* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision:13th March, 2012 + MAC. APP. No.1004/2011 RAJ SINGH & ANR. Appellants Through: Mr. [ENTITY], Advocate Versus LAXMI CONTAINER CARRIER & ORS. Respondents Through: Mr. [ENTITY], Adv. for R-3. CORAM: HON'BLE MR. JUSTICE G.P.MITTAL JUDGMENT
[ENTITY], J. (ORAL)
1. The Appellants who are the parents of deceased [ENTITY] seeks enhancement of compensation of ` 3,60,000/- awarded for his death in an accident which occurred on 04.12.2006.
2. The contentions raised on Appellants behalf are:-
(i) That in a Petition under [SECTION] of the [ACT] (the Act) the compensation has to be granted as per the structured formula and deduction and multiplier has to be applied as given in the [SECTION].
3. Learned counsel for the Respondent does not dispute the same.
He, however, contends that the compensation under non pecuniary heads has also to be in accordance with the [SECTION].
4. It is well settled that in a Petition under [SECTION] of the [ACT], the compensation has to be awarded as per the structured formula given in the [SECTION] to the [ACT].
5. In [PRECEDENT]., decided on 14th February, 2012, this Court while dealing with [SECTION] of the [ACT] has held as under:
"3. The question whether the compensation in a Petition under [SECTION] of the [ACT] (the Act) can be claimed and awarded strictly in accordance with the structured formula given in the [SECTION] has vexed the Courts in the country. The High Courts and the Supreme Court have been requesting the legislature to come out with an amendment to the [SECTION] which was incorporated way back in the year 1994 so that adequate and just compensation may be awarded to the persons in the lower income bracket.
4. In Oriental Insurance Company Limited v. Smt. [ENTITY] & Ors., MAC APP.962/2005 decided on 01.09.2008, it was held that considering the inflation and depreciation in the value of the rupee, there was no justification to restrict the award of general damages to the [SECTION] under [SECTION] of the Act.
5. In Oriental Insurance Company Limited v. [ENTITY] & Ors., 1 (2009) ACC 148, ` 50,000/- was awarded as compensation on account of loss of child and pain and suffering, which was beyond the limits prescribed under [SECTION] of the Act.
6. There are later judgments of this Court in [PRECEDENT] decided on 19.04.2011; and Oriental Insurance Company Limited v. [ENTITY] & Ors., 2011 (5) AD (Delhi) 138, decided on 10.05.2011 which have adopted the line that when the Claimants approach the Court under [SECTION] of the Act, the compensation is to be restricted as per the structured formula.
7. The Supreme Court in some of its reports lamented the inaction on the part of the Central Govt. in not carrying out amendment in the [SECTION] to the Act, but have held that under [SECTION] of the Act, the compensation can be granted only as per the structured formula. The first such judgment is [PRECEDENT], where it was held that the benefit of filing a petition on no-fault liability can be claimed on the basis of income with a cap of `40,000/-. It was the highest slab in the [SECTION]. It was observed that others have to approach the Court under [SECTION] of the Act. Para 15 of the report is extracted hereunder:-
"15. In this context if we refer to the Review Committee's Report, the reason for enacting [SECTION] is to give earliest relief to the victims of the motor vehicle accidents. The Committee observed that determination of cases takes a long time and, therefore, under a system of structural compensation, the compensation that is payable for different classes of cases depending upon the age of the deceased, the monthly income at the time of death, the earning potential in the case of a minor, loss of income on account of loss of limb etc. can be notified and the affected party can then have option of their accepting lump sum compensation under the Scheme of structural compensation or of pursuing his claim through the normal channels. The Report of the Review Committee was considered by the State Governments and comments were notified. Thereafter, the Transport Development Council made suggestions for providing adequate compensation to victims of road accidents without going into long drawn procedure. As per the objects and reasons, it is a new pre-determined formula for payment of compensation to road accidents victims on the basis of age/income, which is more liberal and rational. On the basis of the said recommendation after considering the Report of the Transport Development Council, the Bill was introduced with a new pre-determined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational, i.e. [SECTION] It is also apparent that compensation payable under [SECTION] is almost based on relevant criteria for determining the compensation such as annual income, age of the victim and multiplier to be applied. In addition to the figure which is arrived at on the basis of said criteria, the Schedule also provides that amount of compensation shall not be less than Rs.50,000/-. It provides for fixed amount of general damage in case of death such as (1) Rs.2000/- for funeral expenses (2) Rs.5000/- for loss of consortium, if beneficiary is the spouse (3) Rs.2400/- for loss of estate (4) for medical expenses supported by the bills, voucher not exceeding Rs.15000/-. Similarly, for disability in a non-fatal accident Para 5 of the Schedule provides for determination of compensation on the basis of permanent disability. Para 6 provides for notional income for those who had no income prior to an accident at Rs.15000/- per annum. There is also provision for reduction of 1/3rd amount of compensation on the assumption that the victim would have incurred the said amount towards maintaining himself had he been alive. The purpose of this Section and the [SECTION] is to avoid long drawn litigation and delay in payment of compensation to the victims or his heirs who are in dire need of relief. If such affected claimant opts for accepting the lump-sum compensation based on structured formula, he would get relief at the earliest. It also gives vital advantage of not pleading or establishing any wrongful act or neglect or default of the owner of the offending vehicle or vehicles. This no-fault liability appears to have been introduced on the basis of the suggestion of the Law Commission to the effect that 'the expanding notions of social security and social justice envisage that liability to pay compensation must be "no-fault liability" and as observed by this Court in [ENTITY]'s case (Supra), "in order to meet to some extent the responsibility of the society to the deaths and injuries caused in road accidents."
However, this benefit can be availed of by the claimant only by restricting his claim on the basis of income at a slab of Rs.40,000/- which is the highest slab in the [SECTION] which indicates that the legislature wanted to give benefit of no-fault liability to a certain limit. This would clearly indicate that the Scheme is in alternative to the determination of compensation on fault basis under the Act. The object underlining the said amendment is to pay compensation without there being any long drawn litigation on an predetermined formula, which is known as structured formula basis which itself is based on relevant criteria for determining compensation and the procedure of paying compensation after determining the fault is done away. Compensation amount is paid without pleading or proof of fault, on the principle of social justice as a social security measure because of ever increasing motor vehicles accidents in a fast moving society. Further, the law before insertion of [SECTION] was giving limited benefit to the extent provided under [SECTION] for no-fault liability and determination of compensation amount on fault liability was taking a long time. That mischief is sought to be remedied by introducing [SECTION] and the disease of delay is sought to be cured to a large extent by affording benefit to the victims on structured formula basis. Further, if the question of determining compensation on fault liability is kept alive it would result in additional litigation and complications in case claimants fail to establish liability of the owner of the defaulting vehicles."
8. In [ENTITY] v. United India Insurance Company Limited, (2004) 5 SCC 385; the observations of the Supreme Court in Para 67 it was stated that "we do not agree with the findings in [PRECEDENT] (supra) that if a person invokes provisions of [SECTION] of the Act, the annual income of ` 40,000/- per annum shall be treated as a cap". The Honble Supreme Court hastened to add that the proceedings under [SECTION] being a social security provision, providing for a distinct scheme, only those whose annual income is upto ` 40,000/- can take the benefits thereof. All other claims have to be determined under [SECTION] of the Act.
9. Para 67 in [ENTITY] (supra) is extracted hereunder:-
"67. We, therefore, are of the opinion that [PRECEDENT] (supra) has correctly been decided. However, we do not agree with the findings in [PRECEDENT] (supra) that if a person invokes provisions of [SECTION], the annual income of Rs.40,000/- per annual shall be treated as a cap. In our opinion, the proceeding under [SECTION] being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs. 40,000/- can take the benefit thereof. All other claims are required to be determined in terms of [SECTION] of the Act."
10. The observations of the Supreme Court in Para 72 of the report in [PRECEDENT] (supra) further clarifies the position that the Supreme Court expected the Central Govt. to bestow serious consideration to carry out an amendment in the [SECTION] from time to time to obviate the difficulty faced by the victims belonging to the lower income group.
11. [PRECEDENT] (supra) was relied in two decisions of this Court in (i) Oriental Insurance Company Limited v. [ENTITY] & Ors. (supra) and (ii) [PRECEDENT]. where it was held that:-
" the Claimants approaching the Court under [SECTION] of the Act can be awarded compensation only on the basis of the structured formula given in the [SECTION]."
12. In [ENTITY] & Ors. (supra) a compensation of `10,000/- towards loss of estate, `10,000/- towards funeral expenses, `10,000/- towards loss of consortium and `1,00,000/- towards the loss of love and affection awarded by the Claims Tribunal was reduced to `2,000/- for funeral expenses, `5,000/- towards loss of consortium (where the beneficiary is the spouse) and `2,500/- towards the loss of estate (as per the structured formula). The overall compensation of `8,13,639/- was reduced to `4,39,940/- which was in accordance with the [SECTION].
13. In the later judgment of the Supreme Court in [PRECEDENT] while referring to [PRECEDENT], it was held that a person can apply to the Tribunal to claim compensation in terms of the Schedule without proving the negligence or default on the part of the driver/owner of the offending vehicle and in other cases, the Claimants had to approach the Court under [SECTION] of the Act and was necessarily under an obligation to prove the negligence. Para 27 of the report is extracted hereunder:-
"27. We think that the law laid down in [PRECEDENT]. (supra) was accepted by the legislature while enacting the [ACT] by introducing [SECTION] of the Act providing for payment of compensation notwithstanding anything contained in the Act or in any other law for the time being in force that the owner of a motor vehicle or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of the motor vehicle, compensation, as indicated in the [SECTION], to the legal heirs or the victim, as the case may be, and in a claim made under [SECTION] of the Act, the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle concerned. Therefore, the victim of an accident or his dependants have an option either to proceed under [SECTION] of the Act or under [SECTION] of the Act. Once they approach the Tribunal under [SECTION] of the Act, they have necessarily to take upon themselves the burden of establishing the negligence of the driver or owner of the vehicle concerned. But if they proceed under [SECTION] of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependants to establish any negligence or default on the part of the owner of the vehicle or the driver of the vehicle."
14. In view of the judgments of the Supreme Court in [PRECEDENT] (supra), [ENTITY] and [PRECEDENT] (supra), the judgments of this Court in Smt. [ENTITY] & Ors. (supra) and [ENTITY] & Ors. (supra) cannot be taken as precedent.
15. The judgment of this Court in [ENTITY] & Ors.(supra) which is in consonance with the law laid down in [PRECEDENT] (supra), [ENTITY] (supra) and [PRECEDENT] (supra) shall be taken as a binding precedent."
6. Before the Claims Tribunal, the income of the deceased was claimed to be ` 39,000/- per annum, which is not disputed. On making deduction of one-third towards personal living expenses and applying the multiplier of '17' the loss of dependency works as ` 4,42,000/- (39,000/- x 2/3 x 17).
7. As per [SECTION] under the Act, after adding the compensation under non-pecuniary heads of loss to estate as ` 2,500/- and `2,000/- towards funeral expenses, the total compensation would be `4,46,500/-.
8. The overall compensation awarded is re-assessed as under:-
Head of Compensation Granted by Granted by the Tribunal this Court
1. Loss of Dependency ` 3,00,000/- ` 4,42,000/-
2. Loss to Estate ` 10,000/- ` 2,500/-
3. Funeral Expenses ` 10,000/- ` 2,000/-
4. Loss of Love and Affection ` 40,000/-
TOTAL ` 3,60,000/- ` 4,46,500/-
9. The overall compensation is thus enhanced from `3,60,000/- to ` 4,46,500/-.
10. The excess amount of `86,500/- shall carry interest @ 7.5% per annum from the date of filing of the petition till the date of payment.
11. Respondent No.3 is directed to deposit the enhanced amount alongwith upto date interest within 30 days and shall be held/released in favour of the Appellants as per the Claims Tribunal's order.
12. The Appeal is allowed in above terms.
13. No costs.
([ENTITY]) JUDGE MARCH 13, 2012 vk