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Smart Summary

Factual and Procedural Background

On 10-1-1977 at about 3:30 P.M., one Sarbeswar Rout, travelling in a public service vehicle (O.R.D. 1685) owned by the Orissa State Road Transport Corporation, died in an accident on National Highway No. 42. The Tribunal awarded compensation of Rs. 21,000/-. Two miscellaneous appeals followed: Miscellaneous Appeal No. 104 of 1979 by the owner challenging the award as excessive, and Miscellaneous Appeal No. 108 of 1979 by the claimants (the deceased's parents, grandmother and younger brothers) seeking enhancement of the damages. The Tribunal had found that the vehicle went off the road, rolled over twice, and that the death was due to rash and negligent driving.

Legal Issues Presented

  1. Whether the death of Sarbeswar Rout was caused by rash and negligent driving of the vehicle (the owner contested the Tribunal's finding).
  2. What is the proper quantum of compensation to be awarded to the claimants (the owner alleged excess; the claimants sought enhancement).
  3. Whether the principle of res ipsa loquitur applies to the facts of the accident and, if so, the effect of that principle on the burden of proof.
  4. Whether and how the award should be structured (lump sum versus partial immediate payment with investment) to protect the beneficiaries.

Arguments of the Parties

Owner's Arguments

  • The owner denied that the accident was due to rash and negligent driving and pleaded that the vehicle met with the accident while the driver was trying to save the life of a cyclist who suddenly appeared in front of the vehicle.
  • The owner contended that the damages awarded by the Tribunal were excessive and sought reduction.

Claimants' Arguments

  • The claimants contended that the deceased was a young man (they alleged age 22) with substantial earnings (alleged Rs. 3,000 to Rs. 4,000 per month) from business activities and with good prospects, and claimed a sum of Rs. 2 lakhs as damages.
  • They challenged the adequacy of the Tribunal's award and sought enhancement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Goodburn v. Thomas Cotton Limited, (1968) 1 All ER 518 Observation on the difficulty and perplexing nature of assessment of damages: "The task is frequently perplexing..." The Court cited this to acknowledge the inherent difficulty in assessing damages and to justify exercising judicial discretion in quantifying compensation.
Taff Vale Railway Company v. Jenkins, (1913) AC 1 Principle that a reasonable expectation of pecuniary benefit may be inferred from facts and does not require proof of prior earnings or contributions as essential prerequisites. The Court relied on Lord Atkinson's observations to support that reasonable expectation of pecuniary benefit can be inferred from circumstances other than prior earnings or past contributions.
C.K. Subramonia Iyer v. T. Kunhi Kuttan Nair, AIR 1970 SC 376; 1970 Acc CJ 110 There is no exact uniform rule for measuring the value of human life; assessment depends on facts and circumstances and life-expectancy considerations. The Court used these observations to underscore that damages must be assessed on the particular facts and that life-expectancy and exclusion of speculative elements are relevant considerations.
Bishan Devi v. Sarbaksh Singh, AIR 1979 SC 1862; 1979 Acc CJ 496 Observation that lump sum payments may disadvantage dependants because money can be frittered away during litigation or paid to persons assisting in litigation. The Court relied on this authority to justify directing that a portion of the award be paid outright and the balance invested for a fixed term to protect the dependants' long-term interest.

Court's Reasoning and Analysis

On the issue of negligence, the Court upheld the Tribunal's finding that the death was caused by rash and negligent driving. Applying the principle of res ipsa loquitur, the Court treated the fact that the vehicle went off a national highway and rolled over twice as presumptive evidence of rash and negligent driving. The Court emphasized that the burden lay on the owner to rebut that presumption; the owner failed to place material before the Tribunal (no witnesses examined or documents produced) to substantiate the plea that the driver was avoiding a cyclist. Consequently, the Tribunal's finding on rashness and negligence was sustained.

On quantum, the Court examined the evidence regarding the deceased's age, education and alleged earnings. The Tribunal accepted the School Leaving Certificate showing the deceased to be 17½ years old and disbelieved the claim that he earned Rs. 3,000–4,000 per month. Evidence showed the father (P.W.5) had education up to Class VII and the materials (Exts. 5, 6 series and 7) relied on to show the deceased's cashewnut dealings were insufficient to prove large-scale business or earnings. The Tribunal had awarded Rs. 21,000 (and Rs. 2,000 for the Sudhi ceremony), but had not explained how it reached certain sub-figures (the Tribunal did not indicate the process by which it reached the figure Rs. 19,000).

Finding the Tribunal's arithmetic or reasoning as to components of the award not fully supportable, the Court reassessed on the available material: it fixed the loss to the parents at Rs. 125 per month (based on the deceased being a 17½-year-old who would have assisted the family), and ultimately assessed the damages payable by the owner at Rs. 25,000, although stating this conclusion was reached on a different ground than that used by the Tribunal.

Regarding interest and payment structure, the Court directed interest at 6% per annum from the date of application; if the amount was not deposited before the Tribunal within one month, the amount would carry interest at 10% per annum. To protect the beneficiaries and ensure the benefits are lasting rather than frittered away, the Court—relying on the concerns noted in Bishan Devi v. Sarbaksh Singh—directed that Rs. 5,000 be paid outright to the parents and that the balance be invested by the Tribunal in a nationalised bank for a fixed term of 10 years in the names of the parents, with interest payable annually.

The Court also commented more generally on the role of Tribunals and Courts in ensuring that benefits awarded to dependants reach the real beneficiaries and are not dissipated, particularly stressing heightened responsibility where minors are involved.

Holding and Implications

Final Disposition: Miscellaneous Appeal No. 104 of 1979 is dismissed; Miscellaneous Appeal No. 108 of 1979 is allowed in part. A consolidated cost of Rs. 200 is awarded against the owner.

Direct effect on the parties: The owner is ordered to pay damages of Rs. 25,000 to the claimants. The award shall bear interest at the rate of 6% per annum from the date of application; if not deposited before the Tribunal within one month, interest will be at 10% per annum. Of the awarded sum and interest, Rs. 5,000 is to be paid outright to the parents, and the balance is to be invested by the Tribunal in a nationalised bank for a fixed term of 10 years in the names of the parents, with interest payable annually. Costs of Rs. 200 are payable by the owner.

Broader implications: The Court reiterated established principles (as cited) that assessment of damages is fact-specific and not governed by a precise formula, and emphasized judicial discretion in quantification. The decision also illustrates the application of res ipsa loquitur where the circumstances of an accident are themselves presumptive evidence of negligence and the consequent burden on vehicle owners to rebut that presumption. The Court's directive concerning splitting the award (partial immediate payment with investment of the balance) reflects concern for protecting dependants from dissipation of lump sum awards. The opinion does not purport to lay down any novel legal rule beyond the application of cited authorities and the exercise of judicial discretion in the particular facts of this case.

    General Manager, Orissa State Road Transport Corporation v. Maheswar Rout And Others

    1. One Sarbeswar Rout, who was travelling in a public service vehicle O.R.D 1685 owned by the Orissa State Road Transport Corporation, died in an accident that took place on 10-1-1977 around 3.30 P.M on National Highway No. 42. The Tribunal awarded compensation of Rs. 21,000/-. Miscellaneous Appeal No. 104 of 1979 is by the owner impugning the decision on the ground that the damages awarded were excessive and Miscellaneous Appeal No. 108 of 1979 is by the claimants seeking enhancement of the damages. The claimants are the parents, grandmother and younger brothers of the deceased.

    2. It was alleged that the vehicle proceeding on the National Highway No. 42 was being driven rashly and negligently on account of which it went off the road and rolling over twice came to a halt. In the process, the deceased who had been thrown out was crushed and expired at the spot. It was said that the deceased, a young man of 22 years of age, was a highly resourceful person and out of his business activities, he was earning a sum of Rs. 3,500/- and was contributing the amount for the maintenance and well being of the parents, grandmother and younger brothers. It was alleged that he was engaged in various profitable activities, and had high prospects for larger income. These benefits were lost to the claimants.

    3. The owner refuted the allegations and alleged that the vehicle met with the accident not on account of any rash and negligent driving but in course of the driver trying to save the life of a cyclist who suddenly appeared in front of the vehicle.

    4. On an analysis of the materials the Tribunal held that death of Sarbeswar was due to the rash and negligent driving of the vehicle. It further found that the deceased was 17 years and a half of age at the time of the accident and having regard to the accident and, having regard to the facts and circumstances, a sum of Rs. 21,000/- was the entitlement of the claimants as damages.

    5. Mr. Manawar, the learned counsel for the owner of the vehicle, endeavoured for a reversal of the finding regarding rashness and negligence. But having regard to the materials the contention has no leg to stand on. Having regard to the facts and circumstances, the application of the principle ‘res ipsa loquitur’ is apposite. The fact that the vehicle while moving on a national highway went off the road and rolled over twice is presumptive evidence of rash and negligent driving. The burden was on the owner to establish that there was no rashness and negligence. But no material was placed by the owner before the Tribunal by way of examining witnesses or proving documents to substantiate the plea taken in the written statement. The finding of the Tribunal on the question of rashness and negligence cannot, therefore, be faulted.

    6. The next question is the quantum of compensation to be awarded having regard to the facts and circumstances. The claimants grieve that the amount is low while the owner says that it has been excessive.

    The learned counsel for the claimants referred me to a large number of authorities and based his contentions on a comparative-statement relating to the victim's age at the time of death, his prospects in life, the age of the claimants, the pecuniary loss sustained and the damages awarded. In an exercise of this nature, many imponderables are to be taken into account and the damages awarded in various cases have, therefore, been rightly not uniform. The Courts have tried their best to reach at the sum which appeared to them to be just in the facts and circumstances. One aspect that should, however, be kept in mind while quantifying the damage is that the legislature advisedly has not prescribed any principle or formula according to which the damage is to be quantified. It has left the quantum to the discretion of the Tribunal; to award such amount as damages which appears to it to be just. It is enough to observe that the word ‘just’ has been used in a very wide and comprehensive sense. Edmund Davies L.J, in Goodburn v. Thomas Cotton Limited, (1968) 1 All ER 518 has said regarding the task of assessment of damages:

    “The task is frequently perplexing, and its performance cannot be regarded as affording one of the most impressive examples of the exercise of the judicial function. Certainly it is one of the most difficult.”

    and though the award of damages is essentially a matter of opinion and experience, the Court can pay due regard to ‘the range and limits of the current thought’. The observations of Lord Atkinson in Taff Vale Railway Company v. Jenkins, (1913) AC 1 are worth noticing:

    “I think, it has been well established by authority that all that is necessary is that a reasonable expectation of pecuniary benefit should be entertained by the person who sues. It is quite true that the existence of this expectation is an inference of fact — there must be a basis of fact from which the inference can reasonably be drawn; but I wish to express my emphatic dissent from the proposition that it is necessary that two of the facts without which the inference cannot be drawn are; first, that the deceased earned money in the past, and second, that he or she contributed to the support of the plaintiff. These are, no doubt, pregnant pieces of the evidence but they are only pieces of evidence, and the necessary inference can, I think, be drawn from circumstances other than and different from them.”

    It is profitable to take note of the observations of the Supreme Court in C.K Subramonia Iyer v. T. Kunhi Kuttan Nair, 1970 Acc CJ 110 : (AIR 1970 SC 376 at p. 380).

    “… … .. There can be no exact uniform rule for measuring the value of the human life and the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor. Since the elements which go to make up the value of the life of the deceased to the designated beneficiaries are necessarily personal to each case, in the very nature of things, there can be no exact or uniform rule for measuring the value of human life. In assessing damages, the Court, must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable. As a general rule parents are entitled to recover the present cash value of the prospective service of the deceased minor child. In addition they may receive compensation for loss of pecuniary benefits reasonably to be expected after the child attains majority.”

    7. It was alleged that the income of the deceased was from Rs. 3,000/- to Rs. 4,000/- a month. On that basis a sum of Rs. 2 lakhs was claimed as damages. The Tribunal, however, disbelieved that the age of the deceased was 22 years and held that he was aged 17 years and a half basing on the School Leaving Certificate filed on behalf of the claimants. The evidence of P.W 5, the father, goes to show that he had read up to Class VII. Exts. 5, 6 series and 7 were relied upon to show that the deceased was dealing in cashewnuts. No other document was at all placed before the Tribunal in support of the large scale business, which the claimants alleged, was being carried by the deceased; and the Tribunal on the materials produced before it held that the deceased was not earning anything and was not rendering any financial, help. However, holding, that the deceased had read up to Class VII and he would have been a help and of service to the family in the management of the property and other affairs, the Tribunal has awarded a sum of Rs. 21,000/- for loss of affection and prospective service and Rs. 2,000/- towards the expenses of the Sudhi ceremony of the deceased. The Tribunal has not indicated the process by which it reached at the figure Rs. 19,000/-. In my opinion, the amount awarded is not supportable on the reasonings given. However, taking into consideration the fact that the deceased was a young lad of 17 and half and was helping the family and rendering assistance, I assess the loss to the parents at Rs. 125/- per month.

    I agree with the finding of the Tribunal that the evidence adduced on the side of the claimants regarding the alleged income of the deceased from his personal business is not believable. The father at the time of the application was 47 years of age and the mother was 40 years on the date of application. Taking into account the uncertainties of life and the fact that a lump sum amount is being awarded, I assess the damages, payable by the owner, at Rs. 25,000/-, though on a different ground. I further direct that the amount awarded shall bear interest at the rate of six per cent per annum from the date of application but if the amount is not deposited before the Tribunal within one month hence, the amount shall carry interest at the rate of 10 per cent per annum.

    8. In its anxiety to alleviate the sufferings of those who are suddenly struck by the bolt of misfortune, the legislature provided a cheap and summary remedy before the Tribunals. The contribution of the Tribunals and the Courts should be to ensure that the benefits reach the helpless persons. Complaints are rife that benefits received ultimately by the claimants are only nominal and the anxiety of the legislature and the exercise by the Tribunals and Courts are all in vain. The fruits of the beneficial measures do not reach the real beneficiaries. Large slices of the amounts are snatched by persons lurking around the corner and the unfortunate minors, widows, aged parents and the injured look helplessly on. The Tribunals and the Courts, to be effective delivery agents, having regard to the salutary object, should ensure that the benefits are real and lasting and not empty and ephemeral. A mode has to be devised so that the amounts awarded as damages are not frittered away or snatched by the person assisting in the litigation. Where minors are involved, the responsibility is the greater. They have lost their dear one. The law intervenes with a view to substituting the pecuniary loss in terms of damages.

    But the intervention would not be effective and real if such minors and others are not assured that the pecuniary benefits which they would have otherwise enjoyed, if the accident had not taken place, are to be had in future too. It is proper in equity that the Tribunals and Courts extend that assurance. The way lies in devising a mode for enjoyment. In the litigation some amount may have been spent and other expenses may have been incurred. The Tribunals could, having regard to facts and circumstances direct payment of a portion of the amount outright and investment of the balance, so that the corpus remaining intact, the return therefrom would continue to contribute to the welfare of the dependants. I may in this connection refer to a pregnant observation of the Supreme Court in Bishan Devi v. Sarbaksh Singh, 1979 Acc CJ 496 : (AIR 1979 SC 1862):

    “.. .. … In most cases it is seen that a lump sum payment is not to the advantage of the dependants as large part of it is frittered away during litigation and by payment to persons assisting in the litigation… … …”

    In the facts and circumstances, I direct that out of the sum awarded and interest payable thereon, a sum of Rs. 5,000/- be paid to the parents of deceased. Sarbeswar outright and the balance amount be invested by the Tribunal in a nationalised Bank for a fixed term of 10 years in the names of the parents, interest payable annually.

    9. In the result, Miscellaneous Appeal No. 104 of 1979 is dismissed and Miscellaneous Appeal No. 108 of 1979 is allowed in part. A consolidated cost of Rs. 200/- is awarded against the owner.

    Order accordingly.

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    General Manager, Orissa State Road Transport Corporation v. Maheswar Rout And Others
    (Oct 12, 1982)