Oriental Insurance Co. Ltd. vs Sita Devi and Others

Krishna Murari, J.—This FAFO filed by the appellant Insurance company is directed against the judgment and award dated 15.1.2015 passed by Motor Vehicles Accident Claims Tribunal/Additional District and Sessions Judge, Court No. 19, Allahabad, in M.A.C. No. 770 of 2006 awarding a sum of Rs. 9,23,140/- alongwith simple interest at the rate of 7% per annum from the date of filing of the claim petition till the date of actual payment. The application claiming compensation to the tune of Rs. 12,50,000/- was made by the claimant-respondents on the allegations that on 19.6.1997, Shri Jagnnath Yadav, predecessor-in-interest of the claimant-respondents was travelling from Phulpur to Allahabad by Commandar Jeep No. UP70 G 1039, and at about 9.30 p.m., when it reached near P.S. Tharwai, a Tata 407 Bus bearing No. UP70 B 9441, which was being driven rashly and negligently, hit the Commandar Jeep, in which Jagannath Yadav and other occupants received serious injuries and Jagnnath Yadav expired during his treatment at the Gandhi Memorial Associate Hospital, Lucknow. A First Information Report of the accident was also lodged with P.S. Tharwai, which was registered as Case Crime No. 191/97 under sections 279, 337 and 338, I.P.C. and later on after death of Jagannath Yadav, section 304-A, I.P.C. was also added. It was further pleaded that deceased Jagannath Yadav was employed as Constable in the U.P. police and was aged about 38 years and his monthly salary was Rs. 4404/-. Both the vehicles involved in the accident were insured by the appellant-Oriental Insurance Company Ltd.

After considering the evidence adduced by the parties, oral as well as documentary, Tribunal returned a finding that the deceased Jagannath Yadav was in a permanent job as a police constable in U.P. Police and his age was less than 40 years and at the time of death, his monthly income was Rs. 4,509/-. The Tribunal also added 50% of the income towards future prospects for determining the compensation as the deceased was aged less than 40 years and applying a multiplier of 15, determined a sum of Rs. 9,13,140/-. A sum of Rs. 5,000/- was awarded towards material loss and Rs. 5,000/- towards funeral etc. In this manner, a total compensation of Rs. 9,23,140/- was awarded alongwith 7% interest per annum from the date of filing the claim petition till the date of actual payment.

Learned Counsel for the appellant contends that 50% of the salary has wrongly been added for future prospects in determining the compensation. It has also been submitted that Tribunal has erred in allowing the future prospect, inasmuch as Rule 220-A of Motor Vehicles Rules came into force on 26.9.2011 while the accident took place in 1996. It is further contended that the Rule is prospective and shall apply only in cases, where the accident took place on or after 26.9.2011 and not where the accident took place before the said date. It is next submitted that since the insurance company was subsequently impleaded in the proceedings, as such, the Tribunal is not justified in awarding interest to the claimants with effect from the date of filing of the claim petition.

We have considered the arguments advanced by the learned Counsel for the appellant and perused the record.

In the case of Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) ACJ 1298 : AIR 2009 SC 3104 : (2009) CLT 1055 : (2009) 6 JT 495 : (2009) 6 SCALE 129 : (2009) 6 SCC 121 : (2009) 5 SCR 1098 : (2009) 5 UJ 2280 : (2009) AIRSCW 4992 : (2009) 3 Supreme 487 the Hon''ble Apex Court has held as under:

"In Susamma Thomas, this Court increased the income by nearly 100%, in Sarla Dixit, the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. [Where the annual income is in the taxable range, the words ''actual salary'' should be read as ''actual salary less tax'']. The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments etc.), the Courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances."

The ratio of the decision in the case of Smt. Sarla Varma (supra) was further analysed by the Hon''ble Apex Court in the subsequent decisions rendered in the cases of Sri. K.R. Madhusudhan and Others Vs. The Administrative Officer and Another, (2011) ACJ 743 : AIR 2011 SC 979 : (2011) 162 PLR 487 : (2011) 2 RCR(Civil) 207 : (2011) 2 SCALE 511 : (2011) 4 SCC 689 : (2011) 2 SCC(Cri) 706 : (2011) 2 SCR 1061 : (2011) 1 TAC 874 : (2011) AIRSCW 1390 : (2011) 2 Supreme 86 Santosh Devi Vs. National Insurance Company Ltd. and Others, (2012) ACJ 1428 : AIR 2012 SC 2185 : (2012) 4 SCALE 559 : (2012) 6 SCC 421 : (2012) AIRSCW 2892 : (2012) 3 Supreme 197 and Rajesh and Others Vs. Rajbir Singh and Others, (2013) 2 ACC 841 : (2013) ACJ 1403 : (2013) 3 CTC 883 : (2013) 8 JT 288 : (2014) 173 PLR 779 : (2013) 3 RCR(Civil) 170 : (2013) 6 SCALE 563 : (2013) 9 SCC 54 : (2014) 1 SCC(L&S) 149 and the principles regarding addition to be made to the actual income of the deceased at the time of his death towards future prospect was even made applicable to the persons, who are self employed or engaged on fixed wages. It has been held that, in case of self employed persons or persons with fixed wages, the actual income of the deceased must be analysed for the purpose of computation of compensation by 50%, where his age was below 40, by 30% where he belonged to age of 40-50 and 15% where he was between the age of 50-60. No such addition/enhancement was permissible where the deceased, in such cases, beyond the age of 60 years.

In the present case, the deceased was aged 38 years and was in a permanent job working as a Constable in Police force. There can be no manner of doubt that by the passage of time, till he attained the age of superannuation, his salary would have increased. In view of the law laid down by the Hon''ble Apex Court in the case of Sarla Varma (supra), the Tribunal cannot be said to be unjustified by adding 50% of his wages towards future prospects and, thus, the first argument advanced by the learned Counsel for the appellant has no force and is liable to be rejected.

Now coming to the question of grant of interest by the Tribunal, it may be pointed out that the insurer indemnifies the insured towards third party claim. The liability is that of the owner of the offending vehicle, who has been indemnified by the insurer, and since the claimant is entitled to grant of interest from the date of making of the claim, which is to be paid by the owner of the offending vehicle, who has to be indemnified by the insurance company vide section 149 of the Motor Vehicles Act, 1988, the mere fact that the insurance company was impleaded in the proceedings at a subsequent stage, will have no effect whatsoever on the right of the claimant for being awarded interest from the date of making of the claim.

Under section 171 of the Motor Vehicles Act, the Tribunal is empowered to award, in addition to the amount of compensation, simple interest at such rate and from such date, not earlier than the date of making the claim, as it satisfies.

In the case in hand, the Tribunal has awarded simple interest at the rate of 7% per annum from the date of making of the application and in view of the discussions made hereinabove, the mere fact that insurance company was impleaded in the proceedings at a later stage, will have no effect whatsoever and, thus, the second argument advanced on behalf of the appellant also devoid of merit and is liable to be rejected. No other ground was pressed or argued before us.

As a result of the aforesaid discussions, the appeal is devoid of any merit and, accordingly, stands dismissed summarily. The Registry is directed to return the statutory deposit made before this Court to the Tribunal, which shall be liable to be adjusted towards the payment to be made by the appellant.