The United India Insurance Co. Ltd. vs Shri Surendra Nath Deka & Ors.

Heard Mr. A. J. Saikia, the learned counsel for the appellant. Also heard Mr. B. K. Jain, the learned counsel for the respondent Nos. 1 to 5 as well as Mr. J. Ahmed, the learned counsel for the respondent Nos. 6 and 7 in the appeal as well as respondent Nos. 2 and 3 in the cross-objection.

By this common judgment, this Court proposes to dispose of MAC Appeal No. 214/2016 as well as Cross Objection No. 15/2017.

The MAC Appeal No. 214/2016 has been filed by the appellant, United India Insurance Company Limited, under Section 173 of Motor Vehicles Act, 1988, impugning the judgment and award dated 06.10.2015, passed by the Motor Accident Claims Tribunal No. 2, Kamrup(M), Guwahati, in MAC Case No. 393/2011, whereby the present appellant was directed to pay a compensation amount of Rs.7,50,000/- (Rupees Seven Lakh Fifty Thousand) to the claimants with interest at the rate of 6% per annum from the date of filing of the claim petition till realization.

The appellant was also given a liberty to recover the compensation paid to the claimant from the owner/insured according to due process of law by the impugned judgment. The appellant/Insurance Company is aggrieved with the quantum of compensation payable to the claimants.

On the other hand, the claimants/respondents have also filed Cross Objection No. 15/2017 impugning the aforesaid judgment and award. They are mainly aggrieved with the quantum of compensation awarded to them asserting that the said quantum is on the lower side.

The facts relevant for consideration of the instant appeal/cross-objection, in brief, are that, on16.03.2007, at about 8:00 PM, the son/brother of the claimants, namely, late Pradip Deka was coming from Mukalmua to his home on his bicycle on 16.03.2007. At that time, a vehicle bearing Registration No. AS-14-A-8545 coming from the same direction in a rash and negligent manner knocked him from backside, causing grievous injuries on his person resulting in his death on the spot. After the death of the late Pradip Deka in the aforesaid vehicular accident, the parents and siblings of the deceased approached the Motor Accident Claims Tribunal No. 1, Kamrup by filing an application under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for death of their son/brother. The appellant/Insurance Company contested the claim of the claimants by filing written statement. The owner and the driver (respondent Nos. 6 and 7 in the appeal) did not contest the case before the Tribunal as such the inquiry proceeded ex-parte against them before the Motor Accident Claims Tribunal.

On the basis of the pleadings of both parties, the Motor Accident Claims Tribunal framed following issues:-

During the inquiry, the claimants side examined two witnesses and exhibited certain documents. The Insurance Company i.e., the present appellant also examined two witnesses in support of their case. However, by the judgment and award dated 06.10.2015, passed in MAC Case No. 393/2011, the Motor Accident Claims Tribunal, Kamrup, Guwahati, allowed the claim of the claimants and directed the present appellant to pay the compensation to the claimants in the manner as already described in the foregoing paragraphs of this judgment.

Mr. A. J. Saikia, the learned counsel for the appellant has submitted that the appellant/Insurance company is basically aggrieved with the quantum of compensation awarded to the claimants by the Motor Accident Claims Tribunal. He, however, fairly submits that though one of the grounds taken in the memo appeal was that the Tribunal has erred in not selecting the proper multiplier on the basis of age of the parents,however, in view of the judgment of the Apex Court in the case of “National Insurance Co. Ltd. Vs. Pranay Sethi” reported in“(2017) 16 SCC 680”, he is not pressing the said ground as the law has been clarified by the Apex Court that it is the age of the deceased which has to be taken into consideration while selecting the multiplier for assessing the compensation to be paid to the claimants.

The learned counsel for the appellant has further submitted that the Tribunal has erred in adding 50% of the income of the deceased towards future prospects as the law has been clarified by the Apex Court in the case of “Pranay Sethi” (supra) that in case where the deceased was a self-employed person, an addition of only 40% of his established income should be there when the deceased is below the age of forty. He submits that in the instant case, the deceased was of thirty-four years of age at the time of his death and was doing his own business and as such as per the mandate of the Apex Court, the addition of 40% to his established income was warranted and not 50% as has been done by the Tribunal. As such, he submits that the compensation awarded to the claimants may be reassessed after adding 40% of the income as future prospect instead of 50% as has been done by the Tribunal.

He further submits that the Motor Accident Claims Tribunal also erred in awarding interest to the future prospect which could not have been done in view of the judgment of the Co-ordinate Benches of this Court in several cases. He submits that in the case of “Khusboo Chirania @ Kanta Chirania Vs. Kamal Kumar” reported in “2018 0 Supreme (GAU) 966”as well as in case of “Nasima Begum Vs. Keramat Ali”reported in “2019 0 Supreme (GAU) 507” and in the case of “Oriental Insurance Company Limited Vs. Smti Champabati Ray and Ors.”(Judgment dated 01.09.2019, in MAC Appeal No. 378/2017) it has been held by this Court that there cannot be any interest on future prospect as same relates to an income to be earned in future. He submits that as such the compensation awarded to the claimants has to be reassessed by deducting the interest awarded on future prospect therefrom.

On the other hand, Mr. B.K. Jain, the learned counsel for the claimants/cross-objector submits that though the Tribunal has allowed the claim petition filed by the claimants, however, it has assessed the compensation awarded to them on a lower side and same is required to be enhanced. He submits that the income of the deceased was taken on a lower side by the Tribunal at Rs.5,000/- per month only, whereas there was clear evidence on record that the deceased was engaged in business of poultry farming as well as he also used to assist in the business of stationery shop of their family.

He also submits that the mother of the deceased has categorically stated in her deposition that the deceased used to earn Rs.12,000/-per month from his business. He submits that the Tribunal had assessed the income of the deceased at Rs.5,000/- only as no documentary evidence could be adduced by the claimants’ side. However, he submits that as the deceased was engaged in a small business of poultry farming and stationery shop, he is not supposed to maintain any documents to prove his income and, in this regard, he submits that the question of adducing evidence in a motor accident claims case is not similar to that of a civil suit.

The learned counsel for the cross-objector also submits that Exhibit-8 and Exhibit-9 clearly shows that the deceased was engaged in the business of poultry farming as well as in the stationery shop, which is sufficient for the purpose of assessing his income at the time of his death. He also submits that apart from the mother of the deceased, the independent witness, who was examined as PW-2, also deposed regarding the business in which the deceased was engaged.

The learned counsel for the claimants/cross objector submits that his income, considering the nature of business in which he was engaged, should be taken at least at the rate of Rs.8,000/- per month. In support of his submission, the learned counsel for the claimant/cross-objector has cited following rulings:-

RamachandrappaVs. Manager, Royal Sundaram Alliance Insurance Company Limited., reported in “(2011) 13 SCC 236”;

“Syed Sadiq Ors. Vs. Divisional Manager, United India Insurance Company Limited”, reported in “(2014) 2 SCC 735”;

“Sanobanu Nazirbhai Mirza and Others Vs. Ahmedabad Municipal Transport Service” reported in "(2013) 16 SCC 719".

The learned counsel for the claimant/cross-objector, however, fairly submits that the addition towards future prospect ought to have been at the rate of 40% of the established income of the deceased as held by the Apex Court in the case of “Pranay Sethi” (supra).The learned counsel for the claimants/cross-objector, however, submits that the Tribunal has erred in not awarding any compensation against loss of consortium to the claimants. He submits that the claimant Nos. 1 and 2 being parents of the deceased and claimant Nos. 3, 4 and 5 being siblings of the deceased are entitled to compensation on account of loss of consortium at the rate of Rs.40,000/- each as held by the Apex Court in the case of “Pranay Sethi” (supra) as well as in the case of “Magma General Insurance Co. Ltd. Vs. Nanu Ram@ Chuhru Ram and Ors.” reported in “(2018) 18 SCC 130”.

The learned counsel for the claimants/cross objector further submits that the Tribunal also erred in awarding an interest at the rate of 6% per annum only on the awarded amount, which is on a much lower side. He submits that the Apex Court and some Co-ordinate Benches of this Court have awarded much higher interest at the rate of 9% per annum in many cases under similar circumstances. In support of his submission, he has cited following rulings: -

“Narendra Singh Vs. Nishant Sharma” reported in “(2015) 14 SCC 353”.

“New India Assurance Company Limited Vs. Lata Agarwal and others”, reported in “2022 6 GLT 89”.

Branch Manager, Cholamandalam Vs. Jitu Bura Gohain”, reported in“(2023) 6 GLT 523”.

The learned counsel for the claimants/cross objector, therefore, submits that in view of the aforesaid rulings of the Apex Court/Co-ordinate Benches of this Court, the interest awarded on the compensation amount should be enhanced to 9% per annum instead of 6% which has been awarded by the Tribunal. He also submits that though in some of the cases by a few Co-ordinate Benches of this Court, it was held that no interest ought to have been awarded on future prospect as the same relates to an income to be given in future. However, he submits that in most of the cases, even the Apex Court has not discriminated in this matter and has awarded interest on the entire awarded amount including the future prospect. He, therefore, submits that the interest should also be awarded on future prospect and for the said purpose, if it is required, the matter may be referred to a Larger Bench of this Court so that the questions on awarding interest on future prospect may be settled for all times to come.

He also submits that the compensation awarded against loss of estate is also on a lower side i.e., Rs.5,000/- only has been awarded. Whereas, same ought to have been at the rate of Rs.15,000/- as settled by the Apex Court in the case of “Pranay Sethi” (supra). He also fairly submits that though the compensation awarded against funeral expense is Rs.25,000/-, same may have to be reduced to Rs.15,000/- in terms of the judgment of the Apex Court in the case of “Pranay Sethi” (supra).

Mr. J. Ahmed, the learned counsel for respondent Nos. 6 and 7, i.e., owner and driver of the offending vehicle submits that though owner and driver of the offending vehicle did not contest the claim case before the Motor Accident Claims Tribunal, neither they preferred any appeal against the impugned judgment and award, however, they should not be made liable to pay the amount to the Insurance Company as the Insurance Company has failed to show anything that there was any breach of policy condition by the owner of the offending vehicle. Neither there is anything on record to show that the driving license of the driver was fake or invalid. He also submits that in the written statement filed by the present appellant before the Motor Accident Claims Tribunal, no such plea was taken by the Insurance Company. Hence, he submits that the direction of the Motor Accident Claims Tribunal in the impugned order that the compensation payable by the Insurance Company to the claimant is recoverable from the respondent Nos. 6 and 7 needs to be modified.

While replying to the submissions made by the learned counsel for the cross-objector/claimants, the learned counsel for the appellant submits that in absence of any concrete proof of earning of the deceased, the Tribunal has rightly assessed the income of the deceased at Rs.5,000/- considering the rate of inflation and other factors at the time of death of the deceased i.e., in the year 2007 when the daily wage of an unskilled worker was about Rs.50/- to Rs.75/- only and such he submits that no interference should be made by this Court on the assessment of daily income of the deceased by the Tribunal.

I have considered the submissions made by learned counsel for both sides and I have also gone through the materials available on record. I have also gone through the rulings cited by learned counsel for both sides in support of their respective submissions.

It appears that both the appeal as well as the cross-objection is directed mainly towards the quantum of the compensation awarded to the claimants. The facts of the accident as well as the negligence on the part of the driver of the offending vehicle are not disputed either in the appeal or in the cross-objection. Hence, this Court would not delve into the undisputed facts.

One of the main grounds taken in the cross-objection is that the Motor Accident Claims Tribunal has erred in assessing the monthly income of the deceased at Rs.5,000/- only. It appears that though the mother of the deceased had deposed that her son used to earn about Rs.12,000/- from his shop as well as his broiler farm. However, she has stated that the broiler farm is no longer in existence. It also appears that though Exhibit-8 and Exhibit-9 does indicate that the deceased was a businessman having a shop as well as a broiler farm. However, the earnings from the said business as well as the broiler farm have not been indicated therein. Hence, this Court is of considered opinion that the Tribunal has not committed any wrong in assessing the monthly income of the deceased at Rs.5,000/- on the basis of a rough estimation.

It also appears that the Tribunal has added 50% of the income of the deceased towards future prospects, however, same appears to be wrong in view of the judgment of the Apex Court in the case of “Pranay Sethi” (supra) which has held that an addition of 40% of established income of the deceased towards future prospect is justified where the deceased was having a fixed income or was a self-employed person. As in the instant case, admittedly the deceased was a self-employed person, the addition towards future prospects has to be only @ 40% of his established income in terms of the observation of the Apex Court in the case of “Pranay Sethi” (supra).

It also appears that the Tribunal also erred in assessing the expenses incurred against funeral expenses on a higher side at the rate of Rs.25,000/-instead of Rs.15,000/- as was directed by the Apex Court in the case of “Pranay Sethi” (supra). Similarly, the Tribunal also erred in awarding only Rs.5,000/-against the conventional head of loss of estates as the same has to be at the rate of Rs.15,000/- in pursuant to the direction of the Apex Court in the case of “Pranay Sethi” (supra).

It also appears that the Tribunal has also erred in granting no compensation against loss of consortium to the claimants. The claimants, who are the parents and siblings of the deceased, in the considered opinion of this Court, are entitled to compensation against loss of filial consortium.

As regards payment of compensation on account of loss of consortium, the Supreme Court of India has observed in the case of “Magma General Insurance Company Limited Vs. Nanu Ram” reported in “(2018) 18 SCC 130” as follows: -

In the instant case, though only mother of the deceased was found to be dependent on the deceased. Hence, it is only her who is entitled to get compensation against loss of dependency. However, the father and other siblings of the deceased are entitled to get compensation on account of loss of filial consortium. As such, each of the siblings as well as father and mother are entitled to get Rs.40,000/- each against the head loss of filial consortium.

The interest @ 6% per annum awarded by the Motor Accident Claims Tribunal on the awarded compensation is also on the lower side considering the rate of interest prevailing in respect of money deposited in Fixed Deposit Account in any nationalized bank at the time when the accident occurred. As such, the interest imposed on the awarded amount is enhanced from 6% per annum to 9% per annum from the date of filing of the claim petition till full realization of the awarded compensation.

As regards the direction of the Tribunal that the Insurance Company may recover the compensation payable to the claimants from the owner/insured, this Court is of considered opinion that since the Tribunal came to a finding that the driver of the offending vehicle was not having any license at all as the driving license, details whereof are mentioned in the Form-54, was found to be issued in the name of one Md. Jabbar Ali whereas, the vehicle was driven at the time of accident by one Pabitra Baishya. The said fact has been established by the Insurance Company by adducing the evidence of DW-1 and DW-2. However, no contest was there from the side of the owner or the driver of the offending vehicle as the inquiry proceeded ex-parte against them. There is no evidence to the contrary from the side of owner or driver of the offending vehicle to show that the driver of the offending vehicle was having a valid driving license at the time of the accident. As such, this Court is unable to arrive at a different finding than that of the Tribunal in this regard.

In view of the discussions made and reasons stated in the foregoing paragraphs, the compensation payable to the claimants is calculated as herein below: -

In view of above discussions, the compensation to be paid by the Insurance company to the claimant is enhanced to Rs.9,02,000/- only. The claimant No. 2 shall be entitled to get compensation computed against the heads- loss of dependency and other conventional heads, whereas, the other claimants shall not be entitled to any compensation against the head- loss of dependency.

The appellant/Insurance Company is directed to deposit outstanding due against the awarded compensation as per the modified award, before the Registry of this Court within a period of four weeks from the date of this judgment. On such deposit being made, same shall be disbursed to the claimants in terms of observations made in the foregoing paragraphs of this judgment, after proper verification.

The appellant/Insurance Company will be at liberty to recover the compensation paid by it to the claimants from the owner/insured in due process of law.

With the above observation, both the appeal as well as cross objection are partly allowed.

Send back the records of the MAC Case No. 393/2011 along with a copy of this judgment to the concerned Tribunal.