Syed Sadiq Etc. Vs Divisional Manager,united India Ins.Co.

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C.A.@SLP(C) 16739-16741 of 2012 1

NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.662-664 OF 2014 (ARISING OUT OF SLP(C) NO(s). 16739-16741 OF 2012)

SYED SADIQ ETC. …APPELLANTS Vs.

DIVISIONAL MANAGER, UNITED INDIA INS. CO. … RESPONDENT J U D G M E N T

V. Gopala Gowda, J.

Leave granted.

2. This appeal is filed by the appellants

questioning the correctness of the common judgment

and final order dated 31.10.2011 passed by the High

Court of Karnataka at Bangalore in M.F.A. No. 1131

of 2011 [MV], C/W M.F.A. Nos. 1132 and 1133 of 2011

[MV], urging various facts and legal contentions in

justification of their claim.

3. Necessary relevant facts are stated hereunder

to appreciate the case of the appellants and also

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C.A.@SLP(C) 16739-16741 of 2012 2

to find out whether the appellants are entitled for

the relief as prayed in these appeals.

On 14.8.2008, all the three appellants/

claimants in the appeals herein were proceeding on

the left side of the road by pushing the motorcycle

bearing Registration no. KA-16-2404 since it was

punctured. When the appellants/ claimants came near

the Coper Petrol Bunk, opposite to Jai Hind Hotel,

a tractor bearing no KA-16/T-8219-8220 came from

the opposite direction on its right side in rash

and negligent manner and dashed into the motor

cycle and the appellants/claimants. This resulted

in all the appellants/claimants sustaining grievous

injuries.

4. They filed MV Case Nos. 149, 147 and 148 of

2010 respectively before the Motor Accident Claim

Tribunal, Chitradurga (for short ‘the Tribunal’).

The Tribunal awarded different awards in the three

different appeals which had been heard together by

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C.A.@SLP(C) 16739-16741 of 2012 3

the High Court of Karnataka. Since the injuries

suffered by the three appellants are different, we

are inclined to decide upon the appeals

individually. As far as injuries sustained by the

appellants in the road accident are concerned,

there is no dispute that the accident occurred

on 14.02.2008 due to the rash and negligent driving

of the tractor-trailer bearing registration

No. KA-16/T-8219-8220 by its driver. The appeals

therefore, are confined to determining whether the

quantum of compensation which was enhanced by the

High Court from that of the Tribunal is just and

proper or whether it requires further enhancement

in the interest of justice. We take up the appeals

one at a time.

Civil Appeal @ MFA 1131/2011 (MVC No. 149/ 2010) 5. It is evident from the material and legal

evidence produced on record that the appellant/

claimant in this appeal had sustained injuries to

lower end of right femur and his right leg was

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C.A.@SLP(C) 16739-16741 of 2012 4

amputated. Further, he had sustained injury over

his left upper arm. The injuries sustained by him

and the treatment taken by him are evident from the

wound certificate Ex. P-6, discharge cards Ex.P-

7&8, disability certificate Ex. P-12, X-ray films

Ex.P-218 and was further supported by oral evidence

of the appellant/claimant and the doctor examined

as PW-1 and PW-4 respectively. PW-4 Dr. Rajesh had

stated in his evidence that the appellant/claimant

had suffered disability of 24% to upper limb and

85% to lower limb. The Tribunal, however, had

considered the disability of the appellant/claimant

caused to whole body at 30%. The High Court

however, taking into consideration the amputation

of the right leg of the appellant/claimant,

determined the disability at 65% without assigning

any proper reason for coming to this conclusion.

Therefore, we intend to assign our reasons to hold

that the High Court has erred in concluding the

disability at 65%.

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6. This Court in the case of Mohan Soni v. Ram

Avtar Tomar & Ors.1, has elaborately discussed upon

the factors which determine the loss of income of

the claimant more objectively. The relevant

paragraph reads as under:

“11. In a more recent decision in Raj Kumar v. Ajay Kumar and another, (2011) 1 SCC 343, this Court considered in great detail the correlation between the physical disability suffered in an accident and the loss of earning capacity resulting from it. In paragraphs 10, 11 and 13 of the judgment in Raj Kumar, this Court made the following observations:

10. Where the claimant suffers a permanent disability as a result of injuries, the assessment of compensation under the head of loss of future earnings would depend upon the effect and impact of such permanent disability on his earning capacity. The Tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of

1 (2012) 2 SCC 267

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permanent disability. Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in award of either too low or too high a compensation. 11. What requires to be assessed by the Tribunal is the effect of the permanent disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency). We may however note that in some cases, on appreciation of evidence and assessment, the Tribunal may find that the percentage of loss of earning capacity as a result of the permanent disability is approximately the same as the percentage of permanent disability in which case, of course, the Tribunal will adopt the said percentage for determination of compensation. (See for example, the decisions of this Court in Arvind

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Kumar Mishra v. New India Assurance Company Ltd. (2010) 10 SCC 254 and Yadava Kumar v. National Insurance Company Ltd. (2010) 10 SCC 341).

13. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent disability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood.”

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7. Further, the appellant claims that he was

working as a vegetable vendor. It is true that a

vegetable vendor might not require mobility to the

extent that he sells vegetables at one place.

However, the occupation of vegetable vending is not

confined to selling vegetables from a particular

location. It rather involves procuring vegetables

from the whole-sale market or the farmers and then

selling it off in the retail market. This often

involves selling vegetables in the cart which

requires 100% mobility. But even by conservative

approach, if we presume that the vegetable vending

by the appellant/claimant involved selling

vegetables from one place, the claimant would

require assistance with his mobility in bringing

vegetables to the market place which otherwise

would be extremely difficult for him with an

amputated leg. We are required to be sensitive

while dealing with manual labour cases where loss

of limb is often equivalent to loss of livelihood.

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Yet, considering that the appellant/claimant is

still capable to fend for his livelihood once he is

brought in the market place, we determine the

disability at 85% to determine the loss of income.

8. The appellant/claimant in his appeal further

claimed that he had been earning 10,000/- p.m. by

doing vegetable vending work. The High Court

however, considered the loss of income at 3500/-

p.m. considering that the claimant did not produce

any document to establish his loss of income. It is

difficult for us to convince ourselves as to how a

labour involved in an unorganized sector doing his

own business is expected to produce documents to

prove his monthly income. In this regard, this

Court, in the case of Ramchandrappa v. Manager,

Royal Sundaram Alliance Company Limited2, has held

as under:

“13. In the instant case, it is not in dispute that the Appellant was aged about 35 years and was working as a

2 (2011) 13 SCC 236

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Coolie and was earning 4500/- per month at the time of accident. This claim is reduced by the Tribunal to a sum of 3000/- only on the assumption that wages of the labourer during the relevant period viz. in the year 2004, was 100/- per day. This assumption in our view has no basis. Before the Tribunal, though Insurance Company was served, it did not choose to appear before the Court nor did it repudiated the claim of the claimant. Therefore, there was no reason for the Tribunal to have reduced the claim of the claimant and determined the monthly earning a sum of 3000/- p.m. Secondly, the Appellant was working as a Coolie and therefore, we cannot expect him to produce any documentary evidence to substantiate his claim. In the absence of any other evidence contrary to the claim made by the claimant, in our view, in the facts of the present case, the Tribunal should have accepted the claim of the claimant. 14. We hasten to add that in all cases and in all circumstances, the Tribunal need not accept the claim of the claimant in the absence of supporting material. It depends on the facts of each case. In a given case, if the claim made is so exorbitant or if the claim made is contrary to ground realities, the Tribunal may not accept the claim and may proceed to determine the possible income by resorting to some guess work, which may include the ground realities prevailing at the relevant point of time. In the present case,

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Appellant was working as a Coolie and in and around the date of the accident, the wage of the labourer was between 100/- to 150/- per day or 4500/- per month. In our view, the claim was honest and bonafide and, therefore, there was no reason for the Tribunal to have reduced the monthly earning of the Appellant from 4500/- to 3000/- per month. We, therefore, accept his statement that his monthly earning was 4500/-.”

9. There is no reason, in the instant case for the

Tribunal and the High Court to ask for evidence of

monthly income of the appellant/claimant. On the

other hand, going by the present state of economy

and the rising prices in agricultural products, we

are inclined to believe that a vegetable vendor is

reasonably capable of earning 6,500/- per month.

10. Further, it is evident from the material

evidence on record that the appellant/claimant was

24 years old at the time of occurrence of the

accident. It is also established on record that he

was earning his livelihood by vending vegetables.

The issue regarding calculation of prospective

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increment of income in the future of self employed

people, came up in Santosh Devi v. National

Insurance Company Limited3, wherein this Court has

held as under:

“14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma's case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be nave to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life. 15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put extra efforts to generate additional

3 (2012) 6 SCC 421

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income necessary for sustaining their families.

16. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lac.

17. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the Government employees and those employed in private sectors but it cannot be denied that there has been incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching cloths. If the cost of living increases and the prices

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of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc.

18. Therefore, we do not think that while making the observations in the last three lines of paragraph 24 of Sarla Verma's judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self-employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he / she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation.”

Therefore, considering that the appellant/ claimant

was self employed and was 24 years of age, we hold

that he is entitled to 50% increment in the future

prospect of income based upon the principle laid

down in the Santosh Devi case (supra).

11. Further, regarding the use of multiplier, it

was held in the Sarla Verma v. DTC4 which was

upheld in Santosh Devi case (supra), as under: 4 (2009) 6 SCC 121

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“42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”

Therefore, applying the principle of Sarla Verma in

the present case, we hold that the High Court was

correct in applying the multiplier of 18 and we

uphold the same for the purpose for calculating the

amount of compensation to which the appellant/

claimant is entitled to.

12. With respect to the medical expenses incurred

by the appellant/claimant, he has produced medical

bills and incidental charges bills marked as

Exs. P-25 to P-201 and prescriptions at Exs. P-202

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to P-217 on the basis of which the Tribunal awarded

a compensation of 60,000/- under the head.

However, considering that the appellant might have

to change his artificial leg from time to time, we

shall allot an amount of 1,00,000/- under the head

of medical cost and incidental expenses to include

future medical costs.

Thus, the total amount which is awarded under

the head of ‘loss of future income’ including the

50% increment in the future, works out to be

17,90,100/- [( 65,00/- x 85/100 + 50/100 x 85/100

x 6,500/-) x 12 x 18].

13. Further, along with compensation under

conventional heads, the appellant/claimant is also

entitled to the cost of litigation as per the legal

principle laid down by this Court in the case of

Balram Prasad v. Kunal Saha5. Therefore, under this

head, we find it just and proper to allow 25,000/-

5 Civil Appeal no. 2867 of 2012.

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14. Hence, the appellant/claimant is entitled to

the compensation under the following heads:

Towards cost of artificial leg

50,000/-

Towards pain and suffering

75,000/-

Towards loss of marriage prospectus

50,000/-

Towards loss of amenities 75,000/- Towards medical and incidental cost

1,00,000/-

Towards cost of litigation

25,000/-

15. Also, by relying upon the principle laid down

by this Court in the case of Municipal Corporation

of Delhi v. Association of Victims of Uphaar

Tragedy6, we find it just and proper to allow

interest at the rate of 9% per annum.

16. Hence, the total amount of claim the

appellant/claimant becomes entitled to is

21,65,100/- with interest @ 9% per annum from the

date of application till the date of payment.

6 AIR 2012 SC 100

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Civil Appeal @ MFA 1132/2011 (MVC No. 147/2010) 17. The appellant/claimant in this appeal has

sustained type -3 compound fracture of right femur,

fracture of tibia, fracture of middle shaft tibia

and fibula. The injuries sustained and the

treatment taken by the appellant/claimant are

evident from discharge card Ex. P-225, photographs

marked as Ex. P-227 to P-234, disability

certificate marked as Ex. P-236, X-ray films Ex. P-

574 supported by the oral evidence of the claimant

and the doctor examined as PW-3 and PW-4

respectively. PW-4 Dr. Rajesh had stated in his

evidence that the appellant/ claimant has suffered

from permanent disability of 69% to lower limb. The

High Court has taken his functional disability at

25%. However, while determining the disability of

the claimants in motor accidents cases, this Court

might be sensitive about the functional disability

involved and the nature of the occupation,

particularly, if the occupation involves manual

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labour. Therefore, we hold that the High Court

erred in determining the functional disability of

the appellant in the present appeal on the lower

side. Since, the appellant/claimant in the present

appeal is also a vegetable vendor like the

appellant/claimant in Civil Appeal @ MFA 1131/2011,

we take his monthly income at 6,500/- on average

and for the reasons recorded in that appeal, we

determine the functional disability of the

appellant/claimant in the present appeal at 35%.

Considering his age, and based on the legal

principle laid down by this Court in the cases

mentioned supra, we hold his increment on future

income at 50% and the multiplier at 18. Therefore,

he is entitled to 7,37,100/- [( 6,500 x 35/100 +

50/100 x 35/100 x 6,500) x 12 x18] under the head

of ‘loss of future income’.

18. The amount awarded by the Tribunal and the High

Court under other conventional heads have not been

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disputed by the appellant/claimant by producing

contrary evidence. Therefore, the amount awarded

under those heads shall remain constant. Based on

the reasoning given by us in the earlier appeal,

the appellant/claimant is also entitled to the cost

of litigation at 25,000/-.

19. Hence, the appellant/claimant is entitled to

compensation under the following heads:

Towards pain and suffering

60,000/-

Towards medical and incidental charges

1,00,000/-

Towards loss of amenities

40,000/-

Towards future medical expenses

15,000/-

Towards cost of litigation

25,000/-

20. Therefore, the appellant/ claimant is entitled

to a total sum of 9,77,100/- with interest @ 9%

per annum based on the principle laid down by this

Court mentioned supra.

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Civil Appeal @ MFA 1133/2011 (MVC No. 148/2010) 21. The appellant/claimant in this appeal has

identified himself as a cleaner of lorries by

profession. As per the wound certificate Ex. P-219,

it has been established that the appellant/

claimant has sustained fracture on middle 1/3rd of

right humerus and comminuted fracture at the

junction of upper 1/3rd and middle 1/3rd of right

tibia. The injuries sustained by him and the

treatment taken by him is evident from the

disability certificate marked as Ex. P-221, X-ray

film marked as Ex. P-222 which is supported by oral

evidence of the claimant and doctor examined as PW-

2 and PW-4 respectively. PW-4 Dr. Rajesh has stated

in his evidence that the claimant has suffered 22%

permanent disability to upper limb and 29% to lower

limb. The High Court has calculated the functional

disability to 13%. We are inclined to hold that the

High Court has erred in ascertaining the functional

disability to such a low percentage considering

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that the appellant/claimant earns his livelihood

through manual labour. It is evident from the

material evidence produced on record that the

appellant/claimant has suffered from comminuted

fracture in the accident as a result of which he

will not be able to bend, stretch or rotate his

right hand. He will also not be able to lift heavy

material which is so essential to carry on with his

business to earn his livelihood. Therefore, we are

inclined to observe that the appellant/claimant

suffers from a functional disability to the extent

of 85%.

22. Further, the appellant/claimant has claimed

that he has been earning 5,000/- p.m. by working

as a cleaner of the lorry. The Tribunal assessed

his monthly income at 3000/-. The High Court,

considering his age and his profession as a

cleaner, assessed his income at 3500/-. However,

based on the Karnataka State Minimum Wages Rule

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2012-2013, the appellant/claimant is entitled to

4246/- per month. Since, no written record of his

income could be produced before the Court, we take

his income, as per Revised Minimum Wages Rule at

4246/- rounding it off as 4300/- per month.

Further, an amount of 700/- can be added as daily

barter charges. Therefore, his monthly income

amounts to 5000/-.

23. Further, considering that the appellant/

claimant was 22 years of age, the multiplier

applicable to his age group is 18 and also based on

the legal principle laid down by this Court in

various cases, we hold that he is entitled to 50%

increment in future loss of income. Therefore, he

is entitled to an amount at 13,77,000/- [( 5000 x

85/100 + 50/100 x 85/100 x Rs.5,000) x 12 x 18].

24. It is pertinent to note that the appellant/

claimant in this appeal has produced medical bills

for 8000/-. He was treated as an inpatient for 15

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days in a private hospital. Therefore, considering

the same, the High Court has awarded a sum of

15000/- under the head of medical and incidental

expenses. However, considering the fact that the

appellant/claimant was also required to have

conveyance, nourishment and attendant charges for

proper recovery of health, we increase the

compensation under this head to 50,000/-. Further,

considering the fracture sustained by the

appellant/claimant and the evidence produced by the

doctor, another 5000/- awarded by the High Court

towards future expenses is upheld by us.

25. Further, towards loss of amenities, the

Tribunal has awarded 10,000/-. However,

considering the disability stated by the doctor and

the amount of discomfort and unhappiness he has to

undergo in the future life, the High Court has

awarded 20,000/- under this head. We intend to

observe that the amount awarded by the High Court

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under this head is very meager and inadequate

considering the age and the amount of disability.

Therefore, under this head, we award a sum of

50,000/-.

26. Apart from this, based on the reasoning we have

already provided above for the two other

appellants/claimants, the appellant/claimant in

this appeal, is also entitled to compensation under

the following heads:

Towards pain and suffering

60,000/-

Towards medical and incidental expenses

50,000/-

Towards loss of amenities

50,000/-

Towards future expenses

5,000/-

Towards cost of litigation

25,000/-

27. Therefore, the appellant/ claimant in this

appeal is entitled to a total amount of

15,67,000/- with an interest of 9% per annum from

the date of application till the date of payment.

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C.A.@SLP(C) 16739-16741 of 2012 26

Contributory Negligence

28. On the matter of extent of contribution to the

accident, it is held by the Tribunal that the

appellants/claimants herein should have taken

utmost care while moving on the highway. Looking at

the spot of the accident, the Tribunal concluded

that the appellants/claimants were moving on the

middle of the road which led to the accident.

Therefore, the Tribunal concluded that though the

tractor has been charge sheeted under sections 279

and 338 of IPC, but given the facts and

circumstances of the case, the appellants/claimants

also contributed to the accident to the extent of

25%. The High Court without assigning any reason

concurred with the findings of the Tribunal with

respect to contributory negligence. We find it

pertinent to observe that both the Tribunal and the

High Court erred in holding the appellants/

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C.A.@SLP(C) 16739-16741 of 2012 27

claimants in these appeals liable for contributory

negligence. The Tribunal arrived at the above

conclusion only on the basis of the fact that the

accident took place in the middle of the road in

the absence of any evidence to prove the same.

Therefore, we are inclined to hold that the

contribution of the appellants/claimants in the

accident is not proved by the respondents by

producing evidence and therefore, the finding of

the Tribunal regarding contributory negligence,

which has been upheld by the High Court, is set

aside.

29. The appeals are allowed accordingly. The

appellant/claimant in Civil Appeal @ MFA 1131/2011

(MVC No. 149/ 2010) is awarded a compensation of

amount at 21,65,100/-. The appellant/claimant in

Civil Appeal @ MFA 1132/2011 (MVC No. 147/2010) is

awarded a compensation of amount at 9,77,100/-.

The appellant/claimant in Civil Appeal @ MFA

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C.A.@SLP(C) 16739-16741 of 2012 28

1133/2011 (MVC No. 148/2010) is awarded a

compensation of amount at 15,67,000/-. All the

appellants/claimants are entitled to interest @ 9%

per annum from the date of application till the

date of payment.

30. The name of the erstwhile first respondent has

been deleted from the array of parties by Order of

this Court dated 1.7.2013. The Insurance Company

remains the sole respondent in this case.

Therefore, we direct the Insurance Company to

deposit 50% of the awarded amount with

proportionate interest within four weeks from the

date of receipt of a copy of this order, after

deducting the amount if already paid, in any of the

Nationalized Bank of the choice of the appellants

for a period of 3 years. During the said period, if

they want to withdraw a portion or entire deposited

amount for their personal or any other expenses,

including development of their asset, then they are

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C.A.@SLP(C) 16739-16741 of 2012 29

at liberty to file application before the Tribunal

for release of the deposited amount, which may be

considered by it and pass appropriate order in this

regard.

The rest of 50% amount awarded with

proportionate interest shall be paid to the

appellants/claimants by way of a demand draft

within four weeks. The Insurance Company is further

directed to submit compliance report before this

court within five weeks.

………………………………………………………………………J. [SUDHANSU JYOTI MUKHOPADHAYA]

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

New Delhi, January 16, 2014