MAC.APP.No.253/2007 Page 1 of 19 20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + MAC.APP.No.253/2007 Date of Decision : 15th January, 2010 % DINESH ADHLAK ..... Appellant Through : Mr. Harvinder Singh, Mr. Chetan Sharma and Mr. Dheeraj, Advs. versus PRITAM SINGH & ORS. ..... Respondents Through : Mr. Manoj Ranjan Sinha, Adv. for R-3. Mr. Jeet Pathak and Mr. C.S. Chauhan, Advs. for Ms. Rajdipa Behura, amicus curiae. CORAM :- THE HON'BLE MR. JUSTICE J.R. MIDHA 1. Whether Reporters of Local papers may YES be allowed to see the Judgment? 2. To be referred to the Reporter or not? YES 3. Whether the judgment should be YES reported in the Digest? JUDGMENT (Oral) 1. The appellant has challenged the award of the learned Tribunal whereby compensation of Rs.1,00,000/- has been awarded to him. The appellant seeks enhancement of the award amount. 2. The accident dated 31st January, 2002 resulted in the death of Alka Adhlak. The deceased was survived by her husband who filed the claim petition before the learned Tribunal. MAC.APP.No.253/2007 Page 2 of 19 3. The deceased was aged 31 years at the time of the accident. The deceased was working as a teacher in Government Girls Senior Secondary School at a salary of Rs.11,019/- per month. The income of the deceased was proved by Ex.PW-3/1. The appellant was aged 34 years at the time of the accident and was working in Jesus and Marry College. The appellant was not financially dependent upon the deceased. The learned Tribunal held that the appellant was not entitled to compensation for loss of dependency. The learned Tribunal awarded lump sum compensation of Rs.1,00,000/- towards loss of consortium, funeral expenses and mental agony. 4. The learned counsel for the appellant has urged the following grounds at the time of hearing of this appeal:- (i) The deceased was contributing sufficient amount for running the house and, therefore, compensation for loss of dependency be awarded to the appellant. (ii) The compensation be awarded to the appellant for loss of estate. (iii) The compensation be also awarded for loss of love and affection. (iv) The rate of interest be enhanced. 5. The appellant was not financially dependent upon the deceased and, therefore, the appellant is not entitled to the compensation towards loss of dependency. However, the appellant is entitled for compensation for loss to estate. The MAC.APP.No.253/2007 Page 3 of 19 law in this regard is well settled by the judgment of Karnataka High Court in the case of A.Manavalagan Vs. A. Krishnamurthy and Ors., 2005 ACJ 1992, where it was held 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?” “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 MAC.APP.No.253/2007 Page 4 of 19 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 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 through 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."… MAC.APP.No.253/2007 Page 5 of 19 “15. Where a breadwinner dies and his wife, children and parents, who are normally depending on the deceased, 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 MAC.APP.No.253/2007 Page 6 of 19 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 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: MAC.APP.No.253/2007 Page 7 of 19 (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 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. MAC.APP.No.253/2007 Page 8 of 19 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 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 shrink 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 MAC.APP.No.253/2007 Page 9 of 19 (one-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 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 MAC.APP.No.253/2007 Page 10 of 19 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 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 the multiplicand. The multiplier will be 13 with reference to the age of the claimants and MAC.APP.No.253/2007 Page 11 of 19 the loss of estate would be Rs. 2,10,600/- per annum. Though the quantum of savings will vary from person to person, there is a need to standardise the quantum of savings for determining the loss to estate (where the claimants are not dependants) in the absence of specific evidence to the contrary. The quantum of savings can be taken as one-third of the income of the deceased where the spouses are having a common establishment and one-fourth where the spouses are having independent establishments. The above will apply where the family consists of non-dependant spouse/children/parents. Where the claimants are non-dependant brothers/sisters claiming on behalf of the estate, the savings can be taken as 15 % of the income. The above percentages, one of course, subject to any specific evidence to the contrary led by the claimants.” 6. The salary of the deceased at the time of the accident was Rs.11,019/-. 50% is added towards future prospects following the judgment of the Hon’ble Supreme Court in the case of Sarla Verma vs. DTC, 2009 (6) SCALE 129 and the income of the deceased for computation of compensation is taken to be Rs.16,528/- (Rs.11,019 + Rs.5509). 7. The Karnataka High Court has held that where the husband and wife were having common establishment, the quantum of savings shall be taken as 1/3 of the income of the deceased but where the husband and wife were having independent establishments, the savings be taken as 1/4. In the present case, the appellant and the deceased were having a common establishment and, therefore, savings of the deceased are taken to be 1/3 of her income. MAC.APP.No.253/2007 Page 12 of 19 8. Following the judgment of the Karnataka High Court in the case of A.Manavalagan (supra), the appellant is held to be entitled to 1/3rd of the income of the deceased as loss of estate. The appellant was aged 34 years at the time of the accident and the appropriate multiplier according to the judgment of the Hon’ble Supreme Court in the case Sarla Verma (supra) is 16. Taking the loss of estate as 1/3 of the income of the deceased (Rs.16,528/-) and applying the multiplier of 16, the loss of estate is computed at Rs.10,57,792/- (Rs.5509 X 12 X 16). 9. The learned Tribunal has awarded Rs.1,00,000/- towards loss of consortium, funeral expenses and mental agony which is on a higher side and is, therefore, set aside. Rs.10,000/- is awarded towards loss of consortium, Rs.10,000/- towards love and affection and Rs.10,000/- towards funeral expenses. The appellant is entitled to total compensation of Rs.10,87,792/- (Rs.10,57,792 + Rs.10,000 + Rs.10,000 + Rs.10,000). 10. The learned Tribunal has awarded interest @ 6% per annum which is enhanced to 7.5% per annum following the judgment of the Hon’ble Supreme Court in the case of Dharampal Vs. UP State Road Transporat Corporation, III 2008 ACC (1) SC from the date of filing of the petition till realization. 11. The learned counsel for respondent No.3 submits that there is a possibility of remarriage of the appellant and, therefore, the award of the learned Tribunal should not be MAC.APP.No.253/2007 Page 13 of 19 interfered with. The learned counsel for respondent No.3 refers to and relies upon the judgment of Division Bench of the Karnataka High Court in the case of Basappa vs. K.H. Sreenivasa Reddy, AIR 1982 Karnataka 30 in which it was held that the husband would be entitled to compensation to loss of consortium till he remarries. 12. The learned counsel for the appellant, in reply, refers to the judgment of Jammu and Kashmir High Court in the case of Seema Malik vs. Union of India, 2005 ACJ 1389 in which it was held that remarriage of the widow cannot deprive her of the compensation payable for the death of her husband. The Jammu and Kashmir High Court examined the judgments of various High Courts on this issue and held as under:- “5. Another issue which is required to be taken note of is with regard to the rights of a widow to claim maintenance even if she re-marries. The judicial opinion is to the effect that simply because a widow has remarried, is not to be made a ground for declining her compensation. In Hariram v. Commissioner for Workmen's Compensation, 1994 ACJ 1094 (MP), the view expressed was that the widow on remarriage cannot be deprived of her right of getting compensation. In the above case the argument put across was that as the widow had re-married, therefore, the entire amount be given to the father of the deceased. It was held that this legal proposition cannot be sustained. The reasoning given was that the