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Thursday, October 11, 2018

road accidents ~ MACT - Appeal ~ what is Consortium ??


                                     Vehicles on road are ever increasing and so does accidents !!   In a Civil Society, Courts are of great importance – they protect constitutional rights of the citizens and provides equal opportunity to all the subjects.  There can be Civil and Criminal disputes and Courts provide justice, equality and neutrality. The courts’ function is to adjudicate legal disputes between parties and carry out the administration of justice in accordance with the rule of law.  Still there could be differences – there  could be differences even in well-settled matters – necessitating appeals / reviews ~  Motor Insurance and liability arising out of use of motor vehicles in public place is well defined -  here is an interesting  case decided by the Supreme Court of India in a special leave petition filed by a private Insurance company recently.   This SLP had been filed by the Insurers challenging the compensation awarded  on certain counts by the Punjab & Haryana High Court.


The cause of action arose on 1.12.2013, when a person riding a motorcycle was fatally injured in a road accident involving his vehicle and a Renault car.  The victim was taken to Govt hospital but succumbed to his injuries.   There appears no dispute of the accident, death and other basic factors.  The   father,   brother,   and   sister   of   the   deceased   filed   Claim Petition   under   Section   166   of   the   Motor   Vehicles   Act,   1988 before   the   Motor   Accidents   Claim   Tribunal,   Yamuna   Nagar.  An eye-witness to the accident was examined and deposed that the accident occurred due to rash & negligent driving of the driver of the car.  Sadly, the deceased was only 24 years old and had been engaged in the business of manufacturing Namkeen products.

The Claimants contended  the income of the deceased was Rs. 15,000 per month. However, since no proof could be brought in,  MACT took the income to be that of an unskilled worker i.e. Rs. 5,342 permonth on the basis of the Notification dated 13.08.2013 issued by   the   Labour   Commissioner,   Haryana   prescribing   minimum wages for different categories of work.  MACT computed compensation taking  income @ 5342 – deducting personal income @ 1/3 – take the multiplier 7 (as per the age of the father !) add loss of future income – loss of love and affection @25000 + funeral expenses @15000 totalling Rs.339208 and awarded the same with interest @ 7% from the date of claim until realisation with costs. 

The MACT did not award any compensation to  the brother of the deceased, as he could not be considered to bea dependent. Compensation was awarded to the aged fatherand the unmarried sister of the deceased, who were held to be dependents.  The Insurance Company and the driver of the vehicle –were held to be jointly and severallyliable to pay the compensation.
                                                                                                                              
The petitioners, i.e.,  father and sister of the deceased filed an Appeal against the order of the MACT before the   Punjab   and   Haryana   High   Court   praying   for enhancement of compensation.  The   High   Court   held   that   the   facts   relating   to   the accident were admitted and proved before the MACT. It was established that the deceased had died as a result of the rash and negligent driving of driver of the car. High Court found that the MACT had used the wrong   principle   for   application   of   the   multiplier.   The multiplier ought to have been taken on the basis of the ageof the deceased, and not of his father.The   High   Court   re­assessed   the   compensation   reckoning monthly income at Rs.6000/-  + future prospects @ 50%; deduction of personal expenses @ 1/3rd of total income;  Multiplier @ 18 (as per age of deceased) + loss of love and affection Rs.100000/- (for 2 persons) + funeral expenses @ Rs.25000/-  = total compensation awarded  Rs. 14,21,000/-   with   interest@ 9% from the date of filing the   claim   petition   till realization.

Aggrieved by the Order of the High Court, the Insurers filed SLP before the Apex Court, seeking setting­aside the judgment of the Punjab and Haryana High Court.  The grounds of appeal were :  i) the High Court erroneously awarded 50% towards future prospects whereas following the judgment of   National Insurance Co. Ltd.  v.  Pranay Sethi, it should have been 40%;  ii) the deduction should have been  at ½, and not at 1/3rd, as he was a Bachelor;  iii) minimum wages ought to have been taken at Rs. 5,341 and not Rs. 6,000 - the prevailing rate of minimum wages in Haryana atthe time of the accident. iv) father and sister of the deceased could not be considered as dependants, and were not entitled to compensation. In the case of death of a bachelor, onlythe mother could be considered to be a dependant.  V) 1 lakh on love & affection and 25000 towards funeral expenses was erroneous and  only Rs. 30,000 could have been awarded as per the judgment in  Pranay Sethi (supra).  The dependents of the deceased refuted the grounds raised by the Insurance company, and reiterated their claim for enhanced compensation.

On the grounds of challenge by the Insurance Company – the Apex Court held that :

1.     issue   of   Future   Prospects,   a Constitution   Bench   of   this   Court   in  Pranay Sethi (supra) has held that 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.  Future Prospects are to be awarded on the basis of: i. the nature of the deceased’s employment; and ii. the age of the deceased.  Since no evidence was brought in on salary, the income is assessed on the basis of  minimum wage of an unskilled worker.  Taking age @ 24, future prospects awarded at 40% of the actual income of the deceased, instead of 50% as awarded by the High Court.

2.  On the question of deduction on the count that victim was a bachelor,  citing the   judgment   in  Sarla Verma  (supra)   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 non ­earning sisters or brothers,   his   personal   and   living   expenses   may   be restricted to one­third, as contribution to the family will be taken as two­ third. 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.

3.   income though claimed at Rs.15000/- Court found that Rs. 6,000, taken  is marginally above the minimum wage of an unskilled worker at Rs. 5,342/- and felt not suitable to being interfered with.

4.  to the contention of Insurer that  father and the sister of the deceased could not be treated as dependents,   and   it   is   only   a   mother   who   can   be dependent of her son, the Court felt that this  contention deserves to be repelled. The deceased was a bachelor, whose mother had   pre-­deceased   him.   The   deceased’s   father   was about   65   years   old,   and   an   unmarried   sister.   The deceased was contributing a part of his meagre income to the family for their sustenance and survival. Hence, they   would   be   entitled   to   compensation   as   his dependents.

5.  On Insurer’s contention on loss of love & affection – the Court again citing Pranay Sethi stated that this has  set out the various amounts to be awarded as compensation under the conventional heads in case of   death.   The   relevant   extract   of   the   judgment   is reproduced herein below : “Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable   figures   on   conventional heads, namely, loss of estate, loss of consortium   and   funeral   expenses should be Rs. 15,000/­, Rs. 40,000/­ and Rs.   15,000/­   respectively.  The principle of revisiting the said heads is   an   acceptable   principle.   But   the revisit  should  not  be  fact-centric  or quantum­centric.    Though the Court cited the  afore­said judgment,  and decreased funeral expenses to Rs.15,000/-, maintained the  amount awarded by the High Court towards loss of love and affection.   The MACT as well as the High Court  did not award any compensation with respect to Loss of Consortium and Loss of Estate, which are the other conventional heads.  The Apex Court stated that Motor Vehicles Act is a beneficial and welfare legislation. The Court is duty ­bound and entitled to award “just compensation”, irrespective of whether any plea in that behalf was raised by the Claimant. In exercise of our power under Article 142, and in the   interests   of   justice,   we   deem   it   appropriate   to award an amount of Rs. 15,000 towards Loss of Estate to Respondent Nos. 1 and 2.

In legal parlance, “consortium” is a compendious term   which   encompasses   ‘spousal   consortium’, ‘parental consortium’, and ‘filial consortium’. The   right   to   consortium   would   include   the company,   care,   help,   comfort,   guidance,   solace   and affection of the deceased, which is a loss to his family.  With   respect   to   a   spouse,   it   would   include   sexual relations with the deceased spouse. Spousal consortium is generally  defined as rights pertaining to the relationship of a husband­wife which allows compensation to the surviving spouse for loss of “company, society, co­operation, affection, and aid of the other in every conjugal relation.” Parental consortium is granted to the child upon the premature death of a parent, for loss of “parental aid, protection, affection, society, discipline, guidance and training.” Filial consortium is the right of the parents to compensation in the case of an accidental death of a child.  Consortium is a special prism reflecting changing norms   about   the   status   and   worth   of   actual relationships.  

In sum and substance, the Court upon review  reckoned compensation as : Income 6000 + future prospects 40%; 1/3rd deduction towards personal expenditure X multiplier of 18 =  Rs. 12,09,600 (Rs.5,600 x 12 x 18) + Loss of love and  affection: Rs. 1,00,000 (Rs. 50,000 each) + funeral expenses Rs. 15,000 +  Loss of estate: Rs. 15,000 + loss of Filial  Rs. 80,000  and awarded a total compensation of Rs.14,25,600/- alongwith Interest @ 12% p.a. from the date   of   filing   of   the   Claim petition till payment.

The Hon’ble Court held that the Insurance Company and R 3 were held jointly   and   severally   liable   to   pay   the   compensation awarded.  The court further held that 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 (owner of insured vehicle).

There are learning for everybody, especially for the Insurers

With regards – S. Sampathkumar
10th Oct 2018.

Case citation :  Civil Appeal no. 9581 of 2018 - arising out of SLP (Civil) No. 3192 of 2018)
Magma General Insurance Co. Ltd. …Appellant Vs Nanu Ram Alias Chuhru Ram & Ors. …Respondents

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