Manusha Sreekumar vs The United India Insurance Co.Ltd.

CIVIL APPEAL NO. 7593 OF 2022 [Arising out of Special Leave Petition (C) No. 28833 OF 2019]

Manusha Sreekumar & Ors. …. Appellants

VERSUS

The United India Insurance Co. Ltd. .... Respondent

JUDGMENT

Surya Kant, J.

1. Leave granted.

2. The present appeal arises out of the judgment dated

23.07.2019 passed by the High Court of Kerala, in an appeal

preferred by the Respondent (hereinafter, “Insurance Company”)

against the award dated 26.07.2018 of the Motor Vehicle Signature Not Verified Digitally signed by VISHAL ANAND Date: 2022.10.17 17:40:11 IST Reason:

Accidents Claims Tribunal, Pala (hereinafter, “Tribunal”). The

Page | 1 High Court allowed the appeal and has reduced the

compensation amount of Rs. 32,39,000/­ granted to the

Appellants by the Tribunal to Rs. 19,70,000/­. The issue involved

in the instant matter primarily relates to the determination of

quantum of compensation awarded under various heads by the

Tribunal and the High Court.

A. FACTUAL BACKGROUND:

3. On 21.02.2015, the dreams and aspirations of the 32­year­

old Deceased (Sreekumar) shattered when he met with a fatal

accident that occurred while he was riding his motorcycle bearing

Registration No. KL­36­C­9198 through Thalayolaparambu to

Ernakulam Road, Kerala. At the time of the accident, the

offending car bearing Registration No. KL­07­BB­5053 was

insured by the Respondent Insurance Company and was

allegedly driven in a rash and negligent manner. The car came

from the opposite direction and dashed into the motorcycle

driven by the Deceased. As a result of the impact, Sreekumar fell

and sustained serious injuries. Though concerted efforts were

made to save the Deceased’s life, unfortunately, he succumbed to

his injuries on the way to the hospital.

Page | 2

4. Swaddled in the grief of the untimely death of their

breadwinner, Appellants approached the Tribunal seeking

compensation for their loss. It may be noted that the first

Appellant is the wife of the Deceased, the second Appellant is

their minor son, and the third Appellant is the mother of the

Deceased. Appellants jointly preferred a claim petition under

section 166 of the Motor Vehicles Act, 1988 (hereinafter, “the

Act”) seeking compensation of Rs. 64,15,000/­ with interest. The

Insurance Company confuted the claim contending that the

accident occurred due to negligence of the Deceased. The amount

of compensation claimed under various heads was also alleged to

be excessive.

5. The Appellants stood their ground by stating that they were

entitled to compensation for ‘loss of dependency’ as the Deceased

was a self­employed man who donned multiple hats so as to

provide a comfortable living for his family. According to the

Appellants, the Deceased was a fish vendor­cum­driver and was

earning at least Rs. 25,000/­ per month. Appellants produced

various documentary pieces of evidence before the Tribunal to

prove the Deceased’s financial capacity while he was alive. These

Page | 3 were ­ (i) a course certificate showing that the Deceased had

completed two years course in electronic mechanic trade; (ii) a

job training certificate at Sun Generic Cables Pvt. Ltd.; (iii)

Passport of the Deceased indicating that he was employed in the

Sultanate of Oman between 18.11.2007 and 17.11.2011; (iv) a

certificate to show that the Deceased received rent from a shop in

the Municipal market shopping complex; (v) a job offer letter

dated 11.12.2014 from the United Kingdom, offering the position

of a Telecom Rigger; (vi) bank statements of the Deceased and

(vii) certificate of Kerala Motor Transport Workers Welfare Fund

Board.

6. Taking into consideration the aforementioned documentary

evidence concerning the Deceased’s income, the Tribunal

concluded that he was a skilled labourer. It was also observed

that the Deceased was earning from the rent he received from the

room leased out to conduct fish vending business. The Tribunal

opined that the Deceased was a driver and accordingly fixed his

monthly income at Rs.14,000/­. Additionally, assuming that the

Deceased received at least Rs.3,500/­ as rent, the Tribunal

calculated his final notional income as Rs.17,500/­ (Rs. 14,000 +

Page | 4 Rs. 3,500). The Tribunal fixed the total compensation of loss of

dependency along with various other heads at Rs. 32,39,000/­

and awarded interest at the rate of 9% per annum from the date

of filing of petition till the realisation of awarded compensation.

7. The Insurance Company filed an appeal before the High

Court challenging the quantum of compensation granted by the

Tribunal. Though the High Court concurred with the Tribunal in

finding that the Deceased died in an accident caused due to rash

and negligent driving of the car which was insured by the

Insurance Company, it disagreed with the Tribunal primarily on

three counts. Firstly, compensation granted under the head of

‘loss of dependency’; secondly, compensation under the head of

‘pain and suffering’ and finally, compensation under the head of

‘loss of love and affection’. For ease of reference, the table

supplied below elucidates the compensation granted by the

courts below under various heads:­

SL. Head of claim Amount Amount No. awarded by the awarded by the High Court Tribunal

1. Loss of dependency Rs. 17,92,000/­ Rs. 31,36,000/­

2. Pain and sufferings Rs. 15,000/­ Rs. 30,000/­

Page | 5

3. Loss of consortium Rs. 40,000/­ Rs. 40,000/­ to the first Appellant

4. Loss of love and Rs. 50,000/­ Not allowed affection to the second Appellant

5. Loss of love and Rs. 40,000/­ Not allowed affection to the third Appellant

6. Transport to hospital Rs. 3,000/­ Rs. 3,000/­

7. Funeral expenses Rs. 15,000/­ Rs. 15,000/­

8. Loss of estate Rs. 15,000/­ Rs. 15,000/­

Total Compensation Rs. 19,70,000/­ Rs. 32,39,000/­

8. In relation to the first count, the High Court was swift in

concluding that in the absence of any evidence to establish the

income of the Deceased, the Tribunal had erroneously fixed his

notional income at Rs. 14,000/­ per month. The High Court

viewed that in the decisions of Ramachandrappa v. Manager,

Royal Sundaram Alliance Insurance Company Ltd.1 and

Syed Sadiq and Ors. v. Divisional Manager, United India

Insurance Co. Ltd.2, this Court, in situations where the monthly

income of persons could not be established using independent

1 (2011) 13 SCC 236.

2 (2014) 2 SCC 735.

Page | 6 evidence, fixed it at Rs.4,500/­ and Rs. 6,500/­ for accidents that

took place in the years 2004 and 2008, respectively. On that

premises, the High Court posited that since the accident took

place in 2015, the maximum monthly income that could have

been reckoned is Rs. 10,000/­. The compensation under the

head of ‘loss of dependency’ was thus reduced to Rs.

17,92,000/­.

9. Regarding the second count, the High Court scaled down

the compensation granted by the Tribunal under the head of

‘pain and suffering’ from Rs. 30,000/­ to Rs. 15,000/­. The

reasoning employed by the High Court for this was that except in

cases wherein the death was not instantaneous, the conventional

amount to be granted would be Rs. 15,000/­.

10. In relation to the third count, the High Court granted Rs.

50,000/­ and Rs. 40,000/­ under the head of ‘loss of love and

affection’ to the second and third Appellants respectively, which

was denied by the Tribunal.

11. Consequently, the High Court substantially reduced the

compensation granted by the Tribunal from Rs. 32,39,000/­ to

Rs. 19,70,000/­. The aggrieved Appellants are now before this

Court.

Page | 7 B. CONTENTIONS:

12. We have heard learned counsel for the parties at a

considerable length and meticulously perused the documents on

record. The liability of the Insurance Company to pay the

compensation is not in dispute here. Nor there is any discordant

concerning the compensation awarded under various heads save

and except for ‘loss of dependency’ and/or under the non­

conventional heads.

13. Mr. Thomas P. Joseph, learned senior counsel for the

Appellants vehemently argued that the High Court erred in

placing reliance on the decisions of this Court to assess the ‘loss

of dependency’ based on notional income as, in all those cases,

not even a single piece of evidence was led regarding the income

of the victim. However, in the instant case, the Appellants

produced sufficient documentary evidence to prove the income of

the Deceased. Moreover, it is trite that the power of the Appellate

Court to undertake a fact­finding exercise and interfere with the

reasoning of the Tribunal is limited. The same is done only when

the findings are perverse or there is a material omission on the

part of the Tribunal. He also brought to our notice, Schedule B of

Page | 8 the Kerala Motor Transport Workers’ Payment of Fair Wages Act,

1971 (hereinafter, “Kerala Fair Wages Act”) as per which a

‘driver’ is classified as a ‘Skilled worker’ under Category III­

Skilled­B. This Act was supplemented with the notification G.O.

(Ms.) No. 123/2015/LBR dated 04.09.2015 issued by the

Government of Kerala (hereinafter, “Notification”) wherein, the

pay scale for the year 2015 for each category of workers in

Schedule B of the Act has been stipulated. Learned Senior

Counsel for the Appellant contended that the Deceased being a

registered transport motor driver, was entitled to be considered

as a ‘driver’ as defined under the Kerala Fair Wages Act and his

income was to be fixed in terms of the Notification, referred to

above.

14. Per contra, learned counsel for the Insurance company

urged that the High Court was right in reducing the

compensation amount in the absence of any definite proof of

income and such a finding of fact does not call for any

interference. He further argued that the High Court erred in

granting compensation of Rs.90,000/­ under the head of ‘loss of

love and affection’ as this Court in National Insurance Co.

Page | 9 Ltd. v. Pranay Sethi and Ors.3, has not granted any sum under

such like ‘non­conventional head’. Learned counsel relied on the

decision of this Court in Cholamandalam M/s General

Insurance Company Ltd. V. Aarifa & Ors. 4 and The New

India Assurance Co. Ltd. V. Somwati & Ors.5, wherein no

amount under the head of ‘loss of love and affection’ has been

held payable.

C. ANALYSIS

15. From the aforesaid discussion, two issues arise for

consideration of this Court:

(i) Whether the High Court was right in reducing the

monthly income of the Deceased from Rs. 17,500/­ to

Rs.10,000/­, for want of sufficient documentary evidence?

(ii) Whether the High Court was right in awarding

compensation under the ‘non­conventional heads’ which is

impermissible as per Pranay Sethi?

C.1 Determination of Compensation for loss of dependency.

3 (2017) 16 SCC 680.

4 Civil Appeal No. 6020/2019 vide order dt. 01.08.2019. 5 SLP(Civil) Diary No. 30766/2019 vide order dt. 24.09.2019.

Page | 10

16. While determining compensation under the Act, section 168

of the Act makes it imperative to grant compensation that

appears to be just. The Act being a social welfare legislation

operates through economic conception in the form of

compensation, which renders way to corrective justice. 6

Compensation acts as a fulcrum to bring equality between the

wrongdoer and the victim, whenever the equality gets disturbed

by the wrongdoer’s harm to the victim. It also endeavors to make

good the human suffering to the extent possible and to also save

families which have lost their breadwinners from being pushed to

vagrancy. Adequate compensation is considered to be fair and

equitable compensation. Courts shoulder the responsibility of

deciding adequate compensation on a case­to­case basis.

However, it is imperative for the courts to grant such

compensation which has nexus to the actual loss.

17. This Court, in the case of Sarla Verma and Ors. v. DTC

and Ors.7, laid down an objective formula for calculating just

compensation. According to the dictum, the three factors that

6 See Gregory C. Keating, ‘Distributive and Corrective Justice in the Tort Law of Accidents’ (2000) 74 S Cal L Rev 193.

7 (2009) 6 SCC 121.

Page | 11 need to be established are: (a) age of the deceased; (b) income of

the deceased; and (c) the number of dependents.

18. Further, the issues that are to be determined by the

Tribunal to arrive at the loss of dependency are: “(i)

additions/deductions to be made for arriving at the income; (ii)

the deduction to be made towards the personal living expenses of

the deceased; and (iii) the multiplier to be applied with reference

to the age of the deceased.” The purpose of standardising these

determinants was to bring uniformity to the decisions and settle

claims without delay.

19. Applying the above parameters to the instant case, there

exists sufficient evidence to show that the Deceased,

undoubtedly, was a fish vendor­cum­driver with a valid license.

The certificate issued by the Kerala Motor Transport Workers

Welfare Fund Board, certifying the Deceased as the driver of light

motor goods vehicle bearing Registration No. KL­36­B­7822

under the ownership of one Shri Prakashan has been proved on

record. Further, the Deceased had also paid all his subscriptions

to the Board from April 2012 until the month he died. We find no

reason to doubt that the Deceased was a driver at the time of his

death. This Court in Chandra Alias Chanda Alias

Page | 12 Chandraram and Anr. v. Mukesh Kumar Yadav and Ors.8,

has aptly held that in the absence of a salary certificate, the

minimum wages notification along with some amount of

guesswork that is not completely detached from reality shall act

as a yardstick to determine the income of the deceased. In this

context, keeping in view the import of section 57 of the Indian

Evidence Act, 1872, we take judicial notice of the provisions of

the Kerala Fair Wages Act, especially section 2 thereof which

defines the following expressions:­

“2. Definitions.­ In this Act, unless the context otherwise requires,­

(a) “employer” means in relation to any motor transport undertaking, the person who or the authority which, has the ultimate control over the affairs of the motor transport undertaking, and where the said affairs are entrusted to any other person whether called a manager, managing director, managing agent or by any other name, such other person ;

(b) “motor transport undertaking” means a motor transport undertaking including a private carrier engaged in carrying passengers or goods or both by road for hire or reward ;

(c) “motor transport worker” means a person who is employed in a motor transport undertaking directly or through an agency, whether for wages or not, to work in a professional capacity on a transport vehicle or to attend to duties in connection with the arrival, departure, loading or unloading of such transport vehicle and includes a driver, conductor, cleaner, station staff, line checking staff, booking clerk; cash clerk, depot clerk, time keeper, watchman, or attendant ;

(d) “fair wages” means the rate of wages payable to the motor transport workers specified in the Schedule to this Act or the agreed rate of wages whichever is higher.” 8 (2022) 1 SCC 198.

Page | 13 (emphasis applied)

20. Schedule B­Category III of the Kerala Fair Wages Act

classifies a driver as a “Skilled worker”. Reading this in

conjunction with the Notification that came into effect from

01.01.2015 which amended Schedule A of the Kerala Fair Wages

Act, prescribing a minimum pay scale of the workers listed in

Schedule B, it is apparent that a ‘driver’ in Kerala earned a

minimum of Rs. 15,600/­ in 2015. It appears to us that the

aforesaid Act and the notification issued thereunder were not

brought to the notice of the Tribunal or the High Court. As a

result thereto, the High Court could not be cognizant of the

statutory mandate prescribing minimum wages for a skilled

worker like ‘driver’, and thus, erred in fixing the income of the

Deceased at Rs.10,000/­. We are therefore inclined to fix the

income of the Deceased notionally at Rs. 15,600/­ per month.

21. As regard to the rental income of the Deceased from leasing

out a room for the conduct of fish vending business, notionally

fixed at Rs.3,500/­ by the Tribunal, we find no valid reason for

making such additions to the income of the Deceased as the

Page | 14 rental income would be transferred to his legal heirs, who will

continue enjoying the benefits derived from it.

22. The final notional income of the Deceased must thus be

fixed at Rs.15,600 /­ (Rs. 1,87,200/­ per annum). Since the

Deceased was of 32 years old at the time of his death, the

multiplier applicable in the instant case would be 16, and 40% of

increase for future prospects deserves to be added as the

Deceased was self­employed. One­third of the Deceased’s income

would be deducted towards his personal expense as he had three

dependents. Hence, the compensation payable to the Appellants

under the head of loss of dependency would amount to

Rs.27,95,520/­ (Rs. 15,600 x 140/100 x 12 x 16 x 2/3).

C.2 Determination of compensation under non­conventional heads.

23. In all fairness, it may be noted that, Ld. Counsel for the

Insurance Company has urged that the High Court ought not to

have granted any compensation to the Appellants, under the

‘non­conventional heads’ which is impermissible as per the

dictum of this Court in Pranay Sethi (supra). We are however,

not inclined to entertain this plea for the simple reason that the

Insurance Company has not chosen to file any appeal against the

Page | 15 judgment of the High Court. Having acquiesced, the Insurance

Company cannot turn around and question a paltry amount of

compensation awarded to the Appellants under the ‘non­

conventional heads’. However, question of law, in this regard, is

kept open.

D. CONCLUSION:

24. In light of the above discussion, the appeal is allowed in

part.

25. We grant Rs. 27,95,520/­ as the total ‘loss of dependency’

on account of the income of the Deceased being calculated at Rs.

15,600/­ i.e. Rs.1,87,200/­ per annum. Upon adding the

remaining amount granted by the High Court under different

heads, the total compensation granted to the Appellant comes to

Rs. 29,73,520/­ (Rs.27,95,520/­ + Rs. 1,78,000/­).

26. The Insurance Company is directed to pay the enhanced

compensation amount of Rs. 29,73,520/­ to the Appellants along

with interest at the rate of 9% per annum from the date of filing

of the claim petition till the date of realisation. The aforesaid

amount shall be apportioned among the Appellants in the ratio

fixed by the Tribunal in the award. The Insurance Company shall

Page | 16 pay the said amount either by way of demand draft in favour of

the Appellants or deposit the same before the Tribunal, after

deducting the amount already paid by it, if any, within six weeks

from the date of receipt of the copy of this judgment.

27. The judgment under appeal of the High Court is, thus, set

aside. The appeal is disposed of along with any pending

applications in above terms.

………………….………..J. (SURYA KANT)

………………….………..J. (ANIRUDDHA BOSE)

New Delhi:

October 17th, 2022

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