S. Chandrasekharan vs M. Dinakar

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 4688­4689 OF 2022 (Arising out of SLP (C) Nos. 8119­8120 of 2019)

S. CHANDRASEKHARAN & ORS. …APPELLANT(S)

VERSUS

M. DINAKAR & ANR. ….RESPONDENT(S)

JUDGMENT

ANIRUDDHA BOSE, J.

Leave granted.

2. The appellants before us are the claimants in an action for

compensation under the Motor Vehicles Act, 1988 (1988 Act). An

accident had occurred on 28 th February 2011 at about 10:45

A.M., which resulted in death of one Bala Babitha, a 37 year old

lady, and caused injuries to her husband and her minor

daughter. The first appellant is the husband of the deceased. The Signature Not Verified Digitally signed by second and the third appellants are their children, who were Rajni Mukhi Date: 2022.07.11 18:49:20 IST

minors by age at the point of time the accident occurred. The Reason:

fourth appellant is the mother of the deceased. The first appellant 1 and the third appellant alongwith the deceased were travelling in

an auto rickshaw from Velachery to Adambakkam in the city of

Chennai, which was hit by a vehicle (bearing registration no. TN­

04­W­6189). The respondent no. 1 was the owner of that vehicle.

The second respondent is the insurance company, whose policy

covered the offending vehicle.

3. Claim was lodged by the appellants under Section 166 of the

1988 Act before the Motor Accident Claims Tribunal, Chennai

(the Tribunal). Before the Tribunal, rash and negligent driving of

the offending vehicle was proved, and that finding was not upset

in appeal by the High Court of Judicature at Madras in its

judgment delivered on 27th February 2018. The present appeals

arise from that judgment. The Tribunal awarded compensation in

favour of the appellant no.1 for a sum of Rs.4,77,100/­. The

minor daughter (appellant no.3) of the deceased and the first

appellant was awarded compensation of Rs.2,06,000/­. The

quantum of compensation on account of death of said Bala

Babitha was computed by the Tribunal to be of Rs.36,92,350/­.

Monthly income of the deceased was calculated as one­third of

2 her husband’s income. The Tribunal found the husband’s income

to be Rs.78,700/­ per month. This finding of monthly income of

the husband was not disturbed by the High Court. The

compensation amount was to carry an interest of 7.5% per

annum from the date of filing of the claim, till the date of deposit.

Deposit of the awarded sum was directed to be made within two

months from the date of the award.

4. Both the insurance company and the appellants preferred

separate appeals in respect of sums awarded as compensation in

relation to the deceased and the injured victims. The High Court

reduced the sum awarded as compensation in respect of the first

appellant to Rs.3,41,000/­. As regards the third appellant, award

of Rs.2,06,000/­ as compensation was retained. Compensation

awarded to the family of the deceased victim was modified and

reduced to Rs.32,82,090/­ by the High Court. The Tribunal had

quantified compensation for the surviving members of the family

of deceased on her notional income calculated on the basis of her

husband’s income, following a judgment of this Court delivered in

the case of Arun Kumar Agrawal And Another vs. National

3 Insurance Company Ltd. And Others. [(2010) 9 SCC 218]. The

High Court, however, considered her salary in a job she was

engaged in three years back to be the basis for quantifying the

pecuniary loss to be awarded to the surviving members of her

family. Both the Tribunal and the High Court had applied the

multiplier principle to arrive at the figure of pecuniary loss.

Before us, arguments have been advanced on the point of

reduction of compensation to the family of the deceased victim

and we shall confine our judgment to that issue only.

5. The heads under which award was made by the Tribunal

quantifying the compensation to be paid on account of the

deceased victim were:­

Pecuniary Loss : Rs.31,50,000 Loss of consortium : Rs. 1,00,000 Funeral expenses : Rs. 25,000

Loss of love and : Rs.4,00,000 affection Medical expenses : Rs.17,350 Total Rs.36,92,350/­

6. While modifying the award, the High Court computed the

compensation under the following heads:­

4 Pecuniary loss Rs.30,94,740.00 Loss of consortium Rs.40,000.00 Funeral Expenses Rs.15,000.00 Loss of Love and affection to Rs.1,00,000.00 the claimants­Rs.25,000 Loss of Estate Rs.15,000.00 Medical Expenses Rs.17,350.00 Total Rs.32,82,090.00

7. We are to address now as to whether the pecuniary loss

which had occurred on account of death of the victim has to be

computed on pegging it on her personal income she earned from

her employment approximately three years back or it should be

relatable to the income of her surviving husband. This question

arises as there was evidence before the Tribunal that the

deceased was a graduate with B. Com. degree and was employed

till the year 2008 in a company earning monthly salary of

Rs.34,385/­. At the time of the accident, however, the deceased

was not employed. The Tribunal determined the compensation

relying on the case of Arun Kumar Agrawal (supra). It has been

held in this judgment:­

“35. In our view, it is highly unfair, unjust and inappropriate to compute the compensation payable to the dependants of a deceased wife/mother, who does not have a regular income, by comparing her services with that of a housekeeper or a servant or an employee, who works for a fixed period. The

5 gratuitous services rendered by the wife/mother to the husband and children cannot be equated with the services of an employee and no evidence or data can possibly be produced for estimating the value of such services. It is virtually impossible to measure in terms of money the loss of personal care and attention suffered by the husband and children on the demise of the housewife. In its wisdom, the legislature had, as early as in 1994, fixed the notional income of a non­earning person at Rs. 15,000 per annum and in case of a spouse, 1/3rd income of the earning/surviving spouse for the purpose of computing the compensation.”

8. The High Court, on the other hand, proceeded on the basis

that it would be appropriate to fix the sum of Rs.34,385/­ as the

monthly income of the deceased to arrive at just and fair

compensation in quantifying pecuniary loss. Reasoning of the

High Court on this aspect was:­

“Though at the time of death, the deceased Bala Babitha was a housewife, earlier she was working in a private company and earning a sum of Rs.34,385/­ per month, which is evident from Ex.Ps.23 & 24. Hence, it would be appropriate to fix the sum of Rs.34,385/­ as monthly income of the deceased to arrive at a just and proper compensation under the head of pecuniary loss. If a sum of Rs.34,385/­ is taken as monthly income of the deceased, 50% amount has to be deducted towards personal expenses and if so deducted, the monthly contribution to the family works out to Rs.17,193/­. The deceased was aged 37 years at the time of accident; hence, the correct multiplier that has to be applied in this case is 15. If the multiplier 15 is applied, the total pecuniary loss works out to Rs.30,94,740/­ (17,193 x 12 x 15). Consequently, the sum of Rs.31,50,000/­ awarded by the Tribunal 6 under the head Pecuniary Loss is hereby modified and reduced to Rs.30,94,740/­.” (quoted verbatim from the paperbook)

9. In our opinion, the judgment of the High Court on this point

suffers from error on two counts. At the time of her death, the

deceased was not in employment. She was a homemaker. It was

not a case where the deceased at the time of accident had just left

her job. If that was the case, her last drawn salary might have

had given reliable guidance for computing her monthly income at

that point of time. Here the deceased remained without

employment for a period of approximately three years and what

she earned prior to that ought not to have been treated to be her

monthly income to arrive at just and proper compensation under

the head of pecuniary loss, as has been held by the High Court.

There is a long time gap between the time she was in employment

and the occurrence of the accident. Her monthly salary

approximately three years back thus would be an unreliable

guide for fixing her notional income when she succumbed to her

injuries caused by the accident. Moreover, at the time of the

accident, she was a homemaker providing care and support to

her family. In this context, in our opinion, the computation 7 methodology prescribed in the case of Arun Kumar Agrawal

(supra) would be more appropriate to apply, which was done by

the Tribunal.

10. Plea has been taken before us on behalf of the insurance

company that the appellants could not take a stand for

computing the income of the deceased in the manner held in the

case of Arun Kumar Agrawal (supra), since before the High

Court, they had run a case that the pecuniary loss ought to be

computed on the basis of her last drawn salary. Just because the

appellants urged their claim based on the last drawn salary of the

deceased before the High Court, this Court ought not to anchor

its decision on that argument alone. It remains open to this Court

to examine the nature of the claim and compute the

compensation on a different criterion applying a different

parameter. This is more so, because such compensation figure

could be arrived at on the basis of materials on record, that

includes evidence on monthly earning of the husband of the

deceased and the applied parameter stands judicially recognised

as a legitimate mode for computing pecuniary loss. Further, in

this case, plea was made in the claim petition for compensation 8 calculated on the basis of one­third of the husband’s income. In

the petition for special leave to appeals also, one of the points

formulated is as to whether compensation on account of death of

Bala Babitha would be calculated on the basis of her last drawn

salary or her husband’s income.

11. Section 168 of the Motor Vehicles Act, 1988 stipulates:­

“168. Award of the Claims Tribunal.—On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 163 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:

…..

(2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.

(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct.”

12. The aforesaid provision vests the Tribunal with the power

and jurisdiction to make an inquiry into claims arising out of 9 deaths and injuries caused from an accident and make award

determining the compensation which appears to it to be just. It

would defeat the legislative purpose in the event the Tribunal or

the Appellate Forum is made to confine its inquiry to the plea of

the claimant as regards the factors which ought to be taken into

consideration for determining the compensation amount. Power

to hold an inquiry under the aforesaid provision cannot be

construed in such a restrictive manner. If the factors on which

quantification of claim is asked for cannot be established, the

adjudicatory forum under the 1988 Act would stand divested of

its power to arrive at just compensation even if in course of the

proceeding, materials disclosed could justify award of

compensation based on certain criteria other than those on which

the claim is founded. In the instant case, we find that the

Tribunal, while proceeding to award compensation to the

appellants/claimants had relied on the principle laid down by

this Court in the case of Arun Kumar Agrawal (supra) and there

was evidence before the Tribunal to assess the income of the

husband of the deceased. In fact, the first appellant’s

compensation was quantified taking into consideration his own 10 income at the material point of time. In our opinion, the High

Court ought not to have proceeded on the basis of the income

drawn by the deceased victim approximately three years before

the accident ended her life. The Tribunal did not indulge in pure

guesswork in pegging the notional income of the deceased to her

husband’s income. As we have already observed, in the claim

petition itself, against the column “Occupation of the deceased”­

income calculation of the deceased was contemplated on the

basis of her husband’s income. The Tribunal had rightly followed

the course laid down in the case of Arun Kumar Agrawal (supra),

which in the given facts, constituted, a more definitive and

reliable methodology for quantifying pecuniary loss.

13. So far as deduction on account of personal expenses of the

deceased, following the case of Sarla Verma (Smt) and Others

vs. Delhi Transport Corporation and Another [(2009) 6 SCC

121], the Tribunal directed deduction of 1/3 rd of the earning of

the deceased, the latter being determined on the income of her

spouse. That was, in our view, the proper course. We hold so

because, even if we leave out the husband of the deceased from

11 being treated as a dependent, there were two minor children at

the material point of time who ought to have been treated as

dependent family members. At that point of time the second

appellant was twelve years old and the age of injured daughter

was three years. In the case of Sarla Verma (supra) the

deduction has been held to be valid in a case where there were

dependent family members. We should not restrict the expression

“dependent” to mean those financially dependent only. Minor

children are emotionally dependent on the mother. They lost care

and guidance of their mother at a very young age. While arriving

at just compensation, the Tribunal ought to factor in the loss of

dependency in these terms.

14. The High Court did not give any reason for deducting 50% in

computing pecuniary loss and we do not think this was the

correct view. We are of the view that deduction of 1/3 rd of

determined income of the deceased towards personal expenses is

valid on the basis of the decision of this Court in the case of Sarla

Verma (supra). We also find that neither the Tribunal nor the

High Court had considered loss of future prospect to arrive at the

12 quantum of pecuniary loss. In the case of Rajendra Singh and

Others vs. National Insurance Company Limited and Others

[(2020) 7 SCC 256], addition of loss of future prospects has been

held to be a factor for determining compensation under the head

of pecuniary loss even in a case where the income of deceased is

arrived at on a notional basis. In this judgment it has been held:­

“11. The notional income of the first deceased is therefore held to be Rs 5000 per month at the time of death. The compensation on that basis with a deduction of 1/4th i.e. Rs. 15,000 towards personal expenses with a multiplier of 17 is assessed at Rs 7,65,000. If the deceased had survived, in view of observations in Lata Wadhwa [Lata Wadhwa v. State of Bihar, (2001) 8 SCC 197], her skills as a matured and skilled housewife in contributing to the welfare and care of the family and in the upbringing of the children would have only been enhanced by time and for which reason we hold that the appellants shall be entitled to future prospects @ 40% in addition to the loss of consortium and future expenses already granted. We therefore assess the total compensation payable to the appellants in the first appeal at Rs 11,96,000.”

15. The deceased was 37 years old at the time of her death.

Hence, there ought to be an addition of 40% to the notional

income of the deceased towards future prospects as she was

below 40 years of age. In the present case, it is not in dispute that

multiplier of 15 ought to be applied. In these circumstances, the

13 total entitlement of the appellants under the head of pecuniary

loss would thus be:­

Monthly income of the Rs.26,250/­ deceased future prospects @ 40% of Rs.26,250 x 40/100 = the income (notional) Rs.10,500/­ [Rs.26,250 + Rs.10,500 = Rs.36,750/­] Deduction of 1/3rd for Rs.36,750 x 1/3 = personal living expenses Rs.12,250/­ [Rs.36,750 ­ Rs.12,250 = Rs.24,500/­] Total pecuniary loss of the Rs.24,500 x 12 x 15 = deceased (with 15 as the Rs.44,10,000/­ multiplier)

16. We, accordingly, set aside the judgment of the High Court to

the extent of computation made of pecuniary loss on account of

death of said Bala Babitha for a sum Rs.30,94,740/­. We quantify

the said sum to be Rs.44,10,000/­.

17. Argument was also advanced on behalf of the respondents that

compensation awarded towards loss of love and affection is contrary

to the ratio of the judgement of this Court in case of United India

Insurance Company Limited vs. Satinder Kaur Alias Satwinder

Kaur and Others [(2021) 11 SCC 780]. It was held in this decision

that loss of love and affection is comprehended in loss of 14 consortium, and there is no justification to award compensation

towards loss of love and affection as a separate head. The relevant

paragraphs from the judgement are reproduced below:­

“34. At this stage, we consider it necessary to provide uniformity with respect to the grant of consortium, and loss of love and affection. Several Tribunals and the High Courts have been awarding compensation for both loss of consortium and loss of love and affection. The Constitution Bench in Pranay Sethi, has recognized only three conventional heads under which compensation can be awarded viz. loss of estate, loss of consortium and funeral expenses. In Magma General, this Court gave a comprehensive interpretation to consortium to include spousal consortium, parental consortium, as well as filial consortium. Loss of Love and affection is comprehended in loss of consortium.

35. The Tribunals and the High Courts are directed to award compensation for loss of consortium, which is a legitimate Conventional head. There is no jurisdiction to award compensation towards loss of love and affection as a separate head.”

18. We accept this argument advanced by the respondents. The

High Court has thus committed error in law while providing for

compensation under the heads of loss of love and affection and

also loss of consortium. Instead, in our opinion, compensation

provided under the head of loss of consortium would be Rs.

40,000/­ for each appellant, comprehending the loss of love and

affection within it. Hence, the total compensation provided under

15 this head would amount to Rs 1,60,000/­. That part of the

judgment of the High Court shall stand modified accordingly.

19. We find no reason to interfere with the High Court’s finding

as regards computation of compensation on other heads. Interest

of 7.5% per annum has been awarded by both the Tribunal and

the High Court. We do not disturb the concurrent views of the

High Court and the Tribunal on the rate of interest. Certain

authorities were cited on behalf of the appellants in support of

their argument for enhancing the rate of interest. The first one,

reported in [(2001) 2 SCC 9] related to an accident that occurred

on 20th March 1986. The next one, reported in [(2009) 8 SCC 507]

related to insurance claim on loss of stocks by fire and the date of

occurrence of the accident in that case was 24 th August 1999. The

bank rate of interest has fallen over the years and for this reason

we sustain the award of the Tribunal and the High Court in

appeal on this point.

The total amount payable to the appellants on account of

death of Bala Babitha, thus, would be:­

Pecuniary loss Rs. 44,10,000/­ Loss of consortium Rs. 1,60,000/­ Funeral expenses Rs. 15,000/­ 16 Loss of estate Rs. 15,000/­ Medical expenses Rs. 17,350/­ Total Rs.46,17,350/­

20. The aforesaid sum shall be payable to the appellants in the

proportion directed by the High Court except that in the case of

the 4th appellant (that is the mother of the deceased), we direct

lumpsum payment of Rs.2,00,000/­ instead of Rs.1,00,000/­ as

directed by the High Court. The aforesaid sum shall be paid

within two months from this date adjusting therefrom any

amount which may have already been paid to the appellants.

Unpaid amount shall carry interest at the rate of 7.5% per annum

from the date of filing of the claim petition till payment is made in

terms of this judgment and order.

21. The appeals are allowed in the above terms, without any

order as to costs.

22. Pending application(s), if any, shall stands disposed of.

………………………………., J.

(DINESH MAHESHWARI)

………………………………., J.

(ANIRUDDHA BOSE) 17 NEW DELHI;

11th JULY 2022

18