- Bookmark
- Share
- CaseIQ
Asha Gupta And Others Petitioners v. Ramji Lal And Others S
Factual and Procedural Background
On 21 October 1995 Sh. Shyam Sunder Gupta (the deceased) was involved in a motor accident while travelling by car No. DL-3CD-2021 from Karnal towards Delhi. The car was struck by a truck (No. RJ-14G-2841) coming from the opposite direction near Babbarpur, District Panipat, Haryana. All occupants were injured; Shyam Sunder Gupta died en route to the hospital and was declared brought dead at the General Hospital.
The claim petition was filed by the deceased's widow, Smt. Asha Gupta, and their two sons, Master Rahul Gupta and Master Rohit Gupta. The Motor Accident Claims Tribunal assessed the deceased's income at the basic minimum wages for a semi-skilled worker (Rs. 1,711 per month), accepted the deceased's age as 35 years, deducted one-third for personal expenses, applied a 14-year multiplier and awarded Rs. 1,91,688 as compensation, plus Rs. 2,000 for funeral expenses and Rs. 5,000 for loss of consortium, with interest at 9% per annum from the filing of the petition till realisation.
The claimants appealed against the Tribunal's award. This Court (S.N. Kapoor, J.) heard the matter; respondents were absent and did not present arguments.
Legal Issues Presented
- Whether the Tribunal erred in fixing the deceased's income at the minimum wage rate (Rs. 1,711 per month) despite evidence suggesting a substantially higher income.
- Whether the Tribunal applied an appropriate multiplier for the deceased's age (the appellant contended that a 17-year multiplier should have been applied as per the Schedule to the Motor Vehicles Act).
- Whether the rate of interest awarded by the Tribunal (9% p.a.) was adequate and, if not, what rate should apply and for what period.
Arguments of the Parties
Appellant's Arguments
- The learned Tribunal failed to consider unchallenged evidence indicating that the deceased maintained two cars, paid rent for a shop (Rs. 1,400 per month according to the Tribunal's later findings), and paid school fees for two children; therefore, the Tribunal should not have rejected that evidence and should not have applied the minimum-wage figure.
- The Tribunal applied an incorrect multiplier; according to the appellants' counsel, in view of the Schedule to the Motor Vehicles Act and the deceased's age (35 years), a multiplier of 17 years should have been applied.
- The rate of interest fixed by the Tribunal (9% p.a.) was inadequate; higher interest should be awarded.
- Evidence before the Tribunal (notably the widow's testimony and receipts) supported a much higher monthly/annual earning for the deceased than assumed by the Tribunal.
Respondents' Position
The respondents did not appear before this Court and no counter-arguments or alternative submissions by the respondents are recorded in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, 1994 ACJ 1 | Guidance that where prospects of advancement exist it is appropriate to adopt a liberal assessment of future income (including the practice of increasing present income to reflect future prospects), deduct one-third as personal expenses, and then capitalize the dependency with an appropriate multiplier. | The Court relied on the Susamma Thomas approach to justify taking a higher figure than the Tribunal's minimum-wage estimate. It treated the deceased's likely future income prospectively (doubling the present yearly income estimate) and applied the one-third deduction before capitalising with the relevant multiplier. |
| Sarla Dixit & another v. Balwant Yadav & others, 1996 ACJ 581 | Endorses the approach of taking future prospects into account (including increasing the present income to reflect advancement), averaging actual and prospective incomes to arrive at a gross monthly figure, deducting one-third for personal expenses, and applying a multiplier appropriate to age. | The Court used the reasoning in Sarla Dixit to support estimating the deceased's average yearly income by considering future prospects and then computing the dependency after deducting one-third; this approach formed the basis for the enhanced compensation calculation in the present case. |
Court's Reasoning and Analysis
The Court proceeded in an itemised factual and legal analysis:
- Credibility and evidence: The Court accepted the widow's (P.W.3) testimony that the deceased earned significantly more than the Tribunal's assumed minimum wage. She testified that the deceased gave her Rs. 4,000 per month for household expenses, paid Rs. 1,400 per month as house rent, and Rs. 600 towards the children's fees; she produced receipts (Ex. P.W.2/1, P.W.2/4, P.W.2/5, P.W.2/6). The existence and use of two cars (one registered in the widow's name, the other in the deceased's name) and the fact the accident occurred in a car registered in the widow's name were treated as corroborative of the standard of living and earnings.
- On failure to produce income-tax returns: The Court held that absence of proof of payment of income tax did not displace the widow's credible testimony. If the deceased's income was non-taxable at the relevant threshold, then lack of income-tax returns would not prove lower income or non-payment of amounts given to the widow.
- Minimum demonstrable income: Given the evidence (including confirmation of rent payment by the landlord, P.W. Vinod Kumar Sharma), the Court concluded that the deceased's annual income would not be less than Rs. 55,000 per year.
- Use of precedents to account for future prospects: Applying the principles in Susamma Thomas and Sarla Dixit, which permit a liberal view of future prospects (often achieved by nearly doubling the present income), the Court adopted an average yearly income of Rs. 1,10,000 (i.e., Rs. 55,000 doubled) for the purpose of computing compensation.
- Deduction for personal expenses: Following the cited authorities, the Court deducted one-third of the gross annual figure for the deceased's personal expenses, leaving an average yearly dependency of Rs. 73,333 (i.e., Rs. 1,10,000 − one-third).
- Multiplier: Referring to the Schedule to the Motor Vehicles Act and the deceased's age band (between 35 and 40 years), the Court applied a 16-year multiplier (the Schedule guideline used by the Court) to capitalise the annual dependency.
- Mathematical computation and additions: The capitalised dependency (Rs. 73,333 × 16) yielded Rs. 11,73,328. The Court increased the Tribunal's awards for funeral expenses and loss of consortium to a combined Rs. 7,000 (the Tribunal had awarded Rs. 2,000 and Rs. 5,000 respectively), bringing the total compensation awarded by the Court to Rs. 11,80,328.
- Interest: Noting that Tribunals and High Courts often award interest at 12% p.a., and that 9% was low when bank rates were comparatively high, the Court granted interest at 12% p.a. from the date of the petition until 31 March 2001, and thereafter allowed interest at 9% p.a. from 1 April 2001 (linked to the observed reduction in bank fixed-deposit rates).
- Apportionment and deposit conditions: The Court specified apportionment of the award—60% to the widow and 20% to each son. Of each share, 70% was to be deposited in a fixed deposit for five years and 30% paid out immediately to the claimant (with a special instruction that, for the sons' shares, the 30% may be paid to the widow if none of the sons had attained majority). The claimant-widow (and a major son) would be entitled to quarterly interest on amounts so deposited. The Court also directed the claimants to adjust payments already received.
- Procedure and final direction: The Court observed that respondents were absent and therefore did not present submissions. The appeal was allowed; respondents (jointly and severally liable) were directed to pay and deposit the awarded amount within four weeks.
Holding and Implications
APPEAL ALLOWED / CLAIMANTS' APPEAL ACCEPTED
Holding (direct effect on parties):
- The Tribunal's award was enhanced. The Court awarded total compensation of Rs. 11,80,328 (Rs. 11,73,328 for dependency plus Rs. 7,000 for funeral expenses and loss of consortium).
- Interest was awarded at 12% per annum from the date of the petition until 31 March 2001, and at 9% per annum from 1 April 2001 until payment.
- Apportionment: 60% to the widow, 20% to each son; for each share 70% to be placed in a five-year fixed deposit and 30% payable immediately (with the caveat regarding minors and payment to the widow). Quarterly interest on deposited amounts payable to the widow and any major son.
- The respondents were directed to pay and deposit the awarded amount within four weeks and are jointly and severally liable for the payment.
Implications beyond the parties:
The Court applied established Supreme Court precedents (Susamma Thomas and Sarla Dixit) regarding consideration of future prospects, the practice of liberal estimation of income, the one-third deduction for personal expenses, and application of an appropriate multiplier. The opinion modifies the Tribunal's factual assessment upward on the basis of evidence presented (receipts, testimony, corroboration by landlord). The decision does not purport to establish a new legal principle; it applies existing authorities and the Schedule to the Motor Vehicles Act to enhance the compensation in this factual context.
S.N Kapoor, J.:—
1. Heard.
2. In an unfortunate accident which took place on 21st October, 1995 Sh. Shyam Sunder Gupta (deceased) while travelling by his car No. DL-3CD-2021 from Karnal towards Delhi via G. T. Karnal Road along with two other persons, had reached near Babbarpur District Panipat, Haryana, then his car was hit by truck bearing No. RJ-14G-2841 coming from the opposite side. All the occupants of the said car sustained injuries. Sh. Shyam Sunder Gupta died on his way to the hospital and was declared brought dead at the General Hospital. The claimants in this case, the widow-Smt. Asha Gupta, and the two sons Master Rahul Gupta and Master Rohit Gupta filed the claim petition. The learned Motor Accident Claims Tribunal (in short the ‘Tribunal’) took the income of the deceased at the basic minimum wages for a semi-skilled worker at Rs. 1711/- per month and calculated the compensation. The age of the deceased was accepted as 35 years. One-third was deducted out of the average monthly income towards his personal expenses. 14 years multiplier was applied and a sum of Rs. 1,91,688/- was awarded towards compensation, Rs. 2000/- towards funeral expenses and Rs. 5000/- towards loss of consortium with interest @ of 9% p.a On the awarded amount from the filing of the petition till realisation.
3. The claimants feeling aggrieved have filed this appeal. The learned Counsel for the appellant submits that the learned Tribunal failed to consider the virtually unchallenged evidence on record indicating that he was maintaining two cars, paying Rs. 1400/- as rent for a shop, Rs. 300/- towards school fee of each of the two children. In these circumstances, the learned Tribunal should not have rejected the evidence on record. The learned Tribunal also did not apply appropriate multiplier in view of the fact that the age of the deceased was 35 years and according to the Schedule appended to the Motor Vehicles Act, 17 years multiplier should have been applied. The next contention of the learned counsel for the appellant is that only 9% interest has been awarded.
4. This Court could not have the benefit of hearing the arguments of the respondents on account of absence of the respondents.
5. It is notable that Smt.Asha Gupta, P.W.3, widow, stated that her husband was earning more than Rs. 6000/- per month and he used to give her Rs. 4000/-towards household expenses and Rs. 1400/- as house rent, in addition to Rs. 600/-towards the fees of the two children. She filed receipts Ex. P.W.2/1 and Ex. P.W 2/4. She also stated that her husband had taken a shop on rent at the rate of Rs. 200/- per month and she proved the receipt Ex. P.W.2/5 and Ex. P.W.2/6. She further stated that they were maintaining two cars and one Was registered in her name and another in the name of her deceased husband. The Registration number of her car was DL-3CD-2021 and the registration number of the care of her husband was 4554. The cars were registered with Transport Authority, Delhi.
6. From her statement it is apparent that the claimant (widow) as well as the deceased were residing at Delhi. She also stated that the business of the deceased had to be closed for there was none to look after the same. However, she admitted in cross-examination that there was no proof of payment of income tax in her knowledge. She denied the suggestion that her husband didn't used to give her Rs. 4000/- per month for household expenses.
7. The fact that the deceased was owning a car and maintaining the same is proved by the fact that at the time of the accident the deceased was travelling in the car bearing No. DL 3CD 2021 registered in the name of Smt.Asha Gupta. Thus, this testimony of the claimant (widow) could not be rejected out of hand. In “the aforementioned circumstances, supposing the income of the deceased was Rs. 55,000/- per year then the income would not be taxable and in that light the fact that the income tax return had not been produced would not indicate that the deceased was not giving Rs. 4000/- per month to the claimant/widow. This income of over Rs. 5000/- has been further established that he was paying Rs. 1400/- as rent. A person who was paying Rs. 1400/- per month as rent, as proved by P.W.3 Mr. Vinod Kumar Sharma, the then landlord of the deceased Shyam Sunder Gupta would further confirm it. Accordingly, his annual income would not be less than Rs. 55,000/- per year. In such circumstances to apply the standard minimum wages would not be justified.
8. Taking the income of the deceased at Rs. 55,000/- per year, the compensation has to be calculated taking into consideration the guidelines laid down in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, 1994 ACJ 1 and Sarla Dixit and another v. Balwant Yadav and others 1996 ACJ 581. The relevant paragraph 13 of the judgments in Susamma Thomas's case (supra) reads as under :—
“13.....................The deceased person in this case had a more or less stable job. It will not be inappropriate to take a reasonably liberal view of the prospects of the future and in estimating the gross income it will be unreasonable to estimate the loss of dependency on the present actual income of Rs. 1,032/- per month. We think, having regard to the prospects of advancement in the future career, respecting which there is evidence on record, we will not be in error in making a higher estimate of monthly income of Rs. 2,000/- as the gross income. From this has to be deducted his personal living expenses, the quantum of which again depends on various factors such as whether the style of living was Spartan or Bohemian. In the absence of evidence it is not unusual to deduct one-third of the gross income towards the personal living expenses and treat the balance as the amount likely to have been spent on the members of the family and the dependants. This loss of dependency should capitalize with the appropriate multiplier. In the present case we can take about Rs. 1,400/- per month or Rs. 17,000/- per year as the loss of dependency and if capitalized on a multiplier of 12, which is appropriate to the age of the deceased, the compensation would work out to (Rs. 17,000/- × 12 = Rs. 2,04,000/-) to which is added the usual award for loss of consortium and loss of the estate each in the conventional sum of Rs. 15,000/.”
Similar view was taken in para 6 of the judgment in Sarla Dixit's case (supra), which reads as under :—
“....................Deceased in the present case, as seen above, was earning gross salary of Rs. 1,543/- per month. Rounding it up to figure of Rs. 1,500/- and keeping in view all the future prospects which the deceased had in stable military service in the light of his brilliant academic record and performance in the military service spread over 7 years, and also keeping in view the other imponderables like accidental death while discharging military duties and the hazards of military service, it will not be unreasonable to predicate that his gross monthly income would have shot up to at least double than what he was earning at the time of his death, i.e, up to Rs. 3,000/- per month had he survived in life and had successfully completed his future military career till the time of superannuation. The average gross future monthly income could be arrived at by adding the actual gross income at the time of death, namely, Rs. 1,500/- per month to the maximum which he would have otherwise got had he not died a premature death, i.e Rs. 3,000/- per month and dividing that figure by two. Thus, the average gross monthly income spread over his entire future career, had it been available, would work out to Rs. 4,500/- divided by 2, i.e Rs. 2,200/-. Rs. 2,200/- per month would have been the gross monthly average income available to the family of the deceased had he survived as a bread-winner. From that gross monthly income at least 1/3rd will have to be deducted by way of his personal expenses and other liabilities like the payment of income tax etc. That would roughly work out to Rs. 730/- p.m and deducting the same by way of average personal expenses of the deceased from the average gross earning of Rs. 2,200/- p.m balance of Rs. 1,450/- which can be rounded off to Rs. 1,500/- p.m would have been the average amount available to the family of the deceased, i.e, his dependants, namely, appellants herein. It is this figure which would be the datum figure per month which on annual basis would work out to Rs. 18,000/-. Rs. 18,000/- therefore, would be the proper multiplicand which would be available for capitalisation for computing the future economic loss suffered by the appellants on account of untimely death of the bread-winner. As the age of the deceased was 27 years and a few months at the time of his death the proper multiplier in the light of the aforesaid decision of this court in General Manager, Kerala State Road Transport Corpn. v. Susamma Thomas, 1994 ACJ 1 (SC), would be 15. Rs. 18,000/- multiplied by 15 will work out to Rs. 2,70,000/-. To this figure will have to be added the conventional figure of Rs. 15,000/- by way of loss of estate and consortium, etc. That will lead to a total figure of Rs. 2,85,000/-. This is the amount which the appellants would be entitled to get by way of compensation from the respondent Nos. 1 and 2 subject to our decision on point No. 2.”
9. In both the above cited cases, the future, prospects have been considered by nearly doubling the income of the deceased. Thus, the average yearly income of the deceased in the present case could be taken to Rs. 1,10,000/ ‘-’pe.r year for the purpose of computing compensation. Out of this amount 1/3rd thereof is re- : quired to be deducted towards personal expenditure of the deceased on himself, in view of the above judgments of the Supreme Court, leaving a balance of Rs. 73,333/- as average yearly dependency of the claimants.
10. In view of the Schedule, which can be used as a good guideline, in absence of any circumstance which would not appeal to the common sense and due deference to the legislative intent expressed through the Schedule, 16 years multiplier is required to be applied in case the deceased is between 35 years and 40 years of age. Here, in this case, none of the parents of the deceased are claimants for they have pre-deceased the deceased. The claimants are obviously younger in age and as such 16 years multiplier appears to be just. Accordingly, the claimants are entitled to compensation amounting to Rs. 11,73,328/-.
11. As regards the funeral expenses and loss of consortium, an additional sum of Rs. 7000/- is granted in terms of the award given by the Tribunal for, it is justified. Thus, in all Rs. 11,80,328/- appear to be the just compensation.
12. As regards the interest, generally the Tribunals and the High Courts award interest @ 12% p.a and in some cases awarded interest even at higher rate. Awarding interest of 9% when the bank rate was also high does not appear to be reasonable. Accordingly, the claimants would be entitled to interest @ 12% p.a from the date of petition till 31st March, 2001. However, the claimants shall be en- : titled to claim interest only @ 9% p. a. from 1st April, 2001, in view of the reduction in the rate of interest on fixed deposits in the nationalised banks.
13. As regards the apportionment, 60% of the total amount would be payable to the claimant-widow and 20% each to the two sons. Out of the amount falling in the share of the widow 70% of the total amount of award will be deposited in a fixed deposit for a period of 5 years and 30% will be paid to the claimant-widow. Similarly, out of the total amount falling in the share two sons, 70% of the amount shall be deposited in fixed deposit for a period of 5 years and the remaining 30% may be paid to the claimant-widow, in case none of the sons have attained majority. Claimants shall adjust the payment already recouped accordingly. However, the claimant widow (along with the major son) would be entitled to get quarterly interest on the amount so deposited in the fixed deposit.
14. Appeal is accepted accordingly. The respondents who are jointly and severally liable to pay this amount are directed to pay and deposit the amount within a period of four weeks.
Alert