MACT [Motor
Accident Claim Tribunal] OPs are gory details of claim for monetary
compensation and most of them would leave one saddened reading the details. When
there is a road accident – the injured or the legal heirs (in case of death)
file petition before MACT claiming compensation against the vehicle owner,
driver and the insurer of the vehicle. After due procedure, the Hon’ble Court passes
award against the owner / Insurer and by virtue of Policy, Insurers effect
payment of compensation.
There
are Tribunals specially constituted for ensuring compensation speedily – there are
also Civil Courts, and Appellate Courts.
This post is on a judgment in Court of Small Causes. The Court of Small Causes exercise powers
under the Presidency Small Causes Courts Act, 1882. Tribunals for the trial of
cases under the Motor Vehicles Act and for Rent Controllers for the City of
Chennai also function from Small Causes Court. The Court is presided over by
the Chief Judge in the cadre of a District Judge.
Before
we get into details of this, something on a judgement that is mostly relied
upon in Motor accidents in arriving at the quantum of compensation.
One Rajinder Prakash died on account of
injuries sustained in a motor accident which occurred on 18.4.1988 involving a
bus belonging to the Delhi Transport Corporation. At the time of the accident
and untimely death, the deceased was aged 38 years, and was working as a
Scientist in the Indian Council of Agricultural Research (ICAR) on a monthly
salary of Rs.3402/- and other benefits. His widow, three minor children,
parents and grandfather (who is no more) filed a claim for Rs.16 lakhs before
the Motor Accidents Claims Tribunal, New Delhi. An officer of ICAR, gave evidence that the age of retirement in
the service of ICAR was 60 years and the salary received by the deceased at the
time of his death was Rs.4004/- per month.
Tribunal by its judgment and award dated
6.8.1993 allowed the claim in part. The Tribunal calculated the compensation by
taking the monthly salary of the deceased as Rs.3402. It deducted one-third
towards the personal and living expenses of the deceased, and arrived at the
contribution to the family as Rs.2250 per month (or Rs.27,000/- per annum). In
view of the evidence that the age of retirement was 60 years, it held that the
period of service lost on account of the untimely death was 22 years. Therefore
it applied the multiplier of 22 and arrived at the loss of dependency to the
family as Rs.5,94,000/-. It awarded the said amount with interest at the rate
of 9% per annum from the date of petition till the date of realization.
Dissatisfied
with the quantum of compensation, the appellants filed an appeal. The Delhi
High Court allowed the said appeal in part. The High Court was of the view that
though in the claim petition the pay was mentioned as Rs.3,402 plus other
benefits, the pay should be taken as Rs.4,004/- per month as per the evidence
of the employer. Having regard to the
fact that the deceased had 22 years of service left at the time of death and
would have earned annual increments and pay revisions during that period, it
held that the salary would have at least doubled (Rs.8008/- per month) by the
time he retired. It therefore determined the income of the deceased as
Rs.6006/- per month, being the average of Rs.4,004/- (salary which he was
getting at the time of death) and Rs.8,008/- (salary which he would have
received at the time of retirement). Having regard to the large number of
members in the family, the High Court was of the view that only one fourth
should be deducted towards personal and living expenses of the deceased,
instead of the standard one-third deduction. After such deduction, it arrived at
the contribution to the family as Rs.4,504/- per month or Rs.54,048/- per
annum. Having regard to the age of the deceased, the High Court chose the
multiplier of 13. Thus it arrived at the loss of dependency as Rs.702,624/-.
Not
being satisfied with the said increase, the appellants agitated before the
Supreme Court of India. They contend that the High Court erred in holding that
there was no evidence in regard to future prospects; and that though there is
no error in the method adopted for calculations, the High Court ought to have
taken a higher amount as the income of the deceased.
Apex
Court held that basically only three
facts need to be established by the claimants for assessing compensation in the
case of death : (a) age of the deceased; (b) income of the deceased; and the
(c) the number of dependents. The issues to be determined by the Tribunal to
arrive at the loss of dependency are (i) additions/deductions to be made for
arriving at the income; (ii) the deduction to be made towards the personal
living expenses of the deceased; and (iii) the multiplier to be applied with
reference of the age of the deceased. If these determinants are standardized,
there will be uniformity and consistency in the decisions. There will lesser
need for detailed evidence. It will also be easier for the insurance companies
to settle accident claims without delay. To have uniformity and consistency,
Tribunals should determine compensation in cases of death, by following
well settled steps:
The
Court held that generally the actual income of the deceased less income tax
should be the starting point for calculating the compensation. The question is
whether actual income at the time of death should be taken as the income or
whether any addition should be made by taking note of future prospects. In
Susamma Thomas, this Court held that the future prospects of advancement in
life and career should also be sounded in terms of money to augment the
multiplicand (annual contribution to the dependants); and that where the
deceased had a stable job, the court can take note of the prospects of the
future and it will be unreasonable to estimate the loss of dependency on the
actual income of the deceased at the time of death. In that case, the salary of
the deceased, aged 39 years at the time of death, was Rs.1032/- per month.
Having regard to the evidence in regard to future prospects, this Court was of
the view that the higher estimate of monthly income could be made at Rs.2000/-
as gross income before deducting the personal living expenses.
In the
instant case of Sarla Verma, the Court opined that interest of justice would be met if one-fifth
is deducted as the personal and living expenses of the deceased. After such
deduction, the contribution to the family (dependants) is determined as
Rs.57,658/- per annum. The multiplier will be 15 having regard to the age of
the deceased at the time of death (38 years). Therefore the total loss of
dependency would be Rs.57,658 x 15 = Rs.8,64,870/-. By adding heads loss of estate and funeral
expenses, loss of consortium, the final compensation
was arrived at Rs.8,84,870/- and allowed the appeal in part.
With this background, read
the details of this petition filed u/s Sec 166 of MV Act, by parents of a young
girl of 22 years of age, dead in a road accident on 3.9.2014. The deceased was on the pillion of a two
wheeler which was hit by a bus. The filing date is 19.9.2014; first hearing was
on 9.6.2016 and disposed by Hon’ble Judge P Velmurugan on 16.3.2017.
The issues framed were :
• Whether rash and negligently
driven
• Whether respondents liable to pay compensation
• If so, the quantum
On their part, the
petitioners produced the person who drove the two wheeler as eye witness and HR
Manager of an IT firm where the deceased had been employed. It is recorded that the evidence of the
person who drove the vehicle was cogent, convincing and inspired the Tribunal
into believing that the bus was driven rashly and negligently causing the
accident and instant death. The age of
the deceased was taken at 23.
She was a BE from Anna University
taken on employment with CTC of
Rs.301500/- ; gross monthly salary of
Rs.21555/- and bank pass book revealed
Rs.20100/- credited to her account.
The HR Manager deposed that she had joined on 15.7.2014 [less than 50
days !] and added that upon completion of 4 months training, salary would be
revised to Rs.25000/- They filed CTC
letter and adduced evidence stating that
upon completion of probation salary was to be revised to Rs.335000/-
Counsel on behalf of
Insurers contended that the salary
should be taken at actuals of Rs.21555/-
and not any notional increase. The
Tribunal however decided to take the salary that she would get upon completion
of probation in 4 months recording that she was a meritorious student and
performed well in office; that period of training was only 4 months and the
salary will be increased upon completion.
The Tribunal further made some interesting remarks – on Indian Parliament enacting laws to
protect interests of labour class to prevent exploitation, yet that
continues. After introduction of New
Economic Policy, MNC, Foreign companies have come into being, employing Indians
but they are not strictly implementing or following labour laws in letter and
spirit. They have not allowed employees
to start or involve in Trade union movements and the employees do not have the
bargaining capacity. They are paying
lesser salaries to Indian employees exploiting the competition prevalent in job
market.
Tribunal added that the cost of labour of an Indian
Engineer in IT field is low in Indian market compared with developed countries
and the Tribunal is inclined to take a sum of Rs.25,125/- as per her
appointment order instead of the actual drawn salary. The court adopted multiplier of 18 as per
Sarla Verma, added 50% for future prospects, and as the family consisted of 2
members besides the deceased deducted 50% - calculated pecuniary loss at 25125 x 12 + 50% @ 150750 = 452250 less 50% =
226125 X 18 = 40,70,250/-
Since the income is below
3.5 lakhs did not deduct any income tax.
Besides the pecuniary compensation allowed loss of love and affection @
1 lakh each + funeral expenses at Rs.25000- totaling Rs.43,05,500/-
The
methodology and some of the comments in the Judgments can have a far reaching
impact on compensation, if the same were to be interpreted in other cases too. Reading
this, felt to be far different than the routine manner and hence thought of
placing this before you all.
With regards – S.
Sampathkumar
25th June 2017
I like your information which is very useful for me. Thanks.
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