ORIENTAL INSURANCE CO LTD vs PAWAN KUMAR SHARMA & ORS
* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on : 26 February 2024 Judgment pronounced on : 15 April 2024 + MAC. APP. 426/2014 & CM APPL. 8024/2014 ORIENTAL INSURANCE CO. LTD. ….. Appellant Through: Mr. Pradeep Gaur with Ms. Sweta Sinha, Advs. versus PAWAN KUMAR SHARMA & ORS. ….. Respondents Through: Mr. G.C. Tragic, Mr. Anurag Tyagi, Mr. Hemant Singh, Mr. Bhavesh Bhushan and Mr. Harsh Vardhan, Advs. CORAM: HON’BLE MR. JUSTICE DHARMESH SHARMA J U D G M E N T
1. This judgment shall decide the present appeal preferred by the appellant/Oriental Insurance Company Ltd., in terms of Section 173 of the Motor Vehicles Act, 19881, assailing the common Impugned judgment cum award dated 16.12.2013 passed by the learned Motor Accident Claims Tribunal, Rohini, Delhi2, in MACT Nos. 1075/07 and 1076/073, titled as Pawan Kumar Sharma Vs. Sita Ram & Ors., in so far as the quantum of compensation awarded to the claimant husband on the death of his young wife aged about 30 years in the motor accident that occurred on 04.09.2007.
1 MV Act 2 Tribunal 3 Claim Petition
FACTUAL BACKGROUND:
2. Shorn of unnecessary details, deceased Mrs. Seema Sharma and Master Arijit Sharma aged 2.5 years i.e., the wife and child of the claimant died in a motor accident when the car driven by the claimant husband was hit by the offending Truck bearing registration No. HR-38D-3197 driven by respondent no. 2 Sita Ram (Respondent No. 2 herein), who was held to be responsible for driving it in a rash and negligent manner. The claimant filed three claim petitions bearing MACT No. 1075/07, 1076/07 and 1077/07 before the learned MACT, Rohini, Delhi on 15.12.2007 seeking compensation for the death of his wife and son besides injuries to himself and impleaded the insurer (appellant herein) of the offending vehicle as well as the owner and the driver of the offending vehicle in the aforesaid claim petitions.
3. As regards the quantum of compensation on account of death of the wife, the learned Tribunal relied upon the testimony of PW1 (claimant-husband) and PW2 (employer) to hold that the deceased/wife was working as an Executive-Advertisement Operator in M/s Metropolitan Media Co. Pvt. Ltd from 19.12.2006 till her death, drawing a salary of Rs. 2,42,174/- per annum and was an income tax assessee. The appointment and monthly salary of the deceased was proved by PW2 vide appointment letter dated 19.12.2006 and the salary statement of the employer company i.e. M/s Metropolitan Media Co. Pvt. Ltd. (Ex. PW2/A and PW2/B). Accordingly, the monthly salary of the deceased reckoned to be as Rs. 14,133/- per month for the purposes of assessment of compensation inter alia assuming that the employer would be paying the salary after
deduction of tax in terms of decision of the Supreme Court in the case of Vimal Kanwar v. Kishore Dans4 in which it was held that ” it is duty of the employer to deduct TDS from the salary of the employee and in case income of the victim is only from “salary”, the presumption would be that employer had deducted the tax from the salary of employee.
4. Further, relying upon the decisions in the case of Rajesh v. Rajbir Singh5, Santosh Devi v. National Insurance Company Ltd.6, the learned Tribunal held that an addition of 50% to the actual income of the deceased shall be made for the computation of future prospects. Accordingly, the learned Tribunal computed the total compensation amount payable to the claimant for the death of his wife Mrs. Seema Sharma, in the following manner:
4 Civil Appeal No. 5513 of 2012 decided on May 03, 2013 5 2013(9) SCC 54 6 2012(6) SCC 421
S. No.
Head
Amount
1.
Monthly Salary
Rs.14,133/-
2.
Addition towards future prospects
Rs. 21,199/- (Rs. 14,133 + 7066)
3.
1/3rd deduction towards personal and living expenses
Rs. 14,133/- (Rs.21,199 -7066)
4.
Multiplier
17
5.
Total Loss of dependency
Rs.28,83,132/- (Rs.14,133x12x17)
7.
Loss of consortium
Rs. 1,00,000/-
6.
Funeral Expenses
Rs. 25,000/-
7.
Loss of love and affection
Rs. 1,00,000/-
8.
Loss of Estate
Rs. 10,000/-
Total Compensation
Rs. 31,18,132/- (Rs. 28,83,132 +2,35,000)
Total compensation after deduction of interim award amount
Rs. 30,68,132/- (Rs. 31,18,132- 50,000)
5. Lastly, the learned Tribunal vide impugned judgment cum award dated 16.12.2013 directed the Respondent No.3/ insurance company (appellant herein) to deposit the awarded compensation amount of Rs. 30,68,132/- with interest @ 7.5 % per annum within 30 days from the date of filing of the claim petition till notice of deposit of the award amount. The learned tribunal concluded its findings by stating that recovery rights are granted to Respondent No.3/insurance company against Respondent No.1/driver and Respondent No.2/ owner of the offending vehicle, jointly and severally, apparently for non-possession of a valid permit.
GROUNDS OF APPEAL:
6. The impugned judgment-cum-award has been assailed by the appellant firstly on the ground that the claimant did not establish that he was financially dependent on the earning of the deceased/wife; and secondly, that after the death of his wife, the claimant married the younger sister of the deceased, hence he is not entitled to the amount awarded by the learned Tribunal. Thirdly, the learned Tribunal erred when it deducted 1/3rd towards personal expenses and applied a multiplier of 17 despite the fact that after the death of his wife and his minor son, there remained no other legal heir of the deceased except the claimant himself, who has otherwise been financially independent. Fourthly, the learned Tribunal assessed the salary of the
deceased without considering any deductions on account of personal expenses as well as income tax. Furthermore, the learned Tribunal erred when it considered the future increase in the income @ 50% in ignorance of the fact that the deceased did not have a stable job and had worked only for a period of 8 months before her death. Lastly, the appellant has contended that in awarding such high amounts on account of non-pecuniary damages, the impugned judgment-cum-award passed by the learned Tribunal has resulted in gross miscarriage of justice and loss to the public exchequer.
ANALYSIS AND DECISION:
7. I have given by thoughtful consideration to the submissions advanced by learned counsels for the rival parties at the Bar. I have also perused the relevant records of the case including the digitized Trial Court record.
8. The issue as to how and in what manner compensation has to be assessed in the case of death of wife, came for consideration before this Court in the case of Keith Rowe v. Prashant Sagar7, wherein the deceased/wife was 31 years of age and there was no child from the wedlock and in the said factual circumstances, the Court summarized the principles of law as under:
7 2010 SCC OnLine Del 4686
(i) The law contemplates two categories of damages on the death of a person. The first is the pecuniary loss sustained by the dependant members of his family as a result of such death. The second is the loss caused to the estate of the deceased as a result of such death. In the first category, the action is brought by the legal representatives, as trustees for the dependants beneficially entitled. In the second category, the action is brought by the legal representatives, on behalf of the estate of the deceased and the
compensation, when recovered, forms part of the assets of the estate. In the first category of cases, the Tribunal in exercise of power under Section 168 of the Act, can specify the persons to whom compensation should be paid and also specify how it should be distributed (Note: for example, if the dependants of a deceased Hindu are a widow aged 35 years and mother aged 75 years, irrespective of the fact that they succeed equally under Hindu Succession Act, the Tribunal may award a larger share to the widow and a smaller share to the mother, as the widow is likely to live longer). But in the second category of cases, no such adjustments or alternation of shares is permissible and the entire amount has to be awarded to the benefit of the estate. Even if the Tribunal wants to specify the sharing of the compensation amount, it may have to divide the amount strictly in accordance with the personal law governing succession, as the amount awarded and recovered forms part of the estate of the deceased. (ii) Where the claim is by the dependants, the basis for award of compensation is the loss of dependency, that is loss of what was contributed by the deceased to such claimants. A conventional amount is awarded towards loss of expectation of life, under the head of Loss to Estate. (iii) Where the claim by the legal representatives of the deceased who were not dependants of the deceased, then the basis for award of compensation is the loss to the estate, that is the loss of savings by the deceased. A conventional sum for loss of expectation of life, is added. (iv) The procedure for determination of loss to estate is broadly the same as the procedure for determination of the loss of dependency. Both involve ascertaining the multiplicand and capitalising it by multiplying it by an appropriate multiplier. But, the significant difference is in the figure arrived at as multiplicand in cases where the claimants who are dependants claim Loss of Dependency, and in cases where the claimants who are not dependents claim Loss to Estate. The annual contribution to the family constitutes the multiplicand in the case of loss of dependency, whereas the annual savings of the deceased becomes the multiplicand in the case of Loss to Estate. The method of selection of multiplier is however the same in both cases.
9. In the light of the aforesaid principles of law and also relying upon the judgment of the Karnataka High Court in the case of A.
Manavalagan v. A. Krishnamurthy8, wherein the Court held that where the surviving husband was not financially dependent upon the deceased/wife, there was no question of determination of loss of financial dependency, except that the compensation has to be reckoned towards loss of estate which should be 1/3rd of the annual income of the deceased applied by suitable multiplier. Thus, in the case of Keith Rowe (supra), this Court assumed the income of the deceased/wife @ Rs.13,000/- p.m. towards which 50% was added for future prospects and 1/3rd was assessed towards loss of estate to which multiplier of 15 was applied.
10. It appears that the learned Tribunal was not apprised of the decision in the case of Keith Rowe and it is but apparent that the learned Tribunal has committed grave error in assessing compensation towards loss of financial dependency on account of death of the wife of the claimant husband, who has otherwise got re-married as well. This Court does not wish to hold that re-marrying by a spouse would non-suit him or her in seeking compensation. Certainly, that cannot be the law as every individual is free to make certain choices in his or her life in case of death of his/her spouse and seek companionship for the rest of the life.
11. However, the case-law is replete with the proposition that the compensation has to be just and reasonable and not a bounty and in a contemporary Indian society which is by and large patriarchal set up, while death of the wife would definitely entail pain and misery to the
8 2004 SCC OnLine Kar 222
surviving husband, the element of financial dependency has to be discounted and the loss would be in a nature of loss to estate.
12. In view of the foregoing discussion, the annual income of the deceased is assessed @ Rs.14,133/- to which we add 40% towards future prospects. The total comes to Rs.19,786/-, 1/3rd of which would be monthly loss to the estate. Accordingly, the compensation is worked out as under:
S. No.
Head
Amount
1.
Monthly Salary
Rs.14.133/-
2.
Addition towards future prospects @ 409%
Rs. 19,786/- (Rs. 14,133 + 5653)
3.
Loss of Estate @ 1/3rd of Rs. 19,786/-
Rs.6,595 /-
4.
Multiplier
1710
5.
Annual income i.e. Rs.6,595/- x 12 x 17
Rs.13,45,380/-
6.
Loss of consortium
Rs. 40,000/-
7.
Funeral Expenses
Rs. 15,000/-
Total Compensation
Rs. 14,00,380/-
9 as per decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 10 as per decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680
13. Accordingly, the impugned judgment-cum-award dated 16.12.2023 passed by the learned Tribunal is hereby set aside and the respondent No.1/claimant husband is hereby awarded total compensation of Rs.14,00,380/- with interest @ 7.5% p.a. from the date of filing of the petition till realisation. The amount of compensation be deposited with the learned Tribunal within four weeks from today failing which, the appellant/insurance company
shall be liable to pay penal interest @ 12% p.a. from the date of this judgment till realisation.
14. It may be noted that this Court vide order dated 06.05.2014 had released 50% of the awarded amount in favour of the respondent. Accordingly, it is clarified that if the 50% amount of compensation has been released without accrued interest, in that case, the interest be calculated from the date of impugned judgment-cum-award dated 16.12.2023 till deposit of the entire amount of compensation and thereafter interest @ 7.5% be calculated on the balance amount of 50% of compensation till date, failing which, a penal interest shall be liable to be paid in case there is any default by the appellant/insurance company.
15. The present appeal along with pending application stands disposed of.
DHARMESH SHARMA, J. APRIL 15, 2024/ck