*HON’BLE SRI JUSTICE R. KANTHA RAO +C.M.A.NO. 3544 OF 2000 %Dated: 18.12.2009 BETWEEN: # The Senior Divisional Manager The New India Assurance Company .. Appellant And $ Surya Pratap Singh and others .. Respondents !Counsel for the Appellant: Mr Kota Subba Rao ^ Counsel for the Respondents 1 & 2 : Mr Venkata Raghu Ramulu <GIST: > HEAD NOTE: ? Cases [1] 1987(2) ALT 137 2 2009(5) Supreme 127 3 2007ACJ 1870 4 2007 ACJ 2816 5 2008 ACJ 1405 6 2008 ACJ 802 7 2008 ACJ 1278 8 2009ACJ 690 9 2009 ACJ 1298 HON’BLE SRI JUSTICE R.KANTHA RAO CIVIL MISCELLANEOUS APPEAL NO.3544 OF 2000 DATED: 18.12.2009 BETWEEN: The Senior Divisional Manager The New India Assurance Company .. Appellant And Surya Pratap Singh and others .. Respondents HON’BLE SRI JUSTICE R.KANTHA RAO CIVIL MISCELLANEOUS APPEAL NO. 3544 OF 2000 JUDGMENT:- 1. This appeal arises out of the Award and decree dated 07.04.2000 passed by the Motor Vehicles Accidents Claims Tribunal-cum-IV Additional Chief Judge, City Civil Court, Hyderabad, in O.P.No.115 of 1996. 2. The New India Assurance Company Limited, who was the second respondent before the Tribunal is the appellant herein. The deceased Sanjay Singh is the son of the respondents 1 and 2. He was aged 16 years on the date of accident and was studying in Class IX in Grammar School, Hyderabad. On 01.04.1995 at about 11.45 a.m. while he was proceeding on a Luna moped bearing No. AP 9 3973 driven by his sister as a pillion rider, knocked down by a jeep bearing No. AEU 9646 near the Traffic Police Station. He received severe injuries and succumbed to the said injuries while he was being shifted to the hospital. All these facts are not in dispute. The issue that the accident occurred due to rash and negligent driving of the driver of the jeep bearing No. AEU 9646 had attained finality and this being an appeal wherein the challenge is only to the quantum of compensation, the other facts in relation to the occurrence of the accident need not be gone into in detail. 3. I have heard Sri Kota Subba Rao, the learned counsel appearing for the appellant-insurance company and Sri Venkata Raghuramulu, the learned counsel appearing for the respondents 1 and 2 (claimants). 4. The learned Tribunal considered the income of the deceased to be Rs.4,000/- per month on the premise that he would have become a doctor or engineer or a post graduate, had he not been met with the unfortunate accident. However, it is a matter of record that it is the contention of the claimants that the deceased was a brilliant student but no documents relating to the academic career of the deceased were filed. However, the learned Tribunal for the purpose of computing the compensation selected multiplier 5 given in the case of BHAGWANDAS V. MOHD.ARIF[1] on the assumption that the mother of the deceased would have attained the age of 51 years by the time when the deceased attained majority had he been alive and deducted 1/3rd towards living and personal expenditure of the deceased, arrived at Rs.30,000/- as contribution of the deceased towards the family, applied multiplier 5 and arrived at Rs.1,50,000/- as a loss of dependency. The learned Tribunal granted total compensation of Rs.1,53,000/- by adding amounts of Rs.2,500/- towards funeral expenses and Rs.1000/- towards transport charges. 5. It is now well settled that even though no amount of compensation has been specifically claimed in the claim petition filed under Section 166 of the Motor Vehicle Act by the claimants, it is obligatory on the part of the claims Tribunal to grant the compensation, which is just and reasonable. It is also no longer res integra that the court can grant compensation over and above the amount claimed in the claim petition while deciding the appeal, even though no cross objections have been filed by the claimants seeking enhancement of compensation. The law has been clearly laiddown on this aspect in NINGAMMA AND ANOTHER v. UNITED INDIA INSRUANCE COMPANY LIMITED[2] wherein the Apex Court held that “in a claim under Section 166 of the Motor Vehicles Act, the Court is duty bound to arrive at a just compensation irrespective of any pleading and the Court may even apply the multiplier specified in Second Schedule”. Therefore, there is no bar as such, to award the compensation over and above the actual amount claimed if it is just and reasonable and the Court is duty bound to award a just and reasonable compensation. 6. At the hearing of the appeal, the learned counsel appearing for the appellant insurance company placing reliance on some judgments contended that the compensation granted by the Tribunal is not in accordance with law and the same being exorbitant has to be reduced in the appeal. 7. On the other hand, the learned counsel appearing for the respondents 1 and 2/claimants would submit that in fact, the respondents 1 and 2 are entitled for compensation more than the amount granted by the Tribunal and therefore, the compensation deserves to be enhanced. 8. Initially, in child death compensation cases under the Motor Vehicles Act, the approach of the Apex Court was that since the children, who had not attained the age by which they have the capacity to make some earnings, their future prospects and also the uncertainties in the life have to be kept in mind, the career of the child at the time of his death, his family background etc. are relevant factors, the Tribunal can only grant compensation, which is just and reasonable in lump sum, which in fact, based on guesswork. The Apex Court was of the view that since the future of the child is uncertain, and it has no earning capacity it would not be appropriate for the Courts to award compensation by having recourse to multiplier method. 9. I n KAUSHLYA DEVI v KARAN ARORA AND OTHERS[3] the Supreme Court dealing with compensation in respect of the death of a boy aged 14 years, a brilliant student of Class VIII, the claimants being father and mother, the deceased being the only son of his parents, held as follows: “In cases of young children of tender age, in view of uncertainties abound, neither their income at the time of death nor the prospects of the future increase in their income nor chances of advancement of their career are capable of proper determination on estimated basis. The reason is that at such an early age, the uncertainties in regard to their academic pursuits, achievements in career and, thereafter, advancement in life are so many that nothing can be assumed with reasonable certainty. Therefore, neither the income of the deceased child is capable of assessment on estimated basis nor the financial loss suffered by the parents is capable of mathematical computation.” 10. Similarly in ORIENTAL INSURANCE CO.LTD. v SYED IBRAHIM AND OTHERS[4] the Supreme Court held as follows: “There are some aspects of human life which are capable of monetary measurement, but the totality of human life is like the beauty of sunrise or the splendour of the stars, beyond the reach of monetary tape-measure. The determination of damages for loss of human life is an extremely difficult task and it becomes all the more baffling when the deceased is a child and/or a non-earning person. The future of a child is uncertain. Where the deceased was a child, he was earning nothing but had a prospect to earn. The question of assessment of compensation, therefore, becomes stiffer. The figure of compensation in such cases involves a good deal of guesswork. In cases where parents are the claimants, relevant factor would be age of parents.” 11. I n SANTOSH RANI v RANJIT SINGH AND OTHERS[5] the Supreme Court held as follows: “ Accordingly, the Tribunal held that there was no source of income of the deceased is proved. The Tribunal, however, awarded Rs.50,000- on account of no fault liability. Being aggrieved, the claimant preferred an unsuccessful appeal before the High Court. Hence, the present appeal by special leave.” “Both the Tribunal and the High Court completely ignored the factum of loss of life at a tender age, the future prospect of young man and mental agony suffered by the claimant. In our view, the award of Rs.50,000/- on no fault liability in the case of death of a person is too meager. In the peculiar fact and circumstances of this case, we award a lump sum compensation of rs.2,50,000/- to the claimant along with the interest awarded by the Tribunal. The compensation shall be paid by the respondents jointly and severally.” 12. However, in some recent Judgments, the judicial trend favours computation of compensation basing on multiplier method by fixing notional income of the deceased even where the deceased was not actually making any earnings. 13. The learned counsel invited the attention of this Court to the following judgments (1) ORIENTAL INSURANCE CO. LTD. V. RAJWATI DEVI AND OTHERS[6] wherein it was held as follows: “I note that from year 1994 to today, inflation has gone up by 4 per cent to 6 per cent each year. Keeping in view inflation and the rise in cost of living and the fact that the government has not amended the Second Schedule, I think it appropriate to give benefit of 25 per cent increase in the income even as per the Second Schedule. Thus, I take mean monthly income of the deceased as Rs.2,363 (Rs.2,100 + Rs.2,625(25 per cent increase in income : 2 = Rs.2,363/-). (2) DEVKI DEVI v ANIL GUPTA AND ANOTHER[7] the case came up for a compensation in respect of the death of the deceased aged 18 years, labourer in canteen, Tribunal fixed notional income at Rs.15,000/- per annum. The High Court of Delhi held as follows: “In the Second Schedule the criteria for taking into consideration the multiplier as well as the income of the deceased, a formula was inserted in the year 1994 and thereafter no revision has been made in the Second Schedule. In sub-section (3) of section 163-A, the legislature mandated that the Central Government by keeping in view the cost of living from time to time amend the Second Schedule by notification in the official gazette. But, however, no such notification has been issued by the Central Government even after a lapse of more than 12 years from the date when the said section 163-A and the Second Schedule was brought on the statute of Motor Vehicles Act, 1988. Under the Minimum Wages Act, the salary of Rs.1,382/- in the year 1994 was increased to Rs.2,579/- in the year 2001 and Rs.3,312/- as on 1.8.2006. The price index has also increased manifold due to the inflation and as per the judgment of this Court in M.A.C. Appeal No.297 of 2005, this court has observed increase of at least 50 per cent in the minimum wages from the year 1997 to 2003. It is, thus, apparent that the wages have increased almost double from the year 1994 till 2006 (the revision in the minimum wages is also based on the price index).” 14. What all is to be understood from the analysis of the judgments of the Supreme Court and various High Courts, is where the deceased, who were children below the age of attaining majority and were not actually getting any income at the time of their death in the motor vehicle accident, it would be appropriate to fix their notional income for the purpose of computing the compensation basing on their age, educational qualifications, performance in the school/college, the background of the parents etc. and compute the compensation basing on multiplier method having recourse to the Second Schedule in the motor vehicles Act. If it is to be said that since the deceased who have not at all attained majority and had not been in fact getting any income, the compensation can only be arrived at basing on guesswork, the said method will lead to anomalous situation because it will be left solely to the discretion of the Tribunal without there being any basis or criteria. Therefore, the appropriate method would be to fix the income of the deceased notionally for the purpose of computing the compensation keeping in view the future prospects and uncertainties in life and compute the same basing on multiplier method. 15. In regard to the principles of assessment of just compensation, the Supreme Court in SYED BASHEER AHMED AND OTHERS v MOHD.JAMEEL AND ANOTHER[8] held as follows: “9. Section 168 of the Act enjoins the Tribunal to make an award determining the amount of compensation which appears to be just”. However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression ‘which appears to be just’ vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore the settled principles relating to determination of compensation. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons affected nor should it be punitive to the person(s) liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards.” 16. In SARALA VARMA AND OTHERS v DELHI TRANSPORT CORPORATION AND ANOTHER[9] the Supreme Court after reviewing various decisions relating to computing compensation basing on multiplier method, prescribed certain norms for the purpose of selecting the multiplier and the deductions to be made etc. Apart from issuing certain guidelines, the Apex Court also furnished the table for choosing appropriate multiplier. Since the decision was rendered after analyzing the principles laid down in various earlier decisions, the principles laid down and guidelines issued in the said decision are required to be followed to arrive at the compensation which is just and reasonable in a given case. 17. Coming to the facts of the case on hand, the deceased is the student of Class IX, pursuing the studies in reputed English medium school and nothing was brought on record indicating his academic career and also the other factors which have to be considered, the Tribunal proceeded on the assumption that the deceased was from affluent family and has a bright career and would have been placed in comfortable position with a decent salary, had he not been met with the accident. 18. Since no documentary evidence is forthcoming regarding the academic career of the deceased, for the purpose of compensation, his income can be fixed at Rs.20,000/- per annum taking into account the guidelines issued in Sarala Varma’s case (9th cited) and in the other decisions referred above. As per the Judgment in 9th cited (Sarala Varma case), when the deceased was bachelor and the claimants are parents, normally 50% is to be deducted as personal and living expenses. In the present case, if so deducted the contribution of the deceased to be claimed by the parents comes to Rs.10,000/-. The second claimant, who is mother of the deceased was aged 45 years at the time of the death of the deceased. As per the table furnished in Sarala Varma case (9th cited) the appropriate multiplier relevant to her age is 14. The above amount has to be capitalized with 14 which comes to Rs.10,000/- x 14 = 1,40,000/-. In addition to this, the respondents 1 and 2/claimants would be entitled to a sum of Rs.5,000/- towards loss of estate and a further sum of Rs.5,000/- towards funeral expenses. The respondents 1 and 2 are thus entitled for total compensation of Rs.1,50,000/-. The interest granted by the Tribunal is however, reduced from 12% per annum to 7.5% per annum. The compensation is, therefore, reduced from Rs.1,53,500/- to Rs.1,50,000/- and further the interest is reduced as indicated above. 19. With the above modification, the appeal filed by the appellant – insurance company is partly allowed. There shall be no order as to costs. __________________ R. KANTHA RAO,J Date: 18.12.2009 Note: L.R copy to be marked b/o kvrm HON’BLE SRI JUSTICE R.KANTHA RAO CIVIL MISCELLANEOUS APPEAL NO. 3544 OF 2000 18.12.2009 [1] 1987(2) ALT 137 [2] 2009(5) Supreme 127 [3] 2007ACJ 1870 [4] 2007 ACJ 2816 [5] 2008 ACJ 1405 [6] 2008 ACJ 802 [7] 2008 ACJ 1278 [8] 2009ACJ 690 [9] 2009 ACJ 1298