Dewan Hari Chand and others vs Municipal Committee of Delhi and others

V.S. Deshpande, C.J.—This claim for compensation is by way of an application u/s 110A of the Motor Vehicles Act, 1939 (the Act,), made by Dewan Hari Chand, who is the father of the deceased. Man Mohan, who was 28 years when he was killed in an accident on 27th January, 1962. The death was due to the negligence of the driver of the D. T. U. bus No. 720. The Motor Accident Claims Tribunal acting under Ss. 110A to 110F of the said Act gave an award of Rs. 2750/- as compensation payable to the father. In an appeal against the said decision u/s HOD by the father of the deceased, the compensation payable to the ''father was enhanced by the learned single Judge of this court to Rs. 11,250/-. Against that decision L. P. A. 124 of 1972 has been filed by Hari Chand, while cross-objections have been filed by the Delhi Transport Corporation.

Dewan Hari Chand had joined his three sons as applicants, but the learned single Judge pointed out that the application could be made only by the legal representative u/s 110A (1) (b) of the Act. Under the Hindu Succession Act. the father was in the first category in the second class of heirs while brothers were in category below him and thus were excluded by him. The case of the brothers of the deceased is, however, relevant in a different context. The case of the applicants was that the deceased was a member of an undivided Hindu family and was carrying on business of photography as a family business. Since the business belonged to the family as a whole, the income from the business also belonged to the family as a whole. Even though, therefore, the brothers of the deceased were not his legal representative and were not, therefore, entitled to make an application u/s 110A, they were entitled to an equal share of the income from the ''family business. This will have to be borne in mind in finding out the amount of the dependency of the father when compensation is to be calculated as due to him for the death of his son, Man Mohan.

Mr. Rajni Kant for the Delhi Transport Corporation has submitted that the present case being typical of numerous claims for compensation which are filed against the Corporation, the respondent is interested in this court laying down the guidelines for the determination of compensation payable to the victims of motor accidents, so that the Corporation may bear them in mind, firstly in settling such claims even without litigation and secondly in defending litigation which ensues from such claims. We would, therefore, consider the following questions of law which arise in this case,

What was the income which was being earned by the deceased, Man Mohan, at the time of his death-

(a) either as the income of the family business or

(b) as his separate income and what is the relevance of each of these two in determining the dependency of Hari Chand ?

At what figure per annum should be fixed the amount of dependency of Hari Chand. that is to say, amount of money which Hari Chand would have received from the deceased if the deceased would not have been killed in the accident ?

What amount of longevity of either Man Mohan or Hari Chand should be taken into account in determining the total amount of compensation payable to Hari Chand by the Corporation on the principle that Hari Chand should be compensated ''for the loss caused to him by the death to the extent he would have received the amount of maintenance from the deceased either till the death of the deceased or till the death of Hari Chand?

What is the effect of the application of Sections 1A and 2 of the Fatal Accidents Act in the calculation of the compensation payable to Hari Chard? Question 4:

We will take the last question first to find out the law which is applicable to the determination of compensation payable for death caused by the negligence of the driver of a motor vehicle and the loss thereby caused to the dependents of the deceased. As was pointed out in Amarjit Kaur v. Vanguard Insurance Co. Ltd., 1969 Acc CJ 286 (Del) , the law applicable to the claim for compensation is the common law of torts as modified by the statutes in India. The first modification was made by the Fatal Accidents Act, 1855, which was based on the Lord Campbell''s Act in England. This was necessary because in common law the death of a person did not provide a cause of action for a suit for compensation to his dependents. It is only because the Fatal Accidents Act provides for the payment of such compensation that the cause of action arises in favour of the dependent of the deceased killed in a fatal accident. One species of such fatal accidents is those caused by motor vehicles which are dealt with by the newly added Secs. 110A to 110F of the Motor Vehicles Act. The provisions of the Motor Vehicles Act only provide a forum and a procedure for the claim for compensation. The substantive law is contained in the Fatal Accidents Act modifying the common law. The application under the Motor Vehicles Act is to be made by the legal representatives. What is the meaning of the term "legal representative"? In the broad dictionary sense, they mean the legal heirs of the deceased who can also represent the estate of the deceased. Who are the legal heirs ? This would be determined in the case of Hindus by the Hindu Succession Act. Unfortunately for the brothers of the deceased, the Hindu Succession Act has made the father of the deceased alone as a preferential heir to exclude the brothers of the deceased. Even under the Fatal Accidents Act, the dependents who can sue for compensation for death include the father but not the brothers.

It may be pointed but that in the United Kingdom also originally the legal representatives who could sue for compensation for the death of a person were limited to father, mother, wife and children. The Fatal Accidents Act has followed the same enumeration of legal representatives. While this enumeration is in accord with the enumeration of legal heirs for the purpose of the succession, the purpose of the Fatal Accidents Act as the substantive law and the Motor Vehicles Act as the procedural law is somewhat different than the purpose of providing heirs to succeed a deceased. The purpose of providing compensation for death is to indemnify persons who were actually dependant on the deceased. While actual dependency could include anybody to whom the deceased was providing maintenance, the legislature while making the legislation was entitled to confine the list of dependents to those of the relations who were maintained by the deceased and exclude non-relations even if they were in ''fact being maintained by the deceased. Lord Campbell''s Act was replaced by a more progressive legislation in the United Kingdom in 1959 and a brand new statute in 1976. Minor brothers and sisters who were actually dependent on the income earned by the elder brother have been included there in the list of dependants who could maintain an action for compensation for the death of an elder brother caused by a fatal accident. Unfortunately, no note has been taken by law makers in India of these legislative changes which have long ago replaced Lord Campbell''s Act in England. The Fatal Accidents Act, 1855 was based on Lord Campbell''s Act and is continuing unamended in India. It is high time that the legislature in India may take note of the lacunae in the Fatal Accidents Act which excludes minor brothers and sisters who are actually maintained by an elder brother from the list of legal representatives entitled to sue for compensation under the Fatal Accidents Act as also under the Motor Vehicles Act. A reform by amending legislation is called for.

As has been pointed out in Gobald Motor Service Ltd. and Another Vs. R.M.K. Veluswami and Others, , there are two bases in the Fatal Accidents Act for seeking compensation for death caused by accident. u/s 1A of the said Act is a claim to compensation for the toss caused to the dependents by the death inasmuch as the dependents are deprived of the maintenance being received from the deceased. Under S. 2 of the said Act the cause of action for com-Densation is the loss to the estate, if any caused by the death. It is only when the deceased was in a position to effect a net saving from his income after maintaining the dependents and himself that'' the estate would have accretion from his income. If his death causes a loss of such accretion, then it would be a loss to the estate. In the present case, the question of loss to the estate does not arise because the income of the deceased was not such as to add accretion to the estate after maintaining the family,

Question No. 1:

While the oral evidence regarding the income of the deceased mainly consisting of the testimony of the father was that the deceased earned about Rs. 1,000/-per month as a photographer, the learned single Judge has held that in the income tax return filed by the H. U. F., the income was Rs. 7,000/- for the year 1961-62. that is prior to the death of the deceased. It may be that most people do not show their full income in the income tax returns, but as a court of law, it would not be open to us to accept the argument that the income of the deceased was, in fact, more than Rs. 7,000/-per annum, which was disclosed in the income tax return. So far as the income of the Hindu undivided family was concerned, therefore, we agree with the learned single Judge that we have to go by the income tax return and take it as Rs. 7,000/- per annum in 1961-62. There is, however, evidence of the father as also of A. W. 11, S. P. Handa, that apart from that income, the deceased was making some other income from slides work and decoration which was about Rupees 300 to Rs. 400 per month. It is contended for the appellant that the learned single Judge has not taken into account this evidence. There are two reasons why we think that this evidence should be taken into account. Firstly, the evidence shows that the deceased was a very talented person and was doing extremely well in his profession. Normally he would have earned more and more with the passage of time. Unfortunately, the claimant has not made any pleading and has not adduced any evidence that there were circumstances which would show that the income of the deceased was liable to increase from year to year. We are, therefore, unable to give effect to the probability which existed that the income of the deceased would not have remained stationary but would have increased from year to year. Secondly, we are distressed by the inadequacy in the law which has prevented the three minor brothers of the deceased from claiming compensation for his death even though they were his real brothers and were actually dependent on the income earned by the deceased.

We are aware of the fact that Rupees 7,000/- per annum has to be taken to be the income of the Hindu undivided family as such. In that income all the members do the family had an equal share on the principle that all the members of the joint Hindu family had equal shares in the property of the joint Hindu family. The learned single Judge has calculated that out of the monthly income of Rs. 600/-, the deceased was entitled to 1/5th, while the father and the three brothers were entitled to 1/5th each. The share off the father, therefore, came to Rs. 120/- per month. Since the brothers were not entitled to claim compensation as legal representatives off the deceased under these two statutes, the maintenance which was received by them actually from the income earned by the deceased cannot be taken into account. The value of the dependency of the father alone has, therefore, to be taken into account,

We however, find no reason why the evidence of Hari Chand and S. P. Handa that the deceased was making Rs. 300/- to Rs. 400/- per month from separate business of slides and decoration should not be considered reliable. Giving credence to it, we are of the view that this separate income of the deceased may be taken at Rs. 360/- per month which represents the mean of the two estimate of Rs. 300/- to Rs. 400/- p. m. given by these two witnesses. Since this income of Rs. 360/- per month was the separate income of the deceased and again because the father of the deceased was presumed to be the Karta of the joint family and also the only grown up person in the family while the brothers were minors, we would think that in the natural course, this separate income of the deceased must in all likelihood have been divided by the deceased between himself and his ''father. Further, the father was the only relation who was entitled to succeed him. We are of the view, therefore, that in addition to Rupees 120/- per month which constituted the dependency of the father out of the income for the family earned by the deceased, Rs. 180/- per month constituted the dependency of the father out of the separate income which was earned by the deceased. The total value of the monthly dependency of the father, therefore, comes to Rs. 300/- per month. Questions 2 and 3:

The dependence of the legal representatives of the deceased is called is this context "dependency". It means the measure of maintenance or support which the dependent received from the deceased. It may be calculated annually. Two methods can be used to calculate it One is to calculate the actual number of years for which the deceased and the dependents were expected to live and to total up the figure of annual dependency for that number of years. Since the dependency was receivable from the deceased by the dependents in annual instalments, a deduction on the ground of acceleration would have to be made from such a total when the court grants compensation in one lump sum payable forthwith. Further deduction will have to be made from such a sum by taking into account the risk of illness or incapacity shortening the working life of the deceased and fatal accidents shortening the actual longevity of the deceased. To avoid these numerous calculations, another method is adopted and has become the standard one. It is to arrive at a figure which would represent the purchase of the dependency for a number of years which would be much shorter than the number of years for which the deceased was expected to live. Mr. Rajni Kant has painstakingly collected the following Supreme Court decisions to help us to arrive at the number of years for which the purchase of the dependency should be arrived at in the present case: Gobald Motor Service Ltd. and Another Vs. R.M.K. Veluswami and Others, , Municipal Corporation of Delhi Vs. Subhagwanti and Others, , C.K. Subramania Iyer and Others Vs. T. Kunhikuttan Nair and Others, , Madhya Pradesh State Road Transport Corporation v. Sudhakar, 1977 Acc CJ 290 : (AIR 1977 SC 1189), and Smt. Manjushri Raha and Others Vs. B.L. Gupta and Others, . We also consulted standard works on payment of compensation and on the law of torts. We find that the fixation of the number of years for the purchase of dependency depends on the number of years that the deceased was expected to live had he not died in the accident.

''The basis of this method is that the actual number of years for which the deceased was expected to live is shortened by off-setting against it the risk of untimely death or incapacity to work caused by accident and illness. Since these off-setting factors are such as have to be taken into account in every case. the difference is caused only by the age of the deceased at the time of his death and the number of years he was expected to live had he not died in the accident.

First, it is useful to refer to the description of this method by Lord Diplock in Mallett v. Mc Monagle, 1969 Ace CJ 312 (House of Lords) paragraph 41. Lord Diplock says that the commonly accepted method of working out the compensation is to provide the dependent legal representatives of the deceased with "a capital sum which with prudent management will be sufficient to supply them with material benefits of the same standard and duration as would have been provided for ''them out of the earnings of the deceased had he not been killed by tortious act".

As for the actual number of years to be adopted as the average for the purchase of the dependency when the deceased is a normal healthy man, Win-field on Torts, quoted in Amarjit Kaur''s case (1969 Acc CJ 286 (Del)) (supra); states the law as follows:

"In the case of death of a normal healthy man, the maximum number of years assuming full dependency is likely to be between 12 and 15 years." Lord Diplock in Mallett''s case gives a somewhat more liberal average in the following words:

"Courts have not infrequently awarded 16 years'' purchase of the dependency. It is seldom that this number of years purchase is exceeded. It represents the capital value of an annuity certain for a period of 26 years at interest rates of 4 per cent; 29 years at interest rates of 4i per cent or 33 years at interest rates of 5 per cent. Having regard to the uncertainties to be taken into account 16 years would appear to represent a reasonable maximum number of years'' purchase where the deceased died in his twenties. Even if the period were extended to 40 years, i. e. when the deceased would have attained the age of 65, the additional number of years'' purchase at interest rates of 4 per cent would be less than four years, at 4 1/2 per cent would be less then 2 1/2 years and 5 per cent would be little more than one year." In the present case, the deceased was 28 years old and healthy. Due to the lacuna in the statutes referred to above, we have not been able to take into account the dependency of the brothers of the deceased as they are not his legal representatives. For these two reasons, we think it would be appropriate to take the maximum as adopted by Lord Dip-lock in Mallett''s case (supra), namely 16 years'' purchase of the dependency, on the special facts of this case.

In C.K. Subramania Iyer and Others Vs. T. Kunhikuttan Nair and Others, , the Supreme Court in para 13 observed that. "The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor". In the present case, we find that the father of the deceased who is the claimant before us, was 66 years of age in 1962 when the deceased died. He is still before us and we are pleased to find him an active person in good health who may live for some more years. The average life expectancy for the purpose of determining the number of years for which the dependency should be purchased is only 16. The actual period of the survival of the claimant after the fatal accident exceeds the average life expectancy of the deceased for this particular purpose. We have, therefore, to go by the average life expectancy of the deceased which is shorter than the actual life span of the claimant after the fatal accident.

The value of the dependency which can be claimed by the father of the deceased at Rs. 300/- per month come to Rs. 3600/- per year and Rupees 57,600/- for 16 years.

Mr. Rajni Kant argued that due to the acceleration of the payment being made in lump sum to the claimant, a deduction should be made ''from this amount which has been determined for being awarded to the claimant as compensation. This would have been done if the compensation had been assessed on the basis of the probable longevity of the deceased. But as pointed out by Lord Diplock in Mallett''s case (1969 Ace CJ 312) (supra) the average of 16 years has been arrived at far below the expected longevity of the deceased. Apart from the calculation made by Lord Dip-lock, we may observe that the rate of interest now current in India is much higher than the rate of interest which has been taken into account by Lord Diplock, even in respect of annuity payable annually. We are not, therefore, inclined to make any deduction from the compensation payable to the claimant on that account.

The amount of Rs. 11,250/- awarded by the learned single Judge (though containing arithmetical error according to Mr. Rajni Kant) has already been paid to the appellant-claimant by the respondent Corporation, Deducting that amount from Rs. 57,600/- the remainder payable to the claimant by this order in this appeal comes to Rs. 46,350/-. We order that the respondent-Corporation shall pay to the claimant this amount of Rs. 46,350/-with interest at six per cent per annum till realisation.

The cross-objection related mainly to the mistake of the learned single Judge in arithmetical calculation. Since the amount of compensation has been enhanced by us that mistake is not now-material as the credit for the whole of the payment has been given to the Corporation as above.

The appeal is allowed in the above terms with no order as to costs.