Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 29.04.2016/04.05.2016 /
05.05.16/11.05.16/12.05.2016
th
Pronounced on: 13 May, 2016
1. MAC.APP. 554/2010
CHETAN MALHOTRA ..... Appellant
Through Mr. Jasmeet Singh, Ms. Nishta
Kishore and Mr. Srivats Kaushal,
Advs.
versus
LALA RAM ..... Respondent
Through Mr. Sudhanshu Tomar and Mr. S
A Khan, Advs. for R-1 & 2
Mr. P R Sikka and Mr. Amit
Sikka, Advs. for R-3
Mr. G K Kaushik, Adv. for R-4
2. MAC.APP. 226/2010
UNITED INDIA INSURANCE CO LTD ..... Appellant
Through Mr. P R Sikka and Mr. Amit
Sikka, Advs.
versus
LALA RAM & ORS ..... Respondents
Through Mr. Sudhanshu Tomar and Mr. S
A Khan, Advs. for R-1 & 2
Mr. G K Kaushik, Adv. for R-2
MAC App. Nos. 554/2010 & conn. Page 1 of 70
3. MAC.APP. 580/2007
SUMER SINGH CHAUHAN ..... Appellant
Through: Mr. O P Mannie, Adv.
versus
PANKAJ KUMAR AND ORS .... Respondents
Through: Mr. Pradeep Gaur, Adv. for R-3
4. MAC.APP. 1106/2013
ORIENTAL INSURANCE CO LTD ..... Appellant
Through Mr. Ravi Sabharwal, Adv.
versus
RAKESH KUMAR & ORS .... Respondents
Through None
5. MAC.APP. 421/2015 & CM No.9165/2015
ARJUN SINGH & ANR ..... Appellants
Through Mr. Om Prakash Gupta, Adv.
versus
RAGHUKUL BHUSHAN BAKSHI & ANR (NATIONAL
INSURANCE COMPANY LTD) ..... Respondents
Through Ms. Neerja Sachdeva, Adv. for
R-2
6. MAC.APP. 1288/2012 &CM Nos.21029/2012 & 1059/2014
MAC App. Nos. 554/2010 & conn. Page 2 of 70
ORIENTAL INSURANCE COMPANY LTD ..... Appellant
Through Ms. Neerja Sachdeva, Adv.
versus
SUNITA DEVI & ORS. ..... Respondents
Through Mr. O P Mannie, Adv. for R-1
& 2
7. MAC.APP. 881/2015
SUNITA DEVI & ANR ..... Appellants
Through Mr. O P Mannie, Adv.
versus
ORINETAL INSURANCE COMPANY LTD
& ORS. ….. Respondents
Through Ms. Neerja Sachdeva, Adv.
8. MAC.APP. 1079/2013
SH PRAMOD KUMAR GOND @ PRAMOD
& ANR ..... Appellants
Through Mr. O P Mannie, Adv.
versus
SH AMIT @ TITU & ORS ..... Respondents
Through Ms. Suman Bagga, Adv. with
Mr. Pankaj Gupta, Adv. for R-3
9. MAC.APP. 1187/2014
VIDHYA & ANR ..... Appellants
MAC App. Nos. 554/2010 & conn. Page 3 of 70
Through Mr. Anshuman Bal, Adv.
versus
NATIONAL INSURANCE COMPANY LTD
& ORS. .... Respondents
Through Ms. Neerja Sachdeva, Adv. for
R-1
10. MAC.APP. 729/2013
THE NEW INDIA ASSURANCE CO. LTD. ..... Appellant
Through Mr. Pankaj Seth, Adv.
versus
HARI & ORS. ..... Respondents
Through Mr. S K Vashishta, Adv. for R-1
11. MAC.APP. 250/2013
NATIONAL INSURANCE CO. LTD. ..... Appellant
Through Mr.L.K. Tyagi, Adv.
versus
KIRAN DEVI & ORS. ..... Respondents
Through Ms. Rupika Singh for
Mr. Navneet Goyal, Adv. for R-
1 & 2
12. MAC.APP. 510/2014
NEW INDIA ASSURANCE CO. LTD. ..... Appellant
MAC App. Nos. 554/2010 & conn. Page 4 of 70
Through: Mr. Ravinder Singh and
Ms. Raveesha Gupta, Advocates
versus
LAL CHAND & ORS. ..... Respondents
Through: Mr. Binay Kumar, Adv. for R-1
& R-2
13. MAC.APP. 100/2013
SHAKILA BANO AND ORS. ..... Appellants
Through: Mr. Anshuman Bal, Adv.
versus
THE NEW INDIA ASSURANCE CO. LTD.
AND ORS. ..... Respondents
Through: Mr. Sameer Nandwani, Adv. for
R-1.
14. MAC.APP. 564/2014 and CM No.10489/2014
THE NEW INDIA ASSURANCE CO. LTD. ..... Appellant
Through Mr. S N Parashar, Adv. for
Mr. J P N Shahi, Adv.
versus
SEEMA GARG & ORS. ..... Respondents
Through Mr. Anshuman Bal, Adv. for R-
1 & 2
15. MAC.APP. 956/2014
SONIYA JOSHI & ANR
MAC App. Nos. 554/2010 & conn. Page 5 of 70
..... Appellant
Through: Mr. S N Parashar, Adv.
versus
SARAVJIT @ SONU & ORS (THE NATIONAL
INSURANCE COMPANY LTD) ..... Respondents
Through: Ms. Rakhi Dubey, Adv. for R-3
16. MAC.APP. 175/2014
SHRIRAM GENERAL INSURANCE CO LTD .....Appellant
Through: Mr. P. Acharya, Advocate
versus
ZEENAT FATIMA & ORS ....Respondents
Through: Mr. Nitin Yadav, Adv. for R-1 & 2
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J:
1. These sixteen appeals give rise to common questions of law
concerning the method of calculation of compensation in accident
claim cases involving deaths of children in motor vehicular accidents
and hence have been taken up for being decided together by this
common judgment.
MAC App. Nos. 554/2010 & conn. Page 6 of 70
FACTUAL MATRIX
2. The background facts leading to these appeals in each case may
be taken note of at the outset in chronological order.
Case ‘A’ : MAC Appeal Nos. 226/2010 & 554/2010
(In re: death of three months‟ old child Rama Kant)
3. These appeals arise out of the judgment dated 16.01.2009 of
motor accident claims tribunal (the tribunal) in accident claim case
(Suit No. 518/1993, re-numbered as 1345/2000) instituted on
03.07.1993. The claim case had been presented by Lala Ram and Ram
Sakhi (the claimants), parents of three months‟ old child named Rama
Kant who had died in the accident that occurred on 17.03.1993
involving rash driving of Maruti Van bearing No. DL 2CB 2882 (the
offending vehicle), admittedly insured against third party risk with
United India Insurance Company Ltd. (appellant in MAC Appeal No.
226/2010). The tribunal, after inquiry, by the impugned judgment
upheld the case of the claimants that the accident had occurred due to
negligent driving of the said offending vehicle by Sunil (first
respondent before the tribunal). The offending vehicle concededly
was registered in the name of M/s Grahlaxmi Leasing Company Pvt.
Ltd. (second respondent before the tribunal), it admittedly having
given it on lease for use to Chetan Malhotra (appellant in MAC Appeal
No. 554/2010), he having been impleaded as fourth respondent before
the tribunal. It awarded compensation in the sum of ₹ 3,75,000/- on
account of death of the child with interest at 7.5% per annum from the
MAC App. Nos. 554/2010 & conn. Page 7 of 70
date of filing of the petition till realization, and is doing so following
the method of calculation of compensation adopted by the Supreme
Court in R.K. Malik vs. Kiran Pal 2009 (14) SCC 1 and decision of a
learned Single Judge of this Court in National Insurance Company
Ltd. vs. Farzana 2009 ACJ 2763.
4. The insurance company by its appeal (MAC Appeal No.
226/2010) questions the calculation of compensation on the ground
that the deceased child being only three months old, the award of
compensation of ₹ 3,75,000/- was unduly high since there can be no
parallel drawn with the awards rendered in the case of R.K. Malik
(supra).
5. This case also involves plea of the insurer about breach of terms
and conditions of the insurance policy. This aspect shall need
elaboration and consideration at an appropriate stage in this judgment.
Case ‘B’ : MAC Appeal No. 580/2007
(in re: death of seven years‟ old child Yash Chouhan)
6. The motor vehicular accident which is subject matter of this
appeal occurred on 02.09.2002 involving a two wheeler scooter
bearing registration no.DL-4S-8067 (scooter) driven by Sumer Singh
Chouhan (father of the deceased child) and Tempo bearing registration
no.DDL-4716 (tempo) statedly driven negligently. Besides the
deceased child, his parents Sumer Singh Chouhan and Pushpa
(claimants) were also travelling on the scooter with another child. The
MAC App. Nos. 554/2010 & conn. Page 8 of 70
tribunal by judgment dated 01.05.2007 (which also governed two other
cases relating to injuries suffered by the parents of the child), held both
the scooter driver and tempo driver guilty of negligence. Contributory
negligence on the part of Sumer Singh Chouhan was assessed at 30%.
The tribunal awarded ` 2,25,000/- as compensation for death of the
child, with interest at the rate of 7% p.a. in favour of the claimants
directing the insurer to pay to the extent of 70% though granting it
recovery rights against the owner on account of finding about breach
of terms and conditions of the insurance policy. In assessing the
compensation, it referred to the judgments of the Supreme Court in
Lata Wadhwa Vs. State of Bihar and Ors, 2001 ACJ 1735 and Manju
Devi and Ors. Vs. Musafir Paswan & Ors., 2005 ACJ 99 . By the
appeal at hand, the claimants seek enhancement in the compensation
also challenging the finding on contributory negligence.
Case ‘C’ : MAC Appeal No. 250/2013
(In re: death of eleven years‟ old child Mukesh)
7. This appeal arises out of judgment dated 14-01-2013 of the
tribunal in accident claim case (suit no. 933/2008/2007), instituted on
08-10-2007 by Kiran Devi and Ganesh Prasad (claimants), the first
and second respondents in the appeal, seeking compensation on
account of death of their eleven years‟ old son Mukesh in motor
vehicular accident that had occurred on 24-09-2007 involving
negligent driving of truck bearing no. HR 55F 4841 (the offending
MAC App. Nos. 554/2010 & conn. Page 9 of 70
vehicle), admittedly insured against third party risk for the period in
question with the National Insurance Co. Ltd. (insurer). The tribunal,
by the impugned judgment, upheld the case about negligent driving
and fastened the liability against the insurer to pay compensation in the
sum of ` 12,11,400/- with interest at 7.5% per annum from the date of
filing of the petition, calculating it after assuming the potential income
of the deceased at ` 10,800/- per month, relying upon the judgment of
a learned Single Judge of this court in United India Insurance Co. Ltd.
Vs. Kanwar Lal (MAC Appl. 385/2007 decided on 27-04-2012) which,
in turn, was primarily based on the judgment of the Supreme Court in
Municipal Corporation of Delhi Vs. Uphaar Tragedy Victims
Association (2011)14 SCC 481. The tribunal calculated loss of
dependency by deducting 50% towards personal & living expenses and
applying the multiplier of 18, having regard to the age of the deceased,
also adding 25,000/- towards loss of love & affection and 10,000/-
` `
each towards funeral charges and loss of estate.
8. The insurer, by this appeal, questions the above mentioned
award contending that the tribunal has fallen in serious error by
assuming the potential income at such high rate, without any basis,
only on the oral word that the mother “desired” the deceased son to
eventually become an engineer and further by applying the multiplier
chosen on the basis of age of the deceased.
MAC App. Nos. 554/2010 & conn. Page 10 of 70
Case ‘D’ : MAC Appeal No. 510/2014
(In re: death of 17 years‟ old child Mohit)
9. The appeal by the New India Assurance Co. Ltd. (insurer)
assails judgment dated 07.04.2014 of the tribunal in the accident claim
case (suit no.53/11/2008) which was instituted on 19.12.2008 by Lal
Chand and Chandrawati (claimants), the first and second respondents
in the appeal, seeking compensation for death of their 17 years‟ old
son Mohit in a motor vehicular accident that had occurred on
27.08.2008 involving a bus bearing registration no.DL-1PB-4611
(offending vehicle), concededly insured against third party risk with
the appellant. The tribunal upheld the case about negligent driving and
awarded compensation in the sum of ₹6,56,646/- with interest at the
rate of 9% p.a. from the date of filing of the petition till realization,
which includes ₹25,000/- each towards funeral expenses and loss of
love and affection, ₹10,000/- for loss of love & affection and
₹10,000/- for loss to estate, besides ₹5,96,646/- computed as
dependency loss on the basis of minimum wages (i.e. ₹3683/-) for
unskilled worker which was enhanced by element of future prospects
of increase to the extent of 50% and after deduction of one half
towards personal and living expenses capitalized by multiplier of 18.
10. The insurer argues that in case of death of a child, this was not a
correct method of calculating compensation and that the ruling in R K
Malik (supra) should have been followed.
MAC App. Nos. 554/2010 & conn. Page 11 of 70
Case ‘E’ : MAC Appeal No. 1106/2013
(In re: death of four years‟ old child Vishal)
11. This appeal is directed against the judgment dated 16.09.2013 of
the tribunal in accident claim case (MACP No. 135/2009), instituted
on 02.06.2009 by Rakesh Kumar and Poonam (claimants), the first
and second respondent in the appeal, seeking compensation for the
death of their four years old son named Master Vishal in a motor
vehicular accident that had occurred on 21.02.2009, involving maruti
car bearing No. DL 3CN 4662 (offending vehicle) which was
admittedly insured against third party risk with Oriental Insurance
Company Ltd. (the insurer). By the impugned judgment, the tribunal
upheld the case of the claimants that the accident had occurred due to
negligent driving of the said offending vehicle by its owner Zile Singh
(first respondent before the tribunal). It awarded compensation in the
sum of Rs. 7,50,000/- with interest @ 7.5 per annum from the date of
filing of the petition till realization, referring to the method of
compensation adopted by Supreme Court in Uphaar Tragedy (supra),
assuming the income of the deceased child at minimum wages (₹
6249) per month and capitalizing it with the multiplier of 15, after
rd
deducting 1/3 towards personal and living expenses.
12. The insurer by its appeal (MAC Appeal No. 1106/2013)
questions the above-said computation on the ground that minimum
wages could not have been adopted in the case of a child aged only 4
years and deduction towards personal & living expenses should have
MAC App. Nos. 554/2010 & conn. Page 12 of 70
been made to the extent of 50% as is normally done in cases of deaths
of bachelors, particularly in view of dicta in Sarla Verma (Smt.) &
Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121.
Case ‘F’ : MAC Appeal Nos. 1288/2012 & 881/2015
(In re: death of sixteen years‟ old Seema Kumari)
13. These appeals seek to assail the judgment dated 07.09.2012 of
the tribunal in accident claim case (case no. 718/2009), instituted by
Sunita Devi and Hare Krishna Thakur (appellants in MAC Appeal No.
881/2015), the parents of Seema Kumari, an unmarried girl aged 16
years, who died in a motor vehicular accident that occurred on
18.03.2009 on account of negligent driving of Tempo Tata 407 bearing
registration No. DL 1LE 1899 (the offending vehicle), admittedly
insured against third party risk for the period in question with Oriental
Insurance Company Ltd. (appellant in MAC Appeal No. 1288/2012).
The tribunal, by the impugned judgment, upheld the case of the
claimants that the accident had occurred due to negligent driving of the
offending vehicle by its driver Vikas (first respondent before the
tribunal). It awarded compensation in the sum of Rs. 5,93, 216/- with
interest @ 9% per annum from the date of filing of the petition till
realization; the amount including Rs. 6,000/- towards medical
expenses incurred besides Rs. 10,000/- on account of funeral and
miscellaneous expenses and Rs. 25,000/- towards loss of love &
affection in view of the judgments of Supreme Court in Sunil Sharma
MAC App. Nos. 554/2010 & conn. Page 13 of 70
v. Bachitar Singh , (2011) 11 SCC 425 and in Baby Radhika Gupta v.
Oriental Insurance Company Ltd. , ( 2009 ) 17 SCC 627 , with loss of
dependency calculated at Rs. 5,52,216/- worked out on the monthly
minimum wages (Rs. 4382/-) of the unskilled workers taken as per the
judgment of this court in Ramehar & Ors. v. Vinod Kumar & Ors.
(2009) ACJ 452 with addition of future prospects of increase to the
extent of 50%, having deducted 50% towards personal & living
expenses while relying upon the Supreme Court judgments in Sarla
Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6
SCC 121 and Santosh Devi v. National Insurance Company Ltd. &
Ors. , 2012 (6) SCC 421 and capitalizing it with the multiplier of 14 on
the basis of age of the claimant mother (44 years old) in view of dicta
in Amrit Bhanu Shali & Ors. v. National Insurance Co. Ltd. , (2012) 11
SCC 738.
14. The claimants by their appeal (MAC appeal No. 881/2015)
submit that the non-pecuniary heads of damages have not been
property taken care of.
Case ‘G’ : MAC Appeal No.175/2014
(In re: death of seventeen years‟ old child Hussain Haider)
15. The appeal presented by the insurance company which has been
fastened with the liability to pay the compensation assails the
judgment of the tribunal pronounced on 31.10.2013 whereby
compensation in the sum of Rs.12,02,075/- was awarded in favour of
the claimants (first and second respondents), parents of the deceased
MAC App. Nos. 554/2010 & conn. Page 14 of 70
child, on account of the death in a motor vehicular accident that
occurred on 17.07.2010 involving tempo bearing registration no.UP-
81AB-9028 (offending vehicle) in negligent manner, the said vehicle
admittedly being insured against third party risk with the appellant.
The amount of compensation awarded includes Rs.4,88,248/- towards
medical expenses, the compensation towards loss of dependency and
other non-pecuniary heads being in the sum of Rs.7,13,827/-. It was
conceded at the time of hearing that the child was born on 02.05.1993
and thus at the time of his death on 17.07.2010, he was a little over 17
years in age. The tribunal calculated the loss of dependency assuming
the income of the deceased at Rs.6,448/- adopting the minimum wages
of a matriculate and applying the multiplier of 13, going by the age of
the mother (46 years).
16. The appellant questions the award as inflated, submitting that
the method adopted is not in accord with principles to be followed in
such cases.
Case ‘H’ : MAC Appeal No. 729/2013
(In re: death of three years‟ old Varsha)
17. This appeal assails judgment dated 23.05.2013 of the tribunal
whereby the accident claim case (No.65/11) of Hari and Jayanti
(claimants), instituted on 11.03.2011, was decided and compensation
in the sum of Rs. 3,75,000/- with interest @ 9% per annum from the
date of filing of the petition till realization was awarded in their favour
MAC App. Nos. 554/2010 & conn. Page 15 of 70
on account of death of their three years‟ old daughter Varsha in motor
vehicular accident that had occurred on 09.08.2010 involving
negligent driving of motor vehicle described as HP 12 C 1930
(offending vehicle), admittedly insured for the period in question with
New India Assurance Company Ltd. (appellant) which was called
upon to satisfy the award. The tribunal made the said award following
the method of computation adopted in R.K.Malik (supra).
18. The insurer in its appeal questions the above said computation
on the grounds that the award is not in accord with the view taken in
R.K.Malik (supra) as no deduction has been made towards personal &
living expenses.
Case ‘I’ : MAC Appeal No. 421/2015
(In re: death of fourteen years‟ old Raju)
19. This appeal relates to a motor vehicular accident that occurred
on 09.04.2011 involving negligent driving of a tempo bearing
registration no.DL-1LD-3812 admittedly insured against third party
risk with National Insurance Company Ltd. The tribunal by judgment
dated 09.12.2014 awarded compensation in the sum of ₹3,75,000/-
with interest at the rate of 9% p.a. with effect from 02.08.2011 in
favour of the parents (claimants ) of the child, who are in appeal
seeking enhancement, the grievance being that the compensation is
inadequate.
Case ‘J’ : MAC Appeal No.100/2013
(In re: death of seventeen years‟ old Mohd. Asif)
MAC App. Nos. 554/2010 & conn. Page 16 of 70
20. The motor vehicular accident in this case occurred on
14.05.2011. Though the claim petition filed on 20.05.2011 stated that
the deceased was 18 years‟ old, it having been proved that his year of
birth was 1994, it is now conceded that he was a little over 17 years
old on the relevant date. The tribunal awarded ₹4,20,000/- as
compensation with interest at the rate of 7.5% p.a. applying the
multiplier of 18 on the notional income of ₹15,000/- p.a. as specified
in the second schedule to the M.V. Act, adding the non-pecuniary
damages in terms of R.K. Malik (supra). The parents (claimants) are in
appeal seeking enhancement.
Case ‘K’ : MAC Appeal No.564/2014
(In re: death of 10 years‟ old child Rishabh Garg)
21. The claimants in this case are also parents. The accident had
occurred on 30.06.2011 involving negligent driving of a motor vehicle
bearing registration no.DL-1LE-8152 (offending vehicle) which was
admittedly insured against third party risk with third respondent
(insurer). The tribunal has awarded with interest at the rate of 9% p.a.
₹7,32,047/- which includes ₹5,33,520/- calculated as loss of
dependency on the basis of assumed income of ₹3,952/-, it being the
minimum wages on which 50% was added towards future prospects
and the multiplier of 15 applied, this in addition to ₹1,00,000/-
towards loss of love & affection, ₹10,000/- towards loss of estate and
₹25,000/- towards funeral expenses, besides medical expenses at
MAC App. Nos. 554/2010 & conn. Page 17 of 70
₹63,527/-. The insurance company challenges the award on the
ground it is not in accord with R.K. Malik (supra).
Case ‘L’ : MAC Appeal No.956/2014
(In re: death of eleven years‟ old child Master Gautam Joshi)
22. On 02.10.2011, a motor vehicular accident took place involving
negligent driving of a vehicle bearing registration as DL-1YB 6781
admittedly insured against third party risk with the National Insurance
Company Ltd. (third respondent) for the period in question, resulting
in death of eleven years old Gautam Joshi. His parents (appellants)
had instituted an accident claim case (suit no.38/12/12) on 14.12.2011
impleading the insurer, driver and owner of the offending vehicle as
respondents. By judgment dated 31.05.2014, the tribunal upheld the
case about the death having occurred due to negligent driving, the said
finding having attained finality. The tribunal awarded compensation
in the sum of Rs.3,75,000/- primarily following the view taken in the
case of Farzana (supra).
23. By the appeal at hand, the claimants seek enhancement of the
compensation.
Case ‘M’ : MAC Appeal No. 1187/2014
(In re: death of fourteen years‟ old Bhanu @ Bhanu Kataria)
Case ‘N’ : MAC Appeal No. 1079/2013
(In re: death of four years‟ old Kumari Lajo @ Sanjana)
24. The motor vehicular accidents in the cases from which these
appeals arise had occurred on 02.05.2012 and 04.02.2013 respectively.
MAC App. Nos. 554/2010 & conn. Page 18 of 70
The offending vehicle in the case of death of Bhanu @ Bhanu Kataria
was bus bearing No. DL 1PB 7483, again admittedly insured against
third party risk with National Insurance Company Ltd. The death of
Kumari Lajo had occurred in a motor vehicular accident involving car
bearing No. DL 4C 7061, admittedly insured against third party risk
with Reliance General Insurance Company Ltd. In these cases, the
tribunal (by judgments dated 29.09.2014 and 29.07.2013) has awarded
compensation in the sum of Rs. 3,75,000/- each with interest (@ 9%
per annum in the first case and @ 7.5 % in the second case) with effect
from the date(s) of filing of the petitions (15.05.2012 and 22.02.2013
respectively) till realization, in favour of the parents (the claimants) of
the respective child.
25. The claimants in both cases have come up with these appeals
seeking enhancement, their grievances essentially being that the
awards made following the formula adopted in R.K.Malik (supra) have
resulted in inadequate compensation.
THE ISSUE
26. The awards made in the above mentioned fourteen cases may be
seen at a glance in the tabular form as under, to facilitate a comparative
scrutiny :-
MAC App. Nos. 554/2010 & conn. Page 19 of 70
Case Date of
accident
Age of
deceased
Compensation
Date of award
awarded by
by tribunal
tribunal ( ` )
(Death)
child
A. 17.03.1993 3 months 3,75,000/- 16.01.2009
B. 02.09.2002 7 years 2,25,000/- 01.05.2007
C. 24.09.2007 11 years 12,11,400/- 14.01.2013
D. 27.08.2008 17 years 6,56,646/- 07.04.2014
E. 21.02.2009 4 years 7,50,000/- 16.09.2013
F. 18.03.2009 16 years 5,87,216/- * 07.09.2012
G. 17.07.2010 17 years 7,13,827/-* 31.10.2013
H. 09.08.2010 3 years 3,75,000/- 23.05.2013
I. 09.04.2011 14 years 3,75,000/- 09.12.2014
J. 14.05.2011 17 years 4,20,000/- 13.12.2012
K. 30.06.2011 10 years 6,68,520/-* 26.04.2014
L. 02.10.2011 11 years 3,75,000/- 31.05.2014
M. 02.05.2012 14 years 3,75,000/- 29.09.2014
N. 04.02.2013 4 years 3,75,000/- 29.07.2013
* excluding medical expenses also awarded.
27. The above table graphically demonstrates not only divergence of
opinion but also inconsistencies in approach. The incongruity is vivid.
A case of death of three months‟ old child in March 1993 has been
treated at par with death of a child aged 4 years in February 2013 as
also that deaths of children of 14 years‟ age in April 2011 and May
2012 respectively, each receiving same amount of money. In sharp
contrast, death of 11 years old in September 2007 has resulted in an
award of more than 3 times as compared to a death of a 14 years old
child, five years later in May 2012. The lack of uniformity in
approach stems perhaps from variance in the awards in precedents that
MAC App. Nos. 554/2010 & conn. Page 20 of 70
have been followed. The principles which were adopted in R.K. Malik
(supra) concerning an accident that had occurred in 1997 were adopted
by this court in Farzana (supra) against the backdrop of cause of
action that had arisen three years later in 2000 but the said precedent
has been followed even for purposes of accident of later years virtually
till date.
28. The question which falls for consideration of this court thus
concerns the appropriate formula to be adopted for computation of just
compensation in the case of death of children such that there is no
disparity.
PRECEDENTS
29. It has been observed elsewhere, and it bears repetition to note in
the present context, that India is one of the several countries with an
unduly high rate of road accidents resulting in death, injury or damage,
giving rise to claims for compensation brought before the tribunals by
the victims or their next of kin. The law on the subject of
compensation has been codified by inclusion of necessary provisions
in the MV Act, including on the principle of fault liability (under
Section 166). The decision to make an appropriate award of
compensation in each case is entrusted in the hands of the tribunal.
Whilst a simplified procedure for award of compensation “on
structured formula basis” was introduced by insertion of Section 163A,
MAC App. Nos. 554/2010 & conn. Page 21 of 70
by amending Act no.54 of 1994 (w.e.f. 14.11.1994) wherein it is
restricted and controlled by the method indicated in the Second
Schedule, in claim cases arising out of fault-liability principle, the
legislative guidance through the provision contained in Section 168 is
simply that the tribunal is expected to determine such amount of
compensation as appears to it to be “ just ”.
30. The structured formula contained in Section 163A, enforced
through the prescription in second schedule has been found to be full
of errors or defects and, consequently, adversely commented upon in a
number of cases by the Supreme Court [UPSRTC Vs. Trilok Chandra
(1996) 4 SCC 362; Oriental Insurance Co. Ltd. Vs. Hansrajbhai v.
Kodala (2001) 5 SCC 175; Sarla Verma v. DTC (2009) 6 SCC 121;
Puttamma v. K.L. Narayana Reddy (2013) 15 SCC 45]. The said
special provision was inserted in 1994 with the cap of ₹40,000/- on
the income to be considered for calculating the loss of dependency (or
income) in fatal accident cases. Though by sub-section (3), the
legislature empowered the Central Government to amend the second
schedule by notification from time to time “ keeping in view the cost of
living ”, the said authorization has not resulted in any amendment being
brought about to revise the annual income, even after elapse of more
than two decades; regrettably so, particularly because the court has
reminded the Government of its obligation in this regard a number of
MAC App. Nos. 554/2010 & conn. Page 22 of 70
times [ e.g. see Puttamma Vs. K.L. Narayana Reddy (2013) 15 SCC
45] .
31. Because of the strait-jacketed formula given by Section 163A,
and perhaps more on account of erosion in the real value of money
over the period, resort to the simplified structured formula seems to
have fallen in disuse, except in cases relating to extremely poor
sections of the society. Even a cursory comparison of the awards
available under Section 163A with those handed down in cases under
Section 166 on fault-liability principle reveals that the compensation
received in the former in the present times cannot qualify, by any
stretch of reasoning, as “ just ” compensation.
32. It has been noted ad nauseam in judgments after judgments that
the approach of the tribunals and courts in determining the amount of
compensation which is “ just ” has not only been not uniform or
consistent but also beset by considerable variations most of the time
due to adoption of divergent methods of calculation or on account of
subjectivity. In Nagappa v . Gurdayal Singh 2003 (2) SCC 274, the
Supreme Court ruled that the main guiding principle for determining
the compensation is that it “ must be just ” and further that it “ must be
reasonable ”. As observed in UP State Road Transport Corporation v.
Trilok Chandra (1996) 4 SCC 362 compensation awarded in such
cases has primarily two elements; the pecuniary loss to the estate of
the deceased resulting from the accident and the pecuniary loss
sustained by members of his family on account of his death, in
MAC App. Nos. 554/2010 & conn. Page 23 of 70
addition to the conventional awards under non-pecuniary heads of
damages (e.g. loss of consortium, loss of love & affection, funeral
expenses etc.). In Gobald Motor Service Ltd. v. R. M. K. Veluswami
AIR 1962 SC 1, the court quoted with approval the views of House of
Lords in Davies v. Powell Duffryn Associated Collieries Ltd. (1942)
AC 601 that “ the damages are to be based on the reasonable
expectation of pecuniary benefit or benefits reduceable to money
value ”. But, as stated in General Manager, Kerala, State Road
Transport Corporation v. Susamma Thomas (1994) 2 SCC 176, “ much
of the calculation necessarily remains in the realm of hypothesis ” and
since there are “ so often many imponderables ”, the Court must try to
assess, as best as it can, the loss suffered against the “ overall picture ”
that only matters.
33. In Susamma Thomas (supra), the court ruled that in fatal
accident action, the measure of damages is the pecuniary loss suffered
or likely to be suffered by each dependent as a result of the death and
that :
“9. The assessment of damages to compensate the
dependants is beset with difficulties because from the
nature of things, it has to take into account many
imponderables, e.g., the life expectancy of the deceased
and the dependants, the amount that the deceased
would have earned during the remainder of his life, the
amount that he would have contributed to the
dependants during that period, the chances that the
deceased may not have lived or the dependants may not
live up to the estimated remaining period of their life
MAC App. Nos. 554/2010 & conn. Page 24 of 70
expectancy, the chances that the deceased might have
got better employment or income or might have lost his
employment or income altogether.”
34. Taking note of the evolving jurisprudence on the subject, in
Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121, which
was affirmed by a bench of three Hon‟ble Judges in Reshma Kumari &
Ors. Vs. Madan Mohan & Anr ., (2013) 9 SCC 65, the Supreme Court
held thus :
“16. … “Just compensation” is adequate
compensation which is fair and equitable, on the facts
and circumstances of the case, to make good the loss
suffered as a result of the wrong, as far as money can
do so, by applying the well settled principles relating to
award of compensation. It is not intended to be a
bonanza, largesse or source of profit.
17. Assessment of compensation though
involving certain hypothetical considerations, should
nevertheless be objective. Justice and justness emanate
from equality in treatment, consistency and
thoroughness in adjudication, and fairness and
uniformity in the decision making process and the
decisions. While it may not be possible to have
mathematical precision or identical awards, in
assessing compensation, same or similar facts should
lead to awards in the same range. When the
factors/inputs are the same, and the formula/legal
principles are the same, consistency and uniformity,
and not divergence and freakiness, should be the result
of adjudication to arrive at just compensation…”
MAC App. Nos. 554/2010 & conn. Page 25 of 70
35. Whilst there can be no two opinions about the harsh reality that
no amount of compensation can restore, eliminate or ameliorate the
loss suffered on account of death (or injury with lasting effect), the
endeavour by such award is to repair the damage done so as to restore
the victim (which includes the dependents) to the extent possible to the
pre-accidental position. This is why the pecuniary damages are meant
to take care of the prospective pecuniary loss of future income and the
non-pecuniary damages to compensate, to an extent, for pain &
suffering, loss of love, companionship, expectation of life etc.
Pertinently, the following passage from Lord Halsbury‟s law of
th
England (4 Edition, Vol. 12, page 446-447) was quoted with approval
in R K Malik (supra) (para 18):
“1147. Non-pecuniary loss: the pattern.—Damages
awarded for pain and suffering and loss of amenity
constitute a conventional sum which is taken to be the
sum which society deems fair, fairness being interpreted
by the courts in the light of previous decisions. Thus
there has been evolved a set of conventional principles
providing a provisional guide to the comparative
severity of different injuries, and indicating a bracket of
damages into which a particular injury will currently
fall. The particular circumstances of the plaintiff,
including his age and any unusual deprivation he may
suffer, is reflected in the actual amount of the award.
The fall in the value of money leads to a
continuing reassessment of these awards and to
periodic reassessments of damages at certain key points
in the pattern where the disability is readily identifiable
and not subject to large variations in individual cases.”
MAC App. Nos. 554/2010 & conn. Page 26 of 70
36. The Supreme Court observed in R.K. Malik (supra), thus :
22. It is extremely difficult to quantify the non-
pecuniary compensation as it is to a great extent based
upon the sentiments and emotions. But, the same could
not be a ground for non-payment of any amount
whatsoever by stating that it is difficult to quantify and
pinpoint the exact amount payable with mathematical
accuracy.
23. Human life cannot be measured only in terms of loss
of earning or monetary losses alone. There are
emotional attachments involved and loss of a child can
have a devastating effect on the family which can be
easily visualised and understood. Perhaps, the only
mechanism known to law in this kind of situation is to
compensate a person who has suffered non-pecuniary
loss or damage as a consequence of the wrong done to
him by way of damages/monetary compensation.
Undoubtedly, when a victim of a wrong suffers injuries
he is entitled to compensation including compensation
for the prospective life, pain and suffering, happiness,
etc., which is sometimes described as compensation
paid for “loss of expectation of life”.
37. While the law on the issue of calculation of loss of dependency
in the case of death of bread winner of the family is more or less
settled – except perhaps for the category of those who are “ self-
employed ” or engaged in gainful employment at “ a fixed salary ”, the
issue concerning which is presently under reference before a larger
Bench of the Supreme Court [ National Insurance Company Ltd.
MAC App. Nos. 554/2010 & conn. Page 27 of 70
V. Pushpa & Ors. (2015) 9 SCC 166] – the view taken and the method
adopted for computation of compensation in case of death of children
appears to be still not uniform or consistent, clearly for the reason the
factors that go into calculations in such cases suffer from even greater
uncertainties and imponderables. Lord Atkinson – as quoted in R.K.
Malik (supra) (para 13) – observed in Taff Vale Railway Co. v. Jenkins
1913 AC 1 : (1911-13) All ER Rep 160 (HL) , as under :
“11. … In case of the death of an infant, there may have
been no actual pecuniary benefit derived by its parents
during the child's lifetime. But this will not necessarily
bar the parents' claim and prospective loss will found a
valid claim provided that the parents establish that they
had a reasonable expectation of pecuniary benefit if the
child had lived.”
38. As held by the Supreme Court in R K Malik (supra),
compensation for loss of dependency, by its very nature, is awarded
for prospective or future loss and, therefore, it cannot be allowed to be
argued that death of a child who is “ still studying and not working ”
does not result in any pecuniary loss. But, the challenge before the
tribunals and courts in determining “ just and reasonable ”
compensation in such cases stems from the fact that there is virtually
no evidence of actual loss of earnings of the deceased child. In R K
Mailk (supra), the court noted:
“25. That being the position, the crucial problem arises
with regard to the quantification of such compensation.
MAC App. Nos. 554/2010 & conn. Page 28 of 70
The injury inflicted by deprivation of the life of a child
is extremely difficult to quantify. In view of the
uncertainties and contingencies of human life, what
would be an appropriate figure, an adequate solatium is
difficult to specify. The courts have therefore used the
expression “standard compensation” and
“conventional amount/sum” to get over the difficulty
that arises in quantifying a figure as the same ensures
consistency and uniformity in awarding
compensations.”
39. The case reported as Lata Wadhwa v. State of Bihar (2001) 8
SCC 197 also involved claims for compensation on account of death of
children, though in a fire incident that had occurred on 03.03.1989
within the factory premises of Tata Iron and Steel Company (TISCO)
at Jamshedpur. It had been found, upon inquiry, to be an occurrence
resulting from negligence on the part of the organizers. The children
who had died were put in two categories; first in the age group of 5 to
10 years old and, the other, in age group of 10 to 15 years old, all
being children of TISCO employees. While dealing with the
contentions raised against the claims, the Supreme Court held:
“In case of the death of an infant, there may have been
no actual pecuniary benefit derived by its parents
during the child‟s lifetime, but this will not necessarily
bar the parents‟ claim and prospective loss will found a
valid claim provided that the parents establish that they
had a reasonable expectation of pecuniary benefit if the
child had lived. At the same time, it must be held that a
mere speculative possibility of benefit is not sufficient.
Question whether there exists a reasonable expectation
MAC App. Nos. 554/2010 & conn. Page 29 of 70
of pecuniary advantage is always a mixed question of
fact and law. In case of a bright and healthy boy, his
performance in the school, it would easier for the
authority to arrive at the compensation amount, which
may be different from another sickly, unhealthy, rickety
child and bad student.”
40. Taking note of the facts that the environment from which the
children were brought, their parents being reasonably well placed, the
court in Lata Wadhwa proceeded to award compensation in the sum of
₹2 lakhs for the children in the first category and ₹4.10 lakhs for the
children in the second category, awards in both being inclusive of
₹50,000/- each under the conventional figure of non-pecuniary
damages. Noticeably, in the second category (all students of class 6 to
10), the loss of estate was worked out with the multiplier of 15 on the
assumption that such children having assurance of employment in
TISCO, would have contributed to the family income in the sum of
₹24,000/- per annum.
41. The case reported as New India Assurance Co. Ltd. Vs. Satender
and Ors. , AIR 2007 SCC 324 involved death of a 9 year old child in an
accident on 07.05.2002. The Supreme Court, by judgment dated
08.11.2006, declined to approve the compensation awarded in the sum
of ₹4,45,000/- that had been upheld by the High Court which amount
included ₹3,40,000/- as financial loss calculated on the basis of
notional income of ₹30,000/- with multiplier of 17, reducing it to
₹1,80,000/-, observing as under :-
MAC App. Nos. 554/2010 & conn. Page 30 of 70
“..12. In cases of young children of tender age, in view of
uncertainties abound, neither their income at the time of
death, nor the prospects of the future increase in their
income nor chances of advancement of their career are
capable of proper determination on estimated basis. The
reason is that at such an early age, the uncertainties in
regard to their academic pursuits, achievements in career
and thereafter advancement in life are so many that
nothing can be assumed with reasonable certainty.
Therefore, neither the income of the deceased child is
capable of assessment on estimated basis nor the financial
loss suffered by the parents is capable of mathematical
computation..”
42. On 18.11.1997, a bus ferrying children to school had gone out of
control of its driver and fell into Yamuna river in an incident that has
come to be known as Wazirabad school bus tragedy. Twenty nine
children died in the said accident. Accident claim cases were brought
by their parents invoking the special provision contained in Section
163-A of MV Act. The tribunal divided them into three categories;
first, those aged less than 10 years; second, those in the age group of
10 to 15 years; and the third, those in the age group of 15 to 18 years.
The second schedule to the MV Act which applies in cases under
Section 163-A prescribes the notional income of “non-earning
persons” in such cases to be assumed as ₹15,000/- per annum. It also
requires (by the first foot note) that for calculating the amount of
rd
compensation in fatal accident claims a deduction to the extent of 1/3
be made in consideration of expenses which the victim would have
MAC App. Nos. 554/2010 & conn. Page 31 of 70
incurred towards maintaining himself had he been alive. Thus, the
tribunal took the loss of earnings (on which loss to estate was to be
compensated) at ₹10,000/- per annum. In the case of the third
category (age group of 15 to 18 years), the multiplier of 16 was
applied while in the second category (10 to 15 years), the multiplier of
15 was applied. It appears that in the first category (children less than
10 years in age), the multiplier of 10 was adopted. The tribunal
proceeded to add ₹5,000/- each towards funeral and last rites. Thus,
the total compensation awarded by the tribunal in the three categories
was ₹1,05,000/- (for children less than 10 years), ₹1,55,000/- (for
children in the age group of 10 to 15 years) and ₹1,65,000/- (for
children in the age group of 15 to 18 years).
43. The claimants, feeling dissatisfied, took out appeals before this
Court which were decided by a learned single Judge by judgment
dated 17.05.2006, reported as R K Malik & Ors. v. Kiran Pal & Ors.
[III (2006) ACC 261, 2007 ACJ 2010, (2006) ILR 1 Delhi 866]. It
appears that the focus of challenge against the awards granted by the
tribunal in the appeals before this Court was primarily on the non-
pecuniary damages. The learned single Judge noted the lump-sum
award of ₹50,000/- as the conventional figure for payment of non-
pecuniary damages made in the cases of death of children in Lata
Wadhwa (supra) and held as under :
“The decision in the case of Lata Wadhwa (supra)
relates to a fire accident in 1989 and therefore this
MAC App. Nos. 554/2010 & conn. Page 32 of 70
figure of conventional compensation has to be
adequately enhanced to compensate for inflation and
declining value/purchasing power of the Rupee. As per
notified cost of inflation index issued by the Govt. of
India under Section 48 of the Income tax Act, 1961 with
base year as 1981-82 (= 100), the index was 172 in
1989-90 and 331 in the financial year 1997-98. If we go
by the said figures the corresponding value of
Rs.50,000/- in 1989 would be Rs. 97,000/- (approx.) in
1997. Taking the figure awarded in Lata Wadhwa‟s
case and keeping in view the “just compensation” as
awarded in several other cases mentioned above and
also applying the principle of moderation, I feel that in
all cases a uniform sum of Rs.75,000/- should be
awarded towards non-pecuniary compensation as
conventional compensation or in other words
compensation for loss of expectancy of life and pain and
suffering etc. suffered by the victims due to the death.
Thus the compensation payable to the appellants gets
enhanced by Rs.75,000/- in all the cases. The appellants
for the sake of uniformity will also be entitled to
Rs.1000/- towards loss of books wherever the same has
not been awarded by the ld. tribunal. I may however
add a word of caution that the above “conventional
amount” may not be applicable in cases of death of
adults and this aspect has not been examined by me.”
44. It is the above decision of the learned single Judge of this Court
which was under challenge before the Supreme Court leading to the
judgment dated 15.05.2009 reported as R K Malik v. Kiran Pal (2009)
14 SCC 1 (supra). The question of computation of loss to the estate
with reference to the notional income of non-earning persons specified
in the second schedule to MV Act, referable to Section 163A, having
MAC App. Nos. 554/2010 & conn. Page 33 of 70
been raised before the Supreme Court, while holding that “ deviation
from the structured formula as provided in the Second Schedule is not
ordinarily permissible” even when “ compensation is payable under
Section 166 read with Section 168 of the Act ”, the court ruled that the
notional income mentioned in the second schedule and the multiplier
specified therein “ can form the basis for the pecuniary compensation
for the loss of dependency ” in the said cases. While affirming the
calculation of pecuniary compensation by the tribunal and the High
Court, the Supreme Court made the following observations which are
of utmost relevance to the issues raised before this Court in the present
matters :
17. We must point out here that the learned counsel for
the appellants had argued that the notional sum of Rs
15,000 should be enhanced and increased as the
legislature has not amended the Second Schedule and
the same continues to be in existence since it was
enacted on 14-11-1994. We are not examining and
going into this aspect as the accident had taken place in
the present case nearly three years after the enactment
of the Second Schedule. The time difference between the
date of the enactment and the date of accident is not
substantial.
45. Need one remind oneself about the passage from Lord
Halsbury‟s law of England quoted earlier, albeit in the context of non-
pecuniary damages, that fall in the value of money necessitates
“ continuing ” and “ periodic reassessments ” of such awards.
MAC App. Nos. 554/2010 & conn. Page 34 of 70
46. In R K Malik (supra), the Supreme Court enhanced the
compensation awarded by this Court by another sum of ₹75,000/- in
each case describing it as “ compensation for the future prospects of the
children ”, interestingly clarifying that this represented “ roughly half of
the amount given on account of pecuniary damages” taking note, inter
alia , of the fact that the deceased children had been shown by evidence
to have been performing well in studies and that but for the tragedy,
they would have had a “ good and bright ” future which aspect could
not be overlooked, referring in this context to the decisions in
Susamma Thomas (supra), Lata Wadhwa (supra) and Sarla Dixit (Smt)
v. Balwant Yadav (1996) 3 SCC 179.
47. It may be mentioned here that in certain later decisions, the
Supreme Court has commended taking into account the “ good career
prospects ” of children who have been brilliant in studies for notionally
determining their future income for calculation of compensation,
particularly for those in the age group of 15 to 18 years. For
illustration, one may refer to V. Mekala v. M. Malathi & Anr. (2014)
11 SCC 178.
48. The case of Uphaar tragedy (supra) arose out of a fire incident
that occurred on 13.06.1997 in a cinema hall where 59 persons had
perished, they including some aged 20 years or less. The issue of
compensation arising out of claims based on fault liability was finally
decided by the Supreme Court by judgment dated 13.10.2011. This
Court had earlier awarded compensation assuming the income of those
MAC App. Nos. 554/2010 & conn. Page 35 of 70
who were sitting in the balcony class (where rate of admission was
higher) as those belonging to a strata of society where the monthly
income could not be less than ₹15,000/-. Adopting the multiplier of
15 in all such cases where the deceased persons were more than 20
rd
years, after deducting 1/3 for personal expenses, this Court had
granted compensation in the sum of ₹18 lakhs per such person. For
those below 20 years, the Court had reduced the said amount by ₹3
lakhs and awarded compensation at flat rate of ₹15 lakhs. The
Supreme Court found the assumption of income on the basis of class
of seat where the deceased persons were sitting in the cinema hall to be
improper. Observing that it was “ unsafe to use a high income as the
determinative factor ”, the claims having arisen in a public law remedy,
the Court reduced the compensation in the case of persons aged 20
years or more to the sum of ₹10 lakhs and for those below 20 years in
sum of ₹7.5 lakhs, granting liberty to those seeking more
compensation on the basis of higher income to approach the Registrar
General of this Court with their applications for summary inquiry to be
conducted to determine the compensation in each case.
49. Reference has also been made, in the course of arguments, to the
decision of the Supreme Court in Manju Devi Vs. Musafir Paswan, VII
(2005) SLT 257. It was an appeal arising out of claim due to death of a
thirteen years‟ old boy in a motor vehicular accident that had occurred
on 02-07-1998. The matter was decided by the Supreme Court on 31-
03-2003. The tribunal had awarded a lump-sum amount of ` 90,000/-
MAC App. Nos. 554/2010 & conn. Page 36 of 70
which had been upheld by the High Court. The Supreme Court
increased the award to ` 2,25,000/- applying the notional income of
non-earning person ( 15,000/-), as specified in the Second Schedule
`
of MV Act and adopting the multiplier of 15.
50. Kaushalya Devi Vs. Karan Arora, 2007 11 SCC 120 is yet
another case relied upon by the insurance companies. It arose out of
death of a minor (fourteen years‟ old boy), the claim having been
preferred under section 166 of MV Act by his parents, the accident
having occurred on 05-02-1997. The tribunal awarded the amount of
rupees one lakh with interest and the appeal preferred by the claimant
was dismissed by the High Court. The Supreme Court upheld the said
decision and dismissed the claim of the claimant for further
enhancement, observing thus:
“ There are some aspects of human life which are
capable of monetary measurement, but the totality of
human life is like the beauty of sunrise or the splendor
of the stars, beyond the reach of monetary tape-
measure. The determination of damages for loss of
human life is an extremely difficult task and it becomes
all the more baffling when the deceased is a child
and/or a non-earning person. The future of a child is
uncertain. Where the deceased was a child, he was
earning nothing but had a prospect to earn. The
question of assessment of compensation, therefore,
becomes stiffer. The figure of compensation in such
cases involves a good deal of guesswork. In cases,
where parents are claimants, relevant factor would be
age of parents. ”
MAC App. Nos. 554/2010 & conn. Page 37 of 70
51. The case of National Insurance Co. Ltd. Vs. Farzana (supra) is a
judgment rendered on 14-07-2009 by a learned Single Judge of this
court. As noted earlier, this decision had been followed by the
tribunals in some of the cases from which these appeals arise. In
Farzana , the person who had died was seven years‟ old son of the
claimant parents, in an accident that had occurred on 10-05-2000.
The tribunal had awarded compensation in the sum of 3,62,500/- on
`
the basis of notional annual income of ` 22,500/- which had been
capitalized by multiplier of 15. The learned Single Judge referred to
the decisions of the Supreme Court, inter-alia, in Manju Devi (supra)
and R.K. Malik (supra) and in that light found the tribunal to be in
error. It was held that the notional income of ` 15,000/- per annum
only should have been adopted and the multiplier of 15 applied. The
learned Single Judge capitalized the annual income and, thus, worked
out the loss of dependency at ` 2,25,000/- and added ` 75,000/-
awarded by this Court besides ` 75,000/- awarded further by the
Supreme Court in the matter of R.K. Malik (supra) to grant `
3,75,000/- as compensation.
52. As pointed out by the learned counsel for the insurance
companies, in working out the compensation in Farzana (supra) the
learned Single Judge omitted to make deductions on account of
personal and living expenses, as had been done in the case of R.K.
Malik (supra), without elaborating the reasons for such departure
which, consequently, is assumed to be inadvertent.
MAC App. Nos. 554/2010 & conn. Page 38 of 70
53. The decision in Farzana (supra) seems to have been followed by
another learned Single Judge of this court in a number of other
similarly placed matters of claims arising out of death of children of
young age, some of such decisions including Anita Devi Vs. New India
Assurance Co. Ltd. & Ors (MAC.APP.No.460/2009 decided on
02.05.2012); National Insurance Company Ltd. Vs. Raj Prakash &
Ors. (MAC.APP.No.492/2008 decided on 02.11.2012) and HDFC
ERGO General Insurance Company Ltd. Vs. Bablu Sahni & Ors.
(MAC.APP.No.1038/2012 decided on 22.04.2015). In each of these
cases the awards were granted in the sum of ` 3,75,000/-. Noticeably,
in Bablu Sahni (supra), the insurer had referred to the decision of
Supreme Court in Kaushalya Devi (supra) to claim reduction of
compensation to rupees one lakh. The learned Single Judge, however,
rejected the said submission and decided to follow the precedent of
Farzana (supra) observing that the death in the case before the court
had occurred on 03-06-2011 whereas in Kaushalya Devi (supra), the
cause of action related to 1997.
54. The argument of erosion of real value of money on account of
inflationary trends apart, that the notional income of ` 15,000/- per
annum, as specified in the Second Schedule to MV Act, has become
obsolete and cannot be a valid benchmark, was one consideration on
which the decision of Supreme Court in case reported as Kishan Gopal
Vs. Lala, 2014 (1) SCC 244 turned. In that case, the son of the
claimants, aged ten years, had died in an accident that had occurred on
MAC App. Nos. 554/2010 & conn. Page 39 of 70
19-07-1992. The Supreme Court declined to adopt the income
specified in the Second Schedule to MV Act and after assuming the
notional income as ` 30,000/- granted the compensation in the sum of
4,50,000/- on account of loss of dependency besides 50,000/-
` `
under the conventional head.
ANALYSIS
55. The method of assessment in Lata Wadhwa (supra) was
followed, with improvement, albeit for calculating non-pecuniary
damages, in R.K. Malik (supra). What is pertinent to note, however, is
that the court drew a distinction qua senior age-group (those studying
th th
in 6 to 10 standards) and assumed income higher than that of
notional income, having regard to the prospects of their employability
in future. The view taken in Kaushalya Devi (supra) wherein the
lumpsum award of ₹1 Lakh only was upheld in the case of death of a
14 years‟ old boy on 05.02.1997, need not be followed as binding
precedent in view of the dicta of the Supreme Court in R.K. Malik
(supra ). The view taken in Satender (supra) also must be kept aside as
the judgment in R.K. Malik (supra) would prevail over it. The award
granted in Uphaar Tragedy (supra) may not be used as a precedent for
the reasons what was granted by the Supreme Court in a case arising
out of public law remedy was only tentative, the final computation
having been left to further inquiry, in the peculiar facts and
circumstances of that case. The case of Manju Devi (supra) essentially
MAC App. Nos. 554/2010 & conn. Page 40 of 70
followed the same line as taken in R.K. Malik (supra) . The difficulty
with the ruling in Kishan Gopal (supra) is that though the cause of
action had arisen in July 1992, the Supreme Court while rendering the
final decision on 26.08.2013, made the computation by assuming the
notional income at twice the rate of the one given in Second Schedule
on account of elapse of time not referring to the earlier decision in R.K.
Malik (supra) , the prime take away from the said judgment, however,
being the acknowledgement that the notional income fixed by the
legislature in 1994 would not hold good in the face of drastic reduction
in rupee value over the years.
56. The court faces the challenge of determining “just
compensation”, in each such case. The issue needs to be addressed,
inter alia , in the context of considerations in the nature of future
prospects and inflationary trends affecting the loss of real value of
money. In Sarla Verma (supra), a bench of two Hon‟ble Judges of the
Supreme Court standardized the method of calculation of the factor of
future prospects to be taken into account but kept the category of those
who were “ self employed ” or working on a “ fixed salary ” out of its
purview. The decision in Sarla Verma was upheld by a bench of three
Hon‟ble Judges of the Supreme Court in Reshma Kumari v. Madan
Mohan (supra). A divergent view was taken on this subject by another
bench of three Hon‟ble Judges in Rajesh v. Rajbir (supra), approving
certain observations in judgment in another case reported as Santosh
MAC App. Nos. 554/2010 & conn. Page 41 of 70
Devi v. National Insurance Co. Ltd. (2012) 6 SCC 421. Though the
question of permissibility of “ future prospects ” to be considered in the
two above mentioned categories (“ self employed ” or those on “ fixed
salary ”) is still at large, it having been referred to a larger bench,
certain observations in Santosh Devi (supra) are germane to the
questions raised before this Court and thus, need to be quoted. In
Santosh Devi (supra) the Supreme Court said thus :
“11. We have considered the respective arguments. Although,
the legal jurisprudence developed in the country in last five
decades is somewhat precedent-centric, the judgments which
have bearing on socio-economic conditions of the citizens and
issues relating to compensation payable to the victims of motor
accidents, those who are deprived of their land and similar
matters needs to be frequently revisited keeping in view the fast
changing societal values, the effect of globalisation on the
economy of the nation and their impact on the life of the people.
…
15. The rise in the cost of living affects everyone across the
board. It does not make any distinction between rich and poor.
As a matter of fact, the effect of rise in prices which directly
impacts the cost of living is minimal on the rich and maximum
on those who are self- employed or who get fixed
income/emoluments. They are the worst affected people.
Therefore, they put extra efforts to generate additional income
necessary for sustaining their families.”
57. There can be no two opinions about the fact that in case of
children there can hardly ever be a clear proof of pecuniary loss
resulting from death. Persons of age below 18 years, are not expected
to be, and are most of the time not, engaged in any activity earning
MAC App. Nos. 554/2010 & conn. Page 42 of 70
livelihood. At the same time, it cannot be said that no pecuniary loss
accrues due to their death. The calculation of loss to the estate, to be
awarded as pecuniary damages, is more in the realm of speculation
than based on any actual data. In these circumstances, the most
appropriate course is to go by the notional income of non-earning
persons for which provision was made by the legislature in the Second
Schedule appended to the M.V. Act with reference to Section 163-A.
That bench-mark was adopted by the tribunal in the case leading to the
judgment of Supreme Court in R.K. Malik (supra) wherein the
approach was upheld. In these circumstances, the law can be taken as
generally well settled that the pecuniary damages in cases of death of
children have to be computed with reference to the notional income
specified in Second Schedule appended to the M.V. Act. As in Lata
Wadhwa (surpa), however, the prospects of employability in future of
children in higher age-group necessitate that they are kept at different
footing, ideally at least on the bench-mark of minimum wages with
room for considering even higher prospective income in case
irrefutable evidence is brought forth of exceptionally bright academic
record or training in special talent or skill. Of course, the non-
pecuniary damages as awarded by the High Court, on which Supreme
Court later made further improvement in R.K. Malik (supra) , would
also need to be added in proper ratio in the final award.
MAC App. Nos. 554/2010 & conn. Page 43 of 70
58. But it cannot be ignored that what was specified by the
legislature in Second Schedule as the notional income in November
1994 cannot continue to hold good even after elapse of more than two
decades. The value of money stands eroded on account of the effect of
inflation. What was the value of ₹15,000/- in November 1994 would
in comparison be a pittance in the present times. Same would hold
good for the non-pecuniary damages that were awarded in R.K. Malik
(supra) in relation to an accident of 1997. Noticeably, a similar
contention about erosion of value of money was urged before the
Supreme Court in R.K. Malik (supra) but the said argument was not
accepted for the reason only three years had passed by after the
insertion of the Second Schedule to the M.V. Act. The said view
cannot be taken now as 22 years have gone by.
59. As commended by Halsbury in the passage quoted earlier, the
fall in the value of money must lead to periodic reassessment of
damages. This is what was the theme of discourse in Santosh Devi
( supra ) and in a later decision in Puttamma ( supra). In Puttamma
( supra ) , the Supreme Court called upon the State to explain inaction on
its part in the context of authorization given to the Central Government
by Section 163-A (3) to make improvements on account of “cost of
living”. The response of the State and the view taken by the court on
the subject may be gleaned from the following extracts :-
MAC App. Nos. 554/2010 & conn. Page 44 of 70
“ 53. Considering the current trend of inflation, cost of
foodgrains and all other items, Mr P.P. Malhotra, Senior
Advocate, Amicus Curiae submitted that for just
compensation the multiplier should be enhanced to 24-25
years. Further, according to him, while calculating the
compensation, the amount payable towards dependency
should be increased as the life expectancy is up to 70-75
years and secondly, after 10 years of earning capacity it
should be doubled in view of escalation of cost of living
and progressive increase in the income. Keeping in view
the cost of living, the Central Government is required to
amend the Second Schedule [See Section 163-A(3)]. The
Second Schedule was enacted by Act 54 of 1994 w.e.f. 14-
11-1994. Now more than 19 years have passed but no
amendment has been made. While the cost of living has
gone up manifolds.
54. In view of findings recorded above, we hold that the
Second Schedule as was enacted in 1994 has now become
redundant, irrational and unworkable due to changed
scenario including the present cost of living and current
rate of inflation and increased life expectancy.
55. A Letter dated 5-12-2012 issued by the Joint
Secretary, Ministry of Road Transport and Highways,
New Delhi has been brought to our notice by Mr P.P.
Malhotra. Giving reference to the present case therein,
the officer has informed that the Motor Vehicles
(Amendment) Bill, 2012, inter alia, to amend Section 163-
A of the Motor Vehicles Act, 1988 was passed by the
Rajya Sabha on 8-5-2012. The said Bill proposes to
substitute Section 163-A(3) of the Act by empowering the
Central Government to revise the amount or the
multiplier specified in the Second Schedule after every
three years and furthermore, the Bill also seeks to
substitute the Second Schedule so as to provide that for
death of non-earning persons, a fixed compensation of Rs
MAC App. Nos. 554/2010 & conn. Page 45 of 70
1,00,000 for children up to 5 years of age and Rs
1,50,000 for persons more than 5 years of age. It is
informed that though the Bill has been passed by the
Rajya Sabha it is still pending consideration before the
Lok Sabha for its approval.
X X X X
57. From the proposed Bill we find that there is a
proposal to change the multiplier applicable for different
age groups; it does not contemplate schedule structure of
compensation. The factors to be considered for working
out compensation are (a) age of the victim, (b) multiplier,
(c) annual income up to Rs 1,00,000 (the maximum
annual income for calculation of compensation will be
deemed to be Rs 1,00,000 even if the income exceeds Rs.
1,00,000). Separate provisions have been made for
grievous injury and non-grievous injury, etc.
58. The Central Government was bestowed with duties to
amend the Second Schedule in view of Section 163-A(3),
but it failed to do so for 19 years in spite of repeated
observations of this Court. For the reasons recorded
above, we deem it proper to issue specific directions to
the Central Government through the Secretary, Ministry
of Road Transport and Highways to make proper
amendments to the Second Schedule table keeping in view
the present cost of living, subject to amendment of the
Second Schedule as proposed or may be made by
Parliament. Accordingly, we direct the Central
Government to do so immediately. Till such amendment is
made by the Central Government in exercise of power
vested under sub-section (3) of Section 163-A of the 1988
Act or amendment is made by Parliament, we hold and
direct that for children up to the age of 5 years shall be
entitled for a fixed compensation of Rs 1,00,000 (Rupees
one lakh) and persons more than 5 years of age shall be
entitled for a fixed compensation of Rs 1,50,000 (Rupees
MAC App. Nos. 554/2010 & conn. Page 46 of 70
one lakh and fifty thousand) or the amount may be
determined in terms of the Second Schedule whichever is
higher. Such amount is to be paid if any application is
filed under Section 163-A of the 1988 Act.”
60. The decision in Puttamma (supra) was rendered on 09.12.2013.
More than 2 years and 4 months have gone by and the amendment to
the law is yet to see the light of the day. Noticeably, the amounts of
fixed compensation indicated by the court in (paragraph 58 of) the
judgment in Puttamma (supra) quoted above are unduly low when
compared to the dispensation in R.K. Malik (supra). The court,
however, made it clear that if higher compensation could be
determined in terms of Second Schedule, the same shall be awarded.
61. The legislature and the executive have not lived up to the
assurance held out by Section 163-A (3) of the M.V. Act. The value of
money having gone down substantially over the last more than 22
years, the amount of compensation cannot remain frozen. The Court
cannot remain a helpless spectator, indefinitely awaiting initiative by
the legislature [ Vishakha Vs. State of Rajasthan, (1997) 6 SCC 241 ].
As observed by Supreme Court in M.V. Elisabeth v. Harwan
Investment and Trading (P) Ltd. : 1993 Supp (2) SCC 433 :
“…Access to court which is an important right vested in
every citizen implies the existence of the power of the
Court to render justice according to law. Where statute is
silent and judicial intervention is required, Courts strive to
MAC App. Nos. 554/2010 & conn. Page 47 of 70
redress grievances according to what is perceived to be
principles of justice, equity and good conscience.”
62. The tribunals and courts will have to break free from the groove
or strait-jacket of the stale, outdated and obsolete prescription of the
second schedule to M.V. Act. Time has come, and it is the obligation
of this court to do so, to bring the benchmark in Second Schedule to
M.V. Act upto date, in the present matters for purposes of award of
compensation in the case of death of children so as to make it “ just ”
and “ reasonable ”. The issue is about the proper mode of achieving
this objective.
63. As noted above, the learned single Judge of this court, sitting in
appeal over the judgments of the tribunal in the case of R.K. Malik
(supra) while assessing the non-pecuniary damages had improved
upon what was granted in Lata Wadhwa (supra) in relation to an
accident of 1989 by applying the cost of inflation index notified by the
Government of India under Section 48 of the Income Tax Act, 1961.
The computation thus made was eventually approved by the Supreme
Court, though with further addition towards future prospects. This
holds the key to the predicament faced.
64. A similar route was taken by another single bench of this Court
in a case for compensation arising out of an incident of terrorism in
Kamla Devi v. Govt. of NCT of Delhi 2005 ACJ 216 (Delhi): 114
(2004) DLT 57, wherein the value of the conventional sum awarded in
MAC App. Nos. 554/2010 & conn. Page 48 of 70
Lata Wadhwa (supra) was improved upon by applying the consumer
price index for industrial workers [CPI (IW)]. The view in Kamla
Devi (supra) was followed in a number of subsequent decisions of this
Court in cases reported as Ashwani Gupta v. Government of India &
Ors. 117 (2005) DLT 112; Tasleema v. State (NCT of Delhi) & Ors.
ILR (2009) 6 Del 486 : (2009) 161 DLT 660 (DB); Nagrik Sangarsh
Samiti & Ors. v. Union of India & Ors. ILR (2010) 4 Del 293 : 2012
ACJ 1548; Swarn Singh v. Union of India 2010 SCC Online Del 1190
and Ashok Sharma & Ors. v. Union of India & Ors. ILR (2008) 1 Del
96 : 2009 ACJ 1063.
65. Having regard to the fluctuating trends in CPI (IW), this court
finds the Cost Inflation Index (CII) determined and notified by the
Ministry of Finance in Government of India under Section 48 of
Income Tax Act, 1961 for each financial year, to be a better method to
off-set the effect of inflation on the real value of money. This
approach, if followed, would ensure that there is no inconsistency in
the awards of compensation in cases of death of children. [ R.K.Malik
(supra) and Balram Prasad v. Kumar Saha (2014) 1 SCC 384]. Since
the amount which requires to be subjected to correction was
determined by decision in R.K.Malik wherein cause of action had
arisen on 10.11.1997, the financial year 1997-98 is taken as the “base
year”.
MAC App. Nos. 554/2010 & conn. Page 49 of 70
66. For ready reference, the rates of Cost Inflation Index (CII)
notified by the government till date, to the extent necessary, are
reproduced in the table given below :
CII Financial
Financial
CII
Year
Year
100 2004-05 480
2005-06 497
1981-82 100 2006-07 519
1982-1983 109 2007-08 551
X X X X X X 2008-09 582
1997-98 331 2009-10 632
1998-99 351 2010-11 711
1999-2000 389 2011-12 785
2000-01 406 2012-13 852
2001-02 426 2013-14 939
2002-03 447 2014-15 1024
2003-04 463 2015-16 1081
Before
1/4/1981
CONCLUSIONS
67. In the considered view of this Court, the cases for compensation
on account of death of children in motor vehicular accident cases
ought to be dealt with by considering the claim towards pecuniary
damages (towards loss to estate), in accordance with the age-group
wise categories as in R.K.Malik (supra); the first category being of
children less than 10 years‟ in age, the second category being of
children more than 10 years‟ and up to 15 years‟ in age, and the third
category of children more than 15 years‟ but not having attained the
MAC App. Nos. 554/2010 & conn. Page 50 of 70
age of majority (18 years). The children in the third category would
ordinarily be of such age group as is generally receiving formal school
education or those that are (being) imparted special training so as to be
equipped with requisite skills to be gainfully employed in a variety of
trades. They are after all nearing adulthood and thus, on the threshold
of becoming self-reliant. In such cases, the prospects of their
employability and earnings in future or present, based on evidence
adduced about their academic track record or training in special talents
or skills, would need to be borne in mind. As in Lata Wadhwa (supra),
the claim for pecuniary damages arising out of death of children of this
age group cannot be at par with the lower age groups falling in the first
and second category. Therefore, the pecuniary loss to estate due to
their death would deserve to be worked out by applying a higher
multiplier on the notional income (of non-earning persons) unless, of
course, case is properly made out for higher considerations.
Noticeably, in Sarla Verma (supra) the Supreme Court specified the
multiplier of 18 for cases where the deceased was in the age-group of
15 years‟ to 20 years‟ old. For the first and second category, however,
the multiplier of 10 and 15 respectively, as used in R.K. Malik (supra),
would hold good.
68. Since in the claims arising out of death of children, generally
speaking, (non-earning hands), the income is to be notionally assumed
on the basis of the second schedule to the MV Act, the general practice
MAC App. Nos. 554/2010 & conn. Page 51 of 70
of deduction of one-half (50%) towards personal & living expenses, as
applied in case of bachelors above the age of 18 years would be unfair.
Pertinently, the notional income specified for non-earning persons in
the second schedule is very low as compared to the rates of minimum
rd
wages. Therefore, the deduction of one-third (1/3 ) on this account, as
provided by the first note below the second schedule would only be
appropriate.
69. The award of compensation must necessarily take into account
non-pecuniary damages. In R.K. Malik (supra), ₹75,000/- awarded by
this Court as the “ conventional compensation ” was enhanced by the
Supreme Court by further similar amount (₹75,000/-) as the
“ compensation for future prospects ”. For the reasons set out earlier, in
the context of pecuniary loss to estate, the composite sum of non-
pecuniary damages of ₹1,50,000/- [as awarded in R.K. Malik (supra)]
would deservedly be added, but with suitable correction so as to ensure
that the deficiency in the real value of money is made good. As noted
(in para 46) earlier, the Supreme Court justified the addition of
` 75,000/- towards compensation for “ future prospects ” by noting that
the said amount was “ roughly half of the amount given on account of
pecuniary damages ”. Since the court had also upheld the award of
similar sum ( ` 75,000/-) by this court as “ conventional compensation ”,
both amounts of non-pecuniary damages, put together, account for
roughly an amount equivalent to the sum computed as pecuniary loss
MAC App. Nos. 554/2010 & conn. Page 52 of 70
to estate. Thus, this court is of the view that a composite sum equal to
the amount computed as pecuniary loss to estate may be added as non-
pecuniary damages (inclusive of conventional compensation and for
future prospects), in such cases as at hand to arrive at the appropriate
figure of „ just compensation ‟.
70. It has been noticed by this Court that the tribunals have been
assessing the compensation and awarding it to the last rupee, at times
even in the fraction of a rupee, not bothering to follow the practice of
rounding off. Awards in at least two of the cases from which the
appeals at hand arise provide ready illustration. This seems to be not
correct. It must be added here that human misery cannot be calculated
with such mathematical precision. Even otherwise for convenience of
accounting, it is desirable that the amount of award is rounded off to
the nearest (if not next) thousands of rupees.
71. Subject to all other requisite conditions being fulfilled, for the
foregoing reasons, in order to bring about consistency and uniformity
in approach to the issue, it is held that claims for compensation on
account of death of children shall be determined as follows :
(i). Till such time as the law is amended by the
legislature, or the Central Government notifies the
amendment to the Second Schedule in exercise of the
enabling power vested in it by Section 163-A (3) of the
MAC App. Nos. 554/2010 & conn. Page 53 of 70
Motor Vehicles Act, 1988, and except in cases wherein the
prospects of employability and earnings (in future or
present) of the deceased child are proved by cogent and
irrefutable evidence, this having regard, inter alia , to the
academic record or training in special talents or skills, for
computing the pecuniary damages on account of the loss to
estate, the notional income of non-earning persons ( 15000/-
`
p.a.) as specified in the Second Schedule (brought in force
from 14.11.1994), shall be assumed to be the income of the
deceased child, and taken into account after it is inflation-
corrected with the help of Cost Inflation Index (CII) as
notified by the Government of India from year to year under
Section 48 of the Income Tax Act, 1961, by applying the
formula indicated hereinafter.
(ii) For inflation-correction, the financial year of 1997-
1998 shall be treated as the “base year” and the value of the
notional income relevant to the date of cause of action shall
be computed in the following manner :-
` 15,000/- x A ÷331
[wherein the figure of „ ` 15,000/-‟ represents the
notional income specified in the second schedule
requiring inflation-correction; „A‟ represents the
CII for the financial year in which the cause of
action arose (i.e. the accident / death occurred);
and the figure of „331‟ represents the CII for the
„base year‟]
MAC App. Nos. 554/2010 & conn. Page 54 of 70
(iii). After arriving at an appropriate figure of the present
equivalent value of the notional income (i.e. inflation-
corrected amount), it shall be rounded off to a figure in next
thousands of rupees.
(iv). The amount of notional income thus calculated shall
be reduced to two-third, the deduction to the extent of one-
third being towards personal & living expenses of the
deceased, the balance taken as the annual loss to estate
(hereinafter also referred to as “the multiplicand”).
(v). For assessment of the pecuniary damages on account
of the death of children upto the age of 10 years, the loss to
estate shall be calculated, capitalizing the multiplicand, by
applying the multiplier of ten (10).
(vi). For children of the age-group of more than 10 years
upto 15 years, the loss to estate shall be calculated by
applying the multiplier of fifteen (15).
(vii). For children of the age-group of more than 15 years
but less than 18 years, the loss to estate shall be calculated
by applying the multiplier of eighteen (18).
(viii). After the pecuniary loss to estate has been worked
out in the manner indicated above, an amount equivalent to
the amount thus computed shall be added to it as the
composite non-pecuniary damages taking care of not only
MAC App. Nos. 554/2010 & conn. Page 55 of 70
the conventional heads but also towards future prospects as
awarded in R.K. Malik v. Kiran Pal (2009) 14 SCC 1.
(ix). The final sum thus arrived at, appropriately rounded
off, if so required to the nearest (if not next) thousands of
rupees, shall be awarded as compensation for the death of
the child.
72. The ruling in National Insurance Company Ltd. v. Farzana
(2009 ACJ 2763) was rendered by a learned single Judge of this Court
on 14.07.2009. Though it had built upon the dispensation in R.K.Malik
(supra), given the effect of inflation elaborately discussed above, it has
outlived its utility for cases relating to later years. At the same time, it
must be noted, that the view in Farzana (supra) has governed the field
till date, inasmuch as it has been followed by other single benches of
this Court as also by tribunals in various cases. Given the modified
method of calculation as is being determined by this judgment, it is
possible that in some of the earlier decided cases, the compensation
computed on revised lines may fall below the amount of ₹3,75,000/-
computed in Farzana (supra). Since the awards in such earlier decided
cases were granted with reference to the ratio in Farzana (supra), it
will not be fair to order any modification in cases that relate to the
period on or after 10.05.2000 (the date of cause of action in Farzana )
so as to reduce the awards below the said amount of ₹3,75,000/-,
particularly as some of such awards may already have been satisfied,
including on account of interim orders of this Court.
MAC App. Nos. 554/2010 & conn. Page 56 of 70
73. Thus, in cases founded on cause of action arising on or after
10.05.2000, the amount of compensation shall not in any case be less
than ₹3,75,000/- which was awarded in the case of National Insurance
Co. Ltd. v. Farzana (2009 ACJ 2763).
74. Case-wise decisions taken hereinafter shall provide necessary
illustrations for applying the above-directed method of computation.
CASE-WISE DECISIONS
Case ‘A’ : MAC Appeal Nos. 226/2010 & 554/2010
(In re: death of three months‟ old child Rama Kant)
75. Since the deceased child Rama Kant was only three months‟ old,
there is no question of any higher considerations. The death having
occurred on 17.03.1993, the ruling in R.K.Malik (supra) is the
precedent which is nearest home. In this view, the total compensation
that deserves to be awarded in this case is ₹1,05,000/- towards
pecuniary loss to estate along with ₹1,50,000/- towards non-pecuniary
damages. Thus, the total sum of ₹2,55,000/-. Following the consistent
view taken by this Court [see judgment dated 22.02.2016 in
MAC.APP. 165/2011 Oriental Insurance Co Ltd v. Sangeeta Devi &
Ors .], the rate of interest is increased to 9% per annum from the date
of filing of the petition till realization.
76. The award is modified accordingly.
MAC App. Nos. 554/2010 & conn. Page 57 of 70
77. By order dated 15.04.2010, the insurance company had been
directed to deposit the entire awarded amount with interest within the
period specified. Out of such deposit, ₹1,80,000/- was released in
terms of order dated 14.03.2013. The balance lying in fixed deposit
receipt with UCO Bank, Delhi High Court branch shall be released in
terms of this judgment in favour of the claimants for which the
Registrar General shall take appropriate steps. The excess in deposit
shall be refunded to the insurance company.
78. It may also be added here that in this case, the insurer had also
pleaded breach of terms and conditions of the insurance policy on the
contention that the registered owner had handed over the offending
vehicle for use to Chetan Malhotra (appellant in MAC Appeal No.
554/2010) without any intimation to it (insurer) and further for the
reason the driver (Sunil) was not holding a valid or effective driving
licence. Both these contentions, however, did not find favour with the
tribunal. It rejected the plea about breach on account of vehicle having
been given on lease without intimation on the reasoning that the
liability to indemnify also stood transferred, referring in this context to
Richi Ram & Anr. vs. Sukhrainia & Ors. (2003) ACC 368 (SC) 2003
(1) SCR 872 . The plea regarding driving license was rejected with
observation that the insurer had failed to adduce any evidence in such
regard. Though in the operative part (para 25) of its judgment, the
tribunal directed the insurer to pay the awarded compensation, Chetan
MAC App. Nos. 554/2010 & conn. Page 58 of 70
Malhotra by his appeal (MAC Appeal No. 554/2010) has taken
exception to the observation in the opening line in the said very para of
the impugned judgment holding the liability of the insurer “ to be joint
and several with other respondents” .
79. Since no breach of terms and conditions of the insurance policy
was proved, though Chetan Malhotra (owner) is held vicariously
liable, no responsibility to pay can be fastened on him as the insurer is
bound to indemnify. With this clarification, no further direction is
required on the appeal of Chetan Malhotra.
Case ‘B’ : MAC Appeal No. 580/2007
(in re: death of seven years‟ old child Yash Chouhan)
80. There is no evidence about the academic record of the child.
The death had occurred on 02.09.2002 and therefore, the CII for the
financial year 2002-2003 (i.e. 447) would apply. As the age of the
deceased child was 10 years, calculation has to be made on the
multiplier of 10. The inflation-corrected notional income comes to
( ` 15,000x447/331) ` 20,256/-, rounded off to ` 21,000/-. After
rd
deducting 1/3 , and applying the multiplier of 10, the pecuniary loss to
estate is computed as ( 21,000 x 2/3 x 10) 1,40,000/-. Adding a
` `
similar account towards composite non-pecuniary damages, the total
compensation works out to ` 2,80,000/-. However, in view of the
decision in paragraph 73 (supra), the amount of compensation awarded
in this case shall be ₹3,75,000/-. As in the preceding case, the rate of
interest is increased to 9% p.a.
MAC App. Nos. 554/2010 & conn. Page 59 of 70
81. The connected appeals (MACA Nos.581/2007 and 582/2007)
arising out of awards for injuries suffered by Sumer Singh Chouhan
and Pushpa had also challenged the finding on contributory negligence
returned by the impugned judgment which was common to the three
claim cases. By judgment passed on 11.05.2016, the said two other
appeals were decided by this court setting aside the finding on
contributory negligence and deduction from the compensation on such
account. The said finding shall apply to the present case as well.
Therefore, the insurance company shall be liable to deposit the
requisite amount including on account of increase in the compensation
and rate of interest, without any deduction, with the tribunal within 30
days, making it available to be released to the claimants. For removal
of doubts, it is clarified that the recovery rights granted by the tribunal
shall inure to the insurer even in respect of the enhanced portion of the
award.
Case ‘C’ : MAC Appeal No. 250/2013
(In re: death of eleven years‟ old child Mukesh)
82. There is no case for any higher consideration. The death had
occurred on 24.09.2007 and therefore, the CII for the financial year
2007-2008 (i.e. 551) would apply. As the age of the deceased child
was 11 years, the multiplier of 15 would be appropriate. The inflation-
corrected notional income thus comes to (₹15,000/- x 551/331)
rd
₹24,969/-, rounded off to ₹ 25,000/-. After deducting 1/3 and on the
multiplier of 15, the pecuniary loss to estate is computed as (₹25,000/-
MAC App. Nos. 554/2010 & conn. Page 60 of 70
x 2/3 x 15) ₹2,49,999/- rounded off to ₹2,50,000/-. Adding the
similar amount towards composite non-pecuniary damages, the total
compensation payable in this case comes to ₹5,00,000/-. Following
the reasons set out in the context of the preceding cases, the rate of
interest is increased to 9% p.a.
83. By order dated 15.03.2013, the insurer had been directed to
deposit 80% of the awarded amount with accrued interest with the
Registrar General and on such deposit, 40% was allowed to be
released, the balance kept in fixed deposit receipt with UCO Bank,
Delhi High Court branch. The Registrar General shall calculate the
amount payable to the claimants in this case in terms of the modified
award and release the same, refunding the excess to the insurer.
Case ‘D’ : MAC Appeal No. 510/2014
(In re: death of 17 years‟ old child Mohit)
84. Again, there is no case for any higher consideration than the
notional income. The death occurred on 27.08.2008. Therefore, the
CII for financial year 2008-09 (i.e. 582) would apply. Consequently,
the inflation-corrected notional income works out as ( ₹ 15,000 x 582
/331) ₹26,375/- rounded off to ₹27,000/-. The deceased child was 17
rd
year old and, thus the multiplier of 18 applies. After deducting 1/3
towards personal and living expenses, the pecuniary loss to estate is
computed as (₹27,000 x 2 / 3 x 18) ₹3,24,000/-. Upon an equivalent
amount being added towards composite non-pecuniary damages, the
MAC App. Nos. 554/2010 & conn. Page 61 of 70
total compensation payable in the case is calculated as (₹3,24,000/- x
2) ₹6,48,000/-. Needless to add, it shall carry interest as levied (9%)
by the tribunal.
85. The award is reduced accordingly.
86. In terms of order dated 04.07.2014, the insurance company had
deposited the entire awarded amount with interest with the Registrar
General who was permitted to release 50%, the rest being kept in fixed
deposit receipt with UCO Bank, Delhi High Court branch. The
Registrar General shall calculate the amount payable to the claimants
in this case in terms of the modified award and release the same,
refunding the excess to the insurer.
Case ‘E’ : MAC Appeal No. 1106/2013
(In re: death of four years‟ old child Vishal)
87. The deceased child was not even in the school going age-group.
The death had occurred on 21.02.2009 and therefore, the CII for
financial year 2008-09 (i.e. 582) would apply. The inflation-corrected
notional income is computed as (15000 x 582 / 331) ₹26,375/- rounded
off to ₹27,000/-. Since the age of the child at the time of death was
rd
only four years, the multiplier of 10 applies. After deducting 1/3
towards personal and living expenses, the pecuniary loss to estate is
computed as (₹27,000 x 2 / 3 x 10) ₹180,000/-. Adding an equivalent
sum towards non-composite pecuniary damages, the total
MAC App. Nos. 554/2010 & conn. Page 62 of 70
compensation in the case comes to (₹180,000/- x 2) ₹3,60,000/-. But,
in view of the decision in paragraph 73 (supra), the amount of
compensation is reduced to ₹3,75,000/-. Following the dispensation
in earlier cases, the rate of interest is increased to 9% per annum.
88. By order dated 03.12.2013, the insurance company had been
directed to deposit the entire awarded amount with up-to-date interest
with the Registrar General, out of which 60% was allowed to be
released, the balance kept in fixed deposit receipt with UCO Bank,
Delhi High Court branch. The Registrar General shall calculate the
amount payable to the claimants in this case in terms of the modified
award and release the same, refunding the excess to the insurer. If
excess has been released, the same shall be liable to be refunded.
Case ‘F’ : MAC Appeal Nos. 1288/2012 & 881/2015
(In re: death of sixteen years‟ old Seema Kumari)
89. The death occurred on 18.03.2009 which would fall within the
financial year 2008-2009 in which view the same CII (582) as in the
preceding case would apply. The deceased child was 16 years old, and
therefore, the multiplier of 18 applies. The inflation-corrected notional
income is computed as (₹15,000/- x 582 / 331) ₹26,375/-, rounded off
rd
to ₹27,000/-. After deducting 1/3 towards personal and living
expenses, the pecuniary loss to estate thus works out at (₹27,000 x 2
/3 x 18) ₹3,24,000/-. Adding an equivalent amount towards
composite non-pecuniary damages and ₹6,000/- towards medical
MAC App. Nos. 554/2010 & conn. Page 63 of 70
expenses, the total compensation payable in this case would be
(₹3,24,000/- x 2 + 6,000/-) ₹6,54,000/-. It shall carry interest as
levied (9%) by the tribunal.
90. By order dated 08.12.2012 in MACA 1288/2012, the insurance
company had been directed to deposit 75% of the awarded amount
with the tribunal within the period specified whereupon such deposited
amount was directed to be kept in fixed deposit receipt. The amount
thus deposited shall now be released to the claimants. The insurance
company shall deposit balance of its liability in terms of the modified
award with the tribunal within 30 days for being released to the
claimants.
Case ‘G’ : MAC Appeal No.175/2014
(In re: death of seventeen years‟ old child Hussain Haider)
91. Since the death occurred on 17.07.2010, the CII for the financial
year 2010-2011 would apply (i.e. 711). Therefore, the notional
income comes to (Rs.15,000/- x 711/331) Rs.32,220/-, rounded off to
rd
Rs.33,000/-. After deducting 1/3 towards personal and living
expenses and applying the multiplier of 18, the pecuniary loss to estate
comes to (Rs.33,000 x 2/3 x 18) Rs.3,96,000/-. Adding an equivalent
amount towards composite non-pecuniary damages and Rs.4,88,248/-
incurred as medical expenses, the total compensation in the case comes
to Rs.12,80,248/-, rounded off to Rs.12,81,000/-. Thus, the
MAC App. Nos. 554/2010 & conn. Page 64 of 70
compensation is accordingly enhanced. It shall carry interest as levied
by the tribunal. The balance lying in deposit made by the insurer in
terms of the interim order shall be released to the claimants. The
insurer shall deposit the balance of its liability under the modified
award with the tribunal within 30 days of this judgment making it
available to be released to the claimants.
Case ‘H’ : MAC Appeal No. 729/2013
(In re: death of three years‟ old Varsha)
92. The death had occurred on 09.08.2010. Therefore, the CII for
the financial year 2010-2011 (i.e. 711) would apply. The deceased
child was only 3 years old. Thus, the computation is to be made on the
multiplier of 10. The notional income after inflation-correction comes
to ( ₹15,000/- x 711 / 331) ₹32,220/-, rounded off to ₹33,000/-. After
rd
deducting 1/3 towards personal and living expenses, the pecuniary
loss to estate is calculated as (₹33,000 x 2/3 x 10) ₹2,20,000/-. Adding
similar amount towards composite non-pecuniary damages, the total
compensation in the case is calculated as ₹4,40,000/-. It shall carry
interest as levied (9%) in the impugned judgment. The award is
modified accordingly.
93. By order dated 12.08.2013, the insurance company had been
directed to deposit the entire awarded amount with upto date interest
which was directed to be held by the Registrar General in terms of the
award. As per the application (CM No.14658/2014) moved, the first
MAC App. Nos. 554/2010 & conn. Page 65 of 70
respondent Hari (i.e. the father of the deceased child) died on
10.04.2013. Though his father (Achoo) was substituted in his place,
given the background facts, no portion of the amount deserves to be
granted to him. The entire awarded amount shall, thus, be released in
favour of the second respondent Jayanti (mother of the deceased
child). The Registrar General shall take necessary steps in this regard.
The insurance company will deposit the balance of its liability under
the modified award with the tribunal within 30 days of this judgment
making it available for it to be released to the said claimant.
Case ‘I’ : MAC Appeal No. 421/2015
(In re: death of fourteen years‟ old Raju)
94. The cause of action arose on 09.04.2011. Thus, CII for the
financial year 2011-12 (i.e. 785) would be invoked. The inflation-
corrected income comes to (₹15,000 x 785 / 331) ₹35,574/-, rounded
rd
off to ₹36,000/-. After deducting 1/3 towards personal and living
expenses, the annual pecuniary loss to estate comes to (₹36,000/- x 2 /
3) ₹24,000/-. As the age of the deceased was 14 years, the multiplier
of 15 applies. Therefore, the total pecuniary loss to estate is calculated
as (₹24,000/- x 15) ₹3,60,000/-. Adding an identical sum towards
composite non-pecuniary damages, the total compensation in the case
is calculated as (₹3,60,000/- x 2) ₹7,20,000/-. It shall carry interest as
levied (9%) by the tribunal. The award is modified accordingly.
MAC App. Nos. 554/2010 & conn. Page 66 of 70
Case ‘J’ : MAC Appeal No.100/2013
(In re: death of seventeen years‟ old Mohd. Asif)
95. The death having occurred on 14.05.2011, the calculations with
regard to the annual loss to estate would be same as in the preceding
case (i.e. ₹24,000/-). Since the deceased was 17 years old, the
multiplier of 18 would apply. Therefore, the total pecuniary loss to
estate is calculated as (₹24,000/- x 18) ₹4,32,000/-. Adding an
equivalent amount towards composite non-pecuniary damages, the
total compensation payable in this case comes to (₹4,32,000/- x 2)
₹8,64,000/-. As in the earlier cases, the rate of interest is increased to
9% p.a. The award is modified accordingly. The insurer is directed to
deposit the requisite amount under the modified award within 30 days.
The tribunal shall release it accordingly to the claimants.
Case ‘K’ : MAC Appeal No.564/2014
(In re: death of 10 years‟ old child Rishabh Garg)
96. The accident having occurred on 30.06.2011, again in the
financial year 2011-2012, the calculations of annual pecuniary loss to
estate remain the same as in the preceding two cases. The child in
question was 10 years old and, therefore, the multiplier of 10 would
apply. In this view, the total pecuniary loss to estate comes to
(₹24,000/- x 10) ₹2,40,000/-. Adding similar amount towards
composite non-pecuniary damages, and the medical expenses in the
MAC App. Nos. 554/2010 & conn. Page 67 of 70
sum of ₹63,527/-, the compensation in this case is computed as
(₹2,40,000/- x 2 + 63,527/-) ₹5,43,527/-, rounded off to ₹5,44,000/-.
97. The insurance company had been directed by order dated
23.07.2014, to deposit the entire awarded amount with interest with the
Registrar General within the period specified and from such deposit
₹4,00,000/- was released in equal proportions to the two claimants, the
balance kept in appropriate fixed deposit. The Registrar General shall
now calculate the amount payable to the claimants under the modified
award and release the balance to them, refunding the excess to the
insurance company.
Case ‘L’ : MAC Appeal No.956/2014
(In re: death of eleven years‟ old child Master Gautam Joshi)
98. The death occurred on 02.10.2011 and therefore, the CII for the
financial year 2011-2012 (i.e. 785) would apply. The notional income
comes to Rs.15,000 x 785 / 331 = Rs.35,575/- rounded off to
Rs.36,000/-. Since the age of the deceased child was 11 years, the
rd
multiplier of 15 applies. Deducting 1/3 towards personal and living
expenses, the total pecuniary loss to estate is computed as (Rs.36,000 x
2/3 x 15) Rs.3,60,000/-. Adding similar amount towards composite
non-pecuniary damages, the total compensation in the case comes to
Rs.7,20,000/-. The compensation is enhanced accordingly. Following
the view taken in the cases decided above, the rate of interest is
enhanced to 9% p.a. from the date of the petition till realization. The
MAC App. Nos. 554/2010 & conn. Page 68 of 70
insurer is directed to deposit the requisite amount under the enhanced
award and on account of increased rate of interest with the tribunal
within 30 days so that it can be released forthwith to the claimants.
Case ‘M’ : MAC Appeal No. 1187/2014
(In re: death of fourteen years‟ old Bhanu @ Bhanu Kataria)
99. The death in this case had occurred on 02.05.2012. Therefore,
the CII for the financial year 2012-2013 (i.e. 852) would apply. The
inflation-corrected notional income comes to (₹15,000/- x 852 / 331)
₹38,610/-, rounded off to ₹39,000/-. After deduction towards
personal and living expenses, and on the multiplier of 15, the age of
the deceased being 14 years, the total pecuniary loss to estate is
calculated as (₹39,000/- x 2/3 x 15) ₹3,90,000/-. Adding similar
amount on account of composite non-pecuniary damages, the total
compensation in this case works out to (₹3,90,000/- x 2) ₹7,80,000/-.
It shall carry interest at the rate of 9% p.a. as levied by the tribunal.
The award is modified accordingly. The insurance company shall
make the requisite deposit with the tribunal within 30 days for it to be
released to the claimants.
Case ‘N’ : MAC Appeal No. 1079/2013
(In re: death of four years‟ old Kumari Lajo @ Sanjana)
100. The death occurred on 04.02.2013, again in the financial year
2012-2013, and therefore, the notional annual income would be same
as in the preceding case (i.e. ₹39,000/-). However, since the deceased
MAC App. Nos. 554/2010 & conn. Page 69 of 70
child was 4 years old, the multiplier of 10 would apply. After
rd
deducting 1/3 towards personal and living expenses, the pecuniary
loss to estate is calculated as (₹39,000/- x 2 / 3 x 10) ₹2,60,000/-.
Adding similar amount towards composite non-pecuniary damages,
the total compensation in this case calculated as (₹2,60,000/- x 2)
₹5,20,000/-. Following the directions in the earlier cases, the award in
this case shall also carry interest at the rate of 9% p.a.
101. The insurance company shall be obliged to deposit the requisite
amount with the tribunal within 30 days for it to be released to the
claimants.
102. The statutory amounts, if deposited, in above appeals, shall be
refunded after the Registry has recorded satisfaction that the directions
have been complied with.
103. The appeals and the pending applications stand disposed of in
above terms.
104. It is directed that a copy of this judgment shall be circulated to
the presiding officers of Motor Accident Claims Tribunals of Delhi for
information.
R.K. GAUBA
(JUDGE)
MAY 13, 2016
nk/VLD/yg
MAC App. Nos. 554/2010 & conn. Page 70 of 70