* IN THE HIGH COURT OF DELHI AT NEW DELHI Pronounced on: 27th May, 2015 + MAC.APP. 79/2014 BHARTI AXA GENERAL INSURANCE CO. LTD Appellant Through: Mr. [ENTITY], Advocate versus SMT. POONAM AND ANR. Respondents Through: Mr. [ENTITY], Advocate + MAC.APP. 413/2015 POONAM @ PUNAM Appellant Through: Mr. [ENTITY], Advocate Versus VIKAS PANCHAL & ANR. (BHARTI AXA GENERAL INSURANCE CO. LTD.) Respondents Through: Mr. [ENTITY], Adv. CORAM: HON'BLE MR. JUSTICE G.P.MITTAL G. P. MITTAL, J. (ORAL)
1. These two appeals arise out of the judgment dated 11.09.2013 passed by the Motor Accident Claims Tribunal (the Claims Tribunal) whereby compensation of `16,02,882/- was awarded in favour of Respondents No.1 and 2 (in MAC APP. 79/2014) for the death of [ENTITY], a bachelor who suffered fatal injuries in a motor vehicular accident which occurred on 30.11.2012.
2. The finding on negligence has not been challenged by the Appellant Insurance Company in [CASE NUMBER]. In the absence of any appeal by the owner and driver, the finding on negligence has attained finality.
3. During inquiry before the Claims Tribunal, Respondents no.1 and 2 had set up a case that the deceased was working as a Desk Assistant with [ENTITY]' and was getting a salary of `20,000/- per month.
4. The Claims Tribunal found the salary to be not proved. At the same time, it was observed that deceased [ENTITY] was a Graduate. The Claims Tribunal thus, took the minimum wages of a Graduate, added 50% towards future prospects and applied the multiplier of 17 as per the age of the deceased (27 years) to compute the loss of dependency as `14,67,882/-. In addition, the Claims Tribunal awarded a sum of `1,00,000/- towards loss of love and affection, `25,000/- as funeral expenses and `10,000/- towards loss to estate to compute the overall compensation of ` 16,02,882/-.
5. For the sake of convenience, the Appellant in [CASE NUMBER] shall be referred to as the Insurance Company whereas the Appellants in [CASE NUMBER] shall be referred to as the Claimants.
6. The following contentions are raised on behalf of the Insurance Company:-
(i) In the case of a bachelor, the multiplier has to be adopted as per the age of the Claimants, normally the mother of the deceased.
Reliance is placed on General Manager, Kerala State Road Transport Corporation, Trivandrum v. [ENTITY] (Mrs.) and Ors., (1994) 2 SCC 176; U.P. SRTC v. [ENTITY], (1996) 4 SCC 362; New India Assurance Company Limited v.
Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 and a judgment of this Court in Shriram General Insurance Company Limited v.
[ENTITY] & Ors., MAC APP.655/2014, decided on 20.03.2015.
(ii) There was no evidence with regard to better future prospects, the compensation was awarded only on the basis of minimum wages. In the absence of any evidence with regard to good future prospects, addition towards future prospects was not permissible. Reliance is placed on [ENTITY] and Ors. v.
Madan Mohan and Anr., (2013) 9 SCC 65 and a judgment of this Court in HDFC Ergo General Insurance Co. Ltd. v. Smt. [ENTITY] and Ors. [CASE NUMBER], decided on 12.01.2015.
7. Per contra, relying on [ENTITY] (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121; [ENTITY] and Ors. v.
Madan Mohan and Anr., (2013) 9 SCC 65 and a latest three Judge Bench decision of the Supreme Court in [ENTITY] & Anr. v.
Vipin Kumar Sharma & Ors., [CASE NUMBER], decided on 15.05.2015, the learned counsel for the Claimant urges that the multiplier in all cases has to be as per the age of the deceased and that the age of the Claimants is immaterial.
8. It is urged that addition of 30% or 50% has to be made towards inflation even in the case of self-employed persons and persons earning minimum wages. Reliance is placed on Santosh Devi v.
National Insurance Company Ltd. & Ors., 2012 (6) SCC 421 a three Judge Bench decision of the Supreme Court in [ENTITY] and Ors. v.
Rajbir Singh & Ors., (2013) 9 SCC 54 and a latest three Judge Bench decision of the Supreme Court in [ENTITY] & Anr. v. Vipin Kumar Sharma & Ors., [CASE NUMBER], decided on 15.05.2015.
9. It is further contended that in the instant case, the testimony of PW-1 [ENTITY], mother of the deceased that deceased [ENTITY] was working in '[ENTITY] was not challenged in cross-examination. The deceased was not only a Graduate as was held by the Claims Tribunal but was a Post-Graduate and also holding a diploma in Master of Journalism and Mass Communication. The Claims Tribunal, therefore, ought to have accepted the income of `20,000/- per month. Even otherwise as per the deceased's qualification, his potential income ought to have been taken as more than `20,000/- per month.
MULTIPLIER
10. The question of selection of multiplier was dealt with at great length by me in [ENTITY] & Anr. v. Binod Kumar Yadav & Ors., ILR (2012) 6 Del 447. The question was again re-examined by me in Shriram General Insurance Co. Ltd v. [ENTITY] and Ors., MAC APP.655/2014, decided on 20.03.2015. In [ENTITY] & Anr (supra), the learned counsel for the Appellant had relied on the judgments in (i) Smt. [ENTITY] & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121; (ii) Mohd. Ameeruddin v.
United India Insurance Co. Ltd., 2010 (12) SCALE 155; (iii) [PRECEDENT];
(iv) [PRECEDENT]; (v) [PRECEDENT]; (vi) [PRECEDENT] and (vii) [PRECEDENT].
Further, in paras 11 to 33 of the report in [ENTITY] and Ors., this Court held as under:-
"11. I had discussed the law laid down in the earlier stated judgments and had further referred to the judgments in General Manager, Kerala State Road Transport Corporation, Trivandrum v. [ENTITY] (Mrs.) and Ors., (1994) 2 SCC 176; U.P. SRTC v. [ENTITY], (1996) 4 SCC 362; Fakeerappa v.
Karanataka Cement Pipe Factory, (2004) 2 SCC 473 and [PRECEDENT] to hold that the multiplier has to be selected as per the age of the deceased or the Claimant whichever is higher.
12. The learned counsel for Respondents No. 1 and 2 has submitted that in view of the three Judge Bench decision in [ENTITY] v. Madan Mohan & Anr., (2009) 13 SCC 422 and a later judgment of the Supreme Court in [PRECEDENT], the judgment in [ENTITY] (supra) of this Court needs to be revisited and the multiplier has to be as per the age of the deceased and age of the Claimant is not at all relevant for selection of the multiplier.
13. [SECTION] of the [ACT] (the Act) enjoins a Claims Tribunal to determine the amount of compensation which is just and reasonable. It can neither be a source of profit nor should be a pittance. In other words, it should not be meager nor should be a windfall. In this connection, a reference may be made to the report of the Supreme Court in [PRECEDENT], which dealt with the grant of compensation in case of injury which principles equally apply in case of award of compensation in fatal accident cases. In Para 7, the Supreme Court held as under:
"7. It has to be kept in view that the Tribunal constituted under the Act as provided in [SECTION] is required to make an award determining the amount of compensation which is to be in the real sense damages which in turn appears to it to be just and reasonable. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be just and it cannot be a bonanza; not a source of profit; but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be just compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of just compensation which is the pivotal consideration. Though by use of the expression which appears to it to be just a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression just denotes equitability, fairness and reasonableness, and non-arbitrary. If it is not so it cannot be just."
14. Initially, the trend of the Courts was to ascertain the life expectancy, deduct the age of the deceased and to award the compensation on the basis of the residual life span. The Courts started deducting certain sums out of the sum as arrived above on account of lump sum payment.
15. However, in General Manager, Kerala State Road Transport Corporation, Trivandrum v. [ENTITY] (Mrs.) and Ors., (1994) 2 SCC 176, an attempt was made for the first time to award just and reasonable compensation on the basis of the multiplier method. The Supreme Court referred to the report in [PRECEDENT] and observed that actual pecuniary loss can be ascertained only by balancing, on one hand, the loss to the Claimant of the future pecuniary benefits and on the other hand, any pecuniary advantage which from whatever sources comes to them by reason of death. Paras 8 and 9 of the report in [ENTITY] (Mrs.) (supra) are extracted hereunder:-
"8. The measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant. Thus "except where there is express statutory direction to the contrary, the damages to be awarded to a dependant of a deceased person under the [ACT] must take into account any pecuniary benefit accruing to that dependant in consequence of the death of the deceased. It is the net loss on balance which constitutes the measure of damages." (Per Lord [ENTITY] in Davies v. Powell [(1942) AC 601, 617 :
(1942) 1 All ER 657 (HL)].) Lord [ENTITY] in the same case said, "The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing on the one hand the loss to him of the future pecuniary benefit, and on the other any pecuniary advantage which from whatever source comes to him by reason of the death". These words of Lord [ENTITY] were adopted as the principle applicable also under the [ACT] in [PRECEDENT] where the Supreme Court stated that the general principle is that the actual pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death, must be ascertained.
9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether."
16. The Supreme Court referred to [PRECEDENT] and [PRECEDENT] and in Paras 13 and 14 of the report in [ENTITY] (Mrs.) (supra), the Supreme Court observed as under:-
"13. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last.
14. The considerations generally relevant in the selection of multiplicand and multiplier were adverted to by Lord [ENTITY] in his speech in Mallett case [[PRECEDENT]] where the deceased was aged 25 and left behind his widow of about the same age and three minor children. On the question of selection of multiplicand Lord [ENTITY] observed:
"The starting point in any estimate of the amount of the dependency is the annual value of the material benefits provided for the dependants out of the earnings of the deceased at the date of his death. But there are many factors which might have led to variations up or down in the future. His earnings might have increased and with them the amount provided by him for his dependants. They might have diminished with a recession in trade or he might have had spells of unemployment. As his children grew up and became independent the proportion of his earnings spent on his dependants would have been likely to fall. But in considering the effect to be given in the award of damages to possible variations in the dependency there are two factors to be borne in mind. The first is that the more remote in the future is the anticipated change the less confidence there can be in the chances of its occurring and the smaller the allowance to be made for it in the assessment. The second is that as a matter of the arithmetic of the calculation of present value, the later the change takes place the less will be its effect upon the total award of damages. Thus at interest rates of 4 per cent the present value of an annuity for 20 years of which the first ten years are at 100 per annum and the second ten years at 200 per annum, is about 12 years' purchase of the arithmetical average annuity of 150 per annum, whereas if the first ten years are at 200 per annum and the second ten years at 100 per annum the present value is about 14 years' purchase of the arithmetical mean of 150 per annum. If therefore the chances of variations in the dependency are to be reflected in the multiplicand of which the years' purchase is the multiplier, variations in the dependency which are not expected to take place until after ten years should have only a relatively small effect in increasing or diminishing the dependency used for the purpose of assessing the damages.
17. The purpose of adopting the multiplier as per the age of the deceased or as per the age of the Claimant whichever is higher was that if the Claimant is of much higher age, particularly in case of death of a bachelor where the mother or for that matter the parents may be double the age of the deceased, the dependency is to come to an end in a much lesser period as against the dependency of a widow or minor children of a deceased. In any case, the deceased was not to support more than his own life span and thus, by providing the dependency to the Claimants, it was held that the dependency has to be as per the age of the deceased or the Claimant whichever is higher.
18. The law laid down in [ENTITY] (Mrs.) (supra) with regard to adoption of multiplier method and selection of multiplier according to the age of the deceased or the Claimant whichever is higher was affirmed by a three Judge Bench decision in U.P. SRTC v. [ENTITY], (1996) 4 SCC 362. The three Judge Bench laid down that the multiplier cannot in all cases be solely dependant on the age of the deceased and the age of the parents would also be relevant in case of death of a bachelor in the choice of multiplier. In para 18 of the report of the Supreme Court in [ENTITY] (supra), it was observed as under:-
"18 Besides, the selection of multiplier cannot in all cases be solely dependant on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier "
19. There was some confusion as to the selection of the multiplier because of the multiplier table as given in the Second Schedule of the Act under [SECTION] which was inserted w.e.f. 14.11.1994. Some of the cases had adopted the multiplier as given in the Second Schedule. Although, the three Judge Bench in [ENTITY] (supra) had noticed some clerical mistakes in the multiplier table as given in the Second Schedule, it stated that the said table can be taken as a guide. Noticing the wide variations in the selection of multiplier, a two Judge Bench of the Supreme Court in [ENTITY] (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 noted the multiplier as adopted in [ENTITY], [ENTITY] and New India Assurance Company Limited v. Charlie & Anr. (2005) 10 SCC 720 and in the Second Schedule and in Para 40 of the report, it compared the same in a tabulated form which is extracted hereunder:-
[ENTITY] actually dece-ased as envisaged in scale as [ENTITY] specified in used in Second Susamma adopted by clarified in Charlie Second Column Schedule to the MV Thomas [(1994) Trilok [(2005) 10 SCC 720 in the Table in Act (as seen from 2 SCC 176 : 1994 Chandra [(199 : 2005 SCC (Cri) Second the quantum of SCC (Cri) 335] 6) 4 SCC 362] 1657] Schedule to the compensation) [ACT] (1) (2) (3) (4) (5) (6)
20. The Supreme Court with a view to having a uniform multiplier held that the multiplier as given in Column (4) of the above table should be usually followed. In Paras 41 and 42 of the report in [ENTITY] (Smt.), the Supreme Court observed:-
"41. Tribunals/ courts adopt and apply different operative multipliers. Some follow the multiplier with reference to [ENTITY] [(1994) 2 SCC 176 : 1994 SCC (Cri) 335] [set out in Column (2) of the table above]; some follow the multiplier with reference to [ENTITY] [(1996) 4 SCC 362] , [set out in Column (3) of the table above]; some follow the multiplier with reference to [PRECEDENT] [set out in Column (4) of the table above]; many follow the multiplier given in the second column of the table in the Second Schedule of the [ACT] [extracted in Column (5) of the table above]; and some follow the multiplier actually adopted in the Second Schedule while calculating the quantum of compensation [set out in Column (6) of the table above]. For example if the deceased is aged 38 years, the multiplier would be 12 as per [ENTITY] [(1994) 2 SCC 176 : 1994 SCC (Cri) 335], 14 as per [ENTITY] [(1996) 4 SCC 362], 15 as per [PRECEDENT], or 16 as per the multiplier given in Column (2) of the Second Schedule to the [ACT] as per the multiplier actually adopted in the Second Schedule to the [ACT]. Some tribunals, as in this case, apply the multiplier of 22 by taking the balance years of service with reference to the retiring age. It is necessary to avoid this kind of inconsistency. We are concerned with cases falling under [SECTION] and not under [SECTION] of the [ACT]. In cases falling under [SECTION] of the [ACT], [PRECEDENT]] is applicable.
42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying [ENTITY] [(1994) 2 SCC 176 : 1994 SCC (Cri) 335], [ENTITY] [(1996) 4 SCC 362] and [PRECEDENT] ), 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."
21. It may be noted that the Supreme Court had gone into the history of adoption of multiplier method and referred to [PRECEDENT] and [PRECEDENT].
22. [ENTITY] (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 related to the death of a Scientist who died leaving behind his widow, three minor children, parents and grandfather. Thus, the Supreme Court while laying down that the multiplier has to be adopted as per Column 4 of the table as per the age of the deceased, was generally referring to the award of compensation in cases of death of a person who had a family consisting of widow, children and parents. Of course, general principles with regard to award of compensation in case of death of a bachelor were also laid down by the Supreme Court in [ENTITY] (Smt.), but it was not specifically laid down that even in the case of death of a bachelor, the age of the Claimants who may be aged parents will be totally irrelevant.
23. However, in [PRECEDENT], the Supreme Court stated that the selection of the multiplier has to be as per the age of the deceased and not on the basis of the age of the dependants. It was a case which related to the death of a bachelor.
24. On account of divergence of opinion in the earlier cases, a reference to a larger Bench was made by a two Judge Bench in [ENTITY] v. Madan Mohan & Anr., (2009) 13 SCC 422. The question of award of compensation in relation to multiplier and future prospects was gone into at great length by a three Judge Bench of the Supreme Court in [ENTITY] & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65. The two referred questions by [ENTITY] v. Madan Mohan & Anr., (2009) 13 SCC 422 were:-
"1.1. Whether the multiplier specified in the Second Schedule appended to the [ACT] (for short "the 1988 Act") should be scrupulously applied in all cases" and 1.2. Whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as regards determination of future prospects?"
25. While answering the points, in Para 43, the Supreme Court observed as under:-
"43. In what we have discussed above, we sum up our conclusions as follows:
43.1. In the applications for compensation made under [SECTION] of the 1988 Act in death cases where the age of the deceased is 15 years and above.
43.2. In cases where the age of the deceased is up to 15 years.
43.3. As a result of the above, while considering the claim applications made under [SECTION] in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act.
43.4. The Claims Tribunals shall follow the steps and guidelines stated in para 19 of [ENTITY] v. DTC, (2009) 6 SCC 121 for determination of compensation in cases of death "
26. In [ENTITY] & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65, these were general observations that the steps and guidelines stated in para 19 of [ENTITY] (Smt.) have to be followed. In [ENTITY] (Smt.), it was laid down that having regard to the age of the deceased and period of active career, the active multiplier should be selected and the multiplier should be chosen from the table with reference to the age of the deceased. As I have observed above, it was not the intention in [ENTITY] (Smt.) to apply the multiplier of 18 in case of death of a bachelor aged 25 years where the dependants may only be the aged parents. Thus, in [ENTITY] also, it was not laid down that the multiplier has to be according to the age of the deceased even when the deceased is a bachelor having dependency of the parents only.
27. Of course, in [PRECEDENT], the two Judge Bench observed that the multiplier has to be as per the age of the deceased and even in case of death of a bachelor aged 24 years, the multiplier will be
28. However, there is a three Judge Bench decision of the Supreme Court in [PRECEDENT] wherein a bachelor aged 25 years lost his life in a motor vehicular accident which occurred on 11.11.2002. The Claims Tribunal adopted a multiplier of 17, as per the age of the deceased (25 years). On appeal filed by the New India Assurance Company Limited before the High Court, it was contented that the multiplier has to be as per the age of the Claimants (in that case) and not as per the age of the deceased. The Division Bench of High Court of Uttarakhand declined to accept the contention and dismissed the appeal. In the SLP filed by the Insurance Company, the multiplier of 17 was reduced to 5 on the age of the mother of the deceased being 65 years.
29. Also, in the latest judgment of the Supreme Court in [PRECEDENT], a two Judge Bench of the Supreme Court dealt with the questions of multiplier and the appropriate multiplier in case of death of a bachelor in the said case was taken as 13, keeping in mind the age of the parents of the deceased. Para 11 of the report is extracted hereunder:-
"11. The deceased was a diligent and outstanding student of medicine who could have pursued his MD after his graduation and reached greater heights. Today, medical practice is one of the most sought after and rewarding professions. With the tremendous increase in demand for medical professionals, their salaries are also on the rise. Therefore, we have no doubt in ascertaining the future income of the deceased at Rs 25,000 p.m. i.e. Rs 3,00,000 p.a. Further, deducting 1/3rd of the annual income towards personal expenses as per [PRECEDENT] and applying the appropriate multiplier of 13, keeping in mind the age of the parents of the deceased, as per the guidelines laid down in [ENTITY] case [[ENTITY] v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002], we arrive at a total loss of dependency at Rs 26,00,000 [(Rs 3,00,000 minus 1/3 Rs 3,00,000) 13] "
30. Thus, right from the two Judge Bench decision in General Manager, Kerala State Road Transport Corporation, Trivandrum v. [ENTITY] (Mrs.) and Ors., (1994) 2 SCC 176, which for the first time held that the multiplier method is the best way of awarding just compensation, which was approved in U.P. SRTC v. [ENTITY], (1996) 4 SCC 362, wherein it was held that the multiplier has to be as per the age of the deceased or the Claimant whichever is higher, which is reiterated in [PRECEDENT] by applying the multiplier as per the age of the mother of the deceased (bachelor), the consensus of the larger Bench decisions seems to be that the multiplier has to be selected as per the age of the deceased or the Claimant whichever is higher. The judgment in [ENTITY] & Anr. v. Binod Kumar Yadav & Ors., ILR (2012) 6 DEL 447 has thus, correctly interpreted the law. Three Judge Bench decision in U.P. SRTC v. [ENTITY], (1996) 4 SCC 362 shall be taken as a binding precedent in the matter of selection of multiplier as per the age of the deceased or the Claimants.
31. Moreover, even if there is divergence of opinion in subsequent two Judge Bench decisions or three Judge Bench decisions (although there is no divergence by three Judge Bench decisions), the law laid down by three Judge Bench in [ENTITY] (supra) shall be taken as a binding precedent. In this connection, a reference may be made to [PRECEDENT], wherein, in para 12, the Supreme Court observed as under:-
"12. Having carefully considered the submissions made by the learned Senior Counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms:
(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength.
(2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.
(3) The above rules are subject to two exceptions: (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and
(ii) in spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of the Chief Justice constituting the Bench and such listing. Such was the situation in [PRECEDENT] and [PRECEDENT]."
32. Similarly, in [PRECEDENT], in para 27, the Supreme Court observed as under:-
"27. However, even assuming that the decision in [CASE NUMBER] did not operate as res judicata, we are constrained to observe that even if the learned Judges who decided [CASE NUMBER] did not agree with the view taken by a coordinate Bench of equal strength in the earlier [CASE NUMBER] regarding the interpretation of [SECTION] of the Act and its application to the petition schedule property, judicial discipline and practice required them to refer the issue to a larger Bench. The learned Judges were not right in overruling the statement of the law by a coordinate Bench of equal strength. It is an accepted rule or principle that the statement of the law by a Bench is considered binding on a Bench of the same or lesser number of Judges. In case of doubt or disagreement about the decision of the earlier Bench, the well-accepted and desirable practice is that the later Bench would refer the case to a larger Bench."
33. Also, in Union of India and Ors. v. [ENTITY], (2011) 4 SCC 589, while holding that the decision of the Co-ordinate Bench is binding on the subsequent Bench of equal strength, it was held that the Bench of Co-ordinate strength can only make a reference to a larger Bench. In para 9 of the report, the Supreme Court held as under:-
"9. It may be noted that the decision in [ENTITY] case [PRECEDENT] was prior to the decision in [ENTITY] case [PRECEDENT]. It is well settled that if a subsequent coordinate Bench of equal strength wants to take a different view, it can only refer the matter to a larger Bench, otherwise the prior decision of a coordinate Bench is binding on the subsequent Bench of equal strength. Since, the decision in [ENTITY] case [PRECEDENT] was not noticed in [ENTITY] case [PRECEDENT] , the latter decision is a judgment per incuriam. The decision in [ENTITY] case [PRECEDENT] was binding on the subsequent Bench of equal strength and hence, it could not take a contrary view, as is settled by a series of judgments of this Court."
11. The learned counsel for the Appellant urges that the three Judge Bench decision of the Supreme Court in [ENTITY] & Anr.
(supra) being the latest decision shall be a binding precedent.
12. This Court in [ENTITY] & Ors. (supra) had laid down that the three Judge Bench decision in [ENTITY] (supra) shall be a binding precedent. The logic of taking the age of the deceased or the Claimant as laid down in [ENTITY] (Mrs.) (supra) and [ENTITY], (supra) was not brought to the notice of the Supreme Court in [ENTITY] & Anr. (supra). Otherwise also, in view of the judgment in [PRECEDENT] and Union of India and Ors. v. [ENTITY], (2011) 4 SCC 589, the law laid down in U.P. SRTC v. [ENTITY], (1996) 4 SCC 362 shall be taken as binding precedent.
13. Thus, in the instant case, the age of the mother will have to be taken for selection of multiplier. As per the Voter Identity Card issued by the Election Commission of India, the age of Smt. [ENTITY], mother of the deceased was 45 years. Thus, the appropriate multiplier will be 14 instead of 17 as adopted by the Claims Tribunal.
MULTIPLICAND
14. In the Claim Petition, the Claimants averred that deceased [ENTITY] was working as a Junior Desk Incharge in '[ENTITY]', Branch office, Meerut U.P. and was getting a salary of `20,000/- per month.
15. In order to prove the averments, the Claimant filed her Affidavit Ex.PW-1/A and testified about the averments made in the Claim Petition. In her cross-examination, a simple suggestion was given to PW-1 that she had not placed on record any proof of income of her son [ENTITY]. No suggestion was given to PW-1 that the deceased was not employed in '[ENTITY]' or was not getting a salary of `20,000/- per month.
16. There is another aspect of the matter. The Claims Tribunal had held that the Claimants had failed to prove that the deceased was working in '[ENTITY]'. It further held that the deceased was a Graduate and therefore, it proceeded to award compensation on the minimum wages of a Graduate. It may, however, be noted that the Claims Tribunal erred in holding that the deceased was a Graduate. In fact, the deceased had completed his Graduation in Arts from Chaudhary Charan Singh University, Meerut in the year 2006. He had scored second division in BA. The deceased then did his M.A. and proceeded to obtain a Post-Graduate Diploma in Journalism and Mass Communication (MJMC) again from Chaudhary Charan Singh University, Meerut. It appears that it was on the basis of his diploma in Journalism and Mass Communication that he got employment as Junior Desk Incharge in '[ENTITY]'. Although, PW-1's testimony that the deceased was working in '[ENTITY] and was earning `20,000/- per month was not seriously challenged, but then even if it is assumed that the deceased's employment was not proved, it is well settled that the compensation towards loss of dependency can be awarded on the basis of the potential income of the deceased.
17. In the case of [PRECEDENT], death of a young boy aged 20 years took place in an accident which happened in the year 1972.
The deceased was a student of B.Sc Ist year (Biology) and a compensation of `1,46,900/- was increased and rounded off to ` 1,50,000/-.
18. In [PRECEDENT], decided by this Court on 23.11.2009, which related to the death of a student (studying medicine) who was doing internship and was to be awarded MBBS degree in a short time, the Tribunal awarded a compensation of ` 9,35,352/- on the basis of the minimum wages of a Graduate. This Court observed that although the deceased was getting a stipend of ` 5,000/- per month at the time of his death due to the accident, he would have ultimately joined as a doctor at a salary ranging between ` 16,000/- per month to ` 25,000/- per month.
Thus, the average monthly income of the deceased was taken as ` 18,000/- and after adding 50% towards future prospects, the compensation was enhanced to ` 21,36,000/-.
19. In [PRECEDENT], decided on 20.01.2010 this Court took the potential income of a BE (Bio-Technology) First Year student of Delhi College of Engineering (DCE) as `38,333/- per month.
20. In the instant case, deceased [ENTITY] had obtained Post-Graduate Diploma in Journalism and Mass Communication not from any premier University or Institution. Therefore, I will take the potential income of the deceased to be `20,000/- per month.
FUTURE PROSPECTS
21. As far as future prospects are concerned, there is no evidence on record that the deceased had bright future prospects. The question of grant of future prospects was dealt with by this Court at great length in HDFC Ergo General Insurance Co. Ltd. v. Smt. [ENTITY] and Ors., [CASE NUMBER], decided on 12.01.2015. Paras 8 to 21 of the report in [ENTITY] (supra) are extracted hereunder:
"8. It is no gainsaying that in appropriate cases some addition towards future prospects must be made in case of death or injury of a person pursuing a professional course. At the same time, it cannot be laid down as a uniform principle that every person pursuing professional course will have a bright future. There may be a student pursuing engineering from the reputed engineering colleges like Indian Institute of Technology (IIT), Regional Engineering College or any other reputed college. At the same time, a number of engineering Colleges have mushroomed where an engineering graduate may find it difficult to secure a job of an engineer. In the instant case, deceased [ENTITY], as stated earlier was a student of an unknown engineering college, i.e. Echelon Institute of Technology, Faridabad which is claimed to be affiliated to Maharshi Dayanand University, Rohtak. The Claimants have placed on record result-cum-detailed marks card of First and Second Semester. It may be noted that the deceased had secured just ordinary marks in seven subjects and he had to re-appear in papers 1002 (Mathematical-I), 1006 (Foundation of Computer & Programming) and 1008 (Basics of Mechanical Engineering). Similarly, in the Second Semester the deceased was absent in one of the 12 papers and out of 11 subjects for which he had taken examination, he was to re- appear in four subjects. Thus, it will be difficult to say that the deceased was a brilliant student or that he was pursuing engineering from a well known or even mediocre college.
9. The learned counsel for the Claimants has referred to a three Judge Bench decision of the Supreme Court in [ENTITY] & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 to contend that the future prospects have to be added in all cases where a person is getting fixed wages or is a seasonal employee or is a student.
10. It is urged by the learned counsel for the Claimants that the law laid down in [ENTITY] (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 was extended in [ENTITY] & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 to hold that future prospects ought to be extended in all cases.
11. On the other hand, the learned counsel for the Insurance Company refers to a three Judge Bench decision of the Supreme Court in [ENTITY] & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65 wherein while approving the ratio with regard to future prospects in [ENTITY] (Smt.) & Ors. (supra) and relying on General Manager, Kerala State Road Transport Corporation, Trivandrum v. [ENTITY] (Mrs.) and Ors. (1994) 2 SCC 176; [PRECEDENT] and [PRECEDENT], the Supreme Court held as under:-
"38. With regard to the addition to income for future prospects, in [ENTITY] [[ENTITY] v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002], this Court has noted the earlier decisions in [ENTITY] [Kerala SRTC v. [ENTITY], (1994) 2 SCC 176 : 1994 SCC (Cri) 335], [PRECEDENT] and [PRECEDENT] and in para 24 of the Report held as under: ([ENTITY] case [[ENTITY] v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002] , SCC p. 134):
"24. In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words actual salary should be read as actual salary less tax). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-
employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances."
39. The standardization of addition to income for future prospects shall help in achieving certainty in arriving at appropriate compensation. We approve the method that an addition of 50% of actual salary be made to the actual salary income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years and the addition should be only 30% if the age of the deceased was 40 to 50 years and no addition should be made where the age of the deceased is more than 50 years. Where the annual income is in the taxable range, the actual salary shall mean actual salary less tax. In the cases where the deceased was self-employed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases."
12. The learned counsel for the Insurance Company relies upon a Constitutional Bench judgment of the Supreme Court in [PRECEDENT]; [PRECEDENT]; and Union of India & Ors. v. [ENTITY], (2011) 4 SCC 589 to contend that in case of divergence of opinion in judgments of benches of co-equal strength, earlier judgment will be taken as a binding precedent.
13. It may be noted that in [ENTITY] & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65; the three Judge Bench was dealing with a reference made by a two Judge Bench ([ENTITY] and [ENTITY], J.J.). The two Honble Judges wanted an authoritative pronouncement from a Larger Bench on the question of applicability of the multiplier and whether the inflation was built in the multiplier. The three Judge Bench approved the two Judge Bench decision of the Supreme Court in [ENTITY] (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121 with regard to the selection of multiplier. It further laid down that addition towards future prospects to the extent of 50% of the actual salary shall be made towards future prospects when the deceased had a permanent job and was below 40 years and addition of 30% should be made if the age of the deceased was between 40-50 years. No addition towards future prospects shall be made where the deceased was self-employed or was getting a fixed salary without any provision of annual increment.
14. Of course, three Judge Bench of the Supreme Court in its later judgment in [ENTITY] relying on [PRECEDENT] observed that there would be addition of 30% and 50%, depending upon the age of the deceased, towards future prospects even in the case of self- employed persons. It may, however, be noted that in [ENTITY], the three Judge Bench decision in [ENTITY] (supra) was not brought to the notice of their Lordships.
15. The divergence of opinion was noted by another three Judge Bench of the Supreme Court in [PRECEDENT]. In paras 14 and 15, the Supreme Court observed as under:-
"14. Certain parallel developments will now have to be taken note of. In [ENTITY] v. Madan Mohan [(2009) 13 SCC 422 : (2009) 5 SCC (Civ) 143 : (2010) 1 SCC (Cri) 1044], a two-Judge Bench of this Court while considering the following questions took the view that the issue(s) needed resolution by a larger Bench: (SCC p. 425, para 10) "(1) Whether the multiplier specified in the Second Schedule appended to the Act should be scrupulously applied in all the cases?
(2) Whether for determination of the multiplicand, the Act provides for any criterion, particularly as regards determination of future prospects?"
15. Answering the above reference a three-Judge Bench of this Court in [ENTITY] v. Madan Mohan [(2013) 9 SCC 65 : (2013) 4 SCC (Civ) 191 : (2013) 3 SCC (Cri) 826] (SCC p. 88, para 36) reiterated the view taken in [ENTITY] [[ENTITY] v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002] to the effect that in respect of a person who was on a fixed salary without provision for annual increments or who was self-employed the actual income at the time of death should be taken into account for determining the loss of income unless there are extraordinary and exceptional circumstances.
Though the expression "exceptional and extraordinary circumstances" is not capable of any precise definition, in [PRECEDENT] there is a practical application of the aforesaid principle. The near certainty of the regular employment of the deceased in a government department following the retirement of his father was held to be a valid ground to compute the loss of income by taking into account the possible future earnings. The said loss of income, accordingly, was quantified at double the amount that the deceased was earning at the time of his death."
16. Further, the divergence of opinion in [ENTITY] & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65 and [ENTITY] & Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54 was noticed by the Supreme Court in another latest judgment in National Insurance Company Ltd. v. [ENTITY] & Ors., CC No.8058/2014, decided on 02.07.2014 and in concluding paragraph while making reference to the Larger Bench, the Supreme Court held as under:-
"Be it noted, though the decision in [ENTITY] (supra) was rendered at earlier point of time, as is clear, the same has not been noticed in [ENTITY] (supra) and that is why divergent opinions have been expressed. We are of the considered opinion that as regards the manner of addition of income of future prospects there should be an authoritative pronouncement. Therefore, we think it appropriate to refer the matter to a larger Bench."
17. Now, the question is which of the judgments ought to be followed awaiting answer to the reference made by the Supreme Court in [ENTITY] & Ors. (supra).
18. In [PRECEDENT] in para 12, the Supreme Court observed as under:-
"12. Having carefully considered the submissions made by the learned Senior Counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms:
(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength.
(2) [Ed.: Para 12(2) corrected vide Official Corrigendum No. F.3/Ed.B.J./21/2005 dated 3-3-
2005.] A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.
(3) [Ed.: Para 12(3) corrected vide Official Corrigendum No. F.3/Ed.B.J./7/2005 dated 17-1- 2005.] The above rules are subject to two exceptions:
(i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and (ii) in spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of the Chief Justice constituting the Bench and such listing. Such was the situation in [PRECEDENT] and [PRECEDENT]."
19. Similarly, in [PRECEDENT] in para 27, the Supreme Court observed as under:-
"27. However, even assuming that the decision in [CASE NUMBER] did not operate as res judicata, we are constrained to observe that even if the learned Judges who decided [CASE NUMBER] did not agree with the view taken by a coordinate Bench of equal strength in the earlier [CASE NUMBER] regarding the interpretation of [SECTION] of the Act and its application to the petition schedule property, judicial discipline and practice required them to refer the issue to a larger Bench. The learned Judges were not right in overruling the statement of the law by a coordinate Bench of equal strength. It is an accepted rule or principle that the statement of the law by a Bench is considered binding on a Bench of the same or lesser number of Judges. In case of doubt or disagreement about the decision of the earlier Bench, the well-accepted and desirable practice is that the later Bench would refer the case to a larger Bench."
20. In Union of India & Ors. v. [ENTITY], (2011) 4 SCC 589 while holding that the decision of the Co-ordinate Bench is binding on the subsequent Bench of equal strength, held that the Bench of Co-ordinate strength can only make a reference to a larger Bench. In para 9 of the report, the Supreme Court held as under:-
"9. It may be noted that the decision in [ENTITY] case [PRECEDENT] was prior to the decision in [ENTITY] case [PRECEDENT] . It is well settled that if a subsequent coordinate Bench of equal strength wants to take a different view, it can only refer the matter to a larger Bench, otherwise the prior decision of a coordinate Bench is binding on the subsequent Bench of equal strength. Since, the decision in [ENTITY] case [PRECEDENT] was not noticed in [ENTITY] case [PRECEDENT] , the latter decision is a judgment per incuriam. The decision in [ENTITY] case [PRECEDENT] was binding on the subsequent Bench of equal strength and hence, it could not take a contrary view, as is settled by a series of judgments of this Court."
21. This Court in [PRECEDENT], decided on 06.09.2013, went into this question and held that in view of the report in [ENTITY] (supra), the three Judge Bench decision in [ENTITY] & Ors. (supra) shall be taken as a binding precedent."
22. In the instant case, the deceased's actual or potential income is taken as `20,000/- per month. Even if it is taken that the deceased was working with '[ENTITY]', there was no evidence with regard to his good future prospects or that the deceased was in permanent employment.
23. Thus, in the absence of any evidence of good future prospects, no addition towards future prospects ought to have been made by the Claims Tribunal.
24. The loss of dependency will therefore, come to `16,80,000/-
(`20,000/- x 12 x 1/2 x 14).
25. In addition, the Claimant is entitled to a sum of `1,00,000/- towards loss of love and affection, `25,000/- towards funeral expenses and `10,000/- towards loss to estate in view of the three Judge Bench decision of the Supreme Court in [ENTITY] and Ors. v. Rajbir Singh & Ors., (2013) 9 SCC 54.
26. The overall compensation thus, comes to `18,15,000/-.
27. The compensation is thus, enhanced by `2,12,118/- which shall carry interest @ 9% per annum as awarded by the Claims Tribunal.
28. The enhanced compensation along with proportionate interest shall be deposited by the Appellant Insurance Company with UCO Bank, Delhi High Court Branch New Delhi within six weeks.
29. Statutory amount, if any, deposited shall also be refunded to the Appellant Insurance Company after deposit of the enhanced awarded amount.
30. Both the appeals are disposed of in above terms.
([ENTITY]) JUDGE MAY 27, 2015 vk