Chitra. vs Managing Director, Tamil Nadu State Transport Corporation (Villupuram Division-III) Ltd.

R. Mahadevan, J.—C.M.A. No. 1888 of 2010 has been filed by the Claimants and C.M.A. No. 2879 of 2010 has been filed by the Transport Corporation challenging the Award dated 11.9.2009 passed by the Motor Accident Claims Tribunal (Chief Judicial Magistrate), Vellore in M.C.O.P. No. 428 of 2008.

For the sake of convenience, the parties will be referred as per their ranks in Original Petition.

Mr. Sugumaran, the husband of the First Claimant and son of the Second Claimant succumbed in the fatal accident that took place on 9.1.2008. The Claim Petition was filed seeking a Compensation of Rs. 30,00,000/- under various heads alleging, inter alia, that the Driver of the bus belonging to the Transport Corporation was responsible for the accident.

The Respondent resisted the claim alleging that the deceased alone was responsible for the accident and that the age and income of the deceased as alleged in the claim were not true.

The Tribunal, after considering the oral as well as documentary evidence, has partly allowed the Claim Petition by awarding a Compensation of Rs. 8,40,000/- with costs and interest at 7.5% per annum. Aggrieved, the Claimants have filed C.M.A. No. 1888 of 2010 for enhancement and the Respondent has filed C.M.A. No. 2879 of 2010 to set aside the Award.

The Counsel for the Claimant has vehemently contended that the fixation of income of the deceased at Rs. 10,000/- is wrong when sufficient documents were placed to prove the income of the deceased. The Counsel further assailed the Judgment of the Tribunal contending that the Loss of Future Earnings was not considered by the Tribunal. The Counsel also contended that paltry sums have been awarded towards Loss of Love and Affection and Loss of Consortium and therefore, sought for enhancement of the award upto Rs. 4,60,000/-. The Counsel, however, defended the findings in the award with regard to negligence. This extract is taken from Chitra v. Managing Director, Tamil Nadu State Transport Corporation (Villupuram Division-III) Ltd., (2014) 2 TN MAC 299, at page 300 :

Per contra, the Counsel for the Respondent contended that the Tribunal erred in holding that the driver of the Bus belonging to the Transport Corporation was responsible for the accident, that the evidence of PW3, eyewitness ought not have been accepted as he was an interested witness and that award of Compensation of Rs. 8,40,000/- by fixing higher salary and adopting higher Multiplier is unsustainable considering the age and income of the deceased.

Heard both sides and I have perused the records of the Tribunal.

With regard to the contention raised by Counsel for the Respondent regarding negligence, upon perusal of the evidence of PW2 and the evidence of RW1 and documentary evidences, the Tribunal has attributed the negligence to the Driver of the bus which hit the deceased from behind. There is no material on record to show that PW2 was an interested witness. Not even a suggestion, to that effect, was put during his cross-examination. Unless proved otherwise, the statement of PW2 has to be accepted. Hence, the Tribunal was right in attributing the negligence to the driver of the Respondent-Corporation''s Bus.

Now, going into the issue of monthly income, the Counsel for the Claimants has contested that the total income of the deceased at the time of accident and the Future Prospects must be considered while fixing the income of the deceased. This Court is in the affirmative with the arguments of the Counsel for the Claimant. The Tribunal, after considering Exhibits P5, the pension book of the deceased, P7, the Salary Certificate, P8-Bank Pass Book & P9, the Provident Fund Contribution Book and the documentary and oral evidence, has fixed the income of the deceased at Rs. 10,000/-.

From the records, it is evident that the deceased was a retired Military Officer drawing a Pension of Rs. 6,673/- per month. Either the same pension or enhanced pension as fixed by the Central Government would have been received by him throughout his life time if he had not met with the accident. The Tribunal has also fixed the last drawn salary from the current employment at Rs. 7,035/-. The Tribunal has added 50% of the Pension to the current salary. While finalizing the income, the total income that the deceased was drawing at the time of accident is to be considered. However, while considering that the Claimants would receive 50% even after his death, there is only a loss of 50% in the Pension. Hence, only 50% of the eligible pension is liable to be taken up for consideration while awarding Compensation for Loss of Earning.

The purpose of Chapter XI of the Motor Vehicles Act is to award a "Just" Compensation by considering the earning capacity of the deceased as if he had not met with the accident. The Hon''ble Apex Court in Sarla Verma v. Delhi Transport Corporation, 2009 (2) TN MAC 1, has held that Compensation can also be awarded towards future prospects in case the deceased was permanently employed. The Hon''ble Apex Court also laid down certain Guidelines for adopting the Multiplier. This extract is taken from Chitra v. Managing Director, Tamil Nadu State Transport Corporation (Villupuram Division-III) Ltd., (2014) 2 TN MAC 299, at page 301 :

The Hon''ble Apex Court in Santosh Devi v. National Insurance Co. Ltd., 2012 (2) TN MAC 1 (SC) : (2012) 6 SCC 421, has varied slightly from the findings in Sarala Verma''s case with regard to future prospects and held as follows:

"14. We find it extremely difficult to fathom any rationale for the observation made in Paragraph 24 of the Judgment in Sarla Verma''s case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be naive to say that the wages or total emoluments/income of a person, who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put extra efforts to generate additional income necessary for sustaining their families. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased Employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV Employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lac. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the Government Employees and those employed in private sectors but it cannot be denied that there has been incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a Tailor, who earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason, etc. Therefore, we do not think that while making the observations in the last three lines of Paragraph 24 of Sarla Verma''s Judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self-employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he/she becomes victim of accident then the same formula deserves to be applied for calculating the amount of Compensation. This extract is taken from Chitra v. Managing Director, Tamil Nadu State Transport Corporation (Villupuram Division-III) Ltd., (2014) 2 TN MAC 299, at page 302 :

It is also not possible to approve the view taken by the Tribunal which has been reiterated by the High Court albeit without assigning reasons that the deceased would have spent ?rd of his total earning, i.e., Rs. 500/-, towards Personal Expenses. It seems that the Presiding Officer of the Tribunal and the learned Single Judge of the High Court were totally oblivious of the hard realities of the life. It will be impossible for a person whose monthly income is Rs. 1,500/- to spend ?rd on himself leaving ?rd for the family consisting of five persons. Ordinarily, such a person would, at best, spend 1/10th of his income on himself or use that amount as Personal Expenses and leave the rest for his family.

The Tribunal''s observation that the two sons of the Appellant cannot be treated dependant on their father because they were not minor is neither here nor there. In the cross-examination of the Appellant, no question was put to her about the source of sustenance of her two sons. Therefore, there was no reason for the Tribunal to assume that the sons who had become major can no longer be regarded dependant on the deceased.

In the result, the Appeal is allowed, the impugned Judgment as also the award of the Tribunal are set aside and it is declared that the claimants shall be entitled to Compensation of Rs. 2,94,840 [Rs. 1,500 + 30% of Rs. 1,500 = Rs. 1,950 less 1/10th towards Personal Expenses = Rs. 1,755 x 12 x 14 = Rs. 2,94,840]. The Claimants shall also be entitled to Rs. 5,000/- for Transportation of the body, Rs. 10,000/- as Funeral Expenses and Rs. 10,000/- in lieu of Loss of Consortium. Thus, the total amount payable to the claimants will be Rs. 3,19,840/-. The enhanced amount of Compensation i.e. Rs. 1,42,340/- (Rs. 3,19,840 - Rs. 1,77,500) shall carry interest of 7 per cent from the date of Application till realisation.

Respondent No. 1 - Insurance Company is directed to pay to the Appellant the total amount of Compensation within a period of three months by getting prepared a demand draft in her name which shall be delivered to her at the address given in the Claim Petition filed before the Tribunal. While doing so, Respondent No. 1 shall be free to deduct the amount already paid to the Appellant."

Therefore, applying the ratio laid down by the Apex Court in the above Judgments, this Court is of the view that 30% of the last drawn salary can be added with 50% of the Pension while calculating the Loss of Income. Therefore, the total monthly income of the deceased is fixed at Rs. 12,481 (Rs. 7,035 + 30% + 3,336) rounded off to Rs. 13,000/-. As per the dictum of the Apex Court, the Multiplier of 13 has to be applied when the age of the deceased is between 46 to 50. Applying the above enhancements, the award towards Loss of Income is fixed as follows:

Income Per month

Rs. 13,000

1/3rd deduction towards Personal Expenses

Rs. 4,333

Monthly Income

Rs. 8,667

Compensation awarded in Appeal Towards Loss of Earning

Rs. 8667 � 12 � 13 = Rs. 13,52,052.

Upon perusal of the award, this Court also finds that no Compensation has been awarded towards Loss of Consortium of the First Claimant. Considering the age of the deceased and the age of the First Claimant, a sum of Rs. 20,000/- is being awarded to the First Claimant.

Apart from the above, the award of the Tribunal is sustained in all other aspects. Therefore, the Total Compensation is fixed at Rs. 14,12,052/- giving an enhancement of Rs. 5,72,052/- which also would carry interest at 7.5% per annum. Out of the enhanced amount, the First Claimant would be entitled to a sum of Rs. 3,40,000/- and the Second Claimant would be entitled to a sum of Rs. 2,32,052/-. The Respondent-Corporation shall deposit the enhanced amount along with the balance amount with interest at 7.5% per annum within eight weeks from the date of receipt of copy of this Order. The Claimant shall deposit the differential Court-fee within four weeks from today failing which the enhanced amount shall not carry any interest. On deposit by the Respondent-Corporation, the Claimants are entitled to withdraw the same by filing appropriate Application.

In view of the above, C.M.A. No. 1888 of 2010 is allowed and C.M.A. No. 2879 of 2010 is dismissed without costs. The connected Miscellaneous Petition is also dismissed.