* HIGH COURT OF DELHI : NEW DELHI
FAO No.363 of 1996
% Judgment reserved on: 26th July, 2008
Judgment delivered on: 5th September, 2008
Smt.Sunita Jain,
Widow of Late Sh.Suil Kumar Jain
2.Miss Surbhi jain
D/o Late Sh.Sunil Kumar Jain
3.Master Abhishek Jain
S/o Late Sh.Sunil Kumar Jain
(Appellant No. 2 and 3 being minors
Through her mother/next friend/natural
Guardian, appellant No.1)
All r/o House No.52, Block A
Double Storey Quarters,
Patel Nagar-II,
Ghaziabad, U.P. ....Appellant
Through: Mr.Ashok Bhalla, Adv.
Versus
1.Shri Ram Pal,
Son of Sh.Shiv Lal,
R/o Village & Post Office Badli
Delhi.
2.Sh.Om Prakash Ved prakash
49, Laxmi Bai Nagar Market
New Delhi.
3.M/s National Insurance Co.Ltd.
FAO No.363 of 1996 Page 1 of 19
Divisional Office-14, (351400)
13/32, W.E.A. Arya Samaj Road,
Karol Bagh, New Delhi-110005. ...Respondents.
Through: Ms.Manjusha Wadhwa with
Ms.Gagandeep Kaur, Adv. for
respondent No.3.
Coram:
HON'BLE MR. JUSTICE V.B. GUPTA
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
V.B.Gupta, J.
The present appeal under Section 173 of the
Motors Vehicles Act, 1988 (for short as „Act‟) has been
filed on behalf of the appellant for enhancement of the
compensation to Rs. 35 lacs with costs through out and
interest @ 18% p.a. from the date of filing of the
petition till date.
2. Brief facts of this case are that on 11th July, 1990,
Sunil Kumar Jain (since deceased) was going to his
office on his two wheeler scooter No.DHE-6718. At
FAO No.363 of 1996 Page 2 of 19
about 9.05 a.m., when he was reached National
Highway, Nizamuddin Bridge (near Pole No.41) at a
slow speed and was on his left side, a bus No.DEP-
3898 came from behind and hit the scooter of Sunil
Kumar Jain. As a result of forceful impact on the
scooter, deceased was thrown off on the road and he
was crushed under the front wheel of the offending
bus. He died on the spot.
3. This accident occurred due to rash and negligent
driving on the part of the driver of the offending bus
respondent No.1. The bus is owned by respondent
No.2 and insured with respondent No.3.
4. The case of the appellant is that deceased was
working as a Company Secretary with M/s Montari
Industries Ltd. and was drawing a monthly income of
Rs.9,500/-. It is further stated that deceased was a
talented young professional. He was M.A.LL.B and he
was holding a Diploma in Personal and Industrial
Management. By virtue of his qualification, deceased
FAO No.363 of 1996 Page 3 of 19
would have risen to the position of a Chief Executive in
a large industrial undertaking and would have earned
the income of Rs.25,000/- per month, for at least 30
years. The claimants have assessed the loss of
dependency at Rs.10,000/- per month and have
claimed compensation of Rs.30 lacs. Further
compensation of Rs.5 lacs has been claimed on account
of pain and agony, loss of happy and comfortable life,
loss of enjoyment, etc.
5. All the respondents filed their written statements
before the trial court and contested the claim petition.
6. Vide impugned judgment dated 7th December,
1995 an award for a sum of Rs.7,45,920/- was passed
in favour of the appellants and against the
respondents. Appellants were also awarded interest @
12% per annum from the date of filing of the petition
to the date of its realization.
7. Being aggrieved with the order of the Tribunal,
the appellants have filed the present appeal seeking
enhancement of the compensation.
FAO No.363 of 1996 Page 4 of 19
8. It has been contended by learned counsel for the
appellants that the Tribunal has wrongly taken the
monthly income of the deceased as Rs.5,550/-. In fact
as per the case of the appellants, the deceased was
drawing a monthly salary of Rs.9,500/- per month plus
other perquisites. The appellant has proved on record
the last drawn salary certificate of the deceased. The
total computation of this salary certificate of the
deceased are follows:-
Basic salary Rs.4,600/- p.m.
Company Lease Rs.2,750/- p.m.
Accommodations
Conveyance allowance Rs.1,200/- p.m.
Personal Pay Rs. 600/- p.m.
Entertainment allowance Rs. 350/- p.m.
-------------------
Total Rs.9,500/-p.m.
-------------------
Plus other perquisites and monetary benefits
as per Rules of Company.
9. The Tribunal took into consideration only the
basic pay, personal pay and entertainment allowance.
FAO No.363 of 1996 Page 5 of 19
It did not take into consideration the company lease
accommodation and conveyance allowance, which it
ought to have taken.
10. Further, it is contended that future prospects of
the deceased were not considered at all by the
Tribunal though, the claimants have mentioned about
the same in the claim petition and PW1 & PW2 have
also deposed about the same.
11. On the other hand, it has been argued by learned
counsel for the respondent-Insurance Company that
the Tribunal has rightly taken the monthly income of
deceased as Rs.5,500/- which is as per documents
Ex.PW-1/C and which gives the break up of the salary
of the deceased as on 3rd May, 1990. The Tribunal
rightly did not include conveyance allowance, leave
travel allowance and medical reimbursement
allowance, which was personal to the deceased and
which could not be formed part of the dependency.
12. Regarding future prospects, it is contended by
learned counsel for the respondent-Insurance
FAO No.363 of 1996 Page 6 of 19
Company that PW-2 who is the widow of the deceased
in her cross-examination has admitted that there was
no time bound promotion. Thus, the Tribunal rightly,
did not consider the future prospects.
13. Learned counsel for the respondent in support of
her contention has cited Oriental Insurance
Company Limited v. Jashuben and Ors., 2008
INDLAW SC 210, in which it has been laid down that;
“What would have been the income of
deceased on the date of retirement, was
not a relevant factor in the light of
particular facts of this case.”
14. Regarding the plea that the Tribunal has not
taken into consideration conveyance allowance and
company lease accommodation to compute the loss of
earnings, appellant no. 1 has appeared in the witness
box and had stated that the deceased was drawing a
salary of Rs.12,000/- per month at the time of his
death.
FAO No.363 of 1996 Page 7 of 19
15. However, in the petition, the income of the
deceased at the time of accident has been mentioned,
as Rs.10,000/- approximately.
16. The certificate Ex. PW2/C issued by Montari
Industries Ltd. gives the break-up of salary as on
03.05.90 in respect of the deceased as follows:-
(i) Basic Pay : Rs.4,600/-
(ii) Personal Pay : Rs.600/-
(iii) Others : Rs.350
(Entertainment
allowance)
17. The certificate further states that the deceased
was entitled for company lease accommodation,
conveyance reimbursement and annual perquisites like
LTA, Medical reimbursement as applicable at his level
in the company.
18. The Tribunal while assessing the compensation,
has taken the monthly income of the deceased at
Rs.5,550/- as per certificate issued by the employer.
FAO No.363 of 1996 Page 8 of 19
19. Reverting back to the contentions raised by the
counsel for the appellant claiming inclusion of
company lease accommodation and conveyance
allowances while considering the net income of the
deceased, the recent decision of the Apex Court in
National Insurance Co. Ltd. v. Indira Srivastava
and others, 2008 ACJ 614, will clinch the entire
controversy involved in the present appeal.
20. In the above said case, the Apex Court has
observed as under;
“The term ‘income’ has different
connotations for different purposes. A
court of law, having regard to the
change in societal conditions must
consider the question not only having
regard to pay packet the employee
carries home at the end of the month
but also other perks which are
beneficial to the members of the
entire family. Loss caused to the
family on a death of a near and dear
one can hardly be compensated in
monitory terms.
Section 168 of the Act uses the word
‘just compensation’ which, in our
opinion, should be assigned a broad
meaning. We cannot, in determiningFAO No.363 of 1996 Page 9 of 19
the issue involved in the matter, lose
sight of the fact that the private
sector companies in place of
introducing a pension scheme takes
recourse to payment of contributory
provident fund, gratuity and other
perks to attract the people who are
efficient and hard-working. Different
offers made to an officer by the
employer, same may be either for the
benefit of the employee himself or for
the benefit of entire family. In some
facilities are being provided whereby
the entire family stands to benefit, the
same, in our opinion, must be held to
be relevant for the purpose of
computation of total income on the
basis whereof the amount of
compensation payable for the death of
the kith and kin of the applicants is
required to be determined.”
The Apex Court further observed;
“That if some facilities are being
provided by the employer whereby
the entire family stands to benefit, the
same must be held to be relevant for
the purpose of computation of total
income of the deceased”
21. The Andhra Pradesh High Court in
S.Narayanamma and Ors. v. Secretary to
Government of India and Ors., II (2002) ACC 582,
following Helen C. Rebello (Mrs.) and others v.
FAO No.363 of 1996 Page 10 of 19
Maharashtra State Road transport Corporation
and another, II (1998) ACC 512, held that;
“The contributions made by the
deceased-employee towards
Employees’ Provident Fund, Life
Insurance (LIC), Group Insurance
and the deductions shown in the
salary certificate of the deceased-
employee towards the vehicle loan
instalment, benefit fund, and also the
amounts received by the deceased-
employee towards interim Relief,
Special Pay, Dearness Allowance,
House Rent Allowance, need not be
deducted from the gross salary of the
deceased for ascertaining the
income, because the
contributions/deductions made
towards, E.P.F., L.I.C., Group
Insurance and Benefit Fund would be
beneficial to the family of the
deceased-employee and it would be
the estate of the deceased.”
22. Thus, in view of the above discussions, the
Tribunal has not taken proper care while deducting the
amounts from the salary of the deceased. The
deductions made by the tribunal from the salary such
as company lease accommodation cannot be deducted
while computing the net monthly earnings of the
deceased.
FAO No.363 of 1996 Page 11 of 19
23. In so far as his basic salary of Rs.4,600/- p.m.,
personal pay of Rs.600/- p.m. and entertainment
allowance of Rs.350/- p.m. are concerned, there cannot
be any dispute.
24. The company lease accommodation of Rs.2,750/-
per month had to be considered by the Tribunal and it
is not such an allowance, which should be reduced
while computing the net monthly earnings of the
deceased.
25. However, conveyance allowance is exclusively
personal to his professional expenditure and it has to
be ignored.
26. The above findings of the tribunal are contrary to
the principle of ‘just compensation’ enunciated by the
Supreme Court in the judgment in Divisional
Controller, KSRTC v. Mahadeva Shetty, AIR 2003
SC 4172, where the Apex Court has observed as
under;
FAO No.363 of 1996 Page 12 of 19
“It has to be kept in view that the
Tribunal constituted under the Act as
provided in Section 168 is required to
make an award determining the
amount of compensation which to it
appears to be “just”. It has to be
borne in mind that compensation for
loss of limbs or life can hardly be
weighed in golden scales. Bodily
injury is nothing but a deprivation
which entitles the claimant to
damages. The quantum of damages
fixed should be in accordance with
the injury. An injury may bring about
many consequences like loss of
earning capacity, loss of mental
pleasure and many such
consequential losses. A person
becomes entitled to damages for
mental and physical loss, his or her
life may have been shortened or that
he or she cannot enjoy life, which has
been curtailed because of physical
handicap. The normal expectation of
life is impaired. But at the same time
it has to be borne in mind that the
compensation is not expected to be a
windfall for the victim. Statutory
provisions clearly indicate that the
compensation must be “just” and it
cannot be a bonanza; not a source of
profit but the same should not be a
pittance. The courts and tribunals
have a duty to weigh the various
factors and quantify the amount of
compensation, which should be just.
What would be “just” compensation is
a vexed question. There can be no
golden rule applicable to all cases forFAO No.363 of 1996 Page 13 of 19
measuring the value of human life or
a limb. Measure of damages cannot
be arrived at by precise mathematical
calculations. It would depend upon
the particular facts and
circumstances, and attending peculiar
or special features, if any. Every
method or mode adopted for
assessing compensation has to be
considered in the background of “just”
compensation which is the pivotal
consideration. Though by use of the
expression “which appears to it to be
just”, a wide discretion is vested in
the Tribunal, the determination has to
be rational, to be done by a judicious
approach and not the outcome of
whims, wild guesses and
arbitrariness. The expression “just”
denotes equitability, fairness and
reasonableness, and non-
arbitrariness. If it is not so, it cannot
be just. (See Helen C. Rebello v.
Maharashtra State Road Transport
Corporation & another, II (1998) ACC
512.)”
27. Thus, taking the monthly salary of deceased at
Rs.8,300/- per month (Basic salary Rs.4,600/- p.m.;
Company Lease Accommodation Rs.2,750/- p.m.;
Personal Pay Rs.600/- p.m.; Entertainment allowance
Rs.350/- p.m.) and after deducting 1/3rd amount for
personal expenses, the net salary comes to Rs.5,534/-
FAO No.363 of 1996 Page 14 of 19
per month, which is rounded off as Rs.5,500/- per
month. Thus, applying the multiplier of 16, the total
dependency comes to Rs.5,500x12x16=Rs.10,56,000/-.
28. As regards the future prospects, the Apex Court
in Oriental Insurance Company Limited v.
Jashuben and Others (supra), as cited by the
respondent counsel has observed as under;
“Salary would be revised or not was
not known at that part of time. Only
because such salary was revised at a
later point of time, the same by itself
would not have been a factor which
could have been taken into
consideration.
The amount of compensation
indisputably should be determined
having regard to the pecuniary loss
caused to the dependants by reason of
the death of the victim. It was
necessary to consider the earnings of
the deceased at the time of the
accident. Of course, future prospect is
not out of bound for such
consideration. But the same should be
founded on some legal principle.
The Apex Court has further observed
as under;
“We, therefore, are of the opinion that
what would have been the income of
the deceased on the date ofFAO No.363 of 1996 Page 15 of 19
retirement was not a relevant
factor…….”
29. In Oriental Insurance Co. Ltd. v. Smt.
Kailash Mehta, 1993 ACJ 970, the Gauhati High
Court held that;
“It is well settled that deduction from the
calculated amount of compensation to the
maximum extent of 30 per cent thereof is to
be made because of uncertainty of life and
lump sum payment of compensation.”
30. In the present case, no such deduction have been
made on the account of uncertainty of life.
31. Hence, the contentions regarding future
prospects made by the counsel for Appellants are
rejected.
32. Accordingly, the award passed by the learned
Tribunal is modified to the extent that appellants are
entitled to a total of sum Rs.10,56,000/- as
compensation, which is just and fair.
33. The appellants have also claimed interest @ 18%
p.a. from the date of filing of the petition till date.
FAO No.363 of 1996 Page 16 of 19
34. The Tribunal has awarded the interest @ 12% p.a.
from the date of filing of the petition to the date of its
realization.
35. Section 171 of the Act provides for the award of
interest where any claim is allowed. It reads as under;
“Where any Claims Tribunal allows a
claim for compensation made under
this Act, such Tribunal may direct
that in addition to the amount of
compensation simple interest shall
also be paid at such rate and from
such date not earlier than the date of
making the claim as it may specify in
this behalf.”
36. Though this Section confers a discretion on the
Tribunal to award interest, but the same is meant to be
exercised in cases where the claimant can claim the
same as a matter of right.
37. While determining rate of interest and period for
which the same is sought to be granted, the Tribunal
shall give due consideration to the fact as to whether
the claim proceedings sought to be lingered either by
the claimant or owner or insurer, so that it may act as
FAO No.363 of 1996 Page 17 of 19
deterrent against the earning party and compensatory
for the other.
38. The present appeal was filed in the year 1996 but
the appellant did not take any steps for getting
respondents served till 2008. So, this delay of 12 years
in the disposal of the present appeal is clearly
attributable to the appellants.
39. It is well-settled that „delay and laches‟ cannot
command premium. Thus, the appellants are not
entitled to any interest for the period for which this
appeal was pending before this Court.
40. All the Motor Accident Tribunals should follow the
above guidelines and at the time of awarding interest,
they should not lose sight of the fact, as to whether
claimant or owner or insurer, has caused delay in the
trial.
41. Since, the award has been enhanced in this case,
the appellants are awarded interest @ 8% p.a. for the
FAO No.363 of 1996 Page 18 of 19
enhanced portion only, from the date of filing of the
petition in the Tribunal till the date of judgment of the
Tribunal.
42. This additional compensation shall be payable by
respondent no.3/Insurance Company within four weeks
from today, failing which the Insurance company shall
be liable to pay the interest @ 8% p.a., till the time the
additional compensation is paid.
43. Accordingly, the appeal stands allowed to the
above extent.
44. Registrar General of this Court, shall send copy of
this judgment to all the Tribunals for their information
and guidance.
45. No orders as to costs.
46. Trial court record be sent back.
September 05, 2008 V.B.GUPTA, J.
Bisht
FAO No.363 of 1996 Page 19 of 19