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PUNJAB & HARYANA HIGH COURT
V.Ramaswami, Jagar Singh and G.R.Majithia JJ.
Bimla Devi
Versus
National Insurance Company Limited
First Appeal First Order No. 518 of 1985,
Decided On : AUGUST 4, 1988
MOTOR VEHICLES ACT - SECTION 110D - CHILD DEATH - QUANTUM OF COMPENSATION - PECUNIARY LOSS - MULTIPLIERS - FORMULA - CONVENTIONAL FIGURE - INFLATION - PECUNIARY BENEFITS - EXPECTATION OF LIFE - LOSS OF HAPPY LIFE - DEPENDENCY - PECUNIARY ASSISTANCE - SUPPORT - SERVICES - AGE - HEALTH - FAMILY ENVIRONMENT - INCOME - EARNING CAPACITY - OCCUPATION - EDUCATION - UPKEEP - RISK OF ILLNESS - DISEASE - ACCIDENT - DEATH - SPECULATION - FANCY - CONJECTURE - REASONABLE EXPECTATION - FUTURE INCOME - FUTURE HAPPINESS - CONVENTIONAL AWARD - DAMAGES - ASSESSMENT - FORMULA - WRONGFUL ACT - NEGLIGENCE - DEFAULT - LIABILITY - INSURANCE - POLICY - INTEREST - RATE - AWARD - MODIFICATION - APPEAL - DISMISSAL - CROSS-OBJECTIONS - COSTS - ORDER - NO FAULT LIABILITY - FIXED SUM - INTERIM AWARD - JUST COMPENSATION - PRINCIPLES.
Fact of the Case:
The deceased child Mange alias Manoj, aged 12 years, died in an accident caused by the rash and negligent driving of the vehicle. The parents and sisters of the deceased filed a claim petition under the Motor Vehicles Act, seeking compensation of Rs. 2,00,000. The Tribunal found that the deceased was contributing to the earnings of his father to the tune of Rs. 150 per month and awarded a total pecuniary loss of Rs. 28,800 to the parents. The parents and sisters appealed, contending that a Division Bench decision holding that a one-year-old child was capable of sparing Rs. 100 per month for parents ran counter to the Supreme Court decision and needed reconsideration by a larger Bench.
Finding of the Court:
The court held that the Division Bench decision in FAO No. 38/1984, which had awarded compensation based on the assumption that a one-year-old child could spare Rs. 100 per month for parents, was contrary to the Supreme Court decision in C.K. Subramania Iyer v. T. Kunhi Kuttan Nair and was hereby overruled. The court also overruled the decision in K.L. Pasrija v. The Oriental Fire and General Insurance Co., which had followed the FAO No. 38/1984 decision.
Issues: 1. Whether the Division Bench decision in FAO No. 38/1984, which awarded compensation based on the assumption that a one-year-old child could spare Rs. 100 per month for parents, was correct? 2. Whether the decision in K.L. Pasrija v. The Oriental Fire and General Insurance Co., which had followed the FAO No. 38/1984 decision, was correct? 3. What principles should be applied in determining the quantum of compensation payable to the parents of a deceased child in a motor accident case?
Ratio Decidendi: 1. The court held that the Division Bench decision in FAO No. 38/1984 was contrary to the Supreme Court decision in C.K. Subramania Iyer v. T. Kunhi Kuttan Nair and was hereby overruled. The court reasoned that there was no scope for evaluating the multiplicand exactly in cases of children of tender age, and that the compensation to be awarded was only for the loss of expectation of future happy life, which formed a conventional figure. 2. The court also overruled the decision in K.L. Pasrija v. The Oriental Fire and General Insurance Co., which had followed the FAO No. 38/1984 decision, for the same reasons. 3. The court held that in determining the quantum of compensation payable to the parents of a deceased child in a motor accident case, the following principles should be applied: - The compensation should be for the loss of expectation of future happy life, which forms a conventional figure. - There is no scope for evaluating the multiplicand exactly. - The conventional figure should be upgraded on the basis of inflation. - In cases of children below five years, a maximum sum of Rs. 6,000 may be awarded as compensation. - In cases of children between five and ten years, a sum of Rs. 10,000 may be awarded as compensation. - In cases of children above ten years, the compensation should be determined on a case-by-case basis, taking into account factors such as the family environment, the health and age of the victim, the interest taken by the parents in the child, and the totality of circumstances tending to show whether the victim had a predominantly happy life or life of misery or an insipid life.
Final Decision: The court upheld the Tribunal's award of Rs. 28,800 as compensation to the parents of the deceased child, but modified the interest rate from 10% to 12% per annum. The court also dismissed the appeals filed by the claimants in other cases, except for one case where the compensation was increased from Rs. 20,000 to Rs. 25,000. The court also dismissed the cross-objections filed by the insurance company.
G.R.MAJITHIA, J.
1. This judgment will dispose of F.A.O. Nos. 518/1985, 765/1985, 487/1986 (including X-objections No. 87-CII/1986), 572/1987, 446/1984 and 566/1984 (including X-objections No. 86CII/1984) as a common question of law arises in these appeals.
2. We shall refer to the facts of FAO No. 518/1985 for the purpose of appreciating the matter in controversy and the points arising for adjudication.
3. A claim petition under the Motor Vehicles Act was filed by the parents and sisters of the deceased child Mange alias Manoj, claiming compensation to the tune of Rs. 2,00,000.00 on account of his untimely death. The tribunal found that the accident took place due to the rash and negligent driving of the vehicle by the driver as a result of which Mange alias Manoj died, and his age at that time was 12 years and he was a student of 5th class. With regard to the quantum of compensation, the learned Tribunal found that the deceased was quite hale and hearty and he used to assist his father, who ran a small tea shop, after the school hours. The Tribunal further held that even if a servant of the age of 12 years is employed at a small tea stall he has to be paid not less than Rs. 5/- per day, and in this situation, the Tribunal found that the deceased was contributing to the earnings of his father to the tune of Rs. 150.00 per month. Applying the ratio of Lachhman Singh V/s. Gurmit Kaur reported as 1979 Acc CJ 170 : (AIR 1979 Punj and Hry 50) (FB), and a multiplier of sixteen, the total pecuniary loss suffered by the parents of the deceased Mange was held to be Rs. 28,800.00 . The claim of the sisters of the deceased was not accepted since they were not proved to be dependent on the deceased.
4. The parents and the sisters of the deceased child filed an appeal under Sec.110D of the Motor Vehicles Act in this Court. When the matter came up for motion hearing, it was contended by the counsel for the appellants that a Division Bench of this Court, in FAO No. 38/1984 (M/s. Zenith Papers V/s. Gurmeet Kaur) decided on April 6, 1984, had held that a child of one year was capable of sparing Rs. 100.00 per month for his parents. The Bench felt that the decision in FAO No. 38/1984 (supra) ran counter to the Supreme Court decision, and needed reconsideration by a larger Bench. The appeal was admitted to hearing by the Full Bench and it is in this manner that the matter is before us for decision.
5. In the appeal, the controversy is confined to only one point, as to the quantum of damages the appellants are entitled to. Negligence on the part of the respondent resulting in the death of Mange alias Manoj is not denied and the appellants version as to the manner in which the boy met his end has not been questioned.
6. The right to recover damages for having wrongfully caused the death is wholly a statutory one. The basic rule to which the English statute and the Indian Act, subscribe, is, that the designated beneficiaries are entitled to compensation for a pecuniary or a material loss, resulting from the death of a person, from whom there was a reasonable expectation of a monetary benefit, assistance or support; which the claimant has been deprived of. In the absence of statutory guidelines, we think that for the purpose of securing uniformity some workable formulae should be evolved which can be usefully followed by the courts after making marginal adjustments in the light of peculiar facts of each individual case.
7. The law as to the assessment of damages is stated in Halsbury s Laws of England (Third Edition) Vol. 28, thus :-
"III. Pecuniary loss must be sustained by claimants. The pecuniary loss is not limited to the value of money lost, or to the money value of benefits lost (c), but includes the monetary loss incurred by replacing services rendered gratuitously by the deceased (d), if there was a reasonable prospect of their being rendered freely in the future but for the death of the deceased (e). Pecuniary loss may be evidenced
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