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K. Vasantha And Others v. Venugopal Achari And Others

Madras High Court
Feb 2, 1987
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Structured Summary of the Opinion

Factual and Procedural Background

On 18 May 1977 Krishnamoorthi, employed as a B Grade tinker in the Tamil Nadu Small Scale Industries Engineering Workshop at Villupuram, was killed in an accident involving lorry registration No. TNF 6221. The lorry belonged to the second respondent and was driven by the first respondent. The first appellant is the widow of the deceased and appellants 2–4 are the deceased's minor daughters.

The appellants filed O.P. No. 4 of 1978 before the Motor Accidents Claims Tribunal (Sub-Court), Cuddalore, claiming a total of Rs. 50,000 in compensation. The Tribunal awarded Rs. 4,000. The appellants appealed to challenge the adequacy of the award and certain deductions made by the Tribunal.

The Tribunal found the accident was caused by rash and negligent driving of the lorry by the first respondent. The Tribunal also found on facts that the deceased's monthly salary including allowances was Rs. 265.50 and that the dependants' benefit would be Rs. 160 per month. The deceased was about 35 years old at death and, on the Tribunal's finding, would have continued in employment for 23 years.

On the Tribunal's calculations the lump-sum loss of dependency was fixed at Rs. 14,000 (based on Rs. 60 per month for 23 years after deducting Rs. 100 per month as family pension from Rs. 160). From that Rs. 14,000 the Tribunal further deducted Rs. 10,000 received under a Family Benefit Fund scheme, resulting in a net award of Rs. 4,000.

Legal Issues Presented

  1. Whether the quantum of compensation awarded by the Tribunal was adequate.
  2. Whether the Tribunal was justified in law in deducting Rs. 10,000 paid under the Family Benefit Fund scheme (an ex gratia payment) from the compensation amount.
  3. Whether the Tribunal was justified in deducting an assumed family pension (taken as Rs. 100 per month) from the dependants' loss of dependency.
  4. Whether amounts already received by the appellants under the Workmen's Compensation Act should be deducted from any compensation awarded under the Motor Vehicles Act.
  5. Whether the petition for compensation was maintainable in view of payments already made under the Workmen's Compensation Act (raised by the second respondent).

Arguments of the Parties

Appellants' Arguments

  • Counsel for the appellants argued that the Rs. 10,000 paid under the Family Benefit Fund Scheme is an ex gratia payment and should not be deducted from compensation calculated on different principles (citing a Division Bench decision in Pallavan Transport Corporation Ltd. v. Visalakshi).
  • Counsel also relied on the Supreme Court judgment in Sivammal v. Pandian Roadways Corporation to contend that the Tribunal was wrong to deduct family pension receivable by the appellants from compensation.
  • If those two deductions are disallowed, appellants contended they would be entitled to the compensation as claimed in the appeal (i.e., enhancement substantially above Rs. 4,000 awarded by the Tribunal).
  • On the point of amounts already paid under the Workmen's Compensation Act, appellants' counsel accepted that such amounts should be given due consideration and could be deducted from any award under the Motor Vehicles Act (relying on Oriental Fire & General Insurance Co. Ltd. v. Valliammal).

First Respondent's Arguments

  • Counsel for the first respondent submitted that the compensation granted by the Tribunal was itself excessive and that the appellants were not entitled to any excess compensation beyond the Tribunal's award.

Third Respondent (Insurance Company's) Arguments

  • Counsel for the third respondent supported the Tribunal's finding that the insurance company was not liable because the driver (the first respondent) did not possess a valid driving licence.
  • It is noted in the opinion that no appeal against that particular finding was filed by the other respondents.

Second Respondent's Arguments

  • Counsel for the second respondent contended that the petition for compensation was not maintainable because the appellants had already been paid compensation by the Additional Commissioner for Workmen's Compensation (order dated 21.7.1978).
  • Assuming maintainability, counsel argued that the Tribunal erred in using the full 23 years for multiplication and failed to take into account the uncertainties of life, the effect of accelerated (lump-sum) payment, and the fact that the deceased would have received his earnings over many years (citing M.P. Transports Corporation v. Sudhakar (S.N.) to support this approach).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Pallavan Transport Corporation Ltd. (Metro) rep. by Mg. Director v. Visalakshi and Ors., C.M.A. No. 21 of 1981 (Division Bench) Holds that payment under the Family Benefit Fund Scheme is an ex gratia payment and should not be deducted when calculating compensation payable (which is founded on different principles). The court applied this rule to hold that the Tribunal was wrong to deduct Rs. 10,000 (Family Benefit Fund payment) from the compensation amount.
Sivammal v. Pandian Roadways Corporation (Supreme Court) Holds there is no justification for reducing compensation by pensionary benefits evaluated; reducing compensation by such pensionary benefits is not acceptable. The court relied on this Supreme Court observation to conclude that the Tribunal's deduction of Rs. 100 per month as family pension (reducing dependency loss) was not sustainable.
Messrs Oriental Fire and General Insurance Co. Ltd. v. Valliammal and Ors. (1981) 94 L.W. 503 States that where an application is filed under the Motor Vehicles Act and later payment is made under the Workmen's Compensation Act, the Motor Vehicles Act claim should not be dismissed; amounts already paid under Workmen's Compensation must be taken into account when awarding compensation under the Motor Vehicles Act. The court applied this principle to deduct the amount already received by the appellants under the Workmen's Compensation Act (Rs. 12,700) from the recomputed compensation payable under the Motor Vehicles Act.
M.P. Transports Corporation v. Sudhakar (S.N.) (Supreme Court citation relied on by second respondent) Cited by the second respondent to support the proposition that uncertainties of life, accelerated/lump-sum payment and related considerations should be accounted for when assessing damages and multipliers for loss of dependency. The court considered this argument but found other factors (increments and promotions the deceased would have received) offset the particular lacuna in the Tribunal's approach and ultimately did not accept the second respondent's contention to reduce the award on those grounds.

Court's Reasoning and Analysis

The court proceeded step-by-step on the basis of the material and arguments before it:

  1. The court accepted the Tribunal's unchallenged finding that the accident was caused by the rash and negligent driving of the lorry by the first respondent, and proceeded on that footing.
  2. The court identified the principal legal question as whether the Tribunal was correct in law to make two deductions from the lump-sum calculation of dependency loss: (a) Rs. 10,000 received from the Family Benefit Fund scheme, and (b) an assumed family pension amount (taken by the Tribunal as Rs. 100 per month).
  3. On the first deduction (Rs. 10,000 Family Benefit Fund payment) the court relied on the Division Bench ruling in Pallavan Transport Corporation to hold that this was an ex gratia Government payment and should not be deducted when computing compensation under the Motor Vehicles Act. The court found the Tribunal's deduction of Rs. 10,000 incorrect.
  4. On the second deduction (family pension of Rs. 100 per month) the court relied on the Supreme Court's ruling in Sivammal v. Pandian Roadways Corporation which disapproved of reducing compensation by the monetary valuation of pensionary benefits. The court concluded the Tribunal's deduction of the family pension was not sustainable.
  5. The court then recalculated the compensation on the Tribunal's accepted factual findings: dependants' loss of Rs. 160 per month for 23 years equals Rs. 44,160. From that the court deducted the Rs. 4,000 already paid by the Tribunal, producing Rs. 40,160.
  6. Applying the principle from Oriental Fire & General Insurance (that amounts paid under the Workmen's Compensation Act should be taken into account), the court deducted Rs. 12,700 (amounts already received under the Workmen's Compensation Act) from Rs. 40,160, leaving a balance of Rs. 27,460 payable to the appellants.
  7. The court rejected other contentions of respondents 1 and 3 as not tenable. It also rejected the second respondent's argument that uncertainties of life and the accelerated/lump-sum nature of payment should have led to a smaller multiplicand because the Tribunal's failure to account for increments and promotions was, in the court's view, offsetting. In short, the court did not accept the second respondent's submission to reduce the multiplier or the award on that basis.
  8. The court also noted the procedural point that the insurance company's non-liability finding (due to lack of a driving licence) had not been appealed by other respondents, and therefore that finding stood as in the Tribunal.
  9. Finally, having determined the net additional payable amount at Rs. 27,460, the court ordered interest and directions relating to the minors' share and its custody in a fixed deposit.

Holding and Implications

Core Ruling: The court allowed the appeal and held that the appellants are entitled to an additional sum of Rs. 27,460, in addition to amounts already received, with interest at 12% per annum from the date of the original petition.

Implications and direct effects:

  • The Tribunal's deductions of Rs. 10,000 (Family Benefit Fund payment) and the family pension (Rs. 100 per month) from the compensation amount were held to be incorrect and therefore disallowed.
  • Amounts already received under the Workmen's Compensation Act (Rs. 12,700) were correctly to be taken into account and deducted from the recomputed compensation under the Motor Vehicles Act.
  • The net additional amount payable to the appellants is Rs. 27,460 (after deducting prior payments and Workmen's Compensation receipts), payable with 12% p.a. interest from the date of the original petition. The appeal was allowed with costs.
  • Administrative directions: the minors' share of the enhanced amount is to be deposited in a fixed deposit in a Nationalised Bank by the Tribunal below; the guardian of the minors may withdraw the interest once in six months from that fixed deposit account.
  • The opinion does not state that a novel legal precedent was created; instead, it applied existing authorities (as cited) to the facts and altered the quantification of compensation accordingly.

This summary is strictly confined to the information contained in the provided opinion and does not add or infer facts beyond that text.

Show all summary ...

1. The petitioners in O.P. No. 4 of 1978 on the file of the Motor Accidents Claims Tribunal (Sub-Court), Cuddalore, are the appellants in this appeal.

2. One Krishnamoorthi working as B Grade tinker in Tamil Nadu Small Scale Industries Engineering Workshop at Villupuram, was killed by lorry bearing registration No. TNF 6221, belonging to the second respondent driven by the first respondent on 18th May, 1977. The first appellant is the widow of the deceased Krishnamoorthi and appellants 2 to 4 are the minor daughters of the deceased. In the petition, the appellants claimed a total compensation of -Rs.50,000. However, the Motor Accidents Claims Tribunal, Cuddalore, awarded a sum of Rs. 4,000, and aggrieved by that order of the Motor Accidents Claims Tribunal, Cuddalore, this appeal has been filed for enhancement of the compensation.

3. At the outset, it may be mentioned that against the finding of the Tribunal below, to the effect that the insurance company, the 3rd respondent herein was not liable to pay any compensation as the first respondent who drove the vehicle did not possess a valid driving licence, no appeal was filed by the other respondents.

4. The Tribunal, on an appreciation of oral and documentary evidence has found that the accident was due to the rash and negligent driving of the lorry TNF. 6221 by the first respondent. This finding has not been and cannot be challenged by the respondents. Therefore, I proceed on the footing that the accident was caused as a result of rash and negligent driving of the lorry by the first respondent.

5. The next question will be whether the quantum of compensation given by the Tribunal was adequate and whether the Tribunal is justified in law in deducting the sum of Rs. 10,000, received by the appellants towards the Family Benefit fund scheme and also the pension receivable by the appellants. The Tribunal has found on facts that the deceased was getting a monthly salary of Rs. 265.50 including allowance and out of which, the appellants would have got the benefit of Rs. 160 per month. The Tribunal has also found that the deceased was aged about 35 years at the time of death and he would have been in employment but for the death for a period of 23 years. Normally, the Tribunal would have calculated the lump sum payment taking into account the sum of Rs. 160 as the basis but for the fact that the Tribunal thought that out of Rs. 160, Rs. 100 must be deducted towards the family pension scheme receivable by the appellants and therefore, the actual loss of dependants would be Rs. 60 per month for a period of 23 years. On that basis, the Tribunal fixed the lump sum payment at Rs. 14,000 and from that lump sum the Tribunal, further deducted Rs. 10,000 paid to the appellants towards Family Benefit Fund and therefore, fixed the net compensation at Rs. 4,000.

6. Mr. R. Balasubramaniam, learned Counsel for the appellant contended that a Division Bench of this Court in Pallavan Transport Corporation Ltd. (Metro) rep. by Mg. Director v. Visalakshi and Ors. C.M.A. No. 21 of 1981, has taken the view that payment towards the Family Benefit Fund Scheme being an ex-gratia payment, should not be taken into account in calculating the compensation, payable which is on different principles. Therefore, the deduction of Rs. 10,000 is unsustainable. The learned Counsel also cited a judgment of the Supreme Court reported in Sivammal v. Pandian Roadways Corporation , in support of is contention that the Tribunal was wrong in deducting the family pension receivable by the appellants from the compensation amount. According to the learned Counsel, if these two deductions are disallowed, the appellants would be entitled to the compensation as claimed in the appeal.

7. Mr. Ganapathi, learned Counsel for the first respondent submitted that the compensation granted by the Tribunal itself was excessive and the appellants are not entitled to any excess compensation. Mr. Vedantatn, learned Counsel appearing for the 3rd respondent, submitted that the Tribunal was right in holding that the Insurance Company was not liable to pay any compensation as the vehicle involved in the accident was driven by a person who had no licence to drive the vehicle.

8. Mr. Elamurugan, learned Counsel appearing for the second respondent, submitted that the petition for compensation itself is not maintainable inasmuch as the appellants were paid compensation by the Additional Commissioner for Workmen's Compensation by his proceedings, dated 21.7.1978. Further, Mr. Elamurugan contended that assuming the petition was maintainable, the Tribunal erred in taking the full 23 years for multiplication. According to the learned Counsel in assessing damages, the Tribunal should have taken into account the uncertainties of life and the fact of accelerated payment and also the fact of the appellant's getting lump sum payments, which but for the death of Krishnamoorthi would have been available to them in driblets over a number of years. In support of this, he cited a judgment of the Supreme Court reported in M.P. Transports Corporation v. Sudhakar (S.N.).

9. In reply to the first contention of Mr. Elamurugan, Mr. R. Balasubramaniam, submitted that this Court has held in Messrs, Oriental Fire and General Insurance Co. Ltd, v, Valliammal and Ors. (1981) 94 L.W 503, that if the application for compensation is filed under the Motor Vehicles Act and later on some payment was given under Workmen's Compensation Act, the claim under the Motor Vehicles Act should not be thrown out, but the amount awarded under the Workmen's Compensation Act must be given due consideration, while awarding the compensation under the Motor Vehicles Act. Therefore, the amount already received by the appellants under the Workmen's Compensation Act could be deducted from the amount awardable under the Motor Vehicles Act. On the second point, the learned Counsel submitted that the Tribunal had not taken into account the increments and other promotions that the deceased would have got, had he continued in service and that factor would set off the non-consideration of uncertainties of life, and the accelerated and lump sum payment.

10. After carefully considering the rival contentions I am inclined to agree with the argument of the learned Counsel for the appellants. On the question whether the Tribunal was right deducting Rs. 10,000, paid towards Family Benefit Schemes, V. Ramaswami, J., speaking for the Division Bench has ruled as follows:

The Court in arriving at the compensation, has deducted a sum of Rs. 10,000 which is payable to the legal representatives of the deceased under the Family Benefit Scheme and this is one of the claims in the cross objections. That amount should not have been deducted, because that is an ex gratia payment made by the Government and should not be taken into account in calculating the compensation payable, which is on different principles. Even if the deceased is a rich man, that could not deprive a person of the entitlement for compensation. The disallowance of that sum of Rs. 10,000 is therefore, incorrect.

The above ruling of the Division Bench squarely applies to the facts of this case, and therefore, I do not find any difficulty in holding that the Tribunal was wrong in deducting Rs. 10,000 from the compensation amount arrived at. Further, the Tribunal has deducted a sum of Rs. 100 per month representing family pension receivable by the appellants. The Tribunal in paragraph 34 has observed as follows:

As it Is admitted by P.W.I, that proposals would have been sent for family pension she would ' receive it sooner or later. But she has not stated what the quantum would be. It can be taken judicial notice of the fact that after 1st February, 1975, wife and minor children of a Government servant will be entitled to a minimum family pension of Rs. 60 D.A. Rs. 32, pension increase of Rs. 5 and additional D.A. Rs. 5 all totalling to Rs. 102 per month. It may be roughly taken as Rs. 100 which the petitioners will get sooner or later as soon as it is sanctioned by the head of the department and approved by the Accountant-General. This amount the petitioners would not have been entitled, but for the death of the deceased Krishnamoorthi. So it will have to be given credit to in the loss of dependency of Rs. 160 by them. Then the actual loss of dependency comes to Rs. 60 per month, i.e., Rs. 720 per year.

The above deduction is also not sustainable in the light of the ruling of the Supreme Court in Sivammal v. Pandian Roadways Corporation, . In that case, the Supreme Court has observed as follows:

The High Court next proceeded to evaluate the pensionary benefits which the widow, appellant 1 would enjoy. Appellant 1 as the widow of the deceased is entitled to pension at the rate of Rs. 120 per month, for a period of seven years where after the amount will taper down. The High Court evaluated the monetary benefit of pension and reduced the amount of compensation by Rs. 10,000. We are unable to appreciate this reduction. We find no justification for it.

Therefore, the Tribunal was not right in making two deductions referred to above while arriving at tne compensation payable to the appellants. If these two deductions are disallowed, then the compensation amount payable on the basis of the Tribunal's finding will be Rs. 160 per month, for the period of 23 years. That will be Rs. 44,160. From this amount, Rs. 4,000 already paid as per the award of the Tribunal has to be deducted. Then, the amount will be Rs. 40,160. From this Rs. 40,160 the amounts received by the appellant under the Workmen's Compensation Act have to be deducted. That amount comes to Rs. 12,700. The balance will be Rs. 27,460. In this appeal, the appellants will be entitled to Rs. 27,460. The other arguments of the learned Counsel for respondents 1 and 3 are not tenable and the argument of the learned Counsel for the second respondent that uncertainties and the payment of lump sum will be set off as against the factor not considered by the Tribunal, viz., the increments and the promotion that the deceased would have got had he continued in service.

11. In the result, I hold that the appellants are entitled to Rs. 27,460 in addition to the amount already received by them with interest at 12 per cent per annum from the date of the original petition. This appeal is accordingly allowed with costs. Out of the enhanced amount, as per this judgment, the minors' share shall be deposited in a fixed deposit in a Nationalised Bank by the Tribunal below.

12. The guardian of the minors can withdraw the interest once in six months from the fixed deposit account.