India Assurance Co. Ltd. Vs. Satender & Ors  Insc 764 (8 November 2006)
Pasayat & Lokeshwar Singh Panta
Out of S.L.P. (C) No.2529 of 2006) ARIJIT PASAYAT, J.
in this appeal is to the judgment rendered by a learned Single Judge of the
Delhi High Court in an appeal filed by the appellant. In the appeal, the
quantum of compensation awarded to the respondents 1 and 2 by the Motor
Tribunal, Delhi (in short the 'MACT') was
background in a nutshell is as follows:
7.5.2002 a child-Anuj, aged about nine years was knocked down by a truck which
was the subject matter of insurance with the appellant. As a result of the
accident, said child died. A claim petition was filed under Section 166 of the
Motor Vehicles Act, 1988 (in short the 'Act') claiming
The MACT found that the child was not earning and, therefore, the compensation
has to be assessed on the basis of notional income. MACT referred to the second
schedule to the Act and held that the notional income as per the said schedule
is Rs.15,000/- p.a., but the same was unrealistic. Accordingly the notional
income was taken as Rs.30,000/-p.a. After deducting 1/3rd towards personal
expenses, the financial dependency of the parents was fixed at Rs.20,000/- p.a.
Considering the age of the parents, multiplier of 17 was adopted. The total
financial dependency was calculated at Rs.3,40,000/- for financial loss and a
sum of Rs.1,00,000/- was added for emotional loss and adding a sum of
Rs.5,000/- for funeral expenses a sum of Rs.4,45,000/- was awarded as
compensation with interest at the rate of 9% p.a. from the date of institution
of the claim petition till payment.
appeal was filed before the Delhi High Court by the appellant which, by the
impugned judgment, came to be dismissed.
counsel for the appellant submitted that the quantum of compensation fixed is
unrealistic. If MACT made a reference to the second schedule, it should have
awarded the amount on the basis of the amount indicated in the schedule.
acting on mere surmises and conjectures, MACT should not have held that the
notional income is to be taken at Rs.30,000/- p.a.. Multiplier adopted is also
on the higher side.
is no appearance on behalf of the claimants- respondents 1 and 2 in spite of
counsel appearing for the owner of the offending vehicle and the driver
supported the stand of the appellant- Insurance Company.
v. McMonagle 1970 (AC) 166, Lord Diplock analysed in detail the uncertainties
which arise at various stages in making a rational estimate and practical ways
of dealing with them. In Davies v. Taylor (1974) AC 207, it was held that the Court, in looking at future
uncertain events, does not decide whether on balance one thing is more likely
to happen than another, but merely puts a value on the chances.
possibility may be ignored if it is slight and remote. Any method of
calculation is subordinate to the necessity for compensating the real loss. But
a practical approach to the calculation of the damages has been stated by Lord
Wright in Davies v. Powell Duffryn Associated Colleries Ltd. (1942) 1 All ER
657, in the following words:
starting point is the amount of wages which the deceased was earning, the
ascertainment of which to some extent may depend on the regularity of his
there is an estimate of how much was required to be spent for his own personal
and living expenses. The balance will give a datum or basic figure which will
generally be turned into a lump sum by taking a certain number of years'
purchase." In State of Haryana and Anr.
v. Jasbir Kaur and Ors. (2003(7) SCC 484) it was held as under:
It has to be kept in view that the Tribunal constituted under the Act as
provided in Section 168 is required to make an award determining the amount of
compensation which is to be in the real sense "damages" which in turn
appears to it to be "just and reasonable". It has to be borne in mind
that compensation for loss of limbs or life can hardly be weighed in golden
scales. But at the same time it has to be borne in mind that the compensation
is not expected to be a windfall for the victim. Statutory provisions clearly
indicate that the compensation must be "just" and it cannot be a
bonanza; not a source of profit; but the same should not be a pittance.
courts and tribunals have a duty to weigh the various factors and quantify the
amount of compensation, which should be just. What would be 'just"
compensation is a vexed question. There can be no golden rule applicable to all
cases for measuring the value of human life or a limb. Measure of damages
cannot be arrived at by precise mathematical calculations. It would depend upon
the particular facts and circumstances, and attending peculiar or special
features, if any.
method or mode adopted for assessing compensation has to be considered in the
background of 'just" compensation which is the pivotal consideration.
Though by use of the expression "which appears to it to be just" a
wide discretion is vested in the Tribunal, the determination has to be
rational, to be done by a judicious approach and not the outcome of whims, wild
guesses and arbitrariness. The expression 'just" denotes equitability,
fairness and reasonableness, and non-arbitrary. if it is not so it cannot be
just. (See Helen C. Rebello v. Maharashtra SRTC (1999(1) SCC 90) There are some
aspects of human life which are capable of monetary measurement, but the
totality of human life is like the beauty of sunrise or the splendor of the
stars, beyond the reach of monetary tape-measure. The determination of damages
for loss of human life is an extremely difficult task and it becomes all the
more baffling when the deceased is a child and/or a non-earning person. The
future of a child is uncertain. Where the deceased was a child, he was earning
nothing but had a prospect to earn. The question of assessment of compensation,
therefore, becomes stiffer. The figure of compensation in such cases involves a
good deal of guesswork. In cases, where parents are claimants, relevant factor
would be age of parents.
case of the death of an infant, there may have been no actual pecuniary benefit
derived by its parents during the child's life-time. But this will not
necessarily bar the parent's claim and prospective loss will find a valid claim
provided that the parents' establish that they had a reasonable expectation of
pecuniary benefit if the child had lived. This principle was laid down by the
House of Lords in the famous case of Taff Vale Rly. V. Jenkins (1913) AC 1, and
Lord Atkinson said thus:
that is necessary is that a reasonable expectation of pecuniary benefit should
be entertained by the person who sues.
quite true that the existence of this expectation is an inference of fact -
there must be a basis of fact from which the inference can reasonably be drawn;
but I wish to express my emphatic dissent from the proposition that it is
necessary that two of the facts without which the inference cannot be drawn
are, first that the deceased earned money in the past, and, second, that he or
she contributed to the support of the plaintiff. These are, no doubt, pregnant
pieces of evidence, but they are only pieces of evidence; and the necessary
inference can I think, be drawn from circumstances other than and different
from them." (See Lata Wadhwa and Ors. v. State of Bihar and Ors. (2001 (8) SCC 197) This
Court in Lata Wadhwa's case (supra) while computing compensation made
distinction between deceased children falling within the age group of 5 to 10
years and age group of 10 to 15 years.
cases of young children of tender age, in view of uncertainties abound, neither
their income at the time of death nor the prospects of the future increase in
their income nor chances of advancement of their career are capable of proper
determination on estimated basis. The reason is that at such an early age, the
uncertainties in regard to their academic pursuits, achievements in career and
thereafter advancement in life are so many that nothing can be assumed with
reasonable certainty. Therefore, neither the income of the deceased child is
capable of assessment on estimated basis nor the financial loss suffered by the
parents is capable of mathematical computation.
the principles indicated in Jasbir Kaur's case (supra) to the facts of the
present case we think award of a sum of Rs.1,80,000/- would meet the ends of
justice. The same shall carry interest at the rate of 7.5% from the date of
filing of petition till payment is made. Payment shall be made within a period
of three months from today. Amounts, if any, already paid shall be adjusted
from the aforesaid amount of Rs.1,80,000/- The appeal is allowed to the extent
indicated above. There will be no order as to costs.