Partly allowed

Smt.Mira Prakash Rishwadkar and Ors. v. Shri D.N.Sharma and Ors.

Bombay HC11 Dec 2009FA/60/1997

Case brief

AI extract

What is this about?

The court enhanced compensation awarded in a motor accident claim petition filed under Section 166 of the Motor Vehicles Act 1988. Applying the Sarla Verma guidelines for multiplicand and multiplier, the court allowed a partial appeal and ordered additional compensation.

What did the court decide?

Additional compensation of Rs.1,68,300 with interest at 7.5% per annum from 16th April 1990.

Smt.Mira Prakash Rishwadkar and Ors. Vs Shri D.N.Sharma… — Motor Accident Claims | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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FIRST APPEAL NO.60 OF 1997

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Smt.Mira Prakash Riswadkar & Ors.

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.. Appellants

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versus

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Shri.D.N.Sharma & Ors. .. Respondents

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Mr.Nitin P. Deshpande for the appellants. Mr.S.S.Vidyarathi i/by S.M.Vidyarathi for respondent No.3.

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CORAM : A.S.OKA, J. DATE : 11^th December 2009.

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JUDGMENT:

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. The original claimants in a claim petition filed under section 166 of the Motor Vehicles Act 1988 have preferred this appeal claiming enhancement in compensation. The 1^st appellant is the widow of the deceased and 2^nd to 4^th appellants are the children of the deceased. The accident occurred on 15^th December 1989. A truck driven by the 1^st respondent and owned by the 2^nd respondent has been held responsible for the accident. The 3^rd respondent is the insurer of the truck. The total claim of Rs.9,05,000/- was made by the appellants. The tribunal has granted total compensation of Rs.3,00,000/- with interest at the rate of 12% per annum

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from the date of filing of the claim petition till realisation. The present appeal is preferred for claiming further enhancement of Rs.6,05,100/-.

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The learned counsel appearing for the appellants has invited my attention to the findings recorded by the tribunal. He submitted that both the multiplicand and multiplier applied are on the lower side. He submitted that even income taken in to consideration by the learned Member of the Tribunal for determining the multiplicand is on the lower side. He submitted that future prospects of increase in the income of the deceased have not been considered by the learned Member especially when the deceased was employed in a very reputed company on permanent basis. He, therefore, submitted that the compensation awarded by the Tribunal is on the lower side which requires to be substantially enhanced. The learned counsel appearing appearing for the 3^rd respondent supported the impugned judgment and award by pointing out that the compensation awarded is just and proper and no interference is called for.

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I have given careful consideration to the submissions. The appellants examined one Ajit Ramchandra Patil, an officer of M/s Kirloskar Oil Engines where deceased was employed. He stated that date of birth of deceased was 3^rd September 1944. He stated that as per the office record , the deceased was drawing salary of Rs.3,132/- per month. He stated that there was a revision of pay in April 1992 and April 1995. He stated that if the deceased would have been alive, his salary in January 1996 would have been Rs.6,267/- per month.

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The aforesaid evidence shows that the deceased was a permanent

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employee of a reputed company. His age on the date of the accident was more than 45 but less than 46 years and he was drawing salary of Rs. 3,132/- per month. The evidence of the said officer shows that there were bright prospects of increase in his income and the evidence reflects that by January 1996 his salary would have been increased to Rs.6,267/- which is nearly double the salary payable in the year 1989 at the time of death.

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The 1^st appellant stepped into witness box. In her deposition recorded in 1996 she has disclosed her age as 51 years. Therefore, her age at the time of accident was about 44 years. As far as the children of the deceased are concerned, their ages at the time of accident were 15, 11 and 7 years respectively.

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The learned trial Judge has assessed the dependency at Rs.2,000/per month and has applied multiplier of 12.

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The learned counsel appearing for the appellants relied upon the decision of the Apex Court in the case of Sarla Verma (Smt) & Ors vs. Delhi Transport Corporation & Anr [(2009) 6 Supreme Court Cases 121]. Inviting my attention to various paragraphs he submitted that the said decision will have to be applied and appropriate compensation will have to be determined. Paragraph 24 of the said decision reads thus:

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“24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of

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the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words “actual salary” should be read as “actual salary less tax”). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exception cases involving special circumstances.”

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In view of what is held in the said paragraph, while calculating the multiplicand the amount equivalent to 30% of the income will have to be added to the net income of the deceased on the date of death. In paragraph 30 the Apex Court has observed thus:

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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 standardised 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 (1/3^rd ) where the number of dependent family members is 2 to 3, one-fourth (1/4^th ) where the number of dependent family members is 4 to 6, and one-fifth (1/5^th ) where the number of dependent family members exceeds six.”

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As is apparent from the evidence of the 1^st appellant there were four dependants and therefore 1/4^th of the income will have to be deducted on account of personal expenses. Paragraph 42 of the said decision reads thus:

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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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In view of the said paragraph multiplier of 13 will have to be applied.

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The learned counsel appearing for the 3^rd respondent has placed reliance on the decision of the Apex Court in the case of New India Assurance Co Ltd Vs. Shanti Pathak & Ors (2007 ACJ 2188). He submitted that a larger bench of the Apex Court has applied lesser multiplier in the said decision. He has also placed reliance on another decision of the Apex Court in the case of Tamil Nadu State Transport Corporation Ltd Vs. S.Rajapriya & Ors (2005 ACJ 1441). He pointed out that even in the said case the Apex Court has applied lesser multiplier than what is fixed in the case of Sarla Verma (supra). He placed reliance on the decision of the Apex Court in the case of New India Assurance Co Ltd Vs. Charlie & Anr (2005 ACJ 1131). He has relied upon a decision of the Apex Court in the case of Managing Director, Tamil Nadu State Transport Corporation Ltd Vs. K.I.Bindu & Ors (2006 ACJ 423) where again lesser multipler has been applied. Lastly, he placed reliance on the decision of the Apex Court in the case of U.P.State Road Transport Corporation Vs. Krishna Bala & Ors (2006 ACJ 2114) where the Apex Court has added only 20% of the income on account of future

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prospects of increase in the earnings. His submission is that in view of the aforesaid decisions, the decision in the case of Sarla Verma (supra) need not be followed.

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As far as the decisions of the Apex Court relied upon by the learned counsel appearing for the 3^rd respondent are concerned, the decisions in the case of S.Rajapriya (supra) and Charlie (supra) have been extensively considered by the co-ordinate bench of the Apex Court in the case of Sarla Verma (supra) and therefore it is not necessary to deal with the said decisions. Even the case of Krishna Bala (supra) has been considered by the Apex Court in the decision in the case of Sarla Varma (supra).

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Perusal of the decision of the Apex Court in the case of Sarla Verma (supra) shows that as there was a diversion of views expressed by number of decisions of the Apex Court on the question of computing multiplicand and multiplier, Apex Court has laid down the general principles which will govern the computation of multiplier and multiplicand. Paragraph 14 of the said decision reads thus:

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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 Accidents 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 signature divergence among the Tribunals in determining the quantum of compensation on similar facts, it will lead to dissatisfaction and distrust in the system.”

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In paragraph 18 of its judgment the Apex Court has observed that if various determinants for computing compensation are standardised there will be uniformity and consistently in the decisions. There will be lesser need for detailed evidence and it will be easier for the insurance companies to settle the claims without any delay. Paragraph 19 of the said decision reads thus:

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“19. To have uniformity and consistency, the Tribunals should determine compensation in cases of death, by the following wellsettled steps:

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Step 1 (Ascertaining the multiplicand)

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The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and liviing expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.

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Step 2 (Ascertaining the multiplier)

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Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased.

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Step 3 (Actual calculation)

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The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the “loss of dependency” to the family.

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Thereafter, a conventional amount in the range of Rs.5000 to Rs.10,000 may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5000 to 10,000 should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased.

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The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before

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death (if incurred) should also be added.”

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Thus, the Apex Court has held that for the sake of uniformity and consistently, the Tribunals will have to be determine the compensation in cases of death as per the test laid down by the said decision.

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It is true that the decision the decision in the case of Shanti Pathak & Ors. (supra) is rendered by a bench consisting of 3 Hon’ble Judges of the Apex Court. The perusal of the said decision shows that it does not lay down any law and what is held by the Apex Court is in the fact situation of the said case. As far as law regarding binding precedent is concerned the Apex Court in the case of Rajendra Singh v. State of U.P.,[(2007) 7 SCC 378] , at page 389 quoted with approval a decision of English Court which reads thus:

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19 . In Quinn v. Leathe m E arl of Halsbury, L.C. stated: (All ER p.7 G-H)

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“… that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides.

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The above dictum, as regards the first proposition, was quoted and adopted by the Privy Council in Punjab Co-op.Bank Ltd. v. CIT.” (Emphasis added)

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The decision in the case of K.I.Bindu (supra) is of a co-ordinate bench

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of the Apex Court which is not inconsistent with the view taken in Sarala Varma(supra).

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Thus, so far as this Court is concerned, the determination of the compensation will have to be in accordance with the case of Sarla Verma (supra).

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Now coming to the computation, in terms of paragraph 24 of the decision in the case of Sarla Verma (supra), 30% of the net income will have to be added for the purposes of determining the multiplicand. The witness Ajit Patwardhan stated that the deceased was actually drawing salary of Rs. 3,132/- per month. Broadly, the net income of the deceased on the date of the death can be taken at Rs.3,000/-. A sum of Rs.900/- will have to be added and therefore for the purposes of calculating multiplicand, the income will have to be taken at Rs.3,900/-. As held in the case of Sarla Verma (supra), 1/4^th of the income will have to be deducted on account of personal expenditure. This sum of Rs.925/- will have to be deducted from the said amount. Thus, the monthly dependency will have to be taken at Rs.2,925/-. The yearly dependency will be Rs.35,100/-. As far as multiplier is concerned, the witness examined by the appellants has disclosed the date of birth of deceased as 3^rd September 1934. Therefore, on the date of the accident i.e on 15^th December 1989 the deceased had completed age of 45 years. Going by paragraph 42 of the decision in the case of Sarla Verma (supra), the case of the deceased cannot be considered in the age group of 41 to 45 and therefore the multiplier in the subsequent slab will have to be applied.

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The said multiplier is 13. Thus, the compensation payable to the deceased will be Rs.4,56,300/-. Considering the fact that the accident is of the year 1989, the Tribunal has rightly added usual amount of Rs.12,000/-. Thus, the total amount of compensation payable will be Rs.4,68,300/-. The tribunal has awarded total compensation of Rs.3,00,000/-. Hence, the appellant will be entitled to enhancement of Rs.1,68,300/-. As far as interest is concerned, the rates of the interest of the nationalised banks have considerably come down in the recent past. Therefore, the interest will have to be granted at the rate of 7.5% per annum.

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16. Hence, I pass the following order:

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: O R D E R :

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(a) In addition to the amount awarded by the Tribunal, the appellants will be entitled to additional compensation of Rs.1,68,300/with interest thereon at the rate of 7.5% per annum from 16^th April 1990 till the date of deposit of the amount with the Tribunal.

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(b) The appellants will be entitled to proportionate costs of the appeal.

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(c) Time of four months is granted to the 3^rd respondent to deposit the additional amount of compensation with the Tribunal. After the amount is deposited, the Tribunal will pass appropriate order

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regarding disbursement/withdrawal of the amount.

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(d) The appeal is partly allowed on above terms

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(A.S.OKA,J)

Smt.Mira Prakash Rishwadkar and Ors. v. Shri D.N.Sharma and Ors.

Case brief

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Smt.Mira Prakash Rishwadkar and Ors. v. Shri D.N.Sharma and Ors.

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