Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

CIVIL APPEAL NOS.  4688­4689 OF 2022
(Arising out of SLP (C) Nos. 8119­8120 of 2019)
Leave granted.
2. The appellants before us are the claimants in an action for
compensation under the Motor Vehicles Act, 1988 (1988 Act). An
accident had occurred on 28th  February 2011 at about 10:45
A.M., which resulted in death of one Bala Babitha, a 37 year old
lady,   and   caused   injuries   to   her   husband   and   her   minor
daughter. The first appellant is the husband of the deceased. The
second and the third appellants are their children, who were
minors by age at the point of time the accident occurred. The
fourth appellant is the mother of the deceased. The first appellant
and the third appellant alongwith the deceased were travelling in
an auto rickshaw from Velachery to Adambakkam in the city of
Chennai, which was hit by a vehicle (bearing registration no. TN04­W­6189). The respondent no. 1 was the owner of that vehicle.
The second respondent is the insurance company, whose policy
covered the offending vehicle. 
3. Claim was lodged by the appellants under Section 166 of the
1988 Act before the Motor Accident Claims Tribunal, Chennai
(the Tribunal). Before the Tribunal, rash and negligent driving of
the offending vehicle was proved, and that finding was not upset
in   appeal   by   the   High   Court   of   Judicature   at   Madras   in   its
judgment delivered on 27th  February 2018. The present appeals
arise from that judgment. The Tribunal awarded compensation in
favour of the appellant no.1 for a sum of Rs.4,77,100/­. The
minor daughter (appellant no.3) of the deceased and the first
appellant   was   awarded   compensation   of   Rs.2,06,000/­.   The
quantum   of   compensation   on   account   of   death   of   said   Bala
Babitha was computed by the Tribunal to be of Rs.36,92,350/­.
Monthly income of the deceased was calculated as one­third of
her husband’s income. The Tribunal found the husband’s income
to be Rs.78,700/­ per month. This finding of monthly income of
the   husband   was   not   disturbed   by   the   High   Court.   The
compensation   amount   was   to   carry   an   interest   of   7.5%   per
annum from the date of filing of the claim, till the date of deposit.
Deposit of the awarded sum was directed to be made within two
months from the date of the award. 
4. Both the insurance company and the appellants preferred
separate appeals in respect of sums awarded as compensation in
relation to the deceased and the injured victims.  The High Court
reduced the sum awarded as compensation in respect of the first
appellant to Rs.3,41,000/­.  As regards the third appellant, award
of Rs.2,06,000/­ as compensation was retained. Compensation
awarded to the family of the deceased victim was modified and
reduced to Rs.32,82,090/­ by the High Court. The Tribunal had
quantified compensation for the surviving members of the family
of deceased on her notional income calculated on the basis of her
husband’s income, following a judgment of this Court delivered in
the case of  Arun   Kumar   Agrawal   And   Another   vs.   National
Insurance Company Ltd. And Others. [(2010) 9 SCC 218]. The
High Court, however, considered her salary in a job she was
engaged in three years back to be the basis for quantifying the
pecuniary loss to be awarded to the surviving members of her
family. Both the Tribunal and the High Court had applied the
multiplier   principle   to   arrive   at   the   figure   of   pecuniary   loss.
Before   us,   arguments   have   been   advanced   on   the   point   of
reduction of compensation to the family of the deceased victim
and we shall confine our judgment to that issue only.  
5. The heads under which award was made by the Tribunal
quantifying   the   compensation   to   be   paid   on   account   of   the
deceased victim were:­
Pecuniary Loss : Rs.31,50,000
Loss of consortium : Rs. 1,00,000
Funeral expenses : Rs. 25,000
Loss of love and 
: Rs.4,00,000
Medical expenses : Rs.17,350
Total Rs.36,92,350/­
6. While modifying the award, the High Court computed the
compensation under the following heads:­
Pecuniary loss Rs.30,94,740.00
Loss of consortium Rs.40,000.00
Funeral Expenses Rs.15,000.00
Loss of Love and affection to
the claimants­Rs.25,000
Loss of Estate Rs.15,000.00
Medical Expenses Rs.17,350.00
Total Rs.32,82,090.00
7. We are to address now as to whether the pecuniary loss
which had occurred on account of death of the victim has to be
computed on pegging it on her personal income she earned from
her employment approximately three years back or it should be
relatable to the income of her surviving husband.  This question
arises   as   there   was   evidence   before   the   Tribunal   that   the
deceased was a graduate with B. Com. degree and was employed
till   the   year   2008   in   a   company   earning   monthly   salary   of
Rs.34,385/­. At the time of the accident, however, the deceased
was not employed.   The Tribunal determined the compensation
relying on the case of Arun Kumar Agrawal  (supra). It has been
held in this judgment:­
“35. In   our   view,   it   is   highly   unfair,   unjust   and
inappropriate to compute the compensation payable
to the dependants of a deceased wife/mother, who
does not have a regular income, by comparing her
services with that of a housekeeper or a servant or an
employee,   who   works   for   a   fixed   period.   The
gratuitous services rendered by the wife/mother to
the husband and children cannot be equated with the
services of an employee and no evidence or data can
possibly be produced for estimating the value of such
services. It is virtually impossible to measure in terms
of   money   the   loss   of   personal   care   and   attention
suffered by the husband and children on the demise
of the housewife. In its wisdom, the legislature had,
as early as in 1994, fixed the notional income of a
non­earning person at Rs. 15,000 per annum and in
case   of   a   spouse,   1/3rd   income   of   the
earning/surviving   spouse   for   the   purpose   of
computing the compensation.”
8. The High Court, on the other hand, proceeded on the basis
that it would be appropriate to fix the sum of Rs.34,385/­ as the
monthly   income   of   the   deceased   to   arrive   at   just   and   fair
compensation   in  quantifying  pecuniary loss.  Reasoning of   the
High Court on this aspect was:­
“Though   at   the   time   of   death,   the   deceased   Bala
Babitha was a housewife, earlier she was working in
a private company and earning a sum of Rs.34,385/­
per   month,   which   is   evident   from   Ex.Ps.23   &   24.
Hence,   it   would   be   appropriate   to   fix   the   sum   of
Rs.34,385/­ as monthly income of the deceased to
arrive at a just and proper compensation under the
head of pecuniary loss. If a sum of Rs.34,385/­ is
taken   as   monthly   income   of   the   deceased,   50%
amount   has   to   be   deducted   towards   personal
expenses   and   if   so   deducted,   the   monthly
contribution to the family works out to Rs.17,193/­.
The   deceased   was   aged   37   years   at   the   time   of
accident; hence, the correct multiplier that has to be
applied   in   this   case   is   15.   If   the   multiplier   15   is
applied,   the   total   pecuniary   loss   works   out   to
Rs.30,94,740/­ (17,193 x 12 x 15). Consequently, the
sum   of   Rs.31,50,000/­   awarded   by   the   Tribunal
under the head Pecuniary Loss is hereby modified
and reduced to Rs.30,94,740/­.”
        (quoted verbatim from the paperbook)
9. In our opinion, the judgment of the High Court on this point
suffers from error on two counts. At the time of her death, the
deceased was not in employment. She was a homemaker.  It was
not a case where the deceased at the time of accident had just left
her job.  If that was the case, her last drawn salary might have
had given reliable guidance for computing her monthly income at
that   point   of   time.   Here   the   deceased   remained   without
employment for a period of approximately three years and what
she earned prior to that ought not to have been treated to be her
monthly income to arrive at just and proper compensation under
the head of pecuniary loss, as has been held by the High Court.
There is a long time gap between the time she was in employment
and   the   occurrence   of   the   accident.   Her   monthly   salary
approximately   three   years   back   thus   would   be   an   unreliable
guide for fixing her notional income when she succumbed to her
injuries caused by the accident. Moreover, at the time of the
accident, she was a homemaker providing care and support to
her   family.   In   this   context,   in   our   opinion,   the   computation
methodology   prescribed   in   the   case   of  Arun   Kumar   Agrawal
(supra) would be more appropriate to apply, which was done by
the Tribunal.  
10. Plea has been taken before us on behalf of the insurance
company   that   the   appellants   could   not   take   a   stand   for
computing the income of the deceased in the manner held in the
case   of  Arun   Kumar   Agrawal  (supra),   since   before   the   High
Court, they had run a case that the pecuniary loss ought to be
computed on the basis of her last drawn salary.  Just because the
appellants urged their claim based on the last drawn salary of the
deceased before the High Court, this Court ought not to anchor
its decision on that argument alone. It remains open to this Court
to   examine   the   nature   of   the   claim   and   compute   the
compensation   on   a   different   criterion   applying   a   different
parameter. This is more so, because such compensation figure
could be arrived at on the basis of materials on record, that
includes   evidence   on   monthly   earning   of   the   husband   of   the
deceased and the applied parameter stands judicially recognised
as a legitimate mode for computing pecuniary loss. Further, in
this case, plea was made in the claim petition for compensation
calculated on the basis of one­third of the husband’s income. In
the petition for special leave to appeals also, one of the points
formulated is as to whether compensation on account of death of
Bala Babitha would be calculated on the basis of her last drawn
salary or her husband’s income. 
11.  Section 168 of the Motor Vehicles Act, 1988 stipulates:­
“168. Award of the Claims Tribunal.—On receipt of
an   application   for  compensation   made  under  section
166, the Claims Tribunal shall, after giving notice of the
application to the insurer and after giving the parties
(including the insurer) an opportunity of being heard,
hold an inquiry into the claim or, as the case may be,
each of  the  claims  and, subject  to  the  provisions  of
section   163   may   make   an   award   determining   the
amount of compensation which appears to it to be just
and   specifying   the   person   or   persons   to   whom
compensation shall be paid and in making the award
the   Claims   Tribunal   shall   specify   the   amount   which
shall be paid by the insurer or owner or driver of the
vehicle involved in the accident or by all or any of them,
as the case may be: 
(2) The Claims Tribunal shall arrange to deliver copies
of the award to the parties concerned expeditiously and
in any case within a period of fifteen days from the
date of the award.
(3) When   an   award   is   made   under   this   section,   the
person who is required to pay any amount in terms of
such award  shall, within  thirty days  of  the  date  of
announcing the award by the Claims Tribunal, deposit
the   entire   amount   awarded   in   such   manner   as   the
Claims Tribunal may direct.”
12. The aforesaid provision vests the Tribunal with the power
and jurisdiction to make an inquiry into claims arising out of
deaths and injuries caused from an accident and make award
determining the compensation which appears to it to be just.  It
would defeat the legislative purpose in the event the Tribunal or
the Appellate Forum is made to confine its inquiry to the plea of
the claimant as regards the factors which ought to be taken into
consideration for determining the compensation amount.  Power
to   hold   an   inquiry   under   the   aforesaid   provision   cannot   be
construed in such a restrictive manner.  If the factors on which
quantification of claim is asked for cannot be established, the
adjudicatory forum under the 1988 Act would stand divested of
its power to arrive at just compensation even if in course of the
proceeding,   materials   disclosed   could   justify   award   of
compensation based on certain criteria other than those on which
the   claim   is   founded.   In   the   instant   case,   we   find   that   the
Tribunal,   while   proceeding   to   award   compensation   to   the
appellants/claimants had relied on the principle laid down by
this Court in the case of Arun Kumar Agrawal (supra) and there
was evidence before the Tribunal to assess the income of the
husband   of   the   deceased.   In   fact,   the   first   appellant’s
compensation was quantified taking into consideration his own
income at the material point of time.   In our opinion, the High
Court ought not to have proceeded on the basis of the income
drawn by the deceased victim approximately three years before
the accident ended her life. The Tribunal did not indulge in pure
guesswork in pegging the notional income of the deceased to her
husband’s income. As we have already observed, in the claim
petition itself, against the column “Occupation of the deceased”­
income   calculation   of   the   deceased   was   contemplated   on   the
basis of her husband’s income. The Tribunal had rightly followed
the course laid down in the case of Arun Kumar Agrawal (supra),
which   in   the   given   facts,   constituted,   a   more   definitive   and
reliable methodology for quantifying pecuniary loss.
13. So far as deduction on account of personal expenses of the
deceased, following the case of  Sarla  Verma   (Smt)  and  Others
vs.  Delhi   Transport  Corporation   and   Another  [(2009) 6 SCC
121], the Tribunal directed deduction of 1/3rd  of the earning of
the deceased, the latter being determined on the income of her
spouse.   That was, in our view, the proper course. We hold so
because, even if we leave out the husband of the deceased from
being treated as a dependent, there were two minor children at
the material point of time who ought to have been treated as
dependent   family   members.   At   that   point   of   time   the   second
appellant was twelve years old and the age of injured daughter
was   three   years.     In   the   case   of  Sarla   Verma  (supra)   the
deduction has been held to be valid in a case where there were
dependent family members. We should not restrict the expression
“dependent” to mean those financially dependent only.   Minor
children are emotionally dependent on the mother. They lost care
and guidance of their mother at a very young age. While arriving
at just compensation, the Tribunal ought to factor in the loss of
dependency in these terms.  
14. The High Court did not give any reason for deducting 50% in
computing   pecuniary   loss   and   we   do   not   think   this   was   the
correct   view.     We   are   of   the   view   that   deduction   of   1/3rd  of
determined income of the deceased towards personal expenses is
valid on the basis of the decision of this Court in the case of Sarla
Verma  (supra). We also find that neither the Tribunal nor the
High Court had considered loss of future prospect to arrive at the
quantum of pecuniary loss. In the case of Rajendra Singh and
Others  vs.  National  Insurance Company  Limited  and  Others
[(2020) 7 SCC 256], addition of loss of future prospects has been
held to be a factor for determining compensation under the head
of pecuniary loss even in a case where the income of deceased is
arrived at on a notional basis. In this judgment it has been held:­
“11. The notional income of the first deceased is therefore
held to be Rs 5000 per month at the time of death. The
compensation on that basis with a deduction of 1/4th i.e.
Rs. 15,000 towards personal expenses with a multiplier of
17   is   assessed   at   Rs   7,65,000.   If   the   deceased   had
survived, in view of observations in Lata Wadhwa [Lata
Wadhwa v. State of Bihar, (2001) 8 SCC 197], her skills as
a matured and  skilled housewife in contributing to the
welfare and care of the family and in the upbringing of the
children would have only been enhanced by time and for
which reason we hold that the appellants shall be entitled
to   future   prospects   @   40%   in   addition   to   the   loss   of
consortium   and   future   expenses   already   granted.   We
therefore  assess  the  total  compensation  payable  to  the
appellants in the first appeal at Rs 11,96,000.”
15. The deceased was 37 years old at the time of her death.
Hence, there ought to be an addition of 40% to the notional
income of  the  deceased towards future prospects as she  was
below 40 years of age. In the present case, it is not in dispute that
multiplier of 15 ought to be applied. In these circumstances, the
total entitlement of the appellants under the head of pecuniary
loss would thus be:­
Monthly income of the 
future prospects @ 40% of 
the income (notional)
Rs.26,250 x 40/100 = 
[Rs.26,250 + Rs.10,500 
= Rs.36,750/­]
Deduction of 1/3rd for 
personal living expenses
Rs.36,750 x 1/3 = 
[Rs.36,750 ­ Rs.12,250 
= Rs.24,500/­]
Total pecuniary loss of the 
deceased (with 15 as the 
Rs.24,500 x 12 x 15 = 
16. We, accordingly, set aside the judgment of the High Court to
the extent of computation made of pecuniary loss on account of
death of said Bala Babitha for a sum Rs.30,94,740/­. We quantify
the said sum to be Rs.44,10,000/­.
17. Argument was also advanced on behalf of the respondents that
compensation awarded towards loss of love and affection is contrary
to the ratio of the judgement of this Court in case of United India
Insurance Company Limited vs. Satinder Kaur Alias Satwinder
Kaur and Others [(2021) 11 SCC 780].  It was held in this decision
that   loss   of   love   and   affection   is   comprehended   in   loss   of
consortium, and there is no justification to award compensation
towards loss of love and affection as a separate head. The relevant
paragraphs from the judgement are reproduced below:­
“34. At this stage, we consider it necessary to provide
uniformity with respect to the grant of consortium, and
loss of love and affection. Several Tribunals and the High
Courts have been awarding compensation for both loss of
consortium and loss of love and affection. The Constitution
Bench   in   Pranay   Sethi,   has   recognized   only   three
conventional   heads   under   which   compensation   can   be
awarded viz. loss of estate, loss of consortium and funeral
expenses.   In   Magma   General,   this   Court   gave   a
comprehensive   interpretation   to   consortium   to   include
spousal consortium, parental consortium, as well as filial
consortium. Loss of Love and affection is comprehended in
loss of consortium.
35. The Tribunals and  the High Courts are  directed to
award compensation for loss of consortium, which is a
legitimate Conventional head. There is no jurisdiction to
award compensation towards loss of love and affection as
a separate head.”
18. We accept this argument advanced by the respondents. The
High Court has thus committed error in law while providing for
compensation under the heads of loss of love and affection and
also loss of consortium. Instead, in our opinion, compensation
provided  under  the  head   of  loss   of  consortium  would   be  Rs.
40,000/­ for each appellant, comprehending the loss of love and
affection within it. Hence, the total compensation provided under
this   head   would   amount   to   Rs   1,60,000/­.   That   part   of   the
judgment of the High Court shall stand modified accordingly.
19. We find no reason to interfere with the High Court’s finding
as regards computation of compensation on other heads. Interest
of 7.5% per annum has been awarded by both the Tribunal and
the High Court. We do not disturb the concurrent views of the
High   Court  and   the  Tribunal   on  the   rate  of  interest.  Certain
authorities were cited on behalf of the appellants in support of
their argument for enhancing the rate of interest. The first one,
reported in [(2001) 2 SCC 9] related to an accident that occurred
on 20th March 1986. The next one, reported in [(2009) 8 SCC 507]
related to insurance claim on loss of stocks by fire and the date of
occurrence of the accident in that case was 24th August 1999. The
bank rate of interest has fallen over the years and for this reason
we sustain the award of the Tribunal and the High Court in
appeal on this point. 
The total amount payable to the appellants on account of
death of Bala Babitha, thus, would be:­
Pecuniary loss  Rs. 44,10,000/­
Loss of consortium Rs. 1,60,000/­
Funeral expenses Rs. 15,000/­
Loss of estate Rs. 15,000/­
Medical expenses Rs. 17,350/­
Total  Rs.46,17,350/­
20. The aforesaid sum shall be payable to the appellants in the
proportion directed by the High Court except that in the case of
the 4th appellant (that is the mother of the deceased), we direct
lumpsum payment of Rs.2,00,000/­ instead of Rs.1,00,000/­ as
directed by the High Court. The aforesaid sum shall be paid
within   two   months   from   this   date   adjusting   therefrom   any
amount which may have already been paid to the appellants.
Unpaid amount shall carry interest at the rate of 7.5% per annum
from the date of filing of the claim petition till payment is made in
terms of this judgment and order.
21. The appeals are allowed in the above terms, without any
order as to costs. 
22. Pending application(s), if any, shall stands disposed of.
………………………………., J.
………………………………., J.
11th JULY 2022


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