Dismissed

New India Assurance Co. Ltd. Thru. Administrative Officer v. Smt. Prema Devi and 6 Others

Allahabad HC21 Feb 2022FAFO/572/2017

Case brief

AI extract

What is this about?

Insurer's appeal against a motor accident compensation award, challenging its liability on the ground that the tanker driver lacked an endorsement to drive hazardous-goods vehicles, and challenging the 50% addition for future prospects. The court held an empty tanker is not a hazardous-goods vehicle and dismissed the appeal, declining to enhance compensation.

What did the court decide?

Appeal dismissed with costs of Rs. 25,000/- to be deposited by the appellant insurance company and paid to respondent nos. 1 to 5.

New India Assurance Co. Ltd. Thru. Administrative Officer Vs… — Insurance | Allahabad HC (2022)

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Reserved on 06.01.2022 Delivered on 21.02.2022

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Court No. - 31

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Case :- FIRST APPEAL FROM ORDER No. - 572 of 2017

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Appellant :- New India Assurance Co. Ltd. Thru. Administrative Officer Respondent :- Smt. Prema Devi And 6 Others

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Counsel for Appellant : - Bhanu Prakash Dubey,Dinesh Kumar Shukla Counsel for Respondent : - Sunil Kumar Jaiswal

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Hon'ble Mohd. Faiz Alam Khan,J.

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Heard Shri Bhanu Prakash Dubey, learned counsel for the appellant as well as Sri Dinesh Kumar Shukla, learned counsel for respondent nos.1 to 5 and perused the record.

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The instant appeal under Section 173 of the Motor Vehicles Act, 1988 has been preferred by the appellant- New India Assurance Company Ltd. against the judgment and award dated 06.05.2017 passed in M.A.C.P. No. 28 of 2016 by the Motor Accident Claims Tribunal/F.T.C., Court No. 1, Gonda (U.P.), whereby the compensation to the tune of Rs. 4,31,000/- was awarded in favour of the respondent nos. 1 to 5 along with the interest @ 7 % per annum from the date of filing of claim petition till the date of actual payment.

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The necessary facts required for the disposal of the instant appeal are that on 14.02.2016 at 5.40 p.m. when deceased Arjun Prasad was returning back to his home, the driver of Vehicle (Tanker) No. U.P. 85 X-9143 by driving the vehicle in rash and negligent manner hit him from behind near Ambedkar Chauraha at Gonda-Lucknow Road, in consequence of which, the deceased sustained grievous injuries and while being taken to the hospital had died. The owner and driver of the vehicle appeared before the tribunal and submitted their written

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statements declining the occurrence of any accident. It was stated that the vehicle was insured with the New India Assurance Company Ltd. from 24.11.2015 till 23.11.2016 and the opposite party no.2-driver of the vehicle was holding a valid and effective driving license to drive the impugned vehicle at the time of accident and the insurance company is liable to make the payment of compensation.

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The New India Assurance Company Ltd. has also filed the written statement and stated that the vehicle was being driven in absence of any valid and effective insurance policy and provision of Section 134 M.V. Act has not been complied. The vehicle was not having any fitness certificate and the owner of the vehicle has collided with the claimants and at the date and time of the alleged accident the driver of Vehicle No. U.P. 85 X-9143 (Tanker) was not possessing valid and effective driving license and also that the claimants have claimed the compensation on the higher side.

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The tribunal had framed following issues:-

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(i) Whether on 14.02.2016 at 5:40 pm. near Ambedkar crossing, GondaLucknow Road within the jurisdiction of Police Station Kotwali, District Gonda, the driver of Vehicle No. U.P. 85 X-9143 has caused the accident by driving the vehicle in rash and negligent manner and hit deceased Arjun Prasad from behind, causing grievous injuries resulting in the death of the deceased ? If yes its effect ?

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(ii) Whether the Vehicle No. U.P. 85 X-9143 was being driven at the time of the accident by a person possessing effective and valid driving license ?

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(iii) Whether the offending vehicle bearing Registered No. U.P. 85 X- 9143 (Tanker) at the date and time of the alleged accident was insured with opposite party no.3- The New India Assurance Company Ltd. and was being driven as per the terms and conditions of the insurance policy ?

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(iv) Relief- (How much and from whom) ?

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The claimants have testified P.W.-1/Prema Devi and P.W.2- Lakhan Lal in their favour and has also relied on following documentary evidence:(I) Copy of First Information Report, (II) Photocopy of the postmortem report of the deceased Arjun Prasad, (III) Death Certificate of deceased Arjun Prasad, (IV) Transfer Certificate of deceased Arjun Prasad, (V) Photocopy of Registration Certificate (Vehicle No. U.P. 85 X-9143), (VI) Photocopy fitness certificate of Vehicle No. U.P. 85 X-9143, (VII) Fitness Certificate (VIII) Permit, (IX) Photocopy Driving License, (X) Photocopy of Charge Sheet, (XI) Certified copy Site Map, (XII) Certified copy of the Judgment of the case titled as “Prema Devi and others vs. Rajesh Kumar Gupta and others”, while from the side of the opposite parties witness O.P.W.-1/Nirauti Lal, O.P.W.-2/Rajesh Kumar were testified and in documentary evidence photocopies of Insurance Policy, fitness certificate, permit, bilty and driving license were filed.

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The tribunal while deciding the issue no.1 hold that the driver of the vehicle has caused the accident by driving the vehicle in rash and negligent manner and with regard to issue no.2 was of the view that the driving license is in the name of Nirauti Lal which is valid for driving transport vehicle from 02.04.2003 till 23.11.2019 and for L.M.V. from 11.03.1999 till 23.11.2010 and also hold that at the time of alleged accident the driver of the vehicle was holding a vehicle and valid driving license and also that the vehicle tanker was empty at the time of accident and was not carrying any hazardous and dangereous substance and with regard to issue no.3 hold the liability of the insurance company to pay the compensation as the vehicle was insured with the New India Assurance Company on the date and time of the accident, and with regard to issue no.4 calculated the compensation by taking the income of the deceased as notional income i.e. 3000/- p.a. and also added 50% of the same i.e. 1500/- as loss of future prospects and adopted the multiplier of 11 in view of the age of the deceased and

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granted compensation of Rs. 4,31,000/- under different heads along with 7% interest from the date of filing of the petition till actual payment.

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The appellant- New India Assurance Company Ltd. has challenged the award of the tribunal on the ground that on the date and time of the accident the driver of the vehicle was not holding a valid and effective driving license to drive vehicle carrying dangerous and hazardous goods, as also the future prospects to the tune of 50 % of the assessed salary of the deceased has been wrongly awarded in contravention to the law laid down by the Hon’ble Supreme Court in “ Smt. Sarla Verma and others vs. Delhi Transport Corporation Ltd. and others, 2009 (2) TAC 677”.

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Learned counsel for the appellant vehemently submits that the trial court has committed manifest illegality in assessing the liability of the insurance company to pay the awarded amount as on the date and time of the accident the driver of the vehicle was not holding a valid and effective driving license to drive the vehicle carrying dangerous and hazardous goods. To elaborate further his submissions learned counsel for the appellant submits that the driver of the vehicle at the time of the accident was admittedly driving a ‘tanker’ which comes under the definition of hazardous vehicle and the driver of the vehicle admittedly was not having any endorsement on his driving license to drive the vehicle carrying dangerous and hazardous goods and, thus, it was a fundamental defect going to the root of the matter and, therefore, the insurance company could not be held liable to pay the compensation. Learned counsel for the appellant in support his contention has relied on judgment dated 05.10.2016 passed by a co-ordinate Bench of this Court in First Appeal From Order No. 20 of 2016 and 21 of 2016 entitled “ Krishna Kumar and another vs. United Insurance Company Ltd. Railway Ganj, Hardoi and another".

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It is also submitted on behalf of the appellant that the trial court has also committed a manifest illegality in awarding 50% of the assessed income as loss of future prospects in contravention to the settled law of the Hon’ble Supreme Court passed in Smt. Sarla Verma’ (supra) and, thus, the award of the tribunal is required to be modified and the appeal be allowed.

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Learned counsel for claimants/respondent nos. 1 to 5 has submitted that the trial court has not committed any illegality either in assessing the compensation or in fixing the liability to pay the awarded amount on the insurance company as the admitted case of the parties before the tribunal was that at the time of accident the tanker was not containing any dangerous and hazardous substance and, therefore, there was no requirement to have an effective driving license required to drive the vehicle carrying dangerous and hazardous substance. It is also submitted by him that no illegality has been committed by the tribunal in assessing 50 % of the income of the deceased as loss of future prospects and, thus, there is no substance/merits in the appeal and the same is liable to be dismissed.

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Despite an opportunity was provided to learned counsel for respondent no.6 to file any written submissions as he was not present on the date when the submissions were heard, but as per the report of the Bench Secretary, no written submissions have been filed till date by respondent no.6., thus, this Court has not been left with any other option except to proceed further in absence of respondent no.6.

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Having heard learned counsel for the parties, perusal of the record would reveal that the award of the tribunal has been challenged by the appellant- Insurance Company on the score; firstly that the insurance company is not liable to pay the awarded compensation as the driver of the vehicle was not possessing a valid driving license at the date and time of the incident to drive the vehicle containing hazardous and dangerous substances and the violation of this condition will go to the

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root of the terms of the insurance policy and would be considered a fundamental breach of the terms and conditions of the insurance policy and secondly on the score that the tribunal has calculated income of the deceased by adding 50 % of his income as loss of future prospects and in view of the dictum laid down by the Hon’ble Supreme Court in ‘Smt. Sarla Verma and others vs. Delhi Transport Corporation Ltd . and another” (supra) , as the deceased was aged about 55 years at the date and time of the accident, no future prospects were required to be added in the income of the deceased for the purpose of calculation of compensation.

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So far as the first ground, on which the award of the tribunal has been challenged, is concerned, perusal of the record would reveal that before the tribunal copy of two driving licenses were brought on record and these two copies of the driving licenses were related to the driver of the impugned vehicle namely Nirauti Lal. One of the copy of the driving license was filed by the claimants, which was issued on 15.06.1987 bearing License No. N-351/AG, whereby the driver was authorized to drive transport vehicle from 08.05.2013 till 07.05.2016. According to the insurance company this driving license has been found fake on verification. There is another copy of driving license pertaining to the same driver i.e. Nirauti Lal, which has been filed by the driver Nirauti Lal himself before the tribunal vide application 9-Ga2 dated 03.03.2017. Perusal of this driving license would reveal that the same has been issued on 11.03.1999 and the same is valid for driving LMV vehicle from 11.03.1999 till 23.11.2021 and transport vehicle from 02.04.2003 till 23.11.2019 . Admittedly, there is no endorsement on this driving license to drive vehicle carrying hazardous and dangerous goods. Authenticity of this second driving license has not been challenged by the insurance company either before the tribunal or before this Court and it has been submitted that since there was no endorsement on the driving license to drive the vehicle containing hazardous and dangerous substances, the vehicle was being driven, at

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the date and time of the accident, in violation of the terms and conditions of the insurance policy and thus, the insurance company is not liable to satisfy the award. The defence, which has been taken by the owner and driver of the impugned vehicle is to the tune that the copy of driving license, which has been found to be forged was not filed by either the driver or owner of the vehicle and the insurance company has not adduced any evidence against the second driving license submitted by the driver i.e. Nirauti Lal Baghel like form no. 54, which the insurance Co. had earlier produced with regard to the driving license filed by the claimants, which was found fake. The tribunal has opined that the core issue would be whether the driver of the vehicle was having a valid and effective driving license at the date and time of the accident and as the insurance company has not filed any evidence in rebuttal to the driving license filed by the driver Nirauti Lal the liability to satisfy the award shall be of the insurance company. It is also opined that at the time of the accident no dangerous/hazardous or inflammable goods was being transported from the offending vehicle and only Coal Tar i.e. Bitumen was being transported, which is not a hazardous or inflammable substance and thereafter the tribunal hold that the driver of the vehicle was holding a valid and effective driving license at the time of the accident. However the finding of the tribunal that at the time of accident bitumen was loaded in the tanker is not substantiated by any evidence on record and i will deal this aspect at appropriate place.

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In order to appreciate the controversy, perusal of the record of the tribunal would further reveal that the driver of the offending vehicle namely Nirauti Lal has been testified as O.P.W.-1. In his in chiefexamination filed through an affidavit driver Nirauti Lal has stated that he was possessing a valid and effective driving license at the date and time of the accident. With regard to the filing of another driving license allegedly issued from the R.T.O. at Agra, he stated in his crossexamination that he had applied for issuance of the driving license from R.T.O. office Mathura. The driving license, which was issued from the

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R.T.O. Agra was renewed from 2013 till 2016 and the driving license which was issued from R.T.O. office, Mathura, was valid till 2019. In his cross-examination this witness has admitted that the vehicle which he was driving at the time of the alleged accident was made for transportation of inflammable substances. P.W.-2 Lakhan Lal has been examined as the eye witness of the accident, wherein he has stated that the accident had taken place from Tanker No. U.P. 85X9143 by driving the vehicle in rash and negligent manner. However, he has not described anything pertaining to the nature of the vehicle and the substance which was being transported. P.W.-1/Prema Devi admittedly is not an eye witness of the accident.

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Importantly O.P.W.-2/Rajesh Kumar, who is the owner of the offending vehicle has also been examined as the witness for the opposite side. In his examination-in-chief, this witness has specifically stated that at the date and time of the accident the vehicle was being driven by the opposite party no.2 Narottam Singh and on 14.02.2016 (date of accident) no inflammable substance was being transported from the vehicle and in fact the Bitumen (Coal tar) was loaded in the vehicle from Mathura and after the same has been unloaded at Gonda, the empty tanker was returning back,when the accident had taken place and, therefore, at the time of accident the vehicle (tanker) was empty and no inflammable substance was loaded or being transported through the vehicle. In cross-examination this witness has admitted that the offending vehicle has been registered for transporting inflammable substances and all the papers of the vehicle were up-to-date and he was not aware that the driver Nirauti Lal was having more than one driving license. On specific query being made, he replied that the statement of the driver that at the time of the accident he (Driver) was driving a tanker meant to transport inflammable substances, is wrong.

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Perusal of the evidence which is available on record would suggest that despite a categorical statement has been given by the owner of the vehicle pertaining to the fact that at the date and time of the accident the

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offending vehicle had taken the ‘Bitumen’ from Mathura refinery and after getting the same unloaded at Gonda was returning back without any substance loaded therein when the alleged accident had taken place and therefore, as per the statement of the owner, the tanker at the time of the accident was empty and was not containing any hazardous, inflammable or dangerous substance. No evidence has been produced by the insurance company or any other party against the statement of owner, which may reflect that the tanker at the time of occurrence of the accident was carrying any inflammable/dangerous or hazardous substance. Thus in the considered opinion of this Court the observation/ finding of the tribunal with regard to the fact that at the time of accident Bitumen was loaded in the tanker is based on no evidence. No fact could be presumed and the same has to be proved , unless there is any provision for its presumption. There is no evidence on record which may prove that at the time of the accident ‘Bitumen’ was being transported from the offending vehicle. There is only a copy of invoice of date 12.02.2016 on record, suggesting that Bitumen was loaded in the Tanker No.UP85X/9143 at Mathura refinery, but in the background of specific statement of owner of the vehicle that the accident had occurred when the vehicle was returning after unloading the Bitumen at Gonda, and in absence of any evidence produced by any party including Insurance Co., it could not be said that the tanker was carrying ‘Bitumen’ at the time of accident and thus the question as to whether Bitumen would fall in the definition of hazardous or dangerous goods would be a futile and uncalled for exercise.

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Now, when it is evident that the vehicle at the time of accident was not transporting any dangerous or hazardous substance, the question would arise that even if the offending vehicle was not carrying any dangerous or hazardous substance at the time of accident and as the same was meant for transporting hazardous and dangerous substance, nonendorsement on the driving license of the driver of the offending tanker permitting him to drive the vehicle carrying dangerous or hazardous

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substance, would constitute violation of the terms of the insurance policy and would absolve the insurance company to satisfy the award.

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Reliance in this regard has been placed by learned counsel for the appellant on the judgment of a co-ordinate Bench of this Court dated 05.10.2016 passed in Krishna Kumar (Supra) , wherein it is emphasized that to drive the transport vehicle which may be used for transport of hazardous goods endorsement on the driving license of the driver authorizing him to drive such vehicle would be necessary.

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Learned counsel for the respondent, however, has placed reliance on the judgment of a co-ordinate Bench of this Court dated 24.07.2018 passed in F.A.F.O. No. 3112 of 2018, wherein the above-mentioned judgment of Krishna Kumar (Supra) has been distinguished on facts as in that case the vehicle involved was carrying hazardous goods in the following words:-

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"8. In order to appreciate the arguments Section 14 of the Act, 1988 is reproduced hereunder:

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14. Currency of licenses to drive motor vehicles- (1) A learner's license issued under this Act shall, subject to the other provisions of this Act, be effective for a period of six months from the date of issue of the license. (2) A driving license issued or renewed under this Act shall,

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(a) in the case of a licence to drive a transport vehicle, be effective for a period of three years:

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[Provided that in the case of licence to drive a transport vehicle carrying goods of dangerous or hazardous nature be effective for a period of one year and renewal thereof shall be subject to the condition that the driver undergoes one day refresher course of the prescribed syllabus; and;...........

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11. The object behind the proviso is that a person who is driving vehicle carrying such goods must be trained enough so that no causality of any kind takes place on account of careless or negligent driving. The purpose of endorsement on the license is also same. The question, therefore, is as to whether empty container of such goods by itself to be treated as dangerous or hazardous to human life. In the opinion of the Court an empty container or cylindrical bottle cannot be termed as goods dangerous or hazardous nature to human life. Rule 9 (3) makes endorsement

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obligatory if one intends to carry goods that are dangerous or hazardous by nature to human life. So emphasis is that goods by very nature should be dangerous or hazardous to human life. A mere container or bottle that might be used to contain dangerous or hazardous goods cannot be treated itself as dangerous or hazardous by nature. It is quite possible that empty containers are carried from one place to another place and, therefore, unless sufficient evidence is led by the parties that those containers that were loaded on a truck carried dangerous or hazardous goods, the driver while driving such vehicle with a valid license entitling him to a drive transport vehicle will not get rendered ineligible just for carrying empty cylinders and in such circumstances the insurance company will not get absolved from its liability in a third party claim. It could be a case where manufacturer transports cylinders to the industry/company and it could equally be a case where containers are transported from production unit to sale unit or to a Go-down at distant place. In such circumstances, transportation of such empty cylinders or containers from one place to another would not require driver to have endorsement under proviso to Section 14 of Act, 1988. Since containers or cylinders are not dangerous or hazardous goods by nature, therefore, in the event of a road accident involving transport vehicle carrying such empty cylinders/containers the insurance company cannot get rid of its liability to meet third party claim as per terms of insurance policy.

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19. The case relied upon by learned counsel for the appellant of the Lucknow Bench Judgment of this court in Krishna Kumar (supra) is distinguishable on facts. In that case vehicle involved in accident was a 'hazardous goods transport vehicle'. Meaning thereby, there was no dispute that vehicle involved in accident was carrying hazardous goods. It was admitted so because defence taken by the owner of the vehicle was that driver was having valid endorsement on his driving license as required under the Rules. The argument for consideration before the Court in that case was that endorsement as required to be made under the Rules, once made is valid and no further requirement of renewal of such endorsement more especially in the absence of any provision under the Act, 1989 for registration of Transport Vehicle in a particular class like, 'hazardous goods transport vehicle'. But in the present case, there is no such issue. Even on facts there was no plea that vehicle was carrying dangerous or hazardous goods. It is also not the case of the appellant herein this appeal that tortfeasor vehicle was infact hazardous goods carriage vehicle nor, any evidence to that effect has been led. What Section 11 of the Act talks about is of a vehicle of a particular class for driving of which a license may be applied before the licensing authority and it is in that context Rule 9 becomes

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relevant in driving a particular class of vehicle for the purpose of endorsement of license and other additional qualifications which are prescribed under the said Rule. So on facts, the judgment relied by learned counsel for the appellant in Krishna Kumar (supra), in the opinion of the Court has no application in the present case.

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20.In the present case, The Tribunal has come to record a categorical finding to the effect that no evidence was led as to whether cylinder that were loaded with such gas or not that could be said as hazardous. In the absence of any such evidence being led, the plea taken by the insurance company does not stand substantiated."

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I find myself in agreement with the aforesaid view expressed by the Hon’ble co-ordinate Bench in judgment dated 24.07.2018 passed in F.A.F.O. No. 3112 of 2018, (The New India Assurance Co. Ltd. vs. Smt. Lakshmi And three Others). Proviso to Section 14 of the Motor Vehicles Act shows that for being a driver to drive the vehicle carrying dangerous or hazardous goods the driver is necessarily required to possess a license with an endorsement authorizing him to drive such transport vehicle. Motor Vehicles Act Rules, 1989 vide Table II provides the name of the goods which may be termed as either dangerous or hazardous and Table III of the Rules provides a huge list of such goods. There could not be any doubt that the goods or substances provided in the above-mentioned two tables in the Motor Vehicles Act Rules, 1989 are only an indicative criteria, but the goods by nature should be dangerous and hazardous. The question before this Court is, if any empty container meant to transport these goods by itself, even if it is empty may be treated as dangerous or hazardous to the human life.

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In the considered opinion of this Court, an empty container or transport vehicle not carrying any dangerous or hazardous substance cannot be termed as a vehicle carrying dangerous or hazardous goods or substances unless it is carrying these substances. This Court is also of the view that there cannot be any presumption pertaining to the existence of any fact and the same has to be proved as per the provisions contained in the Indian Evidence Act and for this purpose

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sufficient evidence is to be produced by the parties pertaining to the fact that the vehicle in question was carrying dangerous or hazardous goods and the driver while driving such vehicle was not having any endorsement on his driving license. At the cost of the repetition, it is stated that there is no evidence available on record contrary to the statement made by the owner of the vehicle pertaining to the fact that at the time of accident the vehicle was empty and was not transporting any dangerous or hazardous goods. Therefore, there is no reason not to accept the statement of the owner of the vehicle with regard to the fact that at the time of accident the vehicle was not transporting any dangerous or hazardous substance. The vehicles are not themselves hazardous and dangerous, it is only the substance which they carry label them as the vehicle carrying dangerous and hazardous substance. In this regard Rule 129 to Rule 137 of the Central Motor Vehicles Rules, 1989 are relevant. A conjoint reading of these Rules would reveal that certain conditions are to be followed while carrying dangerous or hazardous goods and the emphasis has been laid in compliance of certain conditions on a vehicle transporting or carrying hazardous or dangerous goods/substances. The emphasis has been laid on the condition that the vehicle transporting or carrying dangerous or hazardous goods are required to follow the norms and conditions mentioned in the Central Motor Vehicles Rules, 1989, but if any transport vehicle is carrying no dangerous or hazardous substance the same could not be classified as the vehicle carrying dangerous substances/goods. Thus, in the considered opinion of this Court, when the driver of the offending vehicle at the time of the accident was possessing a valid driving license to drive the transport vehicle and the vehicle was not transporting any dangerous or hazardous substance, non-endorsement on the driving license to drive hazardous vehicle would not be termed as violation of any condition of the insurance policy.

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So far as the second submission of learned counsel for the appellant with regard to the fact that 50 % of the assessed income of the deceased

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has been taken by the tribunal as future prospects and the same is in violation of the law declared by the Hon’ble Supreme Court in ‘Smt. Sarla Verm’s case’ (supra) is concerned, the law with regard to the grant of loss of future prospects has now been no more res integra and the same has now been settled by a Constitution Bench of the Apex Court in the case of “ National Insurance Company Limited vs. Pranay Sethi and Ors.” , MANU/SC/1366/2017 , relevant portion of the said report is being reproduced below for ready reference:-

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"55. Presently, we come to the issue of addition of future prospects to determine the multiplicand.

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56. In Santosh Devi the Court has not accepted as a principle that a self-employed person remains on a fixed salary throughout his life. It has taken note of the rise in the cost of living which affects everyone without making any distinction between the rich and the poor. Emphasis has been laid on the extra efforts made by this category of persons to generate additional income. That apart, judicial notice has been taken of the fact that the salaries of those who are employed in private sectors also with the passage of time increase manifold. In Rajesh's case, the Court had added 15% in the case where the victim is between the age group of 15 to 60 years so as to make the compensation just, equitable, fair and reasonable. This addition has been made in respect of self-employed or engaged on fixed wages.

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57. Section 168 of the Act deals with the concept of "just compensation" and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of "just compensation" has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, "just compensation". The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (supra) and it has been

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approved in Reshma Kumari (supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of "standardization" so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.

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58. The seminal issue is the fixation of future prospects in cases of deceased who is self-employed or on a fixed salary. Sarla Verma (supra) has carved out an exception permitting the claimants to bring materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any future prospects in respect of the said category.

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59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated Under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or

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for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.

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60. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb Rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of selfemployed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts."

¶76

61. In view of the aforesaid analysis, we proceed to record our conclusions:-

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(i) ........

(ii) .........

(iii) 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.

¶81

(iv) 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.

¶82

(v) 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 herein before.

¶83

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

¶84

(vii) The age of the deceased should be the basis for applying the multiplier.

¶85

(viii) 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."

¶86

The Tribunal has taken the age of deceased as shown in postmortem report as 55 years and rightly so, but in view the age of the deceased (50 years) should have taken 10% of the income of the deceased as future prospects keeping in view the law laid down by the apex Court in Pranay Sethi (Supra) instead of 50%. If 10% of notional income is taken as loss of future prospects the amount will come as Rs.300/- and total income of deceased for the purpose of determination of loss of dependency would be 3000+300=3,300/-per month i.e. 39,600/- per year.

¶87

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¶88

The tribunal has deducted 1/3 of the income of the deceased as personal and living expenses. A mistake appears to have been committed by the tribunal as keeping in view of the law laid down by the Hon’ble Supreme Court in Sarla Verma Vs. Delhi Transport Corporation (2009) 6 SCC 121 as approved in Reshma Kumari and Others vs. Madan Mohan, MANU/SC/0287/2013 and Pranay sethi (supra), and the fact that the number of dependents on the income of the deceased were (5) five, 1/4 of the income of the deceased was liable to be deducted as his living and personal expenses and thus the multiplicand, after deducting 1/4 income of the deceased (Rs. 9000/-), would come to Rs. 39,600 - Rs 9900= Rs 29,700/- per annum.

¶89

The Tribunal has taken the age of the deceased (55 years) for ascertaining the multiplier and has taken a multiplier of 11 which is in consonance with the law laid down by the Hon’ble Supreme Court in Sarla Verma as approved in Reshma Kumari and Pranay sethi (supra) . Thus by applying the multiplier of 11, loss of dependency would come to Rs 3,26,700/-(29,700/- multiplied by 11 =3,26,700/-).

¶90

Tribunal has awarded Rs. 10000/- for loss of consortium for spouse, Rs. 10000/- for loss of estate and Rs. 10000/- for loss of love and affection and Rs 5000/- for funeral expenses.

¶91

The controversy with regard to the amount of compensation which may be awarded under conventional heads has been set at rest by Hon'ble Supreme Court in constitutional Bench judgment of Pranay Sethi (Supra) and it is held as under: -

¶92

"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."

¶93

Hon'ble Supreme Court in New India Assurance Co. Ltd. & Ors. vs. Somwati and Ors., MANU/SC/0674/2020 held as under: -

¶94

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¶95

"31. The next judgment which needs to be noted is Magma General Insurance Co. Limited v. Nanu Ram alias Chuhru Ram and Ors. MANU/SC/1012/2018 : (2018) 18 SCC 130 , the concept of consortium was explained in paragraphs 21,22 and 23 which are as follows:

¶96

21. A Constitution Bench of this Court in Pranay Sethi (supra) dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is Loss of Consortium. In legal parlance, "consortium" is a compendious term which encompasses 'spousal consortium', 'parental consortium', and 'filial consortium'. The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse.

¶97

21.1. Spousal consortium is generally defined as rights pertaining to the relationship of a husband-wife which allows compensation to the surviving spouse for loss of "company, society, cooperation, affection, and aid of the other in every conjugal relation.

¶98

21.2. Parental consortium is granted to the child upon the premature death of a parent, for loss of "parental aid, protection, affection, society, discipline, guidance and training."

¶99

21.3. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love, affection, companionship and their role in the family unit.

¶100

22. Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. Modern jurisdictions world over have recognized that the value of a child's consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of the love, affection, care and companionship of the deceased child.

¶101

23. The Motor Vehicles Act is a beneficial legislation aimed at providing relief to the victims or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium. Parental

¶102

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¶103

Consortium is awarded to children who lose their parents in motor vehicle accidents under the Act. A few High Courts have awarded compensation on this count. However, there was no clarity with respect to the principles on which compensation could be awarded on loss of Filial Consortium.

¶104

32. A two-Judge Bench in Magma General Insurance Company Limited awarded the amount of Rs. 40,000/- to father and sister of the deceased. Paragraph 24 is as follows:

¶105

24. The amount of compensation to be awarded as consortium will be governed by the principles of awarding compensation under 'Loss of Consortium' as laid down in Pranay Sethi (supra). In the present case, we deem it appropriate to award the father and the sister of the deceased, an amount of Rs. 40,000 each for loss of Filial Consortium.

¶106

33. A three-Judge Bench in United India Insurance Co. Ltd. v. Satinder Kaur alias Satvinder Kaur and Ors ., had reaffirmed the view of two-Judge Bench in Magma General insurance Company Ltd. Three-Judge Bench from paragraph 53 to 65, dealt with three conventional heads. The entire discussion on three conventional heads of three-Judge Bench is as follows:

¶107

53. In Pranay Sethi (supra), the Constitution Bench held that in death cases, compensation would be awarded only under three conventional heads viz. loss of estate, loss of consortium and funeral expenses.

¶108

54. The Court held that the conventional and traditional heads, cannot be determined on percentage basis, because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified, which has to be based on a reasonable foundation. It was observed that factors such as price index, fall in bank interest, escalation of rates, are aspects which have to be taken into consideration.

¶109

The Court held that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/and Rs. 15,000/- respectively. The Court was of the view that the amounts to be awarded under these conventional heads should be enhanced by 10% every three years, which will bring consistency in respect of these heads.

¶110

a) Loss of Estate - Rs. 15,000 to be awarded

¶111

b) Loss of Consortium

¶112

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¶113

55. Loss of Consortium, in legal parlance, was historically given a narrow meaning to be awarded only to the spouse i.e. the right of the spouse to the company, care, help, comfort, guidance, society, solace, affection and sexual relations with his or her mate. The loss of companionship, love, care and protection, etc., the spouse is entitled to get, has to be compensated appropriately. The concept of non-pecuniary damage for loss of consortium is one of the major heads for awarding compensation in various jurisdictions such as the United States of America, Australia, etc. English courts have recognised the right of a spouse to get compensation even during the period of temporary disablement.

¶114

56. In Magma General Insurance Co. Ltd. v. Nanu Ram and Ors., this Court interpreted "consortium" to be a compendious term, which encompasses spousal consortium, parental consortium, as well as filial consortium. The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse.

¶115

57. Parental consortium is granted to the child upon the premature death of a parent, for loss of parental aid, protection, affection, society, discipline, guidance and training.

¶116

58. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love and affection, and their role in the family unit.

¶117

59. Modern jurisdictions world-over have recognized that the value of a child's consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is the compensation for loss of love and affection, care and companionship of the deceased child.

¶118

60. The Motor Vehicles Act, 1988 is a beneficial legislation which has been framed with the object of providing relief to the victims, or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium.

¶119

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¶120

61. Parental Consortium is awarded to the children who lose the care and protection of their parents in motor vehicle accidents.

¶121

62. The amount to be awarded for loss consortium will be as per the amount fixed in Pranay Sethi (supra).

¶122

63. At this stage, we consider it necessary to provide uniformity with respect to the grant of consortium, and loss of love and affection. Several Tribunals and High Courts have been awarding compensation for both loss of consortium and loss of love and affection. The Constitution Bench in Pranay Sethi (supra), has recognized only three conventional heads under which compensation can be awarded viz. loss of estate, loss of consortium and funeral expenses.

¶123

64. In Magma General (supra), this Court gave a comprehensive interpretation to consortium to include spousal consortium, parental consortium, as well as filial consortium. Loss of love and affection is comprehended in loss of consortium.

¶124

65. The Tribunals and High Courts are directed to award compensation for loss of consortium, which is a legitimate conventional head. There is no justification to award compensation towards loss of love and affection as a separate head.

¶125

c) Funeral Expenses - Rs. 15,000 to be awarded

¶126

34. The Three-Judge Bench in the above case approved the comprehensive interpretation given to the expression 'consortium' to include spousal consortium, parental consortium as well as filial consortium. Three-Judge Bench however further laid down that 'loss of love and affection' is comprehended in 'loss of consortium', hence, there is no justification to award compensation towards 'loss of love and affection' as a separate head.

¶127

35. The Constitution Bench in Pranay Sethi has also not under conventional head included any compensation towards 'loss of love and affection' which have been now further reiterated by three-Judge Bench in United India Insurance Company Ltd. (supra). It is thus now authoritatively well settled that no compensation can be awarded under the head 'loss of love and affection'.

¶128

36. The word 'consortium' has been defined in Black's law Dictionary, 10th edition. The Black's law dictionary also simultaneously notices the filial consortium, parental consortium and spousal consortium in following manner:

¶129

Consortium 1. The benefits that one person, esp. A spouse, is entitled to receive from another, including companionship, cooperation, affection, aid, financial support, and (between spouses) sexual relations a claim for loss of consortium.

¶130

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¶131

• Filial consortium A child's society, affection, and companionship given to a parent.

¶132

• Parental consortium A parent's society, affection and companionship given to a child.

¶133

• Spousal consortium A spouse's society, affection and companionship given to the other spouse.

¶134

37. The Magma General Insurance Company Ltd. (Supra) as well as United India Insurance Company ltd. (Supra), Three-Judge Bench laid down that the consortium is not limited to spousal consortium and it also includes parental consortium as well as filial consortium. In paragraph 87 of United India Insurance Company Ltd. (supra), 'consortium' to all the three claimants was thus awarded. Paragraph 87 is quoted below:

¶135

87. Insofar as the conventional heads are concerned, the deceased Satpal Singh left behind a widow and three children as his dependants. On the basis of the judgments in Pranay Sethi (supra) and Magma General (supra), the following amounts are awarded under the conventional heads:

¶136

i) Loss of Estate: Rs. 15,000

¶137

ii) Loss of Consortium:

¶138

a) Spousal Consortium: Rs. 40,000

¶139

b) Parental Consortium: 40,000 x 3 = Rs. 1,20,000

¶140

iii) Funeral Expenses: Rs. 15,000

¶141

38. Learned Counsel for the Appellant has submitted that Pranay Sethi has only referred to spousal consortium and no other consortium was referred to in the judgment of Pranay Sethi, hence, there is no justification for allowing the parental consortium and filial consortium. The Constitution Bench in Pranay Sethi has referred to amount of Rs. 40,000/- to the 'loss of consortium' but the Constitution Bench had not addressed the issue as to whether consortium of Rs. 40,000/- is only payable as spousal consortium. The judgment of Pranay Sethi cannot be read to mean that it lays down the proposition that the consortium is payable only to the wife.

¶142

39. The Three-Judge Bench in United India Insurance Company Ltd. (Supra) has categorically laid down that apart from spousal consortium, parental and filial consortium is payable. We feel ourselves bound by the above judgment of Three Judge Bench. We, thus, cannot accept the submission of the learned Counsel for the

¶143

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¶144

Appellant that the amount of consortium awarded to each of the claimants is not sustainable.

¶145

40. We, thus, found the impugned judgments of the High Court awarding consortium to each of the claimants in accordance with law which does not warrant any interference in this appeal. We, however, accept the submissions of learned Counsel for the Appellant that there is no justification for award of compensation under separate head 'loss of love and affection'. The appeal filed by the Appellant deserves to be allowed insofar as the award of compensation under the head 'loss of love and affection'." ( Emphasis Mine)

¶146

Thus keeping in view the above settled legal position it is evident that the tribunal has committed manifest illegality in not awarding the loss of consortium and suitable compensation under other conventional heads to all the claimants/ respondents. All the claimants/ respondents being widow and children of the deceased were otherwise entitled for consortium @ Rs. 40000/- each and also to enhanced compensation with regard to other conventional heads and if the compensation under the head of loss of consortium and compensation under other conventional heads, excluding compensation under loss of love and affection, which is not admissible, would have been added to the loss of dependency calculated by this Court the whole amount of compensation may travel well above Rs. 5,00,000 (five lacs). It is not so that this court could not enhance the amount of compensation even if an appeal or cross objection has not been filed by the claimants. The function of the Tribunal or court under Section 168 of the Motor Vehicles Act, 1988 is to award "just compensation" . The Motor Vehicles Act is a beneficial and welfare legislation. A "just compensation" is one which is reasonable on the basis of evidence produced on record. It cannot be said to have become time-barred. Further, there is no need for a new cause of action to claim an enhanced amount. In this regard reference may be taken of Ramla and Others vs. National Insurance Company Limited and Others MANU/SC/1362/2018 : (2019) 2 SCC 192 and Nagappa v. Gurudayal Singh and others, (2003) 3 SCC 274. But keeping in view the fact that

¶147

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¶148

the matter was earlier settled before tribunal on the basis of compromise and it was due to the fact that the driving license of the driver was subsequently found fake, the case was reopened on the application moved by the insurance company, this Court is refraining itself from enhancing the amount of compensation as the same appears to be just. Thus keeping in view all the facts and circumstances of the case and for the reasons stated above, I do not find any reason or occasion to interfere in the impugned judgment and award passed by the tribunal. Resultantly the appeal filed by the insurance company is dismissed with costs of Rs. 25,000/-.

¶149

The cost of Rs. 25000/- shall be deposited by the appellant insurance company before the Senior Registrar of this Bench within four weeks from today, failing which the same shall be recoverable as arrears of land revenue by the Collector, Lucknow. The cost of Rs. 25,000/- on being recovered shall be paid to the claimants/respondents no. 1 to 5, after their due identification.

¶150

The record of the tribunal be immediately transmitted to the tribunal.

¶151

If statutory deposit of Rs. 25000/- has still not been remitted to the tribunal the same may also be remitted immediately.

¶152

Order Date: 21.02.2022

¶153

Praveen

¶154

Digitally signed by PRAVEEN KUMAR Date: 2022.02.22 16:50:16 IST Reason: Location: High Court of Judicature at Allahabad, Lucknow Bench

New India Assurance Co. Ltd. Thru. Administrative Officer v. Smt. Prema Devi and 6 Others

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New India Assurance Co. Ltd. Thru. Administrative Officer v. Smt. Prema Devi and 6 Others

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