Partly allowed

New India Assurance Co. Ltd. v. Girdharlal Popatlal Barae

Gujarat HC13 Jun 2014FA/487/2003

Case brief

AI extract

What is this about?

This First Appeal challenged the Motor Accident Claims Tribunal's compensation award. The High Court held that the multiplier for future economic loss must be based on the deceased's age, not dependents'. It reduced the compensation to Rs. 10.35 lakhs, dismissing the claimants' cross objections regarding gratuity.

What did the court decide?

Compensation reduced to Rs. 10,35,000 with 9% interest; impugned judgment modified.

New India Assurance Co. Ltd. Vs Girdharlal Popatlal… — Execution and Attachment | Gujarat HC (2014)

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C/FA/487/2003 CAV JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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FIRST APPEAL NO. 487 of 2003 With CROSS OBJECTION NO. 108 of 2006 In FIRST APPEAL NO. 487 of 2003

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FOR APPROVAL AND SIGNATURE:

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HONOURABLE MR.JUSTICE M.R. SHAH

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and

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HONOURABLE MR.JUSTICE R.P.DHOLARIA

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==	========================================	===
1	Whether Reporters of Local Papers may be allowed to see the judgment ?	Yes
2	To be referred to the Reporter or not ?	Yes
3	Whether their Lordships wish to see the fair copy of the judgment ?	No
4	Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?	No
5	Whether it is to be circulated to the civil judge ?	No

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============================================= NEW INDIA ASSURANCE CO LTD.....Appellant(s)

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Versus

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GIRDHARLAL POPATLAL BARAE & 6....Defendant(s)

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============================================= Appearance:

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MR VIBHUTI NANAVATI, ADVOCATE for the Appellant(s) No. 1 (MR SURESHM SHAH), ADVOCATE for the Defendant(s) No. 1 - 2 DELETED for the Defendant(s) No. 6

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MR MEHUL S SHAH, ADVOCATE for the Defendant(s) No. 1 - 2 NOTICE SERVED for the Defendant(s) No. 1 - 5 , 7

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=============================================

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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and

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HONOURABLE MR.JUSTICE R.P.DHOLARIA

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Page 1 of 12

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C/FA/487/2003 CAV JUDGMENT

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Date : 13/06/2014 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

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Feeling aggrieved and dissatisfied with the impugned judgment and award passed by the learned Motor Accident Claims Tribunal (Aux.), Kutch at Bhuj (hereinafter referred to as 'the Tribunal') dated 26.09.2002 passed in Motor Accident Claim Petition No.69 of 1994, by which the learned Tribunal has awarded a total sum of Rs.17,67,000/- towards the compensation for the death of the deceased Mukeshbhai Girdharlal Barai together with running interest at the rate of 9% per annum from the date of claim petition till realization, the appellant herein – original opponent No. 3 – insurance company of the vehicle involved in the accident, has preferred the present first appeal.

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Feeling aggrieved and dissatisfied with the amount of compensation awarded by the learned Tribunal, the original claimants have also preferred the cross objections.

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That in a vehicular accident which took place on 04.12.1993, the deceased Mukeshbhai Girdharlal Baria, who at the relevant time was aged 26 years met with an accident with truck No. GTY-4734 and sustained serious injuries and died on the spot. Therefore, the original claimants – parents filed the claim petition u/s. 166 of the Motor Vehicles Act claiming compensation for a sum of Rs.10,00,000/-. That by submitting an application Exh.35, the original claimants enhanced the claim to Rs.30,00,000/- and the original claimant Nos. 3, 4 and 5 – brothers and sister of the deceased were brought on record and the claim petition was

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C/FA/487/2003 CAV JUDGMENT

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accordingly amended by the learned Tribunal. That the deceased, at the relevant time, serving as a Field Operator in the IOC and getting basic salary of Rs.3643/- per month and was also getting other benefits like bonus, LTC, leave encashment etc. Thus, in all the deceased was getting Rs.4,500/- per month.

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3.1. That the claim petition was opposed by original opponent No. 3 - insurance company alone by filing the written statement at Exh.40.

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3.2. Though served, nobody has appeared on behalf of original opponent Nos. 1 and 2.

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3.3. That the learned Tribunal framed the issues at Exh. 29.

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3.4. That on appreciation of evidence, the learned Tribunal has held original opponent No.1 – driver of the vehicle involved in the accident sole negligent due to which the deceased died in the said vehicular accident.

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3.5. That on appreciation of evidence and considering the evidence on record, the learned Tribunal has considered the income of the deceased at Rs.4,500/- per month. However, thereafter considering the income of the deceased at the time of retirement at Rs.21,000/- per month and thereafter dividing the same by two, the learned Tribunal has considered the datum figure at Rs.12,500/- per month and thereafter deducting 1/3^rd towards the personal expenses of the deceased, the learned Tribunal has considered the loss of dependency at Rs.8,400/- per month. That considering the age of the deceased at 25 years, the learned Tribunal has applied

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C/FA/487/2003 CAV JUDGMENT

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the multiplier of 15 and has thus awarded Rs.15,12,000/towards loss of dependency/future economical loss. That the learned Tribunal has further awarded Rs.2,00,000/- towards the loss of gratuity. The learned Tribunal has also awarded a further sum of Rs.50,000/- towards the loss of conventional amount and Rs.5,000/- towards the funeral expenses etc. Thus, the learned Tribunal has awarded a total sum of Rs.17,67,000/- towards the compensation with interest at the rate of 9% per annum from the date of claim petition till realization.

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Feeling aggrieved and dissatisfied with the impugned judgment and award passed by the learned Tribunal, the appellant – insurance company has preferred the present first appeal and the claimants have also preferred the cross objections to enhance the amount of compensation.

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Shri Vibhuti Nanavati, learned advocate appearing on behalf of the appellant – insurance company has submitted that the learned Tribunal has materially erred in awarding Rs.15,12,000/- under the head of future economical loss considering the loss of dependency at Rs.8,400/- per month. It is submitted that the learned Tribunal has also materially erred in deducting 1/3^rd towards the personal expenditure of the deceased. It is submitted that as such deceased was bachelor and the original claimants were parents, as per the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Smt.) and Others Vs. Delhi Transport Corporation and Another reported in (2009) 6 SCC 121 , 50% of the amount of the income was required to be deducted towards the personal expenditure of the deceased.

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Page 4 of 12

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C/FA/487/2003 CAV JUDGMENT

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5.1. It is further submitted that even the learned Tribunal has materially erred in applying the multiplier of 15 considering the age of the deceased. It is submitted that the learned Tribunal ought to have applied the multiplier considering the age of the parents. In support of his submission that the learned Tribunal ought to have applied the multiplier considering the age of the dependents/parents, Shri Nanavati, learned advocate appearing on behalf of the appellant – insurance company has heavily relied upon the following decisions:

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(1) C.K.Subramonia Iyer v. T. Kunhikuttan Nair reported in AIR 1970 SC 376

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(2) National Insurance Co. Ltd. v. M/s. Swaranlata Das reported in 1993 Suppl (2) SCC 743

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(3) H. S. Ahammed Hussain & Anr. v. Irfan Ahammed & Anr. reported in (2002) 6 SCC 52

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(4) Mohd. Ameeruddin & Anr. v. United India Insurance Company Limited and Another reported in (2011) 1 SCC 304

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(5) National Insurance Company Limited v. Shyam Singh And Others reported in (2011) 7 SCC 65

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(6) New India Assurance Co. Ltd. v. Smt. Shanti Pathak & Ors. reported in AIR 2007 SC 2649

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(7) Kishan Gopal & Anr. v. Lala & Ors. reported in (2014) 1 SCC 244

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(8) General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) & Ors. reported in (1994) 2 SCC 176

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C/FA/487/2003 CAV JUDGMENT

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5.2. Making above submissions and relying upon the aforesaid decisions, it is requested to allow the present appeal and modify the impugned judgment and award passed by the learned Tribunal accordingly. No other submissions have been made on behalf of the appellant – insurance company.

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Present appeal is opposed by Shri Mehul S. Shah, learned advocate appearing on behalf of the original claimants. It is submitted that in the facts and circumstances of the case the learned Tribunal has not committed any error in awarding Rs.15,12,000/- under the head of loss of dependency by considering the dependency at Rs.8,400/- per month. It is submitted that the amount awarded by the learned Tribunal is just compensation which is not required to be interfered by this Court.

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6.1. Shri Shah, learned advocate appearing on behalf of the original claimants has further submitted that the learned Tribunal has not committed any error in applying the multiplier considering the age of the deceased. In support of his above submissions he has relied upon the decisions of the Hon’ble Supreme Court in the cases of Sarla Verma (Supra) as well as in the case of M. Mansoor & Anr. v. United India Insurance Co. Ltd. & Anr. reported in 2013(12) Scale 324.

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6.2. In support of the cross objections, Shri Shah, learned advocate appearing on behalf of the original claimants has vehemently submitted that it has come on record that at the time of retirement, the deceased would have got Rs.3,50,000/towards the gratuity. The learned Tribunal has materially erred in awarding Rs.2,00,000/- only towards the loss of

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C/FA/487/2003 CAV JUDGMENT

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gratuity. Therefore, it is requested to modify the impugned judgment and award passed by the learned Tribunal accordingly and to enhance the amount of compensation accordingly.

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6.3. Making above submissions and relying upon the above decisions, it is requested to dismiss the appeal preferred by the appellant – insurance company and allow the cross objections preferred by the original claimants. No other submissions have been made on behalf of the original claimants.

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Heard the learned advocates appearing on behalf of the respective parities at length and perused the impugned judgment and award passed by the learned Tribunal. We have also appreciated/re-appreciated the entire evidence on record.

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At the outset, it is required to be noted that at the relevant time, the deceased was aged 26 years and was serving in IOC as a Field Operator and was getting Rs.4,500/per month. The deceased was getting some other benefits also. Therefore, as such, the income of the deceased, at the time of his death, can safely be considered at Rs.5000/- per month. As per the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Supra), considering the age of the deceased at 26 years, 50% of the amount is required to be added towards prospective income. As per the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Supra) and as the deceased was bachelor, 50% of the aforesaid is required to be deducted towards personal expenditure of the deceased. Thus, the loss of dependency to the original claimants/parents would come to Rs.3,750/- per month.

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C/FA/487/2003 CAV JUDGMENT

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Looking to the age of the deceased i.e. 25 years, as per the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Supra), multiplier of 18 is required to be applied and therefore the claimants shall be entitled to a total sum of Rs.8,10,000/- (Rs.3,750/- x 12 x 18 = Rs.8,10,000/-) towards the future economical loss against the amount of Rs.15,12,000/- as awarded by the learned Tribunal. Thus, the learned Tribunal has committed an error in awarding Rs.15,12,000/- under the head of future economical loss and the same is contrary to the law laid down by the Hon’ble Supreme Court in the case of Sarla Verma (Supra). Moreover, the claimants shall be entitled to Rs.25,000/- towards the nonconventional amount such as loss of estate, funeral etc.

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Now, so far as the contention on behalf of the appellant – insurance company that the learned Tribunal ought to have applied the multiplier considering the age of the dependents and not the age of the deceased is concerned, it is required to be noted that in the case of Sarla Verma (Supra), the Hon’ble Supreme Court has laid down the law and considered the selection of multiplier. It is required to be noted that in the said decision, the Hon’ble Supreme Court also considered the earlier decisions of the Hon’ble Supreme Court inclusive of the decision in the case of Susamma Thomas (Supra) and other decisions and has held that while awarding future economical loss, the multiplier to be used should be as mentioned in column 4 considering the age of the deceased. In the case of Sarla Verma (Supra), the Hon’ble Supreme Court in para 40 to 42 has observed and held as under:

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“40. The multipliers indicated in Susamma Thomas, Trilok Chandra and Charlie (for claims under section 166 of MV Act) is given below in juxtaposition with the multiplier mentioned in the Second Schedule for

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C/FA/487/2003 CAV JUDGMENT

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claims under section 163A of MV Act (with appropriate deceleration after 50 years):

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Age of the deceased	Multiplier scale as envisaged in Susamma Thomas	Multiplier scale as adopted by Trilok Chandra	Multiplier scale in Trilok Chandra as clarified in Charlie	Multiplier specified in second column in the table in II Schedule to MV Act	Multiplier actually used in Second Schedule to MV Act (as seen from the quantum of compensatio n
[1]	[2]	[3]	[4]	[5]	[6]
Upto 15 yrs	-	-	-	15	20
15 to 20 yrs.	16	18	18	16	19
21 to 25 yrs.	15	17	18	17	18
26 to 30 yrs.	14	16	17	18	17
31 to 35 yrs.	13	15	16	17	15
36 to 40 yrs.	12	14	15	16	15
41 to 45 yrs.	11	13	14	15	14
46 to 50 yrs.	10	12	13	13	12
51 to 55 yrs.	9	11	11	11	10
56 to 60 yrs.	8	10	9	8	8
61 to 65 yrs	6	8	7	5	6
Above 65 yrs.	5	5	5	5	5

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Tribunals/courts adopt and apply different operative multipliers. Some follow the multiplier with reference to Susamma Thomas (set out in column 2 of the table above); some follow the multiplier with reference to Trilok Chandra, (set out in column 3 of the table above); some follow the multiplier with reference to Charlie (Set out in column

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C/FA/487/2003 CAV JUDGMENT

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(4) of the Table above); many follow the multiplier given in second column of the Table in the Second Schedule of MV Act (extracted in column 5 of the table above); and some follow the multiplier actually adopted in the Second Schedule while calculating the quantum of compensation (set out in column 6 of the table above). For example if the deceased is aged 38 years, the multiplier would be 12 as per Susamma Thomas, 14 as per Trilok Chandra, 15 as per Charlie, or 16 as per the multiplier given in column (2) of the Second schedule to the MV Act or 15 as per the multiplier actually adopted in the second Schedule to MV Act. Some Tribunals, as in this case, apply the multiplier of 22 by taking the balance years of service with reference to the retiring age. It is necessary to avoid this kind of inconsistency. We are concerned with cases falling under section 166 and not under section 163A 23 of MV Act. In cases falling under section 166 of the MV Act, Davies method is applicable.

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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 above binding decision of the Hon’ble Supreme Court in which the Hon’ble Supreme Court has laid down the law which if applied as a rule of thumb as observed by the Hon’ble Supreme Court in catena of decisions, the contention on behalf of the appellant – insurance company that while applying the multiplier for the purpose of awarding compensation under the head of future economical loss, the age of the parents/dependents is required to be considered and not the age of the deceased, cannot be accepted. Under the circumstances, as such, the learned Tribunal has not committed any error in applying the multiplier considering the age of the deceased. However, considering the decision of the Hon’ble Supreme Court in the case of Sarla Verma (Supra), looking to the age of the deceased at 25 years, multiplier of 18 is required to be applied as stated hereinabove.

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C/FA/487/2003 CAV JUDGMENT

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Now, so far as the contention on behalf of the original claimants that the learned Tribunal has materially erred in awarding Rs.2,00,000/- only towards the loss of gratuity though it has come on record that at the time of retirement the deceased would have got Rs.3,50,000/- towards gratuity and therefore the the learned Tribunal ought to have awarded Rs.3,50,000/- towards the loss of gratuity is concerned, it is required to be noted that even according to the claimants, the deceased would have got Rs.3,50,000/- towards the gratuity in future i.e. at the time of his retirement i.e. after so many years against which the claimants are paid Rs.2,00,000/- today. Under the circumstances, as such, the learned Tribunal has not committed any error and/or illegality in awarding Rs.2,00,000/- towards the loss of gratuity today. At this stage, it is required to be noted that Shri Nanavati, learned advocate appearing on behalf of the insurance company has not disputed that the claimants shall be entitled to the loss of gratuity. Under the circumstances, no error has been committed by the learned Tribunal in awarding Rs.2,00,000/towards the loss of gratuity.

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Under the circumstances, the cross objections preferred by the original claimants deserves to be dismissed.

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In view of the above and for the reasons stated above, the First Appeal No. 487 of 2003 preferred by the appellant – insurance company succeeds in part and it is held that the claimants shall be entitled to a total sum of Rs.10,35,000/towards the compensation for the death of deceased Mukeshbhai Girdharlal Barai with 9% interest thereon from

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C/FA/487/2003 CAV JUDGMENT

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the date of claim petition till realization. The impugned judgment and award passed by the learned Tribunal is hereby modified to the aforesaid extent.

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In view of the above and for the reasons stated above, Cross Objection No. 108 of 2006 preferred by the original claimants deserves to be dismissed and is accordingly dismissed.

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In the facts and circumstances of the case, there shall be no order as to costs.

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(M.R.SHAH, J.)

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(R.P.DHOLARIA,J.)

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Jani

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New India Assurance Co. Ltd. v. Girdharlal Popatlal Barae

Case brief

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What did the court decide?

New India Assurance Co. Ltd. v. Girdharlal Popatlal Barae

Case brief

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