MAGMA GENERAL INSURANCE CO. LTD vs. NANU RAM ALIAS CHUHRU RAM

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.   9581   OF 2018 (Arising out of SLP (Civil) No. 3192 of 2018) Magma General Insurance Co. Ltd.                             …Appellant Versus Nanu Ram Alias Chuhru Ram & Ors.                     …Respondents J U D G M E N T INDU MALHOTRA, J. Leave granted. 1. This   Special   Leave   Petition   has   been   filed   by   the   Insurance Company   to   challenge   the   compensation   awarded   on   certain counts by the Punjab & Haryana High Court in FAO No. 6943 of 2015 dated 27.09.2017, to be contrary to the Constitution Bench 1 judgment in  National Insurance Co. Ltd.  v.  Pranay Sethi. 2. The factual matrix of the present case, briefly stated, are as Signature Not Verified under: Digitally signed by R NATARAJAN Date: 2018.09.18 16:44:44 IST Reason: 1  (2017) 16 SCC 680 1 On 01.12.2013, the deceased was riding  his motorcycle (Registration   No.   HR­71B­7681)   from   Ambli   Village   to   Arjun Majra Village. A relative of the deceased –Mr. Rakesh Kumar was following   him   on   a   separate   motorcycle   on   the   Sadhaura­ Naraingarh Road. A Renault car bearing Registration No. HR­02­ AB­4646 driven by Respondent No.3, came from the side, and hit the   motorcycle   driven   by   the   deceased.   The   accident   was witnessed by Mr. Rakesh Kumar. As a result of the accident, the deceased fell and sustained multiple   injuries.   He   was   taken  to  the   Government  Hospital, Naraingarh from where he was referred to PGI, Chandigarh. On 02.12.2013   the   victim   was   taken   to   Government   Hospital, Panchkula where the doctors declared him dead. On the same day, F.I.R. No. 337 was registered at Police Station, Naraingarh on the statement of Mr. Rakesh Kumar who was an eye­witness to the accident. 3. The   father,   brother,   and   sister   of   the   deceased   filed   Claim Petition   under   Section   166   of   the   Motor   Vehicles   Act,   1988 before   the   Motor   Accidents   Claim   Tribunal,   Yamuna   Nagar (“hereinafter referred to as MACT”) praying for compensation of Rs. 50,00,000 along with Interest from the date of the accident till the date of realization. Mr. Rakesh Kumar, the eye­witness was examined before the MACT. He deposed stated that the accident occurred due to the rash and negligent driving of Respondent No. 3.  The MACT after considering the evidence placed on record, came to the finding that the accident took place due to the rash and negligent driving of Respondent No. 3.  2 The deceased was 24 years old, and was engaged in the business of manufacturing Namkeen products. The Claimants contended that the income of the deceased was Rs. 15,000 per month. However, they were unable to produce evidence of the income   of   the   deceased.   The   MACT   took   the   income   of   the deceased to be that of an unskilled worker i.e. Rs. 5,342 per month on the basis of the Notification dated 13.08.2013 issued by   the   Labour   Commissioner,   Haryana   prescribing   minimum wages for different categories of work. The   MACT   awarded   compensation   to   the   family   of   the deceased as follows:

The   MACT   did   not   award   any   compensation   to   the brother of the deceased, as he could not be considered to be a dependent. Compensation was awarded to the aged father 3 and the unmarried sister of the deceased, who were held to be dependents.   The Insurance Company and the driver of the vehicle – Respondent No. 3 both were held to be jointly and severally liable to pay the compensation.  4. The Respondent Nos. 1 and 2 – i.e. the father and sister of the deceased filed an Appeal against the order of the MACT before   the   Punjab   and   Haryana   High   Court   praying   for enhancement of compensation. The   High   Court   held   that   the   facts   relating   to   the accident were admitted and proved before the MACT. It was established that the deceased had died as a result of the rash and negligent driving of Respondent No. 3.  The High Court found that the MACT had used the wrong   principle   for   application   of   the   multiplier.   The multiplier ought to have been taken on the basis of the age of the deceased, and not of his father. The   High   Court   re­assessed   the   compensation   as follows:

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The   amount   was   held   to   be   payable   jointly   and severally   by   the   Appellant   –   Insurance   Company   and Respondent No. 3. 5. Aggrieved by the Order of the High Court, the Insurance Company filed the present S.L.P. before this Court, praying for setting­aside the judgment of the Punjab and Haryana High Court. 6. We have heard learned Counsel for the parties, and perused the record. The principal grounds on which the S.L.P. has been filed by the Insurance Company are: i. The High Court has erroneously awarded 50% towards Future Prospects, even though as per the judgment of 5 this   Court  in   National Insurance Co. Ltd.   v.   Pranay 2 Sethi.   only 40% could have been awarded.  ii. The deduction of the income of the deceased ought to rd have been made at ½, and not at 1/3 , as he was a bachelor. iii. The minimum wages of the deceased ought to have been taken at Rs. 5,341 and not Rs. 6,000 as that was the prevailing rate of minimum wages in Haryana at the time of the accident. iv. The   father  and   sister  of   the   deceased  could   not  be considered   as  dependants,   and  were   not   entitled   to compensation. In the case of death of a bachelor, only the mother could be considered to be a dependant.  v. The grant of Rs. 1,00,000 on account of loss of love and   affection,   and   Rs.   25,000   towards   funeral expenses is erroneous.  It was contended that only Rs. 30,000 could have been  awarded  as   per  the   judgment  in   Pranay Sethi (supra). 7. The dependents of the deceased refuted the grounds raised by the Insurance company, and reiterated their claim for enhanced compensation. 8. The grounds of challenge by the Insurance Company are dealt with seriatim. 8.1. With   respect   to   the   issue   of   Future   Prospects,   a Constitution   Bench   of   this   Court   in   Pranay   Sethi (supra) has held that in case the deceased was self­ 2  (2017) 16 SCC 680 6 employed or on a fixed salary, and was below 40 years of age, an addition of 40% of the established income should be granted towards Future Prospects.  Future Prospects are to be awarded on the basis of: i. the nature of the deceased’s employment; and ii. the age of the deceased. In the present case, it is claimed by the family of the deceased that he was engaged in making  namkeen, and   was   earning   a   monthly   income   of   about   Rs. 15,000 per month. However, no evidence was brought on record to establish the same. The MACT as well as the High Court assessed the income of the deceased on the basis of the minimum wage of an unskilled worker. The nature of his employment being taken as a   self­ employed person. The deceased was 24 years old at the time of the accident. Hence, future Prospects ought to have been awarded at 40% of the actual income of the deceased, instead of 50% as awarded by the High Court. Hence, the judgment of the High Court on this issue is modified to that extent. 8.2. With respect to the issue of deduction from the income of  the   deceased,   the   Insurance   Company   contended that  the   deduction   ought  to   have   been   ½,   and   not rd 1/3 , since the deceased was a bachelor.  7 This issue has been dealt with in paragraph 32 of the   judgment   in     (supra)   wherein   this Sarla   Verma Court   took   the   view   that   where   the   family   of   the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non­earning sisters or brothers,   his   personal   and   living   expenses   may   be restricted to one­third, as contribution to the family will be taken as two­third. Considering   that   the   deceased   was   living   in   a village, where he was residing with his aged father who was about 65 years old, and Respondent No. 2 ­ an unmarried sister, the High Court correctly considered them to be dependents of the deceased, and made a rd deduction of 1/3   towards personal expenses of the deceased. The   judgment   of   the   High   Court   is,   therefore, affirmed on this count. 8.3. With respect to the income of the deceased, as the family could not produce any evidence to show that the income of the deceased was Rs. 15,000 per month, as claimed,   the  High  Court  took   his   income   to  be   Rs. 6,000, which is marginally above the minimum wage of an unskilled worker at Rs. 5,342. This finding is also not being interfered with. 8 8.4. The Insurance Company has submitted that the father and the sister of the deceased could not be treated as dependents,   and   it   is   only   a   mother   who   can   be dependent of her son. This contention deserves to be repelled. The deceased was a bachelor, whose mother had   pre­deceased   him.   The   deceased’s   father   was about   65   years   old,   and   an   unmarried   sister.   The deceased was contributing a part of his meagre income to the family for their sustenance and survival. Hence, they   would   be   entitled   to   compensation   as   his dependents. 8.5. The Insurance Company has contended that the High Court had wrongly awarded Rs. 1,00,000 towards loss of love and affection, and Rs. 25,000 towards funeral expenses.  The   judgment   of   this   Court   in   Pranay   Sethi (supra) has set out the various amounts to be awarded as compensation under the conventional heads in case of   death.   The   relevant   extract   of   the   judgment   is reproduced herein below : “Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable   figures   on   conventional heads, namely, loss of estate, loss of consortium   and   funeral   expenses should be Rs. 15,000/­, Rs. 40,000/­ and   Rs.   15,000/­   respectively.  The principle of revisiting the said heads is   an   acceptable   principle.   But   the 9 revisit  should  not  be  fact­centric  or quantum­centric.   We   think   that   it would   be   condign   that   the   amount that   we   have   quantified   should   be enhanced   on   percentage   basis   in every   three   years   and   the enhancement should be at the rate of 10% in a span of three years.”   (Emphasis supplied) As per the afore­said judgment, the compensation of Rs. 25,000 towards funeral expenses is decreased to Rs.15,000.  The amount awarded by the High Court towards loss of love and affection is, however, maintained. 8.6 The MACT as well as the High Court have not awarded any compensation with respect to Loss of Consortium and Loss of Estate, which are the other conventional heads under which compensation is awarded in the event   of   death,   as   recognized   by   the   Constitution Bench in  Pranay Sethi  (supra). The Motor Vehicles Act is a beneficial and welfare legislation. The Court is duty­bound and entitled to award “just compensation”, irrespective of whether any plea in that behalf was raised by the Claimant. In exercise of our power under Article 142, and in the   interests   of   justice,   we   deem   it   appropriate   to award an amount of Rs. 15,000 towards Loss of Estate to Respondent Nos. 1 and 2. 10 8.7 A Constitution Bench of this Court in   Pranay Sethi (supra)   dealt   with   the   various   heads   under   which compensation is to be awarded in a death case. One of these heads is Loss of Consortium.  In legal parlance, “consortium” is a compendious term   which   encompasses   ‘spousal   consortium’, ‘parental consortium’, and ‘filial consortium’. The   right   to   consortium   would   include   the company,   care,   help,   comfort,   guidance,   solace   and affection of the deceased, which is a loss to his family. With   respect   to   a   spouse,   it   would   include   sexual 3 relations with the deceased spouse.   Spousal consortium is generally defined as rights pertaining to the relationship of a husband­wife which allows compensation to the surviving spouse for loss of “company, society, co­operation, affection, and aid of 4 the other in every conjugal relation.” Parental consortium is granted to the child upon the premature death of a parent, for loss of “parental aid, protection, affection, society, discipline, guidance and training.” Filial consortium is the right of the parents to compensation in the case of an accidental death of a child.   An   accident   leading   to   the   death   of   a   child causes   great   shock   and   agony   to   the   parents   and 3  Rajesh and Ors. vs. Rajbir Singh and Ors. (2013) 9 SCC 54 4  BLACK'S LAW DICTIONARY (5th ed. 1979) 11 family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued   for   their   love,   affection,   companionship   and their role in the family unit. Consortium is a special prism reflecting changing norms   about   the   status   and   worth   of   actual relationships.   Modern   jurisdictions   world­over   have recognized that the value of a child’s consortium far exceeds   the   economic   value   of   the   compensation awarded   in   the   case   of   the   death   of   a   child.   Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a   child.   The   amount   awarded   to   the   parents   is   a compensation for loss of the love, affection, care and companionship of the deceased child.  The Motor Vehicles Act is a beneficial legislation aimed   at   providing   relief   to   the   victims   or   their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium.  Parental Consortium is awarded to children who lose their parents in motor vehicle accidents under the Act. A few High Courts have awarded compensation 5 on   this   count .   However,   there   was   no   clarity   with 5 Rajasthan High Court in Jagmala Ram @ Jagmal Singh & Ors. v. Sohi Ram & Ors  2017 (4) RLW 3368 (Raj); Uttarakhand High Court in  Smt. Rita Rana & Anr.  v.  Pradeep Kumar & 6 Ors .  12 respect to the principles on which compensation could be awarded on loss of Filial Consortium.  The amount of compensation to be awarded as consortium   will   be   governed   by   the   principles   of awarding compensation under ‘Loss of Consortium’ as laid down in  Pranay Sethi  (supra). In the present case, we deem it appropriate to award the father and the sister of the deceased, an amount   of   Rs.   40,000   each   for   loss   of   Filial Consortium. 9. In light of the above mentioned discussion, Respondent Nos. 1 and 2 are entitled to the following amounts :­

2014 (3) UC 1687; Karnataka High Court in Lakshman and Ors. v. Susheela Chand Choudhary & Ors  (1996) 3 Kant LJ 570 (DB) 13

Out   of   the   amount   awarded,   Respondent   No.1   is entitled to 60% while Respondent No.2 shall be granted 40% alongwith Interest as specified above. 10.The Insurance Company and Respondent No. 3 are held jointly   and   severally   liable   to   pay   the   compensation awarded.  The Appellant – Insurance Company will pay the full amount   of   compensation   awarded   hereinabove   to Respondent   Nos.   1   and   2   and   can   recover   50%   of   the amount from Respondent No. 3.   11.The appeal is disposed of in the above terms. …………………………..J. (R. F. Nariman) …………………………..J. (Indu Malhotra) New Delhi September 18, 2018. 14