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Judgment
Bharati Dangre, J
1 Being aggrieved by the judgment delivered by the Motor Accident Claims Tribunal on 30th August 2011, the appellants (claimants) are before this
Court. The Tribunal partly allowed the Claim Petition filed by the claimants and awarded compensation to the tune of Rs.11,39,752/- with
proportionate costs in favour of the claimants i.e. father and mother of deceased Nilesh who succumbed to the accident on 15th January 2008
involving a vehicle of the respondent no.1 which was insured with Tata AIG General Insurance Co. Ltd, the defendant no.2. The Tribunal recorded a
finding that Nilesh died in an accident in which the vehicle insured with the Insurance Company was registered. It also recorded that the claimants had
proved that the accident occurred on account of rash and negligent driving of the said vehicle. Recording its reasons in great detail about the amount
of compensation to which the claimants were entitled, the claim petition was partly allowed.
2 The applicant questioned the finding recorded by the Tribunal on issue no.3 i.e. the compensation quantified by the Tribunal and had preferred the
present Appeal. The Appeal is staked on the ground that the Tribunal ought to have awarded the claim of Rs.82,10,000/- as claimed by the applicants
when it was satisfied that the accident in question had occurred on account of rash and negligent driving of the vehicle. Another substantial ground
which the Appeal raises is that the deceased was a medical graduate and was on the verge of completion of his post graduation (Diploma) and if the
accident in question would not have occurred, he was on the verge of being conferred with DCH Degree, with bright chances of being recruited as an
Assistant Teacher and would have been entitled for a regular salary of Rs.39,680/-at the basic rate. If this contingency was not acceptable, the
deceased would have been entitled for a stipend admissible to a junior resident-I @ Rs.27,727/-. The multiplier applied by the Tribunal of 13 has also
been assailed and instead it is the submission that considering the age of the deceased, the multiplier of 17 ought to have been applied.
3 With the assistance of learned counsel for the appellant and learned counsel appearing for the insurance company, I have perused the Memorandum
of Appeal and the supporting documents on which the appellant has placed reliance. The deceased Nilesh was travelling in Vehicle No. MH-10-AG-
1652. The said vehicle dashed against a pole and thereafter hit one tree and the FIR record that the driver of the vehicle drove the vehicle rashly and
negligently causing the accident. The post-mortem report divulge that the death of Nilesh was due to shock due to head injury.
Nilesh had completed his MBBS and taken admission to a Diploma course for DCH in the year 2006-2007, on passing his MBBS examination on 23rd
December 2002. He registered himself under the Maharashtra Medical Council Act, 1965. The course in which he was admitted in the year 2006-07
was a two year diploma course. The accident in which he lost his life occurred on 15th January 2008 , barely a few months before he could have been
conferred with the diploma. While undertaking the said course, he was entitled for stipend and the certificate issued by the Dean, Government Medical
College, Miraj has been placed on record which certify that Dr. Nilesh Kamble who was admitted to the DCH course in the year 2006-07 was paid
stipend of Rs.14,484/- per month. Another certificate issued by the Dean on 11th October 2010 certify to the effect that Dr.Nilesh had worked on the
post of Junior Resident I from 15th June 006 to 1st May 2007, Jr. Resident-II from 2nd May 2007 to 14th January 2008. It also certify that the
duration of period for Junior Resident â€" II is recognized an under-graduate teaching experience and the status of resident during JR-II period for
academic purpose is on par with an under-graduate teacher. By placing reliance on the said certificates, the claim was staked before the Motor
Accident Claims Tribunal by the appellants claiming compensation of Rs.82,10,000/-. This covered an amount of Rs.75 lakhs as compensation towards
loss of future income, an amount of Rs.5 lakhs for the pain and shock, an amount of Rs.Two lakhs towards consortium and Rs.10,000/- as funeral
expenses. The claim before the Tribunal contained a statement that the deceased was earning an amount of R.50,000/- per month from the stipend as
well as the private practice of medicine which he had indulged in. Deceased Nilesh was projected to be an intelligent and hard working person and
expecting that he would have excelled as a practitioner in medicine in future, the claim was put forth by the claimants as they were dependent on him.
In the written statement filed before the Tribunal, the owner of the vehicle as well as the Insurance Company denied the claim as being false and
fanciful. It was denied further on the ground that there is no documentary evidence placed on record to demonstrate the monthly earnings of the
deceased to be Rs.50,000/- per month.
4 On the basis of the material placed, both oral as well as documentary, the Motor Accident Claim Tribunal did not accept the stand of the claimant
that the monthly income of deceased was Rs.50,000/-. The Tribunal reasoned that the documents reflecting the stipend for Junior Resident I was to
the tune of Rs.27,422/- and for Junior Resident-II, the stipend is Rs.27,727/-. The Tribunal further recorded that the deceased had not cleared DCH
and he had just taken admission to the said course and therefore, he was not eligible to be appointed as Assistant Lecturer nor he was appointed as
such.
Relying on the judgment in case of Sarla Verma and ors Vs.Delhi Transport Corporation, (Civil Appeal No. 3483 of 2008) the Tribunal held that in
terms of the said judgment, an addition of 50% of actual salary to the actual salary income of the deceased is to be computed towards future
prospects and the deceased was not having permanent job and much less, he was not in actual service as he was pursuing his education and was only
getting stipend. Considering the fact that there was no permanent job for the deceased, the Tribunal held that addition of 50% of actual salary to the
salary income of the deceased cannot be granted as claimed. As far as the private practice is concerned, the Tribunal held there is no evidence being
brought on record to that effect. Resultantly, the Tribunal computed the compensation based on the stipend which the deceased was being paid i.e.
Rs.14,484/-. Accepting this amount and applying the multiplier of 13, considering the age of Claimant No.2, the loss of dependency was calculated as
Rs.11,29,752/- with an yearly dependency of Rs.86,904/-. The appellants have questioned this computation and submit that the Tribunal has completely
ignored the future prospects and since the deceased was already armed with an MBBS degree and was pursuing a diploma in child health, he was
bettering his prospects and that error has been committed by the Tribunal since his potential as an MBBS doctor has been completely ignored.
5 Perused the raison D'etre of the judgment impugned. The reasoning adopted by the Tribunal do not appeal since the Tribunal has not taken into
consideration the fact that the deceased was already a doctor, being awarded with an MBBS degree in the year 2002. He had sought admission to the
DCH course in the year 2006 indicating that from 2002-2006, he ought to be practicing medicine and only when he procured an admission to the
diploma course, he engaged himself in improving his basic qualification by specializing in a branch of child medicine.
By this time, it is settled position in law that the compensation to be awarded under the Motor Accidents Act should be just indicating that it should be
fair, reasonable and equitable by accepted legal standards. The just compensation may not be perfect or absolute but it should be indicative of a
befitting legal compensation as expressed by the Apex Court in the Constitution Bench judgment of National Insurance Company Ltd Vs. Pranay
Sethi & ors, 2017 ACJ 2700 (SC). The concept of “just compensation†has to be viewed through the prism of fairness, reasonableness and non-
violation of the principles of equatibility. In case of death, the legal heirs of the claimants cannot accept the windfall. Simultaneously, the compensation
granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the Tribunal is quite wide, yet it is obligatory
on the part of the Tribunal to be guided by the expression i.e. “just compensationâ€. The determination has to be on the foundation of the evidence
brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied.
6 Thus, what is expected is a balance to be struck between the two i.e windfall and the pittance. As far as the future prospects are concerned, there
has been standardization by a series of judgments from the Apex Court in view of the principle of certainty, stability and consistency. The Constitution
Bench Judgment in Pranay Sethi (supra) has standardized the future prospectsdepending on the age of the deceased and the nature of his
employment. In para 59 of the said Law Report, the Constitution Bench has held that a deceased who held a permanent job with in-built grant of
annual increment, there is an acceptable certainty, but to state that the legal representative of a deceased who was on a fixed salary would not be
entitled to the benefit of future prospects for the purpose of computation of compensation would be in-apposite. It was held by their Lordships of the
Apex Court that one may perceive that comparative measure is certainty on one hand and uncertainty on the other, but such a perception is fallacious
since there is always incessant effort to enhance one's income for sustenance. The Constitution Bench was also conscious of the earnings of a self
employed person and therefore, held that there can be some degree of difference as regards the percentage that is meant for or applied to in respect
of legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self employed or on a fixed salary. Not to
apply the principle of standardization on foundation perceived, lack of certainty would tantamount to remaining oblivious to the marrows of ground
reality and therefore, the degree test is imperative, is what has been held. With the aforesaid observation, the Constitution Bench permitted an addition
of 40% of established income of the deceased towards future prospects and where the deceased was below 40 years, and an addition of 25% where
the deceased was between the age of 40 to 50 years.
7 Applying the principles laid down by the Constitution Bench, it was expected on the part of the Tribunal to compute the future prospects of the
deceased, taking into account his professional qualifications. By acquiring an MBBS degree even without acquiring the post qualifications by way of a
diploma or a post graduate degree, the deceased as a Doctor would be entitled to be earning on his MBBS qualification. As a student of DCH, he was
paid a sum of Rs.14,484/- as a stipend. Stipend, in any case, is not a salary. It is a payment made to a trainee or learner for living expenses, unlike
salary or wages paid to an employee. The whole object in paying stipend is to attend to the bare living expenses of a trainee and it is no employment
offered for training which is for the benefit of student and not the employer. In stricter sense, the said amount of stipend is not considered to be his
salary and therefore, cannot be determinative of the income of the deceased. The claim made by the claimant that the deceased was paid a stipend of
Rs.14,484/- along with his private practice which has been projected as Rs.50,000/- per month inclusive of the stipend was rejected by the Tribunal on
the ground that while pursuing a diploma course, the deceased was not entitled to practice. The deceased surely do not fall within the salaried class
and his earnings as by way of stipend cannot be considered to be his salary since it was not a fixed income nor it is the case that he would have
remained on the said amount of stipend for ever. If the amount of stipend is not to be considered as salary, in that contingency, the assumptive factor
of what could have been the income on completion of DCH by the deceased, was a moot point for consideration which the Tribunal should have
deliberated upon.
8 In Ashwinbhai Jayantibhai Modi Vs Ramkaran Ramchandra Sharma, 2015 (2) SCC 180, the Apex Court was dealing with a similar situation where
the deceased who met with an accident was a medical student. In the said case, the deceased was a diligent and outstanding student of medicine and
was aged 19 years at the time he died in an accident. The Apex Court dealt with a claim where the Tribunal ascertained the future income of the
deceased at Rs.18,000/- per month and after deduction of 1/3rd of his income towards personal expenses, it calculated the loss of dependency to the
parents of the deceased by reckoning it as Rs.12,000/- per month. The High Court affirmed the future income of the deceased at Rs.18,000/- per
month as determined by the Tribunal and deducted 50% total expended. The Apex Court while considering the case of a 19 year old who was
pursuing his medical degree with good marks at the time of the accident, relying upon the judgment of the Apex Court in Arvind Kumar Mishra Vs
New India Assurance Co. Ltd, 2010(10) SCC 254, held that the Tribunal and High Court has not taken into consideration that the deceased was a
student of medicine at the time of the accident while determining his future income. The Courts below, according to the Apex Court, had wrongly
ascertained the future income of the deceased at only Rs.18,000/- per month which was found to be too less for medical graduate these days. It would
be appropriate to refer to the relevant observation of the Apex Court in para 10 and 11 :-
“10 The Tribunal and the High Court have not taken into proper consideration that the deceased was a student of medicine at the time of accident
while determining his future income. The Courts below have wrongly ascertained the future income of the deceased at only Rs.18,000/- per month,
which in our view, is too less for a medical graduate these days. Therefore, the Courts below have failed in following the principles laid down by this
Court in this aspect in the above case.
11 The deceased was a diligent and outstanding student of medicine who could have pursued his M.D after his graduation and reached greater
heights. Today, medical practice is one of the most sought after and rewarding professions. With the tremendous increase in demand for medical
professionals, their salaries are also on the rise. Therefore, we have no doubt in ascertaining the future income of the deceased at Rs.25,000/- per
month i.e. Rs. 3,00,000/- p.a. per annum. Further, deducting 1/3rd of the total annual income towards personal expenses as per Oriental Insurance Co.
Ltd Vs. Deo Patodi and applying the appropriate multiplier of 13, keeping in mind age of the parents of the deceased, as per guidelines laid down in
Sarla Verma case, we arrive at a total dependency at Rs.26,00,000/- [(Rs.3,00,000 minus 1/3 x Rs.3,00,000) â€" x 13]
9 Resultantly, the Apex Court held the claimants entitled for loss of dependency to the tune of Rs.20 lakhs and awarded total compensation of
Rs.27,25,000/- with interest @ 9% p.a. The future income of the deceased was calculated to be Rs.25,000/- per month i.e. Rs.3 lakhs per annum.
10 In applying the principle laid down by the Apex Court in the aforesaid judgment, the deceased who was a medical graduate and was practicing
medicine for four years before seeking admission to the DCH course where he was held entitled for the stipend is therefore, entitled for considering
his income as Rs.27,727/- which is the stipend of Jr. Resident I and Jr. Resident II. The deceased is already issued a certificate by the Dean,
Government Medical College, Miraj certifying that he has worked as Junior Resident and particularly as Jr. Resident II from 2nd May 2007 to 14th
January 2008 and this duration of period is recognized as under-graduate teaching experience and the status for academic purpose is on par with
under-graduate teachers. Relying on the said certificate, the earnings of the deceased shall be taken at Rs.27,727/- and the loss of dependency would
have to be calculated taking into account the said figure.
11 The Tribunal has fallen into grave error in applying the multiplier of 13, considering the age of the claimants. The Tribunal has seriously erred in
considering the age of the claimants to be the multiplier. In Sube Singh & Anr Vs. Shyam Singh & Anr, (2018) 3 SCC 18, the Apex Court has
clarified the persisting conundrum and conclusively culled out the legal position that the multiplier should depend on the age of the deceased and not on
the age of dependents. The application of multiplier of 13 in the present case is therefore, not sustainable and therefore the multiplier of 17 deserves to
be allowed while calculating loss of dependency. Further, by applying the standard as laid down in Pranay Sethi's judgment, the claimants are entitled
for an amount of Rs.15,000/- towards funeral expenses and Rs.15,000/- towards loss of estate.
12 Considering the aforesaid entitlement of the claimants, the compensation would have to be worked in the following manner :-
Loss of dependency
(considering the income
as 27,727) Rs.27,727/- x 12 = 3,32,724/-
 + 50% = 4,99,086 x 17
 = 84,84,462 ÷ 2 = 42,44,231
Funeral expenses Rs.15,000/-
Loss of estate Rs.15,000/-
Each appellant/claimant is entitled for compensation of Rs.42,59,231/- subject to the deduction towards personal expenses.
13 From the aforesaid amount, 1/3rd of the annual income towards personal expenses would require a deduction. The Tribunal is not correct in not
deducting the personal expenses from the earnings of the deceased and particularly, when the future prospects are being considered by taking into
account his possible earnings, the amount of expenses also deserve to be deducted.
14 In light of the aforesaid observations, the order passed by the Motor Accident Claims Tribunal stands modified to the aforesaid extent and the
calculation of compensation to be worked out in the manner set out as above.
15 The present Appeal is allowed in the aforesaid terms. If the amount of compensation has been paid to the claimants, the future payment should be
made within a period of six months from today by making the necessary adjustments. If the amount, as directed by the Tribunal has not been paid, the
entire amount reworked as above should be paid to the claimants within a period of six months.