SMT. MEENA PAWAIA & ORS. versus ASHRAF ALI & ORS. on 18 November 2021

[2021] 10 S.C.R. 1009

SMT. MEENA PAWAIA & ORS.

v.

ASHRAF ALI & ORS.

(Civil Appeal No. 6724 of 2021)

NOVEMBER 18, 2021

[M. R. SHAH AND SANJIV KHANNA, JJ.]

Motor Vehicles Act, 1988: s.168 – Just compensation – Fatalaccident – Victim-deceased aged 21-22 years at the time of accidentand Third year student in civil engineering – When the deceaseddied at the young age 21-22 years and was not earning at the timeof death/accident, the income for the purpose of determining thefuture economic loss is always done on the basis of guessworkconsidering many circumstances namely the educationalqualification and background of the family, etc. – Deceased washaving a bright future studying in the Third year of civil engineering,his income ought to have been considered at least Rs.10,000/- permonth, more particularly considering the fact that the labourers/skilled labourers were getting Rs.5,000/- per month even under theMinimum Wages Act in the year 2012 – Once such an amount isarrived at he shall be entitled to the addition over the future prospect/future rise in income – It cannot be disputed that the rise in cost ofliving would also affect such a person – Thus, even in case of adeceased who was not serving at the time of death and had noincome at the time of death, their legal heirs shall also be entitled tofuture prospects by adding future rise in income.

Motor Vehicles Act, 1988: Multiplier – Deceased at the timeof accident was aged between 21-22 years – Therefore, the multiplierhas to be adopted/applied considering the age of the deceased andnot the age of the parents thus, multiplier 18 would apply.

Motor Vehicles Act, 1988: Entitlement of claimants to JustCompensation – The claimants are entitled to just compensation –Merely because in the execution proceedings they might haveaccepted the amount as awarded by the High Court, may be as fulland final settlement, it shall not take away the right of the claimantsto claim just compensation and shall not preclude them from claiming

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Athe enhanced amount of compensation which they as such are heldto be entitled to – As such, the Motor Vehicles Act is a benevolentAct and the claimants are entitled to just compensation. As such,the Union of India ought not to have taken such a plea/defence.

Partly allowing the appeal, the CourtB

HELD: 1. The deceased at the time of accident was aged21-22 years and that he was a 3[rd] year student in civil engineering.The Tribunal assessed the income of deceased at Rs.15,000/-per month for the purpose of awarding compensation under thehead of future economic loss. However, by the impugnedCjudgment, the High Court reduced the compensation anddetermined the income of the deceased at Rs.5,000/- per month.Awarding the future economic loss to the claimants consideringthe income of the deceased as Rs.5,000/- is not sustainable at all.Even the labourers/skilled labourers were getting Rs.5,000/- permonth under the Minimum Wages Act in the year 2012. As theDdeceased was studying in the 3[rd]/4[th] semester of civil engineering,he cannot be considered worse than the labourers/skilledlabourers. Therefore looking to the educational qualification andthe family background, the deceased was having a bright futurestudying in the 3[rd] year of civil engineering, the income of theEdeceased at least ought to have been considered at leastRs.10,000/- per month, more particularly considering the fact thatthe labourers/skilled labourers were getting Rs.5,000/- per montheven under the Minimum Wages Act in the year 2012.[Para 8][1014-G-H; 1015-A-B, D-E]F2. In case of a deceased, who was not earning and/or notdoing any job and/or self employed at the time of accident/death,his income is to be determined on the guesswork looking to thecircumstances narrated. Once such an amount is arrived at heshall be entitled to the addition over the future prospect/futurerise in income. It cannot be disputed that the rise in cost of livingGwould also affect such a person. As observed by this court in thecase of Pranay Sethi, the determination of income while computingcompensation has to include future prospects so that the methodwill come within the ambit and sweep of just compensation aspostulated under Section 168 of the Motor Vehicles Act. In caseHof a deceased who had held a permanent job with inbuilt grant of annual increment and/or in case of a deceased who was on a fixedsalary and /or self employed would only get the benefit of futureprospects and the legal representatives of the deceased who wasnot serving at the relevant time as he died at a young age andwas studying, could not be entitled to the benefit of the futureprospects for the purpose of computation of compensation wouldbe inapposite. Because the price rise does affect them also andthere is always an incessant effort to enhance one’s income forsustenance. It is not expected that the deceased who was notserving at all, his income is likely to remain static and his incomewould remain stagnant. As observed in Pranay Sethi to remainstagnant is contrary to the fundamental concept of human attitudewhich always intends to live with dynamism and move and changewith the time. Even in case of a deceased who was not serving atthe time of death and had no income at the time of death, theirlegal heirs shall also be entitled to future prospects by addingfuture rise in income as held by this court in the case of PranaySethi i.e. addition of 40% of the income determined on guessworkconsidering the educational qualification, family background etc.,where the deceased was below the age of 40 years. [Para 11][1019-C-H; 1020-A-B]

3. The deceased at the time of accident was aged between21-22 years. Therefore, the multiplier has to be adopted/appliedconsidering the age of the deceased and not the age of the parentsthus, multiplier 18 would apply. Now so far as the submission onbehalf of the Union of India that as in the execution proceedingsthe claimants accepted the amount due and payable under theimpugned judgment and order and accepted the same as full andfinal settlement, thereafter the claimants ought not to havepreferred appeal for enhancement of the compensation isconcerned, the aforesaid cannot be accepted. The claimants areentitled to just compensation. Merely because in the executionproceedings they might have accepted the amount as awardedby the High Court, may be as full and final settlement, it shall nottake away the right of the claimants to claim just compensationand shall not preclude them from claiming the enhanced amountof compensation which they as such are held to be entitled to. As AB

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Asuch, the Motor Vehicles Act is a benevolent Act and the claimantsare entitled to just compensation. As such, the Union ofIndia ought not to have taken such a plea/defence. [Paras 12,13][1020-B-G]

National Insurance Company Limited vs. Pranay SethiBand Others (2017) 16 SCC 680 : [2017] 13 SCR 100 –relied on.

Case Law Reference

[2017] 13 SCR 100

relied onPara 10

CCIVIL APPELLATE JURISDICTION : Civil Appeal No.6724of 2021.

From the Judgment and Order dated 18.02.2020 of the High Courtof Madhya Pradesh, Bench at Gwalior in MA No.1319 of 2016.

Yadunandan Bansal, Ravi Panwar, Advs. for the Appellants.D

Ms. Madhavi Divan ASG, Ms. Seema Bengani, Adit Khorana,Ms. Priyanka Das, Ms. Vimla Sinha, Ms. Nidhi Khanna, Ms. AditaMishra, Kishore Mishra, Amrish Kumar, Advs. for the Respondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.E

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 18.02.2020 passed by the High Court of Madhya PradeshBench at Gwalior in MA No. 1319 of 2016, by which the High Court haspartly allowed the said appeal preferred by the Union of India/Railwaysand has reduced the amount of compensation from Rs.12,85,000/-F(awarded by the claims tribunal) to Rs.6,10,000/-, the original claimantshave preferred the present appeal.

2. In an accident which occurred on 12.09.2012, the son of theoriginal claimants, Mr. Prashant died. The deceased at the time of accidentwas a bachelor, aged 21 years and was studying in 3[rd] year of B.E. TheGoriginal claimants – mother, father, brother and sister of the deceasedfiled the claim petition before the Motor Accident Claims Tribunal(MACT), being MACT case No.1/2013 claiming Rs.25 lakhs ascompensation on different heads. It was the case on behalf of theoriginal claimants that the deceased at the relevant time was earningRs.8,000/- per month as he was engaged in tuition of other students. On H

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appreciation of evidence the learned Tribunal held that the deceaseddied due to rash and negligence on the part of the driver of the truckinvolved in the accident. The learned Tribunal assessed the monthlyincome of the deceased as Rs.15,000/- per month, disbelieving the caseon behalf of the claimants that he was getting Rs.25,000/- as salaryfrom one Nectal Construction Company. Learned Tribunal alsodisbelieved the fact about earning of Rs.8,000/- by the deceased permonth from private tuition. However considering the young age and theeducational qualification, the learned Tribunal keeping in mind the natureof work to be done by him in future and his future prospect, consideredthe future loss of income at Rs.15,000/- per month. The learned Tribunaldeducted ½ over his own personal expenses as he was a bachelor.However, the learned Tribunal applied the multiplier on the basis of theage of the parents of the deceased and consequently applied the 14multiplier and awarded Rs.12,60,000/- towards future loss of income.The learned Tribunal also awarded Rs.25,000/- under other head, namelyon the head of the last rites of the deceased. Learned Tribunal in allawarded Rs.12,85,000/- with 7.5% interest per annum.

3. Feeling aggrieved and dissatisfied with the judgment and awarddated 16.09.2016 passed by the learned Tribunal, both, the originalclaimants as well as Union of India preferred separate appeals beforethe High Court. Union of India preferred MA No. 1276 of 2016 andoriginal claimants preferred MA No.1319 of 2016. By the impugnedjudgment and order, the High Court has reduced the amount ofcompensation from Rs.12,85,000/- to Rs.6,10,000/- assessing the incomeof the deceased at Rs.5,000/- per month instead of Rs.15,000/- per monthas determined and awarded by the learned Tribunal. The High Courtcorrected the error committed by the learned Tribunal and applied themultiplier considering the age of the deceased and applied the multiplierof 18 and has awarded Rs.5,40,000/- under the head of future loss ofincome. Thereafter it has further awarded Rs.15,000/- as loss of estate;Rs.15,000/- as funeral expenses and Rs.40,000/- as loss of love andaffection. The High Court has awarded a total sum of Rs.6,10,000/-instead of Rs.12,85,000/- as awarded by the learned Tribunal.

4. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court reducing the amount of compensationfrom Rs.12,85,000/- to Rs.6,10,000/-, determining the future loss of incomeat Rs.5,000/- per month, original claimants have preferred the presentappeal.

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A5. Learned counsel appearing on behalf of the appellants - originalclaimants has vehemently submitted that looking to the educationalqualification and the bright future, the High Court has committed a graveerror in considering the income of the deceased at Rs.5,000/- per monthonly.B5.1 It is submitted that the deceased at the time of accident wasaged 21-22 years and was studying in B.E. and considering the fact thateven the labourers were getting Rs.5,000/- per month even under theMinimum Wages Act in the year 2012, the High Court ought not to haveconsidered the income of deceased at Rs.5,000/- per month.

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C5.2 It is further submitted that the High Court has not consideredthe future rise in income while awarding the future loss of income.

6. Learned counsel appearing on behalf of the Union of India isnot in a position to support the impugned judgment and order passed bythe High Court awarding the future loss of income considering the incomeDof the deceased at Rs.5,000/- per month. However, it is submitted thatas the deceased was not earning anything at the time of accident and asthe case on behalf of the claimants that he was earning Rs.25,000/- as asalary from Nectal Construction Company and that he was earningRs.8,000/- from private tuition has been disbelieved and thereby he wasnot earning at all at the time of death, there shall not be any future rise inEincome while determining the future loss of income. It is further submittedby the learned counsel appearing on behalf of the Union of India that inthe execution proceedings the entire amount as awarded by the HighCourt is paid, the claimants have stated that they accept the same as fulland final settlements and therefore the present appeal may not beentertained.F

7. We have heard the learned counsel appearing on behalf of therespective parties at length.

8. At the outset, it is required to be noted that deceased at thetime of accident was aged 21-22 years and that he was a 3[rd] year studentGin civil engineering. Therefore, it can be said that looking to his educationalqualification he was having a bright future. Learned Tribunal assessedthe income of deceased at Rs.15,000/- per month for the purpose ofawarding compensation under the head of future economic loss. However,by the impugned judgment and order, the High Court has reducedthe compensation and determined the income of the deceased atH

Rs.5,000/- per month. Awarding the future economic loss to the claimantsconsidering the income of the deceased as Rs.5,000/- is not sustainableat all. Even the labourers/skilled labourers were getting Rs.5,000/- permonth under the Minimum Wages Act in the year 2012. As the deceasedwas studying in the 3[rd]/4[th] semester of civil engineering, he cannot beconsidered worse than the labourers/skilled labourers. Even the counselappearing on behalf of the Union of India has fairly conceded thatassessing the income of deceased at Rs.5,000/- per month for the purposeof awarding the compensation under the head of future economic losscan be said to be at lower side and as such is not justifiable. Whileawarding the future economical loss, when the deceased died at theyoung age 21-22 years and was not earning at the time of death/accident,as per catena of decisions of this court, the income for the purpose ofdetermining the future economic loss is always done on the basis ofguesswork considering many circumstances namely the educationalqualification and background of the family, etc. Therefore looking to theeducational qualification and the family background and as observedherein above, the deceased was having a bright future studying in the 3[rd]year of civil engineering, we are of the opinion that the income of thedeceased at least ought to have been considered at least Rs.10,000/- permonth, more particularly considering the fact that the labourers/skilledlabourers were getting Rs.5,000/- per month even under the MinimumWages Act in the year 2012.

9. The next question which is posed for the consideration beforethis court is whether anything further is required to be added towardsthe future rise in income? It is submitted that on behalf of the Union ofIndia that as the deceased was not serving and earning at the time ofaccident/death nothing further is to be added towards the future prospect/future rise in income. The aforesaid cannot be accepted.

10. At this stage, the decision of this court in the case of NationalInsurance Company Limited vs. Pranay Sethi and Others (2017)16 SCC 680, on addition of future prospects to determine the multiplicandis required to be referred to and considered. In the aforesaid decisionthe Constitution Bench of this court had an occasion to consider in detailthe justification for addition of future prospects. In the aforesaid decisionit is observed and held that while determining the income, an addition of50% of actual salary to the income of the deceased towards futureprospects, where the deceased had a permanent job and was below the AB

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Aage of 40 years, should be made. The addition should be 30%, if the ageof the deceased was between 40 to 50 years. In case the deceased wasbetween the age of 50 to 60 years, the addition should be 15%. Actualsalary should be read as actual salary less tax. It is also further held thatin case the deceased was self-employed or on a fixed salary, an additionof 40% of the established income should be the warrant where theBdeceased was below the age of 40 years. An addition of 25% where thedeceased was between the age of 40 to 50 years and 10% where thedeceased was between the age of 50 to 60 years should be regarded asthe necessary method of computation. It is also further held that theestablished income means the income minus the tax component. WhileCholding so in paras 54 to 57, it is observed and held as under:- “54. In Santosh Devi [Santosh Devi v. National Insurance Co.Ltd., (2012) 6 SCC 421] the Court has not accepted as a principlethat a self-employed person remains on a fixed salary throughouthis life. It has taken note of the rise in the cost of living whichDaffects everyone without making any distinction between the richand the poor. Emphasis has been laid on the extra efforts madeby this category of persons to generate additional income. Thatapart, judicial notice has been taken of the fact that the salaries ofthose who are employed in private sectors also with the passageof time increase manifold. In Rajesh case [Sarla Verma v. DTC,E(2009) 6 SCC 121], the Court had added 15% in the case wherethe victim is between the age group of 15 to 60 years so as tomake the compensation just, equitable, fair and reasonable. Thisaddition has been made in respect of self-employed or engagedon fixed wages.

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55. Section 168 of the Act deals with the concept of “justcompensation” and the same has to be determined on thefoundation of fairness, reasonableness and equitability onacceptable legal standard because such determination can neverbe in arithmetical exactitude. It can never be perfect. The aim isGto achieve an acceptable degree of proximity to arithmeticalprecision on the basis of materials brought on record in an individualcase. The conception of “just compensation” has to be viewedthrough the prism of fairness, reasonableness and non-violationof the principle of equitability. In a case of death, the legal heirs ofthe claimants cannot expect a windfall. Simultaneously, the H

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compensation granted cannot be an apology for compensation. Itcannot be a pittance. Though the discretion vested in the tribunalis quite wide, yet it is obligatory on the part of the tribunal to beguided by the expression, that is, “just compensation”. Thedetermination has to be on the foundation of evidence brought onrecord as regards the age and income of the deceased andthereafter the apposite multiplier to be applied. The formula relatingto multiplier has been clearly stated in Sarla Verma [SarlaVerma v. DTC, (2009) 6 SCC 121] and it has been approvedin Reshma Kumari [Reshma Kumari v. Madan Mohan, (2013)9 SCC 65]. The age and income, as stated earlier, have to beestablished by adducing evidence. The tribunal and the courtshave to bear in mind that the basic principle lies in pragmaticcomputation which is in proximity to reality. It is a well-acceptednorm that money cannot substitute a life lost but an effort has tobe made for grant of just compensation having uniformity ofapproach. There has to be a balance between the two extremes,that is, a windfall and the pittance, a bonanza and the modicum. Insuch an adjudication, the duty of the tribunal and the courts isdifficult and hence, an endeavour has been made by this Courtfor standardisation which in its ambit includes addition of futureprospects on the proven income at present. As far as futureprospects are concerned, there has been standardisation keepingin view the principle of certainty, stability and consistency. Weapprove the principle of “standardisation” so that a specific andcertain multiplicand is determined for applying the multiplier onthe basis of age.

56. The seminal issue is the fixation of future prospects in casesof deceased who are self-employed or on a fixed salary. SarlaVerma [Sarla Verma v. DTC, (2009) 6 SCC 121] has carved outan exception permitting the claimants to bring materials on recordto get the benefit of addition of future prospects. It has not, perse, allowed any future prospects in respect of the said category.

57. Having bestowed our anxious consideration, we are disposedto think when we accept the principle of standardisation, there isreally no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow thedoctrine of actual income at the time of death and not to add any ABC

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amount with regard to future prospects to the income for thepurpose of determination of multiplicand would be unjust. Thedetermination of income while computing compensation has toinclude future prospects so that the method will come within theambit and sweep of just compensation as postulated under Section168 of the Act. In case of a deceased who had held a permanentjob with inbuilt grant of annual increment, there is an acceptablecertainty. But to state that the legal representatives of a deceasedwho was on a fixed salary would not be entitled to the benefit offuture prospects for the purpose of computation of compensationwould be inapposite. It is because the criterion of distinction betweenthe two in that event would be certainty on the one hand andstaticness on the other. One may perceive that the comparativemeasure is certainty on the one hand and uncertainty on the otherbut such a perception is fallacious. It is because the price risedoes affect a self-employed person; and that apart there is alwaysan incessant effort to enhance one’s income for sustenance. Thepurchasing capacity of a salaried person on permanent job whenincreases because of grant of increments and pay revision or forsome other change in service conditions, there is always acompeting attitude in the private sector to enhance the salary toget better efficiency from the employees. Similarly, a person whois self-employed is bound to garner his resources and raise hischarges/fees so that he can live with same facilities. To have theperception that he is likely to remain static and his income to remainstagnant is contrary to the fundamental concept of human attitudewhich always intends to live with dynamism and move and changewith the time. Though it may seem appropriate that there cannotbe certainty in addition of future prospects to the existing incomeunlike in the case of a person having a permanent job, yet the saidperception does not really deserve acceptance. We are inclinedto think that there can be some degree of difference as regardsthe percentage that is meant for or applied to in respect of thelegal representatives who claim on behalf of the deceased whohad a permanent job than a person who is self-employed or on afixed salary. But not to apply the principle of standardisation onthe foundation of perceived lack of certainty would tantamount toremaining oblivious to the marrows of ground reality. And,therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, itwould be unfair and inequitable. The degree-test has to have theinbuilt concept of percentage. Taking into consideration thecumulative factors, namely, passage of time, the changing society,escalation of price, the change in price index, the human attitudeto follow a particular pattern of life, etc., an addition of 40% ofthe established income of the deceased towards future prospectsand where the deceased was below 40 years an addition of 25%where the deceased was between the age of 40 to 50 years wouldbe reasonable.”

11. We see no reason why the aforesaid principle may not beapplied, which apply to the salaried person and/or deceased self employedand/or a fixed salaried deceased, to the deceased who was not servingand/or was not having any income at the time of accident/death. In caseof a deceased, who was not earning and/or not doing any job and/or selfemployed at the time of accident/death, as observed herein above hisincome is to be determined on the guesswork looking to the circumstancesnarrated hereinabove. Once such an amount is arrived at he shall beentitled to the addition over the future prospect/future rise in income. Itcannot be disputed that the rise in cost of living would also affect such aperson. As observed by this court in the case of Pranay Sethi (Supra),the determination of income while computing compensation has to includefuture prospects so that the method will come within the ambit and sweepof just compensation as postulated under Section 168 of the MotorVehicles Act. In case of a deceased who had held a permanent job withinbuilt grant of annual increment and/or in case of a deceased who wason a fixed salary and /or self employed would only get the benefit offuture prospects and the legal representatives of the deceased who wasnot serving at the relevant time as he died at a young age and wasstudying, could not be entitled to the benefit of the future prospects forthe purpose of computation of compensation would be inapposite. Becausethe price rise does affect them also and there is always an incessanteffort to enhance one’s income for sustenance. It is not expected thatthe deceased who was not serving at all, his income is likely to remainstatic and his income would remain stagnant. As observed in PranaySethi (Supra) to have the perception that he is likely to remain static andhis income to remain stagnant is contrary to the fundamental concept ofhuman attitude which always intends to live with dynamism and moveand change with the time. Therefore we are of the opinion that even in AB

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Acase of a deceased who was not serving at the time of death and had noincome at the time of death, their legal heirs shall also be entitled tofuture prospects by adding future rise in income as held by this court inthe case of Pranay Sethi (supra) i.e. addition of 40% of the incomedetermined on guesswork considering the educational qualification, familybackground etc., where the deceased was below the age of 40 years.B

12. In light of the above, in the present case, the claimants shallbe entitled to future economic loss at Rs.14,000/- per month. Thedeceased at the time of accident was aged between 21-22 years.Therefore, the multiplier has to be adopted/applied considering the ageof the deceased and not the age of the parents thus, multiplier 18 wouldCapply. Therefore, the claimants shall be entitled to Rs.15,12,000/-towards the future economic loss. Claimants shall also be entitled toRs.15,000/- towards loss of estate, Rs.15,000/- towards funeral expensesand Rs.40,000/- towards loss of love and affection. Thus, the claimantsshall be entitled in all a sum of Rs.15,82,000/- with interest thereon atDthe rate of 7% per annum from the date of claims petition till realization.

13. Now so far as the submission on behalf of the Union of Indiathat as in the execution proceedings the claimants accepted the amountdue and payable under the impugned judgment and order and acceptedthe same as full and final settlement, thereafter the claimants ought notEto have preferred appeal for enhancement of the compensation isconcerned, the aforesaid cannot be accepted. The claimants are entitledto just compensation. Merely because in the execution proceedings theymight have accepted the amount as awarded by the High Court, may beas full and final settlement, it shall not take away the right of the claimantsto claim just compensation and shall not preclude them from claimingFthe enhanced amount of compensation which they as such are held tobe entitled to. As such, the Motor Vehicles Act is a benevolent Act andas observed hereinabove the claimants are entitled to just compensation.As such, the Union of India ought not to have taken such a plea/defence.

14. In view of the above and for the reasons stated above, theGpresent appeal succeeds in part. Impugned judgment and order passedby the High Court is modified and it is held that the claimants shall beentitled a total sum of Rs.15,82,000/- with interest thereon at the rateof 7% from the date of claims petition till the date of realization.

15. Now the appellants to deposit the balance enhanced amountHof compensation as per the present judgment and order with the learned SMT. MEENA PAWAIA & ORS. v. ASHRAF ALI & ORS.[M. R. SHAH, J.]

Tribunal within a period of six weeks from today and also deposit theenhanced amount of compensation to be invested by the learned Tribunalin the name of the parents in fixed deposit in any Nationalized Bank fora period of 3 years however, the parents shall be entitled to the periodicalinterest on the same.

16. Present appeal is partly allowed to the aforesaid extent withtoken cost which is quantified at Rs.10,000/- to be paid to the originalclaimants also to be deposited in the learned Tribunal within a period ofsix weeks from today and the same may be paid to the original claimants.

Devika Gujral

Appeal partly allowed.

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