CENTRAL – II vs. PVT. LTD

A claim petition (M.A.C. Petition no. 881/2010) was filed under Sections 166/140 of the Act by the bereaved parents of the deceased i.e. Respondent nos.1&2/ claimants for claiming compensation of Rs. 40,00,000/- (Forty Lakh Rupees) towards the death of their deceased son. A similar claim was brought before the learned Claims Tribunal by the parents of another deceased/Sh. Himanshu Gupta vide M.A.C Petition No.882/2010. 5. Vide an order dated 14.02.2012, the learned Claims Tribunal passed an interim award for the sum of Rs. 50,000/- in favour of Respondent nos. 1 and 2. Learned Claims Tribunal directed the appellant to deposit 50% of the awarded amount in favour of Respondent nos. 1&2/claimants and rest 50% of the awarded amount will be deposited by Respondent no. 6 i.e. Reliance General Insurance Company Ltd. 6. Vide a common impugned Award dated 31.01.2013, the learned Claims Tribunal disposed of both the aforesaid Claim petitions holding that this is a case of contributory negligence as both the vehicles involved in the accident are negligent. Learned Claims Tribunal assessed the negligence on the part of the truck bearing no. HR-45-2917 and three-wheeler bearing no. HR-45-9155 as 70% and 30% respectively. In the M.A.C Petition No.881/2010, the learned Claims Tribunal was pleased to award a Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

Mr. Pankaj Seth, learned counsel appearing for the appellant has submitted that the impugned award is bad in law since the learned Claims Tribunal completely neglected the evidence produced before it. It is averred by the learned counsel that the learned Claims Tribunal unjustifiably adjudged that the driver and owner of the tanker (i.e. Respondent nos. 3&4) was guilty for contributory negligence to the extent of 70%. Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

It is further submitted that the learned Claims Tribunal erroneously and unjustly fixed the liability upon the appellant for paying 70% of the awarded compensation, even when it is an admitted fact that there was a head on collision between the two vehicles and both the drivers were equally responsible for causing the accident that proved fatal to the deceased. The learned counsel while placing reliance on the evidence of PW-4 asserted that the accident took place as the driver of the three- wheeler was driving negligently and was overloaded with passengers in contravention of the Rules. Therefore, ascertainment of the liability in proportion of 70:30 is unjust and discriminatory, and the learned Claims Tribunal should have fixed entire liability of paying compensation on the driver/owner and insurer of the three-wheeler. 12. It is further submitted that the learned Claims Tribunal without any cogent evidence produced and proved on record regarding employment and income of the deceased, arbitrarily assumed Rs.15,000/- as the notional income of the deceased. Learned Claims Tribunal also irrationally added 50% of Rs.15,000/- towards the future prospects and considered Rs.22,500/- as the income of the deceased for purpose of assessing loss of dependency. 13. Learned counsel fairly concedes that the multiplier should be applied as per the law laid down in Sarla Verma & Ors. Vs DTC & Anr (2009) 6 SCC 121 whereby it was held that for the purposes of selection of multiplier, the age of the deceased has to Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

Mr. Javed Ahmad, learned counsel appearing for Respondent nos. 1 and 2 has vehemently opposed the present appeal filed by the appellant. It is submitted that Respondent nos. 1 and 2 being parents of the deceased are entitled to enhanced compensation. It is further submitted that Respondent nos. 1 and 2 have undergone great pain and trauma by losing their son who had a bright future considering his academic records. It is submitted that Respondent nos. 1 and 2 have spent considerable amount of their savings on their son‟s education and the said accident has deprived them of their son‟s love and financial security in the old age. 16. Learned counsel for Respondent nos. 1 and 2 has placed reliance on New India Assurance Co. Ltd. v. Dilip Kumar, 2018 SCC OnLine Del 9263 for seeking enhancement of the claim compensation in the interest of justice. 17. With these submissions, learned counsel for Respondent Nos.1 & 2 prays for enhancement of the compensation in their favour.

On perusal of the testimony given by PW-4, the following circumstances are cogently conveyed:

Respondent nos. 1& 2 have preferred an application under the Section 151 of the Civil Procedure Code, 1908 for enhancement of the compensation awarded by the learned Claims Tribunal. As far as the argument of learned counsel for the appellant with regard to non-entitlement of Respondent Nos. 1&2 for enhancement of compensation on the ground that the Respondents have neither challenged the impugned order by way of an appeal nor preferred any cross-objection to the present appeal is concerned, the Hon‟ble Supreme Court in the case of Surekha and others Vs Santosh and others reported as 2020 ACJ 2156 while granting enhancement of compensation to the claimants has observed that:- “2. This appeal takes exception to the judgment and order dated 4.1.2019 passed by the High Court of Judicature at Bombay, Bench at Aurangabad in First Appeal No. 2564 of 2016 [Shriram General Ins. Co. Ltd. v. Surekha, 2020 ACJ 434 (Bombay)], whereby the High Court, even though agreed with the stand of the appellants that just compensation amount ought to be Rs. 49,85,376, however, declined to grant enhancement merely on the ground that the appellants had failed to file cross appeal. 3. By now, it is well settled that in the matter of insurance claim compensation in reference to the motor accidents, the court should not take hyper-technical approach and Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

In the light of the aforesaid judgment, Respondent nos. 1 and 2 are well within their rights to claim enhanced compensation. This Court can therefore modify the compensation awarded by the learned Claims Tribunal, if so required, for purpose of granting „just compensation‟ and meeting ends of justice in accordance with the objective of the Act. 25. Learned counsel for the Appellant argued that the learned Claims Tribunal, without any cogent evidence produced and proved on record regarding employment and income of the deceased, arbitrarily assumed Rs.15,000/- as the notional income of the deceased. 26. On examination of the impugned Award it shows that the learned Claims Tribunal fixed Rs.15,000/- as the notional income of the deceased without any basis. For fixation of the notional income, there is no straight jacket formula. While concurring with the view expressed by Hon‟ble Mr. Justice Surya Kant (J) in the case of Kirti & Anr Vs Oriental Insurance co Ltd, reported as 2021

The second category of cases relates to those situations wherein the Court is called upon to determine the income of a nonearning victim, such as a child, a student or a homemaker. Needless to say, compensation in such cases is extremely difficult to quantify.

The Court often follows different principles for determining the compensation towards a nonearning victim in order to arrive at an amount which would be just in the facts and circumstances of the case. Some of these involve the determination of notional income. Whenever notional income is determined in such cases, different considerations and factors are taken into account. For instance, for students, the Court often considers the course that they are studying, their academic proficiency, the family background, etc., to determine and fix what they could earn in the future.”.

From the cited case law, it is evident that the notional income of a student pursuing professional course is to be decided based on the facts of each case. The Hon‟ble Supreme Court in V.Mekala Vs Malathi & Anr reported as 2014 SCC OnLine SC 392 held that while determining the notional income of a student, the academic as well as non-academic activities of the student needs to be examined. This Court is cognizant of the fact that deceased was a young student aged 19 and was pursuing Bachelor of Technology (B.Tech) in Electronics & Communication stream at the time of accident, i.e, 19.08.2009. The mark sheet of the Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

Deduction of Income tax from the gross annual income is required for arriving at the net annual income of the deceased for computing compensation under the head of „Loss of dependency‟. Going by the fact that engineering course spans for a period of 4 years, the deceased would have graduated from the college in the year 2011 and have started earning in the same year itself. The assessment year, therefore, will be taken as 2011- 2012. During the assessment year 2011-2012, the income tax rates applicable for the income slab of Rs.1,60,000/- to 5,00,000/- is 10% of the amount exceeding Rs. 1,60,000/-. Considering the same, 10% of Rs. 92,000/- (Rs.2,52,000/- - Rs.1,60,000/-) amounting to Rs. 9,200/- will be treated as income tax payable by the deceased. Therefore, the net annual income of the deceased after income tax deduction comes up to Rs.2,42,800/-. 30. The second limb of submission on behalf of the appellant relates to the selection of the multiplier that will be applicable in the present case. It is prudent to refer to the case of Sarla Verma (supra) which was followed in Pranay Sethi (supra) for the selection of multiplier. As per the law laid down in Sarla Verma (supra) with respect to the operative multiplier while calculating quantum of compensation, the multiplier will be applied as per the age of the deceased. The relevant portion of the said judgment is reproduced hereinbelow: “42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

The multiplier applicable in the present case is '18‟ since the deceased was aged 21 at the time of accident. Learned Claims tribunal erred in applying the operative multiplier as per the age of deceased‟s mother, therefore, the multiplier is enhanced from 14 to 18. 32. Taking income of the deceased as Rs. 2,42,800/- per annum, deducting 50% of the income as personal expenses (Rs.83,600/-), and applying the multiplier of 18, the loss of dependency is calculated at Rs. 1,21,400/ X 18 = Rs. 21,85,200/-. 33. Learned Claims Tribunal has awarded Rs. 25,000/- towards loss of love and affection which is not a permissible head in view of the judgment of the Supreme Court in Pranay Sethi (supra) and is, therefore, set aside. 34. As far as the compensation under the conventional head of Loss of Estate, Funeral Expenses and Loss of Consortium is concerned, the same has been quantified/fixed by the Hon‟ble Apex Court in Pranay Sethi (supra). Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

Accordingly in terms of Pranay Sethi (supra), „Loss of Estate‟ is enhanced from Rs. 10,000/- to Rs. 16,500/- and „Funeral Expenses‟ are enhanced from Rs. 5,000/- to Rs.16,500/-. Compensation under the head of „Loss of Consortium‟ is computed at Rs. 44,000/- for each of the dependant i.e. Rs. 88,000/- in the present matter. 36. In view of the above discussion, the impugned Award dated 31.10.2013 is modified to the following extent: Heads Awarded compensation

The compensation awarded by the learned Claims Tribunal is therefore enhanced from Rs. 19,75,000/- to 23,06,200/-. Digitally Signed By:KOMAL DHAWAN Signing Date:17.02.2023 10:34:20 Signature Not Verified

There would be no change in the rate of interest awarded by the learned Claims Tribunal. 39. It is also pertinent to note that as per order dated 26.04.2013, the appellant was directed to deposit 70% of the awarded compensation which amounts to Rs. 13,82,500/-. However, as per the office record, an amount of Rs. 11,31,096/- was deposited by the appellant to the Registry of this Court vide cheque dated 24.05.2013. Further, out of the aforesaid deposited amount, a sum of Rs. 5,65,548/- has already been released in favour of Respondent nos.1&2. The rest 50% of the aforesaid deposited amount is lying with the Registrar General of this Court. 40. The Appellant and Respondent No.6 are directed to deposit their respective shares of the enhanced compensation with the Registrar General of this Court with interest @ 7.5% from the date of filing the present Appeal within 4 weeks. Upon the deposit of the said amount, the balance 50% of the earlier deposited amount with the interest accrued thereon along with the enhanced compensation shall be released to the Claimants in terms of the impugned Award. 41. Statutory amount, if deposited, be released to the Appellant. 42. In view of the detailed discussion herein above, the Appeal filed by the Insurance Company is partly allowed. 43. Appeal is disposed of in the above terms. No order as to costs.