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Smt. Radha Agarwal And Another v. State Of Uttar Pradesh And Another Opposite Parties.
Structured Summary of the Opinion — K.N. Singh, J.
Factual and Procedural Background
Ram Kishore Agarwal, aged 28, was employed as an Assistant Engineer in the Irrigation Department of the State of Uttar Pradesh. On 3-8-1977 he was travelling on official duty in a Government jeep (UTE 4698) driven by Hemnath (a State employee) from Lucknow to Sitapur. After travelling about 40–45 kms the driver lost control, the vehicle swerved to the right and collided with a tree. Ram Kishore sustained severe head and leg injuries, was taken to hospital and died of his injuries.
He left behind his widow, Smt. Radha Agarwal, and an infant daughter, Km. Lakshmi Agarwal (aged 6 months). The widow and daughter filed a claim petition under S. 110-A of the Motor Vehicles Act claiming compensation. The State of Uttar Pradesh contested the petition. The Motor Accidents Claims' Tribunal, Sitapur, on 7-2-1979 held the accident resulted from rash and negligent driving, found the State vicariously liable and awarded compensation of Rs. 1,53,795.34 paise together with interest at 6% per annum. The claimants appealed under S. 110-D of the Act, contending the award was inadequate.
Legal Issues Presented
- Whether the compensation awarded by the Tribunal was adequate for the pecuniary loss caused by the death of the deceased.
- Whether deductions should be made from compensation for the fact that a lump-sum payment is being made (i.e., allowance for contingencies and accelerated payment).
- Whether deductions are permissible for amounts the claimants receive as family pension, insurance policy proceeds, gratuity or provident fund.
- Whether future increments, promotions and higher pay-scales that the deceased might have earned should be taken into account in computing compensation, and if so, on what basis.
- What the appropriate longevity assumption should be in computing future loss (i.e., expected age of survival for calculating loss of dependency).
Arguments of the Parties
Appellants' (Claimants') Arguments
- The amount fixed by the Tribunal was inadequate.
- The Tribunal failed to take into account increments and promotions the deceased may have received over time; by passage of time he would have drawn higher salary and contributed more to the dependants' welfare.
- The Tribunal impermissibly deducted family pension and amounts received under insurance policy and gratuity from the compensation.
- The appellants argued that no deduction should be made on account of lump-sum payment (i.e., counsel relied on a number of authorities said to support the view that such a deduction is not permissible).
Respondent (State of Uttar Pradesh)
- The written opinion records only that the State of Uttar Pradesh contested the petition; no detailed, specific arguments of the State are set out in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Smt. Manjushri Raha v. B.L. Gupta ((1977) 2 SCC 174 : AIR 1977 SC 1158) | That life expectancy of an average Indian has increased and it is reasonable to expect longevity till the age of 65 years. | The court relied on this authority to adopt 65 years as a reasonable expectancy of life for the deceased when assessing future loss beyond retirement. |
| M.P.S.R.T.C. v. Sudhakar ((1977) 3 SCC 64 : AIR 1977 SC 1189) | That while assessing damages for future loss a deduction should be made to account for uncertainties of life and for the accelerated/lump-sum nature of the payment (i.e., an allowance for contingencies and discount for lump-sum). | The court treated this dictum as binding and applied it by making a 25% deduction from the calculated total pecuniary loss to account for contingencies and accelerated payment. |
| Maj. Jagjit Singh v. Kartar Singh (1973 ACC CJ 147) | Cited by appellants' counsel in support of the submission that no deduction for lump-sum payment should be made. | The court observed that this authority did not clearly establish that no deduction is permissible; it did not accept it as overruling the M.P.S.R.T.C. authority and therefore did not treat it as binding to preclude any deduction. |
| Kailashwati v. Haryana State (1974 ACC CJ 514 : AIR 1975 Him Pra 35) | Cited by appellants' counsel for the proposition that deductions for lump-sum payment should not be made. | The court found that the authority did not clearly lay down a rule disallowing such deductions and noted that each case turns on its own facts; the court did not accept it as contrary to M.P.S.R.T.C. |
| Ganga Devi v. Municipal Corporation of Delhi (1980 ACC CJ 364) (Delhi) | Cited by appellants' counsel as supporting no deduction on account of lump-sum payment. | The court stated that this authority likewise does not clearly establish that no deduction is permissible and emphasized that the Supreme Court's M.P.S.R.T.C. rule is binding. |
| Smt. Kaushalya Devi v. Housing and Development Board (F.A.F.O. No. 297 of 1975) (decided 15-7-1981) | Held that deductions of amounts such as insurance policy proceeds, gratuity or provident fund are not permissible. | The bench agreed with the principle that family pension, insurance policy proceeds and gratuity/provident fund should not be deducted from compensation; the court noted disagreement with the Tribunal's deductions but did not disturb the amount awarded for reasons explained in the opinion. |
Court's Reasoning and Analysis
The court proceeded in a stepwise factual and legal analysis strictly on the evidence before it:
- Liability: The Tribunal had found the accident resulted from rash and negligent driving and that the State was vicariously liable for its employee's act. The High Court opinion accepts the Tribunal's factual finding on negligence and liability.
- Basic factual inputs for computation: The deceased was 28 years old, in Government service as Assistant Engineer drawing Rs. 1,008 per month. The deceased was required to travel on Government work.
- Assessment of monthly contribution: The court rejected the widow's testimony that the deceased spent only about Rs. 150 on himself and gave the rest to the family as not reliable (she being a highly interested witness). The court estimated the deceased's personal expenditure at about Rs. 500 per month and his contribution to family welfare at Rs. 500 per month.
- Period of loss (salary): The court used a 30-year period (presumably from age 28 to 58, the retirement age stated in the opinion) to compute loss of salary: Rs. 500 × 12 × 30 = Rs. 1,80,000, which the court described as the loss from salary.
- Post-retirement loss for widow: Relying on the Manjushri Raha principle that longevity to age 65 is reasonable, the court reasoned the deceased could have lived to 65. After retirement the deceased would have had pensionary benefits (no exact evidence on pension amount was produced), but the court estimated pension would not be less than Rs. 400 per month and additional income from other sources about Rs. 500 per month. From this the court estimated a likely contribution to the widow of Rs. 400 per month for seven years after retirement, totaling Rs. 33,600 (Rs. 4,800 × 7).
- Aggregate before contingencies: Combining the loss from salary (Rs. 1,80,000) and the post-retirement contribution (Rs. 33,600) yielded Rs. 2,13,600 as total pecuniary loss.
- Deduction for contingencies / lump-sum adjustment: The court recognized the legal principle laid down in M.P.S.R.T.C. v. Sudhakar that an allowance must be made for uncertainties of life and the fact that the claimant receives a lump sum instead of periodic payments. Applying that principle the court considered it reasonable, on the facts, to make a 25% deduction to account for these imponderable factors. A 25% deduction reduced Rs. 2,13,600 to Rs. 1,62,000, which the court viewed as the appropriate compensation.
- Comparison with Tribunal award: The Tribunal had awarded approximately Rs. 1,53,795.34 (also referred to in the opinion as Rs. 1,53,000 in rounded form). The court observed that the Tribunal's award "appears to be [a] reasonable figure" and found no reason to disturb it despite identified errors in the Tribunal's approach.
- Deductions for family pension, insurance and gratuity: Counsel for the claimants contended that such deductions were impermissible. The court agreed that family pension and amounts such as insurance policy proceeds and gratuity/provident fund should not be deducted from compensation, citing Smt. Kaushalya Devi. Nonetheless, because the overall award was in the court's view reasonable, the court did not alter the Tribunal's figure on this account.
- Increments and promotions: The court acknowledged that increments and promotions should be considered when evidence exists. However, it found no documentary or oral evidence as to scales of pay, increments, dates of promotions, or probabilities of promotion (no records from the Accountant General or Department, no certificates). In the absence of such evidence the court held it was not possible to allow for increments or promotions and therefore could not increase compensation on that basis.
- Conclusion of analysis: Although the court identified certain errors in the Tribunal's method, on the whole the court considered the amount awarded by the Tribunal to be reasonable and thereby declined to interfere with it.
Holding and Implications
Core Ruling: APPEAL DISMISSED.
Direct consequences:
- The award of the Motor Accidents Claims' Tribunal stands; the petitioners' appeal is dismissed.
- The court recorded that there would be no order as to costs.
- Although the court agreed that certain deductions made by the Tribunal (for family pension, insurance policy and gratuity/provident fund) were not permissible in principle, and that increments/promotions could not be allowed in the absence of evidence, the court nonetheless found the Tribunal's quantum to be reasonable and declined to interfere.
The opinion does not purport to lay down any novel legal principle beyond applying existing authorities (notably M.P.S.R.T.C. and Manjushri Raha); the decision leaves the Tribunal's award intact for the parties without creating a new precedent beyond the application of cited authorities.
K.N Singh, J.:— This is a claimant's appeal against the award of the Motor Accidents Claims' Tribunal, Sitapur, dated 7-2-1979, awarding a sum of Rs. 1,53,795.34 p. as compensation.
2. Ram Kishore Agarwal, a young man of 28 years was in the employment of the State of Uttar Pradesh as Assistant Engineer in the Irrigation Department. On 3-8-1977 he was traveling in a Government vehicle — a jeep bearing number UTE 4698, from Lucknow to Sitapur, on official duty. The vehicle was being driven by Hemnath who was also in the employment of the State of Uttar Pradesh as driver. A number of other persons were sitting in the vehicle. After covering a distance of 40 to 45 Kms. the driver lost control of the vehicle and it swerved to its right side and collided with the trunk of a tree on the right side of the road as a result of which the occupants including Ram Kishore received severe injuries. Ram Kishore Agarwal received severe injuries on his head and leg. He was rushed to the hospital where he succumbed to the injuries. He left behind Smt. Radha Agarwal, as his widow and Km. Lakshmi Agarwal, daughter, aged 6 months. The widow and the daughter both filed a claim petition under S. 110-A of the Motor Vehicles Act claiming compensation for the death of Ram Kishore Agarwal. The State of Uttar Pradesh contested the petition. Both the parties produced oral evidence. The Motor Accidents Claims' Tribunal on appraisal of the evidence on record held that the accident occurred on account of rash and negligent driving of the vehicle and the State was responsible for the act of its employee and as such it was liable to pay compensation to the claimants. The Tribunal further held that the claimants were put to a loss of Rs. 1,53,795.34 paise and the State was liable to pay that amount as compensation along with interest at the rate of 6 per cent per annum. The claimants were not satisfied with the amount of compensation, they have therefore preferred this appeal under S. 110-D of the Act. Learned counsel for the claimants urged that the amount determined by the Tribunal was inadequate as the Tribunal failed to take into account the increments which may have been earned by the deceased and the promotions which may have been granted to him. By passage of time the deceased would have drawn salary in higher grade and he would have contributed higher amount of money for the welfare of the claimants. Learned counsel further urged that the deduction of the amount of family pension as well as the deduction of the amount paid to the claimants on account of insurance policy and gratuity was not permissible.
3. The deceased was in Government service on the date of his death. Had he remained alive, he would have retired from Government service at the age of 58 years on attaining the age of superannuation. The Tribunal was not right in determining the compensation treating the deceased to have remained in service up to 60 years. The deceased was receiving a salary of Rs. 1,008/- per month as Assistant Engineer. He was in Government service. He was required to do touring on Government work. He would be putting on good clothes and must be spending about Rs. 500/- on his person and his contribution for the welfare of his wife and six months' old child must be not more than Rs. 500/- per month. The Tribunal is not right in holding that the deceased must have been paying a sum of Rs. 808/- per month to his wife and child. It is difficult to imagine that a Gazetted Government servant would be able to maintain himself properly with a paltry sum of Rs. 200/- per month. It is true that the widow of the deceased Smt. Radha Agarwal has stated that her husband had been spending only a sum of Rs. 150/- or so on himself and the remaining amount he used to give to her for family expenses. We are not inclined to accept the testimony of Smt. Radha Agarwal on this question. She is highly interested witness. Having regard to the circumstances in which the deceased was placed we are of the opinion that he must have been spending a sum of Rs. 500/- for his own welfare and maintenance including fooding, clothing and entertainment and he would be contributing only Rs. 500/- for the welfare of the family per month. The claimants were deprived of this amount for a period of 30 years. The total amount which the claimants would have received would be Rs. 500/- × 12 × 30 = 1,80,000/-. This represents the loss from salary.
4. The Tribunal fixed the longevity of the deceased at 60 years. We are of the opinion that of late medical facilities have greatly increased as a result or which longevity has increased. In Smt. Manjushri Raha v. B.L Gupta ((1977) 2 SCC 174 : AIR 1977 SC 1158), the Supreme Court held that in the present economic condition the life of an average Indian has increased and as such it would be reasonable to expect longevity till the age of 65 years. The deceased could have therefore lived up to the age of 65 years. Even after his retirement the deceased would have received pensionary benefit and being a technical person he could have employed himself to some avocation. There is no evidence on record to show as to what amount of pension the deceased would have derived after his retirement but we think that the amount of pension would not have been less than Rs. 400/- per month. The deceased's income from other sources would have been about Rs. 500/- per month, out of which the petitioner could have spent and contributed a sum of Rs. 400/- per month towards maintenance of his wife only as his daughter would have been married much before his retirement from service. The deceased's contribution for the welfare of the widow at the rate of Rs. 4,800/- per annum for a period of seven years comes to Rupees 4,800 × 7 = 33,600/-. Thus in all the claimants were put to a pecuniary loss of Rs. 1,80,000/- plus Rs. 33,600 = 2,13,600/-.
5. In assessing damages certain other factors have also to be taken into account, such as uncertainties of life and the fact of accelerated payment that the claimant would be getting a lump sum payment which but for the death of deceased would have been available to him in driblets over a number of years. Allowance must be made for the uncertainties and the total figure scaled down accordingly. The deceased might not have been able to earn till the age of retirement for some reason or the other like illness or for having to spend more time to look after the family which was expected to grow. Thus the amount assessed has to be reduced having taken into account these imponderable factors. See M.P.S.R.T.C v. Sudhakar ((1977) 3 SCC 64 : AIR 1977 SC 1189). In our opinion, a deduction of 25% should be made from the amount of compensation as the claimants would have received the amount determined earlier in driblets spread over for a period of 37 years. Making deduction at the rate of 25 per cent the total amount comes to Rs. 1,62,000/-. This amount, in our opinion, represents the amount of compensation payable to the claimants. The Tribunal has awarded a sum of Rs. 1,53,000/-, which appears to be reasonable figure and we do not find any reason to disturb.
6. Learned counsel for the claimants urged that no deduction on account of lump sum payment should be made. He cited a number of authorities — Maj. Jagjit Singh v. Kartar Singh (1973 ACC CJ 147); Kailashwati v. Haryana State, 1974 ACC CJ 514 : (AIR 1975 Him Pra 35); and Ganga Devi v. Municipal Corporation of Delhi (1980 ACC CJ 364) (Delhi). None of these authorities lay down clearly that no deduction on the basis of lump sum payment is permissible, besides in each case the question of compensation was considered on its own facts and circumstances. We have already pointed out that the Supreme Court has in the case of M.P.S.R.T.C (supra) laid down clearly that such a deduction must be made in determining the compensation. The dictum laid down by the Supreme Court is binding, as such we consider it proper and reasonable to make the deduction on account of lump sum payment. Having regard to the facts and circumstances of the case we think it would be reasonable to make deduction at the rate of 25%.
7. Learned counsel urged that the Tribunal committed error in deducting family pension and the amount of insurance policy and gratuity. We agree with the contention of the counsel for the claimants. The family pension awarded to the claimants could not be deducted from the amount of compensation as the pecuniary benefits would have been earned by the deceased if he had remained alive. It is not permissible to deduct the amount of insurance policy, gratuity of provident fund as held by a Division Bench of this Court in Smt. Kaushalya Devi v. Housing and Development Board (F.A.F.O No. 297 of 1975) decided on 15-7-1981. Even though we, disagree with the view taken by the Tribunal we do not consider it proper or necessary to disturb the amount awarded represents a reasonable figure of compensation as discussed earlier.
8. Learned counsel for the appellants then urged that the Tribunal failed to consider the increments which the deceased would have earned and the increments and promotions which may have been earned by the deceased in service. According to the learned counsel by passage of time the deceased could have earned maximum scale and could have been promoted to the post of Executive Engineer, Superintending Engineer or may be to the apex position of Chief Engineer. The Tribunal should have therefore determined the compensation on the basis of the salary which the deceased would have earned on the aforesaid post. It is true that while considering the pecuniary loss, increments and promotions should be taken into account but in the instant case, there is no evidence at all on record to stow as to what was the scale of salary in which the deceased was working on the date of accident. There is further no evidence as to what increments he would have earned in the years to come. There is no iota of evidence on record as to when he would have been promoted to the higher post and in what pay scale of service. No witness or record from the Accountant General's office or from the Irrigation Department was produced to prove these matters nor any certificate or documentary evidence was filed showing the increments and the maximum grade or the chances of promotion of the deceased. In the absence of evidence it is not possible to take into account the increments and the promotions which the deceased may have earned.
9. For the reasons stated above we are of the opinion that even though the Tribunal committed error in arriving at the amount of compensation but the amount determined by it is reasonable which does not caff for any interference.
10. The appeal fails and is accordingly dismissed, but there will be no order as to costs.
11. Appeal dismissed.
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