FA/4090/2007 1/20 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 4090 of 2007 With CIVIL APPLICATION No. 3787 of 2008 In FIRST APPEAL No. 4090 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE J.R.VORA HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 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 ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= BAJAJ ALIANCE GENERAL INSURANCE CO. THRO' ITS - Appellant(s) Versus PUNJIBEN MANUBHAI MAKWANA & 1 - Defendant(s) ========================================================= Appearance : (MR PV NANAVATI) for Appellant(s) : 1,MR VIBHUTI NANAVATI for Appellant(s) : 1, None for Defendant(s) : 1, MR JAGDISH H MEHTA for Defendant(s) : 1.2.1, 1.2.2, 1.2.3, 1.2.4, 1.2.5,1.2.6 MR VIREN G DAVE for Defendant(s) : 1.2.1, 1.2.2, 1.2.3, 1.2.4, 1.2.5,1.2.6 MR PREMAL S RACHH for Defendant(s) : 1.2.1 RULE NOT RECD BACK for Defendant(s) : 0.0.0 ========================================================= CORAM : HONOURABLE MR.JUSTICE J.R.VORA and FA/4090/2007 2/20 JUDGMENT HONOURABLE MR.JUSTICE M.R. SHAH Date : 16/04/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE M.R. SHAH) 1. This appeal is directed against the judgment and award dated 21.3.2007 passed by the Motor Accident Claims Tribunal (Auxi.), Fast Track Court No.2, Jamnagar, in Motor Accident Claim Petition No.1 of 2006 by which the Tribunal has awarded compensation of Rs.12,07,000/- (Rupees Twelve Lakhs Seven Thousand only) to the claimants with proportionate costs and interest at the rate of 7.5% per annum from the date of claim petition till realisation. 2. Deceased Manubhai Hirabhai Makwana was riding his Hero Honda from Village Aliya to Jamnagar on 5.12.2005. At that time Motor Car No.GJ-3-AB-9204 insured by the appellant – Insurance Company came from the direction of Lalpur Chokdi, and in a collision between the said Car and the Hero Honda, Manubhai Hirabhai FA/4090/2007 3/20 JUDGMENT Makwana received serious injuries. During the course of treatment, said Manubhai Hirabhai Makwana succumbed to the injuries and his widow, one major son, one minor daughter, two minor children and his mother filed a claim petition and claimed compensation of Rs.18,00,000/- from the driver-cum-owner and the Insurance Company of the Car. On the question of negligence, after going through the oral and documentary evidence on record and the manner in which the accident has taken place, the Tribunal held that the deceased died in a motor vehicle accident caused by rash and negligent driving of the car by original opponent No.1. 3. Although Shri Nanavati, learned counsel for the appellant – Insurance Company made an attempt to assail such finding, in the facts and circumstances of the case and the evidence on record, he has not been able to make any dent to the said finding, and considering the discussion in para 18, and considering the finding of the Tribunal and on appreciation of evidence that at FA/4090/2007 4/20 JUDGMENT the time of accident the motor cyclist already crossed the major portion of the road, and at that time the Car hit the motor cyclist, we do not think any further discussion is called for on the question of negligence. 4. Coming to the question of quantum of compensation, the Tribunal gave the following reasonings to assess and award the compensation for loss of future dependency at Rs.11,65,788/-. “Regarding the quantum of compensation, if we consider the documentary evidence on record, it is found that the deceased was an S.T.driver and he was getting gross salary of Rs.8,418/- and he was deducting Rs.1,234/- towards compulsory deductions and in addition to it, Rs.3,000/- for G.P.F. Advance is deducted and was getting net amount of Rs.4,184/- as on 1st December, 2005, as per the pay slip of Exh.29. It also reveals from the pay slip that the P.F. Advance was to be repaid by him for 9 months. As such, in future, the amount of Rs.3,000/- for G.P.F. may not be FA/4090/2007 5/20 JUDGMENT required to be deducted. As such, by calculating his net income from the future prospective gross income, only the compulsory deductions are required to be deducted. Now, as per the statement at Exh.48 as produced by the Officer of S.T. Corpn., Jamnagar, the last salary of deceased on his retirement may be Rs.11,809/-. Now, considering the pay slip at Exh.29, it can be assumed that the deceased might be deducting Rs.3,000/- for compulsory deductions and only Rs.8,809/- might be the net income in the hands of the deceased and his dependants. As such, in view of the judgment of the Apex Court reported in 2004 ACJ page 448 in the case of ASHA AND OTHERS VS. UNITED INDIA INSURANCE CO. LTD. AND ANOTHER, the claimants are entitled to be compensated for the loss suffered by them and this amount is the amount which they would have been receiving at the time when the deceased was alive. As per the observation of the Hon'ble Supreme Court in the aforesaid decision, there can be no doubt that the dependants would only be receiving the net amount less 1/3 for his FA/4090/2007 6/20 JUDGMENT personal expenses. In that case also, the amount for allowances and deductions made towards allowances and amount paid towards L.I.C., society charges and H.B.A. etc., were deducted from the gross amount of the salary and the net amount of salary was taken into account for assessing compensation. Therefore, in this case also, no gross amount, but the net amount is required to be taken into consideration. As such, in this case, the net amount of salary of Rs.8,809/- could be taken into consideration. Now, it is also stated by the applicant that the deceased was getting income from the agriculture, but, there is no iota of evidence. At the same time, he has admitted that the agriculture land is barren land and it depends on rain. As such, the income of the agriculture can be considered at the rate of Rs.2,400/- per month. As such, the total amount of income of the deceased for assessment of compensation could be considered at Rs.11,209/-. Now, admittedly the deceased was married and therefore, 1/3 amount of it is required to be deducted towards his personal FA/4090/2007 7/20 JUDGMENT expenses amounting to Rs.3,736/-. Therefore, the dependency amount would come to Rs.7,473/- per month annually it will come to Rs.89,676/-. Now, as per driving licence of the deceased at Exh.39, his date of birth is shown on 31st July 1956. Therefore, at the time of accident, he was running the age of 50. As such, considering the 2nd Schedule of M.V. Act, multiplier of 13 could be applied. On doing so, the amount of future loss would come to Rs.11,65,788/-. Further awarding Rs.15,000/- as conventional amount of compensation for loss of consortium etc., and Rs.25,537.20 towards medical charges. The Tribunal made a total award Rs.12,07,000/-.” 5. Shri Nanavati, learned counsel for the appellant-Insurance Company has vehemently challenged the aforesaid reasonings and findings of the Tribunal on the score of compensation for loss of future dependency. He has submitted that at the relevant time the deceased was getting net amount of salary Rs.8,809/- and applying the principles laid down by this Court in several FA/4090/2007 8/20 JUDGMENT decisions for computing the prospective income more particularly the decision of the Division Bench of this Court in the case of UNITED INDIA INSURANCE CO. LTD. VS. DHANLAXMIBEN SATISBHAI BHAGAT (PATEL) AND OTHERS reported in 2007(2) GLR 1573 and in the case of CHAMPABEN W/O. CHANDRASINH DHULABHAI RATHOD AND OTHERS VS. ANOPSINH SOMABHAI BARIA AND OTHERS reported in 2007(2) GLR 1663 i.e. to take actual income and add there to 50% of actual income and deducting therefrom 1/3rd amount towards personal expenses of deceased, the dependency benefit would come to Rs.7,950/- per month. It is submitted that looking to the age of the deceased i.e. 50 years, the Tribunal has committed an error in applying the multiplier of 13. It is submitted that looking to the fact that the deceased was aged 50 years, the Tribunal at the most could have applied the multiplier of 10. It is submitted that, so far as income from the agriculture land is concerned, as there is no evidence led, nothing is to be awarded towards loss of income FA/4090/2007 9/20 JUDGMENT of agriculture. It is submitted that the Tribunal has committed an error in considering the income of the agriculture at the rate of Rs.2,400/- per month. It is submitted that such findings are even contrary to the evidence on record more particularly when the claimants have admitted that the agriculture land is barren land. It is submitted that in absence of any evidence with regard to agriculture income, the Tribunal has materially erred in awarding the agriculture income at the rate of Rs.2,400/- per month. 5.1 Making the above submissions and relying upon the above decisions, it is requested to modify the judgment and award passed by the Tribunal to the aforesaid extent. 6. M/s.Viren Dave and Mr.Jagdish Mehta, learned advocates have appeared on behalf of original claimants. It is submitted that the manner in which the accident has taken place, the findings given by the Tribunal with respect to FA/4090/2007 10/20 JUDGMENT the negligence is not required to be interfered with. It is also submitted that, in the facts and circumstances of the case, the Tribunal has rightly awarded the compensation towards loss of agriculture income at the rate of Rs.2,400/- per month which is also not required to be interfered with. 6.1 It is also submitted that in the present case the Tribunal has rightly awarded Rs.11,65,788/- towards future loss of income by considering the dependency amount at Rs.7,473/- per month, and then applying multiplier of 13. Therefore, it is requested to dismiss the present appeal. 7. Heard the learned advocates appearing for the respective parties. As stated above, the finding with respect to the question of negligence is not required to be interfered with more particularly in view of the discussions made in para 18 of the judgment. FA/4090/2007 11/20 JUDGMENT 7.1 Now so far as the question of quantum of compensation is concerned, the Tribunal has awarded Rs.11,65,788/- for loss of future dependency considering the dependency amount at Rs.7,473/- per month, and applying multiplier of 13. The discussions with respect to loss of future dependency is in para 19 of the judgment. Considering the salary slip produced at Exh.29, it appears that the gross salary of the deceased at the relevant time was Rs.8,418/-, and there was a deduction of Rs.1,234/- towards compulsory deductions, and in addition to it, Rs.3,000/- towards GPF Advance was being deducted. The Tribunal considering the statement at Exh.48 produced by the officer of the S.T.Corporation, Jamnagar, to the effect that, at the time of retirement, the deceased might be getting Rs.11,809/- per month and deducting Rs.3,000/- for compulsory deductions, the Tribunal held that the deceased might be getting Rs.8,809/-, and adding Rs.2,400/- towards the income of agriculture, the Tribunal held that the total income of the deceased considered at Rs.11,209/-, FA/4090/2007 12/20 JUDGMENT and deducting 1/3rd amount towards his personal expenses, the Tribunal held that the dependency amount would come to Rs.7,473/- per month. 7.2 Looking to the discussion with respect to the loss of future dependency which is in para 19, we are not satisfied at all with respect to the conclusion arrived at by the Tribunal with respect to the net amount of salary of Rs.8,809/-. How and on what basis Rs.3,000/- is deducted by the Tribunal is not appreciable. Even the finding of the Tribunal with respect to the income of agriculture at the rate of Rs.2,400/- per month is also without any base and/or any evidence. The Tribunal has specifically observed that, “it is stated by the applicant that the deceased was getting income from the agriculture, there is no iota of evidence.” The Tribunal has also observed that, “it is admitted in the cross-examination that the agriculture land is barren land and it depends on rain.” Under the circumstances, the Tribunal has committed an error in awarding the income of FA/4090/2007 13/20 JUDGMENT agriculture at the rate of Rs.2,400/- per month in absence of any evidence. The land still remains with the heirs and therefore there would not be any loss of income of agriculture. Even otherwise the deceased was serving as a S.T. driver and was not depending upon the agriculture activities so that he can be awarded some amount towards supervision as he would not be available even for supervising the agriculture activities. Under the circumstances, nothing is to be awarded to the claimants towards loss of income of agriculture. 7.3 Now so far as compensation for loss of future dependency is concerned, it appears from the pay slip produced at Exh.29 that the gross salary of the deceased at the relevant time was Rs.8,418/-, and out of which Rs.3,000/- was deducted towards GPF Advance and Rs.797/- towards P.F. contribution and Rs.437/- being deducted compulsory deduction. The deduction towards P.F. Contribution and the P.F. Advance is required to be included in the net salary received by the FA/4090/2007 14/20 JUDGMENT deceased and the same is not disputed by the learned counsel appearing on behalf of the Insurance Company. Therefore the net salary received by the deceased was Rs.7,950/- per month. Now applying the principle laid down by this Court in several decisions for computing the prospective income more particularly the decision of the Division Bench of this Court in the case of Dhanlaxmiben (supra) and Champaben (supra) to arrive at prospective income all that the Tribunal is required to do is to take actual monthly/annual income of deceased on the date of accident, double it up and add it to actual income and divide total by two (i.e. Rs.7,950 + 15,900/- = 23,850 / 2 = 11,925) and deducting therefrom 1/3rd amount towards personal expenses of deceased, dependency benefit would come to Rs.7,950/- per month. 7.4 Coming to the question of multiplier, Shri Nanavati, learned counsel has vehemently submitted that the multiplier of 13 adopted by the Tribunal is on higher side and it should be FA/4090/2007 15/20 JUDGMENT at the most 10, and considering the recent decision of the Hon'ble Supreme Court in the case of Andhra Pradesh State Road Transport Corporation, Represented by its General Manager and Another vs. M.Ramadevi and others reported in (2008) 3 SCC 379 and the deceased would retire at the age of 58 years, it would be just and proper to arrive the multiplier of 10 years. Accordingly, the compensation for loss of dependency benefit would work out to Rs.79,500/- x 12 = Rs.9,54,000/-, adding thereto Rs.15,000/- awarded by the Tribunal as the conventional amount for loss of consortium and loss to the estate and Rs.25,537/- as awarded by the Tribunal for medical and other expenditure, the total amount of compensation would come to Rs.9,94,540/-. 7.5 Shri Nanavati, learned counsel for the appellant-Insurance Company has stated that, pursuant to the interim order passed by this Court in Civil Application No.10765 of 2007, the Insurance Company had deposited the entire amount FA/4090/2007 16/20 JUDGMENT of compensation as awarded by the Tribunal together with interest and costs. 8. In view of the above discussions, the appeal is partly allowed in the following terms: (A) The amount of compensation awarded by the Tribunal at Rs.12,07,000/- is reduced to Rs.9,94,540/-. The amount of compensation shall be paid with proportionate costs and with interest at the rate of 7% per annum from the date of the claim petition till the date of deposit. This award is made jointly and severally against all the opponents i.e. appellant – Insurance Company as well as driver/owner of the Motor Car involved in the accident. (B) The Tribunal shall liquidate the fixed deposits and refund the differential amount being Rs.2,12,460/- with proportionate costs and interest thereon to the appellant – Insurance Company within one month from the FA/4090/2007 17/20 JUDGMENT date of receipt of the writ of this Court. (C) The balance amount shall be apportioned in favour of the claimants i.e. widow, sons, daughters and mother of the deceased in the ratio of 50:10:10:10:10:10 respectively. (D) After apportionment in favour of the claimants as aforesaid, the Tribunal shall invest 90% of the amount payable to the claimant No.1 (widow of the deceased) in fixed deposits with a Nationalised Bank near her residence for a period of five years with usual conditions about prohibition against premature encashment/encumbrance etc., of the deposits and with permission to claimant No.1 to withdraw the interest periodically accruing on such fixed deposits. Out of the amounts payable to claimant Nos. 2, 3 and 6, 80% of the amounts shall be invested in fixed deposits with a Nationalised Bank near the residence of said FA/4090/2007 18/20 JUDGMENT claimants for a period of five years with usual conditions about prohibition against premature encashment/encumbrance etc., of the deposits and with permission to the respective claimants to withdraw the interest periodically accruing on such fixed deposits. The balance 20% amount payable to claimant Nos.2, 3 and 6 shall be disbursed to them by Account Payee Cheques in favour of the respective claimants after proper verification and after informing the claimants about the amounts being disbursed to them, the amounts being invested and the conditions on which the investments are made. Out of the amounts payable to claimant Nos.4 and 5, the Tribunal shall invest the entire amounts payable to claimant Nos.4 and 5 in a fixed deposits with a Nationalised Bank near their residence for a period of five years with usual conditions about prohibition against premature encashment/encumbrance etc., of the deposits FA/4090/2007 19/20 JUDGMENT and with permission to claimant Nos.4 and 5 to withdraw the interest periodically accruing on such fixed deposits. The said claimants also be informed about the amounts being invested and the conditions on which the investments are made. The investments shall be made in more than one fixed deposits of varying amounts. 9. Since the appeal is disposed of and necessary directions are issued with respect to disbursement and investments, Civil Application No.3787 of 2008 filed by the original claimants for disbursement do not survive and is accordingly disposed of as infructuous. 10. The appeal is partly allowed to the aforesaid extent. However, in the facts and circumstances of the case, there shall be no order as to costs. ( J.R. VORA, J. ) ( M.R. SHAH, J. ) FA/4090/2007 20/20 JUDGMENT syed/