2001 Supreme(SC) 1107

2001(6) Supreme 151
SUPREME COURT OF INDIA
(Under Art. 32 of the Constitution of India)
G.B. Pattanaik, U.C. Banerjee and S.N. Variava, JJ.
Lata Wadhwa & Ors. -Petitioners
versus
State of Bihar & Ors. -Respondents
Writ Petition (C) No. 232 of 1991
Decided on 16-8-2001
Counsel for the Parties :
For the Petitioners : Ms. Rani Jethmalani, Mrs. Gouri K. Das, Ms. Gitanjali Malviya, and Saurabh Avasthi, Advocates.
For the Respondents : F.S. Nariman and V.P. Singh, Sr. Advocates, Ravinder Narain, S. Sukumaran, Ms. Deepa Das, Tarun Banga, Subhash Sharma, Advocates for M/s. JBD & Co., Advocates B.B. Singh and Ejaz Maqbool, Advocates.

VERY IMPORTANT POINT
The Chandrachud s Committee s report on compensation for TISCO March 1889 Fire Victims (113 injured persons), dependants (of 60 dead persons) upheld by Supreme Court adopting suggested multiplier system but making certain enhancements in conventional addition (50,000/- for suggested 25,000/- per head), not adjusting monetary benefits already given by TISCO to compensate delay and hiking the compensation for those who lost their children in the tragedy.

Headnote:Constitution of India-Articles 21 and 32 -Public Interest litigation for compensation and justice to persons who died and were injured in TISCO s function on 3.3.89 in Jamshedpur by sudden fire-Supreme Court appointed Justice Y.V. Chandrachud to assess and report-Report given after about 7 years-Claimants contending that system of multiplier in assessing compensation is not proper -Whether correct? (No)-Conventional addition of 25,000/- per head -Court found it inadequate and doubled it-Compensation for those who lost their children in tragedy doubled-Monetary benefits already given by TISCO not adjusted to compensate delay-Registry directed to re-calculate the compensation as per report in the light of directions for enhancing the amount-Compensation for TISCO fire victims, dependants as per Justice Chandrachud s report upheld with modifications-Delay held inevitable -Order accordingly.

       Held : So far as the determination of compensation in death cases are concerned, apart from the three decisions of Andhra Pradesh High Court, which had been mentioned in the order of this Court dated 15th December, 1993, this Court in the case of General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas and Ors., 1994(2) SCC 176, exhaustively dealt with the question. It has been held in the aforesaid case that for assessment of damages to compensate the dependants, it has to take into account many imponderables, as to the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether. The Court further observed that the manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants, and thereafter it should be capitalised by multiplying it by a figure representing the proper number of year s purchase. It was also stated that much of the calculation necessarily remains in the realm of hypothesis and in that region arithmetic is a good servant but a bad master, since there are so often many imponderables. In every case, "it is the overall picture that matters", and the court must try to assess as best as it can, the loss suffered. The Court also further observed that the proper method of computation is the multiplier method and any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. The Court disapproved the contrary views taken by some of the High Courts and explained away the earlier view of the Supreme Court on the point. After considering a series of English decisions, it was held that the multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants, whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed up over the period for which the dependency is expected to last. In view of the aforesaid authoritative pronouncement of this Court and having regard to the determination made in the Report by Shri Justice Chandrachud, on the basis of the aforesaid multiplier method, it is difficult for us to accept the contention of Mrs. Rani Jethmalani, that the settled principle for determination of compensation, has not been followed in the present case. The further submission of the learned counsel that the determination made is arbitrary, is devoid of any substance, as Shri Justice Chandrachud has correctly applied the multiplier, on consideration of all the relevant factors. Damages are awarded on the basis of financial loss and the financial loss is assessed in the same way, as prospective loss of earnings. The basic figure, instead of being the net earnings, is the net contribution to the support of the defendants, which would have been derived from the future income of the deceased. When the basic figure is fixed, then an estimate has to be made of the probable length of time for which the earnings or contribution would have continued and then a suitable multiple has to be determined (a number of year s purchase), which will reduce the total loss to its present value, taking into account the proved risks of rise or fall in the income. (Para 8)

       Held further : It is not necessary for us to further delve into the matter, as in our opinion, Shri Justice Chandrachud, has correctly arrived at the basic figure as well as in applying the proper multiplier, so far as the employees of the TISCO are concerned, but the addition of conventional figure to the tune of Rs. 25,000/- appears to us to be inadequate and instead, we think the conventional figure to be added should be Rs. 50,000/-. (Para 9)

       Held also : So far as the deceased housewives are concerned, in the absence of any data and as the housewives were not earning any income, attempt has been made to determine the compensation, on the basis of services rendered by them to the house. On the basis of the age group of the housewives, appropriate multiplier has been applied, but the estimation of the value of services rendered to the house by the housewives, which has been arrived at Rs. 12,000/- per annum in cases of some and Rs. 10,000/- for others, appears to us to be grossly low. It is true that the claimants, who ought to have given datas for determination of compensation, did not assist in any manner by providing the datas for estimating the value of services rendered by such housewives. But even in the absence of such datas and taking into consideration, the multifarious services rendered by the housewives for managing the entire family, even on a modest estimation, should be Rs. 3000/- per month and Rs.36,000 per annum. This would apply to all those housewives between the age group of 34 to 59 and as such who were active in life. The compensation awarded, therefore should be re-calculated, taking the value of services rendered per annum to be Rs. 36,000/- and thereafter applying the multiplier, as has been applied already, and so far as the conventional amount is concerned, the same should be Rs. 50,000/- instead of Rs. 25,000/- given under the Report. So far as the elderly ladies are concerned, in the age group of 62 to 72, the value of services rendered has been taken at Rs. 10,000/- per annum and multiplier applied is eight. Though, the multiplier applied is correct, but the values of services rendered at Rs. 10,000/- per annum, cannot be held to be just and, we, therefore, enhance the same to Rs. 20,000/- per annum. In their case, therefore, the total amount of compensation should be re-determined, taking the value of services rendered at Rs. 20,000/- per annum and then after applying the multiplier, as already applied and thereafter adding Rs. 50,000/- towards the conventional figure. (Para 10)

        So far as the award of compensation in case of children are concerned, held that a mere speculative possibility of benefit is not sufficient. Question whether there exists a reasonable expectation of pecuniary advantage is always a mixed question of fact and law. There are several decided cases on this point, providing the guidelines for determination of compensation in such cases but we do not think it necessary for us to advert, as the claimants had not adduced any materials on the reasonable expectation of pecuniary benefits, which the parents expected. In case of a bright and healthy boy, his performances in the school, it would be easier for the authority to arrive at the compensation amount, which may be different from another sickly, unhealthy, rickety child and bad student, but as has been stated earlier, not an iota of material was produced before Shri Justice Chandrachud to enable him to arrive at just compensation in such cases and, therefore, he has determined the same on an approximation. Mr. Nariman, appearing for the TISCO on his own, submitted that the compensation determined for the children of all age groups could be doubled, as in his views also, the determination made is grossly inadequate. Loss of a child to the parents is irrecoupable, and no amount of money could compensate the parents. Having regard to the environment from which these children were brought, their parents being reasonably well placed officials of the Tata Iron and Steel Company, and on considering the submission of Mr. Nariman, we would direct that the compensation amount for the children between the age group of 5 to 10 years should be three times. In other words, it should be Rs. 1.5 lakhs, to which the conventional figure of Rs. 50,000/- should be added and thus the total amount in each case would be Rs. 2.00 lakhs. So far as the children between the age group of 10 to 15 years, they are all students of Class VI to Class X and are children of employees of TISCO. The TISCO itself has a tradition that every employee can get one of his child employed in the company. Having regard to these facts, in their case, the contribution of Rs. 12,000/- per annum appear to us to be on the lower side and in our considered opinion, the contribution should be Rs. 24,000/- and instead of 11 multiplier, the appropriate multiplier would be 15. Therefore, the compensation, so calculated on the aforesaid basis should be worked out to Rs. 3.60 lakhs, to which an additional sum of Rs. 50,000/- has to be added, thus making the total amount payable at Rs. 4.10 lakhs for each of the claimants of the aforesaid deceased children. (Para 11)

       So far as the eight other persons, who died belonging to the other category, Shri Justice Chandrachud had arrived at the compensation on the basis of dependency at 60 of the annual income and thereafter has applied the different multipliers, depending upon the age, and we see no infirmity with the determination thus made. In their case, however, we would enhance the conventional figure from Rs.25,000/- to Rs. 50,000/-. (Para 12)

       So far as the compensation to the injured persons are concerned, before Shri Justice Chandrachud, though on behalf of the claimants, compensation on several heads had been claimed, but unfortunately, no materials had been placed, which could have been placed. On the basis of meager datas available, the compensation has been determined ranging from Rs. 38 lakhs to Rs. 5 lakhs. In arriving at this figure, the percentage of burn has been taken into account, daily expenses have been taken into account, as indicated in Table-I, cost of medical treatment has been taken into account, as indicated in Table-II. Expenses for Psychotherapy has been taken into account, as indicated in Table-III, Effect on Marriage prospects have been taken into account, as indicated in Table-IV, Non-Pecuniary Losses have been taken into account, as indicated in Table-VII and even Punitive Damages have been taken into account, and finally the total amount of compensation has been arrived at. It may be stated that the injured persons with burn injury of 10 and below have not been awarded any compensation. It may also be stated that while discussing the claim on daily expenses, cost of medical treatment and expenses for psychotherapy as well as punitive damages have been rejected, but in the ultimate tabular form, compensation has been awarded on that score also and since the company has not raised any objection on that score, we do not intend to consider and nullify the said compensation amount, as indicated in the tabular form. It transpires from the report of Shri Justice Chandrachud that in the Statement of Claim, even there has been no indication as to the nature of burn injury suffered, the nature, duration and quality of treatment received, the requirement of future treatment prescribed by any Doctor, the state of condition of burn injuries, when the Statement of Claim was filed, the disability suffered by any burn victim and the expenditure, if any, incurred by any burn victim until the Statement of Claim was filed and last but not the least, the loss of earning capacity in any individual case. Shri Justice Chandrachud has also noted the statement of the counsel, appearing for the Tata Iron and Steel Company, that if any burn victim produces the advice of a Burn-Expert Doctor for any further medical or surgical treatment in India, TISCO is prepared to bear the expenses of the said treatment. The materials produced, indicate the anxiety and steps taken by the company officials in making available the services of doctors from Delhi, Bombay, U.K., USA and Italy and the injured patients were referred to hospitals in Delhi, Bombay, Madras and Bangalore. Even some of the injured patients were sent to U.K., U.S.A., and Paris for cosmetic surgery at the company s expense. In examining the question of damages for personal injury, it is axiomatic that pecuniary and non-pecuniary heads of damages are required to be taken into account. In case of pecuniary damages, loss of earning or earning capacity, medical, hospital and nursing expenses, the loss of matrimonial prospects, if proved, are required to be considered. In the case of Non-Pecuniary losses, loss of expectation of life, loss of amenities or capacity for enjoying life, loss or impairment of physiological functions, impairment or loss of anatomical structures or body tissues, pain and suffering and mental suffering are to be considered. But for arriving at a particular figure on each of the aforesaid head, the claimant is duty bound to produce relevant materials, on the basis of which, a determination could be made, as to what would be the best compensation. A bare perusal of the Report of Shri Justice Chandrachud, bear testimony to the fact that the claimants did not discharge their obligations by putting the relevant materials to enable Shri Justice Chandrachud to arrive at the quantum of compensation. Determination of compensation in such cases is an upheaval task, more so, when no material is produced at all. In such circumstances, we must say that Shri Justice Chandrachud has shown maximum sympathy and has determined the compensation to the maximum extent possible, which is also not objected to by the company. We, therefore, do not find any justification for our interference with the quantum arrived at and enhancing the compensation, in respect of the injured persons, who suffered the burn injury on account of the tragic incident. It is true that persons having burn injury to the extent of 10 and below, have not been awarded any compensation and, therefore, we, as a matter of compassion, award a lump-sum of Rs. two lakhs in favour of each of those persons. (Para 13)

       Held however : We take note of the fact, as indicated in the affidavit of the company, as to several benefits given by the company to the heirs and dependants of the deceased and/or injured persons and though, we could have taken that into account in ultimate assessment of the compensation, but we do not think it appropriate to take that into consideration, after this length of time. The compensation awarded in favour of different claimants by Shri Justice Chandrachud be re-determined by the Registry of this Court, taking into account the enhancement made by us in this Judgment and then the balance amount, after taking into account the amount already in deposit, may be deposited by the company within a period of three months from today. The compensation amount could be disbursed in favour of each of the claimants by way of Account Payee Cheques, and the claimants, on being identified by the counsel, the same should be handed-over to them. In the event, any claimant would require that the compensation should be paid by Bank Draft, then the money could be sent to the claimant by A/c Payee Bank Draft, after deducting the commission of the bank from the amount in question. If any of the claimants are not in a position to come to this Court for receiving the compensation amount, then they should intimate the Registry of this Court, the address to which the amount could be sent and on being properly attested by the counsel, appearing for them and on receipt of such intimation, the amount in question could be sent by A/c Payee Cheque, by Registered Post. (Para 14)

       Held incidentally : We are indeed sorry, that this matter has dragged on for this length of time, but there was no way out and the circumstances indicated by Shri Justice Chandrachud in his Report, are sufficient to hold that there has been no latches on his part, in determining the compensation. (Para 15)

       Held finally : The writ petition is accordingly disposed of. There will however be no order as to costs. (Para 16)