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Swaran Kanta Seth & Ors v. Vijay Aggarwal & Ors S
Structured Summary of the Opinion by A.K. Sikri, J.
Factual and Procedural Background
This is an appeal under Section 110-A of the Motor Vehicles Act, 1939 against the judgment dated 20 May 1987 passed by the Motor Accidents Claim Tribunal (MACT) in Suit No. 157/80. The suit was filed by the appellants, who are the legal heirs of the deceased, Sh. Om Prakash Seth. The appellants originally claimed compensation of Rs. 10,00,000/-.
Facts of the accident as recorded in the opinion: on 25 April 1977 at about 5:50 PM, the deceased (an advocate and taxation consultant aged 48 years) was riding his two-wheeler scooter No. DHE-7005 from his residence to his office. While crossing near Patel Chest Institute, after having crossed roughly three-fourths of the crossing and keeping to the left, a car No. DHD-2823 driven by respondent No. 1 came from the Miranda House side and violently hit the scooter. The deceased sustained fatal injuries and died. The MACT found that respondent No. 1 was driving rashly and negligently (finding recorded on issue No. 2). Respondents 2 and 4 were owners of the car, and respondent No. 3 was the insurance company for the offending vehicle.
By the impugned judgment the MACT awarded Rs. 2,08,000/- with simple interest at 9% per annum from the date of petition till payment. The appellants, dissatisfied with the quantum, filed the present appeal seeking enhancement of compensation.
Legal Issues Presented
- Whether the MACT's award as to the quantum of compensation (Rs. 2,08,000/-) is valid and, if not, what is the correct quantum to be awarded to the appellants?
- Whether the MACT erred in its assessment of the deceased's annual income for computation of dependency and in the choice of multiplier?
- Whether interest should have been awarded at 12% per annum (from filing to date of order) instead of 9% per annum?
Arguments of the Parties
Appellants' Arguments
- The MACT erred in fixing the deceased's annual income at Rs. 20,000/-; the correct income for compensation purposes should be taken at Rs. 5,000/- per month (i.e., Rs. 60,000/- per annum), taking into account future prospects.
- The multiplier of 27 (advanced multiplier) ought to have been applied instead of the multiplier of 16 used by the MACT, given the deceased's age and prospects.
- Interest should have been awarded at 12% per annum rather than 9% per annum.
Respondents' Position
No counsel appeared on behalf of the respondents at the time of arguments; therefore no respondent arguments are recorded in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Shakuntala Garg v. Megh Raj (2001 ACJ 354) | Support for considering future prospects in assessing compensation where a professional's earning potential would increase. | The court relied on the principle that future prospects should be taken into account when assessing compensation for a professional (advocate) approaching a stage of increased earnings. |
| Dr. Nagendra Ghosh Gupta & Anr. v. Lekhi Ram & Ors. (2001 ACJ 593) | Illustrates taking an enhanced average income for a professional (lady doctor) based on evidence of initial earnings and likely increase due to experience; and adjusting multiplier when appropriate. | The court cited the case as an example where the tribunal took future prospects into account and applied a larger monthly income and a higher multiplier; used this reasoning to justify increasing the deceased's assessed income for compensation purposes. |
| B.D. Gupta v. R. Rani (2001 All India High Court Cases 1625) | Enhancement of compensation by considering future increases in earnings; application to young professionals/trainees. | Used as authority for considering future prospects and increasing the assessed monthly/annual income when calculating dependency — supports upward revision of income in this appeal. |
| Arun Sondhi v. Delhi Transport Corporation (91 (2000) DLT 17 : 2001 (58) DRJ 555) | Consideration of future earnings for young persons (example: B.A final year student) and fixation of appropriate future monthly income where present earnings are nil or low. | Cited as precedent where the court took future earning prospects into account; used by the court to support a methodology of assessing and increasing future income for compensation calculation. |
| Spring Meadows Hospital v. Hanoi Ahluwalia | Recognition of compensation for pain and suffering of next kin arising from injury/negligence (example: Rs. 5,00,000 awarded to parents of injured child). | Cited to justify awarding a sum to the appellants for pain and suffering resulting from the sudden and untimely death of the deceased; the court awarded Rs. 1,00,000 on this account in the present case. |
Court's Reasoning and Analysis
The court proceeded by first noting the limited scope of this appeal: no respondents appealed, so the sole issue is the correctness of quantum awarded by the MACT. The MACT had found respondent No.1 negligent and liable; that finding was not disturbed.
On the MACT's computation: the MACT had fixed the deceased's annual income at Rs. 20,000/-, derived from an income tax statement (Ex. PW-12) reflecting Rs. 2,000 per month and corroborated by PW-16 (the widow), who earlier stated the deceased gave her Rs. 1,500 per month for household expenses. The MACT deducted Rs. 7,000 per year as the deceased's personal expenses and applied a multiplier of 16 to arrive at Rs. 2,08,000/-.
The appellants argued for upward revision of income (to Rs. 60,000 per annum), a higher multiplier (27), and interest at 12%. The court examined the evidentiary basis for the MACT's annual income finding and then evaluated whether future prospects ought to be considered in computing compensation.
Relying on the cited authorities, the court accepted that in the case of professionals (such as advocates) approaching an age where their earnings typically increase, future prospects must be taken into account. The court concluded that fixing compensation solely on contemporaneous taxable income (Rs. 20,000/-) was erroneous.
The court fixed the deceased's average future annual earning for compensation purposes at Rs. 40,000/-. From this the court deducted one-third (Rs. 13,000/-) as the deceased's personal expenses, arriving at an annual dependency contribution of Rs. 27,000/-.
Regarding the multiplier, the court noted the MACT's own finding of a family history of longevity and observed that professionals have no fixed retirement and often earn more with advancing age. The court therefore increased the multiplier from 16 to 20, concluding the deceased could have practised for at least another 20 years. Multiplying Rs. 27,000 by 20 produced Rs. 5,40,000/- as loss of dependency.
The MACT had not awarded any sum for pain and suffering of the appellants arising from the sudden death. The court referred to authority recognising awards for such non-pecuniary loss and deemed Rs. 1,00,000/- appropriate for this head given the accident occurred in 1977.
On interest, the court found the appellants' claim for 12% per annum reasonable up to the date of the present order (reflecting historical interest rates). For future interest it fixed 9% per annum. Consequently, interest at 12% was awarded from the date of filing of the petition until the date of the present order, and 9% thereafter until payment.
Summing the components: Rs. 5,40,000 (dependency) + Rs. 1,00,000 (pain and suffering) produced an aggregate compensation of Rs. 6,40,000/-, with the interest and costs directions noted below.
Holding and Implications
The MACT judgment is modified; the appellants are awarded compensation of Rs. 6,40,000/- with specified interest and costs; the appeal is disposed of accordingly.
Direct effects on the parties (as ordered in the opinion):
- The appellants are awarded Rs. 6,40,000/- in total.
- Interest at 12% per annum is awarded from the date of filing of the petition until the date of this order.
- Thereafter interest at 9% per annum will apply from the date of this order until payment.
- The appellants are also entitled to costs of Rs. 5,000/- in this appeal.
- The previous MACT award of Rs. 2,08,000/- is thereby set aside and replaced by the modified award.
Broader implications: The opinion applies established principles (cited precedents) that allow tribunals to consider future prospects of professionals and to adjust multipliers and heads of compensation accordingly. The opinion does not purport to lay down a new legal principle; it applies existing authorities to the facts of this case to revise the quantum.
This summary is strictly confined to the facts, arguments, authorities and reasoning as recorded in the provided opinion and does not add or infer information beyond that text.
A.K Sikri, J.:— This appeal is filed by the appellants under Section 110-A of the Motor Vehicles Act, 1939 against the judgment dated 20th May, 1987 passed by Sh. S.M Gupta, Judge, MACT in Suit No. 157/80. That suit was filed by the appellants herein, who are the legal heirs of deceased Sh. Om Prakash Seth. Sh. Om Prakash Seth died in an accident and by the aforementioned suit, the appellants had claimed compensation to the tune of Rs. 10 lacs. By the impugned judgment, the learned Judge, MACT awarded compensation of Rs. 2,08,000/-with simple interest at the rate of 9 per cent per annum from the date of petition till payment. The appellants are not satisfied with the amount of compensation awarded, and therefore, have filed the present appeal for enhancement of the compensation.
2. The deceased was an Advocate who died in a road accident. On 25th April, 1977, at about 5.50 PM the deceased was going from his residence to his office on his two-wheeler scooter bearing No. DHE-7005 which he was driving himself. When he was crossing the road-crossing near Patel Chest Institute and had crossed 3/4th of the crossing, keeping to his left side of the road going from Vijay Nagar side, towards Delhi University a car No. DHD-2823 which was being driven by the respondent No. 1 came from Miranda House side and violently hit the scooter being driven by the deceased. In the process the accident caused fatal injuries to Sh. Om Prakash Seth who ultimately succumbed to those injuries. The fact that the respondent No. 1 was driving the car rashly and negligently has been proved and the learned Judge MACT has recorded the findings to this effect on issue No. 2. The respondents 2 and 4 were the owners of the car and the respondent No. 3 is the Insurance Company which had insured the offending vehicle.
3. Since there is no appeal filed by the respondents, the only question which is to be determined in this appeal is the validity of the judgment insofar as it relates to the quantum of claim awarded by the learned Judge, MACT.
4. While computing the amount of Rs. 2,08,000/- the learned Judge, MACT has arrived at the annual income of the deceased at Rs. 20,000/- out of which Rs. 7,000/- was taken as his own expenses and his contribution to the family was calculated at Rs. 13,000/- per annum. Using the multiplier of 16, the amount of Rs. 2,08,000/-was arrived at.
5. The learned counsel for the appellants submitted that the learned Judge, MACT has erred on three counts. Firstly, in accepting the annual income of Rs. 20,000/- which is on lower side and it should have been Rs. 5,000/- per month, i.e Rs. 60,000/- per annum. Secondly, the multiplier of 27 ought to have been used instead of multiplier of 16, considering the age of the deceased. Thirdly, it is stated that interest at the rate of 12 per cent per annum should have been awarded instead of 9 per cent per annum.
6. Nobody appeared on behalf of the respondents at the time of arguments. Before adverting to the submissions made by the learned counsel for the appellants, few material facts may be noticed.
7. It is not in dispute that the deceased Sh. Om Prakash Seth was practicing as an advocate and was taxation consultant. He was 48 years of age. The learned Judge, MACT has recorded a finding of fact that there was a history of longevity of life in his family. The appellants had contended that the deceased was earning Rs. 2,700/- per month. However, the learned Judge, MACT found that as per Ex. PW-12 the annual income of the deceased was Rs. 2,000/- per month. The appellant No. 1, the widow the deceased, appearing as PW-16 had although stated that her husband was Rs. 2,000/- to Rs. 3,000/- per month, the learned Judge, MACT noted that prior to framing of issues she had given the income of her husband as Rs. 2,000/- per month and further that the deceased used to give her Rs. 1,500/- per month for the household expenses. From this the learned Judge, MACT arrived at the finding that the annual income of the deceased was around Rs. 20,000/-.
8. In view of the aforesaid evidence and also that this taxable income of the deceased of Rs. 20,000/- annually was on the basis of the income statement for the assessment year 1977-78, findings of the learned Judge, MACT that at the time of his death, the deceased's annual income of Rs. 20,000/- cannot be faulted with. However, learned counsel for the appellants argued that for the purpose of computing compensation the future prospects of deceased should have been taken into consideration and the income ought to have been taken at Rs. 5,000/- per month. In support of this submission, the learned counsel contended that the deceased being an advocate, it is common knowledge that professionals like the advocates start earning substantially after reaching the age of 50 years and when there was evidence of the income of the deceased increasing steadily, the learned Judge, MACT ought to have taken into consideration the possible future increase in income of the deceased. In support of this submission, the learned counsel relied upon the judgment of this Court in the case of Shakuntala Garg v. Megh Raj, 2001 ACJ 354. He also relied upon another judgment of this court in the case of Dr. Nagendra Ghosh Gupta & Anr. v. Lekhi Ram & Ors., 2001 ACJ 593. In the latter case where the victim of accident was a lady Doctor the court noticed that she had just started her own private clinic and had earned around Rs. 25,000/- in four months as per income tax certificate proved on record. However, while awarding average income of Rs. 15,000/- per month was taken keeping in view the future prospects. The court observed:
“Para 3: .... She would have naturally earned much more in the days to come being a trained gynaecologist. Her practice would have grown on her gaining more experience.
Para 4: It is also a matter of common knowledge that health care provided by the State leaves much to be desired and as a result patients are constrained to throng private clinics and seek private treatment. Therefore, given regard to the prevailing state of medical affairs it is not difficult to assess that the deceased could have earned an average income of Rs. 15,000 after a year or so and her dependency could be safely put at Rs. 10,000/- It is also apparent on the face of record that M.A.C.T had applied an inadequate multiplier in the facts and circumstances of the case. Considering that admitted age of the deceased was 30 years, multiplier applied ought to have been 18 in the light of guideline contained in the Schedule under Motor vehicles Act.”
9. Similarly, the Punjab & Haryana High Court in the case Of B.D Gupta v. R. Rani, 2001 All India High Court Cases 1625 enhanced the compensation to Rs. 11,97,000/- payable to the parents of the deceased aged 23 years who was working as MBBS Internee and was getting Rs. 2,000/- per month. It took into consideration the prospects of future increases and thus the income of Rs. 12,000/-per month and calculated the dependency loss suffered by the appellants at the rate of Rs. 8,000/- per month for 12 years and awarded a sum of Rs. 11,97,000/-with interest as compensation. The father of the deceased had retired as Medical Officer and the mother of the deceased was two to three years younger to her husband when their son died in the accident.
10. A Division Bench of this Court in the case of Arun Sondhi v. Delhi Transport Corporation., 91 (2000) DLT 17 : 2001 (58) DRJ 555 took into consideration the future earnings of the injured as Rs. 5,000/- per month who was not earning anything and was a B.A final year student aged about 21 years.
11. Keeping in view the aforesaid legal position, I am of the considered view that the learned Judge, MACT committed an error in restricting the income of the deceased for the purpose of determination of compensation to Rs. 20,000/- per annum which he was earning at that time. The learned counsel for the appellants was right in his submission to the effect that the deceased being an advocate had better future prospects and he was approaching a stage in his life where he could have achieved quantum leap that would have enabled him to earn substantially more than he was earning at the time when he met with the accident. Therefore, for the purpose of compensation, the average future earning of the deceased could safely be fixed at Rs. 40,000/- annually. After deducting 1/3rd therefrom, i.e, Rs. 13,000/- per annum which the deceased would have spent on himself, it can conveniently be stated that the deceased would have contributed a sum of Rs. 27,000/- per annum for the family.
12. Insofar as multiplier is concerned, the learned Judge, MACT has itself observed that there was a history of longevity of life in the family. Keeping that in mind multiplier of 16 as used by the learned Judge, MACT appears to be inappropriate. It is a matter of common knowledge that there is no age of retirement for the professionals like advocates who not only continue to practice at their advanced stage, they even earn more at that stage. Therefore, it can easily be concluded that the deceased could have practised at least for another 20 years and multiplier of 20 can appropriately be applied in his case. Calculated in this manner, the compensation would work out to Rs. 5,40,000/- (Rs. 27,000/- × 20).
13. The learned Judge, MACT has not awarded any amount on account of pain and suffering suffered by the appellants due to sudden and untimely death of Sh. Om Prakash Seth in the said accident. The courts have recognised the principle of awarding compensation for pain and suffering suffered by next kin of the injured on account of accident. (Refer: Spring Meadows Hospital v. Hanoi Ahluwalia). In this case the court had ordered payment of Rs. 5 lacs to the parents of the injured child who had suffered injuries due to negligence of the doctors.
14. Keeping in view the fact that the accident in this case occurred in the year 1977, I am of the opinion that ends of justice would be met if the appellants are awarded a sum of Rs. one lac on this count.
15. In so far as award on interest is concerned, the demand of the appellants claiming interest at the rate of 12 per cent per annum appears to be reasonable keeping in view the Interest rates which prevailed at that time. However, keeping in view today's interest rates, future interest would be restricted to 9 per cent. Thus, the order of the learned Judge, MACT would stand modified in this respect as well by awarding interest at the rate of 12 per cent per annum with effect from the date of filing of petition till the date of this order and future interest at the rate of 9 per cent per annum
16. The order of the learned Judge, MACT, thus, stands modified and instead of compensation of Rs. 2,08,000/- as awarded by the learned Judge, MACT the appellants shall be entitled to the following compensation.
“Rs. 6,40,000/- with interest at the rate of 12 per cent per annum from the date of filing of the petition till the date of this order and interest at the rate of 9 per cent per annum from the date of this order till the payment.”
17. The appellants shall also be entitled to cost in this appeal quantified at Rs. 5,000/-.
18. The appeal stands disposed of accordingly.
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