Partly allowed

The New India Assurance Company Limited v. Graceamma Francis and Others

Kerala HC18 Feb 2022MACA/1039/2011

Case brief

AI extract

What is this about?

The High Court modified the Tribunal's award in a motor accident appeal. It allowed the appellant insurer's claim to apply a split multiplier for partial loss of dependency due to the deceased's near-retirement, enhancing conventional heads like consortium and funeral expenses to Rs. 100,500.

What did the court decide?

The Tribunal's award was modified; total compensation fixed at Rs. 13,27,528 with interest at 7.5% from 16.01.2010, to be apportioned 50:25:25 among respondents.

The New India Assurance Company Limited Vs Graceamma… — Motor Accident Claims | Kerala HC (2022)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MRS. JUSTICE M.R.ANITHA

¶4

FRIDAY, THE 18^TH DAY OF FEBRUARY 2022 / 29TH MAGHA, 1943

¶5

MACA NO. 1039 OF 2011

¶6

(Against the award dated 02.07.2010 in O.P.(MV) 114 of 2010 in the

¶7

Motor Accidents Claims Tribunal, Kozhikode

¶8

APPELLANT/3rd RESPONDENT:

¶9

THE NEW INDIA ASSURANCE COMPANY LIMITED KOZHIKODE NOW REPRESENTED BY ITS MANAGER, REGIONAL OFFICE, M.G.ROAD, KOCHI-11.

¶10

BY ADVS. SRI.MATHEWS JACOB (SR.) SRI.P.JACOB MATHEW

¶11

RESPONDENTS/PETITIONERS:

¶12

1 GRACEAMMA FRANCIS AND OTHERS

¶13

PABLANIL HOUSE, KUTTIKKATTUR P.O,, KOZHIKODE-673 008.

¶14

2 RIYAN MATHEWS SO.LATE MATHEWS

¶15

PABLANIL HOUSE,KUTTIKKATTUR P.O,KOZHIKODE-673 008.

¶16

3 RYGA MATHEWS DO.LATE MATHEWS PABLANIL HOUSE,KUTTIKKATTUR P.O,KOZHIKODE-673 008.

¶17

BY ADV SMT.K.V.RESHMI

¶18

THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 11.01.2022, THE COURT ON 18.02.2022 DELIVERED THE FOLLOWING:

MACA 1039/2011

JUDGMENT

Dated : 18^th day of February, 2022

¶23

This appeal has been filed against the Award passed in OP. (MV).114/2010 on the file of Principal Motor Accident Claims Tribunal, Kozhikode. Appellants/claimants are the legal heirs of deceased Mathew Benedict who died out of a motor accident occurred on 11.7.2009 at about 7.45 pm near Punjab National Bank, Mini Bye pass road, Kozhikode. It is alleged that while the deceased was standing at the bus stop, bus bearing registration No. KL-11-T-5289, driven by the 1^st respondent came in a rash and negligent manner and hit against the deceased causing fatal injuries. Immediately he was taken to MIMS hospital, Kozikode and then he succumbed to the injuries on the same day. A total compensation of Rs.20,00,000/- was claimed by the appellants/claimants.

¶24

Before the Motor Accidents Claims Tribunal (in short 'Tribunal'), though 1^st and 2^nd respondents were served with notice, no written statement was filed and 3^rd respondent insurer filed written statement admitting the policy coverage and denying the rashness and negligence on the part of the 1^st respondent, the driver of the bus. Claimants were also put to proof regarding age, occupation and income of

¶25

¶26

MACA 1039/2011

¶27

the deceased. Insurer also sought for leave under Section 170 of the Motor Vehicles Act, 1988 (in short the Act).

¶28

There was no oral evidence from either side. Exts.A1 to A5 were marked from the side of respondents/claimants (hereinafter be referred as claimants). On evaluating the pleadings as well as other materials produced the Tribunal awarded a total compensation of Rs.19,42,644/- and that was allowed to be realised with interest at the rate of 7% from the date of petition, ie, 15.1.2010.

¶29

Aggrieved by the quantum of compensation awarded by the Tribunal, 3^rd respondent/Insurance Company came up in appeal before this Court. Adv. Resmi appeared on behalf of respondents. LCR was called for and perused. Heard both sides.

¶30

According to the learned Standing Counsel for the appellants/insurer, the deceased was 57 years old at the time of accident. He had been working as Supervisor in BSNL, Kozhikode. So he would have retired at the age of 58. So he would not have received the same monthly income after one year. The tribunal ought to have fixed a notional income after the retirement period and a split multiplier ought to have been adopted.

¶31

In this context, the learned counsel placed reliance on

¶32

Puttamma & Others v. K.l. Narayana Reddy & Another (2013 (15) SCC 45) and National Insurance Company Ltd., v. Kadeeja Musliyar

¶33

MACA 1039/2011

¶34

¶35

(2021 (3) KLT 45) of this Court. It is also contended that widow is the sole dependent and that also ought to have been considered while calculating the dependency compensation. Hence he seeks for an interference in the award passed by the Tribunal.

¶36

The learned counsel for the respondents on the other hand would contend that as has been held in Sarla Verma v. Delhi Transport Corporation (2010 (2) KLT 802) which has been followed in National Insurance Company Limited v. Pranay Sethi and Ors (2017 (4) KLT 662) and Magma General Insurance Co. Ltd. v. Nanu Ram Alias Chuhru Ram & Ors. (2018 (18) SCC 130) the tribunal ought to have fixed 10% enhancement of monthly salary while fixing the dependency towards future prospects. The counsel also placed reliance on N.Jayasree & Ors. v. Cholamandalam MS General Insurance Company Ltd. (2021 0 Supreme (SC) 627) and Sumathi & Ors. v. M/s.National Insurance Company Ltd. & Anr. (Civil Appeal No.7729/2021 – arising out of SLP.(C).9717/2019 ) and would contend that the procedure of adopting split multiplier has been deprecated by the Apex Court and hence contention to the contra advanced by the counsel for the insurer is not sustainable in law.

¶37

In Sarla Verma , the Apex Court adopted a thumb rule of fixing an addition of 50% of actual salary income of the deceased towards 'future prospects' where the deceased had a permanent job and was

¶38

MACA 1039/2011

¶39

¶40

below 40 years, with a rider that if the notional income is in the taxable range, the actual salary should be read as actual salary less the tax. The addition should be only 30% if the age of the deceased was 40 to 50 years and there should be no addition, where the age of deceased is more than 50 years.

¶41

In National Insurance Co. Ltd v. Pranay Sethi ((2017) 16 SCC 680), a Constitutional Bench of the Apex Court held that the thumb rule of there would be no addition after 50 years will be an unacceptable concept. But taking into account the fact that the salary does not remain the same, when a person is in a permanent job there would always be enhancement due to one reason or other and hence laid down as a thumb rule, that there will be no addition after 50 years will be an unacceptable concept and hence an addition of 15% was fixed if the deceased is between the age of 50 to 60 years and there would be no addition thereafter. In the case of self employed persons of fixed salary also, an addition of 10% towards future prospects was fixed for the age group of 50 to 60 years.

¶42

Admittedly the deceased in the case on hand was 57 years Government employee and hence 15% enhancement on account of future prospects is to be given while fixing the monthly income.

¶43

In Sarla Verma , Apex Court held that personal and living expenses of the deceased should be deducted from the monthly income

¶44

MACA 1039/2011

¶45

¶46

to calculate the contribution to the dependents and when number of dependent family members is between 2 and 3, the deduction towards dependent family members is 1/3 and when number of dependent family members is between 4 and 6 the deduction would be ¼ and it would be 1/5 when the number of family members exceeds six and that is followed

¶47

in Resma Kumari & Ors. V. Madan Mohan & Anr : 2013 (9) SCC 65 and approved by the Constitution Bench in Pranay Sethi .

¶48

Though the learned counsel for the appellant would contend that first respondent, widow is the sole dependent, the other claimants are son and daughter and are legal heirs and nothing to show that they are not dependents. Hence deduction of 1/3 towards personal and living expenses of the deceased adopted by the Tribunal is only to be upheld.

¶49

In Sarla Verma, paragraph 42 which is followed in Pranay Sethi , it has been held that the proper multiplier to be applied is 18 for the age group of 15 to 20 and 21 to 25 years and reduced by one unit for every five years, that is multiplier of 17 for 26 to 30 years, multiplier of 16 for 31 to 35 years, multiplier of 15 for 36 to 40 years, multiplier of 14 for 41 to 45 years, and multiplier of 13 for 46 to 50 years, then reduced by two units for every five years, that is, multiplier of 11 for 51 to 55 years, multiplier of 9 for 56 to 60 years, multiplier of 7 for 61 to 65 years and multiplier of 5 for 66 to 70 years.

¶50

MACA 1039/2011

¶51

¶52

Here, the deceased was aged 57 years at the time of incident. So the multiplier of 9 adopted by the tribunal is the proper multiplier and there is no dispute in that regard also.

¶53

But according to the learned counsel for the appellant, the deceased was 57 years of old at the time of the incident. He would retire at the age of 58. So according to him as per the principles laid down in Puttamma 's case, a split multiplier ought to have been adopted and after 58, the deceased would have retired and so after one year, a notional income has to be fixed by the Court for arriving the monthly income and the application of 9 as the multiplier to the amount fixed while he was in service, will cause great prejudice and he would not have received the same monthly income for nine years. Hence, any amount as reasonable can be fixed after retirement period.

¶54

In Puttamma 's case relied on by the Standing counsel for the Insurance Company, it has been held by the Apex Court that departure from usual multiplier system and adoption of split multiplier by the High Court without disclosing any reason is unsustainable. In that case, the age of the deceased was 48 years and he had been working as a Typesetting Assistant in Computer Section of the Mysore Printers Limited (Deccan Herald). He was drawing salary of Rs.13,331/- p.m. In appeal, High Court adopted a split multiplier and applied multiplier of 10 for the multiplicand of Rs.8,295/- and multiplier of 2 for the multiplicand of Rs.4,147/-

¶55

¶56

MACA 1039/2011

¶57

notionally fixed towards the period after retirement. In that decision, it has been held by the Apex Court that for the determination of compensation in motor accident claims under Section 166 of the Act, the Apex Court followed the multiplier method and in Sarla Verma's case a table was prepared for selection of multiplier based on age group of the deceased/victim. The view taken in Sarla Verma was affirmed by the three-Judge Bench of the Apex Court in Reshma Kumari & Ors. v. Madan Mohan & Anr.,((2013) 9 SCC 65) . It is also held that 1988 Act does not envisage application of split multiplier. So it was held that in the absence of any specific reason and evidence on record, the Tribunal or the Court should not apply split multiplier on routine course and should apply the multiplier as per the decision of the Supreme Court in Sarla Verma as affirmed in Reshma Kumari.

¶58

In National Insurance Company Ltd., v. Kadeeja Musliyar (2021 (3) KLT 45), a learned Single Judge of this Court applied the split multiplier was also relied on by the standing counsel. In that case deceased at the time of accident was 52 years. He had three more years of service. In that context the learned Single Judge adopted split multiplier with multiplicand with full salary for three years and half of that multiplicand for the post retirement period of eight years.

¶59

The learned counsel for the claimants relies on N.Jayasree & Ors. v. Cholamandalam MS Generala Insurance Company Ltd.

¶60

MACA 1039/2011

¶61

¶62

referred above, wherein the Apex Court deprecated the application of split multiplier by the High Court. The deceased in that case was 52 years old and was a Selection Grade Lecturer in Mathematics and was a subject expert. He had qualification of M.Sc M.Phil and he is a M.Sc holder in Mathematics. So the Apex Court taking into account the fact that the teachers especially mathematics teachers are employed after their retirement in coaching centres. The conducting of private tuition classes after retirement would also cause increase of their income after retirement. So it was held that High Court was not justified in applying split multiplier in that case. The learned counsel also would contend that the fact that only one year service is left over cannot at all be taken as a special reason for applying split multiplier.

¶63

Sumathi & Ors. M/s.National Insurance Company Ltd. &

¶64

Anr. (Civil Appeal No.7729 of 2021-arising out of SLP(C).No.9717/2019) was also relied on. In that case also, the deceased was a Government servant and died at the age of 54 years while drawing a salary of Rs.45,643/-. After deducting one-third amount towards personal expenses and applying multiplier of 11, a compensation of Rs.40,16,496/- was awarded towards loss of dependency against which the Insurance Company filed appeal before the High Court and High Court referring to the judgment in Sarla Verma and Puttamma , held that compensation is to be awarded by applying split multiplier. High court

¶65

MACA 1039/2011

¶66

¶67

assessed the compensation by taking the total salary of the deceased for left over service of four years and 50% of salary for the remaining period and awarded a compensation of Rs.24,64,722/- towards loss of dependency instead of Rs.40,16,496/- awarded by the Tribunal. In that context, the Apex Court has found that the High Court applied split multiplier only on the ground that deceased was 54 years of age at the time of accident and left over service was only 4 years and referring to Puttamma's case, it was found that in normal course, compensation is to be calculated by applying the multiplier as per the judgment of this Court in Sarla Verma and split multiplier cannot be applied unless specific reasons are recorded. It is also found that finding of the High Court that deceased was having left over service of only 4 years cannot be construed as a special reason for applying the split multiplier for the purpose of assessing the compensation. It is also held that a normal compensation is to be assessed by applying the multiplier as indicated in Sarla Verma . It is further held that as no special reason is recorded for applying the split multiplier, the judgment of the High Court is to be set aside by restoring the award of the Tribunal.

¶68

In Jayasree the deceased was 52 years old at the time of death and had a permanent job. He was Assistant Professor having the qualification of M.Sc M.Phil and was Selection Grade Lecturer in Mathematics. Evidence on record showed that there is acute shortage of

¶69

MACA 1039/2011

¶70

¶71

lecturers in Mathematics for appointment in Colleges and retired Mathematics Professors are appointed in so many colleges. Mathematics Lecturers hold private tuition classes. That would increase their income manifold after retirement. So taking all those factors into account the Apex Court held that the High Court was not justified in applying split multiplier in the above case.

¶72

Multiplier method is always followed in fixing compensation in Motor Accident Claims under Section 166. It has been laid down as a thumb rule in order to prevent inconsistencies in the assessment of compensation in identical claims though it may not be with mathematical precision. But in cases with specific reason, records and evidence the court is empowered to apply split multiplier also with a mandate that the specific reasons should be assigned for adopting such method.

¶73

The deceased alleged to be a Telephone Supervisor in BSNL. There is no evidence with respect to his educational qualification. In other words there is no material to infer any possibility of the deceased earning any income out of his qualification or merit after retirement. Ext.A4 salary certificate issued by Senior Accounts Officer, BSNL, Calicut certifies that deceased was Sr.TOA(P). It does not signify his designation as a supervisor also. The fact that the deceased would retire within one year on superannuation is not in dispute. So after that he will not get the monthly income as on the date of accident is a fact. So applying the

¶74

¶75

MACA 1039/2011

¶76

same multiplier after retirement within one year would definitely be a windfall. Because the same income would not have been received to the family had he been alive. In Raj Kumar v. Ajay Kumar and Anr [(2011) 1 SCC 343 : 2011 ACJ 1 : 2010 KHC 5021] while dealing with an injury case the Apex Court has held that the provisions of the Act makes it clear that the award must be just, which means that compensation should to the extent possible fully and adequately restore the claimant to the position prior to the accident. In Sarla Verma , Apex Court held that 'just compensation' is adequate compensation which is fair and equitable on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit. So the fact that death occurred in a motor accident cannot give such bonanza to the claimants. That will not be a fair, just and equitable compensation also. So I am of the considered view that since the deceased left only one year of service at the time of death, application of the same multiplicand throughout will be an unjust, unreasonable and disproportionate to the actual loss sustained by the claimants. That is not the purport of just compensation envisaged under Section 168 of the Act. In Sumathi & Others relied on by the learned counsel, the deceased had 4 years left over service and it was in that context the Apex Court set aside the application of split

¶77

MACA 1039/2011

¶78

¶79

multiplier adopted by the High Court.

¶80

Ext.A4 certificate shows the gross earnings as Rs.29,763/-. The monthly income calculated at Rs.26,350/- for computing the dependency seems to be just and proper since it might have been less the tax. That fact is not in dispute also. With that, 15% enhancement towards future prospects to be added.

¶81

So in the present case, for one year multiplicand as per Ext.A4 and 15% enhancement towards future prospects can be applied and for the remaining 8 years ½ of the above to be adopted as the multiplicand i.e. Rs.30,302.5 x ½. So the amount towards loss of dependency would be for one year in which the deceased would have continued in service is Rs.26,350 + Rs.3952.5 (15% of Rs.26,350) = Rs.30,302.5 x 12 = Rs.3,63,630/-. From that 1/3 is to be deducted towards personal and living expense, (Rs.1,21,210/-) i.e. Rs.3,63,630 – Rs.1,21,210 = Rs.2,42,420/-. For the remaining years ½ of the monthly income can be taken as the multiplicand. Then the monthly income would be Rs.15,151/-. Annual income would be Rs.15,151 x 12 = Rs.1,81,812/-. Annual dependency would be Rs.1,81,812 – Rs.60,604 (1/3 of Rs,1,81,812/-) = Rs.1,21,208/-. Multiplier is 8. So the amount will be Rs.9,69,664/-. Total amount towards loss of dependency would be Rs.2,42,420 + Rs.9,69,664 = Rs.12,12,084/-.

¶82

Next contention of the learned counsel for the claimants is

¶83

MACA 1039/2011

¶84

¶85

with regard to the compensation awarded under conventional heads. According to the learned counsel, the amount awarded towards 'funeral expenses' is only Rs.3000/-, towards 'loss of estate' is Rs.2,500/- and towards 'loss of consortium' is only Rs.5000/-. In Pranay Sethi , Constitutional Bench has fixed the compensation under the conventional heads, as Rs.15,000/- each towards loss of estate and funeral expenses and Rs.40,000/- towards loss of consortium. That has been followed in Magma General Insurance Co. Ltd ., with an expansion of the consortium as 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 and 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. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. The greatest agony for a parent is to lose their child during their lifetime and accordingly Rs.40,000/- each was awarded towards filial consortium to the father as well as the unmarried sister due to the death of the son aged 25 years. But once consortium is awarded no amount shall further be awarded under the head of loss of love and affection since it would amount to duplication as has been held

¶86

MACA 1039/2011

¶87

¶88

in The New India Assurance Company Limited v. Somwati (2020 (9) SCC 644) . So the amount granted towards 'love and affection' has to be deducted. So a corresponding enhancement under the conventional heads of loss of estate, funeral expenses and loss of consortium is to be awarded.

¶89

In the present case, 3^rd respondent is an unmarried daughter. So Rs.40,000/- each can be awarded towards 'loss of consortium' to the 1^st and 3^rd respondents. (1^st and 3^rd petitioners in OP(MV).114/2010).

¶90

The Apex Court in Rasmita Biswal & Others v. Divisional Manager, National Insurance Company Ltd., & Another (CDJ 2021 SC 1024 ) has awarded 10% increase to the conventional heads taking into account the directions in Pranay Sethi for 10% enhancement after every three years. Accordingly the claimants in that case were awarded 16,500/- each towards loss of estate and funeral expenses and Rs.44,000 towards spousal consortium by giving 10% enhancement to Rs.15,000/each as well as to Rs.40,000/-. The accident in that case, was on 9.5.2013. In pranay Sethi the Apex Court while declaring 10% enhancement in every three years did not make any reference with respect to the date of accident also. Hence claimants are entitled to get 10% escalation of conventional heads.

¶91

So under the heads 'loss of estate' , 'loss of consortium' and funeral expenses, claimants are entitled to get Rs.16,500/- + Rs.44,000/-

¶92

MACA 1039/2011

¶93

¶94

each to respondents 1 and 3 as well as Rs.16,500/- towards funeral expenses, total Rs.1,21,000/- towards conventional heads. Deducting the amounts awarded by the Tribunal under the heads of loss of consortium, love and affection, funeral, loss of estate etc., the balance amount the claimants are entitled to get under the conventional heads are Rs.1,21,000 – (Rs.3,000 + Rs.10,000 + Rs.2,500 + Rs.5,000) = Rs.1,00,500/-. Hence the total compensation claimants are entitled to get is Rs.13,27,528/- (Rs.12,12,084 + Rs.1,00,500 + Rs.1000 (transportation) + Rs.500 (damage to clothing) + Rs.13,444 (medical expenses)) with interest at the rate of 7.5% from the date of petition i.e 16.01.2010.

¶95

In the result appeal allowed in part and the award passed by the Tribunal is modified finding that respondents/claimants are entitled to realise compensation of Rs.13,27,528/- with interest at 7.5% from the date of petition i.e. 16.01.2010 till realisation. Appellant/insurer shall satisfy the compensation awarded together with interest deducting the amount already paid if any within a period of two months from the date of receipt of a certified copy of this judgment. The compensation awarded shall be apportioned in the ratio 50:25:25 among the respondents/claimants.

¶96

The disbursement of compensation to claimants shall be made taking note of the law on the point and in terms of directives issued by this court in Circular No.3 of 2019 dated 06.09.2019 and clarified

¶97

MACA 1039/2011

¶98

¶99

further in Official Memorandum No.D1-62475/2016 dated 07.11.2019. Respondents/claimants shall provide their Bank Account details (attested copy of the relevant page of the Bank Passbook having details of the Bank Account Number and IFSC Code of the branch) before the Tribunal, with copy to the Standing Counsel for the insurer, within one month from the date of receipt of a certified copy of this judgment.

¶100

In the result appeal stands allowed In part. Parties shall bear their respective costs.

¶101

(sd/-) M.R.ANITHA, JUDGE

¶102

Mrcs/5.1.22

The New India Assurance Company Limited v. Graceamma Francis and Others

Case brief

What is this about?

What did the court decide?

The New India Assurance Company Limited v. Graceamma Francis and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Lazar Vs Vinto

Viswanathan Vs Shanthi

Kumari Vs Vittal

Shibu Khan Vs Anulal

K.Mammotty Vs Varghese

National Insurance Company Ltd. Vs Leelamma