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Smt. Kamla Devi and ors. Vs. Kishanchand and anr. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. First Appeal No. 149 of 1966
Judge
Reported inAIR1970MP168; 1970MPLJ273
ActsMotor Vehicles Act, 1939 - Sections 110 and 110B to 110F; Fatal Accidents Act, 1855 - Sections 1A and 2
AppellantSmt. Kamla Devi and ors.
RespondentKishanchand and anr.
Appellant AdvocateR.K. Tankha, Adv.
Respondent AdvocateB.C. Verma, Adv.
Cases Referred and Buckley v. John Allen and Ford
Excerpt:
- - the words 'which appears to it to be just' only recognise that in assessment of compensation the tribunals like courts will have certain measure of discretion. it is well known that the duty of assessing compensation in cases of personal injury or fatal accidents, though governed by well settled rules, is a difficult one as many speculative and uncertain factors have to be taken into account. [see freidman, law in a charming society, 1964 (pelican) edition, pp. 'he was apparently in good health and would have continued in service till the age of fifty-five years which is the superannuation age for government servants. the appellants shall further recover from the second respondent costs proportionate to their success, of this appeal as also of proceedings before the tribunal......india, air 1969 delhi 183. the reasoning in these cases is that having regard to the increase of motor accidents, the legislature enacted sections 110 to 110-f of the motor vehicles act providing a self-contained code for adjudication of claims for compensation made on behalf of victims of a motor accident, that these sections do not make any reference whatsoever to the fatal accidents act and that section 110-b of the motor vehicles act empowers the tribunal to award compensation 'which appears to it to be just',words which are wider in scope than the words used in sections 1a and 2 of the fatal accidents act.we respectfully differ. the group of sections 110 to 110-f of the motor vehicles act deal with the constitution of claims tribunals 'for the purpose of adjudicating upon claims.....
Judgment:

Singh, J.

1. This appeal under Section 110-Dof the Motor Vehicles Act is against an award made by the Motor Accident Claims Tribunal allowing a sum of Rs. 4,000/- as compensation payable to the appellants by the second respondent on account of the death of one Gurmukhdas, who was knocked down by a jeep. The jeep though owned by the first respondent, was borrowed on the date of the accident by the second respondent. The accident took place when the second respondent who was himself driving the jeep was going to the station to receive his guest. It has been found by the Tribunal that the accident took place as a result of the negligence of the second respondent in driving the jeep. As at the time of the accident the jeep was not being used for the purpose of the owner, the first respondent was absolved from liability and that finding is not challenged before us. The grievance of the appellants in this appeal is that the amount of compensation awarded by the Tribunal is inordinately low. As there is no cross appeal, the entire subject-matter involved in this appeal is the quantum of damages.

2. The contention of the learned Counsel for the appellants is that the Tribunal in awarding Rs. 4,000/- as compensation under Section 110-B of the Motor Vehicles Act has not correctly followed the principles settled by the Courts for assessing compensation under Section 1A of the Fatal Accidents Act and the amount awarded by the Tribunal is inordinately low.

3. On the contention raised by the learned counsel the first question that arises is: what is the law which the Tribunal must follow in assessing compensation under Section 110-B of the Motor Vehicles Act ?

We have come across three cases in which it has been held that a claim for compensation under the Motor Vehicles Act bears no connection to claims that can be made under the Fatal Accidents Act, 1855 and the Tribunal need not follow the principles laid down by Courts for determining compensation under that Act. The three cases are: Mohd. Habibulla v. K. Sitammal, 1966 Acc. C. J. 349 (Mad), Veena Kumari Kohli v. Punjab Roadways, 1967 Acc. C. J. 297 (Punj) and Ishwar Dcvi v. Union of India, AIR 1969 Delhi 183. The reasoning in these cases is that having regard to the increase of motor accidents, the Legislature enacted Sections 110 to 110-F of the Motor Vehicles Act providing a self-contained code for adjudication of claims for compensation made on behalf of victims of a motor accident, that these sections do not make any reference whatsoever to the Fatal Accidents Act and that Section 110-B of the Motor Vehicles Act empowers the Tribunal to award compensation 'which appears to it to be just',words which are wider in scope than the words used in Sections 1A and 2 of the Fatal Accidents Act.

We respectfully differ. The group of Sections 110 to 110-F of the Motor Vehicles Act deal with the constitution of Claims Tribunals 'for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles', and lay down the procedure and powers of these Tribunals. These sections also provide for an appeal to the High Court and bar the jurisdiction of Civil Courts 'to entertain any question relating to any claim for compensation which may be adjudicated upon by the Claims Tribunal.' Nothing is said in these sections about the basis and extent of liability or even about persons who can be subjected to liability. The sections do not deal with liability at all; they only provide a new mode of enforcing the liability in respect of accidents involving death or bodily injury which before the constitution of the Tribunals was being enforced by Civil Courts. The object of these sections is to provide a cheap and speedy mode of enforcing liability arising out of use of Motor Vehicles. The remedy is made cheap by providing for application for compensation in place of suit and thus obviating the necessity of payment of court-fees. It is made expeditious by empowering the Tribunals to follow summary procedure and by cutting down second appeals. The sections are a complete code in so far as they deal with the constitution, procedure and powers of the Tribunal and appeals against the awards made by the Tribunal. But these are all matters related to the mode of enforcement of liability. The sections do not enter the field of the law of liability which still remains to be governed by the ordinary law of Torts and the Fatal Accidents Act, 1855 and it is for this reason that the sections do not refer to them at all. The power to make an award 'determining the amount of compensation which appears to it to be just' conferred on the Tribunal, does not create any new basis or extent of; liability, The Tribunal must determine the amount of compensation according to the substantive law of liability already in force. The words 'which appears to it to be just' only recognise that in assessment of compensation the Tribunals like Courts will have certain measure of discretion. It is well known that the duty of assessing compensation in cases of personal injury or fatal accidents, though governed by well settled rules, is a difficult one as many speculative and uncertain factors have to be taken into account. Within the bounds of the law and the rules established by judicial decisions, which are themselves part of the law, there is a certain area where the Courts must exercise discretion of their own and assess the final figure with a sense of justice to both the parties. It is in this sense that it canbe said that the amount of compensation is what the Courts think just. Indeed, in the last clause of Section 1A of the Fatal Accidents Act the words 'as it (the Court) may think' are used in that sense. The same idea is reflected in Section 110-B by which the Tribunal is empowered to determine the amount of compensation 'which appears to it to be just.' The section is in no way intended to give a go-by to the basis and limit of liability fixed by the substantive law. In case of fatal accidents, whether arising out of the use of motor vehicles or otherwise, the basis and extent of liability are determined by the substantive law contained in the Fatal Accidents Act, 1855. Liability under Section 1A of the Act to compensate [he family of the deceased arises only when the death is caused by such wrongful act neglect or default which (had the death not ensued) would have entitled the injured to maintain an action and recover damages. The extent of this liability under Section 1A is that an action under that section can be brought only for the benefit of the named dependants who are to be awarded damages proportioned to the loss suffered by them as a result of the death. Section 2 of the Act permits the joinder in an action under Section 1A a claim for the benefit of the estate for recovery of any pecuniary loss to the estate of the deceased occasioned by the wrongful act, neglect or default. In our opinion, a Claims Tribunal inquiring into a claim for compensation under Section 110-B of the Motor Vehicles Act in respect of a fatal accident arising out of the use of a motor vehicle is bound to apply the law as contained in the Fatal Accidents Act. For example, it cannot award compensation unless the death was caused by wrongful act, neglect or default, Similarly, it can award only such compensation which bears due relation to the loss sustained by the defendants and/or which is admissible to the estate of the deceased under Section 2. The language used in Sections 1A and 2 of the Act has been expounded in a series of cases by highest authorities. That exposition of the language is now part of the law and the Tribunal will be bound to follow that also.

We are conscious that of late there is a movement to change the entire basis of liability in cases arising out of road traffic accidents. The move is to make the liability absolute on no-fault basis, so that the victims or their dependants are able to recover always some minimum compensation. It is suggested that this can be achieved by a system of compulsory loss insurance as distinguished from the present system of liability insurance which would insure a potential victim against loss instead of any potential wrong-doer against claims. [See Freidman, Law in a Charming Society, 1964 (Pelican) edition, pp. 120, 121 and 141; Lord Kilbrand on Other Peoples Law (1966) pp. 38, 50]. Law reform on these lines will be of a far-reaching nature and may be most wel-come; however, all that we need say at present is that Sections 110 to 110-F of the Motor Vehicles Act are not designed to bring about that kind of reform or for that matter any reform affecting the basis or extent of liability.

In the exercise of our power of construction we can at times 'enlarge the brief text--to unfold hidden meanings' (Hidayatullah, Democracy in India and the Judicial Process, p. 68). But all authorities accept that there is a line between exposition and legislation which is not to be crossed. In the words of Frankfurter:

'To go beyond it is to usurp a power which our democracy has lodged in its elected legislature. The great judges have constantly admonished their brethren of the need for discipline in observing the limitations . Whatever temptations the statesmanship of policy making might wisely suggest, construction must eschew interpolation or evisceration.' (Frankfurter, Reading of Statutes, Essays on Jurisprudence from the Columbia Law Review, 1964, edition, p. 49). Even exercising our power of construction to its full extent we are not able to find any hint in Sections 110 to 110-F of an intention on the part of the Parliament to change the basis of extent of liability.

4. The next question is: what are the principles on which damages are 'proportioned to the loss' suffered by the dependents under Section 1A of the Fatal Accidents Act, 1855 ?

The Supreme Court in two cases viz., Gobald Motor Service v. Veluswami, AIR 1962 SC 1 and Municipal Corporation of Delhi v. Subhagwanti, AIR 1966 SC 1750 has approved with special reference to Davies v. Powell Duffryn Associated Collieries Ltd., 1942-1 All ER 657 (HL) and Nauce v. British Columbia Electric Railway Co. Ltd., 1951-1 All ER 448 (HL), the application to cases arising under the Indian Act, the rules developed by the English Courts in assessing compensation under the corresponding English Act. According to Lord Wright's speech, in Davies' case, 1942-1 All ER 657 (HL) (supra), the Court should find out the income of the deceased and estimate how much of it he was spending on himself and how much on his family. The estimate of the yearly contribution which the deceased was making to his family gives the 'datum or basic' figure which is to be turned into a lump-sum by multiplying it by the number of years that the dependency might be expected to last. That sum has further to be taxed down on considerations that instead of yearly payments a lump-sum is being given, and that contingencies might have arisen in future to cut short the period of dependency e.g., the widow might have remarried, or might have died prematurely. Similar method is advocated by Lord Sumner in Nance's case, 1951-2 All ER 448 (HL) (supra).

In practice, however, the final figure is not arrived at in two stages. After settling the figure of annual dependency, it is usual to multiply it with such a reduced multiplier --the number of years* purchase -- which in itself takes into account all considerations for the reduction of the sum to be awarded; [See Mayne and Mcgregor on Damages, 12th edition, p. 813]. In cases where the present annual dependency is likely to vary in future, one method is to take the figure of present annual dependency intact and to alter up or down the multiplier (ibid); another method is to settle the figure of annual dependency in such a manner that it also represents anticipated future variations; [Mallett v. McMonagle, 1969-2 All ER 178 at p. 190 (HL)], As the damages awarded are to represent the balance of loss and gain to a dependant, the assessment has to take notice of the pecuniary benefits arising by reason of the death of the deceased. This may be done by deducting the value of the acceleration of the estate of the deceased from the damages assessed or by reducing the figure of annual dependency or the number of years' purchase; [See Munkman's Damages for personal injuries and death, 2nd edition p. 107]. For a recent statement of the law on the question of assessment of damages, the following passage from the speech of Lord Diplock in 1969-2 All ER 178 at p. 190 (supra) may be usefully quoted:

'To assess the damages it is necessary to form a view on three matters each of which is in greater or less degree one of speculation: (i) the value of the material benefits for his dependants which the deceased would have provided out of his earnings for each year in the future during which he would have provided them had he not been killed; (ii) the value of any material benefits which the dependants will be able to obtain in each such year from sources (other than insurance) which would not have been available to them had the deceased lived but which will become available to them as a result of his death; (iii) the amount of the capital sum which with prudent management will produce annual amounts equal to the difference between (i) and (ii) (i.e., 'the dependency') for each of the years during which the deceased would have provided material benefits for the dependants had he not been killed.

Since the essential arithmetical character of this assessment is the calculation of the present value of an annuity it has become usual both in England and in Northern Ireland to arrive at the total award by multiplying a figure assessed as the amount of the annual 'dependency' by a number of 'years purchase.' (Page 189)'

The assessment of damages in ordinary cases thus resolves into estimating the proper annual dependency -- the multiplicand -- and selecting the number of years' purchase themultiplier. There is not much difficulty in fixing the figure of annual dependency when the deceased is in employment with a steady salary which is likely to continue throughout his working life and when he does not leave behind any property likely to give any income to the dependants. The annual dependency at the time of his death may in such cases be taken as the basic or datum figure representing the multiplicand. As regards the selection of the number of years' purchase the multiplier, regard is to be had to the estimated remainder of working life of the deceased, the probable duration of dependency of the dependants and the fact that instead of yearly payments a lump sum is to be awarded, It has been said that in an average case where the parties are not too old or ailing the multiplier tends to bo in the region of thirteen to eighteen; [See Mayne and Mcgregor on Damages 12th edition p. 697]. A lower multiple may be applied where the normal period of dependency is likely to be cut short for example, where the. widow is expected to remarry; [See -- Goodburn v. Thomas Cotton Ltd., 1968-1 All ER 518 (CA) ], or where duration of dependency is otherwise not likely to last for the estimated remainder of the deceased's working life; [See -- Kassam v. Kampala Aerated Water Co., 1965-2 All ER 875 (PC) at p. 880 (where there was no surviving widow) ].

5. Now the facts of the instant case to which the aforesaid principles are to be applied are very simple. The deceased Gurmukhdas at the time of the accident, which took place on 23rd September, 1964, was thirty-four years of age. He was employed as permanent Overseer in Government service and was drawing a salary inclusive of dear-ness allowance, or Rs. 280/- per month. ' He was apparently in good health and would have continued in service till the age of fifty-five years which is the superannuation age for Government servants. He left behind the appellants as his heirs who at the time of his death were all his dependants. They are his widow, aged twenty-eight years, four daughters aged respectively twelve, nine, seven and three years and a son aged five years. There is no evidence that the deceased was possessed of any substantial property which on his death was inherited by the appellants.

6. Having regard to the income and the family of the deceased, it can be assumed that out of Rs. 280/- per month which he was earning as salary, he was atleast spending Rs. 150/- per month for the maintenance of the appellants. As the deceased was in permanent employment with steady income and as there is no evidence of any substantial inheritance coming to the dependants as a result of the death, the amount of annual dependency can be reasonably fixed at Rupees 1,800/-. This settles the 'datum or basic' figure or the multiplicand. The next question is as to what should be the num-her of years' purchase or the multiplier. The remainder of the working life of the deceased, who was thirty-four at the time of the accident, can be estimated as twenty-one, for he would have normally continued in service till the age of fifty-five which is the retiring age. As regards the period of dependency, it can be taken to last for the full period of working life of the deceased in case of the widow, the daughter aged three and the son aged five. In case of three other daughters who are aged twelve, nine and seven, the period of dependency would be comparatively less. There is no possibility of the widow remarrying, as a Hindu widow with six children has little chance of remarriage. In these circumstances and having regard to other uncertainties and the fact that the dependants will be receiving a lump sum payment, we take fifteen as the multiplier or the number of years' purchase. Thus in our opinion, the appellants were entitled to receive a sum of Rs. 27,000/- as compensation.

7. In selecting fifteen as the multiplier, we have kept in view two cases viz., AIR 1966 SC 1750 and Buckley v. John Allen and Ford, 1967-1 All ER 539.

In AIR 1966 SC 1750 (supra) three suits which arose out of the same accident were decided together. In one of the suits the deceased was aged thirty years and had left as his dependants his widow aged twenty-eight, a son aged fourteen and two daughters aged twelve and two. It was estimated that the deceased must have been spending a sum of Rs. 150/- per month for the maintenance of the family. The dependants were awarded a sum of Rs. 25,000/- as damages. On a challenge to the reasonableness of this amount, the High Court was of the view that in the circumstances of the case, fifteen years purchase of the annual dependency i.e., Rs. 27,000/- would have represented the proper amount of compensation and as the amount awarded was less than that there was no reason for reducing the same. In another suit damages were claimed by the husband and four children of the deceased who was forty or forty-two at the time of her death. In this suit as also in the third suit, the facts of which are not very clear, the multiplier applied by the High Court was fifteen. In appeals to the Supreme Court, the question of reasonableness of the amount of compensation was again raised but it was held that the High Court had applied 'the correct principle in estimation of damages.'

In l967-l All ER 539 (supra) which can be taken as representing the current English trend in similar cases, the deceased was aged thirty-five and had left behind a widow, five months older than him, three girls aged respectively eleven, nine and six and a boy aged three years. In fixing the compensation payable under the Fatal Accidents Act at fifteen times the figure of yearly dependency, Phillimore, J., observed:

'What is the proper multiplication This is the age group in which after due allowance has been made for such factors as the receipt of the capital sum and the chances of life the multiplier is fifteen. Counsel for the defendants suggested thirteen but I do not think he did so with much conviction,' (P. 543)

8. The Tribunal in assessing the compensation payable to the appellants did not take notice of the principles laid down by the Supreme Court in AIR 1962 SC 1 (supra). The amount of Rs. 4,000/- assessed by the Tribunal as compensation is not even three years' purchase of the annual dependency and is inordinately low. In the circumstances, we have no hesitation in interfering with the award. As already stated, our conclusion is that a sum of Rs. 27,000/- would be the proper compensation payable to the appellants.

9. As no claim for damages has been made for the benefit of the estate of the deceased under Section 2 of the Fatal Accidents Act, we need not say anything on that point.

10. In the result, we allow the appeal and modify the award of the Tribunal, We award a sum of Rs. 27,000/- (in place of Rs. 4,000/- awarded by the Tribunal) as compensation payable to the appellants by Manoharlal, the second respondent. This amount shall carry interest at the rate of 4 per cent per annum from the date of the award made by the Tribunal upto the date of payment. The appellants shall further recover from the second respondent costs proportionate to their success, of this appeal as also of proceedings before the Tribunal. The order of the Tribunal dismissing the claim application against the first respondent is confirmed and the appeal is dismissed to that extent. The respondents shall bear their own costs throughout.


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