Allowed

U.P.S.R.T.C. v. Addl. District Judge/Special Judge M.A.C.T. and Others

Allahabad HC1 Mar 2019WRIC/9020/2007

Case brief

AI extract

What is this about?

The High Court adjudicated a writ petition challenging a Motor Accident Claims Tribunal award of Rs. 4,36,500. The Court corrected the quantum of compensation to Rs. 8,26,000 based on Supreme Court precedents regarding income, multiplier, and deductions, while dismissing the petitioner's challenge to the award's existence and procedural history.

What did the court decide?

Compensation enhanced to Rs. 8,26,000 plus interest; writ petition against the Tribunal's jurisdiction/wrap dismissed; costs imposed on petitioner.

U.P.S.R.T.C. Vs Addl. District Judge/Special Judge… — Motor Accident Claims | Allahabad HC (2019)

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A.F.R.

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Reserved on 22.2.2019 Delivered on 01.3.2019

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Court No. - 15

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Case :- WRIT - C No. - 9020 of 2007

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Petitioner :- U.P.S.R.T.C.

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Respondent :- Addl. District Judge/Special Judge M.A.C.T. And Others Counsel for Petitioner :- V.C. Dixit,Mangla Prasad Rai,Sudhir Dixit Counsel for Respondent :- A. Kumar Singh

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Hon'ble Pankaj Bhatia,J.

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The present writ petition has been filed by the petitioner challenging the award dated 28.8.2004 passed in MACP No.259 of 2003 and the order dated 13.11.2006 passed by Motor Accident Claims Tribunal, District Etah, in Misc. Case No.32 of 2005.

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Brief facts, which have led to the filing of the present petition, are as under:-

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That on 24.5.2003 one Vimal Kumar Sharma (son of the claimant) respondent no.2 was going on a motorcycle along with his friend Anil Kumar Gupta on motorcycle No.U.P. 82-D-8847 from Basundhara to Etah. The motorcycle was being driven by Anil Kumar Gupta, on the road a Bus No.U.P. 80-Q-9071 of the UPSRTC, the petitioner herein was coming from the opposite direction and was being driven rashly and negligently and caused an accident with the motorcycle. The driver of the motorcycle Anil Kumar Gupta sustained injuries however, unfortunately Vimal Kumar Sharma died on the spot on account of the said accident. A first information report with regard to the said accident was also lodged by the

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respondent no.2. Subsequently, a claim petition was filed before the MACT/Special Judge, SC/ST Act which was registered as Motor Accident Claim Petition No.259 of 2003, Ramesh Chandra Gupta and another Vs. Anil Kumar Gupta and others. In the said claim petition, it was stated that Vimal Kumar Sharma at the time of the accident was aged about 22 years and was engaged in a business of teaching the students and was earning Rs.5,000/- per month. He used to teach the students of class X and XII. It was stated that the father and mother of Vimal Kumar Sharma, the claimants in MACP No.259 of 2003 were dependant on Vimal Kumar Sharma. Ramesh Chandra Sharma the father of Vimal Kumar Sharma was aged about 55 years and claimant no.2 Smt. Ram Devi, the mother of Vimal Kumar Shrama was aged about 48 years at the time of filing of the claim petition. The claim petitioners had claimed an amount of Rs. ten lakh as compensation on account of death of their only son Vimal Kumar Sharma. In the said claim petition, Anil Kumar Gupta, the driver of motorcycle No. U.P.82-D-8847, had put in appearance and filed his written statement stating that the accident occurred on account of rash and negligent driving by the driver of Bus No. U.P.80-Q-9071. The Insurance Company through which the motorcycle was insured also put in appearance and stated that the accident occurred on account of negligence of the Bus, however, the motorcycle was duly insured with the insurance company and the driver of the motorcycle had a valid driving license at the time of accident.

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In the said claim petition, summons were served on the

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petitioners herein however, they did not appear despite service of summons through registered post and as such vide an order dated 16.7.2004 orders were passed for proceeding ex-parte against the petitioners herein. The Motor Accidents Claims Tribunal heard the matter and framed four issues for adjudication on merit. The issue no.1 pertaining to the negligence for the accident was decided against the Bus and it was held that the accident occurred on account of negligence and rash driving of the Bus. Issue no.4 relating to the quantum of compensation and the liability for payment of the compensation was decided by the Tribunal on the basis of evidence on record. The Tribunal relied upon the oral evidence of the claimants who gave evidence to the effect that at the time of the death, Vimal Kumar Sharma was earning Rs.5,000/per month and on that basis held that the income of the deceased at the time of accident at Rs.5,000/- per month. The Tribunal further held that at the time of accident, the deceased would be spending 1/3^rd of the said amount on himself, however it, ascertained the dependency at Rs.3,000/- per month. The Tribunal proceeded to apply multiplier of 12 and thus, calculated the compensation payable as under:-

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Rs.3,000.00 X 12 X 12 = 4,32,000.00.

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The Tribunal further awarded Rs.2,000/- towards funeral expenses, Rs.2,500/- towards loss of company and thus awarded a sum of Rs.4,36,500/- to be paid by the U.P. State Road Transport Corporation which was payable along with interest at the rate of 6% per annum. The said award was passed by the Tribunal on 28.8.2004.

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The petitioner-corporation filed an application on 12.9.2005 i.e. after about one year and 15 days seeking recall of the ex-parte award dated 28.8.2004 mainly on the ground that the summons were not served on the Regional Officer, U.P. State Road Transport Corporation, Aligarh who was authorized to pursue the case. It was further stated that the petitioners herein came to know of the said award on 5.9.2005 when the Amin came for execution of the said award by means of recovery certificate issued by the Tribunal. It was further averred in the said application that on the inspection of the record, it was revealed that the summons in the case was served on U.P. State Road Transport Corporation, Tedhi Kothi, Lucknow through Depot in-charge Tajganj Depot, Agra and the Regional Manager, U.P. State Road Transport Corporation, Aligarh did not get any information which has resulted into an exparte award. The said application was opposed by the claimants stating that the accident occurred was by the Bus which was being run by the Tajganj Depot, Agra and, thus, it was validly served on the Corporation. It was further stated that in another Claim Petition No.263 of 2003, Anil Kumar Vs. U.P. State Road Transport Corporation (arising out of the same accident) was decided on 4.5.2005 and in that case also the claim has been adjudicated on merits against U.P. State Road Transport Corporation. It was further stated that the said Claim Petition No.263 of 2003 was decided on 4.5.2005. Certified copy of the order passed in Claim Petition No.259 of 2003 decided on 28.8.2004 were duly placed on record of the said Claim Petition No.263 of 2003, thus, the U.P. State Road

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Transport Corporation was very well aware of the judgment and there was no occasion to have filed the application for recall of the ex-parte order on 12.9.2005 and further prayed that the recall application is not maintainable and is liable to be dismissed. It was also brought to the knowledge of the Tribunal that the award passed in the case of Anil Kumar Vs. U.P. State Road Transport Corporation had not been contested and had attained finality. The Tribunal after hearing both the parties vide its order dated 13.11.2006 rejected the application for recall of the ex-parte order holding that the petitioners were well aware of the ex-parte order and further that the application was hopelessly barred by limitation having been filed after one year and 15 days.

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Aggrieved against the order dated 13.11.2006 and the award dated 28.8.2004, the petitioners for the reasons best known to them filed a writ petition despite the fact that the statutory appeal is provided under Section 173 of the Motor Vehicles Act. In the said writ petition, this Court vide its order dated 14.2.2017 dismissed the writ petition for non prosecution.

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However, on an application moved by the petitioners, the same was restored vide order dated 17.7.2018. The writ petition was listed after about 12 years on 22.2.2019. Counsel for the petitioners appeared to press the writ petition. However, no one has appeared on behalf of the respondents-claimants even in the revised call.

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Counsel for the petitioners, Sri Mangala Prasad Rai confined his submissions to two grounds while challenging the award dated 28.8.2004. He argued that the

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Tribunal has erred in deducting 1/3^rd as income spent on the deceased and 2/3^rd as dependency which he submits is against the judgment of the Hon'ble Supreme Court in the case of Sarla Verma Vs. Delhi Development Corporation, 2009 Vol.6 SCC page 121. The second submission made by Mr. Rai is that the multiplier adopted by the Tribunal while awarding the compensation is wrong and, thus, prays that the award be quashed and the matter be remanded, despite the fact that an appeal lies against the award passed under Section 163-A of the Motor Vehicles Act, I am not inclined to relegate the party to the remedy of appeal as the writ petition has come up for hearing after 12 years and relegating the parties for filing the appeal at the this stage would be wholly unjust.

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Coming to the submissions made by the petitioners that the amount awarded is unjust, I am inclined to be guided by the series of judgments of the Hon'ble Supreme Court on the question of quantum of 'just compensation'. The Hon'ble Supreme Court in the case of Rajesh Vs. Rajbir Singh (2013) Vol. 9 SCC page 54 has categorically held that the intent of the Tribunal should be to award 'just compensation'. The Hon'ble Supreme Court while following the judgment rendered in the case of Smt. Sarla Verma and others Vs. Delhi Transport Corporation and another, (2009) Vol. 6, SCC page 121, held as under:-

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" 11. The difference between the two methods was considered and explained by this Court in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas. After exhaustive consideration, this Court preferred the Davies method to Nance method.

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12. We extract below the principles laid down in Susamma Thomas: (SCC p.177)

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'In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant as a result of the death.'

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'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 expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether.

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10. The matter 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 capitalized by multiplying it by a figure representing the proper number of year's purchase.'

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'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 sum should also be consumed-up over the period for which the dependency is expected to last.'

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'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 year 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.'

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13. In U.P.S.R.T.C Vs. Trilok Chandra [1996 (4) SCC 362], this Court, while reiterating the preference to Davies method followed in Susamma Thomas, stated thus :

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'16. In the method adopted by Viscount Simon in the case of Nance also, first the annual dependency is worked out and then multiplied by the estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one-third to one-half of the dependency was reduced, depending on the life-span taken. That is the reason why courts in India as well as England preferred the Davies' formula as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas' case, usually English courts rarely exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when Tribunals/Courts began to use a hybrid method of using Nance's method without making deduction for imponderables'.

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'15. …. Under the formula advocated by Lord Wright in Davies, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier.' [emphasis supplied]

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14. The lack of uniformity and consistency in awarding compensation has been a matter of grave concern. Every district has one or more Motor Accident Claims Tribunal/s. If different Tribunals calculate compensation differently on the same facts, the claimant, the litigant, the common man will be confused, perplexed and bewildered. If there is significant divergence among Tribunals in determining the quantum of compensation on similar facts, it will lead to dissatisfaction and distrust in the system.

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15. We may refer to the following observations in Trilok Chandra : (SCC p.369, para-15)

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'15 We thought it necessary to reiterate the method of working out `just' compensation because, of late, we have noticed from the awards made by Tribunals and Courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/Court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realized that the Tribunal/Court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused.'

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16. Compensation awarded does not become `just compensation' merely because the Tribunal considers it to be just. For example, if on the same or similar facts (say deceased aged 40 years having annual income of 45,000/- leaving him surviving wife and child), one Tribunal awards Rs.10,00,000/- another awards Rs.5,00,000/-, and yet another awards Rs.1,00,000/-, all believing that the amount is just, it cannot be said that what is awarded in the first case and last case, is just compensation. 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."

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With regard to the compensation to be calculated in the case filed and decided under Section 163-A of the Motor Vehicles Act, the Supreme Court in the case of National

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Insurance Company Limited Vs. Pranay Sethi and others, (2017)16 Supreme Court Cases, page-680 after considering the entire history of cases pertaining to Motor Vehicles Act summarized its conclusion as under:-

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" 59.3, While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.

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59.4, In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

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59.5, For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore.

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59.6, The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment.

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59.7, The age of the deceased should be the basis for applying the multiplier.

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59.8, Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years."

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The Supreme Court in the case of Oriental Insurance Company Ltd. Vs. Mohd. Nasir and another has held that the duty of the Tribunal is to arrive at 'just compensation' and has held as under:-

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“ 27 . The function of Commissioner is to determine the amount of compensation as laid down under the Act. Even if no amount is claimed, the Commissioner must determine the amount which is found payable to the workman. Even in the cases arising out of the 1988 Act, it is the duty of the Tribunal to arrive at a just compensation having regard to the provisions contained in Section 168 thereof.

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In Nagappa V. Gurudaya Singh & Ors. [(2003) 2 SCC 274], it is

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held:

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"20. Similarly, the High Court of Punjab and Haryana in Devki Nandan Bangur and Ors. v. State of Haryana and Ors. [1995 ACJ 1288] observed that the grant of just and fair compensation is statutory responsibility of the Court and if, on the facts, the Court finds that the claimant is entitled to higher compensation, the Court should allow the claimant to amend his prayer and allow proper compensation.

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21. For the reasons discussed above, in our view, under the M.V. Act, there is no restriction that Tribunal/Court cannot award compensation amount exceeding the claimed amount. The function of the Tribunal/Court is to award 'Just' compensation which is reasonable on the basis of evidence produced on record. Further, in such cases there is no question of claim becoming time barred or it cannot be contended that by enhancing the claim there would be change of cause of action. It is also to be stated that as provided under Sub-section (4) to Section 166, even report submitted to the Claims Tribunal under Sub- section (6) of Section 158 can be treated as an application for compensation under the M.V. Act. If required, in appropriate cases, Court may permit amendment to the Claim Petition."

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In Syed Basheer Ahmad & Ors V. Mohd. Jameel & another [(2009) 2 SCC 225], this Court held :

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"9. Section 168 of the Act enjoins the Tribunal to make an award determining "the amount of compensation which appears to be just." However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression "which appears to the just" vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of compensation.”

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In view of the categorical pronouncement by the Hon'ble Supreme Court, the only question left to be decided in the present writ petition is as to what should be the 'just compensation' to which the respondents are entitled. Considering the income of the deceased at the time of accident as Rs.5,000/- per month and the age of the deceased at the time of accident as 22 years, the just compensation works out as under :-

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Income of the deceased would be Rs.5,000/- + 40% of the assessed income i.e. Rs. 7,000/- per month as held by the Hon'ble Supreme Court in para 59.4 of the National Insurance Company Vs. Pranay Sethi (supra) as regards the multiplicand and the deduction for personal and living

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expenses, the Hon'ble Supreme Court in the case of Sarla Verma (supra) has held as under:-

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" 30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardized deductions. Having considered several subsequent decisions of this court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependant family members exceed six.

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31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant on the father .

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32. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.

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42. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M- 9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years."

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Thus, 50% of his income has to be treated as personal and living expenses as the deceased was a bachelor and his

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mother and father were dependent on him. Thus, the amount of Rs.7,000/- per month (as assessed above) a 50% deduction is to be made and the dependency comes to Rs. 3,500/- per month as the deceased was 22 years of age at the time of the accident as per the second schedule, the multiplier of 18 is to be adopted and, thus, just compensation that ought to have been awarded by the Tribunal comes to Rs.3500 X 12 X 18 = 7,56,000.

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In addition to the above, the claimants would also be entitled to a funeral expenses of Rs.15,000/-, towards loss of estate Rs.40,000/-, towards loss of consortium and Rs. 15,000 towards funeral expenses (as indicated in paragraph 59.8 of the National Insurance Company Vs. Pranay Sethi). Thus, the just compensation payable to the claimants on account of death of Vimal Kumar Sharma in the accident is worked out as under:-

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Rs. 3500 X 12 X 18 = Rs.7,56,000/- + 15,000 + 40,000 + 15,000 = Rs. 8,26,000.

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The claimants are also entitled to interest at the rate of 8% per annum from the year of the filing of the claim petition up to the date of actual payment to the respondents.

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I have also gone through the judgment of the Hon'ble Supreme Court in the case of Joseph Philip C.J. and another Vs. Judies and others, (2018)11 Supreme Court Cases, page 638, wherein the Hon'ble Supreme Court has awarded a sum of Rs.50,000/- to the parents of the deceased who was the only son. Relevant part of the judgment is reproduced below:-

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“ 6. The deceased was aged 24 years at the time of accident. As

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noticed above, the deceased was employed in a company. It is clear from the materials on record that the deceased had a stable job. Therefore, we are of the view that the higher estimate of monthly income could be made. This Court in Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr. reported in (2009) 6 SCC 121, has held that 50% of the actual salary income of the deceased has to be added towards future prospects where the deceased was below 40 years. Therefore, the gross income of the deceased comes to Rs.15,000/- per month (Rs.10,000/- + Rs.5000/-) before deducting the personal living expenses.”

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However, following the judgment in the case of National Insurance Company Ltd. Vs. Pranay Sethi (supra) I am of the view that the petitioner should pay the just compensation amounting to Rs.8,26,000/- as calculated above plus interest as indicated above. Minus amount already deposit in pursuance to the interim order passed by this Court on 21.2.2007 within a period of two months from today. The said amount should be deposited with the Motor Accident Claims Tribunal/Additional District Judge/Special Judge, (SC/ST Act), District Etah within the time granted who shall pay the deposited amount to the respondent nos.2 & 3 after due verifications.

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Before parting with the case it is necessary to highlight that the conduct of the petitioner-corporation has been unfair to say the least; firstly because they file an order recall application on untrue facts stating that they became aware of the award on 5.9.2005 when the Amin came for recovery whereas the passing of the award was well within the knowledge of the Corporation as the copy of the award had been filed in Claim Petition No.263 of 2003 which was duly contested by the petitioner-corporation, secondly the Corporation chose not to file an appeal under Section 173 of the Motor Vehicles Act and filed a writ petition which was not even maintainable thus, I impose a cost of

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Rs.20,000/- on the petitioner-corporation. The cost awarded shall also be paid to the claimants in addition to the amount awarded in this judgment.

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The writ petition is disposed off in terms of the above referred order.

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The Registry is directed to send a copy of this order to the District Jude, Etah for its compliance. Order Date :- 1.3.2019

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Hasnain

U.P.S.R.T.C. v. Addl. District Judge/Special Judge M.A.C.T. and Others

Case brief

What is this about?

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U.P.S.R.T.C. v. Addl. District Judge/Special Judge M.A.C.T. and Others

Case brief

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