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National Insurance Co. Ltd. v. Kavita Rani And Others
Factual and Procedural Background
On 28 May 1986 an army jeep driven as a duty vehicle from Yol to Alhilal was involved in a collision near Aria with a bus (HIC 516) owned by Unemployed Graduate Bus Service and driven by respondent No. 5. Major General Ram Krishan (a lift passenger in the jeep) and Havildar Rajinder Parshad (driver/occupant of the jeep) sustained injuries, were trapped when the jeep and bus caught fire and subsequently died. Two separate claim petitions were filed by the legal representatives of the deceased: one by Kavita Rani and others (legal representatives of Havildar Rajinder Parshad) and the other by Bimla Krishan and others (legal representatives of Major General Ram Krishan). The bus owner and driver, and National Insurance Co. Ltd. (insurer of the bus) were impleaded as respondents.
The Claims Tribunal found the bus driver to be rash and negligent, fixed liability on the owner and driver, and held the insurance company liable to indemnify the entire awards. The Tribunal awarded Rs. 1,09,000 to Kavita Rani and Rs. 85,000 to Bimla Krishan, with interest at 12% per annum from the date of institution of the petitions.
The insurer appealed, contending that its liability under the policy and the Motor Vehicles Act was limited to Rs. 50,000 per accident. A learned Single Judge dismissed the appeals summarily. The insurer then filed Letters Patent Appeals; the claimants filed cross-objections, seeking enhancement of awards.
Legal Issues Presented
- What is the extent of the liability of the insurance company under the insurance policy read with clause (b) of sub-section (2) of section 95 of the Motor Vehicles Act, 1939, as it stood on the date of the accident (28 May 1986)?
- Where a single accident gives rise to two separate claims (two deaths), whether the statutory or policy limit (referred to as liability "in respect of any one accident") operates so as to restrict the insurer's total liability across all claimants to Rs. 50,000, or whether each claimant may claim separately up to the statutory/policy limit?
- Whether the Claims Tribunal was justified in making a deduction (one-third) from the assessed loss of dependency on account of the lump-sum nature of the compensation (i.e., whether a deduction for lump-sum payment is permissible after applying the multiplier method)?
Arguments of the Parties
Appellant (Insurance Company) — Arguments
- The insurer contended that in view of clause (b) of sub-section (2) of section 95 of the Motor Vehicles Act, 1939, as it stood on the date of the accident, no award in excess of Rs. 50,000 could be made against the insurance company for a single accident.
- The insurer relied on the wording in the policy which limited the company's liability under section II-1(a) to "such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939" and pointed to the statutory limits specified in section 95 as the quantification of that requirement.
Claimants — Arguments / Contentions
- The claimants filed cross-objections seeking enhancement of compensation awarded by the Claims Tribunal. They relied on the evidence adduced at trial as to the deceaseds' incomes and other factors to justify higher awards (the opinion records Tribunal findings on monthly income, multiplier selections and conventional heads of damage).
- Implicitly, claimants maintained the Tribunal's original awards and resisted the insurer's contention that liability was limited to Rs. 50,000 (the Tribunal had held the insurer liable to indemnify the entire amounts awarded).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Insurance Co. Ltd. v. Jugal Kishore, 1988 ACJ 270 (SC) | Judicial interpretation of clause (b) of sub-section (2) of section 95 (pre-Amendment Act No. 56 of 1969): held that where policy refers to "such amount as is necessary to meet the requirements of the Motor Vehicles Act", the statutory limit then in force (in that case Rs. 20,000) constitutes the insurer's third-party liability. | The court treated this decision as decisive on the general principle that a policy clause limiting liability to "such amount as is necessary to meet the requirements of the Act" makes the insurer's exposure co-terminous with the statutory limit in section 95 as in force on the date of the accident. The court relied on this reasoning to conclude that where the statutory limit as on the accident date was Rs. 50,000, the insurer's liability under the policy is limited to Rs. 50,000. |
| Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC) | Interpretation of the phrase "any one accident": the term is to be considered from the point of view of various claimants, each entitled to claim for the loss suffered by him (i.e., multiple claimants arising from a single accident are not to be aggregated for the insurer's limit). | The court applied this principle to reject the insurer's submission that because there was one accident giving rise to two deaths (two claim petitions), the insurer's total liability across both claims should be capped at Rs. 50,000 in the aggregate. Instead, the court held that each claimant is entitled to make a separate claim and that liability up to the statutory limit applies per claimant's claim. |
| Milap Kaur v. Secretary, Himachal Pradesh Public Works Department (Irrigation), 1988 ACJ 372 (HP) | When the multiplier method is used to assess future loss of dependency, the chosen multiplier is to reflect various factors (inflation, future increase in income, delay in award, etc.), and a separate deduction for the lump-sum nature of the award is generally not required; the multiplier itself takes care of such considerations. | The court followed this reasoning in holding that the Claims Tribunal was not justified in making a one-third deduction from the assessed loss of dependency in the Kavita Rani case. The court concluded the multiplier of 15 already accounted for lump-sum payment and other countervailing factors, and therefore enhanced the Kavita Rani award by removing the deduction. |
Court's Reasoning and Analysis
The court proceeded by first examining the insurance policy and the statutory provisions relied upon. The policy (Exh. R-1) contained a limits-of-liability clause providing that the company's liability under section II-1(a) would be "such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939," while also separately specifying Rs. 50,000 as the limit "under section II-1(b) in respect of any one claim or series of claims arising out of one event."
The court traced the statutory language of clause (b) of sub-section (2) of section 95 in its pre-amendment and post-amendment forms. It noted that clause (b) had been amended by the Motor Vehicles (Amendment) Act, 1969 (Act No. 56 of 1969) (in force from 2 March 1970) such that the limits then became fifty thousand rupees in respect of persons other than passengers carried for hire or reward, and Rs. 15,000 for each individual passenger under the amended text.
Relying on the Supreme Court's decision in National Insurance Co. Ltd. v. Jugal Kishore (which had interpreted the pre-amendment clause and held that where the policy limits liability to "such amount as is necessary to meet the requirements of the Motor Vehicles Act", the insurer's liability is confined to the statutory limit in section 95), the court concluded that the policy's reference to "such amount" must be quantified by the statutory limits in force on the date of the accident. Accordingly, since the relevant statutory limit as on 28 May 1986 (the date of the accident in these appeals) was Rs. 50,000, the insurer's liability under section II-1(a) of the policy was limited to Rs. 50,000 in respect of any one accident.
The court then considered the insurer's argument that because there was a single accident resulting in two deaths (two claim petitions), the Rs. 50,000 statutory/policy ceiling should apply once only in aggregate. Applying the Supreme Court's decision in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, the court held that the expression "any one accident" must be viewed from the vantage of individual claimants; each claimant is entitled to press his or her separate claim for the loss suffered. Therefore, multiple claimants arising out of the same accident are not to be aggregated so as to restrict all recoveries collectively to a single statutory limit; the statutory/policy limit thus applies per claimant's claim.
Turning to the claimants' cross-objections about quantum, the court examined the findings of the Claims Tribunal. For Bimla Krishan, the Tribunal's factual conclusions about monthly pension-derived income, the chosen datum figure (Rs. 6,000 p.a.), the multiplier (12) and conventional heads (Rs. 3,000 for loss of expectancy of life and Rs. 10,000 loss of consortium) led to a total award (recorded inconsistently as Rs. 80,000/Sic. Rs. 85,000). The court found this award to be just and adequate and dismissed the claimants' cross-objections in that matter.
For Kavita Rani, the Tribunal had determined a monthly pecuniary loss of Rs. 800 (datum figure Rs. 9,600), applied a multiplier of 15 and added conventional heads to arrive at a total before a one-third deduction. The court reviewed the legal position on making deductions for lump-sum payments where the multiplier method is used. Relying on Milap Kaur, the court held that applying a correct multiplier ordinarily accounts for factors that would otherwise justify a deduction for the lump-sum nature of the award; therefore the Tribunal's deduction of one-third was not legally justified. The court restored the full assessed amount of loss of dependency and accordingly enhanced the Kavita Rani award to the figure computed without the deduction.
Holding and Implications
Holding: Appeals allowed. The court held that the liability of the insurance company in both cases is limited to Rs. 50,000/- in each case (in accordance with the statutory limit under clause (b) of sub-section (2) of section 95 of the Motor Vehicles Act as in force on the date of the accident), and the appeals filed by the insurance company were allowed to that extent.
Implications / Consequences:
- The insurer's maximum liability in each of the two claim petitions is fixed at Rs. 50,000/- plus interest and costs (i.e., the insurer is not required to indemnify the entirety of the awards previously made by the Claims Tribunal if those awards exceed Rs. 50,000 per claim).
- The court applied Jadavji Keshavji Modi to hold that separate claimants arising from the same accident may each claim up to the statutory/policy limit; accordingly the fact that both deaths arose from one accident did not aggregate or dilute each claimant's entitlement to claim under the statutory limit.
- On quantum: the cross-objections by Bimla Krishan were dismissed and the Claims Tribunal's award in that matter was upheld as just and adequate. The cross-objections filed by Kavita Rani were allowed — the Tribunal's deduction (one-third) from the loss of dependency was set aside and the compensation payable to Kavita Rani and others was enhanced to the amount calculated without the deduction (the court fixed the total compensation figure assessed by the Tribunal without the one-third deduction and awarded interest at 12% per annum from the date of institution of the claim petition until realization).
- The court expressly noted that the learned Single Judge's earlier dismissal was per incuriam for not noticing the Jugal Kishore decision; the present judgment sets out the correct application of the statutory limit and the cited precedents to the facts of these cases.
- No novel precedent beyond application of existing Supreme Court and High Court authorities was announced; the decision applies established interpretations of the Motor Vehicles Act and prior case law to determine insurer liability and the proper treatment of multiplier-based awards.
Outcome in brief (as recorded in the opinion): The appeals by the insurance company were allowed; cross-objections by Bimla Krishan were dismissed; cross-objections by Kavita Rani were allowed to the extent of removing the deduction and enhancing compensation. The insurer's liability is limited to Rs. 50,000 in each case, with interest and costs. Appeals allowed.
Devinder Gupta, J.:— Question of law arising for determination in the two appeals being common, the same are being disposed of by a single judgment.
2. On 28th May, 1986, Havildar Rajinder Parshad took army jeep on duty from Yol to Alhilal. Major General Ram Krishan, VSM (Retd), Ex-Col. Commandant Assam Regiment, who had come to visit Yol Camp, under his own arrangement, took lift in the said jeep for going to Palampur, being on way from Yol to Alhilal; Near Aria, bus HIC 516, driven by Nand Kishore, respondent No. 5 and owned by Unemployed Graduate Bus Service, respondent No. 4, came from the opposite direction. According to the claimants, it was being driven rashly and negligently at a very high speed. While it was downhill and on wrong side, it struck against the jeep, as a result of which the jeep was pushed back to the hillside. Consequent to this impact, one side of the jeep was blocked by the hillside and the other by the bus, resulting in breaking out of fire and ultimately burning of the jeep and the bus. Both the occupants of the jeep received multiple injuries. As they could not come out of the jeep, they succumbed to their injuries. It was alleged that the driver of the bus absconded immediately. On the basis of the aforesaid allegations, two separate claim petitions were preferred, one by Kavita Rani and others, the legal representatives of Havildar Rajinder Parshad and the other by Bimla Krishan and others, legal representatives of Major General Ram Krishan. Besides the owner and the driver of the bus, National Insurance Co. Ltd. was impleaded as one of the respondents, since the bus at the relevant time was insured. The Claims Tribunal holding the bus driver liable for rash and negligent driving fastened the liability on the owner and the driver and held the insurance company liable to indemnify the entire amount of claim. In the case of Kavita Rani, a sum of Rs. 1,09,000/- was awarded as the just amount of compensation and in the case of Bimla Krishan, a sum of Rs. 85,000/- was held to be the just compensation amount. In each case, over and above the amount of compensation, the claimants were also held entitled to interest at the rate of 12 per cent per annum from the date of institution of petition till the date of payment.
3. The insurance company felt aggrieved against the awards made by the Claims Tribunal. Its contention was that the extent of its liability qua the third party claim under the terms of the insurance policy was restricted only to Rs. 50,000/- in respect of one accident and as such the Tribunal was not right in directing the entire amount to be recovered from the insurance company.
4. A learned single Judge of this court dismissed both the appeals in limine by a short order, which is reproduced hereunder:
“There is no substance in this appeal in which the only argument advanced at the preliminary hearing related to the extent of liability of the appellant insurance company qua a third party claim. Neither the requirements of law nor the relevant provisions of the insurance policy are capable of being invoked in aid to restrict the liability in such a case to Rs. 50,000, as sought to be urged on behalf of the appellant insurance company. The aforesaid conclusion can be reached irrespective of whether any confession to that effect was made by and on behalf of the appellant insurance company before the Tribunal. Section 94 and section 95, sub-sections (1)(b)(i) and (2)(b) and section 96 of the Motor Vehicles Act, 1939, and the insurance policy [See: section II-1 thereof and also the limits of liability prescribed), if they are read closely and correctly, jointly and/or severally, leave no room for doubt that the liability of the appellant insurance company is not limited to Rs. 50,000/- in such cases. Hence summarily dismissed.”
5. Still dissatisfied, the insurance company has come up in Letters Patent Appeal in both the cases. Claimants have also preferred cross-objections and prayed for enhancement of the amount of compensation.
6. We have heard the learned counsel for the parties and also gone through the records.
7. The main question arising for determination is the extent of the liability of the insurance company. Learned counsel for the appellant has urged that in view of the statutory provision, namely, clause (b) of sub-section (2) of section 95 of the Motor Vehicles Act, 1939, (hereinafter to be referred to as ‘the Act’), as it stood on the date of the accident, namely, 28th May, 1986, no award in excess of Rs. 50,000/- could have been made against the insurance company and that also for a single accident.
8. Dealing with the aforementioned submissions, made by the learned counsel for the appellant, it would be necessary, firstly, to refer to the terms of the policy, copy of which has been proved on record as Exh. R-1, against the heading ‘Limits of Liability’, in which it is provided as under:
“Limit of the amount of the company's liability under section II-1(a) in respect of any one accident Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. Limit of the amount of the company's liability under section II-I(b) in respect of any one claim or series of claims arising out of one event Rs. 50,000/-”
9. In section 11 of the policy under the heading ‘Liability to third parties’, it has, inter alia, been provided as under:
“1. Subject to the limits of liability the company will indemnify the insured against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of
(i) death of or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle.
xxxxxxxxx
Provided always that
(a) xxxxxxxxx
(b) Except so far as is necessary to meet the requirements of section 95 of the Motor Vehicles Act, 1939, the company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment.
(c) Except so far as is necessary to meet the requirements of section 95 of the Motor Vehicles Act, 1939, in relation to liability under the Workmen's Compensation Act, 1923, the company shall not be liable in respect of death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the motor vehicle at the time of the occurrence of the event out of which any claim arises.
(d) xxxXXXxxx”
10. The relevant clause (b) of sub-section (2) of section 95 of the Act, as it stood prior to the coming into force of the Motor Vehicles (Amendment) Act, 1969 (Act No. 56 of 1969) was as under:
“95. Requirements of policies and limits of liability.—
(1) xxxxxxxxx
(2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely—
(a) xxxxxxxxx
(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, in respect of persons other than passengers earned for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver;”
11. The words ‘twenty thousand’ in clause (b) aforementioned were substituted with words ‘fifty thousand’.
12. By virtue of section 54 of the Amendment Act No. 56 of 1969, which came into force on and from 2nd March, 1970, clause (b) was substantially amended and it stood after amendment as under:
“95. Requirements of policies and limits of liability.—
(1) xxx xxxxxx
(2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely—
(a) xxxxxxxxx
(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of, or in pursuance of, a contract of employment,—
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;
(a) xxxxxxxxx”
13. The question, which has been posed in this appeal in view of the judgment of the Apex Court in National Insurance Co. Ltd. v. Jugal Kishore, 1988 ACJ 270 (SC), is no more res integra. The provision of clause (b) of sub-section (2) of section 95 of the Act, as it stood prior to the Amendment Act No. 56 of 1969, was judicially interpreted. It was held that the liability undertaken by the insurance company with regard to the death of or bodily injury to a third party, caused by or arising out of the use (including the loading and/or unloading of the motor vehicle) falling under section II-1(i); wherein it is confined to “such amount as is necessary to meet the requirements of Motor Vehicles Act, 1939”, in view of the apparent clause (b) of sub-section (2) of section 95 of the Act, is Rs. 20,000/- only.
14. The Supreme Court was dealing with a case in which similar clause existed in the terms of the policy about the limit of liability of the insurance company, wherein it was provided that the limit of the amount of company's liability under sub-section II-1(i) in respect of any accident would be such amount as is necessary to meet the requirement of the Motor Vehicles Act, 1939. The accident in that case took place on 15th June, 1969, by which date the Act had not been amended by Amendment Act No. 56 of 1969 and the amendment had not come into force. Negativing the arguments put forth on behalf of the claimants in that case that since the vehicle had been comprehensively insured and higher premium had been paid, the limit of the insurance company with regard to the third party would be unlimited. The court Held in para 6 of the judgment:
“…Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub-section (2) of section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf. Likewise, if risk of any other nature, for instance, with regard to the driver or passengers, etc., in excess of statutory liability, if any, is sought to be covered it has to be clearly specified in the policy and separate premium paid therefor. This is the requirement of the Tariff Regulations framed for the purpose.”
15. In the policy in question, Exh. R-1, the extent of limit of liability of the company under section II-1(A) in respect of any one accident is to the extent of the amount ‘as is necessary to meet the requirement of the Act’. In clause (b) of sub-section (2) of section 95, the limit as on the date of the accident was Rs. 50,000/- in respect of persons other than the persons earned for hire or reward. The vehicle involved in this case, admittedly, was a vehicle in which passengers were carried for hire or reward. The deceased in this case were third parties being persons other than passengers. Consequently, we have no hesitation in holding that the amount necessary to meet the requirements of the Act as on the date when the accident took place was Rs. 50,000/- in respect of any one accident and not unlimited, as held by the Tribunal and affirmed by the learned single Judge.
16. In this view of the matter, the judgment of the learned single Judge, which can be said to be per incuriam, without having noticed the judgment in Jugal Kishore's case, 1988 ACJ 270 (SC), is liable to be set aside.
17. The submission of the learned counsel for the appellant that since it was only one accident in which two deaths have occurred, giving rise to two separate claim petitions, the extent of liability in all should not be more than Rs. 50,000/-, has no force in view of the ratio of the judgment in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC), wherein expression ‘any one accident’ has been judicially interpreted and the court held that the word ‘accident’ is used in the expression ‘any one accident’ from the point of view of various claimants, each of whom is entitled to make a separate claim for the extent suffered by him and not from the point of view of the insurer.
18. The claimants have preferred cross-objections claiming enhancement in the amount of compensation. Dealing with the case of Bimla Krishan, first, the Claims Tribunal accepted the evidence adduced with regard to the earning of the deceased and held the income of the deceased as Rs. 1,076/- per month, as the amount of pension received by him, half of which the deceased might be spending for his own maintenance and the remaining half being contributed by him towards his wife. The two sons and the daughter were already earning; hence as on the date of the accident, they were not dependent upon him. Taking the monthly pecuniary loss as Rs. 500/-, the datum figure was taken as Rs. 6,000/-. The deceased was 58 years of age and was expected to lead a normal life till the age of 70. Taking relevant factors into consideration, the Claims Tribunal applied the multiplier of 12 and adding thereto Rs. 3,000/- being the amount of conventional loss towards loss of expectancy of life and Rs. 10,000/- as the loss of consortium, award in the sum of Rs. 80,000/-(Sic. Rs. 85,000/-) was made. Having gone through the record and having heard the learned counsel for the claimants, we are of the view that the award in this case is just and adequate award. The Claims Tribunal was right in taking Rs. 6,000/- as the datum figure and in applying the multiplier of 12, which was selected after taking into consideration all the relevant factors. Consequently, we do not find any merit in the cross-objections No. 45 of 1989 and the same are dismissed.
19. In the case of Kavita Rani, the Claims Tribunal found that the deceased was getting a salary of Rs. 1,270/- p.m, including dearness allowance. He had put in 16 years of service and had still 11 years more to serve in the army. As per the army regulations, he would have retired at the age of 48 years. Being a qualified and skilled driver, he would have got some job somewhere else and earned handsome salary, keeping in view his age health and other circumstances. In that case, Rs. 800/- was considered as the monthly pecuniary loss to the family and thus the datum figure arrived at is Rs. 9,600/-. Applying the multiplier of 15 and adding Rs. 3,000/- towards the loss of expectancy of life and Rs. 10,000/- towards the loss of consortium, the Tribunal arrived at the figure of Rs. 1,57,000/-. From the total loss of dependency of Rs. 1,44,000, the Tribunal ordered deduction to the extent of ⅓rd for lump sum payment. Consequently, the total amount of compensation awarded is Rs. 1,09,000/- (Rs. 96,000/- towards the loss of dependency, Rs. 3,000/- loss of expectancy of life and Rs. 10,000/- loss of consortium).
20. We find that the reason, which prevailed with the Claims Tribunal in ordering the deduction of Rs. 48,000/- from the amount of loss of dependency, which had been arrived at after correctly applying the multiplier of 15 to the datum figure of Rs. 9,600/-, is not in consonance with the provisions of law. The learned single Judge in Milap Kaur v. Secretary, Himachal Pradesh Public Works Department (Irrigation), 1988 ACJ 372 (HP), after considering catena of decisions of various High Courts and English decisions as also that of the Apex Court, concluded that in case where the amount of compensation is assessed by multiplying the figure of annual loss by selecting the multiplier it in itself takes care of various factors, including the lump sum payment. During the course of the judgment, the learned Judge held that:
“The principle which emerges from these decisions is that no deduction on account of the lump sum payment given to the dependants is required to be made because of diverse factors, such as, the prospects of inflation and the proportionate devaluation of the rupee, the continuing rise in prices of the necessities of life and the increase in the cost of living, the omission to take into account the probability of the future increase in the income’ of the deceased by the improvement of prospects, the time consumed in the making or the finalisation of the award due to the usual delay in the multiplier adjudicatory process and/or in recovering the compensation amount, the denial of interest or the award of interest at low rates on the compensation amount, the increase in needs of the dependants with the advancement of age, et. al. These various factors have been regarded as counterbalancing or offsetting the benefit of getting a lump sum payment. In…, where the multiplier method was followed, no deduction was made since the choice of the correct multiplier was taken to have reflected this factor. The said decision falls in line with the observations made on this point by the learned authors of the two treatises referred to earlier (McGregor on Damages and Kemp & Kemp on the Quantum of Damages). It will be seen that in this line of decisions cogent and convincing grounds have been set out, which accord with common sense, reason and justice, for not allowing deduction being made from the assessed amount of compensation on the ground of lump sum payment. There is no reason why the ratio of these judgments should not prevail unless stronger or equally formidable ratiocination is to be found in the judicial dicta elsewhere.”
21. Considering the opposing view, the court further observed that:
“…the compensation has the effect of putting the deceased's future contribution into the hands of the dependant(s) at once, should not be regarded as justifying a deduction being made from the assessed amount of compensation under all circumstances and in all cases. The view that the benefit of lump sum payment is set off or counterbalanced by several other factors over which the dependants have no control has found acceptance in a large number of cases and although it may appear to be more in consonance with the recent trend of law and also in conformity with the principles of equity, justice and good conscience, a just approach to the matter, in my view, would be that it is not a consideration which is to be wholly ignored or overplayed. It is a factor which may be borne in mind, along with the other equally relevant and probably more rational and realistic factors highlighted in the various decisions referred to earlier…, while selecting the multiplier, if the multiplier method is followed, or in computing the net compensation, if the pecuniary toss is ascertained in terms of the actual number of years for which the loss will be suffered.”
22. We have no reason to differ with the ratio of the judgment in Milap Kaur's case, 1988 ACJ 372 (HP) and are of the view that the Claims Tribunal was not justified in making deduction on account of lump sum payment. Considering the relevant factors in a case, where the deceased was of the age of 37 years and serving as driver in the army, multiplier of 15 was reasonable, which in itself would take care of payment of compensation in lump sum. Consequently, we have no hesitation in holding that the claimants Kavita Rani and others would be entitled to the amount of compensation as assessed by the Claims Tribunal without any deduction to the sum of Rs. 1,44,000/- towards the loss of dependency and Rs. 3,000/- as the loss of expectancy of life and Rs. 10,000/- for loss of consortium. In all, claimants will be entitled to a sum of Rs. 1,57,000/- along with interest at 12 per cent per annum from the date of institution of the claim petition till realisation.
23. In the result, while allowing the appeals filed by the insurance company, we dismiss the cross-objections preferred by Bimla Krishan (Cross-objections No. 45 of 1989) and allow the cross-objections No. 44 of 1989, filed by Kavita Rani and others by modifying the awards of the Claims Tribunal. The liability of the insurance company in both the cases is held to the extent of Rs. 50,000/- in each case along with interest and costs. In the case of Kavita Rani the compensation payable is enhanced to the extent aforementioned. Costs on parties.
24. Appeals allowed.
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