Case: Kirti & Anr. Etc Vs. Oriental Insurance Company Ltd

Surya Kant, J. 1. Leave Granted. 2. These civil appeals, which have been heard through video conferencing, have been filed by three surviving dependents (who are two minor daughters and father) of the two deceased, impugning the judgment dated 17.07.2017 of the High Court of Delhi through which the motor accident compensation of Rs 40.71 lakhs awarded by the Motor Accident Claims Tribunal, Rohini (hereinafter, Tribunal) on 24.12.2016 under Section 168 of the Motor Vehicle Act, 1988 (MV Act), was reduced to Rs 22 lakhs. FACTUAL MATRIX 3. The deceased couple, Vinod and Poonam, while commuting on a motorcycle in Delhi at around 7AM on 12.04.2014 were hit at an intersection by a Santro Car bearing registration DL 7CA 1053. The impact immediately incapacitated both the deceased and they soon passed away from cranio-cerebral damage and haemorrhagic shock caused by the accidents blunt-force trauma. 4. An FIR was registered under Sections 279 and 304 of the Indian Penal Code, 1860 (hereinafter, IPC) against the driver, and the statement of an independent eyewitness (Constable Vishnu Dutt) was recorded, which evidenced rash driving and negligence on part of the car-driver. Subsequently, a claim petition was filed under Section 166 of the MV Act by the two toddler-daughters and septuagenarian- parents of the deceased. This was contested by the driver and owner claiming that the deceased were themselves driving negligently and the accident was as a result of their very own actions. Two witnesses were examined by the appellant-claimants and none by the respondents. The insurance company (Respondent No. 1) offered as settlement a compensation of Rs 6.47 lakhs for the death of Poonam and Rs 10.71 lakhs for Vinod. 5. The Tribunal took note of the chargesheet filed against the driver in the criminal case and also his failure to step-into the witness box. Relying on the strong testimony of the independent witness, it was concluded that the car-driver was indeed driving rashly and thus liability ought to be fastened on the respondent-insurer. Regarding the quantum of compensation, the Tribunal began by determining the ages of Poonam and Vinod as being 26 and 29 years respectively. Consequently, an age-multiplier of 17 was adopted. Although the deceaseds father took a plea that Vinod was earning Rs 14,000 every month as a teacher at the Pratap Public School in Delhi, but he was unable to substantiate his claim with any documentary evidence. Thus, minimum wage in Delhi was adopted for computation of loss of dependency. An additional 25% income was accounted for future prospects of Poonam, and 1/3rd of Vinods salary was deducted towards personal expenses. Rs 2.50 lakhs was given for each deceased as compensation for loss of love and affection, estate, and funeral charges. Thus, the Tribunal awarded a total sum of Rs 40.71 lakhs for both deceased to the claimants. 6. This computation was challenged by the respondent-insurer before the High Court, on grounds that the Tribunal had erroneously relied upon the minimum wage as notified by Government of Delhi as there was no proof that the deceased were employed in Delhi. Instead, given their established residence in Haryana, the minimum wage notified for that State ought to be the basis for calculation of loss of dependency. Simultaneously, addition of future prospects as well as non-deduction of personal expenses for Poonam was prayed to be reversed. Further, compensation was sought to be halved on grounds of contributory negligence. A categorical submission was made highlighting the then divergent law on the issue of payment of future prospects to non-permanent employees, pending resolution of which, it was prayed that no such addition be granted to the claimants. 7. The High Court concurred with these contentions and consequently reduced the notional income for both deceased by adopting the lowest minimum wage applicable for unskilled workers in Haryana, instead of Delhi. Similarly, 1/3 rd of Poonams income was deducted towards personal expenses and future prospects were denied to both deceased. However, given the totality of circumstances and Poonams contribution to her household, 25% additional gratuitous income was added to her salary. The High Court thus brought down the total compensation payable to the claimants to Rs 22 lakhs. CONTENTIONS OF PARTIES 8. This reduction has been assailed before us by learned counsel for the claimants. Re-computation is sought of compensation for loss of dependency consequent to the decision of the Constitutional Bench of this Court in National Insurance Co Ltd v. Pranay Sethi (2017) 16 SCC 680, which authoritatively settles the law on future prospects for non-permanent employees as well. Furthermore, the anomaly between the gratuitous increase of income between Vinod and Poonam, and the usage of unskilled minimum wage for Vinod have been brought to our notice. 9. Learned Counsel for the respondent-insurer, on the other hand, has sought to forestall any increase in compensation, including under the ground of future prospects. It is claimed that the High Courts decision was a consent order, and that the counsel for the appellants had conceded to a lower computation under the head of loss of dependency, which thus cannot be challenged before this Court. ANALYSIS I. Deduction for Personal Expenses 10. We have thoughtfully considered the rival submissions. It cannot be disputed that at the time of death, there in fact were four dependents of the deceased and not three. The subsequent death of the deceaseds dependent mother ought not to be a reason for reduction of motor accident compensation. Claims and legal liabilities crystallise at the time of the accident itself, and changes post thereto ought not to ordinarily affect pending proceedings. Just like how appellant-claimants cannot rely upon subsequent increases in minimum wages, the respondent-insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal proceedings. Similarly, any concession in law made in this regard by either counsel would not bind the parties, as it is legally settled that advocates cannot throw-away legal rights or enter into arrangements contrary to law.(Director of Elementary Education v. Pramod Kumar Sahoo, (2019) 10 SCC 674, 11 .) 11. Any compensation awarded by a Court ought to be just, reasonable and consequently must undoubtedly be guided by principles of fairness, equity, and good conscience. (See, Helen C Rebello v. Maharashtra State Road Transport Corp, (1999) 1 SCC 90, 28 .) Not only did the family of the deceased consist of septuagenarian parents, but there were also two toddler-girls, aged merely 3 and 4 years; each of whom requires exceptional care and expenditure till they reach the stage of self-dependency. Tragically, in addition to the married couple, the negligence of the driver also extinguished the life of the familys third child who was a foetus in Poonams womb at the time of the accident. Thus, the appropriate deduction for personal expenses for both Vinod and Poonam ought to be 1/4th only, and not 1/3rd as applied by the Tribunal and the High Court, more so when there were four family members dependent on the deceased. II. Assessment of monthly income 12. Second, although it is correct that the claimants have been unable to produce any document evidencing Vinods income, nor have they established his employment as a teacher; but that doesnt justify adoption of the lowest-tier of minimum wage while computing his income. From the statement of witnesses, documentary evidence-on- record and circumstances of the accident, it is apparent that Vinod was comparatively more educationally qualified and skilled. Further, he maintained a reasonable standard of living for his family as evidenced by his use of a motorcycle for commuting. Preserving the existing standard of living of a deceaseds family is a fundamental endeavour of motor accident compensation law. ( See, RK Malik v. Kiran Pal, (2019) 14 SCC 1, 9 .) Thus, at the very least, the minimum wage of Rs 6197 as applicable to skilled workers during April 2014 in the State of Haryana ought to be applied in his case. III. Addition of Future Prospects 13. Third and most importantly, it is unfair on part of the respondent-insurer to contest grant of future prospects considering their submission before the High Court that such compensation ought not to be paid pending outcome of the Pranay Sethi (supra) reference. Nevertheless, the law on this point is no longer res integra, and stands crystalised, as is clear from the following extract of the afore-cited Constitutional Bench judgment(National Insurance Co Ltd v. Pranay Sethi, (2017) 16 SCC 680, 59 .4.): 59.4. In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. [Emphasis supplied] 14. Given how both deceased were below 40 years and how they have not been established to be permanent employees, future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional income, is both incorrect in law(Sunita Tokas v. New India Insurance Co Ltd, 2019 SCC OnLine SC 1045.) and without merit considering the constant inflation-induced increase in wages. It would be sufficient to quote the observations of this Court in Hem Raj v. Oriental Insurance Co. Ltd. (2018) 15 SCC 654 ., as it puts at rest any argument concerning non- payment of future prospects to the deceased in the present case: 7. We are of the view that there cannot be distinction where there is positive evidence of income and where minimum income is determined on guesswork in the facts and circumstances of a case. Both the situations stand at the same footing. Accordingly, in the present case, addition of 40% to the income assessed by the Tribunal is required to be made.. [Emphasis supplied] IV. Other heads and division of compensation 15. Finally, given the lack of arguments on the other heads of funeral charges, loss of estate, love, and affection; there arises no cause of alteration. We similarly see no infirmity with the High Courts adoption of 17 as the age-multiplier, award of 9% interest, calculation of Poonams notional income or the division of total compensation in the ratio of 1:2:2 between the grandfather and the two girls. For ready reference, a comparative table of revised compensation after suitable increases would thus be as follows: Table CONCLUSION

Decision reasoning: 1[ds]I. Deduction for Personal Expenses10. We have thoughtfully considered the rival submissions. It cannot be disputed that at the time of death, there in fact were four dependents of the deceased and not three. The subsequent death of the deceaseds dependent mother ought not to be a reason for reduction of motor accident compensation. Claims and legal liabilities crystallise at the time of the accident itself, and changes post thereto ought not to ordinarily affect pending proceedings. Just like how appellant-claimants cannot rely upon subsequent increases in minimum wages, the respondent-insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal proceedings. Similarly, any concession in law made in this regard by either counsel would not bind the parties, as it is legally settled that advocates cannot throw-away legal rights or enter into arrangements contrary to law.(Director of Elementary Education v. Pramod Kumar Sahoo, (2019) 10 SCC 674, 11 .)11. Any compensation awarded by a Court ought to be just, reasonable and consequently must undoubtedly be guided by principles of fairness, equity, and good conscience. (See, Helen C Rebello v. Maharashtra State Road Transport Corp, (1999) 1 SCC 90, 28 .) Not only did the family of the deceased consist of septuagenarian parents, but there were also two toddler-girls, aged merely 3 and 4 years; each of whom requires exceptional care and expenditure till they reach the stage of self-dependency. Tragically, in addition to the married couple, the negligence of the driver also extinguished the life of the familys third child who was a foetus in Poonams womb at the time of the accident. Thus, the appropriate deduction for personal expenses for both Vinod and Poonam ought to be 1/4th only, and not 1/3rd as applied by the Tribunal and the High Court, more so when there were four family members dependent on the deceased.II. Assessment of monthly income12. Second, although it is correct that the claimants have been unable to produce any document evidencing Vinods income, nor have they established his employment as a teacher; but that doesnt justify adoption of the lowest-tier of minimum wage while computing his income. From the statement of witnesses, documentary evidence-on- record and circumstances of the accident, it is apparent that Vinod was comparatively more educationally qualified and skilled. Further, he maintained a reasonable standard of living for his family as evidenced by his use of a motorcycle for commuting. Preserving the existing standard of living of a deceaseds family is a fundamental endeavour of motor accident compensation law. ( See, RK Malik v. Kiran Pal, (2019) 14 SCC 1, 9 .) Thus, at the very least, the minimum wage of Rs 6197 as applicable to skilled workers during April 2014 in the State of Haryana ought to be applied in his case.III. Addition of Future Prospects13. Third and most importantly, it is unfair on part of the respondent-insurer to contest grant of future prospects considering their submission before the High Court that such compensation ought not to be paid pending outcome of the Pranay Sethi (supra) reference. Nevertheless, the law on this point is no longer res integra, and stands crystalised, as is clear from the following extract of the afore-cited Constitutional Bench judgment(National Insurance Co Ltd v. Pranay Sethi, (2017) 16 SCC 680, 59 .4.):59.4. In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.14. Given how both deceased were below 40 years and how they have not been established to be permanent employees, future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional income, is both incorrect in law(Sunita Tokas v. New India Insurance Co Ltd, 2019 SCC OnLine SC 1045.) and without merit considering the constant inflation-induced increase in wages. It would be sufficient to quote the observations of this Court in Hem Raj v. Oriental Insurance Co. Ltd. (2018) 15 SCC 654 ., as it puts at rest any argument concerning non- payment of future prospects to the deceased in the present case:7. We are of the view that there cannot be distinction where there is positive evidence of income and where minimum income is determined on guesswork in the facts and circumstances of a case. Both the situations stand at the same footing. Accordingly, in the present case, addition of 40% to the income assessed by the Tribunal is required to be made..IV. Other heads and division of compensation15. Finally, given the lack of arguments on the other heads of funeral charges, loss of estate, love, and affection; there arises no cause of alteration. We similarly see no infirmity with the High Courts adoption of 17 as the age-multiplier, award of 9% interest, calculation of Poonams notional income or the division of total compensation in the ratio of 1:2:2 between the grandfather and the two girls.