KANCHANBEN H SHAH vs. HARVINDERSINGH GURUDEVSINGH

C/FA/2749/1997 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL NO. 2749 of 1997

FOR APPROVAL AND SIGNATURE:

HONOURABLE MS.JUSTICE HARSHA DEVANI

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ KANCHANBEN H SHAH & 7....Appellant(s) Versus HARVINDERSINGH GURUDEVSINGH & 2....Defendant(s) ================================================================ Appearance: MR YOGESH S LAKHANI, ADVOCATE for the Appellant(s) No. 1 - 8 MR. JAY M THAKKAR, ADVOCATE for the Appellant(s) No. 1 - 8 DELETED for the Defendant(s) No. 2 MR SUNIL B PARIKH, ADVOCATE for the Defendant(s) No. 3 SERVED BY AFFIX.-(R) for the Defendant(s) No. 1 ================================================================ CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI

Date : 14/03/2014 Page 1 of 9

C/FA/2749/1997 JUDGMENT

ORAL JUDGMENT 1. This appeal under section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”) for enhancement, at the instance of the claimants, is directed against the judgment and award dated 29th April, 1997 passed by the Motor Accident Claims Tribunal, Jamnagar in Claim Case No.640 of 1996 to the extent the claim of the appellants has not been allowed by the Tribunal. 2. The facts stated briefly are that the husband of appellant No.1 and father of the other appellants, sustained injuries on account of an accident that took place on 15.09.1989 on National Highway Road No.8 near Prantij towards Dalpur. According to the claimant, a truck No.U.H.Q.-47 was parked on the highway in such a manner so as to obstruct passing vehicles. The deceased was travelling in his motorcar No.G.J.P.- 1507, which rammed into the truck as there were no marks or lights put around the stationary truck. Upon the car colliding with the truck, the door of the car opened and the deceased fell down from the car and sustained serious injuries on his head. The deceased was taken to the hospital at Ahmedabad where he died while undergoing treatment. The appellants who are the heirs of the deceased filed a claim petition seeking compensation of Rs.5,00,000/-. It was the case of the claimants that the deceased was aged 48 years and that he was carrying on the business of dealing scrap and his annual income was Rs.34,031/-. 3. The Tribunal, after appreciating the evidence on record, held that the accident had occurred solely on account of Page 2 of 9

C/FA/2749/1997 JUDGMENT negligence on the part of the driver of the truck. As regards the quantum of compensation, on behalf of the claimants, a statement of income of the deceased for the year 1985-86 and 1988-89 was produced for the purpose of showing that the deceased was a partner in a partnership firm in the name of M/s. Fatehlal Harakhlal & Co. and his annual income as a partner thereof was Rs.34,000/-. The Tribunal found that the statement produced by the appellants was not sufficient evidence inasmuch as the return of income tax had not been filed and, accordingly, assessed the monthly income of the deceased at Rs.2000/-. The Tribunal, accordingly, calculated the annual income of the deceased at Rs.24,000/- and deducted 6,000/- therefrom and computed the annual dependency at Rs.18,000/-. Considering the age of the deceased to be 50 years, the Tribunal applied a multiplier of 10 and, accordingly, calculated the dependency loss at Rs.1,80,000/-. The Tribunal also awarded Rs.10,000/- towards pain, shock and suffering, Rs.10,000/- towards loss of estate, Rs. 5,000/- towards medical treatment and transportation and, accordingly, awarded a total compensation of Rs.2,05,000/-. Being aggrieved, the claimants are in appeal. 4. Mr. Jay Thakkar, learned advocate for the appellants, assailed the impugned award on the ground that while computing the loss of dependency, the Tribunal has not considered the prospective income of the deceased. Reliance was placed upon the decision of the Supreme Court in the case of Sarla Varma v. Delhi Transport Corporation Ltd. (2009) 6 SCC 121, for contending that having regard to the fact that the age of the deceased was 50 years, the prospective income ought to have been considered by adding Page 3 of 9

C/FA/2749/1997 JUDGMENT 30% of the income. It was further submitted that the multiplier applied by the Tribunal is on the lower side, inasmuch as, the Supreme Court in above case has held that in case where the age of the deceased is between 45 to 50 years, a multiplier of 13 is required to be applied. It was also submitted that the Tribunal had failed to award any amount towards loss of consortium and funeral expenses. It was further submitted that the deceased had eight dependents, out of whom, three had not been considered by the Tribunal as being adults and not dependent on the deceased. However, there were still five dependents and, hence, the Tribunal ought to have deducted only 1/4th towards personal expenses. It was accordingly urged that the compensation awarded by the Tribunal is required to be enhanced. 5. On the other hand, Mr. Sunil Parikh, learned advocate for respondent No.3-insurance company submitted that the impugned award passed by the Tribunal is just, legal and proper and does not warrant interference. It was submitted that insofar as the claim for prospective income is concerned, the claimants had not led any evidence to establish the income of the deceased. The deceased being a businessman, the decision of the Supreme Court in the case of Sarla Verma (supra) would not be applicable. Reliance was placed upon the decision of a Division Bench of this court in the case of Sheelaben W/o. Jayeshbhai Ramchand v. Vishnubhai Valjibhai Rabari, rendered in First Appeal No.1474 of 2002 on 12.12.2012, wherein the court, after considering various decisions of the Supreme Court including its decision in the case of Santosh Devi v. National Insurance Co. Ltd., 2012 (6) SCC 421, observed that the said decision nowhere Page 4 of 9

C/FA/2749/1997 JUDGMENT deals with the issue of prospective income of a businessman. The court was of the view that in support of a business income, there has to be reasonable evidence on the record to show the nature of business, its dimensions, its potentialities and latent dangers and also the contribution of the personal skill of the businessman in mending and manning the business. Mr. Parikh submitted that in the facts of the present case in the absence of any evidence having been led as regards the personal skills of the deceased, the question of awarding future prospective income does not arise. Under circumstances, the claim for future prospective income does not require to be entertained. Insofar as the multiplier applied by the Tribunal is concerned, Mr. Parikh fairly submitted that in the light of the decision of the Supreme Court in the case of Sarla Verma (supra), a multiplier of 13 ought to have been applied. As regards the submission with regard to deduction of one fourth of the income towards personal expenses of the deceased, Mr. Sunil Parikh pointed out that though the Tribunal has adopted different approach by deducting one unit, even if one fourth of the income is deducted towards personal expenses of the deceased, the final figure would still remain the same and, hence, no change is required to be made in the impugned award in this regard. 6. This court has considered the submissions advanced by the learned advocates for the respective parties and has perused the record of the case. 7. As noticed earlier, since the only evidence produced in support of the claim of the claimants regarding the income of the deceased was by way of income tax statements of the Page 5 of 9

C/FA/2749/1997 JUDGMENT deceased which were not in the nature of income tax returns submitted before any statutory authority, the Tribunal, had, therefore, rightly refused to rely upon the same and had computed the monthly income of the deceased at Rs.2,000/-. The case of the appellant is that after taking the income of the deceased at Rs.2,000/-, the Tribunal ought to have considered the question of future prospective income and should have added 30% of the said income for this purpose. In this regard, it may be noted that in the case of Sarla Verma (supra), the Supreme Court has held that generally the actual income of the deceased less income tax should be the starting point for calculating the compensation. The court was of the view that an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects should be made where the deceased had a permanent job and was below 40 years. The addition should be only 30% if the age of the deceased was between 40 to 50 years and there should be no addition where the age of the deceased is more than 50 years. The court further held that where the deceased was self- employed or was on a fixed salary (without provision of annual increment etc.), the court 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. Subsequently the Supreme Court in the case of Santosh Devi (supra) held that even in case where the deceased was self-employed or on a fixed salary without provision for annual increment, the future prospective income is required to be considered. Subsequently, in Rajesh v. Rajbir Singh (2013) 9 SCC 54, the Supreme Court held that in case of self-employed persons or persons with fixed wages, the actual income of the deceased must be enhanced for the Page 6 of 9

C/FA/2749/1997 JUDGMENT purpose of computation of compensation by 50% where his age was below 40 years and by 30% where he belonged to the age group of 40 to 50 years and by 15% where he was between the age group of 50 to 60 years. However, a Division Bench of this court in the case of Sheelaben W/o. Jayeshbhai Ramchandra Dave v. Vishnubhai Valjibhai Rabari (supra) has, after considering various decisions of the Supreme Court including its decision in the case of Santosh Devi v. National Insurance Co. Ltd (supra) which formed the basis of the decision of the Supreme Court in the case of Rajesh v. Rajbir, held that in support of business income, there has to be reasonable evidence on the record to show the nature of business, its dimensions, its potentialities and latent dangers and also the contribution of the personal skill of the businessman in mending and manning the business. In the present case except for production of the statement of income, no evidence worth the name has been led to establish the nature of activities carried on by the deceased and his contribution to the business. Under the circumstances, applying the above decision in the case of Sheelaben W/o. Jayeshbhai Ramchandra Dave v. Vishnubhai Valjibhai Rabari (supra), the question of considering future prospective income would not arise in the facts and circumstances of the present case. However, insofar as the multiplier applied by the Tribunal is concerned, the Supreme Court in the case of Sarla Verma (supra) has laid down standards for computation of compensation whereby in case where the deceased is between 46 to 50 years, a multiplier of 13 is required to be adopted. The total loss of income can accordingly be worked out as under: Page 7 of 9

C/FA/2749/1997 JUDGMENT Monthly income Rs.2000/- Annual income = Rs.2000/- x 12 Rs.24,000/- Annual loss of dependency after deducting One third towards personal expenses Rs.18,000/- Total loss of dependency by applying a multiplier of 13 Rs. 2,34,000/- 8. The appellant No.1 is the wife of the deceased, however, no amount has been awarded under the head of loss of consortium, under the circumstances, in the opinion of this court, an amount of Rs.10,000/- is required to be awarded under this head. The Tribunal has also not awarded any amount towards funeral expenses. Therefore, having regard to the compensation awarded by the Supreme Court in various decisions, an amount of Rs.5,000/- is required to be awarded towards funeral expenses. 9. Accordingly, the compensation is required to be worked out as under: Total loss of dependency Rs.2,34,000/- Pain, shock and suffering Rs. 10,000/- Loss of estate Rs. 10,000/- Loss of consortium Rs. 10,000 Medical & transportation expenses Rs. 5,000/- Funeral expenses Rs. 5,000/- Total Compensation Rs.2,74,000/- Page 8 of 9

C/FA/2749/1997 JUDGMENT The Tribunal has awarded a total compensation of Rs.2,05,000/-. The claimants shall, therefore, be entitled to an additional compensation of Rs.69,000/-. 10. In the light of the above discussion, the appeal partly succeeds and is, accordingly, allowed to the following extent: The appellants shall be entitled to recover an additional compensation of Rs.69,000/- with interest at the rate of 7.5% from the date of filing of the claim application till realisation thereof from the respondents, jointly and severally. 11. The Registry shall forthwith send back the record and proceedings of the case. (HARSHA DEVANI, J.) Vahid Page 9 of 9