Case: United India Insurance Co.Ltd Vs. Patricia Jean Mahajan

of the amount awarded which is on account of future expenditure yet to be incurred by the claimants. The interest is to be awarded on the amount which is payable on the date of the award. It is also to be noted that in some cases interest at the rate of 6% was awarded. This case however does not help the appellant Insurance Company. The next case which has been cited is reported in 2001 (2) S.C.C. 9 - Kaushnuma Begum (Smt.) and others versus New India Assurance Company Ltd. In this case interest at the rate of 9% was awarded. The reason indicated in Paragraph 24 of the Judgment, we quote hereunder: "Now, we have to fix up the rate of interest, Section 171 of the MV Act empowers the Tribunal to direct that "in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf". Earlier. 12% was found to be the reasonable rate of simple interest. With a change in enconomy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalized banks are now granting interest at the rate of 9% on fixed deposit for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants....." In our view the reason indicated in the case of Kaushnuma Begum (supra) is a valid reason and it may be noticed that the rate of interest is already on the decline. We therefore, reduce the rate of interest to 9% in place of 12% as awarded by the High Court.40. The next point which remains to be considered is in relation to the exchange rate of the Dollar in Rupee. The Motor Accident Claims Tribunal allowed the exchange rate of the Dollar at Rs.30. The learned Single Judge allowed it at the then current rate of Rs.47. The Division Bench restored the exchange rate at Rs. 30 observing that the matter was closed since the claimants had withdrawn the amount as awarded by the Tribunal and the matter was now on the second stage relating to enhanced amount of compensation. Shri P.P. Rao, learned senior counsel appearing for the appellants has vehemently urged that it is only the current rate which should be allowed since the value of the Rupee has fallen in exchange of Dollar after the application for claim was made and award was given. Therefore, the amount of Rupees as arrived at the exchange rate of Rs.47 should be allowed. In connection with his submission about rate of conversion, a reference to a case reported in 1984 Supp. SCC 263 - Oil and Natural Gas Commission versus Forasal has been made. This Court held that rate of conversion as on the date of passing of the decree should be taken on the basis of which conversion should be allowed. We however find that the facts in that case are different. According to the contract itself, a part of the payment was to be made in French currency. The question then arose as to what rate of conversion should be allowed. The Court was of the view that there would be three relevant dates of the purpose, namely, the date on which the amount became payable, the date of the filing of the suit and the date of the judgment and it was further held that it would be fairer to both the parties to take the latest of these dates, namely, the date of passing the decree as the relevant date for applying the conversion rate. In the present case since the deceased was an American citizen, settled there and income accrued to him in America in terms of Dollars, details of income etc, have been given in Dollars but so far the prayer for passing a decree is concerned, it was for a a sum indicated in Rupees which figure was arrived at by the claimants applying Rs.30 as the conversion rate. Therefore, in the present case there is no such dispute as to what rate of conversion was to be applied. As a matter of fact, whatever rate may have been applied by claimants, the fact remains that the decree in terms of Rupees specified for a sum of Rs.54 crores was prayed for. In terms of the prayer whatever amount in rupee was found to be payable to the claimants was decreed. In the present case the exchange rate of Dollar against Rupee was relevant for the purpose of arriving at a fair assessment of the loss of the dependency of the claimants at the relevant time. In such a situation we are of the view that no such question as in the case of Oil and Natural Gas Commission (supra) is involved. The decree was for a definite sum in terms of Rupees, a part of which was found admissible which amount was decreed. There is no occasion to convert the amount of decree in Rupees into Dollars applying Rs.30 as rate of conversion and then re-convert it in Rupees at the rate of Rs. 47. The claimants cannot ask for more than what was prayed for in the claim petition. We are therefore not inclined to accede to the request made for calculation of the amount of award at the conversion rate of Rs.47.41. Shri T.R. Rajagopalan, learned senior counsel appearing for the Insurance Company in SLP (c) 20874/2001 preferred on the question of rash and negligent driving against the driver of the Troller advanced some arguments but we do not think that the findings of fact recorded by the Courts of fact namely the Motor Accident Claims Tribunal and upheld by the learned Single Judge as well as the Division Bench can be re-opened to re-assess the evidence on the point.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. From the provisions quoted above, it is clear that a claim under Section 166 covers cases of all kinds of bodily injuries or damage to the property of third party or both. Under the explanation to1 of Section 165 it has been indicated that the provision includes the claims for compensation under Section 140 and Section 163A but it is nowhere provided that the amount of compensation is to be assessed or calculated according to the second Schedule. On the other hand, Section 168 provides the key leading to determination of amount of compensation under Section 166 of the Act.It thus makes it clear that it is for the Tribunal to arrive at an amount of compensation, which it may consider to be just in the facts and circumstances of the case. This Court however has been of the view that structured formula as provided under the Second Schedule be a safe guide to calculate the amount of just compensation. Division though permissible, may only be resorted to for some special reasons to do so. So far structured formula is concerned, it provides for a maximum multiplier of 18. The application of the multiplier depends upon the age of the deceased, age of his dependents, number of his dependents, the amount of dependency etc. Again we find that the structured formula relates to victim whose income is up to a sum of Rs. 40,000/per annum. It may be clarified that in the present case, it is not in dispute that the multiplier method, which is accepted and prevalent method, would be applicable and has been applied. The question of setting apart 1/3rd of the income on account of expenditure on the self by the deceased is also not in dispute, i.e. to say that the amount of multiplicand and shall be the 2/3rd of annual income of the deceased. The annual income of the deceased, as found by the learned Single Judge and the Division Bench namely $3,39445 is also not in dispute, nor the amount of dependency 2,26297 US Dollars.It was reiterated in para 16 that the multiplier method is logically sound and legally well established as compared to other methods indicated in the other decisions in which different methods of computation was applied. It was observed that those cases cannot be said to have laid any principle of computation of compensation.In the case in hand it is amply clear that it is not the case of any party that proper method of computing the amount of compensation, namely the multiplier method has not been applied. We have already seen that in the decisions referred to, in the earlier part of this judgment it is clearly stated that except in very rare cases, multiplier system should not be deviated from. The other methods, which were in vogue prior to introduction of multiplier system have been held to be no more good system. The choice of multiplier may differ to some degree as observed in the case of Jyoti Kaul (supra) depending upon various facts and circumstances of the case. Though, normally the multiplier as indicated in 2nd schedule should be applied as it is as found to be a safe guide for the purpose of calculation of amount ofSecond Schedule may provide a guide for application of multiplier but for valid and proper reasons, different multiplier can be applied, indeed not exceeding 18 in any case on the upper side. As indicated in the case of Susamma Thomas (supra) itself the Court gave an example of a situation where the age of the victim may be 45 years, but who may be a bachelor with his parents alone as dependents, obviously, meaning thereby that lesser multiplier could be applied in such a case. By applying a multiplier other than the schedule multiplier does not mean that any method other than multiplier method has been applied. For some special reasons some deviation from the scheduled multiplier can be made.17. In the present case we find that the parents of the deceased were 69/73 years. Two daughters were age 17 and 19 years. Main question, which strikes to us in this case is that in the given circumstances the amount of multiplicant also assumes relevance. The total amount of dependency as found by the learned Single Judge and also rightly upheld by the Division Bench comes to 226297 Dollars. Applying multiplier of 10, the amount with interest and the conversion rate of Rs.comes to Rs. 10.38 crores and with multiplier of 13 at the conversion rate of Rs. 30/the amount came to Rs. 16.12 crores with interest. These amounts are huge indeed. Looking to the Indian economy, fiscal and financial situation, the amount is certainly a fabulous amount though in the background of American conditions it may not be so. Therefore, where there is no much of disparity in the economic conditions and affluence of the two places viz. the place to which the victim belongs and the place where the compensation is to be paid, a golden balance must be struck somewhere, to arrive at a reasonable and fair mesne. Looking by the Indian standards they may not be much too overcompensated and similarly not very much under compensated as well, in the background of the country where most of the dependent beneficiaries reside. Two of the dependents namely, parents aged 69/73 years live in India, but four of them are in the United States. Shri Soli J. Sorabjee submitted that the amount of multiplicand shall surely be relevant and in case it is a high amount, a lower multiplier can appropriately be applied. We find force in this submission. Considering all the facts and factors an indicated above, to us it appears that application of multiplier of 7 is definitely on the lower side. Some deviation in the figure of multiplier would not mean that there may be a wide different between the multiplier applied and the scheduled multiplier which in this case is 13. The difference between 7 and 13 is too wide. As observed earlier, looking to the high amount of multiplicand and the ages of the dependents and the fact that parents are residing in India, in our view application of multiplier of 10 would be reasonable and would provide a fair compensation i.e. a purchased factor of 10 years. We accordingly hold that multiplier of 10 as applied by the learned Single Judge should be restored instead of multiplier of 13 as applied by the Division Bench. We find no force in the submission made on behalf of the claimants that in no circumstances the amount of multiplicand would be a relevant consideration for application of appropriate multiplier. We have already given our reasons in the discussion heldthe above passage it is clear that the deductions are admissible from the amount of compensation in case the claimant receives the benefit as a consequences of injuries sustained, which otherwise he would not have been entitled to. It does not cover cases where the payment received is not dependent upon an injury sustained on meeting with an accident. The other observation to which our attention has been drawn at Page 876 plassitam F also does not help the contention raised on behalf of the Insurance Company for deduction of amounts in the present case. The Court was considering a situation where due to the injuries received the victim was claiming cost of care necessary in future in respect of which statutory provision, provided for attendants allowance. It was found that the statutory benefit and the damages claimed were designed to meet the identical expenses. This is however not so, at least not shown, to be so in the case in hand.A perusal of the recommendations of the Royal Commission headed by Lord Pearson as referred to and relied upon on behalf of the Insurance Company also does not indicate that, all kinds of receipts or benefits as may be payable to the claimants from whatever source and under whatever statutory provisions have to be deducted. The recommendations made specific mention about non deductibility of amount of pension the benefit on account of Life Insurance, Child benefit and maternity benefit etc. It is also specifically provided under para 482 quoted above that the recommendation is for deducting full value of social security benefits payable as a result of injury for which damages are awarded. That is to say benefits not related to the injury are not to be taken into account for deductions.We are in full agreement with the observations made in the case of Helen Rebello (supra) that principle of balancing between losses and gains, by reason of death, to arrive at amount of compensation is a general rule, but what is more important is that such receipts by the claimants must have somewith the accidental death by reason of which alone the claimants have received the amounts. We do not think it would be necessary for us to go into the question of distinction made between the provisions of the Fatal Accident Act and the Motor Vehicles Act. According to the decisions referred to in the earlier part of this Judgment, it is clear that amount on account of social security as may have been received must have nexus of relation with the accidental injury or death, so far to be deductible from the amount of compensation. There must be somebetween the amount received and the accidental death or it may be in the same sphere, absence the amount received shall not be deducted from the amount of compensation. Thus the amount received on account of insurance policy of the deceased cannot be deducted from the amount compensation though no doubt the receipt of the insurance amount is accelerated due todeath of the insured. So far other items in respect of which learned counsel for the Insurance Company has vehemently urged for example some allowance paid to the children and Mrs. Patricia Mahajan under the social security system noof those receipts with the accidental death has been shows much less established. Apart from the fact that contribution comes from different sources for constituting the fund out of which, payment on account of social security system is made one of the constituent of found is tax which is deducted from income for the purpose. We feel that the High Court has rightly disallowed any deduction on account of receipts under the Insurance Policy and other receipts under social security system which the claimant would have also otherwise entitled to receive irrespective of accidental death of Dr. Mahajan. If the proposition "receipts from whatever source" is interpreted so widely that it may cover all the receipts, which may come into the hands of the claimants, in view of the mere death of the victim, it would only defeat the purpose of the Act providing for just compensation on account of accidental death. Such gains may be on account of savings or other investment etc. made by the deceased would not go to the benefit of wrong doer and the claimant should not be left worse of, if he had never taken an Insurance Policy or had not made investments for future returns.37. We therefore, do not allow any deduction as pressed by the Insurance Company on account of receipts of Insurance Policy and social security benefits received by the claimants.Learned senior counsel for the respondent Shri P.P. Rao took an objection that the question relating to rate of interest was not under challenge before the High Court. He has referred to the observations made by the Divisions Bench in its judgment to the effect "in any case, the rate of interest is not in dispute before us". Thereafter it is observed that the Tribunal had awarded interest @ 12% per annum which was maintained by the learned Single Judge. Consequently, the Division Bench also did not think it appropriate to interfere with the award of interest @ 12% per annum. It is however refuted by the learned counsel for the Insurance Company that the rate of interest was not in dispute. The learned counsel for the respondent has however submitted that the factual position as recorded by the Court that the rate of interest was not in dispute before the Court, should not be allowed to be disputed and it should be treated conclusive of the fact that the rate of interest was not in dispute before the Division Bench. He has in support of his contention referred to decision of this Court, reported in (1982 2 S.C.C. 463State of Maharashtra versus Ramdas Shrinivas Nayak and another and 1992 Supp. (1) S.C.C. Apar (P) Ltd. and another versus Union of India and others in which it has been held a that concession made by a party and an observation made to that effect in the judgment, cannot be allowed to be denied. Only the Court which recorded the statement itself was competent to rectify the error if the Court recording the statement was approached to consider the matter without delay. The position as indicated in thedecisions is undoubtedly correct and cannot be doubted. But in certain cases where a stay remark or observation made by the Court which is not very clear and is vague, and a different picture emerges from other part of judgment it may be open for this Court to ascertain to correct position on the basis of totality of the observations made in the judgment itself. In that light we may see the observations of the Division Bench in its judgment. It is nowhere indicated that the counsel appearing for the Insurance Company had made any statement conceding the rate of interest nor it is indicated how the concession was made. Then the observation that the "rate of interest was not in dispute before the Court" may only lead to an inference that the rate of interest was not disputed before the Court in the arguments advanced on behalf of the party concerned. But we, on the other hand find that, on behalf of the Insurance Company, the learned counsel had cited the decisions to indicate that the lower rate of interest was awarded in certain decisions, which had been relied upon by him. This is enough to indicate that the rate of interest was actually disputed. More than one case, a reference of which has been made in the judgment of the Division Bench itself, has been relied upon by the counsel for the Insurance Company for reducing the rate ofthe observations made in the case of Kanshnuma Begum (Supra) have been quoted. After so much discussion on the point of rate of interest and after mentioning the decisions relied upon by both the sides on their part, it could not be said that rate of interest was not in dispute before the Court. As indicated earlier the observation is not indicated to have been made in reference to any statement of the counsel for the party nor it comes out that the respective parties may not have advanced arguments for maintaining the rate of interest as awarded and the other party for reducing the rate of interest. In the light of the position indicated above, we do not think it will be possible to shut out the Insurance Company from urging before us that lesser rate of interest should have been awarded in place of 12% as awarded by the High Court. Before us also, learned counsel for the Insurance Company has referred the decision of this Court reported in 1999 (8) S.C.C. 226A Robert versus Insurance Company Limited to indicate that interest at the rate of 6% was awarded in that case. Another case cited awarding 6% interest is reported in 2001 A.C.C. 540, particularly paragraph 35 has been referred. [1970 All ER 1202R.D. Hattangadi versus Pest Control (India) Pvt. Ltd. and others, more particularly Para 18 of the judgment where it has been held that no interest is awardable on the amount of future expenditure. It is further observed: "It need nor be pointed out that interest is to be paid over the amount which has become payable on the date of award and not which is to be paid for expenditures to be incurred in future" But it is not indicated by the learned counsel for the appellant Insurance Company as to which is that amount out of the amount awarded which is on account of future expenditure yet to be incurred by the claimants. The interest is to be awarded on the amount which is payable on the date of the award. It is also to be noted that in some cases interest at the rate of 6% was awarded. This case however does not help the appellant Insurance Company. The next case which has been cited is reported in 2001 (2) S.C.C. 9Kaushnuma Begum (Smt.) and others versus New India Assurance Company Ltd. In this case interest at the rate of 9% wasour view the reason indicated in the case of Kaushnuma Begum (supra) is a valid reason and it may be noticed that the rate of interest is already on the decline. We therefore, reduce the rate of interest to 9% in place of 12% as awarded by the High Court.40.The next point which remains to be considered is in relation to the exchange rate of the Dollar in Rupee.The Motor Accident Claims Tribunal allowed the exchange rate of the Dollar at Rs.30. The learned Single Judge allowed it at the then current rate of Rs.47. The Division Bench restored the exchange rate at Rs. 30 observing that the matter was closed since the claimants had withdrawn the amount as awarded by the Tribunal and the matter was now on the second stage relating to enhanced amount of compensation. Shri P.P. Rao, learned senior counsel appearing for the appellants has vehemently urged that it is only the current rate which should be allowed since the value of the Rupee has fallen in exchange of Dollar after the application for claim was made and award was given. Therefore, the amount of Rupees as arrived at the exchange rate of Rs.47 should be allowed. In connection with his submission about rate of conversion, a reference to a case reported in 1984 Supp. SCC 263Oil and Natural Gas Commission versus Forasal has been made. This Court held that rate of conversion as on the date of passing of the decree should be taken on the basis of which conversion should be allowed. We however find that the facts in that case are different. According to the contract itself, a part of the payment was to be made in French currency. The question then arose as to what rate of conversion should be allowed. The Court was of the view that there would be three relevant dates of the purpose, namely, the date on which the amount became payable, the date of the filing of the suit and the date of the judgment and it was further held that it would be fairer to both the parties to take the latest of these dates, namely, the date of passing the decree as the relevant date for applying the conversion rate. In the present case since the deceased was an American citizen, settled there and income accrued to him in America in terms of Dollars, details of income etc, have been given in Dollars but so far the prayer for passing a decree is concerned, it was for a a sum indicated in Rupees which figure was arrived at by the claimants applying Rs.30 as the conversion rate. Therefore, in the present case there is no such dispute as to what rate of conversion was to be applied. As a matter of fact, whatever rate may have been applied by claimants, the fact remains that the decree in terms of Rupees specified for a sum of Rs.54 crores was prayed for. In terms of the prayer whatever amount in rupee was found to be payable to the claimants was decreed. In the present case the exchange rate of Dollar against Rupee was relevant for the purpose of arriving at a fair assessment of the loss of the dependency of the claimants at the relevant time. In such a situation we are of the view that no such question as in the case of Oil and Natural Gas Commission (supra) is involved. The decree was for a definite sum in terms of Rupees, a part of which was found admissible which amount was decreed. There is no occasion to convert the amount of decree in Rupees into Dollars applying Rs.30 as rate of conversion and thenit in Rupees at the rate of Rs. 47. The claimants cannot ask for more than what was prayed for in the claim petition. We are therefore not inclined to accede to the request made for calculation of the amount of award at the conversion rate of Rs.47.41.Shri T.R. Rajagopalan, learned senior counsel appearing for the Insurance Company in SLP (c) 20874/2001 preferred on the question of rash and negligent driving against the driver of the Troller advanced some arguments but we do not think that the findings of fact recorded by the Courts of fact namely the Motor Accident Claims Tribunal and upheld by the learned Single Judge as well as the Division Bench can bess the evidence on the point.