1 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2019 PRESENT THE HON'BLE MRS. JUSTICE B. V. [ENTITY] AND THE HON'BLE MR. JUSTICE K. NATARAJAN MISCELLANEOUS FIRST APPEAL No.1379 of 2018 (MV-D) C/W MISCELLANEOUS FIRST APPEAL No.2574 of 2018 (MV-D) IN MFA No.1379 of 2018: BETWEEN: THE BRANCH MANAGER, FUTURE GENERALI INDIA INSRUANCE COMPANY LIMITED, HOWEVER, THE INCORRECT NAME IS - FUTURE GENERAL INDIA INSURANCE COMPANY LIMITED, PASADENA No.18/1 (OLD No.125/3) III FLOOR, ASHOKA PILLAR ROAD, JAYANAGAR 1ST BLOCK, BENGALURU-526 011. NOW REPRESENTED BY SENIOR MANAGER, FUTURE GENERALI INDIA INS. CO. LTD., 3RD AND 4TH FLOOR No.31, SHRAVANEE, KRISHNA MANSION, 100 FEET ROAD, II BLOCK, JAYANAGAR, BENGALURU -560 011. APPELLANT (BY SRI [ENTITY], ADVOCATE) 2 AND: 1. SMT. [ENTITY]. S.L., W/O. LATE [ENTITY], NOW AGED ABOUT 37 YEARS, 2. [ENTITY] E., S/O. LATE [ENTITY], NOW AGED ABOUT 5 YEARS, SINCE MINOR REPRESENTED BY NATURAL GUARDIAN, MOTHER THE 1ST RESPONDENT HEREIN, BOTH R.1 AND 2 HEREIN ARE RESIDING AT No.666, 6TH 'C' MAIN, 11TH CROSS, J.P. NAGAR, 3RD PHASE, BENGALURU - 560 078. 3. [ENTITY], S/O. LATE VEERAPPAGOWDA, NOW AGED ABOUT 74 YEARS, 4. SMT. [ENTITY], W/O. N. BOMMAIH, NOW AGED ABOUT 68 YEARS, 5. MS. [ENTITY], D/O. N. BOMMAIH, NOW AGED ABOUT 38 YEARS, RESPONDENTS No.3 TO 5 HEREIN, ARE RESIDING AT SANGAMA, HIG No.3, 3RD PHASE, KHB COLONY, GOPAL, SHIMOGA TOWN & DISTRICT - 577 201. 6. [ENTITY] A., S/O. LATE ANJANAPPA, MAJOR, RESIDENT OF HALESAMPIGEHALLI, JAGANATPALYA, BANNERGHATTA POST, BENGALURU - 560 083. RESPONDENTS (BY SRI [ENTITY], ADVOCATE FOR R1-R5) 3 THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER [SECTION] OF [ACT] AGAINST THE JUDGMENT AND AWARD DATED 15.11.2017 PASSED IN [CASE NUMBER] ON THE FILE OF THE 8TH ADDITIONAL SMALL CAUSE JUDGE & 33RD ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, MEMBER, MACT, BENGALURU, AWARDING COMPENSATION OF Rs.1,70,70,000/- WITH INTEREST 9% P.A. FROM THE DATE OF PETITION TILL REALIZATION. IN [CASE NUMBER]: BETWEEN: 1. SMT. [ENTITY] S.L., W/O. LATE [ENTITY], HINDU NOW AGED 36 YEARS 2. [ENTITY] E., S/O. LATE [ENTITY], HINDU NOW AGED 4 YEARS, APPELLANT No.2 SINCE MINOR REPRESENTED BY MOTHER AS NATURAL GUARDIAN, APPELLANTS No.1 & 2 ARE NOW RESIDING AT No.32, [ENTITY], [ENTITY], DHARWAD - 580 001. 3. [ENTITY], S/O. LATE [ENTITY], HINDU NOW AGED 73 YEARS, 4. SMT. [ENTITY], W/O. [ENTITY], HINDU NOW AGED 67 YEARS, 5. [ENTITY], D/O. [ENTITY], HINDU NOW AGED 37 YEARS, 4 APPELLANTS No.3 TO 5 ARE RESIDING AT SANGAMA, HIG No.3, III PHASE, KHB COLONY, SHIMOGA TOWN & DISTRICT - 577 205. APPELLANTS (BY SRI [ENTITY], ADVOCATE) AND: 1. [ENTITY] A., S/O. LATE ANJANAPPA, [ENTITY], RESIDENT OF HALESAMPIGEHALLI, JAGANATPALYA, BANNERGHATTA POST, BENGALURU - 560 083. 2. THE BRANCH MANAGER, FUTURE GENERAL INDIA INSURANCE CO. LTD., PASADENA N.18/1, (OLD No.125/3), III FLOOR, ASHOKA PILLAR ROAD, JAYANAGAR I BLOCK, BENGALURU -560 011. RESPONDENTS (BY SRI [ENTITY], ADVOCATE FOR R2. R1- NOTICE DISPENSED WITH VIDE ORDER DATED 24.04.2018) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER [SECTION] OF [ACT] AGAINST THE JUDGMENT AND AWARD DATED 15.11.2017 PASSED IN [CASE NUMBER] ON THE FILE OF THE VIII ADDITIONAL SMALL CAUSES JUDGE & XXXIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, MEMBER & MACT, BENGALURU (SCCH-5), PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. 5 THESE MISCELLANEOUS FIRST APPEALS COMING ON FOR HEARING THIS DAY, [ENTITY] J., DELIVERED THE FOLLOWING: JUDGMENT
Though these appeals are listed to consider the applications filed by the respondents-claimants for release of amount and for vacating the interim stay granted by this Court, with the consent of learned counsel on both sides, they are heard finally.
2. [CASE NUMBER] has been filed by the Insurance Company while [CASE NUMBER] has been filed by the claimants, both assailing the judgment and award dated 15/11/2017 passed in [CASE NUMBER] by the VIII Additional Small Causes Judge and Motor Accident Claims Tribunal, Bengaluru, (hereinafter referred to as 'Tribunal' for the sake of convenience) on the only question of quantum of compensation awarded by the Tribunal.
3. For the sake of convenience, parties shall be referred to in terms of their status before the Tribunal.
4. The claimants filed the claim petition under [SECTION] of the [ACT] (hereinafter referred to as 'Act' for the sake of brevity) seeking compensation of Rs.50,02,00,000/- on account of the death of [ENTITY] in a road traffic accident. According to the claimants on 10.02.2015, [ENTITY] was proceeding in a car bearing Regn.No.KA-03/MU-5519, which was driven by [ENTITY] towards Sukkallamma Temple near Bagepalli via Bengaluru-Hyderabad National Highway No.7 (NH-7). When they were near Paragodu Village at about 3.30 p.m., the car capsized and turned turtle, which was on account of rash and negligent driving by the driver of the car. As a result, [ENTITY] sustained grievous injuries and succumbed to the injuries on the spot. Post-Mortem examination was conducted at General Hospital, Bagepalli. Thereafter, his funeral rites and obsequies were performed at Shivamogga.
5. It is the further case of the claimants that [ENTITY] was a bright student. That he had secured 6th Rank in Pre-University Course (PUC), 3rd Rank in CET, Karnataka, 77th Rank in All India Examination of IIT-JEE and 76th Rank in [ACT]. According to claimants, the deceased had a Bachelor of Technology degree in Computer Science from IIT-Madras and he had passed with distinction. He had studied M.S. in Computer Science from Georgia Institute of Technology, USA on a merit scholarship. That [ENTITY] had worked in reputed Software Companies such as, Bell Laboratories in USA, Kasenna Inc., in USA, Sasken Communication Technologies, India, Real Time Tech Solutions Private Limited, Sensact Application Private Limited, Analytica India Private Limited and, thereafter, at Akamai, Bengaluru. That he was working as a Manager at Yahoo Software Development India Private Limited earning a salary of Rs.30,00,000/- per annum. They claimed that the deceased had planned to set up a Software Company. That he was awarded [ENTITY] Patent Medal in the year 2013 from Alcatol Lucent Bell Labs of USA for imparting good knowledge and excellent work. That on account of the untimely death of [ENTITY], the family had been put to untold miseries. Hence, they filed the claim petition seeking compensation.
6. In response to the notices issued by the Tribunal, respondent Nos.1 and 2 appeared through their counsel and filed their separate statements of objection.
The owner of the vehicle, respondent No.1 in his statement of objections admitted that he was the RC owner of the car bearing Regn.No.KA-03/MU-5519, which was insured with respondent No.2-Insurance Company and the driver had a valid driving licence as on the date of the accident. The owner of the car, however, sought for dismissal of the claim petition filed against him.
Respondent No.2-Insurance Company filed its statement of objections denying the averments made in the claim petition and contended that the driver of the car was not having a valid driving licence and was not wearing the seat belt. However, the Insurance Company admitted issuance of Policy in favour of respondent No.1, which was valid from 20.08.2014 to 19.08.2015, but, the payment of compensation was subject to the terms and conditions of the Policy. The Insurance Company also sought for dismissal of the claim petition filed against it.
7. On the basis of the aforesaid rival pleadings, the Tribunal framed the following issues for its consideration:
"1) Whether the Petitioners prove that deceased Sri.[ENTITY] S/o. [ENTITY] died in a road traffic accident on 10.02.2015 at about 3.30 p.m. on Bengaluru-Hyderabad, NH-7 Road, near Paragodu, Bagepalli Taluk, Chikaballapura District, due to the rash and negligent driving of the driver of the Car bearing Reg.No.KA-03-MU-5519?
2. Whether the Petitioners are entitled for any compensation? If so, to what extent and from whom?
3. What order or award?"
8. In support of their case, Smt.[ENTITY], widow of the deceased examined herself as PW.1. She produced 42 documents, which were marked as Exs.P.1 to P.42. The Insurance Company examined RW.1-[ENTITY], who is the HR Manager at M/s. Yahoo Software Development India Private Limited wherein the deceased was working prior to his death. She produced Ex.R.1-Authorization Letter.
9. On the basis of the evidence on record, the Tribunal answered Issue No.1 in the affirmative and awarded compensation of Rs.1,70,70,000/- with interest at 9% per annum from the date of petition till its realisation.
10. Contending that the award of compensation is excessive and exorbitant, the Insurance Company has preferred [CASE NUMBER], while the claimants have sought for enhancement of compensation by filing [CASE NUMBER]. The said appeals have been connected as they arise out of the same judgment and award and have been heard together.
11. We have heard Sri [ENTITY], learned counsel for the Insurance Company and Sri [ENTITY], learned counsel for the respondents- claimants and perused the material on record as well as the original records.
12. Sri [ENTITY], learned counsel for the Insurance Company contended that the Insurance Company has preferred its appeal seeking reduction in the quantum of compensation awarded by the Tribunal to the claimants. That on the date of the accident i.e. 10.02.2015, the deceased was not in employment. Therefore, he was not earning any income on that date. However, the Tribunal has assessed his notional income at Rs.1,00,000/- per month, which is purely a conjecture and therefore incorrect. He submitted that the Tribunal could not have assessed the notional income at Rs.1,00,000/- per month, when the deceased was unemployed on the date of the accident. He next contended that the five claimants namely, widow and son of the deceased, parents and sister of the deceased claimed compensation. That the father of the deceased cannot be a dependent on his son who died in the accident. That 1/4th of the income could not have been deducted towards personal expenses of the deceased; that 1/3rd of the income had to be construed as the personal expenses of the deceased. He further submitted that when the deceased was not working on the date of the accident and, therefore, no income was being earned by him, grant of future prospects to the extent of 25% by the Tribunal was wholly improper. He therefore, contended that reckoning of 25% towards future prospects is incorrect. Learned counsel for the Insurance Company also contended that the deceased was 40 years 7 months 5 days. That the multiplier of '14' ought to have been applied as he had crossed 40 years and running 41, but the Tribunal has applied the multiplier of '15', which is also not just and proper.
13. Next submission of learned counsel for the Insurance Company was that the award of compensation on the conventional heads is also exorbitant. He also submitted that the award of interest at 9% per annum is exorbitant without there being any reason assigned for the same.
14. Learned counsel, Sri [ENTITY], further contended that the total compensation of Rs.1,70,70,000/- with interest with 9% per annum awarded by the Tribunal being excessive and exorbitant would call for a reduction in this appeal. In support of his submission, he placed reliance on the decision of Hon'ble Apex Court in case of National Insurance Company Limited vs. [ENTITY] and others reported in (2017)16 SCC 680 [[ENTITY]].
15. Per contra, learned counsel, Sri [ENTITY], appearing for the claimants, who have also filed [CASE NUMBER] contended that the award of compensation of Rs.1,70,70,000/- by the Tribunal is meager and on the lower side. That the claimants have preferred this appeal seeking enhancement of compensation. The deceased [ENTITY] was a brilliant student, rank-holder who studied at IIT-Madras and at Georgia Institute of Technology, USA. He had a Patent registered to his credit. He was a Software Engineer, who had worked in several Companies both overseas and in India. He was working at Yahoo Software Development India Private Limited, in Bengaluru. The division of the said Company in which he was working was translocated to the United States of America (USA). The deceased was offered a placement in USA but he did not accept that offer. Unfortunately, he died before he joined any other Company. The Tribunal was not right in assessing the notional income of the deceased at Rs.1,00,000/- only per month. That the last annual income of the deceased assessed for the year 2013-2014 was Rs.32,65,308/- and he was paying annual income tax of nearly Rs.10,00,000/-, i.e. Rs.9,92,995/- to be precise per annum. Therefore, the compensation on the head of loss of dependency had to be assessed by taking into consideration the last earned income of the deceased and the potential that the deceased had, to earn a higher income. He contended that the evidence on record establishes clearly the brilliant academic career that the deceased had and the fact that he had the potential to earn a higher income even at Yahoo Software Development India Private Limited, but for the fact that the division of the Company in which he was working was shifted to USA. Therefore, the Tribunal's assessment of the notional income of the deceased at Rs.1,00,000/- per month is a total departure from and contrary to the evidence on record and hence, the compensation on the head of loss of dependency must be calculated based on the last pay drawn by the deceased for the year 2013- 2014 as the accident had occurred on 10.02.2015 and he had been relieved from his last job in November-2014, three months prior thereto.
16. He further contended that the deceased had not completed 41 years. He had just completed 40 years, 7 months and 5 days. It cannot be construed as completion of 41 years. Therefore, the Tribunal was right in applying the multiplier of '15' rather than '14', having regard to the dictum of the Hon'ble Apex Court in the case of [ENTITY] vs. Delhi Transport Corporation Limited reported in (2009)6 SCC 121 [[ENTITY]].
17. Learned counsel for the claimants also contended that the Tribunal has taken only 25% towards future prospects of the deceased whereas, having regard to the age of the deceased being 40 years, 40% had to be added towards future prospects. He next contended that the award of compensation with interest at 9% per annum is just and proper, but the award of compensation on conventional heads requires enhancement and that the appeal filed by the Insurance Company may be dismissed and the appeal filed by the claimants may be allowed by enhancing the compensation.
18. In support of his submission, he placed reliance on the judgment of the Hon'ble Apex Court in the case of [ENTITY] vs. Oriental Insurance Company Limited reported in (2018)15 SCC 654 [[ENTITY]] with regard to future prospects that has to be computed and the case of [ENTITY] vs. Gangalakshmamma reported in 2015 ACJ 1239 [[ENTITY]] with regard to appropriate multiplier to be adopted.
19. By way of reply, learned counsel for the Insurance Company, Sri [ENTITY], reiterated his submissions and contended that no doubt there may be a misfortune that has fallen on the family of the claimants, but the same should not result in a windfall. It is not necessary that in every case, future prospects has to be considered. It would all depend on the particular facts and circumstances of each case. That when a huge amount of compensation is to be paid by the insurer, amount towards future prospects may not be taken in to consideration at all. In support of this submission, he placed reliance on a decision of the Hon'ble Apex Court in the case of [PRECEDENT].
20. No other contention has been raised by the learned counsel for the respective parties.
21. Having heard learned counsel for the respective parties and on perusal of the material on record, the following points would arise for our consideration:
"1. Whether the Tribunal was right in assessing the notional income of the deceased at Rs.1,00,000/- per month?
2. Whether the Tribunal was right in applying multiplier of '15'?
3. Whether the Tribunal was right in adding an amount to an extent of 25% of the monthly salary towards future prospects?
4. Whether the award of compensation on the conventional heads is just and appropriate?
5. Whether the Tribunal was justified in granting interest at 9% per annum on the compensation awarded?
6. What order?"
The aforesaid points would be considered in seriatim.
22. It is noted that the claimants have established the fact that [ENTITY] died in a road traffic accident that occurred on 10.02.2015 when he was proceeding in car bearing KA-03/MU-5519 being driven by [ENTITY] towards Sukkallamma Temple near Bagepalli on Bengaluru-Hyderabad, NH-7 road. The car capsized and turned turtle on account of rash and negligent driving by its driver. As a result, [ENTITY] sustained severe injuries such as, fractures and other injuries and succumbed to the injuries on the spot.
23. At this stage itself, it may be noted that in these appeals, there is no controversy with regard to the aspect of negligence or on the liability to satisfy the award by the Insurance Company, but only on the quantum of compensation to be paid to the claimants. Re. Point Nos.1 to 3:
24. The first question to be considered is with regard to the calculation of compensation on the head of loss of dependency. Before embarking on that endeavor, it would be useful to refer to paragraph 55 of the judgment of the Hon'ble Apex Court in [ENTITY] wherein, it has been held that [SECTION] of the Act deals with the concept just compensation which must be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. The aim is to attain the degree of proximity to arithmetical precision on the basis of the materials brought on record in an individual case. The concept of just compensation has to be viewed through the prism of fairness, reasonableness and non- violation of principle of equitability. In a case of death, the legal heirs of deceased cannot accept a windfall. Simultaneously, the compensation granted cannot be an apology for compensation or a pittance. Though the discretion vested in the Tribunal is quite wide, yet it is obligatory on the part of the Tribunal to be guided by the expression, just compensation. The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and, thereafter, the apposite multiplier to be applied. The formula to be applied has been clearly stated in [ENTITY]. It has been approved in [PRECEDENT]. The Hon'ble Apex Court went on to observe that, it is well accepted norm that money cannot substitute the life lost, but an effort has to be made for grant of just compensation having uniformity of approach. Ultimately, the Hon'ble Apex Court held that, there has to be a balance between the two extremes, that is, a windfall and pittance, a bonanza and the modicum. In such an adjudication, the duty of the Tribunal and the Courts is difficult and hence, an endeavour has been made by the Hon'ble Apex Court for standardization within which includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. According to the Hon'ble Apex Court the principle of Standardization enables that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.
25. It is also necessary to bear in mind that under [SECTION] of the Act, the Tribunal as well as the Court must ensure that a just compensation is paid to the injured claimant or the legal representatives of the deceased in a road traffic accident. The Hon'ble Supreme Court has repeatedly held that Courts must strike a balance between the inflated and unreasonable demands of a victim and the equally untenable claim of the opposite party saying that nothing is payable. Sympathy for the victim does not, and should not, come in the way of making a correct assessment, but if a case is made out, the court must not be chary of awarding adequate compensation. The just compensation or adequate compensation must, to some extent, be a rule of thumb measure, and as a balance has to be struck, it would be difficult to satisfy all the parties concerned. Thus, the function of the Tribunal/Court is to award "just compensation", which is reasonable on the basis of evidence produced on record. In fact, there is no restriction that the Court cannot award compensation exceeding the claim amount since the function of the Tribunal or the Court under the provisions of the Act is to award just compensation. The Act is a beneficial and welfare legislation and just compensation is one which is reasonable on the basis of the evidence produced on record. Hence, the Courts are bound to award just compensation.
26. Bearing in mind the aforesaid guidelines of the Hon'ble Apex Court, we would have to consider the evidence on record in order to determine what the income of the deceased [ENTITY] was. It is an admitted fact that on the date of the accident, he was not employed; but can it be said that this is a case where the deceased was not earning an income? In other words, is this a case where notional income would have to be determined as if the deceased was not working or an unemployed person? In this regard, what has to be borne in mind is the guidelines of the Hon'ble Apex Court having regard to the evidence brought on record.
27. The claimants have let in evidence through the widow of the deceased, Smt.[ENTITY] Exs.P.7 and P.7(a) are the originals of the SSLC and PUC marks cards. Ex.P.8 is the original showing the PUC ranking certificate. Ex.P.9 is the paper cutting showing the rank of deceased in CET and PUC, Ex.P.10 is the [ACT] Certificate, Ex.P.11 is the IIT-JEE Ranking, Ex.P.12 is the IIT B-Tech Certificate, Ex.P.13 is the M.S.Computer Science Certificate issued by Georgia Institute of Technology in USA; Ex.P.14 is the Student Internship Letter dated 29.04.1997 with salary of $2,050- 00 bi-weekly; Ex.P.15 is the Summer Internship Letter dated 06.03.1998 with living stipend or annual salary of $38,889; Ex.P.16 is the Employment Letter dated 03.09.1998 of Lucent Technologies in USA; Ex.P.17 is the Employment Letter dated 24.11.1999 of Kasenna Inc. of USA; Ex.P.18 is the Employment Letter dated 28.02.2003 of Sasken Communication Technologies with annual emolument; Ex.P.19 is the Employment Letter dated 15.11.2007 of Akamai Technologies; Ex.P.20 is the Promotion Letter dated 15.03.2010 of Akamai Technologies, Ex.P.21 is the Salary Increase Letter dated 25.07.2011; Ex.P.22 is the Experience Certificate; Ex.P.22(a) is the Employment Letter dated 04.09.2013 of Yahoo Software Development India Private Limited; Ex.P.23 is the Relieving Certificate, Ex.P.24 are the Income Tax Returns for the Assessment years 2011-12, 2012-13 & 2013-14; Ex.P.25 is the Marriage Registration Certificate; Ex.P.27 and P.27(a) are the photographs of [ENTITY] Patent Award given to the deceased; Exs.P.31 to P.39 are Newspaper cuttings; Ex.P.40 is the IT Returns of the deceased for the Assessment Year 2014-15, Ex.P.41 is the copy of the Account extract of deceased issued by ICICI Bank and Ex.P.42 is the Severance, Release and Transition services agreement of Yahoo Company dated 07.10.2014 with [ENTITY], the deceased. All the aforesaid documents pertain to the deceased [ENTITY].
28. On a close perusal of the aforesaid documents, it is noted that [ENTITY] had secured 532 out of 600 marks in SSLC Examination (88.66%) and 561 out of 600 marks in II Year PUC Examination (93.5%). He had secured 6th Rank in the II PUC Examination in the State. The same was also published in the local newspapers. He had secured 76th Rank in XII Standard (II year Pre- University) in [ACT] in the year 1992. He had secured 3rd Rank in CET Examination. He had a very good ranking in the Entrance Examination namely, IIT-JEE and studied IIT B- Tech in Computer Science and Engineering of Indian Institute of Technology, Madras and also did his Master of Science in Computer Science at Georgia Institute of Technology in USA. [ENTITY] had worked for some time in USA in various positions and in several Companies which has also been adverted to by PW.1 during the course of her oral evidence such as Sun Micro Systems, Bell Core, Lucent Technologies, Kasenna Inc. USA, Sasken Communication Technologies Limited, Akamai Technologies, and subsequently was working at Yahoo Software Development India Private Limited. He had worked in several positions in software companies both in USA as well as in India.
29. At Yahoo Software Development India Private Limited, he was working in the position of Engineering Manager. According to Exs.P.22 and P.23, dated 04.09.2013, his last pay was Rs.30,00,000/- annually. Thereafter, he was also entitled to Yahoo Incentive Plan for Excellence and Execution (YIPEE) of Rs.3,75,000/- i.e. 12.5% of the gross salary. As per Ex.P.23, it is noted that on 07.11.2014, he was relieved from the services of the said Company, the reason being that the Department of the Company in which the deceased [ENTITY] was working was shifted to USA. RW.1-Miss [ENTITY], who has been examined by the Insurance Company has stated in her evidence that [ENTITY] was offered a placement at USA in the same Company, but he had not accepted the said offer.
30. The aforesaid evidence would clearly indicate that [ENTITY] had a brilliant academic career and on completion of his Post-Graduation in Computer Science in USA, he was working in various positions in various Companies both in USA as well as in India. The evidence would reveal that as and when he changed his job, his pay package was ascending and he had not accepted any employment for a pay lower than what he had secured in the previous employment. The termination of [ENTITY] from Yahoo Software Development India Private Limited was not on account of any mis-conduct or disciplinary action initiated against him, but on account of the Company shifting the Division in which [ENTITY] was working from India to USA. He was, in fact, offered a placement in USA, but he had not accepted the same. It was during the interregnum period when after being relieved from Yahoo Software Development India Private Limited and before joining any other Company, that the accident occurred and he died in the said accident.
31. In order to establish the fact that [ENTITY] was earning a sizable income as a Software Engineer both at USA and in India, several documents have been produced, but as far as 2011-2012, 2012-2013 and 2013-2014 years are concerned, Ex.P.24-Income Tax Returns have been produced, which show that for the Assessment Year 2011- 2012, the gross total annual income was Rs.29,85,282/- and Income Tax paid was Rs.7,43,710/-. For the Assessment Year 2012-2013, the gross total annual income was Rs.32,59,364/- and Income Tax paid was Rs.8,23,115/-. For the Assessment Year 2013-2014, Rs.32,65,308/- was the gross total annual income and Income Tax of Rs.9,92,995/- was being paid. Therefore, he was paying tax at the rate of 30% on his gross total annual income after deductions being made thereunder.
32. Having regard to the aforesaid evidence on record, we do not find that the deceased [ENTITY] could be considered to be an unemployed person or not having any income at all. Although he was not working in any Company nor had any job as on the date of the accident, the cumulative evidence produced by the claimants must be considered in order to determine the earning potential of the deceased in the absence of any salary slip that could have been produced by the claimants relatable to the date of accident. Although on the date of the accident, the deceased was not having any salary income as such, it must be borne in mind that the accident occurred at a time when [ENTITY] had been relieved from Yahoo Software Development India Private Limited (Yahoo) and was in search of another employment. Despite the offer being made to [ENTITY] by Yahoo at USA, he had not accepted the said offer. Therefore, there was a potential employment and a potential earning capacity ahead of him in USA which he had not accepted as possibly he wanted to remain in India. Therefore, bearing in mind the aforesaid aspects, compensation on the head of dependency must be determined. It is also noted from Ex.P.27 that [ENTITY] had a Patent registered in his name for inventing Method for Streaming Multimedia Information Over Public Networks and the said Patent was registered in USA.
33. Learned counsel for the claimants has drawn our attention to the newspapers report at Exs.P.31 and P.32 to contend that the potential of [ENTITY] must be compared with Sri [ENTITY] of Google, and Sri [ENTITY] and Sri [ENTITY] of Infosys, Bengaluru. In support of the plea that deceased [ENTITY] had a bright career PW.1/widow of the deceased has stated in her examination in chief that eminent persons such as Sri [ENTITY] was working along with her husband in BellCore Company of USA. That Sri [ENTITY] is presently the CEO of Google with an annual emolument of Rs.667.00 crore. Similarly, [ENTITY], who is also an IIT graduate, is in Microsoft Company earning an annual emolument of Rs.1.02 crore. That her husband [ENTITY] also belonged to the same league having secured high academic ranking and educational qualification both in India as well as USA. That even in USA when he was working as an intern, he was receiving stipend of 38,889/- dollars in Lucent Technologies of USA and was earning 77,000/- dollars annually; in Kasenna Inc., USA, with annual base salary of 80,000/- dollars with bonus of 5,000/- dollars; in Sasken Communication Technologies in India, his annual emolument initially was Rs.6,00,000/- per annum and at Akamai Technologies, his annual emolument was Rs.14,00,000/- per annum as a Senior Software Engineer and on promotion, it became Rs.18,77,315/- per annum as a Manager. Thereafter, it increased to Rs.23,96,393/- per annum and subsequently, in April 2013, he received Rs.29,52,356/- per annum. He had also received an appreciation letter on being promoted. Subsequently, he joined Yahoo Software Company as Engineering Manager and his annual emolument was Rs.34,45,000/- and he was relieved from the said job on 07/11/2014 with a service certificate. He had immense knowledge of the subject, but the reason as to why he did not travel to USA when the division in which he was working at Yahoo was shifted to USA was because he was receiving offers and higher placements, but was having plans to set up his own software company in collaboration with other software companies in USA. Therefore, he had the potential to earn a salary higher than what he received when he was relieved at Yahoo. That he had also received [ENTITY] Patent Award Medal.
She has further stated in her cross-examination that her husband [ENTITY] was changing companies for better prospects, but he always received appreciation letters from the previous compenies.
RW.1 [ENTITY], H.R. Manager, Yahoo, was examined by the insurer. She has stated that deceased [ENTITY] was working in Yahoo from 16/09/2013 to 07/11/2014 as Manager, Software System Development. That the employees of the said company are permanent employees, but there is no guarantee for continuation of service. That the Research and Development (R&D) Branch of Yahoo at Bengaluru was shifted to USA, Sunnyvale, and [ENTITY] and other employees were terminated from the Company after being offered to work at USA, but on declining to do so.
34. Having regard to the positions that [ENTITY] occupied soon after his Masters Degree in Computer Science at USA as well as in India and particularly, in the last position that he held at Yahoo as the Managing Engineer and bearing in mind the fact that he was paying income tax of nearly Rs.10,00,000/- per annum and his starting annual income was Rs.30,00,000/- and his last annual income was Rs.32,65,308/- in Yahoo, the notional monthly income of the deceased ought to have been appropriately assessed. But, the Tribunal has grossly erred in assessing his notional income at Rs.1,00,000/- per month i.e. only Rs.12,00,000/- per annum; whereas in Yahoo, three months prior to his death, his gross annual income was Rs.32,65,308/-. The Tribunal has lost sight of and has been unable to appreciate the potential of [ENTITY] to earn a handsome and sizable income although on the date of accident he was not holding any job. In the circumstances, we are of the considered view that the notional annual income of the deceased [ENTITY] must be assessed at Rs.32,65,308/-, which is the last paid income. Of course, while assessing the same, we have not taken into consideration the bonus that he would have been entitled to, which is 12.5% of the income. We also deduct Rs.10,00,000/- towards income tax and a sum of Rs.2,400/- as Professional Tax. Therefore, Rs.32,65,000 minus Rs.10,00,000/-, ie. Income Tax deducted, comes to Rs.22,65,600/- and minus Rs.2,400/- being Professional Tax, it comes to Rs.22,62,600/- which is the notional net annual income and the net monthly income would be Rs.1,88,550/- which is not, in our opinion, an exaggerated figure but in tune with the earnings of a senior engineer in a Software Company.
35. The next aspect to be considered is with regard to future prospects that has to be reckoned in the instant case.
36. Learned counsel for the Insurance Company submitted that since the deceased was not earning as on the date of the accident, no future prospects could be considered. But, the contra submission made by the counsel for the claimants is that since the deceased was only 40 years of age and but for the unfortunate death in the accident, he would have survived to have a long career and earnings, therefore, future prospects must be reckoned at 40%. The Tribunal has added only 25% of his income towards future prospects. In this regard, learned counsel for the Insurance Company relied upon paragraph 57 in [ENTITY] to contend that future prospects must be assessed with regard to realities of the case and in the instant case, in the absence of there being any established income as on the date of the accident, future prospects cannot be awarded at all.
37. As already noted, learned counsel for the claimants relied upon the decision in the case of [ENTITY] wherein, the Hon'ble Apex Court has observed that in the said case, the High Court was not right in deleting future prospects which had been granted by the Tribunal. In other words, according to learned counsel for the claimants, there cannot be any case where future prospects cannot be granted at all particularly, having regard to the judgment of Hon'ble Apex Court in [ENTITY] and [ENTITY].
38. In [ENTITY], the main issue was with regard to inter alia, fixation of future prospects in the case of a deceased who is self-employed or on a fixed salary. While considering the said aspect, the Hon'ble Apex Court observed that, to follow doctrine of actual income at the time of death and not to add any amount having regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method would come within the ambit and sweep of just compensation as postulated under [SECTION] of the Act. That in the case of a deceased who is having a permanent job with in-built grant of annual increment, there is an acceptable certainty. But in the case on hand, the deceased had a fixed salary. It would be unjust and improper to deny future prospects for the purpose of computation of compensation. While comparing the earnings of salaried persons in a permanent job vis vis those who are in a fixed salary in a private entity, the Hon'ble Apex Court observed that the purchasing capacity of a salaried person on permanent job increases because of grant of increments and pay revision or for some other change in the service conditions. But in the private sector, there is always an attempt to enhance salary to get better efficiency from the employees. Similarly, in the case of self-employed, there is bound to be garnering of resources to raise charges/fees so that they can live with same facilities. To hold that salaries or earnings would remain static and stagnant in respect of private sector employees or self-employed persons is contrary to fundamental concept of human attitude. According to the Hon'ble Apex Court though it may seem appropriate to think that unlike any person having a permanent job, in the case of a person in a private entity, future prospects may not arise, the said perception does not deserve acceptance. Though there may be a degree of difference having regard to the percentage that has to be applied with regard to the legal representatives who claim on behalf of the deceased, who had a permanent job than the person who is self- employed on a fixed salary, nevertheless, in both cases future prospects would have to be applied. Therefore, the Hon'ble Apex Court applied the degree-test and that the parties must adduce evidence to establish the same. The degree-test would include taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the rise of price index the human attitude to follow a particular pattern of life, which would be the basis for applying the percentage of income towards future prospects of the deceased. After discussing at length, at paragraphs 59.3 and 59.4, the Hon'ble Apex Court held as under:
"59.3. While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased has a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.
59.4. In case the deceased was self-
employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component."
39. The Tribunal in the instant case has applied addition of 25% towards future prospects as the deceased [ENTITY] was aged between 40 and 50 years and he was on a fixed salary and it was not known as to whether he was on a permanent job or not. That has been contested by the Insurance Company by contending that the Tribunal ought not to have awarded any amount towards future prospects. But in the case of [ENTITY], the Hon'ble Apex Court has held that the deletion of future prospects by the High Court in the said case was erroneous. In the circumstances, it is established that future prospects would have to be added in all cases, inter alia, having regard to the longevity which the deceased would have had, but for the accidental death in the instant case.
40. Although learned counsel for the Insurance Company relied upon the decision in the case of [ENTITY] to contend that grant of future prospects is not a mandatory requirement in all the cases, nevertheless, we feel bound by the decision of the Five Judge Bench of the Hon'ble Apex Court in [ENTITY], which has precisely gone into the rationale for payment of future prospects and, therefore, we think, that in the instant case, amount towards future prospects ought to be awarded, particularly, when the claimants were solely depending upon the deceased, [ENTITY] for their living expenses.
41. Then the question is, what would be the amount of compensation towards future prospects? According to learned counsel for the claimants, it should be 40% of the gross salary since the deceased was below 40 years of age, but we are not inclined to accept the said contention, because the deceased was not in a permanent job on the date of the accident. But at the same time, one cannot be oblivious of the facts in the instant case. Having regard to what we have discussed in the earlier portion of this judgment, the potential that [ENTITY] had to earn an income and to sustain himself having regard to his merit and qualification cannot be ignored. This is because as we have noted in the earlier part of this judgment, deceased [ENTITY] had not only the potential to seek employment in various software companies in USA as well as in India, but also always received a higher salary in the Company he joined as compared to his earlier employment. In the circumstances, we think that 25% should be added towards future prospects to the income as has been awarded by the Tribunal. Thus, the annual income after adding 25% to it (which is Rs.5,65,650/-) would be totaling to Rs.28,28,250/-. Further, we are adding only 25% net income or salary and not gross income towards future prospects.
42. Learned counsel for the Insurance Company contended that although there are five claimants but the father of the deceased as well as the sister of the deceased cannot be considered to be dependents and hence, the Tribunal could not have deducted 1/4th of the income towards personal expenses of the deceased. It has to be 1/3rd. But when the age of the father was over 65 years at the time of the accident and deceased's sister was not married and unemployed, the said contention needs to be rejected for the reason that the aged parents and the unmarried sister were depending on [ENTITY] for their day-to-day sustenance. It is noted that the precise age of the father was 71 years when the claim petition was filed; the mother was 65 years and the unmarried sister was 35 years. Apart from them, the wife and the minor son of [ENTITY] were also depending on his earnings. There is no evidence brought on record to show that the father and sister of deceased had any independent source of income and having regard to the age of the parents and the unmarried sister, it is obvious that they were depending on [ENTITY] for their sustenance. Therefore, the Tribunal has rightly deducted 1/4th of the income towards personal expenses of the deceased.
43. In this context, we place reliance on the decision in the case of [ENTITY] wherein, it was observed as under:
"14. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in [ENTITY], the general practice is to apply standardized 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 dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependant family members exceed six."
After deducting 1/4th of the net income so arrived towards personal expenses of the deceased, the balance amount would be Rs.21,21,187/-.
44. The next controversy is with regard to the appropriate multiplier to be applied in the instant case. As noted above, the contention of Sri [ENTITY], learned counsel for the Insurance Company is that the deceased was 40 years 7 months 5 days and therefore, he was 41 years and not 40 years and hence, the multiplier which is applicable for the age group 41 to 45 years being '14' had to be applied in the instant case, but the Tribunal has applied the multiplier of '15', which is for the age group of 35-40 years.
45. The contra submission of learned counsel for the claimants is that the completed age has to be taken into consideration for the purpose of applying the multiplier and the running age. In the instant case, the deceased [ENTITY] had completed 40 years and not 41 years. That he may be 40 years and few months thereafter, but that does not mean that he had completed 41 years. Hence, the contention of learned counsel for the claimants is that multiplier '15' has been rightly applied by the Tribunal.
46. In the context of application of multiplier, the leading decision is [ENTITY]. In the said case, the Hon'ble Apex Court arrived at a standard with regard to applicability of multiplier after referring to judgments of the Hon'ble Apex Court which had relied upon judgment of United Kingdom in [PRECEDENT] and in [PRECEDENT] in the methodology adopted for ascertaining the compensation in cases of injury as well as death on the head of loss of dependency. Reference has also been made to [PRECEDENT] and UPSRTC vs. [ENTITY] [(1996) 4 SCC 362].
47. The Hon'ble Apex Court has discussed on the selection of the multiplier from paragraph 16 onwards in the said judgment and compared the multiplier scale as envisaged in Susamma Thomas, [ENTITY] and New India Assurance Company Limited vs. Charlie [(2005) 10 SCC 720] with the multiplier specified in II Column of the Table in the II Schedule of the Act and ultimately, held that if the age of the deceased is between 36 - 40 years, then '15' multiplier would apply; if the age of the deceased is between 41 to 45 years, '14' multiplier would apply; if the age of the deceased is above 65 years, multiplier '5' would apply and if the age of the deceased is between 61 to 65 years, multiplier '7' would apply. The aforesaid would clearly give an indication as to how the age has been reckoned in the said case. It is stated that if the age is between 61 to 65 years, the multiplier '7' would apply and if the age is above 65 years, multiplier 5 would apply. If the same formula is to be applied, when the age is above 65 years, multiplier '5' would apply. If it is above 41 years, multiplier '14' would apply. Therefore, what has been considered is the completed age and not the 'running age' as such. When the expression used is 65 years or 40 years it would be completion of age of 65 or 40 years and not entering into the 65th or 40th year. No doubt when a person completes 65 years, he/she would enter into the 66th year or it would be the 66th birthday but the age completed is 65 years which is the proper age to be reckoned. Hence, in the instant case, what has to be seen is that 40 years of age had been completed by the deceased and not 41 years as is contended by the learned counsel for the Insurance Company. Since the deceased was 40 years 7 months 5 days, it does not mean that he had completed 41 years. It is the international practice to reckon the completed age and not the running age. He might have been running 41 years, but the deceased had completed 40 years. In the circumstances, the multiplier to be applied is '15' as has been done so by the Tribunal. In this regard, we are supported by the decision of the Hon'ble Apex Court in the case of [ENTITY] wherein, it has been held that where the deceased was 45 years 5 months 20 days, the multiplier applied was '14' and not '13', which is for 46 to 50 years. The Apex Court approved the application of the multiplier '14' in the said case. Therefore, in the instant case, applicability of '15' multiplier is just and proper. Therefore, the compensation on the head of loss of dependency is Rs.21,21,187 x 15 = Rs.3,18,17,805/- instead of Rs.1,68,75,000/- as awarded by the Tribunal.
Re. Point No.4:
48. This takes us to the aspect of compensation under the conventional heads. Towards compensation on the head of loss of consortium, we place reliance on [ENTITY] and Magma General Insurance Co. Ltd., vs. Nanu Ram alias Chuhru [2018 ACJ 2782]. It has been elucidated in the latter case as under:
"8.7 A Constitution Bench of this Court in [ENTITY] (supra) dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is Loss of Consortium.
In legal parlance, "consortium" is a compendious term which encompasses 'spousal consortium', 'parental consortium', and 'filial consortium'.
The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse.
Spousal consortium is generally defined as rights pertaining to the relationship of a husband- wife which allows compensation to the surviving spouse for loss of "company, society, co-operation, affection, and aid of the other in every conjugal relation."
Parental consortium is granted to the child upon the premature death of a parent, for loss of "parental aid, protection, affection, society, discipline, guidance and training."
Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love, affection, companionship and their role in the family unit.
Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. Modern jurisdictions world over have recognized that the value of a child's consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of the love, affection, care and companionship of the deceased child.
The [ACT] is a beneficial legislation aimed at providing relief to the victims or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium.
Parental Consortium is awarded to children who lose their parents in motor vehicle accidents under the Act."
Hence, a sum of Rs.40,000/- is awarded on the head of loss of spousal consortium. A sum of Rs.30,000/- each is awarded to the parents of the deceased [ENTITY] towards loss of filial consortium. A sum of Rs.30,000/- is awarded to the minor son of deceased towards loss of parental consortium and a sum of Rs.30,000/- to the unmarried sister towards loss of love and affection. Taking the total to Rs.1,60,000/- towards loss of consortium.
49. Following the judgment of the Apex Court in the case of [ENTITY], we award a sum of Rs.15,000/- only towards loss of estate. Similarly, a sum of Rs.15,000/- is awarded towards funeral and obsequies expenses. Thus, we arrive at a total compensation to be awarded at Rs.3,20,07,805/-.
Re. Point No.5:
50. The controversy does not end. The next question is whether the said compensation carries interest at 9% per annum, as awarded by the Tribunal, or 6% per annum, as is normally awarded by this Court.
51. In this regard, we accept the contention of learned counsel for the Insurance Company as normally, this Court awards compensation with interest at 6% per annum when it is a case of death. In the circumstances, the said compensation shall carry interest at 6% per annum from the date of petition till its realisation.
52. One of the reasons as to why we have reduced the interest to 6% per annum instead of 9% per annum as awarded by the Tribunal is having regard to the fact that the compensation awarded in the instant case is, though just, there is a lump-sum award made.
53. The aforesaid compensation shall be apportioned in the following manner:
i) The widow of the deceased and the minor son shall each be awarded 30%.
ii) The parents of the deceased each shall be awarded 15%.
iii) The unmarried sister of the deceased shall be awarded 10% of the total compensation.
iv) As the son of the deceased was only two years at the time of the death of his father [ENTITY], the entire compensation with proportionate interest shall be deposited in any Post Office or Nationalised Bank until he attains the age of majority.
v) 75% of the compensation amount payable to the widow of the deceased shall be deposited in any Post Office or Nationalised Bank for an initial period of ten years. She shall be entitled to draw periodical interest on the said deposit.
vi) The parents of the deceased shall also deposit 75% of the compensation awarded to them in any Post Office or Nationalised Bank for an initial period of five years. They shall be entitled to draw periodical interest on the said deposit.
vii) Out of the compensation apportioned to the sister of the deceased, a sum of
Rs.25,00,000/- shall be deposited in any Post Office or Nationalised Bank for an initial period of ten years. She shall be entitled to draw periodical interest on the said deposit.
viii) The balance amount of compensation shall be released to the respective claimants after due identification.
54. In the result, the appeal filed by the Insurance Company is partly allowed only on the question of rate of interest while the appeal filed by the claimants is allowed- in-part.
The amount in deposit be transmitted to the Tribunal.
55. At this stage, learned counsel for the Insurance Company submits that 10% of the compensation amount has already been deposited before the Tribunal pursuant to the interim order passed by this Court in this appeal. Therefore, the Insurance Company shall deposit the balance compensation with up-to-date interest within a period eight weeks from the date of receipt of certified copy of this judgment.
Parties to bear their respective costs.
In view of the disposal of the appeals, all pending applications stand disposed.
Office to transmit the LCR to the Tribunal at the earliest.
JUDGE Sd/-
JUDGE Mv/S*