R. Kantha Rao, J.:— These two appeals have been filed challenging the award dated 18.4.2006 passed by the III Additional Metropolitan Sessions Judge-cum-XVII Additional Chief Judge, Hyderabad in OP No. 361 of 2002.

2. Wife and four children of the deceased B. Satyanarayana Siddhanthi filed the claim petition before the Tribunal under Section 166 of the M.V Act, 1988 claiming compensation of Rs. 41,10,280/- on account of the death of B. Satyanarayana Siddhanthi in a motor vehicle accident occurred on 23.5.2001 near Narketpally of Nalgonda District. The learned Tribunal after making an enquiry into the claim passed an award for an amount of Rs. 13,70,000/- granting subsequent interest @ 7.5% per annum from the date of the petition till payment.

3. Challenge to the award by the claimants in MACMA No. 1661/06 is regarding the quantum of compensation on the ground that it is grossly inadequate and not computed in accordance with the principles applicable for computation of compensation. Whereas, MACMA No. 2535 of 2006 has been filed by the second respondent/insurance company challenging the award on the grounds viz., that the Tribunal ought not to have held that the appellant insurance company is liable to pay compensation since the offending vehicle was insured under the ‘Act only policy’ and under private car category which was hired by the deceased at the time of the accident, the Tribunal erred in holding that the claimants 2, 4 and 5 who are the major son and married daughters respectively are dependants of the deceased entitled to claim compensation on account of his death in a motor vehicle accident and also that the compensation granted is highly excessive and not in accordance with law.

4. We have heard Sri Kota Subba Rao, learned Counsel appearing for the appellants (claimants) in MACMA No. 1661 of 2006 and Sri Sitharamaswamy Vari Devasthanam v. G. Sambasiva Rao & Ors., learned Counsel appearing for the appellant-insurance company in MA CMA No. 2535 of 2006.

5. The questions of fact and law arise for determination being common in respect of the same accident and between the same parties, these two appeals are disposed of by the following common order.

6. The facts which are not in dispute are that B. Satyanarayana Siddhanthi, hereinafter referred to as ‘the deceased’ was aged 49 years on the date of his death, died in a motor vehicle accident which occurred on account of rash and negligent driving of Tata Sumo vehicle bearing No. AP-24-D-0999 and the deceased was working as Stapathi in the cadre of Executive Engineer in the Endowments Department who had fair chances of further promotion. The offending vehicle i.e Tata Sumo bearing No. AP-24-D-0999 was insured under Act only policy with the Oriental Insurance Company and under private car category.

7. The following are the disputed questions which arise for consideration in these appeals:

(1) Whether the appellant insurance company in MA CMA No. 2535 of 2006 can be fastened with liability to pay compensation?

(2) Whether the compensation awarded by the learned Tribunal below is just and reasonable?

Point No. 1:

8. Although several decisions have been relied upon by the learned Counsel, we wish to refer to a few decisions which laid down the law on the subject in clear terms. It is true that in the present case there is evidence adduced by the claimants which reveals that the accident was caused due to rash and negligent driving of the driver of the said vehicle. Therefore, for the rash and negligent driving of the driver of the vehicle which resulted in the accident primarily the driver of the offending vehicle is liable and the owner of the vehicle is also vicariously liable to pay compensation to the claimants.

9. The crucial issue is whether the insurance company i.e the appellant in MACMA No. 2535 of 2006 is liable to pay compensation to the claimants on account of the death of the deceased in terms of Section 147 of the M.V Act and under terms and conditions of the police-Ex. A37 under which the offending vehicle was insured.

10. The evidence of RW1, who is owner of the offending vehicle Tata Sumo bearing No. AP 24 D 0999 is to the effect that at the request of one Krishna his father sent the vehicle, but it was not given on hire. Though he seeks to assert that the vehicle was not given on hire he being not an eye-witness either to the entrustment of the vehicle or to the accident, his evidence cannot be taken into consideration for any purpose. In the petition itself the claimants stated that after completing his duty at Dwaraka Tirumala on 22.5.2001, the deceased engaged Tata Sumo vehicle bearing No. AP24 D 0999 to go to Hyderabad via Penuganchiprolu. PW2, who is examined on behalf of the claimants also stated that the vehicle was taken on hire by the deceased. Admittedly, as it would appear from copy of policy of insurance-Ex. A37, the policy is an ‘Act only policy’ and was issued in respect of a private vehicle. Therefore, if the vehicle is hired for the purpose of carrying passengers, it amounts to violation of terms and conditions of the policy. A premium of Rs. 534/- was paid under the ‘Act only policy’ and no extra premium was paid to cover the risk of the passengers, who were carried in the vehicle, if it is taken on hire. In other words, the vehicle was registered as a private vehicle for the own purpose and business of the owner of the vehicle. The policy issued is an ‘Act only policy’. In Oriental Insurance Company Ltd. v. Meena Variyal, 2007 (3) ALD 99 (SC) : 2007 ACJ 1284, it has been laid down that where a person is not a third party within the meaning of the Act, the insurance company cannot be made automatically liable merely by resorting to Swarna Singh's ratio; deceased being an employee not covered under Workmen's Compensation Act, has not to be covered compulsorily under Motor Vehicles Act and there is no special contract covering such a person, insurance company cannot be made liable to pay the compensation first and then to recover it from the insured.

11. In National Insurance Co. Ltd. v. Baljit Kaur, 2004 (1) ALD 98 (SC) : (2004) 2 SCC 1, the Supreme Court held as follows:

“The effect of the 1994 amendment on Section 147 is unambiguous. Earlier, the words “any person” could be held not to include the owner of the goods or his authorized representative travelling in the goods vehicle. Parliament has now made it clear that such a construction is no longer possible. The scope of this rationale does not, however, extend to cover the class of cases where gratuitous passengers for whom no insurance policy was envisaged, and for whom no insurance premium was paid, employed the goods vehicle as a medium of conveyance.”

12. Applying the ratio laid down in the above cited cases, we would like to emphasise that the offending vehicle i.e Tata Sumo bearing No. AP24 D 0999 had never been intended to be a vehicle which could be used for taking passengers on hire. It was registered and insured as a private vehicle and no extra premium was paid in respect of the passengers carried in the vehicle for hire. Therefore, in our view the learned trial Court went wrong in fastening the liability on the insurance company and the said finding is liable to be set aside.

13. Accordingly, the finding recorded by the trial Court that the insurance company is liable to pay compensation to the claimants is set aside and it is held that the owner of the vehicle shall be liable to first satisfy the award. However, following the ratio in Baljit Kaur's case (supra), we direct the insurance company (appellant in CMA No. 2535 of 2006 to first satisfy the award amount and recover from the owner of the vehicle by initiating a proceeding before the executing Court without filing a separate suit for the said purpose.

Point No. 2:

14. Before the Tribunal below, the claimants adduced some evidence in regard to the private income of the deceased. The entire evidence adduced on this aspect is oral evidence. The evidence is to the effect that the deceased is a scholar in Agama, Vastu and Jyothisha Sastras. He used to fix Muhurthams, prepare horoscopes and perform different kinds of poojas and also install dieties. Apart from his salary, his income from the said private source is said to be between Rs. 10,000-A to Rs. 15,000/- per month. The learned Tribunal however, hypouhetically considered his private income. The learned Tribunal expressed the view that no documentary evidence such as income tax returns etc., have not been filed by the claimants to show the income of the deceased and also held that without there being any sanction or permission from the Government, the deceased who was working as Stapati in the Endowments Department in the cadre of Executive Engineer is not supposed to undertake any private job and earn income therefrom. Therefore, the learned Tribunal rightly held that the evidence that the deceased was getting income of Rs. 10,00.0/- to Rs. 15,000/- per month by attending private job cannot be taken into consideration for the purpose of computing the compensation.

15. However, the learned Tribunal held that the deceased but for the unfortunate accident would have lived upto the age of 65 years and even after his retirement on completing 58 years, he can perform private job and thereby would be getting average income of Rs. 5,000/- per month from attending the private job and thus, his private income would be Rs. 60,000/- per year and would have earned Rs. 60,000/- × 7 : Rs. 4,20,000/- and added the said income as additional income to the compensation awarded by having recourse to the multiplier method. We wish to state that the said approach is totally erroneous and no such income arrived at on hypothetical basis can be added to the actual loss of dependency. It has to be worked out strictly according to the multiplier method and in accordance with the provisions of Motor Vehicles Act.

16. The deceased was aged 49 years on the date of his death, the learned Tribunal having noticed his chances of being promoted to the higher post and getting higher salary, did not add any amount towards future prospectus. The learned Tribunal took into consideration the net salary of the deceased which is Rs. 9,406/- per month and computed the compensation basing on the multiplier method. Insofar as taking the net salary for the purpose of computing compensation, we consider it proper in view of the judgment of the Supreme Court in Asha v. United India Insurance Co. Ltd., 2004 ACJ 448, wherein it was held as follows:

LASTLY, it was submitted that the salary certificate shows that the salary of the deceased was Rs. 8,632/-. It was submitted that the High Court was wrong in taking the salary to be Rs. 6,642/-. It was submitted that the High Court was wrong in deducting the allowances and amounts paid towards L.I.C, society charges and H.B.A, etc. We are unable to accept this submission also. The claimants are entitled to be compensated for the loss suffered by them. The loss suffered by them is the amount which they would have been receiving at the time when the deceased was alive. There can be no doubt that the dependants would only be receiving the net amount less ⅓rd for his personal expenses. The High Court was therefore right in so holding.

17. In the instant case, as per Ex. A62-salary certificate, the gross salary of the deceased at the time of his death was Rs. 16,221/- p.m and his net salary was Rs. 9,406/- p.m Keeping in view, the promotional chances of the deceased, who was aged 49 years on the date of his death, 30% of the actual salary can be added to his income towards future prospects which comes to Rs. 9,406/- + Rs. 2822/- : Rs. 12,228/-, as per the judgment of the Supreme Court in Sarla Varnt v. Delhi Transport Corporation, (2009) 6 SCC 121 : 2009 (3) ALD 83 (SC) : 2009 (2) LS 29 (SC).

18. Therefore, the annual income of the deceased comes to Rs. 12,228/- × 12 : Rs. 1,46,736/-. From this ⅓rd has to be deducted towards personal living expenses of the deceased which comes to Rs. 48,912/- and the remaining ⅔rd amount i.e Rs. 97,824/- shall be taken as contribution to the family. The multiplier applicable to the age of the deceased is 13. To arrive at the loss of dependency, the above amount has to be capitalised with 13, which comes to Rs. 97,824/- × 13 : Rs. 12,71,712/-. This apart, the first claimant, who is the widow of the deceased is entitled for an amount of Rs. 10,000/- towards loss of consortium and the claimants are entitled for a sum of Rs. 5,000/- towards loss of estate and Rs. 5,000/- towards funeral expenses. In all, the claimants are entitled to compensation of Rs. 12,91,712/-.

19. The claimant No. 2 being major son and the Government employee, the claimants 4 and 5 being major daughters, who are married, not being the dependents on the deceased, they are not entitled for compensation and the claimant No. 1, widow and claimant No. 3, minor daughter are only entitled for compensation being dependents on account of the death of the deceased. The amount of compensation shall be apportioned equally between the claimants 1 and 3.

20. With the modification of the award passed by the Tribunal below as indicated above, MA CMA No. 2535 of 2006 is partly allowed and MA CMA No. 1661 of 2006 is dismissed. The claimants 1 and 3 are entitled for the total compensation of Rs. 12,91,712/- together with interest at the rate of 7.5% per annum from the date of petition till the date of realization and the claim of the remaining claimants 2, 4 and 5 stands dismissed. The amount of compensation shall be apportioned equally between the claimants 1 and 3 with interest and costs. The owner of the vehicle (respondent No. 1 N. Appi Reddy before the Tribunal and in MA CMA No. 2535 of 2006) is liable to pay compensation awarded. The United India Insurance Company Limited-appellant in MA CMA No. 2535 of 2006 is not liable to pay compensation to the claimants 1 and 3, but it shall satisfy the award by paying compensation amount to the claimants 1 and 3 in the first instance and then recover the same from the first respondent - owner of the vehicle without filing a separate suit. There shall be no order as to costs.