2018 (9) TMI 2160 - SC - Indian Laws

Motor accident compensation: Future prospects reduced to 40%, income fixed at Rs. 6,000 monthly, additional Rs. 15,000 awarded for loss of estate.

SC modified HC's compensation award in motor accident case. Future prospects reduced from 50% to 40% as deceased was 24 years old. HC's 1/3rd deduction ... Challenge the compensation awarded on certain counts by the Punjab & Haryana High Court - award of 50% towards Future Prospects - deduction of the income of the deceased ought to have been made at ½, and not at 1/3rd, as he was a bachelor - minimum wages of the deceased. Future Prospects - HELD THAT:- In the present case, it is claimed by the family of the deceased that he was engaged in making namkeen, and was earning a monthly income of about Rs. 15,000 per month. However, no evidence was brought on record to establish the same. The MACT as well as the High Court assessed the income of the deceased on the basis of the minimum wage of an unskilled worker. The nature of his employment being taken as a selfemployed 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 income of the deceased, instead of 50% as awarded by the High Court - the judgment of the High Court on this issue is modified to that extent. Deduction from the income of the deceased - Insurance Company contended that the deduction ought to have been ½, and not 1/3rd, since the deceased was a bachelor - HELD THAT:- This issue has been dealt with in paragraph 32 of the judgment in Sarla Verma [2009 (4) TMI 1030 - SUPREME COURT] wherein this Court took the view that where the family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non­earning sisters or brothers, his personal and living expenses may be restricted to one­third, as contribution to the family will be taken as two­third. Considering that the deceased was living in a village, where he was residing with his aged father who was about 65 years old, and Respondent No. 2 ­an unmarried sister, the High Court correctly considered them to be dependents of the deceased, and made a deduction of 1/3rd towards personal expenses of the deceased - The judgment of the High Court is, therefore, affirmed on this count. Minimum wages of the deceased - HELD THAT:- With respect to the income of the deceased, as the family could not produce any evidence to show that the income of the deceased was Rs. 15,000 per month, as claimed, the High Court took his income to be Rs. 6,000, which is marginally above the minimum wage of an unskilled worker at Rs. 5,342/- - This finding is also not being interfered with. The Motor Vehicles Act is a beneficial and welfare legislation. The Court is duty­bound and entitled to award “just compensation”, irrespective of whether any plea in that behalf was raised by the Claimant - In exercise of power under Article 142, and in the interests of justice, it is deemed appropriate to award an amount of Rs. 15,000 towards Loss of Estate to Respondent Nos. 1 and 2. Conclusion - The Insurance Company and Respondent No. 3 are held jointly and severally liable to pay the compensation awarded - The Appellant – Insurance Company will pay the full amount of compensation awarded hereinabove to Respondent Nos. 1 and 2 and can recover 50% of the amount from Respondent No. 3. Appeal disposed off. Issues Presented and ConsideredThe core legal questions considered by the Court in this matter were:Whether the High Court erred in awarding 50% towards future prospects instead of 40% as per the Constitution Bench judgment in National Insurance Co. Ltd. v. Pranay Sethi.The appropriate deduction to be made from the deceased's income towards personal expenses, particularly whether it should be one-third or one-half, considering the deceased was a bachelor.The correct assessment of the deceased's income, whether it should be taken as Rs. 6,000 or Rs. 5,342 per month, based on minimum wages applicable at the time.Whether the father and unmarried sister of the deceased could be considered dependents entitled to compensation, or if only the mother qualifies as a dependent in the case of a bachelor's death.The correctness of the amounts awarded for loss of love and affection and funeral expenses, and whether these awards conformed to the principles laid down in Pranay Sethi.The applicability and quantum of compensation for loss of consortium and loss of estate, which were not awarded by the MACT or the High Court but recognized as heads of compensation in Pranay Sethi.Issue-wise Detailed Analysis1. Future ProspectsThe Court examined the principle established by the Constitution Bench in Pranay Sethi, which mandates that where the deceased was self-employed or on a fixed salary and below 40 years of age, future prospects should be awarded at 40% of the established income. The deceased was 24 years old and engaged in the business of manufacturing namkeen products, which was treated as self-employment.The family claimed a monthly income of Rs. 15,000 but failed to provide evidence. Both the MACT and the High Court assessed income based on minimum wages for an unskilled worker, treating the deceased as self-employed. The High Court awarded 50% towards future prospects, which the Court found excessive and modified to 40%, aligning with the authoritative precedent.2. Deduction Towards Personal ExpensesThe Insurance Company argued for a 50% deduction from income, asserting that since the deceased was a bachelor, a larger portion of income would have been spent on personal expenses. The Court referred to paragraph 32 of Sarla Verma, which allows for only one-third deduction if the deceased supported a large family dependent on his income.Given the deceased lived with an elderly father and unmarried sister, both dependents, the Court upheld the High Court's one-third deduction, reasoning that the deceased's contribution to family sustenance justified a lower personal expense deduction.3. Assessment of IncomeThe family's claimed income of Rs. 15,000 was unsupported by evidence. The High Court took Rs. 6,000 as monthly income, slightly above the minimum wage of Rs. 5,342 for an unskilled worker in Haryana at the relevant time. The Court found no reason to interfere with this assessment, considering it reasonable and consistent with the evidence.4. Dependents Entitled to CompensationThe Insurance Company contended that only the mother could be a dependent in the case of a bachelor's death, excluding the father and sister. The Court rejected this contention, noting the mother had pre-deceased the deceased, and the deceased's father (aged about 65) and unmarried sister lived with and depended on him.The Court emphasized that the deceased contributed to their sustenance and survival, entitling them to compensation as dependents under the Motor Vehicles Act.5. Compensation for Loss of Love and Affection and Funeral ExpensesThe Insurance Company challenged the High Court's award of Rs. 1,00,000 for loss of love and affection and Rs. 25,000 for funeral expenses, contending these were excessive compared to the Rs. 30,000 combined award suggested in Pranay Sethi.The Court referred to the relevant extract from Pranay Sethi, which fixed reasonable sums for conventional heads of compensation and provided for periodic enhancement. It reduced the funeral expenses award to Rs. 15,000 but maintained the Rs. 1,00,000 award for loss of love and affection, finding it justified in the circumstances.6. Compensation for Loss of Consortium and Loss of EstateNeither the MACT nor the High Court awarded compensation under these heads, despite their recognition as conventional heads of compensation in Pranay Sethi. The Court observed that the Motor Vehicles Act is a beneficial and welfare legislation, empowering courts to award just compensation even if not specifically claimed.Exercising powers under Article 142, the Court awarded Rs. 15,000 for loss of estate and Rs. 40,000 each to the father and sister for loss of filial consortium. The Court elaborated on the legal concept of consortium, encompassing spousal, parental, and filial consortium, emphasizing the emotional and societal value of such losses beyond economic considerations.The Court noted that modern jurisprudence recognizes the value of a child's consortium to parents and that parents are entitled to compensation for loss of filial consortium in the event of the accidental death of a child or unmarried son or daughter.7. Application of Law to Facts and Treatment of Competing ArgumentsThe Court carefully applied established legal principles from authoritative precedents, particularly Pranay Sethi and Sarla Verma, to the facts of the case. It balanced the Insurance Company's submissions with the claimants' circumstances, evidence, and the welfare objectives of the Motor Vehicles Act.Where the Insurance Company's contentions lacked evidentiary support or conflicted with settled legal principles, the Court rejected them. Conversely, where the High Court's award exceeded the limits prescribed by precedent (e.g., 50% future prospects), the Court modified the award to conform to the law.The Court also proactively addressed omissions by the lower courts regarding loss of consortium and loss of estate, ensuring comprehensive justice.ConclusionsThe Court upheld the High Court's findings on the accident's cause, income assessment, and dependency of the father and sister. It modified the future prospects award from 50% to 40%, reduced funeral expenses to Rs. 15,000, and added compensation for loss of estate and filial consortium.The total compensation was fixed at Rs. 14,25,600 with interest at 12% per annum from the date of filing the claim petition until payment. The Insurance Company and the driver were held jointly and severally liable, with the Insurance Company entitled to recover 50% from the driver.Significant HoldingsThe Court articulated crucial legal reasoning, including:'In case the deceased was self employed or on a fixed salary, and was below 40 years of age, an addition of 40% of the established income should be granted towards Future Prospects.''Where the family of the bachelor is large and dependent on the income of the deceased, his personal and living expenses may be restricted to one-third, as contribution to the family will be taken as two-thirds.''The deceased's father and unmarried sister, living with him and dependent on his income, are entitled to compensation as dependents.''The Motor Vehicles Act is a beneficial legislation aimed at providing relief to victims or their families, and courts are entitled to award just compensation even if no plea in that behalf was raised.''Consortium is a compendious term encompassing spousal, parental and filial consortium, reflecting the loss of company, care, comfort, guidance, solace and affection of the deceased.''Parents are entitled to compensation for loss of filial consortium upon the accidental death of a child, unmarried son or daughter.'The Court thereby clarified and expanded the scope of compensation under the Motor Vehicles Act, reinforcing the principles of just and adequate relief for victims' families.