JUDGMENT P.K. Jain, J.
1. The claimants-respondents in this appeal Manish Porwar, Ashish Porwar, Meenakshi Gupta and Neha Gupta filed claim petition under Section 166 of the Motor Vehicles Act claiming compensation of Rs. 23,96,000 for the death of their father Munnu Lal Gupta and mother Kusum Lata.
2. The facts briefly stated are that on 27.3.1994 both the deceased were returning to their house after meeting Ratan Lal , elder brother of Munnu Lal Gupta. On way to their house their Hero Honda motor cycle went out of order. Deceased Munnu Lal Gupta parked the vehicle on left side of the road and while he was examining the defect, tanker No. UP 30-2002 overran both the victims on account of rash and negligent driving of the said vehicle by its driver. Both the victims died at the spot.
3. The claimants alleged that Munnu Lal Gupta was aged 49 years and 7 months. His date of birth is 7.8.1944 and he was employed as Junior Engineer in U.P. Jal Nigam and was drawing salary of Rs. 6,635 per month. He had fair chances of promotion to the post of Assistant Engineer and also an increase of salary in the near future, which would have been at least Rs. 8,000 per month. After his retirement he would have earned at least Rs. 5,000 per month. Thus total loss of income was Rs. 8,16,000 plus Rs. 6,00,000 on the death of Munnu Lal Gupta. The mother of the claimants Kusum Lata had passed M.A. Previous (Economics) and was running Shishu Shiksha Kendra and was earning about Rs. 24,000 per annum. She would have earned this money till 20 years and the claimants suffered a loss of Rs. 4,80,000 on account of her death. The claimants further alleged that they suffered a loss of Rs. 5,00,000 on account of being deprived of love and affection of both the parents. Her age was around 41 years.
4. Respondent No. 5, owner of the vehicle, denied involvement of his vehicle in the alleged accident and further pleaded that the tanker was insured with the present appellant United India Insurance Co. Ltd.
5. The appellant insurance company in its written statement besides other pleas having been taken, also pleaded that a highly excessive amount of compensation has been claimed. There could be no presumption for future earning after retirement of deceased Munnu Lal Gupta and deceased Kusum Lata was not earning anything from tuitions as claimed by the claimants.
6. The Claims Tribunal after consideration of the evidence adduced by the parties, held that both the deceased died due to rash and negligent driving of the tanker in question by its driver. The deceased had a valid driving licence. On the question of quantum of compensation the Tribunal held that the monthly income of deceased Munnu Lal Gupta was Rs. 6,855 and he spent Rs. 5,000 per month on his family. The loss thus comes to Rs. 60,000 per annum. The Tribunal applied the multiplier of 8 and awarded compensation of Rs. 4,80,000 for loss of income during the service period of deceased Munnu Lal Gupta. For the loss of love and affection and consortium an amount of Rs. 2,20,000 was awarded. For loss of future income after retirement, the Tribunal awarded compensation of Rs. 3,00,000. Thus a total loss for the death of Munnu Lal Gupta was assessed at Rs. 10,00,000. For the death of Kusum Lata, the Tribunal held that she was earning Rs. 12,000 per year and would have lived up to the age of 60 years. The Tribunal assessed the loss due to her death at Rs. 3,00,000. The Tribunal had further directed that on the total amount of Rs. 13,00,000, interest of 12 per cent per annum shall be payable. The present appellant was held liable for payment of the entire compensation amount along with the interest.
7. Aggrieved by the award of the Tribunal, United India Insurance Co. Ltd. has preferred the present appeal.
8. We have heard Mr. Vineet Saran, learned counsel for the appellant and Mr. S.D.N. Singh, learned counsel for respondent Nos. 1 to 4 at length.
9. Mr. Vineet Saran has strenuously contended that the amount of compensation awarded is too excessive. His submission is that the certificate of income dated 2.1.1995 was not admissible in evidence and was wrongly relied upon by the Tribunal; that the income-tax was payable by the deceased Munnu Lal Gupta, which has not been considered by the Tribunal. It is further submitted that the amount of future income after retirement has been wrongly awarded and lastly it is submitted that the compensation for the loss of love and affection and consortium was too excessive. As regards compensation for death of Kusum Lata, it is submitted that there is no reliable evidence showing that Kusum Lata had any earning and further that multiplier applied is not correct. Mr. S.D.N. Singh appearing for the claimants-respondents has raised a preliminary objection on the ground that the insurer of the vehicle can challenge the award only on the grounds available to it under Sections 170 and 149(2) of the Motor Vehicles Act. He has further submitted that the amount of compensation awarded by the Tribunal is just and fair and no interference is called for by this court.
10. As to the preliminary objection raised by the learned counsel for the claimants-respondents, attention of this court is drawn to Sections 170 and 149(2) of the Motor Vehicles Act. Section 149(2) of the Motor Vehicles Act provides that the insurer to whom the notice of bringing of any proceedings is given, shall be entitled to be a party to such proceedings and to defend the action on any of the grounds mentioned in the section. Ground (a) contemplates that if there has been a breach of a specified condition of the policy relating to a condition prescribed under the aforesaid provisions and ground (b) contemplates that the policy is void on the ground that it was obtained by the nondisclosure of material fact or by a representation of fact which was false in some material particular.
11. Section 170 of the Motor Vehicles Act works as an exception as it contemplates that where in the course of any inquiry, the Claims Tribunal is satisfied that there is collusion between the person making the claim and the person against whom the claim is made, or the person against whom the claim is made has failed to contest the claim, the Tribunal for reasons to be recorded in writing, can direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceedings and the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in Sub-section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.
12. As it transpires from the record, insured of the vehicle as well as the driver were impleaded as opposite party Nos. 1 and 3 respectively. The owner of the vehicle filed its written statement denying the involvement of the vehicle in the accident and claiming that the vehicle was fully insured and the liability was that of the insurance company. Respondent No. 3 did not contest the proceedings. It would further transpire from the record that even though the present appellant had taken the plea that the amount of compensation claimed by the claimants-respondents was highly excessive, Kusum Lata was not running any coaching institute and no compensation could be granted for the present and future earning, no objection was raised by the claimants to the taking of such pleas by the insurance company. It would further appear that even though the witnesses examined by the claimants were cross-examined on the question of earning of Kusum Lata no objection was raised by the claimants.
13. Learned counsel for the claimants-respondents has referred to a number of decisions in support of his contentions that the appellant United India Insurance Co. Ltd. cannot contend that the compensation awarded is excessive or is not just and fair. He has referred to the decision of this court in New India Assurance Co. Ltd. v. Shakuntla Devi 1996 ACJ 342 (Allahabad) and the decision of the Apex Court in Narendra Kumar v. Yarenissa 1998 ACJ 244 (SC). In Narendra Kumar's case (supra) the Hon'ble Supreme Court had held that:
It is a different matter that claimants normally make the insurance company a party to the claim application. That by itself cannot confer a right of appeal on the insurer. The grounds on which the insurer can defend the action commenced against the tortfeasors are limited and unless one or more of those grounds is/are available the insurance company is not and cannot be treated as a party to the proceedings. That is the reason why the courts have consistently taken the view that insurance company has no right to prefer an appeal under Section 110-D of the Act unless it has been impleaded and allowed to defend on one or more of the grounds set out in Sub-section (2) of Section 96 or in the situation envisaged by Sub-section (2-A) of Section 110-C of the Act. If then the insurer and owner of the offending vehicle file a joint appeal and if the court comes to the conclusion that the insurer had no right to prefer an appeal under Section 110-D of the Act because none of the defences mentioned in Sub-section (2) of Section 96 were available to him nor had a situation of the type envisaged by Sub-section (2-A) of Section 110-C arisen, it cannot be permitted to file an appeal whether on its own or in association with one or more of the tortfeasors against whom the award is made which the insurer is liable to answer as if a judgment-debtor.
14. In the Division Bench judgment of this court in New India Assurance Co. Ltd. 1996 ACJ 342 (Allahabad), it was held that the insurance company has contested the claim only on the grounds permissible by Section 149(2) of the Act. Owner of the vehicle has appeared and duly contested the claim. Exceptions carved out by Section 170 of the new Act or Section 110-C (2-A) of the old Act are not attracted, as such, even assuming that the reasoning of the latter Division Bench is applied to the case, the insurance company cannot be permitted to raise additional points other than those contemplated by Section 149(2) of the Act in the facts of this case.
15. In view of the aforesaid two decisions as well as the decision of the Apex Court in British India General Insurance Co. Ltd. v. Captain Itbar Singh 1958-65 ACJ 1 (SC), we are of the view that normally the insurance company can be permitted to defend the claim only on the grounds permissible under Section 149(2) of the new Act or Section 96 (2) of the old Act. However, there may be cases where the owner of the vehicle had colluded with the claimants and did not defend the claim of the claimants, in such circumstances the Tribunal can permit the insurance company to raise additional pleas other than those contemplated by Section 149(2) of the Act. In the instant case, as we have found above, even though the owner filed his written statement, but did not contest the proceedings and the driver of the vehicle even did not file his written statement and allowed the claim petition to proceed ex pane against him. There is another aspect of the matter. The provisions of the Motor Vehicles Act, old as well as new, provide that the Tribunal shall hold an enquiry into the claim and make an award determining the amount of compensation which appears to be just. The question which arises for determination is whether in the cases where the Tribunal awarded the amount of compensation arbitrarily ignoring the established principles on which the amount of compensation is assessed, could such illegality be not brought by the insurance company to the notice of the appellate court when the amount of compensation awarded is too excessive or not in accordance with well settled law for determining the amount of compensation. In our view, the insurance company can certainly bring such illegality or arbitrariness to the notice of the appellate court and the High Court while examining the question of compensation being just and fair, can go into the question, if the compensation awarded is not in accordance with the well settled principles/norms for assessment of amount of compensation. We would, therefore, hold that normally the insurance company cannot be heard on the grounds other than those contained in Section 149(2) of the Motor Vehicles Act on which it can contest the proceedings or the claim petition. However, in exceptional circumstances where actually the tortfeasors or the owner of the vehicle had colluded with the claimants or the Tribunal committed grave error of law in assessing the amount of compensation, the insurer can bring such facts to the notice of the appellate court and the appellate court can certainly look into and consider such submissions. In the instant case the driver and owner of the vehicle in the absence of specific evidence, cannot be held to have colluded with the claimants-respondents yet they can be said to have neglected/failed to contest the claim petition and on hearing the parties' counsel we find that serious questions with regard to the arbitrariness in determining the amount of compensation are raised. Section 170, sub-clause (b) permits the Tribunal to implead insurer as a party to the proceedings if the Claims Tribunal is satisfied that "the person against whom the claim is made has failed to contest the claim. Section 170 of the Act further provides that the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in Sub-section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made". In our view, on the facts of the present case the appellate court can go into such question relating to illegality or arbitrariness in computing the amount of compensation awarded by the Tribunal. We find support to the view taken by us from a number of decisions of this court as well as of the Apex Court in which the court had gone into the questions of adequacy of or just and fair amount of compensation awarded by the Tribunal on the appeal preferred by the insurer. We may refer the cases of New India Assurance. Co. Ltd. v. Shakuntla Devi 1996 ACJ 342 (Allahabad); Oriental Fire & Genl. Ins. Co. Ltd. v, Rajendra Kaur 1989 ACJ 961 (Allahabad) and New India Assurance Co. Ltd. v. Kiran Singh 1988 (2) TAC 453 (Allahabad). In these cases the question of adequacy of the amount of compensation awarded was pleaded in the appeal preferred before the court and such question was entertained by the court, though the court held that the amount of compensation awarded was just and fair.
16. Now coming to the arguments as advanced by the learned counsel for the appellant, we may point out at the very out set that so far as the finding of the Tribunal with regard to the income of Kusum Lata is concerned, that is the finding of fact that cannot be challenged by the appellant insurance company in this appeal. We may point out here that the claimants had examined Manish Porwar as PW 1, who categorically stated that Kusum Lata was earning Rs. 2,000 per month from tuition and coaching centre. His evidence was corroborated by the evidence of Rajjan Lal Gupta, PW 2, and the factum of running of coaching school was brought on record during cross-examination of this witness and this witness had categorically stated that about 25-30 children used to come to the coaching centre of Kusum Lata. There is no dispute about the age of Kusum Lata at the time of her death. The Tribunal has held that deceased Kusum Lata must be spending Rs. 1,000 per month on her family. Thus loss of income on her death to the claimants was Rs. 12,000 per annum. We do not find any error in the findings of the Tribunal. However, the Tribunal committed error in computing the amount of loss. In a number of cases the Apex Court has held that the multiplier of 16 at best could be applied considering the age factor. In U.P. State Road Trans. Corporation v. Trilok Chandra 1996 ACJ 831 (SC), the Hon'ble Supreme Court has observed "in Susamma Thomas' case 1994 ACJ 1 (SC), that usually English courts rarely exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when the Tribunals/courts began to use a hybrid method of using Nance's method without making deduction for imponderables."
17. The situation has now undergone a change with the enactment of the Motor Vehicles Act, 1988 as amended by Amendment Act 54 of 1994. The most important change introduced by the amendment in so far as it relates to determination of the compensation is the insertion of Sections 163-A and 163-B in Chapter XI titled 'Insurance of motor vehicles against third party risks' and a Table in Schedule II. According to this Table multiplier from 5 to 18 depending on the age-group of the victim could be applied for determining compensation. Under this Schedule the maximum multiplier can be up to 18 and not 16 as was held in Susamma Thomas' case, 1994 ACJ 1 (SC).
18. While computing the compensation amount payable on account of the death of Kusum Lata the Claims Tribunal appears to have applied the multiplier of 25 thereby fixing the amount of compensation at Rs. 3,00,000. Learned Tribunal observed that the average longevity of life of the deceased may be taken to be 60 years. Even if the longevity was taken to be 60 years, Kusum Lata would have lived for another 20 years as at the time of her death she was around 40 years. We have already pointed out above that the Apex Court in U.P. State Road Trans. Corporation 1996 ACJ 831 (SC), held that previously the multiplier of 16 rarely exceeded whereas due to the change in the enactment of Motor Vehicles Act, 1988 as amended by Act No. 54 of 1994 maximum multiplier applied can be up to 18 and that too had to be applied considering the age of the deceased as well as the age of the claimants. In the instant case, since the age of the deceased was 40 years 4 months, multiplier of 15 at best could have been applied as provided in Second Schedule under Section 163-A of the Motor Vehicles Act, 1988. By applying multiplier of 15 the amount of compensation which the claimants were entitled would come to Rs. 1,80,000 (Rs. 12,000 x 15 = Rs. 1,80,000). To this amount may be added usual amount of conventional sum of Rs. 15,000 for loss of love and affection and loss to the estate. Thus, the total amount which the appellant shall be liable to pay on the death of Kusum Lata would come to Rs. 1,95,000.
19. Now coming to the question of amount which will be payable for the death of Munnu Lal Gupta, the first two submissions made on behalf of the appellant are devoid of merit and we reject them outright. The claimants examined Manish Porwar, PW 1, who is son of the deceased, has categorically stated that the monthly salary of his father was Rs. 6,855 which is supported by the certificates as contained in papers 30-C and 31-C which were issued by the Project Manager of the Constructions and Design Services, U.P. Jal Nigam, where the deceased was employed. Both these certificates were filed prior to the examination of Manish Porwar as PW 1. There is no endorsement of acceptance or denial on these certificates and no question was at all put to the witness challenging the monthly salary of the deceased Munnu Lal Gupta. Therefore, the contention of the learned counsel that 30-C cannot be looked into is without any substance. Learned counsel has vigorously argued that the income tax on the income of the deceased was payable and while computing his net income no discount has been made towards income tax payable by him. Again we may observe that no cross-examination in this regard was directed and there is nothing on record to show that deceased Munnu Lal Gupta was paying income tax. One may manage his income in a manner that no income tax may be payable. In any case it was for the insurance company to have shown that income tax was being paid by the deceased. Therefore, the question of giving discount for payment of income tax while computing the income of the deceased does not arise.
20. The learned counsel has further submitted that the Tribunal has committed error of law in computing future income of the deceased after he had retired. We have already pointed out above that the Second Schedule to Section 163-A as inserted by Act No. 54 of 1994 provides for multiplier for different age groups. Multipliers have been provided taking into consideration the longevity of life which is now normally between 65 and 70 years. Therefore, the learned Tribunal instead of assessing separate income of the deceased Munnu Lal Gupta after his retirement ought to have assessed the income of the deceased by applying relevant multiplier provided in Second Schedule as stated above. In General Manager, Kerala State Road Trans. Corporation v. Susamma Thomas 1994 ACJ 1 (SC), the facts were that the Motor Accidents Claims Tribunal had awarded compensation of Rs. 58,760. In appeal the High Court enhanced amount of compensation to Rs. 2,64,000 and in addition to usual award for loss of the dependency a sum of Rs. 50,000 was awarded under the head loss of future earnings in the United States of America. The Apex Court while disposing of the appeal of the Kerala State Road Trans. Corporation held that the claim made for loss of future earnings of Rs. 50,000 on the prospects of future employment in USA was rightly negatived by the Tribunal. The award under this head is clearly unjustified in the facts of the present case. In the instant case before us also we find that loss of future earnings of the deceased after his retirement was not justified. There are many factors which might have led to variations, up or down, in the future. The earning of the deceased might have increased and with it the amount provided by him for his dependants. Likewise, the future income may diminish with a recession in trade or he might have had spells of unemployment. In considering the effect to be given in the award of damages to possible variations in the dependency there are two factors to be borne in mind. The first is that the more remote in the future is the anticipated change, the less confidence there can be in the chance of its occurring and the smaller the allowance to be made for it in the assessment. The second is that as a matter of the arithmetic of the calculation of present value, the later the change takes place the less will be its effect upon the total award of damages. There was no certainty that the victim after his retirement would have increased his income or not. Therefore, in our view the award of compensation under the head of future income after retirement was unjustified.
21. We may observe that the Tribunal has committed error in applying multiplier of 8 while computing the loss of income of dependency to the claimants. The Second Schedule of Section 163-A as introduced by Act No. 54 of 1994 to the Motor Vehicles Act, 1988 provides for multiplier of 13 in case the age of the deceased was between 45 and 50 years. In the instant case, we find that the age of deceased Munnu Lal Gupta was 49 years and 7 months. In our view, therefore, the multiplier of 8 was wrongly applied by the Tribunal as the deceased was nearing 50 years and the multiplier for the age group 50 to 55 years as provided in the Second Schedule is 11. In the instant case, in our view, the multiplier of 12 ought to have been applied. We may also observe that in the instant case the victim had almost more or less stable job. Pay was expected to be revised in near future as stated in the claim petition and was actually revised in view of the recommendations of the new Pay Commission with effect from 1.1.1996. The record shows that at the time of his death the victim was placed in the pay scale of Rs. 2,200-4,000. We can take judicial notice of the fact that with the implementation of the new pay scale, the scale equivalent to the scale of Rs. 2,200-4,000 was Rs. 8,000-13,500 and fixation was made after adding one increment with effect from 1.1.1996. We can, therefore, giving consideration to the future rise in the income of the deceased presume that the income of the deceased should be fixed at Rs. 9,000 per month. In General Manager, Kerala State Road Trans. Corporation v. Susamma Thomas 1994 ACJ 1 (SC), the Apex Court has observed:
The deceased person in this case had a more or less stable job. It will not be inappropriate to take a reasonably liberal view of the prospects of the future and in estimating the gross income it will be unreasonable to estimate the loss of dependency on the present actual income of Rs. 1,032 per month. We think, having regard to the prospects of advance-meet in the future career, respecting which there is evidence on record, we will not be in error in making a higher estimate of monthly income at Rs. 2,000 as the gross income.
That was a case in which the victim died at the age of 39 years and the Apex Court considering future prospects of advancement in career computed the amount of compensation by almost doubling the present income of the deceased. In the present case the deceased was around 50 years of age and we feel that considering the future prospects of increased income we will be justified in computing the loss by making a higher estimate of the monthly income of the deceased at Rs. 9,000 in view of the circumstances stated above.
22. The Second Schedule to Section 163-A of the Amending Act 54 of 1994 further provides that the amount of the compensation so arrived at in the case of fatal accident claims shall be reduced by '/3rd in consideration of the expenses which the victim would have incurred towards maintaining himself had he been alive. Therefore, after reducing aforesaid income of Rs. 9,000 by '/3rd, the dependency of the claimants for the loss suffered by them due to the death of the deceased may be arrived at Rs. 6,000 per month. If we take dependency at Rs. 6,000 per month or Rs. 72,000 per year and we capitalise it on a multiplier of 12 the compensation amount would work out to Rs. 8,64,000. To this amount may be added usual award for loss of consortium and loss to estate in conventional sum of Rs. 15,000. Thus the total amount of compensation payable on the death of deceased Munnu Lal Gupta would come to Rs. 8,79,000. In our view, the Tribunal was not justified in awarding the amount of Rs. 2,20,000 for loss of love and affection. The amount which is now usually awarded for loss of love and affection and consortium is conventional sum of Rs. 15,000 as has been held in a number of cases.
23. Learned counsel referring to the case of U.P. State Road Trans. Corporation v. Trilok Chandra 1996 ACJ 831 (SC), has strenuously argued 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. It is further submitted that after working out dependency multiplied by the estimated useful life of the deceased, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependant, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. He further submits that as observed by the Apex Court in the above case calculation of compensation and the amount worked out in the Schedule suffer from several defects. Neither the Tribunal nor the courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. The Supreme Court further observed that these mistakes are limited to actual calculations only and not in respect of other items. We while computing or assessing the damage or loss to the claimants have taken into consideration these factors. We may observe here that in the U.P. State Road Trans. Corpn. (supra) even though the Hon'ble Supreme Court held that the multiplier of 18 cannot exceed yet considering the facts and circumstances of that case the court held that the multiplier was excessive, but a very low multiplicand was used as loss of dependency and if the multiplicand is corrected and correct multiplier is used, the compensation would work out to near about the same figure. The Apex Court, therefore, declined to interfere with the award of the Tribunal as modified by the High Court.
24. In view of the foregoing discussions the appeal is partly allowed and the award of the Tribunal is modified. The claimants are awarded compensation of Rs. 10,74,000 (Rs. 1,95,000 for the death of Kusum Lata Gupta and Rs. 8,79,000 for the death of Munnu Lal Gupta) with interest at the rate of 12 per cent per annum from the date of filing of the claim petition till the payment of the amount of compensation. At the time of admission of the appeal the appellant was directed to deposit Rs. 5,75,000 over and above the amount of Rs. 25,000 deposited by him at the time of filing of the appeal. The balance amount with interest shall be deposited by the appellant within two months from today failing which the claimants shall be entitled to execute the award. We further award costs of the proceedings before the Tribunal which we assess at Rs. 2,500. Costs of this appeal are, however, made easy. Rs. 25,000 deposited at the time of filing of appeal shall be remitted to the Tribunal forthwith if not already remitted. Amount already deposited may be withdrawn by claimants.
25. Out of the amount so awarded Rs. 3,25,000 each shall be paid to Minakshi Gupta and Neha Gupta and Rs. 2,12,000 each shall be paid to claimants Ashish Porwar and Manish Porwar. The amount of compensation payable to Minakshi Gupta and Neha Gupta shall be invested in a nationalised bank in fixed deposits with annual interest. The amount of interest may be withdrawn by the guardian of Minakshi Gupta and Neha Gupta to meet out the expenses on their maintenance.