IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT & THE HONOURABLE MRS. JUSTICE M.C.HARI RANI WEDNESDAY, THE 19TH OCTOBER 2011 / 27TH ASWINA 1933 MACA.No. 1569 of 2011() ----------------------- OPMV.30/2006 of MOTOR ACCIDENT CLAIMS TRIBUNAL, PALA .................... APPELLANT/PETITIONER ------------------------ SUKUMARAN, S/O.KESAVAN, MANJAKALAYIL HOUSE, AKKAMKUNNU BHAGOM, ETTUMANOOR VILLAGE AND KARA. BY ADV. SRI.SAJU JOHN RESPONDENTS/RESPONDENTS --------------- 1. MANOJ SEBASTIAN, PLAPPARAMPIL HOUSE, CHELIKUZHY, MUNDAKAYAM-686 513. 2. P.J.SALIM, S/O.ISMAIL, PUTHUPARAMBIL HOUSE, ERIKADU BHAGOM, THAMPALAKKADU KARA, KANJIRAPPALLY VILLAGE-686 507. 3. THE ORIENTAL INSURANCE COMPANY LTD., KANJIRAPPALLY-686 507. ADV. SRI.MATHEWS JACOB, SENIOR ADVOCATE FOR R-3 SRI.P.JACOB MATHEW FOR R-3 SC ADV.GEORGE CHERIAN THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19/10/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: zR.BASANT & M.C.HARI RANI, JJ. * * * * * * * * * * * * * M.A.C.A.No.1569 of 2011 ---------------------------------------- Dated this the 19th day of October 2011 J U D G M E N T R.BASANT,J Does the decision in Nissam K.S. v. Premji Joy and Others [2011(4)KHC 81(DB) require re-consideration? This is the question that has been raised before us in this appeal lodged by the claimant and directed primarily against the quantum of compensation awarded by the tribunal. 2. According to the appellant/injured/claimant, there has also been subsequent aggravation of the injury after the passing of the impugned award and the appellant is entitled to further amounts to compensate him for the loss suffered by him on account of such subsequent medical treatment and loss of earnings. 3. We have attempted to ascertain whether the matter can be disposed by this Court taking into account the subsequent documents produced. The learned counsel for the insurance company submits that the insurance company is unable to agree to such a course and that if this Court were so inclined, the matter may be sent back to the court below to ascertain whether M.A.C.A.No.1569 of 2011 2 any further amount of compensation is liable to be paid on the ground of aggravation of the injury and subsequent expenditure incurred after the passing of the impugned award. We agree with the learned counsel for the insurance company that the said course can be followed. 4. However, it is pointed out to us that the tribunal in this case after accepting that the monthly income of the insured/claimant was Rs.3,000/- had deducted 1/3rd towards his personal expenses both while ascertaining the actual loss of earnings (for a period of five months) and while ascertaining the compensation payable for reduction in earning capacity consequent to permanent partial disability. 5. Dispute is raised as to whether such deduction for personal expenses is permissible when the claim is for compensation for personal injuries suffered and not in respect of death. We have taken the view in Nissam's case (Supra) that such deduction is impermissible. The learned counsel for the insurance company was requested to advance detailed arguments on the question. Adv.Mathews Jacob first of all relies on the decision of the two Judges Bench of the Supreme Court in M.A.C.A.No.1569 of 2011 3 New India Assurance Co.Ltd. v. Charlie [2005(3)KLT 227 (SC)]. Particular reliance is made on paragraph 6 of the said judgment which we extract below; “What would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula by universal application. It would depend upon circumstances of each case. In the instant case the claimant was nearly 37 years of age and was married. Therefore, as rightly contended by learned counsel for the appellant, 1/3rd deduction has to be made for personal expenditure.” 6. The learned counsel for the insurance company fairly points out that in a subsequent decision of the Supreme Court, this question had again come up for consideration. In Oriental Insurance Co.Ltd. v. Ram Prasad [2009(1)KLT 462 SC] in paragraph 11 it has been held by the Supreme Court that such deduction need not always be insisted upon. We extract paragraph 11 below: “One-third amount is deducted from computation of compensation from the total income on the premise that some expenses were necessary for one's own survival. Incidentally, M.A.C.A.No.1569 of 2011 4 we may notice that in the note appended to the Second Schedule, the amount of compensation arrived in the case of fatal accident claims is required to be reduced by one-third in consideration of the expenses which the victim would have incurred towards maintaining himself had he been alive. A person, although alive, but when he is not in a position to move and even for every small thing he has to depend upon the services of another, in our opinion, a direction to deduct 1/3rd of the amount from his total income need not always be insisted upon.” 7. The learned counsel for the appellant points out that in Rani Gupta v. United India Insurance Company Co.Ltd. [(2009)13 SCC 498] another two judges Bench has observed that such deduction need be made only in death cases. We extract below the relevant observations in paragraph 14. That was, of course, a case where compensation was claimed for the loss suffered on account of the death of the victim. “14. Ordinarily and subject to just exceptions, a lump sum amount equivalent to one-third of the income of the deceased i.e. living and miscellaneous expenses from the income should be deducted (See Sunil Kumar v. M.A.C.A.No.1569 of 2011 5 Ram Singh Gaud, SCC p.62, para 9). We may, however, note that in a case of permanent disability, where the injured even for a very small thing would have to depend on the services of another, a direction to deduct the said amount may not be insisted upon.” 8. When we took up the question for consideration in Nissam (Supra) our attention was not drawn to the above precedents. We have said so in Nissam (Supra). We had come to the conclusion that ordinarily deduction of 1/3rd towards personal expenses of the victim should not be made in a case where compensation is claimed not for the death of the victim but only for permanent disability suffered by him. Detailed reasons were given in paragraphs 5 to 8 of Nissam (Supra) by us. 9. We do further note that under the second schedule to the Motor Vehicles Act, though in a claim under Section 163A 1/3rd of the amount is directed to be deducted from the total amount of compensation in all cases where death has resulted. Such a stipulation is significantly not there in cases of permanent, partial or total disability. 10. From principle also, we find no justification to resort M.A.C.A.No.1569 of 2011 6 to such deduction of 1/3rd or any other portion from the monthly earnings of a living person. The rationale underlying the principle of deduction of 1/3rd (or whatever fraction) is that if the victim were living, his expenses will also have to be met from his earnings. Where he is dead, such expenditure of himself will not be there and consequently the claimants cannot be permitted to derive any advantage from the death of the victim. It is on that principle that 1/3rd amount (or appropriate fraction) of the income of the victim is deducted while computing the quantum of compensation payable in all cases of death. 11. It may not be impossible to accept in the peculiar facts of a given case where the victim may have been obliged to incur peculiar expenditure in connection with his employment to claim his monthly income. In such cases, may be, reduction of the expenses peculiarly incurred in connection with employment can be reduced. But, at any rate, there is no justification for a standard deduction of 1/3rd (or any fraction) from the monthly income of a living victim. We do not, in these circumstances, think it necessary to reconsider the dictum in Nissam (Supra). Though the above precedents were not brought to our notice by M.A.C.A.No.1569 of 2011 7 the counsel while disposing of the matter in Nissam (Supra), we are satisfied, even after referring to those precedents that the dictum laid down in Nissam (Supra) does not require reconsideration. Charlie (Supra) had not considered the question specifically and we must assume that the deduction of 1/3rd in Charlie (Supra) was justified in the peculiar facts of that case. The course followed by the Supreme Court in the facts of a particular case cannot be held to be the dictum or obiter binding all courts of law under Article 141 of the Constitution of India. 12. In this case, the tribunal has committed the error obviously of deducting 1/3rd of the income as personal expenses from the monthly earnings of the living claimant. That error will have to be reversed and corrected by the tribunal when the matter is disposed of afresh. 13. We are satisfied, in these circumstances, that this appeal can be allowed in part and the tribunal can be directed to dispose of the matter afresh after giving the parties opportunity to adduce any further relevant evidence that may be found necessary. 14. In the result, M.A.C.A.No.1569 of 2011 8 a) This appeal is allowed in part. b) The impugned award is set aside and the tribunal is directed to dispose of the matter afresh in accordance with law and in the light of the above observations giving the parties further opportunity to adduce all further relevant evidence as may be necessary. c) The documents produced along with C.M.Application No.2406 of 2011 shall be returned to the appellant by the Registry for production before the tribunal. d) The parties are directed to appear before the tribunal on 01/12/2011. The tribunal shall dispose of the matter afresh as expeditiously thereafter at any rate within a period of four months from 01/12/2011. Inasmuch as the insurance company has not challenged the impugned award, we are satisfied that amounts, if any, deposited can be dealt with in accordance with the directions of the impugned award by the tribunal. (R.BASANT, JUDGE) (M.C.HARI RANI, JUDGE) jsr // True Copy// PA to Judge M.A.C.A.No.1569 of 2011 9 M.A.C.A.No.1569 of 2011 10 M.A.C.A.No.1569 of 2011 11 K.M.JOSEPH & M.C.HARI RANI, JJ. .No. of 200 ORDER/JUDGMENT 30/082010