FAO No. 640 of 2003 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH FAO No. 640 of 2003 Date of decision July 7, 2010 The New India Assurance Company Limited ....... Appellant Versus Ram Ashre and others ........ Respondents CORAM: HON'BLE MR. JUSTICE K. KANNAN ***** Present:- Mr. L. M. Suri , Advocate for the appellant. Mr. Ashwani Arora, Advocate for the respondents. **** 1. The Insurance Company is in appeal challenging the ascertainment of compensation in proceedings under Section 163-A where it had not conformed to the statutory dictate of arriving at the compensation by the applicant. All the parameters are set down in Schedule 2 of the Motor Vehicle Act. In particular the basic requirement for applicability for schedule 2 is that the claim shall not relate to a case of a person whose annual income is more than Rs.40,000/-. It further provides for principle of multiplier to be followed and the manner of making provisions for personal expenses. It states uniformly that for personal expenses there shall be a deduction of 1/3rd amount. In UPSRTC Vs. Trilok Chandra (1996) 4 SCC 362 the Hon'ble Supreme Court found that FAO No. 640 of 2003 2 Schedule 2 contains several mistakes. While propounding on unit theory, the Hon'ble Supreme Court said that each child shall be treated as one unit and adult would be treated as two units and it suggested that the total number of units must be worked out by assigning the number of dependents and then deduct the proportion that the husband's unit bears to the whole number. This unit theory is laid down by the Hon'ble Supreme Court is the law stated under the Constitution and therefore binding. The Hon'ble Supreme itself did not direct that this could be applied in Section 163-A in Schedule 2. There have been several pronouncements of the Supreme Court where it has pointed out to the mistakes in sets 2 and has exhorted the legislature to make changes. 2. In this case, if the formula has not been properly applied, I would take it to be an exercise of jurisdiction by a Tribunal which is illegal as in conflict with an express provision of law. In such a situation the insured is entitled to point out that the formula has not been properly followed and seek for rectification. Learned counsel for the respondents would contend that the insurer has no power to challenge the quantum. Learned counsel for the respondents refers to a decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Nicolletta Rohtagi reported in 2002 ACJ 1950 to state that the defence of the insurance Company shall be restricted to what are provided under Section 149 and therefore, the fact that the Tribunal did not follow the method of calculation provided under Section 163-A cannot be a subject of appeal. Learned counsel also refers to decisions of the Madhyapradesh and Allahabad High Court viz. Dilip Deshlehra Vs. Varsha Gyanwani and others 2002 ACJ 473 and Dhoomanganj Vs. Smt. Kavita Devi 2008(3) RCR 730 respectively that have held that a deduction higher than 1/3rd could also be done in proceedings under Section 163-A. I find myself unable to accept such a view. Learned counsel also refers to a decision of this Court in an FAO No. 640 of 2003 3 unreported case bearing FAO no.1322 of 2008 Jaswinder Kaur and others Vs. Bhupinder Singh decided on 26.9.2008 where a learned Judge of this Court has held in a case where the claimants were widow and four minor children and mother that the deduction ought to have been 1/5th for personal expenses. I do not see that the learned Judge to have state any point of law but he was only doing what he thought was appropriate. If it were to be taken an issue at law, I respectfully disagree with such a view taken. There is no discretion left in the Tribunal while entertaining a petition under Section 163-A in the matter of arriving at the compensation with all the relevant data relating to the deceased as regards income and the age of the deceased were available. The contention that the Insurance Company's defence would be restricted only to the defence under Section 149 is too obvious to be restated but where the contention is with regard to the illegality of the order, the fetter under Section 149 cannot apply. There can also be instances where claims could be made for injury or death arising otherwise than by the use of a motor vehicle. If such a claim is made and if an Insurance Company states in defence that the petition is not maintainable, it will be verily tenable because the Tribunal will be then considering a jurisdictional issue which goes to the root of the tenability of the claim. This extreme example I am showing only to point out that when a claim is not possible before the Motor Vehicle Tribunal or when it is filed and it should be processed only in a particular manner, any deviation which will cut at the root of the issue is an issue which an insurer will have a right to challenge. A wrong deduction made would therefore be a ground which would be available for the Insurance Company to point out. 3. In this case, the deceased was aged 40 years and his income was taken as Rs.3,000/- and the contribution to the family could have therefore been taken only Rs.2,000/- after deducting 1/3rd. The FAO No. 640 of 2003 4 award of the Tribunal is modified to Rs.3,84,000 (2000 x 12 x 16). Rs. 2,500/- for loss of estate, Rs. 2,000/- for loss of consortium must also be provided as in set 2. Now the claimants shall be entitled to a sum of Rs.3,88,500/-. The award in excess of the above said sum shall stand set aside. The appeal is partly allowed. (K. KANNAN) JUDGE July 7, 2010 archana