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Concise Analytical Summary: First Appeal No. 3876/2007 (M.R. Shah, J.)

Factual and Procedural Background

This appeal arises from an award dated 29.03.2007 by the Motor Accident Claims Tribunal (Auxi.-2), Gandhinagar at Kalol in Motor Accident Claim Petition No. 1266/2004. The Tribunal had partly allowed the claim petition filed by the parents (original claimants) of a deceased daughter and awarded Rs. 15,71,000/- with 12% interest thereon. The appellant in this First Appeal (No. 3876/2007) is the insurer (New India Assurance Co. Ltd.) of one of the vehicles involved. The original claimants filed cross-objections seeking enhancement of compensation.

The underlying accident occurred on 16.08.1998 at about 3:00 pm near Limdi on National Highway No. 8-A, between a Tata Sierra (Reg. No. GJ-2A-9514) and a truck (Reg. No. GJ-1X-6573). The deceased, a 25-year-old female employee (B.E. Civil) working as an International Internal Sales Engineer with a monthly salary of Rs. 6,273/-, died in that collision. She was a widow and had been living with her parents since her husband’s death in April 1996. The claim petition sought Rs. 25,00,000/- under various heads.

The Tribunal, after appreciating oral and documentary evidence, found contributory negligence on part of both drivers (truck driver 80%, Tata Sierra's driver 20%), assessed the deceased’s income and future prospects, applied computations for future loss of dependency and awarded the total sum noted above. Both parties appealed on limited grounds: the insurer challenged quantum/method of calculation; the claimants sought enhancement.

Legal Issues Presented

  1. Whether the learned Tribunal was justified in adding approximately 100% to the deceased's actual income to determine prospective income for future loss of dependency.
  2. Whether the appropriate deduction for the deceased's personal expenses (one-third as applied by the Tribunal versus one-half suggested by the appellant) was correct in the circumstances where the claimants are the parents and the deceased was a widow living with them.
  3. Whether the proper multiplier should be 16 (as applied by the Tribunal) or 18 (as contended by the claimants and applied by the appellate Court) for a 25-year-old deceased.
  4. Whether the amounts awarded under the heads of 'loss of estate' and 'loss of love and affection' (Rs. 15,000/- each as awarded by the Tribunal) were adequate and should be enhanced.

Arguments of the Parties

Appellant (New India Assurance Co. Ltd.) — Primary Contentions

  • The Tribunal erred in adding approximately 100% to the deceased’s income to determine prospective income; relying on Smt. Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121, only 50% should be added for a 25-year-old deceased, yielding a prospective income of Rs. 9,417/- per month.
  • Because the claimants are the parents, the Tribunal ought to have deducted 50% (instead of one-third) towards the deceased's personal expenses.
  • On these bases the appellant sought reduction of the award.

Original Claimants — Primary Contentions (via counsel Shri. Mehul S. Shah and Shri. Radhesh Vyas)

  • The learned Tribunal correctly added approximately 100% for future rise in income, considering the deceased’s promising career and prospects.
  • The Tribunal correctly deducted one-third towards personal expenses.
  • The Tribunal materially erred in applying multiplier 16; relying on Sarla Verma, multiplier 18 should apply for a 25-year-old deceased.
  • The Tribunal under-awarded amounts under 'loss of estate' and 'loss of love and affection' (each Rs. 15,000/-) and those heads deserve enhancement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt. Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 Guidance on (a) percentage to be added to actual income for future prospects (50% for the deceased aged 25 as applied here), (b) appropriate deduction towards personal expenses in certain relationships (principle applied analogously to parents of a deceased who was living with them), and (c) selection of multiplier based on age (multiplier 18 for age 25). The Court applied Sarla Verma to reduce the Tribunal's 100% uplift to 50% (yielding prospective income Rs. 9,417/‑ per month), applied a deduction of 1/2 for personal expenses (producing a monthly dependency figure of Rs. 4,708, rounded to Rs. 4,710), and applied multiplier 18 to compute future loss of dependency.
United India Insurance Co. Ltd. v. Naynaben Wd/o. Bharatkumar Bhalchandra Patel (Division Bench of this Court, First Appeal No. 481/2001 with cross objections) Authority for awarding an aggregate amount of Rs. 50,000/- under the heads of 'loss of estate' and 'loss of love and affection' (as a guideline for appropriate compensation under these heads for claimants). The Court relied on this Division Bench decision to increase the combined award under those heads from Rs. 30,000/- (as assessed by the Tribunal) to Rs. 50,000/- (i.e., enhanced relief to the claimants on those specific heads).

Court's Reasoning and Analysis

The appellate Court re-appreciated the entire evidence and proceeded in a stepwise manner, focusing on the quantum calculations made by the Tribunal:

  1. The Tribunal's primary factual finding on the deceased's salary at the time of accident (Rs. 6,273/- per month) was accepted by the appellate Court as the starting point for calculations.
  2. On the question of uplift for future prospects, the Court applied the principle in Sarla Verma and held that only 50% (not ~100%) ought to have been added to the actual income for a 25-year-old deceased. This reduced the prospective monthly income figure from Rs. 12,000/- (as used by the Tribunal) to Rs. 9,417/-.
  3. Regarding deduction for personal expenses, the Court followed the ratio in Sarla Verma applicable when parents are claimants (analogous to the situation of a bachelor whose parents are claimants) and deducted half of prospective income. Thus the monthly loss of dependency computed to Rs. 4,708/-, rounded to Rs. 4,710/-.
  4. On the multiplier, the Court again applied Sarla Verma's guidance for age 25 and chose multiplier 18 (rather than 16 applied by the Tribunal). Applying multiplier 18 to Rs. 4,710/- produced Rs. 10,17,360/- as the correct figure for future loss of dependency (instead of Rs. 15,36,000/-).
  5. The Court also examined the Tribunal's modest awards under 'loss of estate' and 'loss of love and affection' (Rs. 15,000/- each). Citing a recent Division Bench decision of the same Court (United India Insurance Co. Ltd. v. Naynaben...), the appellate Court held that the claimants should be awarded an aggregate of Rs. 50,000/- for those heads (instead of the Rs. 30,000/- awarded by the Tribunal).
  6. After making these adjustments, the appellate Court fixed the total entitlement of the claimants at Rs. 10,72,360/- together with the interest as awarded by the learned Tribunal and proportionate costs.
  7. The Court noted the Tribunal’s finding of contributory negligence between the drivers (truck driver 80%, Tata Sierra driver 20%) and observed that, because the deceased was a passenger and claimants could recover from either insurer, no argument was pressed by the appellant on the contributory negligence findings or on maintainability given the peculiar family circumstances of the deceased (a widow living with parents).

Holding and Implications

Core Ruling: The First Appeal No. 3876/2007 is partly allowed, and the cross objections filed by the original claimants are allowed. The Tribunal's award dated 29.03.2007 is modified so that the original claimants are entitled to Rs. 10,72,360/- with interest as awarded by the Tribunal, from all the opponents, with proportionate costs.

Implications and direct effects on the parties:

  • The compensation awarded by the Tribunal is reduced/modified to Rs. 10,72,360/- (with interest as previously awarded) instead of Rs. 15,71,000/-.
  • The insurer-appellant shall be entitled to recovery of any amounts deposited in excess of this modified award, together with proportionate costs and interest from Fixed Deposits lying with the learned Tribunal.
  • The remaining/balance amount (after payment of any excess to the insurer) is permitted to be withdrawn by the original claimants.
  • No statement in the opinion purports to create a novel precedent; the Court applied existing precedents (as cited) to adjust quantification of compensation and to enhance modest heads of damages in line with a prior Division Bench decision of the same Court.

Note: This summary is based exclusively on the content of the provided opinion and does not add or infer facts not present in the original text.

    New India Assurance Co. Ltd. v. Sureshchandra Bagmalbhai Doshi

    M.R Shah, J.:— Feeling aggrieved and dissatisfied with the impugned judgment and award dated 29.03.2007 passed by the learned Motor Accident Claims Tribunal (Auxi.-2), Gandhinagar, at Kalol (hereinafter referred to as “Tribunal”) in Motor Accident Claim Petition No. 1266/2004 by which the learned Tribunal has partly allowed the said claim petition and has awarded a sum of Rs. 15,71,000/- to the original claimants from the original opponents towards the compensation for the death of deceased daughter of the original claimants with 12% interest thereon from the date of application till realization, the appellant herein-original opponent No. 3-insurer of the Tata Sierra involved in the accident has preferred the present First Appeal No. 3876/2007.

    2. That the original claimants have also preferred the cross objections to enhance the amount of compensation.

    3. The facts leading to the present First Appeal and the cross objections in nut-shell are as follows:

    [2.1] In a vehicular accident which took place on 16.08.1998 at about 3 pm in the afternoon near Limdi, on Limdi-Ahmedabad National Highway No. 8-A between two vehicles viz. Tata Sierra bearing Registration No. GJ-2A-9514 and Truck No. GJ-1X-6573, unfortunately the daughter of the original claimants died. Therefore, the original claimants-parents filed the claim petition before the learned Tribunal claiming Rs. 25 lacs towards the compensation under different heads from all the opponents. It was the case on behalf of the original claimants that their deceased daughter was working in the company of original opponent No. 4 as an International Internal Sales Engineer on a monthly salary of Rs. 6273/-. She was B.E Civil. She got married initially at very young age and thereafter on account of sad demise of her husband in the year April 1996, she started living with the parents since then and till her death in accident. It was also the case on behalf of the original claimants that their deceased daughter had dynamic career in her life and therefore, within short period, she reached on high post from the initial post of Secretary in her service with high rise in salary. It was also the case on behalf of the original claimants that if she would not have died in the vehicular accident, she would have been able to earn monthly salary of more than Rs. 25,000/-.

    [2.2] The claim petition was opposed by the insurance company of both the vehicles involved in the accident on number of grounds including on the ground of negligence/contributory negligence as well as the income of the deceased etc. The learned Tribunal framed the issues at Exh.20

    [2.3] That the original claimants led the evidence oral as well as documentary. The original claimants examined original claimant No. 1-father of the deceased-Sureshchandra B. Doshi at Exh.24 To prove the income of the deceased the original claimants examined one Maheshkumar Kantilal Patel-the Executive of the employer. The original claimants also produced the documentary evidences at Exhs.54 to 59 to prove the income/salary of the deceased at the time of accident as well as her future prospects and rise in income. The original claimants also produced the FIR at Exh.37; panchnama of place of accident at Exh.38; inquest panchnama of the deceased at Exh.39; report of the deceased at Exh.40; death certificate of the deceased at Exh.41; certificate of her qualification at Exh.42; the school leaving certificate of the deceased at Exh.36 to prove the age of the deceased at the time of accident, charge-sheet against the original opponent No. 1-driver of the motor truck involved in the accident.

    [2.4] That on appreciation of evidence the learned Tribunal held the original opponent No. 1-driver of the motor truck involved in the accident contributory negligent to the extent of 80% and the driver of the Tata Sierra involved in the accident (who died in the accident) contributory negligent to the extent of 20%. However, so far as the original claimants are concerned, as the deceased was traveling in Tata Sierra, the learned Tribunal considered the composite negligence on the part of the driver of both the vehicles involved in the accident.

    [2.5] On appreciation of evidence the learned Tribunal has assessed the income of the deceased at the time of accident at Rs. 6,273/- per month however, adding approximately 100% towards future rise in income, considered the prospective income at Rs. 12,000/- per month and after deducting 1/3rd towards personal expenses of the deceased, the learned Tribunal had considered the total loss of dependency/future economic loss at Rs. 8,000/- per month and thereafter applying the multiplier of 16, by impugned judgment and award, has awarded Rs. 15,36,000/- towards loss of dependency benefit. Awarding further sum of Rs. 15,000/- towards conventional amount and under the head of loss of estate; Rs. 15,000/- towards loss of love and affection and Rs. 5,000/- towards funeral expenses, the learned Tribunal has awarded a total sum of Rs. 15,71,000/- from all the opponents with interest at the rate of 12% per annum thereon from the date of application till realization.

    [2.6] Feeling aggrieved and dissatisfied with the impugned judgment and award passed by the learned Tribunal, the appellant herein-original opponent No. 3-New India Assurance Co. Ltd.-insurer of the motor truck involved in the accident has preferred the present First Appeal.

    4. As observed herein above, the original claimants have also preferred the cross objections to enhance the amount of compensation awarded by the learned Tribunal.

    5. Shri. Nanavati, learned advocate appearing on behalf of the appellant-insurance company has vehemently submitted that the learned Tribunal has materially erred in awarding the future economic loss/loss of dependency considering the prospective income at Rs. 12,000/- per month. It is submitted by Shri. Nanavati, learned advocate appearing on behalf of the appellant-insurance company that the learned Tribunal has materially erred in adding approximately 100% towards the future rise in income. Relying upon the decision of the Hon'ble Supreme Court in the case of Smt. Sarla Verma v. Delhi Transport Corporation reported in (2009) 6 SCC 121. It is submitted that as the deceased at the time of accident was aged 25 years, the learned Tribunal ought to have added 50% of the actual income at the time of accident towards future rise in income and thereby ought to have considered the prospective income at Rs. 9,417/- per month. It is submitted that as the claimants were parents, the learned Tribunal ought to have deducted 50% towards the personal expenses of the deceased instead of 1/3 as deducted by the learned Tribunal.

    6. Making above submissions, it is requested to allow the present First Appeal preferred by the appellant insurance company.

    7. No other submissions have been made.

    8. Shri. Mehul S. Shah, learned advocate with Shri. Radhesh Vyas, learned advocate for Shri. Yatin Soni, learned advocate appearing on behalf of the original claimants has tried to oppose the present First Appeal and has also made the submissions in the cross objections filed by the original claimants and in support of the cross objections filed by the original claimants.

    9. It is submitted that in the facts and circumstances of the case, as such the learned Tribunal has not committed any error in adding approximately 100% towards future rise in income more particularly considering the bright future career of the deceased. It is further submitted that the learned Tribunal has also not committed any error in deducting 1/3 towards personal expenses of the deceased. It is submitted that as such the learned Tribunal has materially erred in applying the multiplier of 16. It is submitted that as per the decision of the Hon'ble Supreme Court in the case of Sarla Verma (Supra) and as the deceased was aged 25 years, the multiplier of 18 was required to be applied while awarding the future economic loss. It is further submitted by Shri. Shah, learned advocate appearing on behalf of the original claimants that even the learned Tribunal has materially erred in awarding Rs. 15,000/- only loss of estate and Rs. 15 000/- towards loss of love and affection.

    10. Making above submissions, it is requested to dismiss the present First Appeal preferred by the appellant-insurance company and allow the cross objections preferred by the original claimants.

    11. No other submissions have been made.

    12. Heard learned advocates appearing on behalf of respective parties at length. Perused the impugned judgment and award passed by the learned Tribunal and we have re-appreciated the entire evidence on record.

    13. That on appreciation of evidence the learned Tribunal has held the original opponent No. 1-driver of the motor truck involved in the accident contributory negligent to the extent of 80% and the driver of the Tata Sierra in which the deceased was traveling, contributory negligent to the extent of 20%. However, so far as the original claimants are concerned, as the deceased was a passenger and traveling in Tata Sierra, there shall be composite negligence between the insurance company of two vehicles involved in the accident and therefore, the claimants have nothing to do with the same as they can recover the amount from either of the insurance company. Shri. Nanavati, learned advocate appearing on behalf of the appellant-insurance company therefore, has not made any submissions on the findings recorded by the learned Tribunal on contributory negligence.

    14. In the peculiar facts and circumstances of the case and more particularly when the deceased daughter was a widow and it has come on record that her husband died before two years of accident and since then she was living with her parents 1-oiginal claimants, Shri. Nanavati, learned advocate appearing on behalf of the appellant-insurance company is also not making any submissions whether the original claimants can be said to be the dependents and whether at their instance the claim petition was maintainable. He has stated at the Bar that he is not making submissions on the aforesaid in the peculiar facts and circumstances narrated herein above.

    15. Therefore, what is required to be considered by this Court in the present appeal and the cross objections is whether the learned Tribunal is justified in awarding a total sum of Rs. 15,71,000/- to the original towards compensation for the death of deceased. In other words this Court is required to consider the quantum and amount of compensation awarded by the learned Tribunal.

    16. It is required to be noted that by impugned judgment and award, the learned Tribunal has awarded Rs. 15,36,000/- towards the loss of dependency/future loss of income. From the impugned judgment and award it appears that on appreciation on evidence the learned Tribunal assessed/considered the income/salary of the deceased at Rs. 6,273/- per month. However, thereafter, has added approximately 100% towards future rise in income for the purpose of determining the prospective income. It is required to be noted that the deceased was aged 25 years of age and she was a widow and considering the decision of the Hon'ble Supreme Court in the case of Sarla Verma (Supra) only 50% of the actual income at the time of accident was required to be added towards future rise in income and while determining the prospective income. Accordingly, the prospective income would come to Rs. 9,417/- per month instead of Rs. 12,000/- assessed, determined and considered by the learned Tribunal. As the claimants were the parents and the deceased was a widow living with them, applying the ratio of the law laid down by the Hon'ble Supreme Court in the case of Sarla Verma (Supra), when it is held that in the case of a bachelor died in an accident and the claimants are the parents, only 1/2 is required to be deducted towards personal expenses of the deceased, in the present case also, 1/2 was required to be deducted towards the personal expenses of the deceased. Accordingly, the loss of dependency would come to Rs. 4,708/- per month and after rounding off it will come to Rs. 4,710/-. As the deceased was aged 25 years, considering the decision of the Hon'ble Supreme Court in the case of Sarla Verma (Supra), multiplier of 18 was required to be applied instead of 16 applied by the learned Tribunal. Therefore, considering the loss of dependency at Rs. 4,710/- per month and applying the multiplier of 18, the claimants shall be entitled to Rs. 10,17,360/- under the head of future loss of income/loss of dependency instead of Rs. 15,36,000/- as awarded by the learned Tribunal. Therefore, to that extent i.e applying the multiplier of 18, cross objections preferred by the original claimants are required to be allowed to the aforesaid extent as in the cross objections that is the only prayer.

    17. However, at the same time, while considering the appeal preferred by the appellant-insurance company and the claimants shall be entitled to just compensation, when the learned Tribunal has awarded a sum of Rs. 15,000/- only towards loss to estate and Rs. 15,000/- only towards loss of love and affection to the claimants, the same deserves to be considered by this Court. As per the recent decision of the Division Bench of this Court in the case of United India Insurance Co. Ltd. v. Naynaben Wd/o. Bharatkumar Bhalchandra Patel rendered in First Appeal No. 481/2001 with cross objections, the learned Tribunal ought to have awarded a total sum of Rs. 50,000/- under the head of loss to the estate as well as loss of love and affection to the original claimants (instead of Rs. 30,000/- awarded by the learned Tribunal). Under he circumstances, the claimants shall be entitled to a total sum of Rs. 10,72,360/- with interest as awarded by the learned Tribunal. Consequently, the appeal preferred by the appellant-insurance company is required to be partly allowed to the aforesaid extent and the impugned judgment and award passed by the learned Tribunal is required to be modified to the aforesaid extent.

    18. In view of the above and for the reasons stated above, First Appeal No. 3876/2007 preferred by the original opponent No. 3-insurer of Tata Sierra No. GJ-2A-9514 is hereby partly allowed and as observed herein above even the cross objections preferred by the original claimants are also allowed in toto. Impugned judgment and award dated 29.03.2007 passed by the learned Motor Accident Claims Tribunal (Auxi.-2), Gandhinagar, at Kalol in Motor Accident Claim Petition No. 1266/2004 is hereby modified to the extent and it is held that the original claimants shall be entitled to a sum of Rs. 10,72,360/- with interest thereon as awarded by the learned Tribunal from all the opponents with proportionate cost. Consequently, First Appeal No. 3876/2007 as well as the cross objections are allowed as observed hereinabove.

    19. It goes without saying that in view of partly allowing the present First Appeal as observed herein above and modifying the impugned judgment and award passed by the learned Tribunal to the extent as observed herein above, the appellant-insurance company shall be entitled to get back any amount deposited by them in excess to the aforesaid together with proportionate cost and interest from the Fixed Deposits lying with the learned Tribunal and now in view of the disposal of the First Appeal, rest of the amount/balance amount is permitted to be withdrawn by the original claimants.

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