FA/2094/2007 1/19 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 2094 of 2007 with CIVIL APPLIATION NO. 5932 OF 2007 For Approval and Signature: HONOURABLE MR.JUSTICE A.M.KAPADIA HONOURABLE MR.JUSTICE R.H.SHUKLA ===================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ===================================================== UNITED INDIA INSURANCE CO LTD - Appellant(s) Versus USHABEN WD/O KAMLESHKUMAR C PANCHAL & 2 ===================================================== Appearance : MS. ANUSHRI KAPADIA with MS MEGHA JANI for Appellant(s) : 1, MR KASHYAP R JOSHI for Respondent(s) : 1/1 TO 1/5 Respondent Nos. 2 and 3 ....Served ===================================================== FA/2094/2007 2/19 JUDGMENT CORAM : HONOURABLE MR.JUSTICE A.M.KAPADIA and HONOURABLE MR.JUSTICE R.H.SHUKLA Date : 19/06/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE A.M.KAPADIA) 1. Challenge in this appeal filed under Section 173 of the Motor Vehicles Act ('the Act' for short) is to the judgment and award dated 7.5.2005 rendered in MACP No. 855 of 1994 by the Motor Accident Claims Tribunal (Aux.), Joint District Judge, 4th Fast Track Court, Surat ('the Tribunal' for short) by which the claim petition filed under Section 166 of the Act by respondent Nos.1/1 to 1/5 - original claimants ('the claimants' for short) against the appellant – United India Insurance Company Limited and respondent Nos.2 and 3, i.e., driver and owner of the motor vehicle involved in the accident being Truck bearing registration No. GJ-7T-6090, to recover compensation of Rs.30 lacs on account of the untimely demise of Kamleshkumar Chaganlal Panchal in a road accident which took place on 1.8.1994, has been partly allowed FA/2094/2007 3/19 JUDGMENT and thereby the appellant-insurance company and respondent Nos.2 and 3, driver and owner were directed to pay, jointly and severally, a sum of Rs.9,73,000/- together with interest at the rate of 9% per annum from the date of the application till realization and proportionate costs, as compensation to the claimants. 2. As per the averments made in the claim petition, on the fateful day i.e., 1.8.1994, deceased Kamleshkumar Chaganlal Panchal was proceeding on his scooter bearing registration No. GJ 16 2251, in company of Dineshbhai Panchal as a pillion rider. Deceased Kamleshkumar was riding the scooter at a moderate speed and was proceeding from Kadodara to Kim on the left side of the road, observing traffic rules and when they reached sim of Village Ubhal on National Highway No.8, Respondent No.2, i.e. the Driver of the Truck bearing registration No. GJ 7T 6090 came from opposite direction in full speed, driving in a rash and negligent manner endangering human life. The Driver of the Truck lost control of the steering and went on wrong side, knocked down the deceased and dragged them with the scooter upto 100 FA/2094/2007 4/19 JUDGMENT feet and dropped the scooter in a pit, and caused the accident. As a result of the accident, Kamleshkumar Chaganlal Panchal, who was riding the scooter as well as pillion rider Dineshbhai Panchal sustained serious multiple injuries and succumbed to the same. It was, therefore, the case of the claimant that the accident was a result of rash and negligent driving on part of the driver of the offending Truck, and therefore, he was primarily liable to pay compensation. Respondent No.3 being the owner of the Truck was also liable to pay compensation under the principle of vicarious liability whereas the Appellant - Insurance Company was liable to pay compensation under the contract of indemnity. Therefore, appellant and Respondent Nos. 2 and 3 were liable to pay compensation to the heirs and legal representatives of deceased Kamleshkumar Chaganlal Panchal for the tortuous act of the driver of the offending Truck. 2.1 Putting forward the claim for compensation, it was averred by the claimant that at the time of accident, Kamleshkumar Chaganlal Panchal was aged 33 years and his physical and mental condition was hale FA/2094/2007 5/19 JUDGMENT and hearty. He did Draughtsman Mechanical Diploma after SSC and went to Yaman for civil work construction and thereafter, he went to Abudhabi and joined in “Abu Khalid Plaster And Painting Company” and he was a partner of said firm till his demise. He was doing construction work in Abudhabi earning i.e. 5000 Dirham, i.e. Rs.50,000/- per month. It was also averred that if he had not met with the accident and died, he would have earned 1000 Dirhams. But due to the accident, the claimants have lost the company of the deceased and hence the heirs of deceased have claimed an amount of Rs.30,00,000/- as compensation for untimely demise of Kamleshkumar along with running interest at the rate of 18% from the date of application till its realisation, from the Driver, owner as well as insurer. 2.2 The claim petition was contested by the Appellant – United India Insurance Company Limited by filing written statement at Exh.13 wherein inter alia the brief particulars of the accident were not admitted. The factual aspect was also denied by the appellant. It was also denied that deceased Kamleshkumar was riding the scooter slowly and FA/2094/2007 6/19 JUDGMENT carefully and at moderate speed on the correct side of the road. It was also asserted that deceased Kamleshkumar himself was negligent in riding the scooter. It was also emphatically contended that the Insurance policy was not effective so the Insurance Company was not liable to pay compensation. It was therefore prayed to dismiss the claim petition filed by the claimants. 3. On the pleadings of the parties, the Tribunal framed issues and after considering the evidence, oral as well as documentary, more particularly the oral evidence of Respondent No.1 - Ushaben recorded at Exh. 27, the complaint at Exh.28 and panchnama at Exh.29 adduced and produced by the claimants and the submissions advanced by the learned advocates appearing for the parties, came to the conclusion that the accident was the result of rash and negligent driving on the part of the driver of the offending Truck bearing registration No. GJ 7T 6090. The Tribunal came to the conclusion that the deceased Kamleshkumar, rider of the Scooter was not contributory negligent. The Tribunal also came to the conclusion that the rash and negligent driving on FA/2094/2007 7/19 JUDGMENT part of the driver of the Truck claimed the lives of two promising earning members and therefore Driver of the Truck was held liable for the accident and he was liable to pay compensation. 3.1 It was also held that since the driver of the Truck was held liable for causing the accident, the Respondent No.2 being the owner of the offending vehicle, was vicariously liable to pay the compensation and the appellant being the insurance company of the offending Truck, was liable to indemnify the award which was going to be passed against the driver and owner of the Truck insured with it and, therefore, held that appellant and respondent Nos.2 and 3 being the driver, owner of the offending Truck, jointly and severally liable to pay compensation to the claimants. 3.2 So far as the quantification of compensation is concerned, the Tribunal, on the basis of the evidence of Ushaben, widow of deceased Kamleshkumar Chaganlal Panchal, Ex.27 as well as documentary evidence in the form of certificates showing income of the deceased, while he was working in Abudhabi, FA/2094/2007 8/19 JUDGMENT came to the conclusion that deceased Kamleshkumar, at the relevant time was aged 33 years and was working with his brother in Abudhabi and earning Rs.4000/-. Thereafter the Tribunal has also considered the prospective income at Rs.8000/- and after deducting 1/3rd for his personal upkeep worked out dependency benefit at Rs.5334/- and thereafter, after considering the 15 multiplier, has worked out dependency benefit at Rs.9,60,000. The Tribunal has awarded the amount of compensation to the claimants in the following break-up: Rs.9,60,000.00 Dependency benefit (5000x12x15) Rs.10000.00 Loss of Estate Rs.3000.00 Transport Expenses ---------------- Rs. 9,73,000.00 Thus the Tribunal has awarded Rs.9,73,000/- with interest at the rate of 9% per annum from the date of the application till realization together with proportionate costs of the claim petition which has given rise to instant appeal at the instance of the appellant – United India Insurance Company Limited. FA/2094/2007 9/19 JUDGMENT 4. In support of the appeal, Ms. Megha Jani, learned advocate appearing for the appellant, has mainly confined her submission to the quantum of compensation awarded to the claimants and according to her it is on higher side. According to her, the Tribunal has committed grave error in believing the prospective income of the deceased at Rs.8000/- after having come to the conclusion that the deceased was earning Rs.4000/- per month at the time of accident. Therefore, according to her, the impugned award is on higher side, which is required to be suitably modified by awarding just, proper and adequate dependency benefits. Therefore, according to her, the appeal is required to be allowed. She, therefore, urged to allow the appeal. 5. Per contra, Mr. Kashyap Joshi, learned advocate for the claimants, has contended that the impugned award does not require any interference as the Tribunal has rightly considered average prospective income of the deceased as he was engaged in the business with his brother at Abudhabi. According to him, if he would have not died, he could have earned more. On the aforesaid premises, FA/2094/2007 10/19 JUDGMENT according to him, the impugned award does not require interference in this appeal filed under Section 173 of the Act. He, therefore, urged to dismiss the appeal. 6. We have considered the submissions advanced by Ms. Megha Jani, learned advocate of the appellant and Mr. Kashyap Joshi, learned advocate for the claimants. We have also perused the impugned judgment and award as well as the averments made in the claim petition and the memo of appeal and also the set of oral as well as documentary evidence supplied by the learned advocates appearing for the parties during the course of their submissions. 7. So far as the factum of involvement of the Truck bearing registration no. GJ 7T 6090 in the accident as well as the negligence on the part of the driver of the offending Truck is concerned, no dispute is raised in the appeal. Therefore, it is not necessary for us to discuss the question of negligence. However, we have also independently examined the complaint at Exh.28 and panchnama at Exh.29, and we are satisfied that the Tribunal has rightly recorded the finding with regard to the FA/2094/2007 11/19 JUDGMENT negligence and has come to the correct conclusion that the driver of the Truck was solely responsible in causing the accident. 8. Now the next question which is required to be answered by this Court is whether the compensation awarded by the Tribunal is just, proper and reasonable or it is on higher side. 9. In this connection, now adverting to the oral testimony of Ushaben at Exh. 27, we have noticed that deceased Kamleshkumar Chaganlal Panchal was aged 33 years and he was hale and hearty at the time of accident. He had also passed SSC and went to Yaman for civil work construction and thereafter, he went to Abudhabi and joined in Abu Khalid Plaster And Painting Company and he was a partner of said firm till his death. He was doing construction work in Abudhabi earning Rs.50,000/- per month i.e. 5000/- Dirham as income and if alive, he would have earned 1000 Dirhams. He had joined as partner of the said company in Abudhabi. The said partnership firm was doing business on contractual basis and also having the license of Chamber of Commerce and also doing business through Habib Bank and National Bank of FA/2094/2007 12/19 JUDGMENT Abudhabi. He was life partner of that firm and was doing personally all the work attached to the company. Deceased Kamleshkumar Chaganlal Panchal was getting Rs.50,000/- per month, i.e. 5000 DH. in Abudhabi. In support of the income of 5000 DH certificate is on record at Exh.64. However, no account book or receipt is produced before the Court for considering the income alleged by the claimants. The Tribunal has not relied upon the said certificate for determining the dependency benefit of deceased Kamleshkumar Chaganlal Panchal. According to us the Tribunal has rightly not believed the oral evidence of Claimant No.1-Ushaben in the absence of any corroborative evidence. According to us the Tribunal has also committed grave error in determining the prospective income of Rs.8000/- after having come to the conclusion that the deceased was earning Rs.4000/- per month at the time of accident. 10. On overall appraisal of the evidence adduced by the claimants as well as documentary evidence, there is no manner of doubt that the deceased was doing construction work in Abudhabi and earning 5000 Dirham, i.e. Rs.50,000/- per month. However, at the time of accident he was in India. Therefore, FA/2094/2007 13/19 JUDGMENT considering his overall experience, it would not have been impossible for the deceased to earn Rs.5000/- per month in India. We, therefore, determine the income of the deceased Kamleshkumar at Rs.5000/- per month, at the time of accident. Deceased Kamleshkumar was aged 33 years, therefore, there was a long span of his life and with the expertise it would not have been impossible for him to earn Rs.10000/- per month at the fag end of his career. 11. We therefore determine the income of the deceased Kamleshkumar at Rs.5000/- per month at the time of accident, and Rs.10,000/- at the fag end of his career. Therefore, average prospective income of the deceased would come to Rs.7500/- (Rs.5000 + Rs.10,000 divided by one half = Rs.7500/-). We, therefore, determine the average prospective income of the deceased at Rs.7500/- per month. At the same time it should not have been forgotten that if the deceased Kamleshkumar would not have met with an accident and died, he could have definitely spent substantial amount for his personal upkeep, like food, clothing, medicines, etc., we therefore propose to deduct 1/3rd (i.e. Rs.2500/-) for the personal upkeep of the deceased from Rs.7500/- of his average FA/2094/2007 14/19 JUDGMENT prospective income. In doing so, figure would come to Rs.5000/- per month (Rs.7500 – Rs.2500 = Rs.5000). Therefore, net dependency benefit available to the claimants would be Rs.5000/-. 12. Now the next question would be, what multiplier should be applied for finding out the correct dependency benefit available to the claimant. As per the evidence, deceased Kamleshkumar was aged 33 years, therefore, according to us 13 multiplier would be appropriate for determining the dependency benefit. We have determined the dependency benefit at Rs.5000/-, therefore, applying 13 multiplier, net dependency benefit would come to Rs.7,80,000/- (Rs.5000 x 12 x 13). The claimants are also entitled to Rs.20,000/- under the head of expectation of life as well as Rs.20,000/- under the head of consortium. 13. In view of the aforesaid discussion, the claimants are now entitled to compensation in the following break up: Rs.7,80,000/- Dependency benefit. (Rs.5000x12x13) Rs.20,000/- Expectation of Life. Rs.20,000/- Consortium. FA/2094/2007 15/19 JUDGMENT ---------------------------------------- Rs.8,20,000/- Therefore, the claimants are now entitled by way of compensation Rs.8,30,000/- with interest @9% per annum from the date of application till realization with proportionate cost of the claim petition. 14. Ms. Megha Jani, learned advocate of the appellant, has drawn our attention that during the pendency of proceedings, Respondent No.4 – minor Bhavik as well as mother Narmada passed away, therefore, according to us, an amount awarded to the claimants is now required to be disbursed amongst three claimants, i.e. widow and two minor sons in the ratio of 50:25:25. 15. Seen in the above context, the appeal deserves to be allowed in part by reducing the amount of compensation and the award is also required to be modified to the extent indicated in this judgment. 16. For the foregoing reasons, the appeal succeeds in part and accordingly it is partly allowed with no order as to costs of this appeal. The impugned judgment and award dated 7.5.2005 rendered in MACP FA/2094/2007 16/19 JUDGMENT No. 855 of 1994, by MACT (Aux.), 4th Fast Track Court, Surat, awarding compensation of Rs.9,73,000/- is hereby modified by awarding total compensation of of Rs.8,20,000/- instead of Rs.9,73,000/-, together with interest at the rate of 9% per annum from the date of the application till realization with proportionate costs of the claim petition. The Tribunal is directed to apportion the amount of compensation awarded to the claimants as under: (i) Claimant No.1 shall be paid 50% of the total amount of compensation. (ii) Claimant No.2 shall be paid 25% of the total amount of compensation. (iii) Claimant No.3 shall be paid 25% of the total amount of compensation. (iv) The Tribunal is further directed to invest 70% of the amount from the total amount of compensation payable to claimant No.1 in any nationalized bank for a period of three years, yielding higher rate of interest, in her name on which she is entitled to receive periodical interest FA/2094/2007 17/19 JUDGMENT with a rider that she is not permitted to encash the said FDR prematurely or to take advance or create any encumbrance upon it. Remaining 30% amount that comes to the share of claimant No.1 as per the apportionment made herein above, shall be paid to her by account payee cheque in her name. (v) So far as the claimant Nos.2 and 3 are concerned, they are minors, and, therefore, the Tribunal shall invest the entire amount of compensation payable to them i.e., 25% of the amount that comes to their respective share, in the joint names of each minor claimant and claimant No.1 – mother, being the guardian of the minors, in any nationalized bank for a period of three years, yielding higher rate of interest, on which they are entitled to receive periodical interest which shall be utilized for the upkeep of the minor children with a rider that they are not permitted to encash the said FDR prematurely or to take advance or create any encumbrance upon them. On reaching the maturity of the FDR the same shall be renewed till each of the minor claimants reach the age of majority. Modified award to be drawn up accordingly. FA/2094/2007 18/19 JUDGMENT 17. As the appeal is partly allowed, the civil application now does not assume any survival value and hence the same is disposed of with no order as to costs. 18. Ms. Megha Jani, learned advocate of the appellant states that the appellant – United India Insurance Company Limited has deposited the entire awarded amount together with interest and proportionate cost thereon and this Court has allowed the appeal by reducing the compensation, therefore, excess amount deposited by the Insurance Company shall be paid back to the Insurance Company. Tribunal is therefore directed to pay the excess amount deposited by the Insurance Company back to it. 19. The amount of Rs.25000/- deposited by the appellant – insurance company at the time of filing of the Appeal shall be transmitted to the Tribunal forthwith, if not transmitted so far. (A.M. Kapadia, J.) (R.H.Shukla, J.) FA/2094/2007 19/19 JUDGMENT Jayanti*