New India Assurance Company Limited vs Jagdish Yadav

With the consent of parties, appeal is heard finally. The appellant/Insurance Company has filed the present appeal against the award dated 10.07.2018, passed in Claim Case No.693/2015 in favour of respondent No.1.

The respondent No.4 is owner of Bus bearing registration No.MP-10-A-9331 and the respondent No.5 is the driver. The aforesaid bus was insured at the relevant point of time by the New India Assurance Company limited i.e. the present appellant. On 17.01.2015, the said bust dashed a motorcycle driven by Vinod Yadav who was going from Dongargaon to Dhamnod. Due to the aforesaid accident Raghuram @ Prabhuram received the injuries. They were taken to the Hospital and the Vinod was declared dead and Raghuram was referred to Indore for treatment. A criminal case under Section 304-A of the Cr.P.C was registered against driver and owner. The parents i.e. respondent Nos.1 to 3 being dependents of the deceased Vinod claimed the compensation of Rs.50.00 lac.

According to them at the time of accident the deceased was aged about 24 years and employed in Sanghvi Food Pvt. Ltd. and he was earning Rs.15,000/- per month. The respondent Nos.4 & 5 contested the claim case by filing reply. The appellant/Insurance Company also filed reply on the usual grounds like validity of license, fitness certificate violation of terms and conditions of policy. On the basis of pleadings, learned MACT framed 6 issues for adjudication. After appreciating the evidence, learned Tribunal has held that the driver of the offending bus was negligent while driving. Since, the vehicle was found insured at the relevant point of time, therefore, the Insurance Company has been held jointly and separately liable to pay the compensation. Learned MACT has assessed the compensation while taking into consideration the age of the deceased 25 years and annual income Rs.1,28,520/-. Since, three family members were depended on the earning of the deceased, therefore, the learned Tribunal has deducted 1/3rd amount on personal experience. The Tribunal applied the multiplier of 18 and in total awarded the compensation Rs.21,89,136/- vide award dated 10.07.2018.

Being aggrieved by the aforesaid award dated 10.07.2018 Insurance Company has preferred this appeal only on the ground that in case of death of a bachelor the income ought to have been reduced by 50% for deciding just and proper amount of compensation.

In case of Sarla Verma Vs. Delhi Transport Corporation, reported in 2009 ACJ 1298 & National Insurance Company Limited Vs. Pranay Sethi & Others, reported in ILR 2017 SC 5157, the Apex Court has held that where the deceased was a bachelor and claimants are the parents normally 50% is deducted as personal and living expenses. Para 39 of the the judgement passed in the case of Pranay Sethi (Supra) is reproduced below:

"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:

Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this 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 (1/2rd) 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 bachelor and 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 survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living 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 non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third."

Learned Tribunal has wrongly deducted the gross amount income by 1/3rd whereas it should be ½.

In view of the above, impugned award is modified to the following extend:

"MACT held earning of the deceased

=

Rs.1,28,520/-

40% future prospect

=

Rs.51,408/-

Total

=

Rs.1,79,928/-

50% deducted toward personal expenses

Rs.1,79,928 ÷ 2

=

Rs.89,964/-

Multiplier of 18

Rs.89,694 x 18

=

Rs.16,19,352/-

Other heads

+ Rs.30,000/-

Total

=

Rs.16,49,352/-

Thus, the amount of Rs.21,89,136/- is reduced to Rs.16,49,352/-, hence the claimants are entitled to receive Rs.16,49,352/- (Rupees Sixteen Lacs Forty Nine Thousand Three Hundred and Fifty Two Rupees only) instead of Rs.21,89,136/- from the appellant.

In view of the above, this appeal stands allowed in part, to the extent indicated above. The aforesaid amount be released to the claimants forthwith if deposited by the appellant. No order as to costs.

CC as per rules.