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Captan Singh & Ors. Petitioners v. Oriental Insurance Co. Ltd. & Ors.
Judgment Summary — S.K. Mahajan, J.
Factual and Procedural Background
The appellants filed this appeal seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal for the death of Mrs. Rama Devi (wife of appellant No. 1 and mother of appellants 2 to 4) in a road accident alleged to have been caused by the rash and negligent driving of the offending vehicle. The Tribunal had made an award which the appellants challenged before this court; the primary factual and factual-adjacent findings in the impugned award included an assessment of gratuitous household services at Rs. 660 per month, an assessment of the deceased's income from gainful employment of Rs. 12,000 per annum (for six months' work), a refusal to consider future prospects due to the non-permanent nature of employment, and a deduction towards the deceased's personal expenses by the Tribunal.
Legal Issues Presented
- Whether the value of the deceased's multifarious gratuitous household services should be taken at Rs. 3,000 per month as indicated in Lata Wadhwa (appellant's submission) or otherwise assessed given the facts of this case.
- Whether the method of deducting the deceased's personal expenses (including the correctness of the Tribunal's deduction and the applicability of the unit method in U.P. State Road Transport Corporation v. Trilok Chandra) was correct.
- Whether the Tribunal erred in refusing to consider future prospects or rise in income and cost of living on the ground that the deceased's employment was not permanent and was for only six months in a year.
Arguments of the Parties
Appellant's Arguments
- The Tribunal undervalued the gratuitous services rendered by the deceased, assessing them at Rs. 660 per month; relying on the Supreme Court judgment in Lata Wadhwa and others v. State of Bihar and Others (AIR 2001 SC 3218), the appellant submitted that such multifarious services should be assessed at Rs. 3,000 per month (Rs. 36,000 per year).
- The Tribunal wrongly deducted one-third of the deceased's income towards personal expenses; reliance was placed on U.P. State Road Transport Corporation v. Trilok Chandra (1996 AC J 831), where the method of dividing the family into units (two units per adult, one per minor) was endorsed to calculate the deceased's personal expenditure where definite evidence of spending was absent.
- The Tribunal erred in refusing to consider future prospects merely because the deceased's job was not permanent and was for six months in a year; the appellant relied on principles (cited from Sfarla Dixit v. Balwant Yadav (1996 ACJ 581)) to argue that future prospects and rise in cost of living should be considered even when the income was not of a permanent nature.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lata Wadhwa and others v. State of Bihar and Others, AIR 2001 SC 3218 | Observed that multifarious services rendered by housewives could be estimated at Rs. 3,000 per month (Rs. 36,000 per year) in the absence of other evidence. | The court held that Lata Wadhwa was fact-specific (deceased belonged to higher strata) and its Rs. 3,000/month figure could not be mechanically applied here; instead the court relied on the Motor Vehicles Act Second Schedule and the case facts to adopt a different notional figure (Rs. 10,000 per annum) for the deceased's household services. |
| U.P State Road Transport Corporation v. Trilok Chandra, 1996 AC J 831 | Where no definite evidence is available about the deceased's personal spending, divide the family into units (two units per adult, one per minor) and apportion the total income into those units to deduce the deceased's personal expenditure. | The court applied this unit method: the deceased left behind two adults and three minor children (total seven units), computed share per unit at Rs. 4,700, assessed personal expenses of the deceased at Rs. 9,400 per annum, and used that deduction to calculate loss of dependency. |
| Sfarla Dixit v. Balwant Yadav, 1996 ACJ 581 | Principles for considering future prospects and increased income/cost of living when assessing loss of dependency; applicable to cases with stable income and, as held by this court, also to cases where income may not be permanent or is based on minimum wages. | The court applied these principles to hold that the Tribunal erred in ignoring future prospects due to non-permanent employment, and on account of rise in cost of living and inflation estimated the average income for calculating loss of dependency at Rs. 33,000 per annum. |
Court's Reasoning and Analysis
The court's analysis follows the sequence of valuation, aggregation of incomes, consideration of future prospects, deduction for personal expenses, and computation of total compensation.
- Valuation of gratuitous household services: The court acknowledged the Supreme Court's observation in Lata Wadhwa that Rs. 3,000 per month may be an appropriate notional value in that case but held that Lata Wadhwa was fact-specific (higher social strata) and its figure could not be automatically applied. In absence of other evidence, the court resorted to the Motor Vehicles Act Second Schedule which provides a notional income of Rs. 15,000 per annum where the deceased has no income. Because the deceased here was gainfully employed for six months (income assessed at Rs. 12,000 per annum from that employment), the court declined to value household services at the full Rs. 15,000 and instead fixed the value of multifarious services at Rs. 10,000 per annum on the date of the accident.
- Aggregation of income: The court added the Rs. 12,000 per annum (gainful employment) and Rs. 10,000 per annum (household services) to arrive at a base total income of Rs. 22,000 per annum as on the date of the accident.
- Future prospects: The Tribunal had refused to consider future prospects because the deceased's job was not permanent and limited to six months a year. The court held this was a misdirection: non-permanency alone is not a valid reason to ignore prospective increases. Applying the principles in Sfarla Dixit (rise in cost of living and inflation), the court estimated an average income for the purpose of dependency at Rs. 33,000 per annum.
- Deduction for personal expenses using unit method: Relying on Trilok Chandra, the court divided the family into units — two adults (2 units each) and three minors (1 unit each) — totalling seven units. Using the adopted average income of Rs. 33,000 per annum, the court arrived at a per-unit share of Rs. 4,700 and thus assessed the deceased's personal expenditure at Rs. 9,400 per annum (two units), leaving a loss of dependency of Rs. 23,600 per annum.
- Calculation of total compensation: The deceased was 27 years old; applying the multiplier of 18 (in terms of the Second Schedule) to the annual loss of dependency (Rs. 23,600) produced Rs. 4,24,800. The court added Rs. 20,000 granted by the Tribunal for non-pecuniary damages (loss of love and affection, loss of estate, funeral expenses) to arrive at a total compensation figure of Rs. 4,44,800. The court further directed payment of interest at 9% per annum on the enhanced compensation from the date of the application before the Tribunal until payment.
Holding and Implications
Core Ruling: The appeal is allowed and the impugned award is modified. The appellants are entitled to total compensation of Rs. 4,44,800/- (Rupees Four Lakh Forty Four Thousand Eight Hundred only), with interest at 9% per annum on the enhanced compensation from the date of the application before the Tribunal until payment.
Consequences for the parties: The direct effect is an enhanced award in favour of the appellants to the extent stated and interest on the enhanced amount. The court applied established principles from the cited precedents (Lata Wadhwa, Trilok Chandra and Sfarla Dixit) to value household services, calculate personal expenditure using the unit method, and to consider future prospects even where employment was not permanent. The opinion does not purport to lay down a new rule of law beyond application of those precedents to the facts of this case.
S.K Mahajan, J.:— The appellants have filed this appeal for enhancement of compensation awarded by the Motor Accident Claims Tribunal for the death of one Mrs. Rama Devi wife of appellant No. 1 and mother of appellants 2 to 4 in a road accident caused by the rash and negligent driving of the offending vehicle by its driver.
2. The only point argued by learned counsel for the appellant is that gratuitous services rendered by the deceased to the family have been evaluated by the tribunal only at Rs. 660/- per month. Learned counsel has relied upon the judgment of the Supreme Court in Lata Wadhwa and others v. State of Bihar and Others, AIR 2001 SC 3218 wherein it was observed that the multifarious services rendered by the housewives for managing the entire family even on a moderate estimate should be Rs. 3,000/- per month or Rs. 36,000/- per year. Relying upon this judgment, learned counsel for-the appellant has submitted that the gratuitous services rendered to the family by the deceased ought to have been assessed at Rs. 3,000/- per month. Learned counsel has also challenged the finding of the Tribunal about its having deducted 1/3rd income from the income of the deceased towards personal expenses. It is submitted that as per the judgment of the Supreme Court in U.P State Road Transport Corporation v. Trilok Chandra, 1996 AC J 831 where no definite evidence was available about the amount the deceased was spending upon himself, the Court should break up the family into units, taking two units for adult and one unit for the minor and dividing the entire income into these units, the units of the deceased can be deducted from the same towards his personal expenses and the balance can be taken to be the loss of dependency to the family.
3. While it is true that in Lata Wadhwa and others v. State of Bihar and others (supra) the Supreme Court has observed that the multifarious services rendered by the housewives for managing the entire family could be taken at Rs. 3000/- per month, however, that judgment was given on the facts of that case. The deceased in that case belonged to the higher strata of the society and it was in those circumstances that the Supreme Court had taken the amount of Rs. 3000/- per month to be the value of the multifarious services rendered by the housewives in the absence of any other evidence. Observations of the Supreme Court in Lata Wadhwa's case about the value of multifarious services rendered by the deceased housewife cannot be applied to the facts of the present case. However, in the absence of any other evidence the Court can take recourse to the Second Schedule to the Motor. Vehicles Act to evaluate the multifarious services rendered by the housewife. Second schedule to the Motor Vehicles Act provides that where the deceased has no income, his/her notional income prior to the accident can be taken to be Rs. 15000/- per annum. The tribunal in the impugned judgment has held that the deceased was also gainfully employed for six months in a year and her annual income from such gainful, employment has been assessed at Rs. 12,000/- per annum. Since the deceased was gainfully employed for six months in a year, her services to the family cannot be evaluated in terms of the second schedule at Rs. 15,000/- per annum. This Court in the facts of the present case would not be in error if the income of the deceased for rendering multifarious services to the family is taken at Rs. 10,000/- per annum on the date of the accident.
4. Income of the deceased from gainful employment has been taken by the tribunal to be Rs. 12,000/- per annum. Adding to this the value of multifarious services rendered by the deceased the total income of the deceased as on the date of the accident comes to Rs. 22,000/- per annum. The Tribunal refused to consider the future prospects in the life and career of the deceased on the ground that the job of the deceased as per evidence was not of permanent nature and she was working only for months in the year. The Tribunal, therefore, observed that in those circumstances, keeping in view the non-permanent nature of the work and uncertainty of job about the deceased he did not find any reason to arrive at some notional figure of future prospects of increase in the income of the deceased. In my opinion, the Tribunal has misdirected itself by not taking into consideration the future prospects of increase in the income of the deceased only on the ground that the job of the deceased was not of a permanent nature and she was assigned job for six months in a year. That in my opinion could not be a ground not to consider the future prospects. Even the minimum wages of unskilled and skilled workers are being periodically increased by the Government by issue of notifications from time to time. The job of these workers was also not of permanent nature to what would not mean that they will not be entitled to increase in the minimum wages notified by the Government. In my opinion, the Tribunal was required to consider the rise in the cost of living and inflation to arrive at the notional income of the deceased at a future date. I am, therefore, of the considered opinion that the principles laid down in Sfarla Dixit v. Balwant Yadav, 1996 ACJ 581 are applicable not only in cases where the deceased had a stable income but it also applies in cases where the deceased may not have a work of permanent nature or his income is assessed either on the basis of the minimum wages in the Second Schedule of the Motor Vehicles Act. Therefore, taking into consideration the rise in (cost of living and inflation this Court would not be in error in estimating the average income of the deceased for deciding the loss of dependency at Rs. 33,000/- per annum.
5. In view of the judgment of the Supreme Court in U.P State Road Transport Corporation v. Trilok Chandra (supra) it is no longer res-Integra that to arrive at the amount which the deceased might have been spending upon herself towards personal expenses, the family is to be divided into units, taking two units for an adult and one unit for a minor. The deceased besides her husband had left behind three minor children. The family would thus be divided into seven units taking two units each for the two adults and one unit for each of the three minors. Share per unit would thus work out to Rs. 4,700/-. It can thus be assessed that a sum of Rs. 9,400/- per annum was being spent by the deceased upon herself towards personal expenses. The loss of dependency to the family would, therefore, come to Rs. 23,600/- per annum: Deceased was-27 years of age at the time of her death. Applying, therefore, the multiplier of 18 in terms of second schedule to this loss of dependency the total loss of dependency to the family would work out to Rs. 4,24,800/-. Adding to this a sum of Rs. 20,000/- as non-pecuniary damages towards loss of love and affection, loss of estate and funeral expenses etc:, as have been granted by the tribunal, the appellant would be entitled to total compensation of Rs. 4,44,800/-.
6. I, accordingly, allow this appeal, modify the impugned award and direct that the appellants would be entitled to total compensation of Rs. 4,44,800/-. The appellants would be also entitled for the interest @ 9% per annum on the enhanced compensation from the date of application before the tribunal till payment.
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