Allowed

Anjuman Ara And Anr. v. Rabindra Prajapati And Anr.

Jharkhand HC12 Oct 2019MA/212/2017

Case brief

AI extract

What is this about?

The High Court allowed an appeal to enhance compensation for a minor child killed in a road accident. The Court refined the calculation methodology using the Cost Inflation Index, rounding off figures, and applying specific multipliers, while also directing interest payment from the date of the claim application.

What did the court decide?

Compensation enhanced to Rs. 5,80,000/- and interest at 7.5% p.a. from the date of application; direct insurance company to pay within 90 days.

Anjuman Ara And Anr. Vs Rabindra Prajapati And Anr. — Insurance | Jharkhand HC (2019)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI (Civil Miscellaneous Appellate Jurisdiction)

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M. A. No. 212 of 2017

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Anjuman Ara W/o If Abrar @ Md. Ibrarul Haque.

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Md. Abrar S/o Abdul Barik Ansari.

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Both of R/o Village- Dewaria, P.O.- Shahi, P.S.- Hunterganj, Distt.Chatra. .......... Appellants.

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Versus

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Rabindra Prajapati, S/o Lochan Prajapati, R/o Village- Dewaria, P.O. Shahi, P.S.- Hunterganj, Distt.- Chatra.

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Bajaj Allianz General Insurance Company Ltd. 504 Mahabir Tower, Opposite Church Complex main Road, Ranchi, P.O.-G.P.O. P.S.Sadar, Distt.- Ranchi. ………… Respondents

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CORAM: HON'BLE MR. JUSTICE KAILASH PRASAD DEO

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For the Appellants : Mr. Vijay Kumar Sharma, Advocate. For the Respondent No.2 : Mr. S. J. Roy, Advocate

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…........ 07/12.10.2019. Heard, learned counsel for the appellants and learned counsel for the respondent no.2.

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The claimants are the appellants before this Court. The present Miscellaneous Appeal has been preferred for enhancement of the award dated 17.01.2017 in Claim Case No.02 of 2012 passed by learned Motor Accident Claims Tribunal-cum-District Judge-V, Chatra whereby the claimants have been awarded compensation to the tune of Rs.2,50,000/-.

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Learned counsel for the appellants has submitted that deceasedMd. Hasan aged about 7 years died on 02.11.2010 in a road accident caused by Tractor bearing Registration No. JH-13A-7635. The claim application was filed by mother and father of the deceased before the learned Tribunal on 02.01.2012. Learned counsel for the appellants has submitted that learned Tribunal has considered the deceased to be non earning member and awarded compensation to the tune of Rs.2,50,000/- though the claimants are entitled for compensation to the tune of Rs.5,00,000/- in view of the judgment passed by the Apex Court in the case of Kishan Gopal and Another Vs. Lala and Others (2014) 1 SCC 244. Learned counsel for the appellants has further submitted that the High

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Court of Delhi at New Delhi has disposed of different claim applications where the deceased are of different age groups. The facts of the case appellant of the present appeal is identical to the case of Sumer Singh Chauhan vide M.A.C. Application No.580 of 2007 as considered at paragraph nos.41 and 42 of the said judgment. Learned counsel for the appellants has further submitted that the Hon'ble High Court of Delhi has taken note of cost inflation index while computing the compensation to the victim who were minors and not a earning member.

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Learned counsel for the appellants has further submitted that in the case of

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State of Haryana v. Jasbir Kaur, (2003) 7 SCC 484 it has been held by the Apex Court at para-7, which is profitably quoted hereunder:-

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“7. It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which is to be in the real sense “damages” which in turn appears to it to be “just and reasonable”. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be “just” and it cannot be a bonanza; not a source of profit; but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be “just” compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of “just” compensation which is the pivotal consideration. Though by use of the expression “which appears to it to be just” a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression “just” denotes equitability, fairness and reasonableness, and non-arbitrary. If it is not so it cannot be just. (See Helen C. Rebello v. Maharashtra SRTC [(1999) 1 SCC 90 : 1999 SCC (Cri) 197 : AIR 1998 SC 3191] .)”

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Learned counsel for the appellants has further submitted that same view

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has been reiterated by the Apex Court in the case of New India Assurance Co. Ltd. Vs. Satender and others (2006) 13 SCC 60 . Learned counsel for the appellants has further submitted that case of the appellants stands on similar

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facts. Learned counsel for the appellants has further submitted that the High Court of Delhi has taken note of the cost inflation index in the case of Chetan Malhotra Vs. Lala Ram 2016 SCC Online Del 2981 paragraph nos. 65, 66, 67, 68, 69, 70 and 71 of which are profitably quoted hereunder:-

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“65. Having regard to the fluctuating trends in CPI (IW), this court finds the Cost Inflation Index (CII) determined and notified by the Ministry of Finance in Government of India under Section 48 of Income Tax Act, 1961 for each financial year, to be a better method to off-set the effect of inflation on the real value of money. This approach, if followed, would ensure that there is no inconsistency in the awards of compensation in cases of death of children. [R.K. Malik (supra) and Balram Prasad v. Kumar Saha (2014) 1 SCC 384]. Since the amount which requires to be subjected to correction was determined by decision in R.K. Malik wherein cause of action had arisen on 10.11.1997, the financial year 1997-98 is taken as the “base year”.

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66. For ready reference, the rates of Cost Inflation Index (CII) notified by the government till date, to the extent necessary, are reproduced in the table given below:

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*Financial Year*	*CII*
*Before 1/4/1981*	*100*
1981-82	100
1982-1983	109
xxx	xxx
1997-98	331
1998-99	351
1999-2000	389
2000-01	406
2001-02	426
2002-03	447
2003-04	463
2004-05	480
2005-06	497
2006-07	519
2007-08	551
2008-09	582
2009-10	632
2010-11	711
2011-12	785
2012-13	852
2013-14	939
2014-15	1024
2015-16	1081

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CONCLUSIONS

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67. In the considered view of this Court, the cases for compensation on account of death of children in motor vehicular accident cases ought to be dealt with by considering the claim towards pecuniary damages

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(towards loss to estate), in accordance with the age-group wise categories as in R.K. Malik (supra); the first category being of children less than 10 years' in age, the second category being of children more than 10 years' and up to 15 years' in age, and the third category of children more than 15 years' but not having attained the age of majority (18 years). The children in the third category would ordinarily be of such age group as is generally receiving formal school education or those that are (being) imparted special training so as to be equipped with requisite skills to be gainfully employed in a variety of trades. They are after all nearing adulthood and thus, on the threshold of becoming self-reliant. In such cases, the prospects of their employability and earnings in future or present, based on evidence adduced about their academic track record or training in special talents or skills, would need to be borne in mind. As in Lata Wadhwa (supra), the claim for pecuniary damages arising out of death of children of this age group cannot be at par with the lower age groups falling in the first and second category. Therefore, the pecuniary loss to estate due to their death would deserve to be worked out by applying a higher multiplier on the notional income (of non-earning persons) unless, of course, case is properly made out for higher considerations. Noticeably, in Sarla Verma (supra) the Supreme Court specified the multiplier of 18 for cases where the deceased was in the age-group of 15 years' to 20 years' old. For the first and second category, however, the multiplier of 10 and 15 respectively, as used in R.K. Malik (supra), would hold good.

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68. Since in the claims arising out of death of children, generally speaking, (non-earning hands), the income is to be notionally assumed on the basis of the second schedule to the MV Act, the general practice of deduction of one-half (50%) towards personal & living expenses, as applied in case of bachelors above the age of 18 years would be unfair. Pertinently, the notional income specified for non-earning persons in the second schedule is very low as compared to the rates of minimum wages. Therefore, the deduction of one-third (1/3^rd ) on this account, as provided by the first note below the second schedule would only be appropriate.

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69. The award of compensation must necessarily take into account nonpecuniary damages. In R.K. Malik (supra), Rs. 75,000/- awarded by this Court as the “conventional compensation” was enhanced by the Supreme Court by further similar amount (Rs. 75,000/-) as the “compensation for future prospects”. For the reasons set out earlier, in the context of pecuniary loss to estate, the composite sum of nonpecuniary damages of Rs. 1,50,000/- [as awarded in R.K. Malik (supra)] would deservedly be added, but with suitable correction so as to ensure that the deficiency in the real value of money is made good. As noted (in para 46) earlier, the Supreme Court justified the addition of Rs. 75,000/- towards compensation for “future prospects” by noting that the said amount was “roughly half of the amount given on account of pecuniary damages”. Since the court had also upheld the award of similar sum (Rs. 75,000/-) by this court as “conventional compensation”, both amounts of non-pecuniary damages, put together, account for roughly an amount equivalent to the sum computed as pecuniary loss to estate. Thus, this court is of the view that a composite sum equal to the amount computed as pecuniary loss to estate may be added as non-pecuniary damages (inclusive of conventional compensation and for future prospects), in such cases as at hand to arrive at the appropriate figure of ‘just compensation’.

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70. It has been noticed by this Court that the tribunals have been assessing the compensation and awarding it to the last rupee, at times even in the fraction of a rupee, not bothering to follow the practice of rounding off. Awards in at least two of the cases from which the appeals

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at hand arise provide ready illustration. This seems to be not correct. It must be added here that human misery cannot be calculated with such mathematical precision. Even otherwise for convenience of accounting, it is desirable that the amount of award is rounded off to the nearest (if not next) thousands of rupees.

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71. Subject to all other requisite conditions being fulfilled, for the foregoing reasons, in order to bring about consistency and uniformity in approach to the issue, it is held that claims for compensation on account of death of children shall be determined as follows:

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(i). Till such time as the law is amended by the legislature, or the Central Government notifies the amendment to the Second Schedule in exercise of the enabling power vested in it by Section 163-A (3) of the Motor Vehicles Act, 1988, and except in cases wherein the prospects of employability and earnings (in future or present) of the deceased child are proved by cogent and irrefutable evidence, this having regard, inter alia, to the academic record or training in special talents or skills, for computing the pecuniary damages on account of the loss to estate, the notional income of non-earning persons (Rs.15000/p.a.) as specified in the Second Schedule (brought in force from 14.11.1994), shall be assumed to be the income of the deceased child, and taken into account after it is inflation-corrected with the help of Cost Inflation Index (CII) as notified by the Government of India from year to year under Section 48 of the Income Tax Act, 1961, by applying the formula indicated hereinafter.

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(ii) For inflation-correction, the financial year of 1997-1998 shall be treated as the “base year” and the value of the notional income relevant to the date of cause of action shall be computed in the following manner:-

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Rs. 15,000/- × A ÷331

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[wherein the figure of ‘Rs. 15,000/-’ represents the notional income specified in the second schedule requiring inflation-correction; ‘A’ represents the CII for the financial year in which the cause of action arose (i.e. the accident/death occurred); and the figure of ‘331’ represents the CII for the ‘base year’]

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(iii). After arriving at an appropriate figure of the present equivalent value of the notional income (i.e. inflation-corrected amount), it shall be rounded off to a figure in next thousands of rupees.

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(iv). The amount of notional income thus calculated shall be reduced to two-third, the deduction to the extent of one-third being towards personal & living expenses of the deceased, the balance taken as the annual loss to estate (hereinafter also referred to as “the multiplicand”).

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(v). For assessment of the pecuniary damages on account of the death of children upto the age of 10 years, the loss to estate shall be calculated, capitalizing the multiplicand, by applying the multiplier of ten (10).

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(vi). For children of the age-group of more than 10 years upto 15 years, the loss to estate shall be calculated by applying the multiplier of fifteen (15).

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(vii). For children of the age-group of more than 15 years but less than 18 years, the loss to estate shall be calculated by applying the multiplier of eighteen (18).

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(viii). After the pecuniary loss to estate has been worked out in the

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manner indicated above, an amount equivalent to the amount thus computed shall be added to it as the composite nonpecuniary damages taking care of not only the conventional heads but also towards future prospects as awarded in R.K. Malik v. Kiran Pal (2009) 14 SCC 1.

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(ix). The final sum thus arrived at, appropriately rounded off, if so required to the nearest (if not next) thousands of rupees, shall be awarded as compensation for the death of the child.

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Learned counsel for the appellants has further submitted that High Court

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of Delhi at New Delhi while considering the case of appellant, Sumer Singh Chauhan vide M.A.C. Application No.580 of 2007 who lost his son, Yash Chauhan aged about 7 years has granted compensation to the tune of Rs.3,75,000/- along with interest @ 9% per annum from the date of filing of the application, as such the appellant is also entitled for the same. Learned counsel for the appellants has further submitted that in the case of Kishan Gopal and Another (Supra) The Apex Court has given compensation to the tune of Rs.3,50,000/- to the claimants, who lost their child aged about 7 years.

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Learned counsel for the appellants has further submitted that the present award has been also assailed by the Bajaj Allianz General Insurance Company Ltd before this Hon'ble Court in Miscellaneous Appeal No.13 of 2018 and the same has been dismissed by a Co-ordinate Bench of this Hon'ble Court vide judgment dated 28.03.2019, though the present Miscellaneous appeal has been preferred earlier before this Court on 11.04.2017 but remains pending, as such compensation amount may be enhanced by fixing the date of interest from the date of application, in view of Section 171 of the MV Act.

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Learned counsel for the respondent no.2- Bajaj Allianz General Insurance Company Ltd has submitted that the appellant has claimed Rs.1,60,000/- as compensation vide claim application though the learned Tribunal has awarded more than what they have claimed by awarding Rs.2,50,000/-, as such, this Court may not enhance the same.

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After hearing learned counsel for the parties and perusal of the

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record, it appears that the deceased- Md. Hasan died in a road accident on 02.11.2010 at age of 7 years. Section 163-A of the Motor Vehicle Act has been amended on 14.11.1994 by introducing special provision as to payment of compensation on structure formula basis as per 2^nd Schedule. From perusal of the same, it appears that the victim upto 15 years of age has been considered in the scale for multiplier 15. Apart from this Section 163-A sub-Section (3) reads as follows:-

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“The Central Government may, keeping in view cost of living by notification in the official gazette, from time to time amend the 2^nd Schedule”.

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The High Court of Delhi at New Delhi has taken note of such situation as incorporated in paragraph 71 of said judgment as referred above.

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Under the aforesaid circumstances, considering the cost inflation index of the year, 2009-10 as 632 divided by the cost inflation index of base year 199798 as 331, in view of the Central Government notification and multiplying the same with 15,000/- (Rs.15,000/- x A ÷ 331 i.e., 15,000/- x 632/331) gross income come to Rs.28,640/- which is rounded off to Rs.29,000/-. After deducting 1/3 of Rs.29,000/- and applying the multiplier of 10, the pecuniary loss to estate is computed as (Rs.29,000/- x 2/3 x15 = 2,90,000/-). Adding a similar account towards composite non-pecuniary damages, the total compensation work out to Rs.5,80,000/- though the same is reduced to Rs.3,75,000/- in view of the judgment passed in the case of National Insurance Company Ltd. Vs. Farzana 2009 ACJ 2763. In any cause of action arising on or after 10.05.2010 the amount of compensation shall not in any case be less than Rs.3,75,000/- as it has been awarded in the case of Farzana (Supra) .

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The Insurance Company is directed to indemnify the amount within a period of 90 days from today with interest of 7.5% in view of the judgment passed by the Apex Court in the case of Dharmpal and Sons Vs. U.P. State

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Road Transport Corporation [2008 (4) JCR 79 (SC)] from the date of application in view of Section 171 of the MV Act.

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Under the aforesaid circumstances, the appellants are also entitled for a sum of Rs.3,75,000/- along with simple interest @ 7.5% per annum from the date of filing of application, as contemplated under Section 171 of the MV Act.

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Accordingly, the instant miscellaneous appeal is allowed.

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(Kailash Prasad Deo, J.)

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Jay/R.S.

Anjuman Ara And Anr. v. Rabindra Prajapati And Anr.

Case brief

What is this about?

What did the court decide?

Anjuman Ara And Anr. v. Rabindra Prajapati And Anr.

Case brief

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What the court decided

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