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  • JUSTICE P.D RAJAN
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Smart Summary

Factual and Procedural Background

This appeal is preferred against the award in OP(MV) No.52/06 of the Motor Accidents Claims Tribunal, Pala by the dependents and legal representative of the deceased Santhosh. On 31.12.2005 Santhosh sustained injuries in a motor accident and died on the way to the hospital. His dependents and legal representatives preferred the claim petition; the learned Tribunal awarded compensation of Rs.3,17,000/- with interest and cost. The dependents aggrieved by the quantum preferred this appeal.

There is no dispute about occurrence of the accident. The deceased was riding motorcycle No. KL-5/Q-8475 and another motorcycle KL-5/S-7859 driven rashly collided with it. In the lower court, the driver and owner took a joint contention. The insurer of the offending vehicle admitted insurance. The appellants did not adduce oral evidence but documents Exts. A1 to A8 were marked. Respondents did not adduce evidence.

Legal Issues Presented

  1. Whether the tribunal erred in assessing the monthly income of the deceased for computation of dependency (dispute over monthly income: tribunal used Rs.2,000; appellants claim Rs.5,000).
  2. Whether, in computing future prospects, the addition specified in National Insurance Co. v. Pranay Sethi (as applied) should be made (the appellants contend 40% addition).
  3. Application of the multiplier and deduction for personal living expenses (the appellants used multiplier 16 and a 1/4 deduction resulting in multiplication by 3/4).

Arguments of the Parties

Appellants' Arguments

  • The deceased was a rubber tapper earning Rs.5,000 per month; the tribunal's adoption of Rs.2,000 was incorrect.
  • Relying on Dixit Kumar v. OM Prakash Goel, in absence of contrary evidence the Tribunal cannot reduce the income; therefore Rs.5,000 should be accepted as the established income.
  • Applying National Insurance Co. v. Pranay Sethi, 40% of the income should be added as future prospects (calculated here as Rs.2,000), bringing monthly income to Rs.7,000.
  • Deceased's age was 35 years, multiplier 16 applies; with six dependents and after the applicable deduction (multiplication by 3/4), dependency is calculated as Rs.7,000 x 12 x 16 x 3/4 = Rs.10,08,000.

The opinion states that respondents did not adduce any evidence. The opinion does not set out any detailed arguments on behalf of the respondents.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
National Insurance Company v. Pranay Sethi [2017 (4) KLT 662 (SC)] Multiple conclusions reproduced: (i) observations on Santhosh Devi vs Sarla Verma and need for larger Bench; (ii) Rajesh not binding where it ignored Reshma Kumari; (iii)-(iv) percentages for addition to income (future prospects) by age and by employment status (e.g., 50% where permanent job and <40; 40% for self-employed and <40; lower percentages for older age groups); (v) guidance to follow Sarla Verma paragraphs 30–32 for deduction for personal expenses; (vi)-(vii) selection of multiplier per Sarla Verma and use of deceased's age; (viii) conventional heads amounts for loss of estate, consortium and funeral expenses and periodic enhancement. The court relied on Pranay Sethi for the appropriate percentage addition to income (applied 40% addition in this case), and for guidance on deduction and multiplier selection (reference to Sarla Verma as interpreted in Pranay Sethi).
Dixit Kumar and Ors. v. OM Prakash Goel (2017 ACJ 2057) Where there is no contra evidence, the Tribunal cannot reduce the income claimed by the claimant. The court invoked this principle to support accepting the appellants' claimed income of Rs.5,000/month in the absence of contradictory evidence.
Sarla Verma Guidance on deduction for personal and living expenses (paras 30–32) and on selection of multiplier (table and paragraph 42). The court followed Sarla Verma (as cited in Pranay Sethi) for determining the deduction for personal expenses (resulting in application of a 3/4 factor) and selection of multiplier (multiplier 16 for the deceased aged 35).
Santhosh Devi Mentioned as a two-Judge Bench decision that took a view different from Sarla Verma; Pranay Sethi notes it should have been referred to a larger Bench. The opinion records Pranay Sethi's analysis of Santhosh Devi; no separate application of Santhosh Devi's rule is made beyond relying on Pranay Sethi's critique.
Rajesh Referenced in Pranay Sethi as not being a binding precedent because it did not take note of Reshma Kumari. The court follows Pranay Sethi's view that Rajesh is not binding where it overlooked earlier decisions; the opinion relies on Pranay Sethi rather than Rajesh.
Reshma Kumari Identified as an earlier decision which Rajesh did not take into account (per Pranay Sethi's analysis). Mentioned only in the context of Pranay Sethi's discussion about precedential hierarchy; no direct substantive application beyond reliance on Pranay Sethi.

Court's Reasoning and Analysis

The court proceeded on the undisputed factual matrix: accident, death en route to hospital, admission of insurance, absence of respondent evidence, and only quantum being contested. The reasoning steps explicitly recorded in the opinion are:

  1. The dispute is confined to quantum; the appellants claimed the deceased's monthly income was Rs.5,000 whereas the tribunal used Rs.2,000.
  2. Applying Dixit Kumar, in absence of contrary evidence the tribunal cannot reduce the income; accordingly the appellants' claim of Rs.5,000 can be considered as the established income.
  3. Relying on Pranay Sethi, an addition (in this case 40%) is to be made to the established income as future prospects (the opinion records a 40% addition equating to Rs.2,000), resulting in a total monthly income of Rs.7,000.
  4. Deceased's age is recorded as 35 years; the opinion applies multiplier 16. There were six dependents. The computation applies a deduction for personal/living expenses (expressed in the computation as multiplication by 3/4), leading to the dependency calculation: Rs.7,000 x 12 x 16 x 3/4 = Rs.10,08,000.
  5. The learned Tribunal had awarded Rs.2,72,000 for loss of dependency; the opinion notes the balance between the computed dependency and the Tribunal award as Rs.7,36,000 (Rs.10,08,000 - Rs.2,72,000). The provided excerpt ends after recounting these figures and further reference to Pranay Sethi.

Holding and Implications

No final disposal or formal concluding order is recorded in the provided excerpt.

Direct effect reflected in the excerpt:

  • The appellate reasoning accepts the appellants' claimed monthly income of Rs.5,000 in the absence of contrary evidence and applies a 40% addition (per Pranay Sethi), arriving at Rs.7,000 per month for dependency computation.
  • Using multiplier 16 (age 35) and a deduction reflected as multiplication by 3/4, the court's computation of total dependency is Rs.10,08,000.
  • The Tribunal's award for loss of dependency was Rs.2,72,000; the excerpt states the difference between the computed amount and the Tribunal award as Rs.7,36,000. The excerpt does not state a final direction to grant this balance or any order altering the previously awarded amount.

The excerpt does not announce any new legal precedent; it applies and relies upon existing Supreme Court authorities (as summarized above) to reassess quantum in the present appeal.

Show full summary ...

    JAYA ALIAS SUMA AND OTHERS v. THOMAS.K.A. AND OTHERS

    This appeal is preferred against the award in OP(MV) No.52/06 of Motor Accidents Claims Tribunal, Pala by the dependents and legal representative of the deceased Santhosh. On 31.12.2005, Santhosh sustained injuries in a motor accident and on the way to the hospital, he died. His dependents and legal representatives preferred the above claim petition and the learned Tribunal awarded compensation of Rs.3,17,000/- with interest and cost. Being aggrieved by that amount, the dependents preferred this appeal.

    2. There is no dispute with regard to the accident. The deceased was riding a motorcycle No.KL- 5/Q-8475, when he reached at the place of occurrence, another motorcycle KL-5/S-7859 driven in a rash and negligent manner hit against the above vehicle and both M.A.C.A No. 519 of 2008 vehicles collided. In the lower court, the driver and owner took a joint contention. The insurer of the offending vehicle admitted the insurance of the vehicle. The appellants did not adduce any oral evidence but the documents were marked as Exts.A1 to A8. Respondents did not adduce any evidence.

    3. Apex Court in National Insurance Company V. Pranay Sethi [2017 (4) KLT 662 (SC)] held as follows:

    61. In view of the aforesaid analysis, we proceed to record our conclusions:-

    (i) The two-Judge Bench in Santhosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.

    (ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent. M.A.C.A No. 519 of 2008

    (iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.

    (iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

    (v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced herein before.

    (vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment. M.A.C.A No. 519 of 2008

    (vii) The age of the deceased should be the basis for applying the multiplier.

    (viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.

    4. The dispute is with regard to the quantum alone. The learned counsel appearing for the appellants contended that the deceased was a rubber tapper and was getting Rs.5,000/- per month. The learned Tribunal took monthly income of Rs.2,000/- for calculating dependency compensation. It is true that, the dependents are entitled to get just amount as compensation. Apex court in Dixit Kumar and Ors. v. OM Prakash Goel (2017 ACJ 2057) held that in the absence of any contra evidence, the Tribunal cannot reduce the income to lower rate. Appellants claimed Rs.5,000/- as the income and that can be considered for calculating the dependency. 40 percentage of the income M.A.C.A No. 519 of 2008 has to be added with the income in view of Pranay Sethi case (supra) that is Rs.2,000/-. Total monthly income will be Rs.7,000/-. The deceased was aged 35 years and the multiplier is 16. There are 6 dependents, B< is to be deducted. The total dependency will come to Rs.7,000x12x16x3/4= Rs.10,08,000/-.

    5. The learned Tribunal awarded Rs.2,72,000/- for loss of dependency. The balance amount is Rs.7,36,000/- (Rs.10,08,000-2,72,000). Apex court in National Insurance Company V. Pranay Sethi [2017 (4) KLT 662 (SC)] held as follows:

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    Comments

    JAYA ALIAS SUMA AND OTHERS v. THOMAS.K.A. AND OTHERS
    (Mar 15, 2018)