Saraladevi Vs Div.Mgr.,m/s.Royal Sundaram A.In.Co.Ltd.

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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7158 OF 2014 (Arising out of SLP(C) NO. 4333 OF 2014)

SARALADEVI & ORS. ………APPELLANTS

Vs.

DIVISIONAL MANAGER, M/S ROYAL SUNDARAM ALLIANCE INS. CO. LTD. & ANR. …RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J. This appeal has been filed by the appellants

being aggrieved by the judgment dated 12.09.2012

passed in C.M.A. No. 690 of 2011 by the High Court of

Madras whereby the High Court reduced the compensation

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awarded at Rs.37,33,248/- by the Motor Accidents

Claims Tribunal and re-determined at Rs.15,84,750/-. 2. The necessary relevant facts are stated hereunder

to appreciate the case of the appellants with a view

and to ascertain whether the appellants are entitled

for the enhancement of compensation as prayed in this

appeal. The deceased met with an accident on 28.01.2009

on account of rash and negligent driving of the motor

vehicle bearing registration No. TN-23-AF-0048, which

hit the back side of the deceased’s motor cycle. The

deceased sustained grievous injuries and succumbed to

the same. A post-mortem was conducted on 29.01.2009

and inspection report was filed in CC.No.55 of 2009

before the Court of Judicial Magistrate No. II,

Walajahpet by the Inspector of Police against the

driver of the offending vehicle. The prosecution has

failed to prove the case against the driver beyond

reasonable doubt, therefore, the learned Judicial

Magistrate had acquitted the driver of the vehicle

from the charge framed against him vide order dated

31.05.2010.

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3. The appellants - the widow, two daughters and bed-

ridden aged mother of the deceased-Vasanthan

approached the Motor Accidents Claims Tribunal,

Vellore (for short “MACT”) by filing claim petition

under Section 166 of the Motor Vehicles Act, 1988 (for

short “the Act”) claiming compensation of

Rs.45,00,000/- on account of death of their sole bread

earner, against the owner as well as the insurer of

the vehicle. The said claim petition was registered as

M.C.O.P. No. 138 of 2009. 4. The Insurance Company filed its counter statement

stating that the accident occurred only due to the

negligent riding of the two wheeler by the deceased-

Vasanthan and that they are not liable to pay the

compensation amount as claimed by the appellants. 5. The MACT has conducted an enquiry by giving an

opportunity to the parties to adduce evidence in

support of their respective claim. Three witnesses

(PW-1 to PW-3) were examined on behalf of the

appellants and the exhibits were marked as Exs. P-1

to P-15. On behalf of respondents two witnesses RW-1

and RW-2 were examined and exhibits were marked as

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Exs. R-1 and R-2. The Tribunal on appreciation of

pleadings and legal evidence on record came to the

right conclusion and held that the accident occurred

due to the negligence of the driver of the offending

vehicle. Thereafter, on the basis of legal evidence

on record the MACT determined the quantum of

compensation. For this purpose, the Tribunal has taken

the monthly salary of the deceased at Rs.50,809/- as

per the salary certificate Exh.P-7. Therefore, his

annual income was fixed at Rs.6,09,708/-. The deceased

was aged 58 years at the time of the accident and the

Tribunal has taken the multiplier as 8. Therefore,

the total loss of income of the deceased would be

Rs.48,77,664/-. 1/4th of this amount i.e.

Rs.12,19,416/- was deducted towards his personal

expenses as his dependents are four in number. Hence,

the loss of dependency of the appellants was

calculated at Rs.36,58,248/-. For funeral expenses, a sum of Rs.5,000/- was awarded. For loss of estate

Rs.10,000/- and for loss of consortium to the 1st

appellant, a sum of Rs.10,000/- was granted. For loss

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of love and affection, a sum of Rs.50,000/- was

granted to the appellants. Thus, the Tribunal has

assessed the total compensation under different heads

as mentioned above and passed an award for a sum of

Rs.37,33,248/- to the appellants with interest @ 7.5%

from the date of petition i.e. 08.06.2009 and further

directed the Insurance Company to pay the said amount

by indemnifying the owner of the vehicle as the same

was insured with it. 6. The insurer i.e. the Royal Sundaram Alliance

Insurance Company Ltd. had challenged the correctness

of the award passed by the Tribunal in favour of the

appellants by filing an appeal before the High Court

of Judicature at Madras seeking for the modification

of the compensation awarded in favour of the

appellants by the Tribunal contending that the same is

excessive, urging various grounds in support of its

appeal. 7. The High Court, after examining the facts,

evidence and circumstances of the case, has held that

as per the judgement in Sarla Verma & Ors. vs. Delhi

Transport Corporation & Anr.1 the correct multiplier 1

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between the age group of 56-60 should have been 9

since the deceased was 58 years at the time of his

death. Further, the High Court held that if the actual

salary of Rs.50,809/- is taken into consideration, the

annual loss of income of the deceased works out to

Rs.6,09,708/- and 10% of the amount is liable to be

deducted towards income tax deduction. 10% in the sum

of Rs.6,09,708/- comes to Rs.60,970.80 and the same

can be rounded off to Rs.61,000/-. If so, the balance

amount works out to Rs.5,48,708-(Rs.6,09,708/- minus

Rs.61,000/-), rounded off to Rs.5,49,000/- as the

annual income of the deceased. Hence, annual loss of

income could be fixed at Rs.5,49,000/-. For the first

two years, the loss of income would be Rs.10,98,000/-

(Rs.5,49,000/- x 2 years). For the balance 7 years,

only 50% annual income has to be taken into

consideration as notional income, which comes to

Rs.19,21,500/- (Rs.2,74,500/- x 7 years). Therefore,

the total loss of income works out to Rs.30,19,500/-.

Further, the High Court was of the opinion that 1/3rd

amount is liable to be deducted towards personal (2009) 6 SCC 121

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expenses of the deceased. If this amount is deducted

out of the annual income of the deceased, the balance

amount works out to Rs.20,13,000/- which amounts to a

total loss of dependency (Rs.30,19,500/- minus

Rs.10,06,500/-). The High Court further held that

there is contributory negligence on the part of the

deceased which was assessed at 25% which amount would

be Rs.5,03,250/-. When this amount was deducted out

of Rs.20,13,000/-, the High Court held that the legal

heirs of the deceased are entitled to Rs.15,09,750/-

towards loss of dependency. Thus, the High Court reduced the total

compensation and awarded under the following heads: Loss of Dependency Rs.15,09,750/- Funeral Expenses Rs. 5,000/- Loss of Estate Rs. 10,000/- Loss of Consortium Rs. 10,000/- Loss of love and affection Rs. 50,000/- Total : Rs.15,84,750/-

8. Thus, the High Court while partly allowing the

Civil Miscellaneous Appeal of the Insurance Company,

directed it to deposit the above said amount with an

interest at the rate of 7.5% per annum from the date

of the petition, within a period of six weeks before

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the Tribunal after deducting the amount already

deposited. 9. Aggrieved by the impugned judgement and final

Order dated 12.09.2012 passed by the High Court, the

appellants filed this appeal before this Court urging

various tenable grounds namely, as to whether the High

Court was justified in holding that there is a

contributory negligence on the part of the deceased

contrary to the evidence of the eye witness; whether

the High Court was justified in fixing the ratio of

contributory negligence as 25% on the part of the

deceased on the basis of an erroneous finding; whether

the High Court was justified in reducing the amounts

awarded by the Tribunal from Rs.37,33,248/- to

Rs.15,84,750/- and lastly, whether the High Court was

justified in deducting 1/3rd amount towards personal

expenses of the deceased contrary to the law laid down

by this Court in various judgements? 10. In our considered view, the High Court has erred

in not considering the principles laid down in the

case of Sarla Verma & Ors. (supra) in so far as

deduction of 1/4th of the monthly income of the

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deceased to arrive at the multiplicand and reducing

the compensation by adopting the split up multiplier.

Further, recording the finding of contributory

negligence on the part of the deceased in the absence

of evidence on record in this regard rendered the

finding erroneous in law and error in law as the same

is contrary to the decision of this Court reported in

Jiju Kuruvila and Ors. v. Kunjujamma Mohan & Ors.2. At

the time of death, Vasanthan was 58 years old and was

earning a salary of Rs.50,809/- per month i.e.

Rs.6,09,708/- annually. By applying the appropriate

multiplier of 8 as laid down under Kerala Road

Transport Corporation v. Susamma Thomas3, the loss of

dependency comes to Rs.48,77,708/-.

11. Further, deduction towards personal expenses of

the deceased out of the annual income would be 1/4th

as held by this Court in the case of Sarla Verma &

Ors.(supra), the relevant portion of the judgment

reads thus : –

2 (2013) 9 SCC 166

3 AIR 1994 SC 1631

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“30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.”

The High Court failed to follow the above

judgement and committed an error in law in deducting

1/3rd amount towards personal expenses of the

deceased. Therefore, as per the above judgement the

deduction ought to be 1/4th only as correctly

calculated by the Tribunal. Thus, after deducting

1/4th i.e. Rs.12,19,416/- towards personal expenses;

the loss of dependency would be Rs.36,58,248/.

Further, we affirm the sum granted by the Tribunal as

Rs.5,000/- for funeral expenses, under the head of

loss of estate at Rs.10,000/-, loss of consortium at

Rs.10,000/- and Rs.50,000/- for loss of love and

affection of the deceased.

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12. Further, the High Court has erred in not

following the decision of Rajesh and Ors. v. Rajbir

Singh and Ors.4 by awarding only Rs.10,000/- for loss

of consortium, instead of Rs.1,00,000/-. Towards loss

of estate, the High Court awarded Rs.10,000/- instead

of Rs.1,00,000/. Therefore, to this extent there is

loss caused to the appellants in not being compensated

correctly under different heads such as, loss of

consortium, loss of estate, and loss of love and

affection. Further, as per Municipal Corporation of

Delhi v. Uphaar Tragedy Victims Association & Ors.5, the appellants are entitled for 9% interest per annum

on the compensation awarded from the date of filing of

the application till the date of payment. Thus, there

will be a difference of 1.5% interest amount payable

on the total compensation awarded by both the Tribunal

and the High Court as they have awarded at 7.5%

interest. Therefore, if the less awarded difference of

interest amount @ 1.5% by both the Tribunal and the

4 (2013) 9 SCC 54

5 (2011) 14 SCC 481

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High Court is taken into consideration on the total

compensation awarded in favour of the appellants, it

would take care of the amount that was required to be

deducted towards income tax out of the gross salary of

the deceased for determining the compensation under the heading of loss of dependency. 13. Since, the High Court has erred in not

correctly awarding compensation under the above heads

and having regard to the facts and circumstances of

the case, we affirm the Award of the Tribunal and the

same is restored. Therefore, the determination of compensation under

the loss of dependency under other heads as indicated

in the following paragraph is perfectly legal and

valid as the said compensation is just and reasonable

keeping in view the monthly income at Rs.50,809/- as

per the documentary evidence (Ex.P-7), the salary

certificate.

14. In the result, the impugned judgment and order

of the High Court is liable to be set aside and

accordingly set aside and the Award of the Tribunal is

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affirmed. Therefore, the appellants shall be entitled

to compensation under the following heads:

Loss of Dependency Rs.36,58,248/- Funeral Expenses Rs. 5,000/- Loss of love and affection Rs. 50,000/- Loss of estate Rs. 10,000/- Loss of consortium Rs. 10,000/- Total: Rs.37,33,248/- Thus, the total compensation payable to the

appellants/claimants will be Rs.37,33,248/- with

interest @ 7.5% per annum from the date of filing of

the application till the date of payment. The

apportionment of the compensation in favour of the

appellants is as per the Award of the Tribunal.

15. Accordingly, we allow this appeal in the above

terms. The respondent-Insurance Company shall either

pay the compensation by way of demand draft/drafts in

favour of the appellants or deposit the same with

interest as awarded by the Motor Accidents Claims

Tribunal within six weeks from the date of receipt of

the copy of this judgment, after deducting the amount

already deposited.

…………………………………………………………J.

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[DIPAK MISRA]

…………………………………………………………J. [V. GOPALA GOWDA]

New Delhi, August 20, 2014

SARALADEVI Vs DIV.MGR.,M/S.ROYAL SUNDARAM A.IN.CO.LTD.

SARALADEVI Vs DIV.MGR.,M/S.ROYAL SUNDARAM A.IN.CO.LTD.