LPA No. 775 of 1993 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH LPA No. 775 of 1993 Date of decision: July 5, 2011 Smt. Simla Devi and others ...Appellants Versus M/s Ishapal Singh Paramjit Singh and others ...Respondents CORAM:- HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE GURDEV SINGH Present: Mr. Hitesh Pandit, Advocate, for the appellants. Mr. Pardeep Bedi, Advocate, for respondent No.4. 1. To be referred to the Reporter or not ? 2. Whether the judgment should be reported in the Digest ? GURDEV SINGH, J. It was on 27.2.1983 that Tarsem Lal Singla deceased, alongwith Inderjit Ohri and Miss Maneet Maunder, was travelling in motor car bearing registration number PUV 6350 when it met with an accident with truck No. HRU 591, which was owned by M/s Ishpal Singh Paramjit Singh-respondent No.1 and was being driven by Baldev Singh-respondent No.2 and was insured with New India Assurance Co. Ltd.-respondent No.4. As a result of the injuries received by the deceased, he died. The appellants Smt. Simla Devi and others, who are widow, minor sons and father of the deceased, filed claim petition under Section 110-E of the Motor Vehicles LPA No. 775 of 1993 2 Act, 1939, claiming compensation to the tune of `3 lakh on the ground that the deceased was employed as S.A.S. Accountant in P.S.E.B.-respondent No.3, was earning ` 1600/- per month, besides other facilities and was of the age of 43 years at the time of his death. The petition was contested by the respondents on the ground that it was the driver of the motor car, who was negligent and that the respondents have already been granted family pension, gratuity, funeral expenses, benefit of leave encashment, G.F.P. Fund and ` 33636/-, which was due from the deceased as house loan, which has already been written off. The insurance company took the plea that its liability was limited only to ` 50,000/- as per the terms and conditions of the insurance policy. The MACT awarded compensation of ` 2,03,099/- alongwith interest @ 12% per annum to appellants No. 1 to 4, being widow and minors sons of the deceased and respondents No. 1 , 2 and 4 were directed to pay the same jointly and severally. That amount was ordered to be disbursed to the appellants in the following manner:- 1. Smt. Simla (widow) ` 1,58,099/- 2. Pushpinder (minor son) ` 15,000/- 3. Sanjay (minor son) ` 15,000/- 4. Amrit (minor son) ` 15,000/- Against that award, respondents No. 1, 2 and 4 preferred an appeal (being FAO 14 of 1985) before this Court. In that appeal, the appellants, preferred cross-objections, claiming that they be awarded compensation of ` 3 lakhs alongwith interest @ 18% per annum. The appeal was dismissed, whereas the cross-objections were allowed, vide order dated 22.4.1993. Learned Single Judge modified the award reducing the multiplier from 20 to 16, set LPA No. 775 of 1993 3 aside the order of the Tribunal, vide which the amount of gratuity was taken into consideration, while determining the amount of compensation and enhanced the interest from 12% to 15%. It is against that order that the present LPA has been preferred under Clause X of the Letters Patent. According to the appellants, suitable multiplier was 20 and not 16 and that deduction of 1/3rd from the income of the deceased, while calculating the compensation was on much higher side. We have heard learned counsel for both the sides. It has been submitted by the learned counsel for the appellants that, keeping in view the law laid down by the Hon'ble Supreme Court in Sarla Verma and others V. Delhi Transport Corporation and another 2009 ACJ 1298, while calculating the salary of the deceased, an addition of 30% was to be made, as the deceased at the time of his death was 43 years old. The deduction of 1/3rd from the salary of the deceased on account of his own expenses is on the higher side and it should have been 1/4th, keeping in view the size of the family of the deceased. He also submitted that the Tribunal committed an illegality, while deducting the amount of ` 33636/-, which was loan amount due from the deceased and was written off after his death. All the benefits given to the legal heirs of the deceased after his death viz gratuity etc. were not to be taken into consideration while determining the dependency of the appellants. However, he did not press the ground that multiplier of 20 applied by the Tribunal was suitable multiplier. On the other hand, learned counsel for the respondents has tried to assert that, as per the principles laid down for determining the suitable multiplier, the multiplier of 16 is on the higher and it should have been 14. He did not challenge the proposition of law as laid down in Sarla Verma's LPA No. 775 of 1993 4 case (supra), for allowing addition of 30% in the actual salary of the deceased. However, he submitted that as per the well established proposition of law, deduction of 1/3rd from the salary of the deceased was to be made for determining the dependency of his dependents. According to him, allowing of interest @ 15% is on the higher side, keeping in view the rate of interest, which was prevalent at different times since filing of the claim petition. The Tribunal came to the conclusion that the deceased at the time of his death was drawing salary of ` 1850/-. The Hon'ble Supreme Court laid down the general principles for assessing compensation to be paid under Section 166 of the Motor Vehicles Act 1988 in Sarla Verma's case (supra) after taking into consideration the ratio of a number of judgments on the point of assessing the compensation and held as under:- “...In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50 per cent 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 per cent 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.” That very principle was followed by the Hon'ble Supreme Court in Shyamwati Sharma & Ors versus Karam Singh & Ors. 2010 (3) R.C.R. (Civil) 741. Therefore, addition of 30% to the salary of the deceased was to be made for determining his actual income and, as such, his income LPA No. 775 of 1993 5 is to be taken as 1850+1850x30 =2405 per month. 100 In Sarla Verma's case (supra), the Hon'ble Apex Court also decided the question regarding deduction from the income of the deceased for his personal and living expenses. After considering various decision of that Court it self, it was held that where the deceased was married the deduction towards personal and living expenses of the deceased should be 1/3rd where the number of dependent family members is 2 to 3; 1/4th where the number of dependent family members is 4 to 6 and 1/5th where the number of the dependent family members exceed six. In National Insurance Company Ltd. Vs. Kimlibai & Ors 2009 (3) Apex Court Judgments 559, the deceased was a carpenter and his age was 40 years. He left behind a large family to be looked after and all the family members were dependent on his income. The High Court deducted 1/4th of the amount which the deceased would have spent on himself. A plea was raised before the Hon'ble Supreme Court for making deduction of 1/3rd instead of 1/4th for determining the dependency of the dependents. It was held that there was no error in deducting 1/4th from the total income of the deceased towards expenses, which he would have incurred on himself. In the present case, the Tribunal came to the conclusion that the appellant No.1 is the widow and appellants No. 2 to 4 are the minor sons of the deceased and were dependent upon him. Therefore, applying the above said principle, deduction of 1/4th from the income of the deceased is to be made on account of his personal and living expenses. Learned Single Judge fell in error while holding that the Tribunal was erred in taking into consideration the amount of gratuity. It LPA No. 775 of 1993 6 was not the amount of gratuity which was taken into consideration by the Tribunal, but it was a sum of ` 33636/- which was the house loan obtained by the deceased and was ordered to be written off after his death and a finding was recorded that the estate of the deceased got enriched to that extent. The Tribunal while deducting that amount from the total compensation, so calculated by it, committed an illegality. It appears that the learned Single Judge referred to that amount as gratuity. Any such pecuniary benefit which accrued on account of the death of the deceased is not be deducted while assessing the compensation. It was held by the Hon'ble Supreme Court in Sunita Rani and others Versus Hardev Singh and others 1995 ACJ (2) 1174 that neither grant of special pensionary benefits would be a substitute for compensation nor additional benefit could be deducted from just compensation payable under the statute which categorically debars making any deduction on account of such payment from the compensation awarded under the Act. For the purpose of assessing the compensation, the monthly income of the deceased comes to `2405/- and after deducting 1/4th i.e. `601.25 towards personal and living expenses, the dependency of the appellants comes to ` 1803.75 and the annual dependency comes to `1803.75x12=`21,645/-. It has now been well settled by a catena of rulings on the selection of suitable multiplier, that the table as given in the schedule to the Motor Vehicles Act, 1988 is the proper guide. The latest judgment of the Hon'ble Supreme Court on this point is Sarla Verma's case (supra). The deceased at the time of his death was 43 years old and, therefore, the suitable multiplier is 14. Therefore, the amount of compensation comes to LPA No. 775 of 1993 7 `21645x14=`3,03,030/-. The appellants are also entitled to general damages by way of funeral expenses, loss of consortium, as one of the appellants is widow, and loss of estate by virtue of second schedule to the Motor Vehicles Act, 1988. The right to receive those general damages was recognized by Division Bench of this Court in Smt. Navroop Kaur and others versus The State of Punjab and others 1997 (2) P.L.R. 189. The appellants are entitled to `2000/- as funeral charges, `5,000/- as loss of consortium and `2500 as loss of estate. Therefore, the total compensation payable to the appellants comes to `3,03,030+`9500= `3,12,500/-. The same is rounded to `3,15,000/-. No set principle is being followed regarding rate of interest to be allowed on compensation. The general practice is to fix the rate as per prevailing bank rate of interest. The claim application was filed in the year 1983. There was variation in the bank rate of interest during all this period. Sometime it had gone upto 18% and some time it has come down to 9%. Keeping in view that variation during the intervening period, the appellants are allowed interest on the said amount of compensation @ 12% per annum. This amount is to be paid by respondents No. 1, 2 and 4 jointly and severally and shall be disbursed to the appellants No. 1 to 4 equally. Each of them shall be entitled to a sum of `78,750/-. The counsel's fee is fixed at `5,000/-. The appeal is disposed of accordingly. (M.M. KUMAR) (GURDEV SINGH ) JUDGE JUDGE July 5, 2011 prem LPA No. 775 of 1993 8