IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O. No.668 of 1996 Date of decision: 20th July, 2010 Smt. Sundri Devi and another … Appellants Versus Vinod Kumar and others … Respondents CORAM: HON'BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. Gaurav Singla, Advocate for Mr. Sanjiv Gupta, Advocate for the appellants. None for the respondents. KANWALJIT SINGH AHLUWALIA, J. Present appeal has been filed by claimants Smt.Sundri Devi wife of Bachna Ram and Angrezo Devi wife of Gurmaij Singh against the award dated 20.7.1995 passed by the Motor Accident Claims Tribunal, Ambala (hereinafter to be referred as, ‘the Tribunal’) dismissing their claim petition. Both the appellants are daughters of Gopala Ram who died in an accident on 25.9.1991 at 11.00 A.M. on the crossing of Barara-Dosarka in the area of Police Station Mullana. Gopala Ram after the accident remained admitted in the Community Health Centre, Mullana for a period of five days. Thereafter, he remained admitted in Philadephia Hospital, Ambala City for another five days, wherefrom he was referred to P.G.I., Chandigarh. However, on 20.10.1991, Gopala Ram succumbed to the injuries at his house. At the time of death, Gopala Ram was aged 67 years and was survived by both the appellants who are his daughters. Both the appellants-claimants were married at the time of accident. It was projected F.A.O. No.668 of 1996 before the Tribunal that monthly income of Gopala Ram was Rs.2,000/- from agriculture. The Tribunal after going through the entire evidence led by the claimants came to the conclusion that Som Nath PW2 an eye witness of the occurrence is reliable and held that Gopala Ram died due to rash and negligent driving of scooter No.HR-01-1875 driven by Vinod Kumar-respondent No.1. The following findings of the Tribunal on issue No.1 are required to be noticed:- “12. From the entire evidence lead by both the parties on this issue in my opinion, it stands proved on record that Gopala Ram died on account of rash and negligent driving of the scooter no.HR-01-1875 by Vinod Kumar-respondent no.1. The oral testimony of PW.2 Som Nath, who is an eye witness finds corroboration from the FIR Ex.P.4 which was lodged before the police immediately after the accident and in the said FIR all the details were given with regard to the manner in which the accident had taken place. There is no evidence on behalf of the respondent to rebut the evidence of the claimants nor the scooterist has appeared in the witness-box to deny the factum of accident or to say that the accident had not taken place due to his negligence. I, therefore, hold that the accident in question had taken place due to the rash and negligent driving of the scooter no.HR-01-1875 by its driver Vinod Kumar – respondent no.1. The issue is thus decided in favour of the claimants and as against the respondents.” However, the Tribunal, after considering various judgments cited by the learned counsel, came to the conclusion that both the claimant-appellants who were married daughters of Gopala Ram deceased were not dependent upon Gopala Ram. For returning this finding, the Tribunal relied upon the testimony of Angrezo Devi PW1. Angrezo Devi PW1 in examination-in-chief stated that her mother died prior to the death of her father. They were two sisters and name of other sister was Sundri Devi. The following portion of the cross-examination was 2 F.A.O. No.668 of 1996 relied upon by the Tribunal to hold that appellants were not dependent upon Gopala Ram:- “I am married to Gurmeet Singh and now residing with him. I am dependent on my husband for all my needs. My husband is a agriculturist. My father Gopala Ram was residing in his own house in village Dheen. .....” Angrezo Devi PW1 was residing in her matrimonial home in another village. The claimant-appellants have only examined Angrezo Devi PW1 and Som Nath PW2, eye witness of the occurrence. Other sister Sundri Devi was not examined. Besides these two witnesses, Dr.S.K.Gupta appeared as PW3. The Tribunal relied upon various judgments to hold that married daughter who is not dependent upon the deceased was not entitled to claim the compensation. Counsel for the appellants has relied upon a judgment of Hon’ble Apex Court rendered in ‘Manjuri Bera v. Oriental Insurance Co. Ltd. and another’ 2007 ACJ 1279, to contend that even a relation, who is not a dependent, can represent the estate of the deceased and is entitled to compensation, which cannot be less than the liability referable to Section 140 of the Motor Vehicles Act, 1988 (hereinafter referred to as, ‘the Act’). The following observations of Dr.Arijit Pasayat, J. made in Manjuri Bera’s case (supra) are required to be noticed: “16. … … … Therefore, even if there is no loss of dependency the claimant if he or she is a legal representative will be entitled to compensation, the quantum of which shall be not less than the liability flowing from Section 140 of the Act. The appeal is allowed to the aforesaid extent. There will be no order as to costs.” Concurring with the operative part of the judgment delivered by Dr.Arijit Pasayat, J., My Lord Kapadia, J. had observed as under: “20. In the impugned judgment, the High Court has correctly drawn a distinction between ‘right to apply for 3 F.A.O. No.668 of 1996 compensation’ and ‘entitlement to compensation’. The High Court has rightly held that even a married daughter is a legal representative and she is certainly entitled to claim the compensation. It was further held, on the facts of the present case, that the married daughter was not dependent on her father. She was living with her husband in her husband’s house. Therefore, she was not entitled to claim statutory compensation. According to the High Court, the claimant was not dependent on her father’s income. Hence, she was not entitled to claim compensation based on ‘no fault liability’. 21. In my opinion, ‘no fault liability’, envisaged in Section 140 of the said Act, is distinguishable from the rule of ‘strict liability’. In the former, the compensation amount is fixed. It is Rs.50,000/- in cases of death [Section 140(2)]. It is a statutory liability. It is an amount which can be deducted from the final amount awarded by Claims Tribunal. Since, the amount is a fixed amount/crystallized amount, the same has to be considered as part of the estate of the deceased. In the present case, the deceased was an earning member. The statutory compensation could constitute part of his estate. His legal representative, namely, his daughter has inherited his estate. She was entitled to inherit his estate. In the circumstances, she was entitled to receive compensation under ‘no fault liability’ in terms of Section 140 of the said Act. My opinion is confined only to the ‘no fault liability’ under Section 140 of the said Act. That Section is a code by itself within the Motor Vehicles Act, 1988.” The Delhi High Court in ‘Keith Rowe v. Prashant Sagar and others’ MAC.APP No.601/2007, decided on 15th January, 2010, relied upon a judgment of Karnataka High Court in the case of ‘A. Manavalagan v. A. Krishnamurthy and others’ I(2005) ACC 304/2005 ACJ 1992, to hold that non-dependent relation is also entitled to compensation. In A. Manavalagan’s case (supra), Karnataka High Court observed as under: “8. On the contentions urged, the following questions arise for consideration: (i) What are the principles for determining compensation, where the claimant is not a dependant?” 4 F.A.O. No.668 of 1996 “12. In GOBALD MOTOR SERVICE v. R.M.K. VELUSWAMI, MANU/SC/0016/1961 : [1962]1SCR929 referring to Sections 1 and 2 of the Fatal Accidents Act (Sections 1A and 2 after 1951 amendment to the said Act), the Supreme Court pointed out the difference between damages recoverable under the said two Sections. It was held that while under Section 1 (new Section 1A) damages are recoverable for the benefit of the persons mentioned therein, under Section 2, compensation goes to the benefit of the estate; whereas under Section 1, damages are payable in respect of loss sustained by the persons mentioned therein, under Section 2 damages can be claimed inter alia for loss of expectation of life and loss to the estate. The Supreme Court held that persons who claim benefit under Section 1 and 2 need not be the same as the claims under the said two Sections are based upon different causes of action. The Supreme Court held: "The principle in its application to the Indian Act has been clearly and succinctly stated by a division bench of the Lahore High Court in SECRETARY OF STATE v. GOKAL CHAND (AIR 1925 Lah 636). In that case, Sri SHADILAL CJ observed thus: "The law contemplates two sorts of damages: the one is the pecuniary loss to the estate of the deceased resulting from the accident; the other is the pecuniary loss sustained by the members of his family through his death. The action for the latter is brought by the legal representatives, not for the estate, but as trustees for the relatives beneficially entitled; while the damages for the loss caused to the estate are claimed on behalf of the estate and when recovered from part of the assets of the estate. An illustration may clarify the position X is the income of the estate of the deceased, Y is the yearly expenditure incurred by him on his dependants (we will ignore the other expenditure 5 F.A.O. No.668 of 1996 incurred by him). X-Y, i.e., Z is the amount he saves every year. The capitalised value of the income spend on the dependants, subject to relevant deductions, is the pecuniary loss sustained by the members of his family though his death. The capitalised value of his income, subject to relevant deductions, would be the loss caused to the estate by his death. If the claimants under both the heads are the same, and if they get compensation for the entire loss caused to the estate, they cannot claim again under the head of personal loss the capitalised income that might have been spent on them if the deceased were alive. Conversely, if they got compensation under Section 1, representing the amount that the deceased would have spent on them, if alive, to that extent there should be deduction in their claim under Section 2 of the Act in respect of compensation for the loss caused to the estate. To put it differently, if under Section 1 they got capitalised value of Y; under Section 2 they could get only the capitalised value of Z, for the capitalised value of Y+Z, i.e., X, would be the capitalised value of his entire income." "The rights of action under Section 1 and 2 of the Act are quite distinct and independent. If a person taking benefit under both the Sections is the same, he cannot be permitted to recover twice over for the same loss. In awarding damages under both the heads, there shall not be duplication of the same claim, that is, if any part of the compensation representing the loss to the estate goes into the calculation of personal loss under Section 1 of the Act, the portion shall be excluded in giving compensation under Section 2 and vice versa."… “15. Where a breadwinner dies and his wife, children and parents, who are normally depending on the deceased, 6 F.A.O. No.668 of 1996 claim compensation, the method of computation is now standardized. The Court first finds out the income of the deceased, then estimates how much he would have spent for himself (for his personal and living expenses). The balance is taken as the contribution to the dependents (family). The said estimate of the amount contributed to the family per year, which is the annual dependency, becomes the basis for arriving at the compensation. It is converted into a lump sum by multiplying it by the number of years during which he would have contributed to the family (duly scaled down to take several uncertainties into account). Thus, the annual dependency becomes the multiplicand and the number of years' purchase becomes the multiplier. As it is well settled that there cannot be a duplication of award under Sections 1A and 2 of the FA Act, where the main head for award of compensation is loss of dependency, the Courts will not duplicate the award under the head of loss of estate. Instead a conventional sum (Say Rs. 10,000/-) is awarded under the head of loss of estate, where the income has already been taken note of under the head of loss of dependency. 16. But, what would be the position if the claimant, though a legal heir is not a dependant of the deceased? Obviously, the question of awarding any amount under the head of loss of dependency would not arise, as there was no financial dependency. In fact in this case, the deceased was not even managing the 'house hold' as is normally done by a housewife as the husband and wife were living in different places due to exigencies of service and the couple had no children. In such a case, the main head of compensation will be loss to estate under Section 2 of the Fatal Accidents Act. The claim petition becomes one on behalf of the estate of the deceased and the compensation received becomes part of the assets of the estate. Consequently what is to be awarded under the head of loss of dependency under Section 1A would be nil, as there is no real pecuniary loss to the members of the family. 17. In GAMMELL v. WILSON, 1981(1) ALL ER. 578 the House of Lords held that in addition to the conventional and moderate damages for loss of expectation of life, damages for loss to the estate should include damages for loss of earnings of the lost years. The annual loss to the estate was computed to be the 7 F.A.O. No.668 of 1996 amount that the deceased would have been able to save after meeting the cost of his living and damages for loss to the estate were computed after applying a suitable multiplier to the annual loss. GAMMEL was relied on in SUSAMMA THOMAS (Supra) and by the Madhya Pradesh High Court in RAMESH CHANDRA v. M.P.STATE ROAD TRANSPORT CORPORATION, 1983 ACC. C.J 221". 18. In MADHYA PRADESH STATE ROAD TRANSPORT CORPORATION v. SUDHAKAR, 1977 ACJ 290 the Supreme Court considered a case where an employed husband claimed compensation in regard to the death of his wife who was employed on a monthly salary of Rs. 200/- to Rs. 250/-. The Supreme Court observed: "We find it difficult to agree that only half of that amount would have been sufficient for her monthly expenses till she retired from service, so that the remaining half may be taken as the measure of her husband's monthly loss. It is not impossible that she would have contributed half of her salary to the household, but then it is reasonable to suppose that the husband who was employed at slightly higher salary would have contributed his share to the common pool which would have been utilised for the lodging and boarding of both of them. We do not therefore think it is correct to assume that the husband's loss amounted to half the monthly salary the deceased was likely to draw until she retired. If on an average she contributed Rs. 100/- every month to the common pool, then his loss would be roughly not more than Rs. 50/-per month." 19. We may summarise the principles enunciated, thus: (i) The law contemplates two categories of damages on the death of a person. The first is the pecuniary loss sustained by the dependant members of his family as a result of such death. The second is the loss caused to the estate of the deceased as a result of such death. In the first category, the action is brought by the legal representatives, as trustees for the dependants beneficially entitled. In the second category, the action is brought by the legal representatives, on behalf of the estate of the deceased and the compensation, when recovered, forms part of the 8 F.A.O. No.668 of 1996 assets of the estate. In the first category of cases, the Tribunal in exercise of power under Section 168 of the Act, can specify the persons to whom compensation should be paid and also specify how it should be distributed (Note: for example, if the dependants of a deceased Hindu are a widow aged 35 years and mother aged 75 years, irrespective of the fact that they succeed equally under Hindu Succession Act, the Tribunal may award a larger share to the widow and a smaller share to the mother, as the widow is likely to live longer). But in the second category of cases, no such adjustments or alternation of shares is permissible and the entire amount has to be awarded to the benefit of the estate. Even if the Tribunal wants to specify the sharing of the compensation amount, it may have to divide the amount strictly in accordance with the personal law governing succession, as the amount awarded and recovered forms part of the estate of the deceased. (ii) Where the claim is by the dependants, the basis for award of compensation is the loss of dependency, that is loss of what was contributed by the deceased to such claimants. A conventional amount is awarded towards loss of expectation of life, under the head of loss to estate. (iii) Where the claim by the legal representatives of the deceased who were not dependants of the deceased, then the basis for award of compensation is the loss to the estate, that is the loss of savings by the deceased. A conventional sum for loss of expectation of life, is added. (iv) The procedure for determination of loss to estate is broadly the same as the procedure for determination of the loss of dependency. Both involve ascertaining the multiplicand and 9 F.A.O. No.668 of 1996 capitalising it by multiplying it by an appropriate multiplier. But, the significant difference is in the figure arrived at as multiplicand in cases where the claimants who are dependants claim loss of dependency, and in cases where the claimants who are not dependents claim loss to estate. The annual contribution to the family constitutes the multiplicand in the case of loss of dependency, whereas the annual savings of the deceased becomes the multiplicand in the case of loss to estate. The method of selection of multiplier is however the same in both cases. 20. The following illustrations with reference to the case of a deceased who was aged 40 years with a monthly income of Rs.9000/ will bring out the difference between cases where claimants are dependents and cases were claimants are not dependents. (i) If the family of the deceased consists of a dependant wife and child, normally one-third will be deducted towards the personal and living expenses of the deceased. The balance of Rs. 6000/- per month (or Rs. 72000/- per annum) will be treated as contribution to the dependent family. The loss of dependency will be arrived by applying a multiplier of 14. The loss of dependency will be Rs. 10,08,000/- plus Rs. 10,000/- under the head of loss of Estate. (ii) If the family of the deceased was larger, say consisting of dependent parents, wife and two children, necessarily the deceased would spend more on his family and the deduction towards personal and living expenses of the deceased will H.R.ink to one-fifth instead of one- third (Note: In Gulam Khader v. United India Insurance Co., Ltd., - ILR 2000 Kar 4416 details of this illustration have been given). Therefore the deduction toward personal and living expense would be Rs. 1800/- per month (one- 10 F.A.O. No.668 of 1996 fifth of Rs. 9000/-) and contribution to the family would be Rs. 7200/- per month or Rs. 86,400/- per annum. Thus loss of dependency will be Rs. 12,09,600/- (by applying the multiplier of 14). The award under the head of loss of estate would be Rs. 10000/-. (iii) If the deceased was a bachelor with dependent parents aged 65 and 60 years, normally 50% will be deducted towards personal and living expenses of the deceased. This is because a bachelor will be more care free as he had not yet acquired a wife or child and therefore would tend to spend more on himself. There was also a possibility of the bachelor getting married in which event the contribution to parents will get reduced. Therefore the contribution to the family (parents) will be Rs. 4500/- per month or Rs. 54000/- per annum. As the multiplier will be 10 with reference to age of the mother, the loss of dependency will be Rs. 5,40,000/-. Loss of Estate would be a conventional sum of Rs. 10,000/-. Note: The above three illustrations relate to cases where the claimants are dependants. The said illustration demonstrate that even though the income of the deceased and age of the deceased are the same, the 'loss of dependency' will vary, having regard to the number of dependants, age of the dependants and nature of dependency. The ensuing illustrations relate to cases where the legal heirs of the deceased are not dependants. (iv) If the deceased is survived by an educated employed wife earning an amount almost equal to that of her husband and if each was maintaining a separate establishment, the question of 'loss of dependency' may not arise. Each will be spending from his/her earning towards his living and personal expenses. Even if both pool their income and spend from the 11 F.A.O. No.668 of 1996 common income pool, the position will be the same. In such a case the amount spent for personal and living expenses by each spouse from his/her income will be comparatively higher, that is three-fourth of his/her income. Each would be saving only the balance, that is one fourth (which may be pooled or maintained separately). If the saving is taken as one-fourth (that is 25%), the loss to the estate would be Rs. 2250/- per month or Rs. 27000/- per annum, By adopting the multiplier of 14, the loss to estate will be Rs. 3,78,000/-. Note: The position would be different if the husband and wife, were both earning, and living together under a common roof, sharing the expenses. As stated in BURGESS v. FLORENCE NIGHTINGALE HOSPITAL (1955(1) Q.B. 349), 'when a husband and wife, with separate incomes are living together and sharing their expenses, and in consequence of that fact, their joint living expenses are less than twice the expenses of each one living separately, then each, by the fact of sharing, is conferring a benefit on the other'. This results in a higher savings, say, one-third of the income; In addition each spouse loses the benefit of services rendered by the other in managing the household, which can be evaluated at say Rs. 1,000/- per month or Rs. 12,000/- per annum). In such a situation, the claimant (surviving spouse) will be entitled to compensation both under the head of loss of dependency (for loss of services rendered in managing the household) and loss to estate (savings to an extent of one-third of the income that is Rs. 3,000/- per month or Rs. 36000/- per annum). Therefore, the loss of dependency would be 12000x14=168,000/- and 12 F.A.O. No.668 of 1996 loss to estate would be 36000x14=504,000/-. In all Rs.6,72,000/- will be the compensation. (v) If the deceased was a bachelor and the claimants are two non-dependent brothers/sisters aged 47 years and 45 years with independent income, the position would be different. As the deceased did not have a 'family', the tendency would be to spend more on oneself and the savings would be hardly 15%. If the saving is taken as 15% (Rs. 1350/- per month), the annual savings would be Rs. 16,200/- which would be