IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS MONDAY, THE 24TH AUGUST 2009 / 2ND BHADRA 1931 MACA.No. 1907 of 2007() ----------------------------------- (OPMV.1299/1999 of ADDL.MOTOR ACCIDENT CLAIMS TRIBUNAL, ERNAKULAM) .................... APPELLANT(S): 3RD RESPONDENT: -------------------------------------------------- UNITED INDIA INSURANCE COMPANY LIMITED NOW REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE, "SHARANYA", HOSPITAL ROAD, KOCHI-11. BY ADV. SRI.MATHEWS JACOB, SENIOR ADVOCATE SRI.P.JACOB MATHEW RESPONDENT(S): CLAIMANTS: -------------------------------------------- 1. P.K.NALINI, W/O.BHASKARAN, IX/323, THEVARPARAMBIL HOUSE, ELAMKULAM PANCHAYATH, PALATHODU P.O., PERINTHALMANNA, MALAPPURAM-679 340. 2. NAVANEETH.T.P. (MINOR), S/O.BHASKARAN, DO. DO. 3. NEETHU.T.P. (MINOR), D/O.BHASKARAN, DO. DO. (MINOR RESPONDENTS 2 AND 3 ARE REPRESENTED BY THEIR MOTHER AND GUARDIAN IST RESPONDENT). BY ADV. SRI.T.A.SHAJI SRI.P.C.JEEVA THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 24/08/2009, ALONG WITH MACA NO. 20 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ. ------------------------------------------------------ M.A.C.A.No.1907 of 2007-C & M.A.C.A.No.20 of 2008-A ---------------------------------------------- Dated, this the 24th day of August, 2009 J U D G M E N T K.M.Joseph, J. Both the appeals being connected they are disposed of by common judgment. 2. We heard Sri.Mathews Jacob, learned senior counsel for the insurance company and Sri.T.A.Shaji, learned counsel for the claimants. 3. Appellant in M.A.C.A.No.1907/2007 is the 3rd respondent and respondents are claimants 1 to 3 in O.P.(MV) No.1299/1999 in a petition filed under Section 166 of the Motor Vehicles Act. M.A.C.A.No.20/2008 is filed by the claimants seeking higher compensation. Claimants in the petition included originally the late mother of the deceased and also the sister of the deceased. The company has come up in appeal being aggrieved by the quantum of compensation. The Tribunal has awarded Rs. 36,68500/-. The break up is given as under: MACA.1907/2007, 20/2008 -2- Compensation for loss of dependency:Rs.36,00,000/- Pain and sufferings : Rs. 10,000/- Transport to hospital : Rs. 1,000/- Funeral expenses : Rs. 5,000/- Loss of consortium : Rs. 50,000/- Loss of estate : Rs. 2,500/- ----------------------- Total Rs.36,68,500/- ------------------------ 4. The principal complaints of the insurance company are 3 in number. Firstly, the Tribunal has erred in fixing the dependency compensation as Rs.36 lakhs. The learned senior counsel for the appellant would point out that even going by the materials on record the amount is exorbitant. Secondly, he would submit that the Tribunal has erred in granting Rs.50,000/- towards loss of consortium. Thirdly, he would submit that the Tribunal has erred in awarding 9% interest. 5. Learned counsel for the claimants submits that higher compensation should be granted. The original claim of the claimants was for Rs.30 lakhs. Subsequently the claim was amended and as per the amended claim an amount of Rs.56,74,000/- was raised. MACA.1907/2007, 20/2008 -3- 6. The deceased was 42 years at the time of the accident. Paragraphs 7,8 and 9 of the judgment deals with the qualification and the income. We extract the same as follows: “7.Ext.A26 is the SSLC Book of the deceased which shows his date of birth as 10.3.1957. The deceased was 42 at the time of accident. He had passed Type writing Malayalam higher, Typewriting English higher and Shorthand English Higher as is evident from Exts.A27 to A30 certificates. Ext.A31 Diploma shows that he had passed the Diploma course in Cobol & Advanced Cobol programming. He was a Commerce Graduate and he joined the M.Com Degree course at the Karnataka State Open University KSOU), Mysore. Ext.A32 is the chalan certificates for the payment of fees at KSOU on 19.2.1999. 8. The deceased was working as Assistant Manager, Scale I at the Indian Bank, Shanmugham Road, Ernakulam. Ext.A11 is the salary certificate of the deceased for the month of February 1999, which shows that his total salary for the month as Rs.13968.07+Rs.1,550/- as HRA. Ext.A13 is the copy of the salary revision for officers of the Indian Bank passed on 15.7.2000 with retrospective effect from 1.4.1998. Ext.A17 is the certificate issued by the Sr.Manager, Indian Bank, Shanmugham Road, which shows the calculation of the said revised salary of the deceased as on 1.4.1998 as Rs.14,460.08+Rs.1,550/- as HRA and Rs.1,186/- as contributory Provident Fund (totalling Rs.17,196.08). The arrears of the said revised salary of the deceased were received by the first petitioner as is evident from Ext.A33 passbook of MACA.1907/2007, 20/2008 -4- the first petitioner. The salary was again revised as per circulars dated 29.6.2005 and 9.11.2006 with effect from 1.11.2002. In such case, as per Ext.A17 the deceased would have received Rs.21,881.79 + HRA of Rs.2,600/- + contributory Provident Fund of Rs.1,712/- (total of Rs.26,193.79) from November 2002 had he been alive. As on November 2006 with eight increments to which he was entitled, the deceased would have drawn Rs.27,541/- + HRA and Contributory PF totalling Rs.32,307.36. Ext.A10 copy of Indian Bank Officers' Service Regulations 1979 shows that on 30.4.2001 the salary of the deceased would have been moved to that of Scale II Manager directly as the scale would reach the maximum. Ext.A18 shows that the deceased could have been promoted to Scale III Senior Manager, Scale IV Chief Manager, Scale V Asst.Manager, Scale VI Deputy General Manager and Scale VII General Manager. Considering the qualification, experience and young age of the deceased such promotions could not have been said to be an impossibility, had he been alive. 9. Ext.A18 is the statement prepared by the Indian Bank showing the future emoluments that could have been received by the deceased had he been alive. As per the said statement Rs.1,89,70,634/- is the total loss of salary. Rs.3,10,598/- is the loss of gratuity and Rs.6,61,821/- is the loss of contributory PF. The total loss is calculated by the Indian Bank through Ext.A18 as Rs.1,99,43,053/-. The said calculation is without considering the chances of future promotions.” 7. Learned senior counsel would rely on the decision of the Apex Court in Sarla Verma and others v. Delhi MACA.1907/2007, 20/2008 -5- Transport Corporation and another {2009 ACJ 1298}. He would contend that even if 30% is added to the income the amount arrived at is clearly exorbitant. He also invited our attention to paragraphs 22 to 24 of the decision in Sarla Verma's case (supra) to contend that the salary at the time of death alone should be considered and in appropriate cases 30% additions can be made and even if 30% is made after deducting of course the amount being disbursed by way of HRA the claimants should not have been awarded the amount as is awarded. 8. Paragraphs 22 to 24 of the decision read as follows: “22. In this case as noticed above the salary of the deceased at the time of death was Rs.4,004. By applying the principles enunciated by this court to the evidence, the High Court concluded that the salary would have at least doubled (Rs.8,008) by the time of his retirement and consequently, determined the monthly income as an average of Rs.4,004 and Rs.8,008, that is, Rs.6,006 per month or Rs.72,072 per annum. We find that the said conclusion is in conformity with the legal principle that about 50 per cent can be added to the actual salary, by taking note of future prospects. 23. Learned counsel for the appellants contended that when actual figures as to what would be the MACA.1907/2007, 20/2008 -6- income in future, are available it is not proper to take a nominal hypothetical increase of only 50 per cent for calculating the income. He submitted that though the deceased was receiving Rs.4,004 per month at the time of death, as per the certificates issued by the employer (produced before High Court), on the basis of pay revisions and increases, his salary would have been Rs.32,678 in the year 2005 and there is no reason why the said amount should not be considered as the income at the time of retirement. It was contended that the income which is to form the basis for calculation should not therefore be the average of Rs.4,004 and Rs.8,008, but the average of Rs.4,004 and Rs.32,678. 24. The assumption of the appellants that the actual future pay revisions should be taken into account for the purpose of calculating the income is not sound. As against the contention of the appellants that if the deceased had been alive, he would have earned the benefit of revised pay scales, it is equally possible that if he had not died in the accident, he might have died on account of ill health or other accident, or lost the employment or met some other calamity or disadvantage. The imponderables in life are too many. Another significant aspect is the non- existence of such evidence at the time of accident. In this case, the accident and death occurred in the year 1988. The award was made by the tribunal in the year 1993. The High Court decided the appeal in 2007. The pendency of the claim proceedings and appeal for nearly two decades is a fortuitous circumstance and that will not entitle the appellants to rely upon the two pay revisions which took place in the course of the said two decades. If the claim petition filed in 1988 had been disposed of in the year 1988- MACA.1907/2007, 20/2008 -7- 89 itself and if the appeal had been decided by the High Court in the year 1989-90, then obviously the compensation would have been decided only with reference to the scale of pay applicable at the time of death and not with reference to any future revision in pay scales. If the contention urged by the claimants is accepted, it would lead to the following situation: The claimants only could rely upon the pay scales in force at the time of the accident, if they are prompt in conducting the case. But if they delay the proceedings, they can rely upon the revised higher pay scales that may come into effect during such pendency. Surely, promptness cannot be punished in this manner. We, therefore, reject the contention that the revisions in pay scale subsequent to the death and before the final hearing should be taken note of for the purpose of determining the income for calculating the compensation.” 9. Sri.T.A.Shaji, learned counsel appearing for the claimants on the other hand would submit that having regard to the future prospects which are proved by records the amount of compensation should be in tune with the records made available to the Tribunal. 10. In paragraph 11 of the Sarla Verma's case (supra) it is held as follows: “11. In Susamma Thomas, 1994 ACJ 1 (SC), this court increased the income by nearly 100 per cent, in Sarla Dixit, 1996 ACJ 581 (SC), the income was increased only by 50 per cent and in Arati Bezbaruah, 2003 ACJ 680 (SC), the income MACA.1907/2007, 20/2008 -8- was increased by a mere 7 per cent. In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50 per cent of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. {Where the annual income is in the taxable range, the words 'actual salary' should be read as 'actual salary less tax}. The addition should be only 30 per cent if the age of the deceased was 40 to 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances.' 11. If one goes by the salary which was drawn by Ext.A11 certificate for the month of February, 1999 (the deceased died on 13.3.1999) the total salary was Rs.13,968.07+ Rs.1550 as HRA and if one goes by Ext.A17 certificate showing revised salary as on 1.4.1998 he would be getting Rs.14,460 + Rs.1550 (HRA) +Rs.1186 as contributory Provident Fund ie., Rs.17,196/-. Learned senior counsel opposes the addition of HRA. Even taking Rs.17,196/- as the income and adding 30% to the same the amount would be MACA.1907/2007, 20/2008 -9- Rs.22,353/-. But after reducing one-third towards expenses the dependency would be Rs.14,380/-. One aspect to be borne-in-mind is that the dependency is to be calculated after considering tax effect also. We notice that the Tribunal has not considered the tax effect. To arrive at Rs.14,380/-, at 8% interest the amount would be Rs.21 lakhs. We are not inclined to accept the reasoning of the Tribunal regarding the amount which the deceased would have got on the basis of projections which were made. Therefore, we feel that the dependency is to be scaled down from Rs.36 lakhs to Rs.21 lakhs. 12. As regards the case of the insurer based on award of Rs.50,000/- towards loss of consortium we notice that no amount is awarded towards loss of love and affection. Also only Rs.2,500/- is granted towards loss of estate. In such circumstances, we are not inclined to accept the contention of the learned counsel for the insurance company and we sustain the amount awarded towards loss of consortium in the circumstances. As far as interest is concerned it appears to be granted on the basis of the MACA.1907/2007, 20/2008 -10- judgment of the Apex Court. In such circumstances, we allow the appeal M.A.C.A.No.1907/2007 in part and modify the award by reducing the compensation for loss of dependency from Rs.36 lakhs to Rs.21 lakhs and we award Rs.21,68,500/-. The rate of interest will be as ordered. In the light of the above discussion, we see no reason to award any further compensation in M.A.C.A.No.20/2008. Accordingly, the said appeal is dismissed. I.A.No.2354/2007 is closed. (K.M.JOSEPH) JUDGE. (M.L.JOSEPH FRANCIS) JUDGE. MS