The aforesaid aspect regarding increase in future prospects of income has been dealt with in paragraph 59.4 of the decision rendered by Hon'ble the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi(supra), which is as follows:-
"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."
19. From a perusal of the aforesaid judgment, it is evident that addition in the future prospects of income has to be taken in case of established income. It is also noticeable that notional income as per the Act of 1988 has been taken as Rs.3,000/- per month. In the present case, the Tribunal after disbelieving the income indicated by the claimants has taken the income of the deceased as Rs.5,000/- per month. Although there is no evidence indicated by the Tribunal regarding fixing of the aforesaid income of the deceased but the same in any case cannot be taken as notional income. Income determined by the Tribunal with regard to the deceased whether on the basis of evidence or otherwise even on the basis of notional would definitely be held as established income since it is based on a finding recorded by the Tribunal. Even if the Tribunal records income of a deceased person as notional, the same necessarily implies that such an income has been established by the Tribunal and as such it cannot be said that notional income arrived at by the Tribunal would not amount to established income. Consequently, the increase in future prospects of income would definitely be applicable whether the income derived at by the Tribunal is on the basis of evidence or even if taken to be notional. The submission of learned counsel for answering respondent to the contrary is, therefore rejected.
20. Considering the aforesaid aspects of the matter, and as has already been held herein above, the judgment rendered by Hon'ble the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi(supra) would be applicable even in the present case where the accident had taken place prior to the advent of the Act of 1988. In view thereof, it would be evident that the concept of increase in future prospects of income as indicated in the said judgment would be applicable.
21. It is admitted by the parties and as has been held by the Tribunal that the age of the deceased at the time of the accident was 31 years. Increase in the established income as indicated in the judgment in National Insurance Company Ltd. v. Pranay Sethi(supra) is 40% in case the age of the deceased was below the age of 40 years. As such, it would be appropriate that the increase in future prospects of income with regard to the deceased is taken as 40% of the income established by the Tribunal pertaining to the deceased.
22. Similarly, in paragraph 59.8 of the decision in National Insurance Company Ltd. v. Pranay Sethi(supra), reasonable figures regarding conventional heads for loss of estate, loss of consortium and funeral expenses have been taken as Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively which would be appropriate to award in the present case.
23. Considering the aforesaid aspect of the matter, the compensation awarded to the applicant would stand revised as hereinafter provided:-
The Tribunal has assessed monthly income of deceased at Rs.5,000/- per month, which is now required to be enhanced by 40%, which would lead to an income of Rs.7,000/- per month. Hence the annual income of deceased would stand at Rs.84,000/-. Considering the deceased would have spent one-third of his annual income towards maintaining himself, the annual income as such would stand reduced to Rs.56,000/- (84,000 ÷ ⅓ = Rs.28,000, 84,000(-)28,000 = Rs.56,000/-). The Tribunal has taken the multiplier at 17 with which learned counsel for appellant does not have any objection. Hence the compensation would stand at Rs.9,52,000/- (56,000 X 17).
Description Awarded by Tribunal Modified/enhanced by this Court Difference compensation Rs.6,89,500/-
9,52,000/-
Rs.2,62,500/-
loss of estate Rs.2,500/-
Rs.15,000/-
Rs.12,500/-
loss of consortium Rs.5,000/-
Rs.40,000/-
Rs.35,000/-
funeral expenses Rs.2,000/-
Rs.15,000/-
Rs.13,000/-
TOTAL Rs.3,23,000/-
rate of interest on the amount awarded by the Tribunal.
12% per annum from effective date as stipulated in the award.
remains the same as awarded by the Tribunal with no modification by this Court.
rate of interest entitled by claimants on the enhanced amounts.
Not applicable 6% per annum from the date of institution of appeal before this Court i.e. 18.12.2020 till actual payment to the claimants.
24. Consequently, the appeal succeeds and is allowed modifying the judgment and award dated 07.09.2000 passed in Claim Petition No.83 of 1987 in the aforesaid terms. The parties to bear their own costs.
25. Since it is submitted that the insurance company has already made certain deposits of the compensation awarded some of which apparently has already been withdrawn by the claimants, it is therefore provided that the enhanced compensation would be paid to the claimants after adjusting the amount that have already been paid to them. The claimants would also be entitled to the statutory amount of Rs.25,000/- which has been deposited at the time of filing of the present appeal.
Order Date :- 25.8.2021 kvg/-