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2022 Supreme(All) 1305

IN THE HIGH COURT OF ALLAHABAD
Ajay Bhanot, J.
Tata A.I.G. General Insurance Co. Ltd. – Appellant
Versus
Amar Kaur And Others – Respondents
First Appeal From Order No. 2385, 3211 of 2017
Decided On : 04-11-2022

Advocates:
Advocate Appeared:
For the Appellant : Sushil Kumar Mehrotra
For the Respondent: Ram Singh, Sudhir Dixit

The main legal point established in the judgment is the proper calculation of compensation under various heads, including salary, future prospects, application of multiplier, conventional heads, and interest, in accordance with relevant statutory rules and case law.

Headnote:

Compensation Calculation - Motor Accident Claims - Uttar Pradesh Motor Vehicles Rules, 1998, Rule 220A-3(iii), New India Assurance Co. Ltd. vs. Urmila Shukla and others, 2021 SCC OnLine SC 822, Divisional Manager, Royal Sundaram Alliance Insurance Co. Ltd. Chennai Vs. Sarladevi and Others, 2013 (1) TAC 77 (Mad), K.R. Madhusudhan v. Administrative Officer, 2011 (4) SCC 68, Puttamma v. K.L. Narayana Reddy, 2013 (15) SCC 45, Sarla Verma (Smt) and others Vs. Delhi Transport Company and another, 2009 (6) SCC 121 - Salary, Future Prospects, Split Multiplier, Conventional Heads, Interest

Fact of the Case:

The deceased died in a motor accident, and the claimants sought compensation. The tribunal awarded compensation, which was challenged by the Insurance Company and the claimants.

Finding of the Court:

The court found that the compensation calculation needed adjustments in the salary, future prospects, application of multiplier, conventional heads, and interest. The appeal by the Insurance Company was dismissed, and the appeal by the claimants was partly allowed.

Issues: The court considered whether the compensation was lawfully computed under various heads, including salary, future prospects, application of multiplier, conventional heads, and interest.

Ratio Decidendi: The court held that the salary, future prospects, and conventional heads should be calculated in accordance with the Uttar Pradesh Motor Vehicles Rules, 1998, and relevant case law. The court rejected the application of a split multiplier and affirmed the interest rate of 7%.

Final Decision: The appeal by the Insurance Company was dismissed, and the appeal by the claimants was partly allowed. The court directed the Insurance Company to deposit the awarded compensation within three months before the tribunal.

JUDGMENT :

Ajay Bhanot, J.

1. Heard Shri Ram Singh, learned counsel for the appellant-claimants and Shri Sushil Kumar Mehrotra, learned counsel for the appellant-Insurance Company.

I. INTRODUCTION

2. These two appeals arise out of an award made by the learned Motor Accident Claims Tribunal/Additional District Judge, Aligarh, hereinafter referred to as the “learned tribunal” in Motor Accident Claim Petition No. 709 of 2014 (Amar Kaur and another Vs. Tata A.I.G. General Insurance Co. Ltd. and others) dated 11.04.2017 by partly allowing the claim of the claimants.

2.1. The appeals have been filed by the Insurance Company and the claimants respectively and are being decided by a common judgement.

II. Case of the claimants and respondents before the learned tribunal:

3. Briefly the case of the claimants before the learned tribunal was that the deceased died of injuries sustained in an accident which occurred on 26.08.2014, and was caused by the rash and negligent driving of the driver of Bolero Jeep bearing Registration No. UP 81 X 0168. The offending vehicle was insured by TATA AIG General Insurance Company Ltd. The deceased was pillion rider on a motorcycle bearing Registration No. DL75BK-4482 driven by his son Pawan Kumar when the accident occurred. The claimants are the dependants of the deceased Kalicharan. The deceased was 58 years of age at the time of his death.

III. Compensation awarded by the learned tribunal

4. The learned tribunal in the impugned judgement dated 11.04.2017 awarded compensation which is depicted in the tabulated form hereunder:

Sr. No.

Heads

Amount Awarded by the tribunal

1.

Monthly Income (A)

40,000/-

2.

Annual Income (B) (Ax12=B)

4,80,000/-

3.

Future Prospects (C)

20% of 4,80,000= 96,000/-

4.

Annual Income + Future Prospects (B+C=D)

4,80,000+96,000/-=5,76,000/-

5.

Deduction towards (E) personal expenses (1/3 of D)

1/3 of 5,76,000/-=1,92,000/-

6.

Annual Loss of dependancy (F) (D-E =F)

5,76,000-1,92,000/-= 3,84,000/-

7.

Multiplier (G)

9

8.

Total loss of dependancy (F x G)

3,84,000 x 9 = 3,456,000/-

9.

Conventional Heads (a) Loss of consortium (b) loss of Estate (c) Funeral Expenses

40,000/-

10.

Total compensation

3,456,000 + 40,000/-= 3,496,000/-

11.

Interest

7%

4.1. The appeal filed by the claimants seeks enhancement of compensation, and the Insurance Company in appeal has assailed the quantum of compensation as being excessive.

IV. Submissions of learned counsels for the parties:

5. Shri Sushil Kumar Mehrotra, learned counsel for the appellant-Insurance Company submits that the income of the deceased was incorrectly calculated. Secondly the future prospects of 20% were not liable to be calculated in view of the judgement of National Insurance Company Ltd. vs. Pranay Sethi and Others, 2017 (16) SCC 680 . Thirdly adoption of split multiplier was advocated on behalf of the Insurance Company.

6. Sri Ram Singh, learned counsel for the claimants-respondents submits that the compensation was not rightly calculated. The claimants were entitled to a higher amount.

V. Issues for Consideration:

7. After advancing their arguments, learned counsels for the respective parties agree that only the following question falls for consideration in these appeals:

    Whether the learned tribunal while determining the compensation lawfully computed the amounts under these heads: salary, future prospects, application of multiplier, conventional heads and interest?

VI a. Issue of Salary of the deceased:

8. The deceased was working as a supervisor in the Agriculture Department in Rajasthan. The salary fixation certificate issued by the employer of the deceased records that the monthly salary of the deceased was 49,480/-and duly proved by the claimants.

9. Learned tribunal arbitrarily deducted an amount of Rs. 10,000/- p

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