The courts are not justified in reducing the compensation without assigning any reason: Supreme court of India

IN THE CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7549 of 2021 Arising out of S.L.P.(C)No.231718 RASMITA BISWAL & ORS DIVISIONAL MANAGER NATIONAL INSURANCE COMPANY LTD. AND ANR JUDGMENT S. ABDUL NAZEER J This appeal is directed against the judgment and order dated 07.03.2018 passed by the High Court of Orissa at Cuttack in MACA No.965 of 2016 whereby the High Court has reduced the compensation payable to the appellants claimants from Rs.22 60 000 to Rs.17 00 000 The first appellant is the wife of one Manoj Kumar Biswal and the second and third appellants are their minor sons. Manoj Kumar Biswal died in a motor vehicle accident which occurred on 09.05.2013. The appellants filed claim petition bearing MAC No.46 2013 before the Additional District Judge cum Motor Accident Claims Tribunal Talcher District seeking compensation on account of the death of Manoj Kumar Biswal. The first respondent owner of the offending truck filed his written statement denying any negligence on the part of the driver of the offending truck Respondent no.2 is the insurer who also filed the written statement opposing the claim petition. The Tribunal on appreciation of the materials on record held that the cause for the accident was the rash and negligent driving of the offending truck by its driver. The Tribunal awarded a total compensation of Rs.12 90 064 along with interest at the rate of 6% per annum. The claimants as well as the insurer challenged the award of the Tribunal before the High Court vide MACA Nos.1134 and 11614. The High Court set aside the award and remitted the matter back to the Tribunal for fresh disposal. The Tribunal once again considered the matter and awarded a total compensation of Rs.22 60 000 . The insurer challenged the award of the Tribunal before the High Court by filing an appeal bearing MACA No.9616. In that appeal the High Court has modified the award of the Tribunal and awarded compensation of Rs.17 00 000 with interest at the rate of 7.5% per year from the date of claim petition till the date of realization. Learned counsel for the appellant would contend that the High Court was not justified in reducing the compensation without assigning any reason. It is contended that the appellant was earning Rs.15 000 and was aged about 28 years at the time of his death. The Courts below have taken his age as 33 years and has applied multiplier ‘16’ instead of ‘15’. It is further argued that the deceased had a permanent job. The Courts below have not awarded any compensation towards loss of future prospects. Even the compensation awarded under the conventional heads is not in accordance with the judgment of this Court in National Insurance Company Limited v. Pranay Sethi and On the other hand learned advocate appearing for the respondent insurer has supported the judgment of the High Court 7. We have carefully considered the submissions made at the Bar and perused the materials placed on record The finding of the Tribunal and that of the High Court with regard to the cause of the accident and the liability of the insurer to pay compensation is not disputed. Therefore the only question for consideration is whether compensation awarded by the High Court is adequate. The deceased was working as supervisor under one Kusha Samalproprietor of M s. Divine Construction. Exhibit P 8 is certificate issued by PW 3 shows that the deceased was a supervisor in the organisation and his salary 116 SCC 680 was Rs.15 000 per month. In his evidence PW 3 has also stated that the deceased was paid salary of Rs.15 000 per month. The first appellant wife of the deceased was examined as PW 1. She has stated that the income of the deceased at the time of his death was Rs.15 000 per month. Taking into account the evidence on record the Tribunal has assessed his income at Rs.15 000 . We do not find any error with the assessment of the salary as such by the Tribunal Though the appellants claim that the deceased was aged 28 years at the of his death no documents have been produced in support of the said contention On the contrary PAN cardof the deceased shows that he was aged 33 years at the time of his death. Even the post mortem report of the deceased suggests the same. Therefore the Tribunal held that the deceased was aged 33 years and multiplier ‘16’ was applied. After deducting ¼ of the income towards the personal expenses of the deceased the Tribunal awarded a total compensation of Rs.21 60 000 towards loss of dependency and a sum of Rs.1 00 000 under other conventional heads. Thus a total sum of Rs.22 60 000 was awarded by the Tribunal 11. However the High Court without assigning any reason whatsoever has modified the award of the Tribunal and has awarded a compensation of Rs.17 00 000 by holding as under “Considering the submissions made and keeping in view the quantum of compensation amount awarded and the basis on which the same has been arrived at I feel the interest of justice would be best served if the awarded compensation amount of Rs.22 60 000 is modified and reduced to Rs.17 00 000 Rupees Seventeen Lakhs) only which is payable to the claimants along with the awarded interest. The impugned award is modified to the said extent.” Section 173 of the Motor Vehicles Act 1988 provides for filing of an appeal against the award passed by the Claims Tribunal. It is settled law that an appeal is continuation of the proceedings of the original Court Tribunal. An appeal is a valuable right of the appellant and at the stage of an appeal all questions of fact and law decided by the Tribunal are open for the reconsideration. Therefore the appellate court is required to address all the questions before it and decide the case by giving reasons. 13. We have already held that the monthly income of the deceased as assessed by the Tribunal at the rate of Rs.15 000 per month is just and proper It is also established that the deceased was 33 years at the time of his death Therefore application of multiplier of ‘16’ by the Tribunal is also proper. The annual salary of the deceased comes to Rs.1 80 000 which has to be multiplied by ‘16’ which becomes Rs.28 80 000 In Pranay Sethi 1 the Constitution Bench of this Court has held that in case the deceased was self employed or on a fixed salary an addition of 40% of the established income should be awarded where the deceased was below the age of 40 years “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.” 40% of the income of the deceased therefore has to be added towards loss of future prospects which comes to Rs.11 52 000 . Thus the total income of the deceased is Rs.40 32 000 . One fourth of the income i.e. 10 08 000 has to be deducted towards the personal expenses of the deceased as he has left behind three dependants. Therefore the total amount payable to the claimants towards loss of dependency comes to Rs.30 24 000 . In Pranay Sethi 1 this Court has awarded a total sum of Rs.70 000 under conventional heads namely loss of estate loss of consortium and funeral expenses. The said Judgment of the Constitution Bench was pronounced in the year 2017. Therefore the claimants are entitled to 10% enhancement Rs.16 500 is awarded towards loss of estate and conventional expenses and Rs.44 000 is awarded towards spousal consortium. Thus the total compensation payable to the claimants is as under Towards loss of dependency Towards loss of estate Rs.30 24 000 Rs.16 500 Rs.16 500 Rs.44 000 Rs.31 01 000 17. As noticed above the High Court has already awarded a sum of Rs.17 00 000 . Thus the balance sum payable to the appellants is Rs.14 01 000 . The second respondent Insurer is directed to deposit a sum of Rs.14 01 000 before the Tribunal along with interest at the rate of 7.5% per annum from the date of claim petition till the date of realization within eight weeks from today. On such deposit being made the same shall be disbursed to the claimants appellants in the same proportion as directed by the Tribunal in Award dated 27.02.2016 The appeal is accordingly disposed of. There shall be no order as to costs 19. Before parting with the judgment we may notice that a large number of claim petitions under the provisions of the Motor Vehicles Act 1988 are being filed before the various Claims Tribunals established thereunder throughout the country. Against the awards of the Tribunals appeals are filed under Section 173 of the Motor Vehicles Act 1988 before the relevant High Court either by the claimants or by the insurers and owners of the offending vehicles. Large number of such appeals are pending before the various High Courts. Having regard to the above we are of the view that in order to curtail the pendency before the High Courts and for speedy disposal of the appeals concerning payment of compensation to the victims of road accident it would be just and proper to consider constituting ‘Motor Vehicle Appellate Tribunals’ by amending Section 173 of the Motor Vehicles Act so that the appeals challenging the award of a Tribunal could be filed before the Appellate Tribunal so constituted. The various Benches of such an Appellate Tribunal could consist of two Senior District Judges. To ensure access to justice and to avoid pendency it is also proper to consider setting up Benches of the Appellate Tribunal in various regional cities in addition to the capital city of each State as may be indicated by the relevant High Court. For this purpose appropriate rules governing the procedure of the Appellate Tribunal may also be framed. No further appeal against the order of the Appellate Tribunal need be provided. If any of the party is aggrieved by the order of the Appellate Tribunal he can always invoke the writ jurisdiction of the concerned High Court for appropriate reliefs Department of Justice Ministry of Law and Justice is requested to examine this matter. The Registry is directed to send a copy of this Judgement to the Secretary Department of Justice Ministry of Law and Justice forthwith. (S. ABDUL NAZEER (KRISHNA MURARI New Delhi December 08 2021

Summary: An appeal is a valuable right of the appellant and at the stage of an appeal, all questions of fact and law decided by the Tribunal are open for reconsideration. Therefore, the appellate court is required to address all the questions before it and decide the case by giving reasons. Such an observation was made by the Hon’ble Supreme Court of India before Hon’ble Justice S. ABDUL NAZEER Hon’ble Justice KRISHNA MURARI in the matter of RASMITA BISWAL &amp; ORS. vs DIVISIONAL MANAGER, NATIONAL INSURANCE COMPANY [CIVIL APPEAL NO. 7549 of 2021] 
The facts of the case were that the husband of the claimant, Manoj Kumar Biswal, died in a motor vehicle accident. The Motor Vehicle Accident Tribunal held the accident occurred due to the negligence and rash driving of the offending truck and held an award of Rs .12,90,064/- along with interest at the rate of 6% per annum. Aggrieved by the quantum of the award both the claimant and the insurer appealed before the High Court. The High Court set aside the award and remitted the matter back to the Tribunal for fresh disposal. The Tribunal once again considered the matter and awarded total compensation of Rs.22,60,000/-. Aggrieved, the insurer once again appeal before the High Court and the high court reduced the said award from Rs.22,60,000/- to Rs.17,00,000/-. with interest at the rate of 7.5% per year from the date of the claim petition till the date of realization. Aggrieved by such a reduction in the compensation award the claimant had filed the instant appeal.

The Hon’ble Supreme Court observed that “the High Court, without assigning any reason whatsoever, has modified the award of the Tribunal and has awarded a compensation of Rs.17,00,000/-”

Additionally, the Hon’ble Supreme Court observed that the monthly income of the deceased, as assessed by the Tribunal at the rate of Rs.15,000/- per month, is just and proper. It is also established that the deceased was 33 years at the time of his death. Therefore, the application of a multiplier of ‘16’ by the Tribunal is also proper. The annual salary of the deceased comes to Rs.1,80,000/- which has to be multiplied by ‘16’ which becomes Rs.28,80,000/- Further, an addition of 40% of the established income should be awarded where the deceased was below the age of 40 years as held in the case of Pranay Sethi  (2017) 16 SCC 680 by the constitutional bench.

Finally, Hon’ble Supreme Court allowed the appeal and enhanced the compensation to Rs. 31,01,000/-. Furthermore, the Hon’ble Supreme Court suggested the formation of Motor Vehicle Appellate Tribunals for speedy disposal of the appeals concerning payment of compensation to the victims of road accidents.
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Judgment Reviewed by: Rohan Kumar Thakur
 The facts of the case were that the husband of the claimant, Manoj Kumar Biswal, died in a motor vehicle accident. The Motor Vehicle Accident Tribunal held the accident occurred due to the negligence and rash driving of the offending truck and held an award of Rs .12,90,064/- along with interest at the rate of 6% per annum. Aggrieved by the quantum of the award both the claimant and the insurer appealed before the High Court. The High Court set aside the award and remitted the matter back to the Tribunal for fresh disposal. The Tribunal once again considered the matter and awarded total compensation of Rs.22,60,000/-. Aggrieved, the insurer once again appeal before the High Court and the high court reduced the said award from Rs.22,60,000/- to Rs.17,00,000/-. with interest at the rate of 7.5% per year from the date of the claim petition till the date of realization. Aggrieved by such a reduction in the compensation award the claimant had filed the instant appeal. 
The Hon’ble Supreme Court observed that “the High Court, without assigning any reason whatsoever, has modified the award of the Tribunal and has awarded a compensation of Rs.17,00,000/-”

Additionally, the Hon’ble Supreme Court observed that the monthly income of the deceased, as assessed by the Tribunal at the rate of Rs.15,000/- per month, is just and proper. It is also established that the deceased was 33 years at the time of his death. Therefore, the application of a multiplier of ‘16’ by the Tribunal is also proper. The annual salary of the deceased comes to Rs.1,80,000/- which has to be multiplied by ‘16’ which becomes Rs.28,80,000/- Further, an addition of 40% of the established income should be awarded where the deceased was below the age of 40 years as held in the case of Pranay Sethi  (2017) 16 SCC 680 by the constitutional bench.

Finally, Hon’ble Supreme Court allowed the appeal and enhanced the compensation to Rs. 31,01,000/-. Furthermore, the Hon’ble Supreme Court suggested the formation of Motor Vehicle Appellate Tribunals for speedy disposal of the appeals concerning payment of compensation to the victims of road accidents.
Click Here To Read The Judgment
Judgment Reviewed by: Rohan Kumar Thakur
 The Hon’ble Supreme Court observed that “the High Court, without assigning any reason whatsoever, has modified the award of the Tribunal and has awarded a compensation of Rs.17,00,000/-” 
Additionally, the Hon’ble Supreme Court observed that the monthly income of the deceased, as assessed by the Tribunal at the rate of Rs.15,000/- per month, is just and proper. It is also established that the deceased was 33 years at the time of his death. Therefore, the application of a multiplier of ‘16’ by the Tribunal is also proper. The annual salary of the deceased comes to Rs.1,80,000/- which has to be multiplied by ‘16’ which becomes Rs.28,80,000/- Further, an addition of 40% of the established income should be awarded where the deceased was below the age of 40 years as held in the case of Pranay Sethi  (2017) 16 SCC 680 by the constitutional bench.

Finally, Hon’ble Supreme Court allowed the appeal and enhanced the compensation to Rs. 31,01,000/-. Furthermore, the Hon’ble Supreme Court suggested the formation of Motor Vehicle Appellate Tribunals for speedy disposal of the appeals concerning payment of compensation to the victims of road accidents.
Click Here To Read The Judgment
Judgment Reviewed by: Rohan Kumar Thakur
 Additionally, the Hon’ble Supreme Court observed that the monthly income of the deceased, as assessed by the Tribunal at the rate of Rs.15,000/- per month, is just and proper. It is also established that the deceased was 33 years at the time of his death. Therefore, the application of a multiplier of ‘16’ by the Tribunal is also proper. The annual salary of the deceased comes to Rs.1,80,000/- which has to be multiplied by ‘16’ which becomes Rs.28,80,000/- Further, an addition of 40% of the established income should be awarded where the deceased was below the age of 40 years as held in the case of Pranay Sethi  (2017) 16 SCC 680 by the constitutional bench. 
Finally, Hon’ble Supreme Court allowed the appeal and enhanced the compensation to Rs. 31,01,000/-. Furthermore, the Hon’ble Supreme Court suggested the formation of Motor Vehicle Appellate Tribunals for speedy disposal of the appeals concerning payment of compensation to the victims of road accidents.
Click Here To Read The Judgment
Judgment Reviewed by: Rohan Kumar Thakur
 Finally, Hon’ble Supreme Court allowed the appeal and enhanced the compensation to Rs. 31,01,000/-. Furthermore, the Hon’ble Supreme Court suggested the formation of Motor Vehicle Appellate Tribunals for speedy disposal of the appeals concerning payment of compensation to the victims of road accidents.