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Judgment
Appellants have filed this appeal, challenging the award dated 18.01.2017, whereby, claim petition filed by the claimants, was allowed.
Learned counsel for the appellants has submitted that the Tribunal has erred in exonerating the insurance company of its liability to indemnify the
insured. Learned counsel has further submitted that the amount of compensation granted by the Tribunal was on a higher side.
Learned counsel for the claimants has opposed the appeal and has submitted that the amount of compensation granted by the Tribunal was rather on a
lower side. Income of the deceased had been taken on a lower side and multiplier of ‘7’ was liable to be applied, whereas, multiplier of
‘5’ has been applied. Tribunal has erred in deducting 1/3rd out of the income of the deceased towards his personal expenses, whereas, 1/5th out
of the income of the deceased was liable to be deducted towards his personal expenses. In support of his arguments, learned counsel has placed reliance on the decision given by the Hon'ble Supreme Court in case of National Insurance Company Limited Versus Pranay Sethi and others AIR
2017 (SC) 4973, wherein it was held as under:-
“39. Before we proceed to analyse the principle for addition of future prospects, we think it seemly to clear the maze which is vividly
reflectible from Sarla Verma, Reshma Kumari, Rajesh and Munna Lal Jain. Three aspects need to be clarified. The first one pertains to deduction towards personal and living expenses. In paragraphs 30, 31 and 32, Sarla Verma lays down:-
“30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok
Chandra4, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this 37 (2003) 3 SLR (R) 601
31 Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to
6, and one-fifth (1/5th) where the number of dependent family members exceeds six.
Where the deceased was a bachelorand the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally,
50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically.
Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father.
Thus even if the deceased is survivedby parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated
as the personal and iving expenses of the bachelor and 50% as the contribution to the family. However, where the family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger nonearning sisters or brothers,
his personal and living expenses may be restricted to onethird and contribution to the family will be taken as two-third.”
“ 44. As far as the multiplier is concerned, the claims tribunal and the Courts shall be guided by Step 2 that finds place in paragraph 19 of Sarla
Verma read with paragraph 42 of the said judgment. For the sake of completeness, paragraph 42 is extracted below :-
“42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma
Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for
46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-
5 for 66 to 70 years.”
“59.Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index,
the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.
“61. In view of the aforesaid analysis, we proceed to record our conclusions:-
(i) The two-Judge Bench in SantoshDevi should have been well advised to refer the matter to a larger Bench as it was taking a different view than
what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.
(ii) As Rajesh has not taken note ofthe decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding
precedent.
(iii) While determining the income,an additionof 50% of actual salary to the income of the deceased towards future prospects, where the deceased had
a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50
years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less
tax.
(iv) In case the deceased was selfemployed or on a fixed salary, an addition of 40% of the established income should be the warrant where the
deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.
(v) For determination of themultiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30
to 32 of Sarla Verma which we have reproduced hereinbefore.
(vi) The selection of multiplier shallbe as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment.
(vii) The age of the deceasedshould be the basis for applying the multiplier.
(viii) Reasonable figures on conventionalheads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/-
and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.”
Learned counsel for insurance company has submitted that as per the insurance policy issued by the insurance company in favour of the insured, the risk was covered only when the vehicle was being driven with a valid permit. The owner was not holding a valid permit to ply the vehicle in the
State of Haryana.
Claimants had filed the claim petition seeking compensation on account of death of Lallu in the motorvehicle accident which had occurred on
25.06.2014.
AW-2 Deen Mohammad had been examined by the claimants to prove the manner of accident. The said witness deposed that on 25.06.2014, he was walking on foot along with Lallu and Shokin. They were walking on the Kachha portion of the road. In the meantime, truck bearing No. RJ02G-6529
which was overloaded with haystock struck against Lallu. As a result, Lallu suffered injuries and died.
Admittedly, challan was presented in the court against the appellant no.1 with regard to the accident-in-question.
In the facts and circumstances of the present case, learned Tribunal rightly held that Lallu had died on account of accident which has been caused due to rash and negligent driving of respondent no.1 while driving the offending vehicle.
So far as, quantum of compensation assessed by the Tribunal is concerned, Tribunal has taken the income of the deceased as Rs.4,500/- per month.
Although, it was the case of the claimants that the deceased was earning Rs.15,000/per month but in the absence of any documentary evidence in this
regard, income of the deceased was liable to be assessed as per minimum wages fixed by the State. At the relevant time, minimum wages fixed by the State of an unskilled worker were Rs.4,914/- per month. Claimants were the widow and children of the deceased and were, in all, seven in
number. Hence, 1/5th out of the income of the deceased was liable to be deducted towards his personal expenses, whereas, Tribunal has deducted
1/3rd out of the income of the deceased. Deceased was aged 65 years at the time of the accident. Thus, multiplier applied by the Tribunal to work out
the amount of compensation, i.e., ‘5’ is also on a lower side. In these circumstances, amount of compensation to the tune of Rs.3,11,400/-
granted by the Tribunal to the claimants does not require any reduction.
The next question that requires consideration is as to whether insurance company was liable to indemnify the insured. In the present case, accident had occurred in the State of Haryana. Admittedly, the owner was not holding a valid permit to ply the offending vehicle in the State of Haryana.
Insurance company had issued commercial vehicle package policy in favour of the owner. However, the policy covered use of offending vehicle only under a permit within the meaning of Motor-Vehicles Act, 1988.
Since, in the present case, the offending vehicle was being driven in the State of Haryana without any valid permit at the time of the accident, learned
Tribunal rightly held that the insurance company was not liable to indemnify the insured.
Hence, no ground for interference by this court is made out.
Dismissed.