S. CHANDRASEKHARAN & ORS. versus M. DINAKAR & ANR on 11 July 2022

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SUPREME COURT REPORTS

[2022] 12 S.C.R.

S. CHANDRASEKHARAN & ORS.

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M. DINAKAR & ANR.

(Civil Appeal Nos. 4688-4689 of 2022)

BJULY 11, 2022

[DINESH MAHESHWARI AND ANIRUDDHA BOSE, JJ.]

Motor Vehicles Act, 1988 – s. 166, 168 – Compensation –Enhancement of – Accident occurred which resulted into death ofwife of appellant – Claim was lodged by the appellant before theCTribunal – Tribunal awarded compensation of Rs. 36,92,350/- andas at the time of accident the deceased was unemployed, the monthlyincome of deceased was calculated on basis of her husband’s income(following the judgment of Arun Kumar Agrawal and anothers) –However, the High Court considered the deceased’s salary in a jobDwhere she was engaged three years prior to the accident as thebasis for quantifying the pecuniary loss to be awarded and reducedthe amount of compensation to Rs. 32,82,090/- – On appeal, held:There is a long time gap between the time she was in employmentand the occurrence of the accident thus her salary would be anunreliable guide for fixing her notional income – The Tribunal hadErightly followed the course laid down in the case of Arun KumarAgrawal – Deduction in pecuniary loss by the High Court notcorrect – The deduction of 1/3rd of determined income of thedeceased towards personal expenses is valid on the basis of thedecision of Supreme Court in the case of Sarla Verma – Loss ofFfuture prospect was not considered by the Tribunal and the HighCourt to arrive at the quantum of pecuniary loss – Further, loss oflove and affection is comprehended in the loss of consortium, HighCourt not justified to award compensation towards loss of love andaffection as a separate head – Considering the aforementionedfactors, the compensation was set to Rs. 46,17,350/- – AppealsGallowed.

Arun Kumar Agrawal and Another v. National InsuranceCompany Ltd. and Others. [(2010) 9 SCC 218 : [2010]9 SCR 303 – relied on.

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Sarla Verma (Smt) and Others v. Delhi TransportCorporation and Another (2009) 6 SCC 121;Rajendra Singh and Others v. National InsuranceCompany Limited and Others [(2020) 7 SCC 256 :[2020] 6 SCR 579 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4688-4689 of 2022.

From the Judgment and Order dated 27.02.2012 of the High Courtof Judicature at Madras in CMA Nos. 3017 of 2014 and cross appealCMA No. 3313 of 2014.

P. B. Suresh, Vipin Nair, Arindam Ghosh, Karthik Jayshankar,Prakash Baghel, Advs. for the Appellants.

Amit Kumar Singh, Mrs. K. Enatoli Sema, Ms. Chubalemla Chang,Advs. for the Respondents.

The Judgment of the Court was delivered by ANIRUDDHA BOSE, J.

Leave granted.

2. The appellants before us are the claimants in an action forcompensation under the Motor Vehicles Act, 1988 (1988 Act). Anaccident had occurred on 28[th] February 2011 at about 10:45 A.M., whichresulted in death of one Bala Babitha, a 37 year old lady, and causedinjuries to her husband and her minor daughter. The first appellant is thehusband of the deceased. The second and the third appellants are theirchildren, who were minors by age at the point of time the accidentoccurred. The fourth appellant is the mother of the deceased. The firstappellant and the third appellant alongwith the deceased were travellingin an auto rickshaw from Velachery to Adambakkam in the city of Chennai,which was hit by a vehicle (bearing registration no. TN- 04-W-6189).The respondent no. 1 was the owner of that vehicle. The secondrespondent is the insurance company, whose policy covered the offendingvehicle.

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A3. Claim was lodged by the appellants under Section 166 of the1988 Act before the Motor Accident Claims Tribunal, Chennai (theTribunal). Before the Tribunal, rash and negligent driving of the offendingvehicle was proved, and that finding was not upset in appeal by the HighCourt of Judicature at Madras in its judgment delivered on 27[th] February2018. The present appeals arise from that judgment. The TribunalBawarded compensation in favour of the appellant no.1 for a sum ofRs.4,77,100/-. The minor daughter (appellant no.3) of the deceased andthe first appellant was awarded compensation of Rs.2,06,000/-. Thequantum of compensation on account of death of said Bala Babitha wascomputed by the Tribunal to be of Rs.36,92,350/-. Monthly income ofCthe deceased was calculated as one-third of her husband’s income.The Tribunal found the husband’s income to be Rs.78,700/- per month.This finding of monthly income of the husband was not disturbed by theHigh Court. The compensation amount was to carry an interest of 7.5%per annum from the date of filing of the claim, till the date of deposit.Deposit of the awarded sum was directed to be made within two monthsDfrom the date of the award.

4. Both the insurance company and the appellants preferredseparate appeals in respect of sums awarded as compensation in relationto the deceased and the injured victims. The High Court reduced thesum awarded as compensation in respect of the first appellant toERs.3,41,000/-. As regards the third appellant, award of Rs.2,06,000/- ascompensation was retained. Compensation awarded to the family of thedeceased victim was modified and reduced to Rs.32,82,090/- by the HighCourt. The Tribunal had quantified compensation for the survivingmembers of the family of deceased on her notional income calculatedFon the basis of her husband’s income, following a judgment of this Courtdelivered in the case of Arun Kumar Agrawal And Another vs.National Insurance Company Ltd. And Others. [(2010) 9 SCC 218].The High Court, however, considered her salary in a job she was engagedin three years back to be the basis for quantifying the pecuniary loss tobe awarded to the surviving members of her family. Both the TribunalGand the High Court had applied the multiplier principle to arrive at thefigure of pecuniary loss. Before us, arguments have been advanced onthe point of reduction of compensation to the family of the deceasedvictim and we shall confine our judgment to that issue only.

5. The heads under which award was made by the TribunalHquantifying the compensation to be paid on account of the deceasedvictim were:-

S. CHANDRASEKHARAN & ORS. v. M. DINAKAR & ANR.[ANIRUDDHA BOSE, J.]

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6. While modifying the award, the High Court computed thecompensation under the following heads:- C

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7. We are to address now as to whether the pecuniary losswhich had occurred on account of death of the victim has to be computedon pegging it on her personal income she earned from her employmentapproximately three years back or it should be relatable to the income ofFher surviving husband. This question arises as there was evidence beforethe Tribunal that the deceased was a graduate with B. Com. degreeand was employed till the year 2008 in a company earning monthly salaryof Rs.34,385/-. At the time of the accident, however, the deceasedwas not employed. The Tribunal determined the compensation relyingGon the case of Arun Kumar Agrawal (supra). It has been held in thisjudgment:- “35. In our view, it is highly unfair, unjust and inappropriateto compute the compensation payable to the dependants of adeceased wife/mother, who does not have a regular income, H

Aby comparing her services with that of a housekeeper or aservant or an employee, who works for a fixed period. Thegratuitous services rendered by the wife/mother to the husbandand children cannot be equated with the services of anemployee and no evidence or data can possibly be producedfor estimating the value of such services. It is virtuallyBimpossible to measure in terms of money the loss of personalcare and attention suffered by the husband and children onthe demise of the housewife. In its wisdom, the legislaturehad, as early as in 1994, fixed the notional income of anon-earning person at Rs. 15,000 per annum and in case ofCa spouse, 1/3rd income of the earning/surviving spouse forthe purpose of computing the compensation.”

8. The High Court, on the other hand, proceeded on the basis thatit would be appropriate to fix the sum of Rs.34,385/- as the monthlyincome of the deceased to arrive at just and fair compensation inDquantifying pecuniary loss. Reasoning of the High Court on this aspect was:- “Though at the time of death, the deceased Bala Babitha wasa housewife, earlier she was working in a private companyand earning a sum of Rs.34,385/- per month, which is evidentEfrom Ex.Ps.23 & 24. Hence, it would be appropriate to fix thesum of Rs.34,385/- as monthly income of the deceased to arriveat a just and proper compensation under the head of pecuniaryloss. If a sum of Rs.34,385/- is taken as monthly income ofthe deceased, 50% amount has to be deducted towardspersonal expenses and if so deducted, the monthly contributionFto the family works out to Rs.17,193/-. The deceased was aged37 years at the time of accident; hence, the correct multiplierthat has to be applied in this case is 15. If the multiplier 15 isapplied, the total pecuniary loss works out to Rs.30,94,740/- (17,193 x 12 x 15). Consequently, the sum of Rs.31,50,000/G- awarded by the Tribunal under the head Pecuniary Loss ishereby modified and reduced to Rs.30,94,740/-.”

(quoted verbatim from the paperbook)

9. In our opinion, the judgment of the High Court on this pointsuffers from error on two counts. At the time of her death, the deceasedHwas not in employment. She was a homemaker. It was not a case where the deceased at the time of accident had just left her job. If that was thecase, her last drawn salary might have had given reliable guidance forcomputing her monthly income at that point of time. Here the deceasedremained without employment for a period of approximately three yearsand what she earned prior to that ought not to have been treated to beher monthly income to arrive at just and proper compensation under thehead of pecuniary loss, as has been held by the High Court. There is along time gap between the time she was in employment and the occurrenceof the accident. Her monthly salary approximately three years back thuswould be an unreliable guide for fixing her notional income when shesuccumbed to her injuries caused by the accident. Moreover, at the timeof the accident, she was a homemaker providing care and support toher family. In this context, in our opinion, the computation methodologyprescribed in the case of Arun Kumar Agrawal (supra) would be moreappropriate to apply, which was done by the Tribunal.

10. Plea has been taken before us on behalf of the insurancecompany that the appellants could not take a stand for computing theincome of the deceased in the manner held in the case of Arun KumarAgrawal (supra), since before the High Court, they had run a case thatthe pecuniary loss ought to be computed on the basis of her last drawnsalary. Just because the appellants urged their claim based on the lastdrawn salary of the deceased before the High Court, this Court oughtnot to anchor its decision on that argument alone. It remains open to thisCourt to examine the nature of the claim and compute the compensationon a different criterion applying a different parameter. This is more so,because such compensation figure could be arrived at on the basis ofmaterials on record, that includes evidence on monthly earning of thehusband of the deceased and the applied parameter stands judiciallyrecognised as a legitimate mode for computing pecuniary loss. Further,in this case, plea was made in the claim petition for compensationcalculated on the basis of one-third of the husband’s income. In thepetition for special leave to appeals also, one of the points formulated isas to whether compensation on account of death of Bala Babitha wouldbe calculated on the basis of her last drawn salary or her husband’sincome.

11. Section 168 of the Motor Vehicles Act, 1988 stipulates:- “168. Award of the Claims Tribunal.—On receipt of anapplication for compensation made under section 166, the AB

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Claims Tribunal shall, after giving notice of the applicationto the insurer and after giving the parties (including theinsurer) an opportunity of being heard, hold an inquiry intothe claim or, as the case may be, each of the claims and, subjectto the provisions of section 163 may make an awarddetermining the amount of compensation which appears to itto be just and specifying the person or persons to whomcompensation shall be paid and in making the award theClaims Tribunal shall specify the amount which shall be paidby the insurer or owner or driver of the vehicle involved inthe accident or by all or any of them, as the case may be:

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(2) The Claims Tribunal shall arrange to deliver copies ofthe award to the parties concerned expeditiously and in anycase within a period of fifteen days from the date of theaward.

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(3) When an award is made under this section, the personwho is required to pay any amount in terms of such awardshall, within thirty days of the date of announcing the awardby the Claims Tribunal, deposit the entire amount awarded insuch manner as the Claims Tribunal may direct.”

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12. The aforesaid provision vests the Tribunal with the powerand jurisdiction to make an inquiry into claims arising out of deaths andinjuries caused from an accident and make award determining thecompensation which appears to it to be just. It would defeat the legislativepurpose in the event the Tribunal or the Appellate Forum is made toFconfine its inquiry to the plea of the claimant as regards the factorswhich ought to be taken into consideration for determining thecompensation amount. Power to hold an inquiry under the aforesaidprovision cannot be construed in such a restrictive manner. If the factorson which quantification of claim is asked for cannot be established, theGadjudicatory forum under the 1988 Act would stand divested of its powerto arrive at just compensation even if in course of the proceeding,materials disclosed could justify award of compensation based on certaincriteria other than those on which the claim is founded. In the instantcase, we find that the Tribunal, while proceeding to award compensationto the appellants/claimants had relied on the principle laid down by G

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this Court in the case of Arun Kumar Agrawal (supra) and there wasevidence before the Tribunal to assess the income of the husband ofthe deceased. In fact, the first appellant’s compensation was quantifiedtaking into consideration his own income at the material point of time. Inour opinion, the High Court ought not to have proceeded on the basis ofthe income drawn by the deceased victim approximately three yearsbefore the accident ended her life. The Tribunal did not indulge in pureguesswork in pegging the notional income of the deceased to herhusband’s income. As we have already observed, in the claim petitionitself, against the column “Occupation of the deceased”- incomecalculation of the deceased was contemplated on the basis of herhusband’s income. The Tribunal had rightly followed the course laiddown in the case of Arun Kumar Agrawal (supra), which in the givenfacts, constituted, a more definitive and reliable methodology forquantifying pecuniary loss.

13. So far as deduction on account of personal expenses of thedeceased, following the case of Sarla Verma (Smt) and Others vs. DelhiTransport Corporation and Another [(2009) 6 SCC 121], the Tribunaldirected deduction of 1/3[rd] of the earning of the deceased, the latterbeing determined on the income of her spouse. That was, in our view,the proper course. We hold so because, even if we leave out the husbandof the deceased from being treated as a dependent, there were twominor children at the material point of time who ought to have beentreated as dependent family members. At that point of time the secondappellant was twelve years old and the age of injured daughter wasthree years. In the case of Sarla Verma (supra) the deduction has beenheld to be valid in a case where there were dependent family members.We should not restrict the expression “dependent” to mean thosefinancially dependent only. Minor children are emotionally dependent onthe mother. They lost care and guidance of their mother at a very youngage. While arriving at just compensation, the Tribunal ought to factor inthe loss of dependency in these terms.

14. The High Court did not give any reason for deducting 50% incomputing pecuniary loss and we do not think this was the correct view.We are of the view that deduction of 1/3[rd] of determined income of thedeceased towards personal expenses is valid on the basis of the decisionof this Court in the case of Sarla Verma (supra). We also find thatneither the Tribunal nor the High Court had considered loss of future A

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Aprospect to arrive at the quantum of pecuniary loss. In the case ofRajendra Singh and Others vs. National Insurance CompanyLimited and Others [(2020) 7 SCC 256], addition of loss of futureprospects has been held to be a factor for determining compensationunder the head of pecuniary loss even in a case where the income ofdeceased is arrived at on a notional basis. In this judgment it has beenBheld:-

“11. The notional income of the first deceased is thereforeheld to be Rs 5000 per month at the time of death. Thecompensation on that basis with a deduction of 1/4th i.e.Rs. 15,000 towards personal expenses with a multiplier ofC17 is assessed at Rs 7,65,000. If the deceased had survived,in view of observations in Lata Wadhwa [Lata Wadhwa v.State of Bihar, (2001) 8 SCC 197], her skills as a maturedand skilled housewife in contributing to the welfare and careof the family and in the upbringing of the children wouldDhave only been enhanced by time and for which reason wehold that the appellants shall be entitled to future prospects@ 40% in addition to the loss of consortium and futureexpenses already granted. We therefore assess the totalcompensation payable to the appellants in the first appeal atRs 11,96,000.”E15. The deceased was 37 years old at the time of her death.Hence, there ought to be an addition of 40% to the notional income of thedeceased towards future prospects as she was below 40 years of age.In the present case, it is not in dispute that multiplier of 15 ought to beapplied. In these circumstances, the total entitlement of the appellantsFunder the head of pecuniary loss would thus be:- G

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16. We, accordingly, set aside the judgment of the High Court tothe extent of computation made of pecuniary loss on account of death ofsaid Bala Babitha for a sum Rs.30,94,740/-. We quantify the said sum tobe Rs.44,10,000/-.

17. Argument was also advanced on behalf of the respondentsthat compensation awarded towards loss of love and affection is contraryto the ratio of the judgement of this Court in case of United IndiaInsurance Company Limited vs. Satinder Kaur Alias SatwinderKaur and Others [(2021) 11 SCC 780]. It was held in this decisionthat loss of love and affection is comprehended in loss of consortium,and there is no justification to award compensation towards loss of loveand affection as a separate head. The relevant paragraphs from thejudgement are reproduced below:- “34. At this stage, we consider it necessary to provideuniformity with respect to the grant of consortium, and lossof love and affection. Several Tribunals and the High Courtshave been awarding compensation for both loss of consortiumand loss of love and affection. The Constitution Bench inPranay Sethi, has recognized only three conventional headsunder which compensation can be awarded viz. loss of estate,loss of consortium and funeral expenses. In Magma General,this Court gave a comprehensive interpretation to consortiumto include spousal consortium, parental consortium, as wellas filial consortium. Loss of Love and affection iscomprehended in loss of consortium.

35. The Tribunals and the High Courts are directed to awardcompensation for loss of consortium, which is a legitimateConventional head. There is no jurisdiction to awardcompensation towards loss of love and affection as a separatehead.”

18. We accept this argument advanced by the respondents. TheHigh Court has thus committed error in law while providing forcompensation under the heads of loss of love and affection and also lossof consortium. Instead, in our opinion, compensation provided under thehead of loss of consortium would be Rs. 40,000/- for each appellant,comprehending the loss of love and affection within it. Hence, the totalcompensation provided under this head would amount to Rs 1,60,000/-.That part of the judgment of the High Court shall stand modifiedaccordingly.

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A19. We find no reason to interfere with the High Court’s findingas regards computation of compensation on other heads. Interest of7.5% per annum has been awarded by both the Tribunal and the HighCourt. We do not disturb the concurrent views of the High Court and theTribunal on the rate of interest. Certain authorities were cited on behalfof the appellants in support of their argument for enhancing the rate ofBinterest. The first one, reported in [(2001) 2 SCC 9] related to an accidentthat occurred on 20[th] March 1986. The next one, reported in [(2009) 8SCC 507] related to insurance claim on loss of stocks by fire and thedate of occurrence of the accident in that case was 24[th] August 1999.The bank rate of interest has fallen over the years and for this reasonCwe sustain the award of the Tribunal and the High Court in appeal on thispoint.

The total amount payable to the appellants on account of deathof Bala Babitha, thus, would be:- D

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20. The aforesaid sum shall be payable to the appellants in theproportion directed by the High Court except that in the case of the 4[th]appellant (that is the mother of the deceased), we direct lumpsum paymentFof Rs.2,00,000/- instead of Rs.1,00,000/- as directed by the High Court.The aforesaid sum shall be paid within two months from this date adjustingtherefrom any amount which may have already been paid to theappellants. Unpaid amount shall carry interest at the rate of 7.5% perannum from the date of filing of the claim petition till payment is made interms of this judgment and order.G21.The appeals are allowed in the above terms, without any orderas to costs.

22. Pending application(s), if any, shall stands disposed of.

HAnkit Gyan(Assisted by : Aarsh Choudhary, LCRA)