Case: National Insurance Co.Ltd Vs. Kusuma

On 28th June 1995, the car in which Mrs. Kusuma, respondent No.1 in this appeal (hereinafter referred to as "the claimant"), aged about 36 years, was travelling from Sullia to Puttur collided with a Bus owned by Karnataka State Road Transport Corporation, respondent No.2 herein. Due to the impact of the accident, the claimant and others sustained injuries. The claimant, who was 30 weeks pregnant, suffered a fatal blow on the stomach. She was admitted in the hospital, where an X-ray and scanning of the foetus showed that the baby had died inside the uterus. On an induced delivery, the following day she delivered a still born baby. The claimant filed a claim petition under Section 166 of the Act before the Tribunal, Mangalore, making a claim of `2,00,000/- with cost and interest at 12%, towards the expenses incurred on medical treatment, mental shock, pain and loss of child.4. The Tribunal vide award dated 5th October 2004, inter alia, held that loss of foetus on account of injury sustained by the claimant in the accident was akin to the death of a child of a tender age. Relying on a decision of the Karnataka High Court, wherein the Court had awarded a compensation of `25,000/- towards the loss of affection and `25,000/- towards the loss of estate on the death of a child of less than 1 year of age in an accident, the Tribunal allowed the claim in part and awarded a compensation of an amount of `50,000/- towards the loss of unborn child and a further sum of `10,000/- towards pain and sufferings to the claimant, along with an interest @ 6% per annum from 18th November 1995 i.e. the date of institution of the claim petition till the date of deposit/payment. The Insurance Company, the appellant in this appeal, was directed to pay the said compensation to the claimant, in order to indemnify the owner of the car. Claim petition against the owner of the Bus was rejected.5. Dissatisfied with the quantum of compensation awarded by the Tribunal, the claimant filed an appeal before the High Court, seeking enhancement of the aforesaid compensation. Pertinently, the Insurance Company did not question the award.6. Applying the principle indicated by this Court in New India Assurance Company Ltd. Vs. Satender & Ors. ((2006) 13 SCC 60 ), in relation to assessment of quantum of compensation on the death of a child in an accident, the High Court, by a short judgment allowed the appeal in part and enhanced the compensation to a consolidated amount of `1,80,000/- with interest @ 6% per annum from the date of the petition till the date of payment.7. Being aggrieved, the Insurance Company is before us in this appeal.

Court's reasoning:
On receipt of an application for compensation made under Section 166 of the Act, Section 168 of the Act casts an obligation on the Tribunal to determine the amount of compensation "which appears to it to be just". The expression "which appears to it to be just" gives a wide discretion to the Tribunal to determine the compensation which in the opinion of the Tribunal is "just". Explaining the meaning of the word "just" as appearing in Section 110B of the Motor Vehicles Act, 1939, which was in pari materia with Section 168 of theword "just" connotes something which is equitable, fair and reasonable, conforming to rectitude and justice and not arbitrary. It may be true that Section 168 of the Act confers a wide discretion on the Tribunal to determine the amount of compensation but this discretion is also coupled with a duty to see that this exercise is carried out rationally and judiciously by accepted legal standards and not whimsically and arbitrarily, a concept unknown to public law. The amount of compensation awarded is not expected to be a windfall or bonanza for the victim or his dependent, as the case may be, but at the same time it should not be niggardly or a pittance. Thus, determination of "just" amount of compensation is beset with difficulties, more so when the deceased happens to be an infant/ child because the future of a child is full of glorious uncertainties. In the case of death of an infant many imponderables, like life expectancy of the deceased, his prospects to earn, save, spend and distribute have to be taken into account. It is quite possible that there may be no actual pecuniary benefit which may be derived by his parents during the life time of the child. But at the same time that cannot be a ground to reject the claim of the parents, albeit they establish that they had reasonable expectation of pecuniary benefit if the child had lived. The question whether there exists a reasonable expectation of pecuniary benefit is always a mixed question of fact and law but a mere speculative possibility of benefit is notis quite true, as observed in Satender & Ors. (supra), that the question of assessment of compensation in a case where the deceased is an infant involves a good deal of guesswork but in our view it cannot be a wild guesswork. As aforesaid, some material has to be adduced by the claimants to prove that they entertained a reasonable expectation of pecuniary advantage from the deceased. There are quite a few precedents providing guidelines for determination of compensation in such cases but because of nature of the order we propose to pass on facts in hand, we deem it unnecessary to burden the judgment by making a reference to all these cases, except to note that in Lata Wadhwa & Ors. Vs. State of Bihar & Ors. ((2001) 8 SCC 197 ) as also in M.S. Grewal & Anr. Vs. Deep Chand Sood & Ors. ((2001) 8 SCC 151 ), wherein a large number of young school going children had lost their lives, respectively in fire and by drowning, multiplier method was adopted and applied for assigning value of future dependency to determine the quantum of compensation.14. Having examined the instant case on the touchstone of the aforestated broad principles, we are of the opinion that neither the Tribunal nor the High Court applied any principle for determination of the amount of compensation on account of the death of a still born child. It is clear from a bare reading of the orders of the Tribunal and the High Court that no reasons have been indicated by the Tribunal while awarding a lump sum amount of `50,000/- towards the loss of unborn child and `10,000/- towards pain and suffering to the mother and by the High Court enhancing the said amounts to a consolidated amount of `1,80,000/-. Besides, in the impugned judgment, we do not find any discussion on the question of non-pecuniary compensation awarded by the Tribunal to the claimant-mother on account of pain and suffering as a result of death of the child. In the normal course, we would have remanded the matter back to the Tribunal for fresh consideration. However, bearing in mind the quantum of compensation awarded by the courts below and the fact that the accident took place in the year 1995, we are of the opinion that at this juncture it would be too harsh to direct the claimants to undergo the entire gamut of a fresh exercise under Section 168 of the Act. Therefore, in the facts and circumstances of the case, we refrain from interfering with the impugned judgment and dismiss the appeal accordingly, with no order as to costs.