Manusha Sreekumar & Ors. VERSUS The United India Insurance Co. Ltd.

Manusha Sreekumar & Ors.  VERSUS The United India Insurance Co. Ltd. 

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

[Arising out of Special Leave Petition (C) No. 28833 OF 2019]
Manusha Sreekumar & Ors.                                    …. Appellants
The United India Insurance Co. Ltd.                      .... Respondent
Surya Kant, J.
1. Leave granted.
2. The   present   appeal   arises   out   of   the   judgment   dated
23.07.2019 passed by the High Court of Kerala, in an appeal
preferred by the Respondent (hereinafter, “Insurance Company”)
against   the   award   dated   26.07.2018   of   the   Motor   Vehicle
Accidents   Claims   Tribunal,   Pala   (hereinafter,   “Tribunal”).   The
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High   Court   allowed   the   appeal   and   has   reduced   the
compensation   amount   of   Rs.   32,39,000/­   granted   to   the
Appellants by the Tribunal to Rs. 19,70,000/­. The issue involved
in the instant matter primarily relates to the determination of
quantum of compensation awarded under various heads by the
Tribunal and the High Court. 
3. On 21.02.2015, the dreams and aspirations of the 32­yearold Deceased (Sreekumar) shattered when he met with a fatal
accident that occurred while he was riding his motorcycle bearing
Registration   No.   KL­36­C­9198   through   Thalayolaparambu   to
Ernakulam   Road,   Kerala.   At   the   time   of   the   accident,   the
offending   car   bearing   Registration   No.   KL­07­BB­5053   was
insured   by   the   Respondent   Insurance   Company   and   was
allegedly driven in a rash and negligent manner. The car came
from   the   opposite   direction   and   dashed   into   the   motorcycle
driven by the Deceased. As a result of the impact, Sreekumar fell
and sustained serious injuries. Though concerted efforts were
made to save the Deceased’s life, unfortunately, he succumbed to
his injuries on the way to the hospital. 
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4. Swaddled   in   the   grief   of   the   untimely   death   of   their
breadwinner,   Appellants   approached   the   Tribunal   seeking
compensation   for   their   loss.   It   may   be   noted   that   the   first
Appellant is the wife of the Deceased, the second Appellant is
their minor son, and the third Appellant is the mother of the
Deceased.   Appellants   jointly   preferred   a   claim   petition   under
section 166 of the Motor Vehicles Act, 1988 (hereinafter, “the
Act”) seeking compensation of Rs. 64,15,000/­ with interest. The
Insurance   Company   confuted   the   claim   contending   that   the
accident occurred due to negligence of the Deceased. The amount
of compensation claimed under various heads was also alleged to
be excessive. 
5. The Appellants stood their ground by stating that they were
entitled to compensation for ‘loss of dependency’ as the Deceased
was a self­employed man who donned multiple hats so as to
provide   a   comfortable   living   for   his   family.   According   to   the
Appellants, the Deceased was a fish vendor­cum­driver and was
earning at least Rs. 25,000/­ per month. Appellants produced
various documentary pieces of evidence before the Tribunal to
prove the Deceased’s financial capacity while he was alive. These
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were ­  (i)  a course certificate showing that the Deceased had
completed two years course in electronic mechanic trade;  (ii)  a
job   training   certificate   at   Sun   Generic   Cables   Pvt.   Ltd.;  (iii)
Passport of the Deceased indicating that he was employed in the
Sultanate of Oman between 18.11.2007 and 17.11.2011;  (iv)  a
certificate to show that the Deceased received rent from a shop in
the Municipal market shopping complex;  (v)  a job offer letter
dated 11.12.2014 from the United Kingdom, offering the position
of a Telecom Rigger;  (vi)  bank statements of the Deceased and
(vii) certificate of Kerala Motor Transport Workers Welfare Fund
6. Taking into consideration the aforementioned documentary
evidence   concerning   the   Deceased’s   income,   the   Tribunal
concluded that he was a skilled labourer. It was also observed
that the Deceased was earning from the rent he received from the
room leased out to conduct fish vending business. The Tribunal
opined that the Deceased was a driver and accordingly fixed his
monthly income at Rs.14,000/­. Additionally, assuming that the
Deceased   received   at   least   Rs.3,500/­   as   rent,   the   Tribunal
calculated his final notional income as Rs.17,500/­ (Rs. 14,000 +
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Rs. 3,500). The Tribunal fixed the total compensation of loss of
dependency along with various other heads at Rs. 32,39,000/­
and awarded interest at the rate of 9% per annum from the date
of filing of petition till the realisation of awarded compensation. 
7. The Insurance Company filed an appeal before the High
Court challenging the quantum of compensation granted by the
Tribunal. Though the High Court concurred with the Tribunal in
finding that the Deceased died in an accident caused due to rash
and   negligent   driving   of   the   car   which   was   insured   by   the
Insurance Company, it disagreed with the Tribunal primarily on
three counts.  Firstly,  compensation granted under the head of
‘loss of dependency’; secondly, compensation under the head of
‘pain and suffering’ and finally, compensation under the head of
‘loss   of   love   and   affection’.   For   ease   of   reference,   the   table
supplied   below   elucidates   the   compensation   granted   by   the
courts below under various heads:­ 
Head of claim  Amount
awarded  by  the
High Court
awarded   by   the
1. Loss of dependency  Rs. 17,92,000/­ Rs. 31,36,000/­
2. Pain and sufferings  Rs. 15,000/­ Rs. 30,000/­
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3. Loss   of   consortium
to the first Appellant
Rs. 40,000/­ Rs. 40,000/­
4. Loss   of   love   and
affection   to   the
second Appellant 
Rs. 50,000/­ Not allowed 
5. Loss   of   love   and
affection to the third
Rs. 40,000/­ Not allowed 
6. Transport to hospital Rs. 3,000/­ Rs. 3,000/­
7. Funeral expenses Rs. 15,000/­ Rs. 15,000/­
8. Loss of estate  Rs. 15,000/­ Rs. 15,000/­
Total Compensation Rs. 19,70,000/­ Rs. 32,39,000/­
8. In relation to the first count, the High Court was swift in
concluding that in the absence of any evidence to establish the
income of the Deceased, the Tribunal had erroneously fixed his
notional  income  at  Rs.  14,000/­ per month.  The  High  Court
viewed that in the decisions of Ramachandrappa v. Manager,
Royal   Sundaram   Alliance   Insurance   Company   Ltd.1
Syed   Sadiq   and   Ors.   v.   Divisional   Manager,   United   India
Insurance Co. Ltd.
, this Court, in situations where the monthly
income of persons could not be established using independent
(2011) 13 SCC 236. 
(2014) 2 SCC 735. 
Page | 6
evidence, fixed it at Rs.4,500/­ and Rs. 6,500/­ for accidents that
took place in the years 2004 and 2008, respectively. On that
premises, the High Court posited that since the accident took
place in 2015, the maximum monthly income that could have
been   reckoned   is   Rs.   10,000/­.   The   compensation   under   the
head   of   ‘loss   of   dependency’   was   thus   reduced   to   Rs.
9. Regarding the second count, the High Court scaled down
the compensation granted by the Tribunal under the head of
‘pain   and   suffering’   from   Rs.   30,000/­   to   Rs.   15,000/­.   The
reasoning employed by the High Court for this was that except in
cases wherein the death was not instantaneous, the conventional
amount to be granted would be Rs. 15,000/­. 
10. In relation to the third count, the High Court granted Rs.
50,000/­ and Rs. 40,000/­ under the head of ‘loss of love and
affection’ to the second and third Appellants respectively, which
was denied by the Tribunal. 
11. Consequently,   the   High   Court   substantially   reduced   the
compensation granted by the Tribunal from Rs. 32,39,000/­ to
Rs. 19,70,000/­. The aggrieved Appellants are now before this
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12. We   have   heard   learned   counsel   for   the   parties   at   a
considerable length and meticulously perused the documents on
record.   The   liability   of   the   Insurance   Company   to   pay   the
compensation is not in dispute here. Nor there is any discordant
concerning the compensation awarded under various heads save
and   except   for   ‘loss   of   dependency’   and/or   under   the   nonconventional heads.
13. Mr.   Thomas   P.   Joseph,   learned   senior   counsel   for   the
Appellants   vehemently   argued   that   the   High   Court   erred   in
placing reliance on the decisions of this Court to assess the ‘loss
of dependency’ based on notional income as, in all those cases,
not even a single piece of evidence was led regarding the income
of   the   victim.   However,   in   the   instant   case,   the   Appellants
produced sufficient documentary evidence to prove the income of
the Deceased. Moreover, it is trite that the power of the Appellate
Court to undertake a fact­finding exercise and interfere with the
reasoning of the Tribunal is limited. The same is done only when
the findings are perverse or there is a material omission on the
part of the Tribunal. He also brought to our notice, Schedule B of
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the Kerala Motor Transport Workers’ Payment of Fair Wages Act,
1971   (hereinafter,   “Kerala   Fair   Wages   Act”)   as   per   which   a
‘driver’   is   classified   as   a   ‘Skilled   worker’   under   Category   IIISkilled­B. This Act was supplemented with the notification G.O.
(Ms.)   No.   123/2015/LBR   dated   04.09.2015   issued   by   the
Government of Kerala (hereinafter,  “Notification”) wherein, the
pay   scale   for   the   year   2015   for   each   category   of   workers   in
Schedule   B   of   the   Act   has   been   stipulated.   Learned   Senior
Counsel for the Appellant contended that the Deceased being a
registered transport motor driver, was entitled to be considered
as a ‘driver’ as defined under the Kerala Fair Wages Act and his
income was to be fixed in terms of the Notification, referred to
14. Per   contra,   learned   counsel   for   the   Insurance   company
urged   that   the   High   Court   was   right   in   reducing   the
compensation amount in the absence of any definite proof of
income   and   such   a   finding   of   fact   does   not   call   for   any
interference.   He   further   argued  that  the   High   Court   erred   in
granting compensation of Rs.90,000/­ under the head of ‘loss of
love  and affection’  as this  Court in  National   Insurance   Co.
Page | 9
Ltd. v. Pranay Sethi and Ors.3
, has not granted any sum under
such like ‘non­conventional head’. Learned counsel relied on the
decision   of   this   Court   in  Cholamandalam   M/s   General
Insurance   Company   Ltd.   V.   Aarifa   &   Ors.4
  and  The New
India   Assurance   Co.   Ltd.   V.   Somwati  &   Ors.5
, wherein no
amount under the head of ‘loss of love and affection’ has been
held payable.
15. From   the   aforesaid   discussion,   two   issues   arise   for
consideration of this Court:
(i) Whether   the   High   Court   was   right   in   reducing   the
monthly   income   of   the   Deceased   from   Rs.   17,500/­   to
Rs.10,000/­, for want of sufficient documentary evidence?
(ii) Whether   the   High   Court   was   right   in   awarding
compensation under the ‘non­conventional heads’ which is
impermissible as per Pranay Sethi? 
C.1  Determination of Compensation for loss of dependency.
(2017) 16 SCC 680.
4 Civil Appeal No. 6020/2019 vide order dt. 01.08.2019.
5 SLP(Civil) Diary No. 30766/2019 vide order dt. 24.09.2019. 
Page | 10
16. While determining compensation under the Act, section 168
of   the   Act   makes   it   imperative   to   grant   compensation   that
appears to be just. The Act being a social welfare legislation
operates   through   economic   conception   in   the   form   of
compensation,   which   renders   way   to   corrective   justice.6
Compensation acts as a fulcrum to bring equality between the
wrongdoer and the victim, whenever the equality gets disturbed
by the wrongdoer’s harm to the victim. It also endeavors to make
good the human suffering to the extent possible and to also save
families which have lost their breadwinners from being pushed to
vagrancy. Adequate compensation is considered to be fair and
equitable   compensation.   Courts   shoulder   the   responsibility   of
deciding   adequate   compensation   on   a   case­to­case   basis.
However,   it   is   imperative   for   the   courts   to   grant   such
compensation which has nexus to the actual loss. 
17. This Court, in the case of Sarla Verma and Ors. v. DTC
and  Ors.7
,  laid down an objective formula for calculating just
compensation. According to the dictum, the three factors that
6 See Gregory C. Keating, ‘Distributive and Corrective Justice in the Tort Law of Accidents’ 
(2000) 74 S Cal L Rev 193.
(2009) 6 SCC 121. 
Page | 11
need to be established are: (a) age of the deceased; (b) income of
the deceased; and (c) the number of dependents.
18. Further,   the   issues   that   are   to   be   determined   by   the
Tribunal   to   arrive   at   the   loss   of   dependency   are:   “(i)
additions/deductions to be made for arriving at the income; (ii)
the deduction to be made towards the personal living expenses of
the deceased; and (iii) the multiplier to be applied with reference
to the age of the deceased.” The purpose of standardising these
determinants was to bring uniformity to the decisions and settle
claims without delay. 
19. Applying the above parameters to the instant case, there
exists   sufficient   evidence   to   show   that  the   Deceased,
undoubtedly, was a fish vendor­cum­driver with a valid license.
The certificate issued by the Kerala Motor Transport Workers
Welfare Fund Board, certifying the Deceased as the driver of light
motor   goods   vehicle   bearing   Registration   No.   KL­36­B­7822
under the ownership of one Shri Prakashan has been proved on
record. Further, the Deceased had also paid all his subscriptions
to the Board from April 2012 until the month he died. We find no
reason to doubt that the Deceased was a driver at the time of his
death.  This   Court   in  Chandra   Alias   Chanda   Alias
Page | 12
Chandraram  and  Anr.   v.  Mukesh  Kumar  Yadav  and  Ors.8
has aptly held that in the absence of a salary certificate, the
minimum   wages   notification   along   with   some   amount   of
guesswork that is not completely detached from reality shall act
as a yardstick to determine the income of the deceased. In this
context, keeping in view the import of section 57 of the Indian
Evidence Act, 1872, we  take judicial notice of the provisions of
the Kerala Fair Wages Act, especially section 2 thereof which
defines the following expressions:­ 
“2.        Definitions.­  In   this   Act,   unless   the   context
otherwise requires,­ 
(a)  “employer”  means in relation to any motor transport
undertaking, the person who or the authority which, has
the ultimate control over the affairs of the motor transport
undertaking, and where the said affairs are entrusted to
any other person whether called a manager, managing
director, managing agent or by any other name, such other
person ; 
(b) “motor transport undertaking” means a motor transport
undertaking   including   a   private   carrier   engaged   in
carrying passengers or goods or both by road for hire or
reward ; 
(c)  “motor   transport   worker”  means   a   person   who   is
employed   in   a   motor   transport   undertaking   directly   or
through an agency, whether for wages or not, to work in a
professional capacity on a transport vehicle or to attend to
duties in connection with the arrival, departure, loading or
unloading of such transport vehicle and includes a driver,
conductor,   cleaner,   station   staff,   line   checking   staff,
booking   clerk;   cash   clerk,   depot   clerk,   time   keeper,
watchman, or attendant ; 
(d)  “fair wages” means the rate of wages payable to the
motor transport workers specified in the Schedule to this
Act or the agreed rate of wages whichever is higher.”
(2022) 1 SCC 198. 
Page | 13
(emphasis applied) 
20. Schedule   B­Category   III   of   the   Kerala   Fair   Wages   Act
classifies   a   driver   as   a   “Skilled   worker”.   Reading   this   in
conjunction   with   the   Notification   that   came   into   effect   from
01.01.2015 which amended Schedule A of the Kerala Fair Wages
Act, prescribing a minimum pay scale of the workers listed in
Schedule B, it is apparent that  a ‘driver’ in Kerala earned a
minimum of Rs. 15,600/­ in 2015. It appears to us that the
aforesaid Act and the notification issued thereunder were not
brought to the notice of the Tribunal or the High Court. As a
result  thereto,  the  High  Court  could  not   be  cognizant  of  the
statutory   mandate   prescribing   minimum   wages   for   a   skilled
worker like ‘driver’, and thus, erred in fixing the income of the
Deceased at Rs.10,000/­. We are therefore inclined to fix the
income of the Deceased notionally at Rs. 15,600/­ per month. 
21. As regard to the rental income of the Deceased from leasing
out a room for the conduct of fish vending business, notionally
fixed at Rs.3,500/­ by the Tribunal, we find no valid reason for
making such additions to the income of the Deceased as the
Page | 14
rental income would be transferred to his legal heirs, who will
continue enjoying the benefits derived from it.  
22. The final notional income of the Deceased must thus be
fixed   at  Rs.15,600  /­  (Rs.  1,87,200/­  per   annum).   Since   the
Deceased   was   of   32   years   old   at   the   time   of   his   death,   the
multiplier applicable in the instant case would be 16, and 40% of
increase   for   future   prospects   deserves   to   be   added   as   the
Deceased was self­employed. One­third of the Deceased’s income
would be deducted towards his personal expense as he had three
dependents. Hence, the compensation payable to the Appellants
under   the   head   of   loss   of   dependency   would   amount   to
Rs.27,95,520/­ (Rs. 15,600 x 140/100 x 12 x 16 x 2/3). 
C.2  Determination of compensation under non­conventional
23. In all fairness, it may be noted that, Ld. Counsel for the
Insurance Company has urged that the High Court ought not to
have  granted  any  compensation   to  the  Appellants,  under  the
‘non­conventional   heads’   which   is   impermissible   as   per   the
dictum of this Court in Pranay Sethi (supra). We are however,
not inclined to entertain this plea for the simple reason that the
Insurance Company has not chosen to file any appeal against the
Page | 15
judgment of the High Court. Having acquiesced, the Insurance
Company cannot turn around and question a paltry amount of
compensation   awarded   to   the   Appellants   under   the   ‘nonconventional heads’. However, question of law, in this regard, is
kept open.   
24. In light of the above discussion, the appeal is allowed in
25. We grant Rs. 27,95,520/­ as the total ‘loss of dependency’
on account of the income of the Deceased being calculated at Rs.
15,600/­   i.e.   Rs.1,87,200/­   per   annum.   Upon   adding   the
remaining amount granted by the High Court under different
heads, the total compensation granted to the Appellant comes to
Rs. 29,73,520/­ (Rs.27,95,520/­ + Rs. 1,78,000/­). 
26. The Insurance Company is directed to pay the enhanced
compensation amount of Rs. 29,73,520/­ to the Appellants along
with interest at the rate of 9% per annum from the date of filing
of the claim petition till the date of realisation. The aforesaid
amount shall be apportioned among the Appellants in the ratio
fixed by the Tribunal in the award. The Insurance Company shall
Page | 16
pay the said amount either by way of demand draft in favour of
the Appellants or deposit the same before the Tribunal, after
deducting the amount already paid by it, if any, within six weeks
from the date of receipt of the copy of this judgment.  
27. The judgment under appeal of the High Court is, thus, set
aside.   The   appeal   is   disposed   of   along   with   any   pending
applications in above terms. 
New Delhi:
October 17th, 2022
Page | 17


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