IN THE HIGH COURT OF DELHI AT NEW DELHI
FAO No. 516/2001
Judgment reserved on: 1st April, 2008.
Judgment delivered on: 13.4.2009.
Ram Pal. ..... Appellant.
Through: Mr. O.P. Goyal, Advocate.
Versus
Banwari Lal & Ors. ..... Respondents
Through: Mr. Amarjit Bedi, Adv. for R-1
to 3.
Ms. Seema Sharma, Adv. for
R-4.
Mr. Pankaj Seth, Adv. for R-6.
CORAM:
HON’BLE MR. JUSTICE KAILASH GAMBHIR,
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
KAILASH GAMBHIR, J. :
1. The present appeal arises out of the award dated
8.8.2001 of the Motor Accident Claims Tribunal whereby the
FAO No.516/2001 Page 1 of 13
Tribunal awarded a sum of Rs.1,25,000/- along with interest
@ 9% per annum to the claimants. Appellant is the father of
the deceased Sh. Jatinder Prakash @ Jatinder Prasad.
2. The brief conspectus of the facts is as follows:
That on 09.2.97 deceased Sh. Jatinder Prakash @
Jatinder Prasad was travelling in Maruti Van bearing
registration no. DAE-3681 driven by one Rakesh
Khandelwal. Smt. Alka, wife of Sh. Jatinder Prakash @
Jatinder Prasad, Smt. Santra, wife of Sh. Ram Pal and Smt.
Suresh, wife of Sh. Pratap Singh were also travelling in the
said maruti car, which was going from Mathura to Delhi at a
slow speed. At about 9:30PM, when the Maruti van reached
near village Samri under Police Station Chhatta, District
Mathura (U.P) and was on its extreme left side, a truck
trailer bearing registration no. NL-01-A-2072 being driven
by R1 rashly, recklessly and negligently in due course of his
employment under R2 & R3 came from the direction of
Delhi and after coming on the wrong side, hit the Maruti van
with a great force with the front of the trailer and the Maruti
van was taken by the truck trailer to the left side of the road
coming from Mathura and going towards Delhi. The vehicle
FAO No.516/2001 Page 2 of 13
driven by R1 was loaded with Maruti vehicles and it came
over the maruti van in which the deceased alongwith others
was travelling and caused the death of abovesaid four
occupants of the maruti van alongwith its driver.
A claim petition was filed on 29.8.97 and an award
was passed, on 8.8.2001. Aggrieved with the said award
enhancement is claimed by way of the present appeal.
3. Sh. O.P. Goyal, counsel for the appellants contended
that the compensation of Rs.1,25,000/- awarded by the
tribunal is on the lower side and needs to be revised
considering the various judicial decisions. It is stated that
Ld. Tribunal did not notice various judicial decisions relevant
in the instant case. The Ld. Tribunal ought to have awarded
compensation of Rs.7,50,000/- by taking the salary of the
deceased @ Rs.2500/- per month for a period of 25 years,
the counsel contended. It is further urged that Ld. Tribunal
should have awarded compensation for loss of services
rendered by the deceased to the appellants @ Rs.3000/- per
month. The counsel further submitted that Ld. Tribunal
should have awarded Rs.15,00,000/- towards economic loss
suffered by the appellant on account of death of late Sh.
FAO No.516/2001 Page 3 of 13
Jatinder Prakash @ Jatinder Prasad. It was urged by the
counsel that the tribunal erred in not considering future
prospects while computing compensation as it failed to
appreciate that the deceased would have earned much
more in near future as he was of 25 yrs of age only. In this
regard the Ld. Counsel for the appellant placed reliance on
the following cases:
(i) Arun Sondhi vs. DTC, 1 (2201) ACC Page 615.
(ii) All India Lawyers’ Union Vs. Union of India, 2000
ACJ Page 1006.
(iii) M.S. Grewal & Ors. Vs. Deep Chand Sood & Ors.
JT 2001 (7) SC Page 159
(iv) Lata Wadhwa & others Vs. State of Bihar, 2001
(5) SCALE Page 286.
(v) Spring Medos Hospital Vs. Harjol Ahluwalia
decided by Hon’ble Supreme Court.
4. The counsel also raised the contention that the rate of
interest allowed by the tribunal is on the lower side and the
tribunal should have allowed simple interest @ 18 per
annum in place of only @ 9% per annum. The counsel
contended that the tribunal has erred in not awarding
FAO No.516/2001 Page 4 of 13
compensation towards pain and sufferings undergone by
the appellant due to death of his son.
5. Per Contra Mr. Pankaj Seth, counsel for respondent
insurance company submitted that there is no illegality in
the impugned award. Counsel further contended that award
passed by the Tribunal is absolutely fair, just and
reasonable and no fault can be found with the same.
6. I have heard the learned counsel for the parties and
perused the record.
7. The assessment of damages to compensate the
dependants is beset with difficulties because while doing so,
many imponderables have to be taken in to account, 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 expectancy, the chances that the
deceased might have got better employment or income or
might have lost his employment or income altogether. The
FAO No.516/2001 Page 5 of 13
manner of arriving at the damages is to ascertain the net
income of the deceased available for the support of himself
and his dependants, and to deduct therefrom such part of
his income as the deceased was accustomed to spend upon
himself, as regards both self-maintenance and pleasure,
and to ascertain what part of his net income the deceased
was accustomed to spend for the benefit of the dependants.
Then that should be capitalised by multiplying it by a figure
representing the proper number of year’s purchase. In this
relation, the Apex Court has held in plethora of judgments
that the multiplier method is the best method.
8. In this regard in G.M., Kerala SRTC v. Susamma
Thomas, (1994) 2 SCC 176 the Hon’ble Apex Court
observed as under:
“12. There were two methods adopted for
determination and for calculation of compensation
in fatal accident actions, the first the multiplier
mentioned in Davies case3 and the second in
Nance v. British Columbia Electric Railway Co. Ltd.
13. The multiplier method involves the
ascertainment of the loss of dependency or the
multiplicand having regard to the circumstances of
the case and capitalizing the multiplicand by an
appropriate multiplier. The choice of the multiplier
is determined by the age of the deceased (or that
of the claimants whichever is higher) and by the
calculation as to what capital sum, if invested at a
rate of interest appropriate to a stable economy,
would yield the multiplicand by way of annual
interest. In ascertaining this, regard should also be
had to the fact that ultimately the capital sumFAO No.516/2001 Page 6 of 13
should also be consumed-up over the period for
which the dependency is expected to last.
16. It is necessary to reiterate that the multiplier
method is logically sound and legally well-
established. There are some cases which have
proceeded to determine the compensation on the
basis of aggregating the entire future earnings for
over the period the life expectancy was lost,
deducted a percentage therefrom towards
uncertainties of future life and award the resulting
sum as compensation. This is clearly unscientific.
For instance, if the deceased was, say 25 years of
age at the time of death and the life expectancy is
70 years, this method would multiply the loss of
dependency for 45 years — virtually adopting a
multiplier of 45 — and even if one-third or one-
fourth is deducted therefrom towards the
uncertainties of future life and for immediate lump
sum payment, the effective multiplier would be
between 30 and 34. This is wholly impermissible.
We are, aware that some decisions of the High
Courts and of this Court as well have arrived at
compensation on some such basis. These decisions
cannot be said to have laid down a settled
principle. They are merely instances of particular
awards in individual cases. The proper method of
computation is the multiplier-method. Any
departure, except in exceptional and extraordinary
cases, would introduce inconsistency of principle,
lack of uniformity and an element of
unpredictability for the assessment of
compensation. Some judgments of the High Courts
have justified a departure from the multiplier
method on the ground that Section 110-B of the
Motor Vehicles Act, 1939 insofar as it envisages the
compensation to be ‘just’, the statutory
determination of a ‘just’ compensation would
unshackle the exercise from any rigid formula. It
must be borne in mind that the multiplier method
is the accepted method of ensuring a ‘just’
compensation which will make for uniformity and
certainty of the awards. We disapprove these
decisions of the High Courts which have taken a
contrary view. We indicate that the multiplier
method is the appropriate method, a departure
from which can only be justified in rare andFAO No.516/2001 Page 7 of 13
extraordinary circumstances and very exceptional
cases.”
9. In a decision of the Apex Court in Manjuri Bera v.
Oriental Insurance Co. Ltd., (2007) 10 SCC 643
“12. As observed by this Court in Custodian of
Branches of BANCO National Ultramarino v. Nalini
Bai Naique1 the definition contained in Section
2(11) CPC is inclusive in character and its scope is
wide, it is not confined to legal heirs only. Instead it
stipulates that a person who may or may not be
legal heir competent to inherit the property of the
deceased can represent the estate of the deceased
person. It includes heirs as well as persons who
represent the estate even without title either as
executors or administrators in possession of the
estate of the deceased. All such persons would be
covered by the expression “legal representative”.
As observed in Gujarat SRTC v. Ramanbhai
Prabhatbhai2 a legal representative is one who
suffers on account of death of a person due to a
motor vehicle accident and need not necessarily be
a wife, husband, parent and child.
13. There are several factors which have to be
noted. The liability under Section 140 of the Act
does not cease because there is absence of
dependency. The right to file a claim application
has to be considered in the background of right to
entitlement. While assessing the quantum, the
multiplier system is applied because of deprivation
of dependency. In other words, multiplier is a
measure. There are three stages while assessing
the question of entitlement. Firstly, the liability of
the person who is liable and the person who is to
indemnify the liability, if any. Next is the
quantification and Section 166 is primarily in the
nature of recovery proceedings. As noted above,
liability in terms of Section 140 of the Act does not
cease because of absence of dependency.
15. Judged in that background where a legal
representative who is not dependant files an
application for compensation, the quantum cannot
be less than the liability referable to Section 140 of
the Act. Therefore, even if there is no loss of
dependency the claimant if he or she is a legal
FAO No.516/2001 Page 8 of 13
representative will be entitled to compensation, the
quantum of which shall be not less than the liability
flowing from Section 140 of the Act. The appeal is
allowed to the aforesaid extent.
………
In the impugned judgment the High Court has
correctly drawn a distinction between “right to
apply for compensation” and “entitlement to
compensation”. The High Court has rightly held
that even a married daughter is a legal
representative and she is certainly entitled to claim
compensation.”
10. In view of the above discussion, as regards the income
of the deceased it has come on record as per deposition of
PW3, father of the deceased that the deceased was
studying in the final year of graduation. Vide Ex. PW3/A,
statement of marks of the deceased obtained in B.A. (I & II)
were proved also. The deceased was giving tuitions and
through it he used to earn Rs. 3,000/- pm. It is no more res
integra that mere bald assertions regarding the income of
the deceased are of no help to the claimants in the absence
of any reliable evidence being brought on record. The
thumb rule is that in the absence of clear and cogent
evidence pertaining to income of the deceased learned
Tribunal should determine income of the deceased on the
basis of the minimum wages notified under the Minimum
Wages Act. Therefore, the tribunal ought to have assessed
FAO No.516/2001 Page 9 of 13
the income of the deceased as that of a matriculate on the
basis of the minimum wages notified under the Minimum
Wages Act prevailing at the time of the accident i.e. at Rs.
2,232/- pm.
11. Furthermore, it has been the consistent view of this
court that whenever aid of Minimum Wages Act is taken
while computing income, then increase in minimum wages
should also be considered. It is well settled that future
prospects are not akin to increase in minimum wages. To
neutralize increase in cost of living and price index, the
minimum wages are increased from time to time. A perusal
of the minimum wages notified under the Minimum Wages
Act show that to neutralize increase in inflation and cost of
living, minimum wages virtually double after every 10
years.
12. Also, in the facts of the present case considering that
prior to the accident the family of the appellant comprised
of the deceased son, deceased wife and appellant himself, I
feel that 1/3 rd deductions should be made towards
personal expenses of the deceased.
FAO No.516/2001 Page 10 of 13
13. As regards the multiplier, this case pertains to the
year 1997 and at that time II schedule to the Motor Vehicles
act was already brought on the statute book. The age of the
deceased at the time of the accident was 24 years and he is
survived by his aged father who at the time of the accident
was of 51 years of age. In the facts of the present case I am
of the view that after looking at the age of the claimants
and the deceased and after considering the multiplier
applicable as per the II Schedule to the MV Act, the
multiplier of 11 shall be applicable.
14. As regards the issue of interest that the rate of
interest of 12% p.a. awarded by the tribunal is on the lower
side and the same should be enhanced to 9% p.a., I feel
that the rate of interest awarded by the tribunal is just and
fair and requires no interference. No rate of interest is fixed
under Section 171 of the Motor Vehicles Act, 1988. The
Interest is compensation for forbearance or detention of
money and that interest is awarded to a party only for being
kept out of the money, which ought to have been paid to
him. Time and again the Hon’ble Supreme Court has held
that the rate of interest to be awarded should be just and
FAO No.516/2001 Page 11 of 13
fair depending upon the facts and circumstances of the case
and taking in to consideration relevant factors including
inflation, policy being adopted by Reserve Bank of India
from time to time and other economic factors. In the facts
and circumstances of the case, I do not find any infirmity in
the award regarding award of interest @ 9% pa by the
tribunal and the same is not interfered with.
15. As regards non-pecuniary damages, compensation
towards loss of love and affection is awarded at Rs. 10,000/-
; compensation towards funeral expenses is awarded at Rs.
10,000/- and compensation towards loss of estate is
awarded at Rs. 10,000/-.
16. On the basis of the discussion, the income of the
deceased would come to Rs. 3,348/- after doubling Rs.
2,232/- to Rs. 4,464/- and after taking the mean of them.
After making 1/3rd deductions the monthly loss of
dependency comes to Rs. 2,232/- and the annual loss of
dependency comes to Rs. 26,784/- per annum and after
applying multiplier of 11 it comes to Rs. 2,94,624/-. Thus,
the total loss of dependency comes to Rs. 2,94,624/-. After
considering Rs. 30,000/-, which is granted towards non-
FAO No.516/2001 Page 12 of 13
pecuniary damages, the total compensation comes out as
Rs. 3,24,624/-.
17. In view of the above discussion, the total
compensation is enhanced to Rs. 3,24,624/- from Rs.
1,25,000/- with interest @ 7.5% per annum from the date of
filing of the present petition till realisation and the same
should be paid to the appellants by the respondent no. 3.
18. With the above direction, the present appeal is
disposed of.
13.4.2009 KAILASH GAMBHIR J.
FAO No.516/2001 Page 13 of 13