National Insurance Co.Ltd vs Kimlibai & Ors

National Insurance Company Ltd. ....Appellant

Versus

Khimlibai & Ors. .... Respondents

J U D G M E N T

Deepak Verma, J.

1. Leave granted.

2. Vir Singh aged about 40 years, carpenter by profession met

with a motor accident on 24th May 1997, while he was

travelling in a jeep bearing No.MP11-4690 which was hit from

behind by an offending truck, bearing No.MP09-D-5665. He

sustained injuries, was given first-aid in the hospital but

succumbed to the same at 5.00 p.m. on the same date.

3. Respondent nos.1 to 8 herein, claiming to be the widow, sons,

daughter and aged parents of the deceased, filed a Claim

Petition under Section 166 of the Motor Vehicles Act, 1988

(hereinafter referred to as 'the Act') before Motor Accident

Claims Tribunal, Jhabua, M.P. (for short, 'the Tribunal')

registered as Claim Case No.202 of 2003. They claimed a

total compensation of Rs.8,31,000/- against the respondents, i.e., insurance company (appellant herein), owner and driver

of the truck.

4. Both, the owner and the driver of the truck, were proceeded

ex-parte and they did not file any written statement.

5. The appellant herein, arrayed as respondent no.3 in the Claim

Case, filed its written statement generally denying the

averments made in the Claim Case.

6. It was contended by the insurance company before the Tribunal

that respondent no.2-driver did not have a valid and proper

licence to drive the truck at the relevant point of time and

no information was given to the appellant nor was any claim

form submitted. Therefore, it was not liable to pay any

compensation.

7. It further contended that the driver of the jeep, which was

hit from behind by the offending truck, also did not have a

valid driving licence and the deceased was travelling as a

gratuitous passenger. Thus, in any case no liability can be

fastened on the appellant-insurance company and prayed for

its exoneration.

8. On the strength of the pleadings of the parties, the Tribunal

framed issues. It appears that the appellant did not lead

any evidence in rebuttal to the evidence that was led by the

respondent-claimants.

9. From the voluminous material available on record, it has

neither been disputed before us, nor was it agitated in the

High Court that the accident was caused due to rash and negligent driving of the truck and at the relevant point of

time, it was owned by respondent no.9/10 and driven by

respondent no.11.

10.These facts having not been disputed before us, we have only

to consider whether the amount awarded by the Tribunal and as

enhanced in appeal by the Division Bench of the High Court of

Madhya Pradesh, Indore Bench, was proper or not.

11. On appreciation of evidence available on record, the

Tribunal awarded a total amount of Rs.2,32,762/- together

with interest at the rate of 9% against the appellant and

respondent nos.9, 10 and 11 herein. The said figure was

arrived at on the basis that the deceased was earning Rs.84/-

per day and adding certain expenses towards conventional

heads and then applying the multiplier of 15.

12. Feeling aggrieved by the said award and order passed by the

Tribunal on 20th February 2004, an appeal was carried under

Section 173 of the Act to the High Court.

13. In appeal, the High Court came to the conclusion that it can

safely be assumed that deceased Vir Singh, who was working

as carpenter before his death in the year 1997, must be

earning Rs.100/- per day. Thus, his monthly income would be

Rs.3,000/-. Keeping in mind the large family of dependents,

as mentioned hereinabove, i.e., the widow, sons, daughter

and aged parents, in all 8 persons, 1/4th of the total income

so arrived at, was directed to be deducted towards the

amount which the deceased would have spent on himself and the multiplier of 17 was applied. Thus, the High Court

awarded compensation of Rs.4,59,000/-. The High Court

awarded an additional lump sum amount of Rs.25,000/- under

various conventional heads thereby making a total

compensation of Rs.4,84,000/- with further stipulation that

the enhanced sum would carry interest at the rate of 6% p.a.

from the date of the application till its realisation.

14.Appellant-insurance company is in appeal challenging the

impugned award and order primarily on the following two

grounds :

(i)that the amount enhanced by the High Court is excessive and exorbitant, more so, without there being any basis, it has been assessed that deceased could have earned Rs.100/- per day; and

(ii) that deduction of only 1/4th towards his personal expenses from his total income has wrongly been allowed and it should have been 1/3rd of his total income.

15.In the light of the aforesaid, we have heard Ms. Pankaj Bala

Verma, learned counsel appearing for the appellant-insurance

company; Mr. Vikas Mehta, learned counsel appearing for

respondent nos.1 to 8; and Mr. T.N. Singh, learned counsel

appearing for respondent nos.9 to 11.

16.It could not be disputed before us that deceased was working

as a carpenter. Thus, obviously working as such, even in

the year 1997 he could have comfortably earned Rs.100/- per

day. This has also been admitted by P.W.3 with whom the deceased was employed that he was being paid Rs.100/- per

day. Even if we assume that he was working only for six

months in a year as carpenter and for remaining six months

he was working in his own field, that would not materially

affect his income. While he was working in his own field,

he was contributing to augment his income and thereby was

saving Rs.100/- per day on the labour that he would have

spent, if he had not worked himself. Thus, looking to the

matter from that angle, it is clear that he would have

continued to earn Rs.100/- per day, whether he worked as a

carpenter or in his own field.

17.As far as application of proper multiplier is concerned,

looking to the age of the deceased and that of the widow, in

our opinion, multiplier of 17 which has been applied by the

High Court is proper and does not call for interference.

18.Thus, the first question is answered against the appellant.

19.As far as question no.2 is concerned, it stands proved that

deceased had left behind a large family to be looked after,

who all were dependents on his income. To reiterate, his

widow, sons, daughter and aged parents - total 8 members in

the family.

20. Keeping in mind the family background, the High Court has

deducted 1/4th amount as the amount which the deceased would

have spent on himself. In our opinion, the High Court

committed no error in deducting only 1/4th amount from the

total income of the deceased towards the expenses which would have been incurred on himself. It has also been held

so in a recent judgment of this Court in Sarla Verma (Smt) &

Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121

:

"30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in U.P.SRTC v. Trilok Chandra (1996) 4 SCC 362, 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."

It was further held in para 48 of the said judgment as under:

"48. The appellants next contended that having regard to the fact that the family of the deceased consisted of 8 members including himself and as the entire family was dependent on him, the deduction on account of personal and living expenses of the deceased should be neither the standard one-third, nor one-fourth as assessed by the High Court, but one-eighth. We agree with the contention that the deduction on account of personal living expenses cannot be at a fixed one-third in all cases (unless the calculation is under Section 163-A read with the Second Schedule to the MV Act). The percentage of deduction on account of personal and living expenses can certainly vary with reference to the number of dependant members in the family. But as noticed earlier, the personal living expenses of the deceased need not exactly correspond to the number of dependants."

21.In the light of the aforesaid discussion, we are of the

opinion that there is no substance in this appeal. It is

accordingly hereby dismissed with costs to be borne by the appellant.

22.Counsel fee assessed at Rs.10,000/-.

......................J. [S.B. SINHA]

.......................J. [DEEPAK VERMA]

New Delhi.

August 04, 2009.