MAGMA GENERAL INSURANCE CO. LTD. versus NANU RAM ALIAS CHUHRU RAM & ORS. on 18 September 2018

[2018] 11 S.C.R.

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MAGMA GENERAL INSURANCE CO. LTD.

v.

NANU RAM ALIAS CHUHRU RAM & ORS.

(Civil Appeal No. 9581 of 2018)

BSEPTEMBER 18, 2018

[R. F. NARIMAN AND INDU MALHOTRA, JJ.]

Motor Vehicles Act, 1988 – Compensation under – Variousheads – Person died in an accident when the motor cycle driven byhim was hit by a car driven by respondent no.3 – MACT grantedCRs.3,39,208/- with 7% interest as compensation to respondent nos.1 and 2, father and sister of the deceased – High Court grantedRs.14,21,000/- with interest @ 9% – Challenged by appellant-Insurance Company – Held: High Court’s finding regarding incomeof the deceased to be Rs.6,000/- p.m. is correct – High CourtDcorrectly considered respondent nos.1 and 2 to be dependents ofthe deceased, and made a deduction of 1/3[rd] towards personalexpenses of the deceased – Judgment of the High Court affirmedon this count – Amount awarded by the High Court towards loss oflove and affection is also maintained – However, since deceasedwas 24 years old at the time of the accident, hence, in view of decisionEof Supreme Court in Pranay Sethi case, future Prospects is awardedat 40% of the actual income of the deceased, instead of 50% asawarded by the High Court – Further, also in view of decision inPranay Sethi case, compensation of Rs.25,000/- towards funeralexpenses decreased to Rs.15,000/- – Though neither MACT norFHigh Court awarded any compensation to respondent nos.1 and 2under “Loss of Estate”, in exercise of power u/Art.142 and in theinterests of justice, Rs.15,000/- awarded under this head – Further,respondent nos.1 and 2 also awarded Rs. 40,000/- each for loss of“Filial Consortium” – Respondent nos.1 and 2 entitled to totalcompensation of Rs.14,25,600/- with interest @ 12% p.a.– AppellantGand respondent no. 3 jointly and severally liable to pay thecompensation – Constitution of India – Art.142.

Motor Vehicles Act, 1988 – Beneficial Legislation – Purposeof – Discussed.

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MAGMA GENERAL INSURANCE CO. LTD. v. NANU RAMALIAS CHUHRU RAM & ORS.

Words & Phrases – “Consortium” – Meaning of – Discussed.

Disposing of the appeal, the Court

HELD: 1.1 With respect to the issue of Future Prospects,a Constitution Bench of this Court in Pranay Sethi case held thatin case the deceased was self-employed or on a fixed salary, andwas below 40 years of age, an addition of 40% of the establishedincome should be granted towards Future Prospects. FutureProspects are to be awarded on the basis of: (i) the nature of thedeceased’s employment; and (ii) the age of the deceased. TheMACT as well as the High Court assessed the income of thedeceased on the basis of the minimum wage of an unskilledworker. The nature of his employment being taken as a self-employed person. The High Court took his income to be Rs.6,000,which is marginally above the minimum wage of an unskilledworker at Rs.5,342. This finding is not being interfered with. Thedeceased was 24 years old at the time of the accident. Hence,Future Prospects ought to have been awarded at 40% of the actualincome of the deceased, instead of 50% as awarded by the HighCourt. Hence, the judgment of the High Court on this issue ismodified to that extent. [Paras 8.1 and 8.3] [671-F-H; 672-B-C, G]

National Insurance Co. Ltd. v. Pranay Sethi (2017) 16SCC 680 – followed.

1.2 The deceased was a bachelor, whose mother had pre-deceased him. The deceased was living in a village with his fatherwho was about 65 years old, and respondent no.2- an unmarriedsister. The deceased was contributing a part of his meagre incometo the family for their sustenance and survival. Hence, they wouldbe entitled to compensation as his dependents. The High Courtcorrectly considered them to be dependents of the deceased,and made a deduction of 1/3[rd] towards personal expenses of thedeceased. The judgment of the High Court is, therefore, affirmedon this count. [Para 8.2, 8.4] [673-B; 672-F]

1.3 As per the judgment in Pranay Sethi case thecompensation of Rs. 25,000 towards funeral expenses isdecreased to Rs.15,000. The amount awarded by the High Courttowards loss of love and affection is, however, maintained. [Para8.5] [673-C, F-G]

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A1.4 The MACT as well as the High Court did not award anycompensation with respect to Loss of Consortium and Loss ofEstate, which are the other conventional heads under whichcompensation is awarded in the event of death, as recognized inthe Pranay Sethi case. The Motor Vehicles Act is a beneficial andwelfare legislation. The Court is duty-bound and entitled to awardB“just compensation”, irrespective of whether any plea in thatbehalf was raised by the Claimant. In exercise of power underArticle 142, and in the interests of justice, it is deemed appropriateto award an amount of Rs. 15,000 towards Loss of Estate toRespondent Nos. 1 and 2. [Para 8.6] [673-G-H; 674-A-B]

C1.5 In legal parlance, “consortium” is a compendious termwhich encompasses ‘spousal consortium’, ‘parental consortium’,and ‘filial consortium’. The right to consortium would includethe company, care, help, comfort, guidance, solace and affectionof the deceased, which is a loss to his family. With respect to a Dspouse, it would include sexual relations with the deceasedspouse. Spousal consortium is generally defined as rightspertaining to the relationship of a husband-wife which allowscompensation to the surviving spouse for loss of “company,society, co-operation, affection, and aid of the other in everyconjugal relation”. Parental consortium is granted to the childEupon the premature death of a parent, for loss of “parental aid,protection, affection, society, discipline, guidance and training”.Filial consortium is the right of the parents to compensation inthe case of an accidental death of a child. Consortium is a specialprism reflecting changing norms about the status and worth ofFactual relationships. Modern jurisdictions world-over haverecognized that the value of a child’s consortium far exceeds theeconomic value of the compensation awarded in the case of thedeath of a child. Most jurisdictions therefore permit parents tobe awarded compensation under loss of consortium on the deathof a child. The amount awarded to the parents is a compensationGfor loss of the love, affection, care and companionship of thedeceased child. The Motor Vehicles Act is a beneficial legislationaimed at providing relief to the victims or their families, in casesof genuine claims. The amount of compensation to be awarded as H

consortium will be governed by the principles of awardingcompensation under ‘Loss of Consortium’ as laid down in PranaySethi case. In the present case, it is deemed appropriate to awardthe father and the sister of the deceased, an amount of Rs. 40,000each for loss of Filial Consortium. [Paras 8.7] [674-C-G; 675-A-B]

1.6 Respondent Nos.1 and 2 are entitled to the totalcompensation of Rs.14,25,600/- alongwith interest @ 12% p.a.from the date of filing of the Claim petition till payment. Out ofthe amount awarded, Respondent No.1 is entitled to 60% whileRespondent No.2 shall be granted 40% alongwith Interest. TheAppellant-Insurance Company and Respondent No. 3 are heldjointly and severally liable to pay the compensation awarded.Insurance Company will pay the full amount of compensationawarded to Respondent Nos. 1 and 2 and can recover 50% of theamount from Respondent No. 3. [Paras 9, 10] [675--E; 676-D-F]

Rajesh and Ors. v. Rajbir Singh and Ors. (2013) 9 SCC54: [2013] 5 SCR 961; Jagmala Ram @ Jagmal Singh& Ors. v. Sohi Ram & Ors 2017 (4) RLW 3368 (Raj);Smt. Rita Rana & Anr. v. Pradeep Kumar & 6 Ors. 2014(3) UC 1687; Lakshman and Ors. v. Susheela ChandChoudhary & Ors (1996) 3 Kant LJ 570 (DB) –referred to.

Black’s Law Dictionary (5th ed. 1979) – referred to.

Case Law Reference

(2017) 16 SCC 680followed Para 1[2013] 5 SCR 961referred toPara 8.7

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9581of 2018

From the Judgment and Order dated 27.09.2017 of the HighCourt of Punjab and Haryana at Chandigarh in FAO No. 6943 of 2015

Ms. Shantha Devi Raman, Garvesh Kabra, Vikas Verma, KaushalYadav, Advs. for the appearing parties.

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AThe Judgment of the Court was delivered byINDU MALHOTRA, J. Leave granted.

1. This Special Leave Petition has been filed by the InsuranceCompany to challenge the compensation awarded on certain counts bythe Punjab & Haryana High Court in FAO No. 6943 of 2015 datedB27.09.2017, to be contrary to the Constitution Bench judgment in NationalInsurance Co. Ltd. v. Pranay Sethi.[1]

2. The factual matrix of the present case, briefly stated, are asunder:

On 01.12.2013, the deceased was riding his motorcycleC(Registration No. HR-71B-7681) from Ambli Village to Arjun MajraVillage. A relative of the deceased –Mr. Rakesh Kumar was followinghim on a separate motorcycle on the Sadhaura-Naraingarh Road. ARenault car bearing Registration No. HR-02-AB-4646 driven byRespondent No.3, came from the side, and hit the motorcycle driven byDthe deceased. The accident was witnessed by Mr. Rakesh Kumar.

As a result of the accident, the deceased fell and sustained multipleinjuries. He was taken to the Government Hospital, Naraingarh fromwhere he was referred to PGI, Chandigarh. On 02.12.2013 the victimwas taken to Government Hospital, Panchkula where the doctors declaredhim dead.E

On the same day, F.I.R. No. 337 was registered at Police Station,Naraingarh on the statement of Mr. Rakesh Kumar who was an eye-witness to the accident.

3. The father, brother, and sister of the deceased filed ClaimPetition under Section 166 of the Motor Vehicles Act, 1988 before theFMotor Accidents Claim Tribunal, Yamuna Nagar (“hereinafter referredto as MACT”) praying for compensation of Rs. 50,00,000 along withInterest from the date of the accident till the date of realization.

Mr. Rakesh Kumar, the eye-witness was examined before theMACT. He deposed stated that the accident occurred due to the rashGand negligent driving of Respondent No. 3.

The MACT after considering the evidence placed on record, cameto the finding that the accident took place due to the rash and negligentdriving of Respondent No. 3.

H1 (2017) 16 SCC 680

The deceased was 24 years old, and was engaged in the businessof manufacturing Namkeen products. The Claimants contended that theincome of the deceased was Rs. 15,000 per month. However, they wereunable to produce evidence of the income of the deceased. The MACTtook the income of the deceased to be that of an unskilled worker i.e.Rs. 5,342 per month on the basis of the Notification dated 13.08.2013issued by the Labour Commissioner, Haryana prescribing minimum wagesfor different categories of work.

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The MACT awarded compensation to the family of the deceasedas follows:

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The MACT did not award any compensation to the brother of thedeceased, as he could not be considered to be a dependent. Compensationwas awarded to the aged father and the unmarried sister of the deceased,who were held to be dependents.

The Insurance Company and the driver of the vehicle – RespondentNo. 3 both were held to be jointly and severally liable to pay thecompensation.

4. The Respondent Nos. 1 and 2 – i.e. the father and sister of thedeceased filed an Appeal against the order of the MACT before thePunjab and Haryana High Court praying for enhancement ofcompensation.

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AThe High Court held that the facts relating to the accident wereadmitted and proved before the MACT. It was established that thedeceased had died as a result of the rash and negligent driving ofRespondent No. 3.

The High Court found that the MACT had used the wrong principleBfor application of the multiplier. The multiplier ought to have been takenon the basis of the age of the deceased, and not of his father.

The High Court re-assessed the compensation as follows:

The amount was held to be payable jointly and severally by theAppellant – Insurance Company and Respondent No. 3.

G5. Aggrieved by the Order of the High Court, the InsuranceCompany filed the present S.L.P. before this Court, praying for setting-aside the judgment of the Punjab and Haryana High Court.

6. We have heard learned Counsel for the parties, and perusedthe record.

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MAGMA GENERAL INSURANCE CO. LTD. v. NANU RAMALIAS CHUHRU RAM & ORS. [INDU MALHOTRA, J.]

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The principal grounds on which the S.L.P. has been filed by theInsurance Company are:

i. The High Court has erroneously awarded 50% towards utureProspects, even though as per the judgment of this Court inNational Insurance Co. Ltd. v. Pranay Sethi.[2]only 40%could have been awarded.B

ii. The deduction of the income of the deceased ought to havebeen made at ½, and not at 1/3[rd], as he was a bachelor.

iii. The minimum wages of the deceased ought to have beentaken at Rs. 5,341 and not Rs. 6,000 as that was the prevailingrate of minimum wages in Haryana at the time of the accident.

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iv. The father and sister of the deceased could not be consideredas dependants, and were not entitled to compensation. In thecase of death of a bachelor, only the mother could beconsidered to be a dependant.

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v. The grant of Rs. 1,00,000 on account of loss of love andaffection, and Rs. 25,000 towards funeral expenses iserroneous.

It was contended that only Rs. 30,000 could have beenawarded as per the judgment in Pranay Sethi (supra).

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7. The dependents of the deceased refuted the grounds raised bythe Insurance company, and reiterated their claim for enhancedcompensation.

8. The grounds of challenge by the Insurance Company are dealtwith seriatim.

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8.1. With respect to the issue of Future Prospects, a ConstitutionBench of this Court in Pranay Sethi (supra) has held that in case thedeceased was self-employed or on a fixed salary, and was below 40years of age, an addition of 40% of the established income should begranted towards Future Prospects.

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Future Prospects are to be awarded on the basis of:

i. the nature of the deceased’s employment; and

ii. the age of the deceased.

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AIn the present case, it is claimed by the family of the deceasedthat he was engaged in making namkeen, and was earning a monthlyincome of about Rs. 15,000 per month. However, no evidence wasbrought on record to establish the same. The MACT as well as the HighCourt assessed the income of the deceased on the basis of the minimumwage of an unskilled worker. The nature of his employment being takenBas a self-employed person.

The deceased was 24 years old at the time of the accident. Hence,future Prospects ought to have been awarded at 40% of the actual incomeof the deceased, instead of 50% as awarded by the High Court.

CHence, the judgment of the High Court on this issue is modified tothat extent.

8.2. With respect to the issue of deduction from the income of thedeceased, the Insurance Company contended that the deduction oughtto have been ½, and not 1/3[rd], since the deceased was a bachelor.

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This issue has been dealt with in paragraph 32 of the judgment inSarla Verma (supra) wherein this Court took the view that where thefamily of the bachelor is large and dependent on the income of thedeceased, as in a case where he has a widowed mother and large numberof younger non-earning sisters or brothers, his personal and livingEexpenses may be restricted to one-third, as contribution to the familywill be taken as two-third.

Considering that the deceased was living in a village, where hewas residing with his aged father who was about 65 years old, andRespondent No. 2 - an unmarried sister, the High Court correctlyconsidered them to be dependents of the deceased, and made a deductionFof 1/3[rd] towards personal expenses of the deceased.

The judgment of the High Court is, therefore, affirmed on thiscount.

8.3. With respect to the income of the deceased, as the familyGcould not produce any evidence to show that the income of the deceasedwas Rs. 15,000 per month, as claimed, the High Court took his incometo be Rs. 6,000, which is marginally above the minimum wage of anunskilled worker at Rs. 5,342.

This finding is also not being interfered with.

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8.4. The Insurance Company has submitted that the father andthe sister of the deceased could not be treated as dependents, and it isonly a mother who can be dependent of her son. This contention deservesto be repelled. The deceased was a bachelor, whose mother had pre-deceased him. The deceased’s father was about 65 years old, and anunmarried sister. The deceased was contributing a part of his meagreincome to the family for their sustenance and survival. Hence, they wouldbe entitled to compensation as his dependents.

8.5. The Insurance Company has contended that the High Courthad wrongly awarded Rs. 1,00,000 towards loss of love and affection,and Rs. 25,000 towards funeral expenses.

The judgment of this Court in Pranay Sethi (supra) has set outthe various amounts to be awarded as compensation under theconventional heads in case of death. The relevant extract of the judgmentis reproduced herein below :

“Therefore, we think it seemly to fix reasonable sums. It seemsto us that reasonable figures on conventional heads, namely,loss of estate, loss of consortium and funeral expenses should---be Rs. 15,000/, Rs. 40,000/ and Rs. 15,000/ respectively.The principle of revisiting the said heads is an acceptableprinciple. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amountthat we have quantified should be enhanced on percentagebasis in every three years and the enhancement should be atthe rate of 10% in a span of three years.”

(Emphasis supplied)

As per the afore-said judgment, the compensation of Rs. 25,000towards funeral expenses is decreased to Rs.15,000.

The amount awarded by the High Court towards loss of love andaffection is, however, maintained.

8.6 The MACT as well as the High Court have not awarded anycompensation with respect to Loss of Consortium and Loss of Estate,which are the other conventional heads under which compensation isawarded in the event of death, as recognized by the Constitution Benchin Pranay Sethi (supra).

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The Motor Vehicles Act is a beneficial and welfare legislation.The Court is duty-bound and entitled to award “just compensation”,irrespective of whether any plea in that behalf was raised by the Claimant.

In exercise of our power under Article 142, and in the interests ofjustice, we deem it appropriate to award an amount of Rs. 15,000 towardsBLoss of Estate to Respondent Nos. 1 and 2.

8.7 A Constitution Bench of this Court in Pranay Sethi (supra)dealt with the various heads under which compensation is to be awardedin a death case. One of these heads is Loss of Consortium.

In legal parlance, “consortium” is a compendious term whichCencompasses ‘spousal consortium’, ‘parental consortium’, and ‘filialconsortium’.

The right to consortium would include the company, care, help,comfort, guidance, solace and affection of the deceased, which is a lossto his family. With respect to a spouse, it would include sexual relationsDwith the deceased spouse.[3]

Spousal consortium is generally defined as rights pertaining to therelationship of a husband-wife which allows compensation to the survivingspouse for loss of “company, society, co-operation, affection, and aid ofthe other in every conjugal relation.”[4]

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Parental consortium is granted to the child upon the prematuredeath of a parent, for loss of “parental aid, protection, affection, society,discipline, guidance and training.”

Filial consortium is the right of the parents to compensation in thecase of an accidental death of a child. An accident leading to the deathFof a child causes great shock and agony to the parents and family of thedeceased. The greatest agony for a parent is to lose their child duringtheir lifetime. Children are valued for their love, affection, companionshipand their role in the family unit.

Consortium is a special prism reflecting changing norms aboutGthe status and worth of actual relationships. Modern jurisdictions world-over have recognized that the value of a child’s consortium far exceedsthe economic value of the compensation awarded in the case of the 3 Rajesh and Ors. vs. Rajbir Singh and Ors. (2013) 9 SCC 54

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death of a child. Most jurisdictions therefore permit parents to be awardedcompensation under loss of consortium on the death of a child. Theamount awarded to the parents is a compensation for loss of the love,affection, care and companionship of the deceased child.

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The Motor Vehicles Act is a beneficial legislation aimed at providingrelief to the victims or their families, in cases of genuine claims. In casewhere a parent has lost their minor child, or unmarried son or daughter,the parents are entitled to be awarded loss of consortium under the headof Filial Consortium.

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Parental Consortium is awarded to children who lose their parentsin motor vehicle accidents under the Act.

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A few High Courts have awarded compensation on this count[5].However, there was no clarity with respect to the principles on whichcompensation could be awarded on loss of Filial Consortium.

The amount of compensation to be awarded as consortium willbe governed by the principles of awarding compensation under ‘Loss ofConsortium’ as laid down in Pranay Sethi (supra).

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In the present case, we deem it appropriate to award the fatherand the sister of the deceased, an amount of Rs. 40,000 each for loss ofFilial Consortium.

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9. In light of the above mentioned discussion, Respondent Nos. 1and 2 are entitled to the following amounts :- 5 Rajasthan High Court in Jagmala Ram @ Jagmal Singh & Ors. v. Sohi Ram & Ors. 2017 (4) RLW 3368 (Raj): Uttarakhand High Court in Smt. Rita Rana & Anr. v. Pradeep Kumar & Ors. 2014 (3) UC 1687; Karnataka High Court in Lakshman and Ors. v. Susheela Chand Choudhary & Ors (1996) 3 Kant LJ 570 (DB)

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SUPREME COURT REPORTS

[2018] 11 S.C.R.

Aiv. Total Income:Rs. 5,600 [i.e. 2/3[rd] of(Rs.6,000 + Rs.2,400]v. Multiplier:18vi. Loss of future income:Rs. 12,09,600 (Rs.5,600 x 12x 18)Bvii. Loss of love and affection:Rs. 1,00,000 (Rs. 50,000 each)viii. Funeral expenses:Rs. 15,000ix. Loss of estate:Rs. 15,000x. Loss of Filial Consortium:Rs. 80,000 (Rs. 40,000 payableCto each of Respondent Nos.1and 2)Total compensation awarded:Rs. 14,25,600 alongwithInterest @ 12% p.a. from thedate of filing of the ClaimDpetition till payment.

Out of the amount awarded, Respondent No.1 is entitled to 60%while Respondent No.2 shall be granted 40% alongwith Interest asspecified above.

E10. The Insurance Company and Respondent No. 3 are held jointlyand severally liable to pay the compensation awarded.

The Appellant – Insurance Company will pay the full amount ofcompensation awarded hereinabove to Respondent Nos. 1 and 2 andcan recover 50% of the amount from Respondent No. 3.

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11. The appeal is disposed of in the above terms.

Divya Pandey

Appeal disposed of.

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