R.K. Malik & ANR.
Vs. Kiran Pal & Ors. [2009] INSC 1092 (15 May 2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 3608 OF 2009 (Arising
out of SLP(C) No. 17525 of 2006) R. K. Malik & Anr. .....Appellants Versus
Kiran Pal & Ors. .....Respondents With CIVIL APPEAL No. 3609 OF 2009
(Arising out of SLP(C) No. 1686 of 2007) And CIVIL APPEAL No. 3607 OF 2009
(Arising out of SLP(C) No. 13397 of 2007)
Dr. Mukundakam
Sharma, J.
1.
Leave
granted.
2.
Challenge
in these appeals is made to the legality and validity of the judgment and order
dated 17.05.2006 rendered by a Single Judge of Delhi High Court in a bunch of
motor accident claims 1
petitions bearing
MACT Nos. 194, 195, 196, 197, 199, 200, 201-
202, 203-204,
207-208, 209-210, 213, 214, 215, 217, 221, 222, 228-229, 231-232, 233-234 and
742-743 of 2005, whereby and whereunder the High Court was pleased to dispose
of the claim petitions of the appellants herein.
3.
In
order to decide these appeals, it would be necessary to state few basic facts.
The appellants herein are claimants whose children were studying in school. On
18.11.1997 when these children were proceeding to the school in a bus bearing
No. DL IP-1644, the bus after overrunning the road and breaking the railing got
drowned in Yamuna river at Wazirabad Yamuna Bridge. Consequent to the accident,
29 children died.
4.
The
bus was being driven by Mr. Karan Pal (respondent No.1 herein) and was owned by
Mr. Hari Kishan (respondent No.2) and was insured with National Insurance
Company Ltd. (respondent No.
3). It was alleged
that the driver was driving the bus in a rash and negligent manner and at a
very fast speed. It was further alleged that the bus driver lost control of the
bus and after breaking the railing of the bridge on left side, the same fell
into the river Yamuna.
5.
The
appellants filed claim petitions individually on account of fault liability and
sought for payment of compensation under Section 163-A read with Second
Schedule of the Motor Vehicle Act, 1988 (in short `the Act'). It was pleaded
that the deceased-children would have earned good amount per month in future
and would have provided financial assistance and pecuniary help to their
parents- appellants. The claim petitions of the appellants were heard together
by the Motor Accident Claims Tribunal, Delhi (in short `the Tribunal').
6.
During
the course of trial before the Tribunal, several witnesses were examined in
support of the respective claims. The appellants also examined themselves as
witnesses. The Tribunal by award dated 06.12.2004 held that the accident had
taken place due to the negligence of the driver (respondent No. 1) and,
therefore, the said respondent along with respondent Nos. 2 and 3 were jointly
and severally liable to pay compensation. The Tribunal by its common award
awarded a sum of Rs. 1, 55,000/- to the dependents of children between age
group of 10 to 15 years and Rs. 1, 65,000/- between 15 to 18 years. Three of
the children namely Kailash Rathi, Neena Jain and Jatish Sharma were less than
10 years. In the case of Kailash Rathi, compensation of Rs. 1, 05,000/- was
awarded and in the cases of Neena Jain and Jatish Sharma, 3 compensation of
Rs. 1, 30,000/- and Rs. 1, 31,000/- respectively was awarded. Additional Rs.
1000/- was awarded in the case of Jatish Sharma, as in some other cases, for
loss of books. The figures mentioned above include Rs. 5,000/- each towards
funeral and last rites. It awarded interest @ 6% for four years. As per the
Second Schedule of the Act, the balance amount was awarded for loss of
dependency that was calculated on notional income of Rs.
15,000/- per annum.
Rs. 5,000/- was deducted towards personal living expenses. The Tribunal applied
multiplier of 15 for children below 15 years and multiplier of 16 for children
between 16 and 18 years respectively.
7.
Against
the said order of the Tribunal, appeals were filed before the High Court by the
appellants who were heard together by the High Court. It was submitted before
the High Court that the amount awarded by the Tribunal was not just and
reasonable and the Tribunal erred in not awarding interest from the date of
petition till realization.
8.
The
High Court by its common order held that the appellants are entitled to
enhancement of compensation in all the cases by Rs. 75,000/- and Rs. 1000/- (if
not already awarded by the Tribunal) and interest @ 7.5% per annum from the
date of filling of the claim petition till payment. It was further held that
50% of the enhanced compensation with interest shall be paid and the balance
50% shall be kept in the form of fixed deposit or in the post office for a
period of six years. The High Court directed that the dependents would be
entitled to interest but would not withdraw the principal amount during the
lock-in period of six years without the permission of the Tribunal.
9.
Feeling
aggrieved, the appellants have preferred the present special leave petition
contending that the High Court ought to have applied the ratio of Lata Wadhwa
v. State of Bihar, (2001) 8 SCC 197 to the facts of the case and also that it
failed to award a fair and reasonable compensation. It was submitted that the
High Court ought to have awarded compensation of Rs. 10, 00,000/-. It was the
further contention that the High Court erred in applying notional income of
deceased child as Rs. 15,000/- per annum only. It was further contended that
the Tribunal ought to have enhanced the income considering the rise in cost of
living as well as inflation.
10.
Undoubtedly,
the compensation in law is paid to restore the person, who has suffered damage
or loss in the same position, if the tortuous act or the breach of contract had
not been committed.
The law requires that
the party suffering should be put in the same position, if the contract had
been performed or the wrong had not been committed. The law in all such matters
requires payment of adequate, reasonable and just monetary compensation.
11.
In
cases of motor accidents the endeavour is to put the dependents/claimants in
the pre-accidental position. Compensation in cases of motor accidents, as in
other matters, is paid for reparation of damages. The damages so awarded should
be adequate sum of money that would put the party, who has suffered, in the
same position if he had not suffered on account of the wrong. Compensation is
therefore required to be paid for prospective pecuniary loss i.e. future loss
of income/dependency suffered on account of the wrongful act.
12.
However,
no amount of compensation can restore the lost limb or the experience of pain
and suffering due to loss of life. Loss of a child, life or a limb can never be
eliminated or ameliorated completely. To put it simply-pecuniary damages cannot
replace a human life or limb lost. Therefore, in addition to the pecuniary
losses, the law recognises that payment should also be made for non pecuniary
losses on account of, loss of happiness, pain, suffering and expectancy of life
etc. The Act provides for payment of "just compensation" vide section
166 and 168. It is left to the courts to decide what would be "just
compensation" in facts of a case.
13.
For
calculating pecuniary loss or loss of dependency, this Court has repeatedly
held that it is the multiplier method which should be applied. The said method
is based upon the principle that the claimant must be paid a capital sum, which
would yield sufficient interest to provide material benefits of the same
standard and duration as the deceased would have provided for the dependents,
if the deceased had lived and earned. The multiplier method is based upon the
assessment that yearly loss of dependency should be equal to interest that
could be earned in normal course on the capital sum invested. The capital sum
would be the compensation for loss of dependency or the pecuniary loss suffered
by the dependents. Needless to say, uniform application of the multiplier
method ensures consistency and certainty and prevents different amounts being
awarded in different cases.
14.
For
calculating the yearly loss of dependency the starting point is the wages being
earned by the deceased, less his personal and living expenses. This provides a
basic figure. Thereafter, effect is given to the future prospects of the
deceased, inflation and general price rise that erodes value and the purchasing
power of money.
7 To the
multiplicand so calculated, multiplier is to be applied. The multiplier is
decided and determined on the basis of length of dependency, which must be
estimated. This has to be necessarily discounted for contingencies and
uncertainties. Reference in this regard may be made to the judgments of this
Court in the case of Sarla Dixit v. Balwant Yadav, (1996) 3 SCC 179; Managing
Director TNSTC Ltd. v. K. T. Bindu, (2005) 8 SCC 473; T. N. State Transport
Corp. Ltd. v. S. Rajapriya, (2005) 6 SCC 236;
New India Assurance
Co. Ltd. v. Charlie, (2005) 10 SCC 720 and United India Insurance Co. Ltd. v.
Patrica Jean Mahajan (2002) 6 SCC 281.
15.
The
real problem that arises in the cases of death of children is that they are not
earning at the time of the accident. In most of the cases they were still
studying and not working. However, under no stretch of imagination it can be
said that the parents, who are appellants herein, have not suffered any
pecuniary loss. In fact, Loss of dependency by its very nature is awarded for
prospective or future loss. In this context, Lord Atkinson aptly observed in
Taff Vale Rly. Co. v. Jenkins, (1911-13) All England Reporter 160 as follows:
"In case of the
death of an infant, there may have been no actual pecuniary benefit derived by
its 8 parents during the child's lifetime. But this will not necessarily bar
the parents' claim and prospective loss will found a valid claim provided that
the parents establish that they had a reasonable expectation of pecuniary
benefit if the child had lived."
16.
Then,
how does one calculate pecuniary compensation for loss of future earnings and
loss of dependency of the parents, grand parents etc. in the case of
non-working student? Under the Second Schedule of the Act in case of a non
earning person, his income is notionally estimated at Rs. 15,000/- per annum.
The Second Schedule is applicable to claim petitions filed under Section 163 A
of the Act. The Second Schedule provides for the multiplier to be applied in
cases where the age of the victim was less than 15 years and between 15 years
but not exceeding 20 years. Even when compensation is payable under Section 166
read with 168 of the Act, deviation from the structured formula as provided in
the Second Schedule is not ordinarily permissible, except in exceptional cases.
[see Abati Bezbaruah v. Dy. Director General, Geological Survey of India,
(2003) 3 SCC 148); United India Insurance Company Ltd. v. Patricia Jean
Mahajan, (2002) 6 SCC 281 and UP State Road Transport Corp. v. Trilok Chandra,
(1996) 4 SCC 362].
17.
Reverting
back to the factual position of the present case, the date of accident is
18.11.1997. Prior to this, the Second Schedule of the Act was already
introduced w. e. f. 14.11.1994. Thus, the notional income mentioned in the
Second Schedule and the multiplier specified therein can form the basis for the
pecuniary compensation for the loss of dependency in the present cases. No fact
and reason was highlighted during the arguments why the Second Schedule should
not apply in the present cases. The Second Schedule also provides for deduction
of 1/3rd consideration towards expenses;
which the victim
would have incurred on himself if he had lived. As compensation for loss of
dependency is to be calculated on the basis of notional income because the
deceased was a child. It by necessary implication takes into account future
prospects, inflation, price rise etc.
18.
Therefore
keeping in view of Second Schedule of the Act, this Court do not see any reason
to differ with the view taken by the Tribunal as well as the High Court in so
far as award of pecuniary compensation to the dependents/claimants is
concerned. We must point out here that the learned counsel for the appellants
had argued that the notional sum of Rs. 15,000/- should be enhanced and
increased as the legislature has not amended the Second Schedule and the same
continues to be in existence since it was 10 enacted on 14.11.1994. We are not
examining and going into this aspect as the accident had taken place in the
present case nearly three years after the enactment of the Second Schedule. The
time difference between the date of the enactment and the date of accident is
not substantial.
19.
The
other issue is with regard to non-pecuniary compensation to the
appellants-dependents on the loss of human life, loss of company,
companionship, happiness, pain and suffering, loss of expectation of life etc.
20.
In
the Halsbury's Laws of England, 4th Edition, Vol. 12, page 446, it has been
stated with regard to non-pecuniary loss as follows:
"Non-pecuniary
loss: the pattern.
Damages awarded for
pain and suffering and loss of amenity constitute a conventional sum which is
taken to be the sum which society deems fair, fairness being interpreted by the
Courts in the light of previous decisions. Thus there has been evolved a set of
conventional principles providing a provisional guide to the comparative
severity of different injuries, and indicating a bracket of damages into which
a particular injury will currently fall. The particular circumstance of the
plaintiff, including his age and any unusual deprivation he may suffer, is
reflected in the actual amount of the award.
The fall in the value
of money leads to a continuing reassessment of these awards and to periodic
reassessments of damages at certain key points in the pattern where the
disability is readily 11 identifiable and not subject to large variations in
individual cases."
21.
In
the case of Ward v. James, (1965) I All E R 563, it was observed:
"Although you
cannot give a man so gravely injured much for his `lost years', you can,
however, compensate him for his loss during his shortened, span, that is,
during his expected `years of survival'. You can compensate him for his loss of
earnings during that time, and for the cost of treatment, nursing and
attendance. But how can you compensate him for being rendered a helpless
invalid? He may, owing to brain injury, be rendered unconscious for the rest of
his days, or, owing to a back injury, be unable to rise from his bed. He has lost
everything that makes life worthwhile. Money is no good to him. Yet Judges and
juries have to do the best they can and give him what they think is fair. No
wonder they find it well nigh insoluble. They are being asked to calculable.
The figure is bound to be for the most part a conventional sum. The Judges have
worked out a pattern, and they keep it in line with the changes in the value of
money."
22.
The
Supreme Court in the case of R. D. Hattangadi v. Pest Control (India) (P) Ltd.,
(1995) 1 SCC 551, at page 556, has observed as follows in para 9:
"9. Broadly
speaking while fixing an amount of compensation payable to a victim of an
accident, the damages have to be assessed separately as pecuniary damages and
special damages. Pecuniary damages are those which the victim has actually
incurred and which are capable of being calculated in terms of money; whereas
non-pecuniary 12 damages are those which are incapable of being assessed by
arithmetical calculations. In order to appreciate two concepts pecuniary
damages may include expenses incurred by the claimant: (i) medical attendance;
(ii) loss of earning of profit up to the date of trial; (iii) other material
loss. So far non-pecuniary damages are concerned, they may include (i) damages
for mental and physical shock, pain and suffering, already suffered or likely
to be suffered in future; (ii) damages to compensate for the loss of amenities
of life which may include a variety of matters i.e. on account of injury the
claimant may not be able to walk, run or sit; (iii) damages for the loss of
expectation of life, i.e., on account of injury the normal longevity of the
person concerned is shortened; (iv) inconvenience, hardship, discomfort,
disappointment, frustration and mental stress in life."
In this case, the
Court awarded non-pecuniary special damages of Rs. 3, 00,000/- to the
claimants.
23.
In
Common Cause, A Registered Society v. Union of India, (1999) 6 SCC 667 @ page
738, it was observed:
"128. The object
of an award of damages is to give the plaintiff compensation for damage, loss
or injury he has suffered. The elements of damage recognised by law are
divisible into two main groups: pecuniary and non-pecuniary. While the
pecuniary loss is capable of being arithmetically worked out, the non-pecuniary
loss is not so calculable. Non-pecuniary loss is compensated in terms of money,
not as a substitute or replacement for other money, but as a substitute, what
McGregor says, is generally more important than money: it is the best that a
court can do. In Mediana, Re87 Lord Halsbury, L.C. observed as under:
"How is anybody
to measure pain and suffering in moneys counted? Nobody can suggest that you
can by arithmetical calculation establish what is the exact sum of money which
would 13 represent such a thing as the pain and suffering which a person has
undergone by reason of an accident.... But nevertheless the law recognises that
as a topic upon which damages may be given."
24.
It
is extremely difficult to quantify the non pecuniary compensation as it is to a
great extent based upon the sentiments and emotions.
But, the same could
not be a ground for non-payment of any amount whatsoever by stating that it is
difficult to quantify and pinpoint the exact amount payable with mathematical
accuracy.
Human life cannot be
measured only in terms of loss of earning or monetary losses alone. There are
emotional attachments involved and loss of a child can have a devastating
effect on the family which can be easily visualized and understood. Perhaps,
the only mechanism known to law in this kind of situation is to compensate a
person who has suffered non-pecuniary loss or damage as a consequence of the
wrong done to him by way of damages/monetary compensation. Undoubtedly, when a
victim of a wrong suffers injuries he is entitled to compensation including
compensation for the prospective life, pain and suffering, happiness etc.,
which is sometimes described as compensation paid for "loss of expectation
of life". This head of compensation need not be restricted to a case where
the injured person himself initiates action but is equally admissible if his
dependant brings about the action.
25.
25.That
being the position, the crucial problem arises with regard to the
quantification of such compensation. The injury inflicted by deprivation of the
life of a child is extremely difficult to quantify. In view of the
uncertainties and contingencies of human life, what would be an appropriate
figure, an adequate solatium is difficult to specify. The courts have therefore
used the expression "standard compensation" and "conventional
amount/sum" to get over the difficulty that arises in quantifying a figure
as the same ensures consistency and uniformity in awarding compensations.
26.
26.While
quantifying and arriving at a figure for "loss of expectation of
life", the Court have to keep in mind that this figure is not to be
calculated for the prospective loss or further pecuniary benefits that has been
awarded under another head i.e. pecuniary loss. The compensation payable under
this head is for loss of life and not loss of future pecuniary prospects. Under
this head, compensation is paid for termination of life, which results in
constant pain and suffering. This pain and suffering does not depend upon the
financial position of the victim or the claimant but rather on the capacity and
the ability of the deceased to provide happiness to the claimant. This
compensation is paid for loss of prospective happiness which the
claimant/victim would have enjoyed had the child not been died at the tender
age.
27.
In
the case of Lata Wadhwa (supra), wherein several persons including children
lost their lives in a fire accident, the Court awarded substantial amount as
compensation. No doubt, the Court noticed that the children who lost their
lives were studying in an expensive school, had bright prospects and belonged
to upper middle class, yet it cannot be said that higher compensation awarded
was for deprivation of life and the pain and suffering undergone on loss of
life due to financial status. The term "conventional compensation"
used in the said case has been used for non pecuniary compensation payable on
account of pain and suffering as a result of death. The Court in the said case
referred to Rs.50, 000/- as conventional figure. The reason was loss of
expectancy of life and pain and suffering on that account which was common and
uniform to all regardless of the status. Unless there is a specific case
departing from the conventional formula, non- pecuniary compensation should not
be fixed on basis of economic wealth and background.
28.
In
Lata Wadhawa case (supra), wherein the accident took place on 03.03.1989, the
multiplier method was referred to and adopted with approval. In cases of children
between 5 to 10 years of age, compensation of Rs.1.50 lakhs was awarded towards
pecuniary compensation and in addition a sum of Rs.50, 000/- was awarded
towards `conventional compensation". In the case of children between 10 to
18 years compensation of Rs.4.10 lakhs was awarded including "conventional
compensation". While doing so the Supreme Court held that contribution of
each child towards family should be taken as Rs.24, 000/- per annum instead of
Rs.12, 000/- per annum as recommended by Justice Y. V.Chandrachud Committee.
This was in view of the fact that the company in question had an un-written
rule that every employee can get one of his children employed in the said
company.
29.
In
the case of M. S. Grewal v. Deep Chand Sood, (2001) 8 SCC 151, wherein 14
students of a public school got drowned in a river due to negligence of the
teachers. On the question of quantum of compensation, this Court accepted that
the multiplier method was normally to be adopted as a method for assigning
value of future annual dependency. It was emphasized that the Court must ensure
that a just compensation was awarded.
30.
In
Grewal case (supra), compensation of Rs.5 lakhs was awarded to the claimants
and the same was held to be justified. Learned Counsel for the respondent no.3,
however, pointed out that in the said case the Supreme Court had noticed that
the students 17 belonged to an affluent school as was apparent from the fee
structure and therefore the compensation of Rs.5 lakhs as awarded by the High
Court was not found to be excessive. It is no doubt true that the Supreme Court
in the said case noticed that the students belonged to an upper middle class
background but the basis and the principle on which the compensation was
awarded in that case would equally apply to the present case.
31.
A
forceful submission has been made by the learned counsels appearing for the
claimants-appellants that both the Tribunal as well as the High Court failed to
consider the claims of the appellants with regard to the future prospects of
the children. It has been submitted that the evidence with regard to the same
has been ignored by the Courts below. On perusal of the evidence on record, we
find merit in such submission that the Courts below have overlooked that aspect
of the matter while granting compensation.
It is well settled
legal principle that in addition to awarding compensation for pecuniary losses,
compensation must also be granted with regard to the future prospects of the
children. It is incumbent upon the Courts to consider the said aspect while
awarding compensation. Reliance in this regard may be placed on the decisions
rendered by this Court in General Manager, Kerala S. R. T. C. v. Susamma
Thomas, (1994) 2 SCC 176; Sarla Dixit 18 v. Balwant Yadav, (1996) 3 SCC 179;
and Lata Wadhwa case (supra).
32.
In
view of discussion made hereinbefore, it is quite clear the claim with regard
to future prospect should have been be addressed by the courts below. While
considering such claims, child's performance in school, the reputation of the
school etc. might be taken into consideration. In the present case, records
shows that the children were good in studies and studying in a reasonably good
school. Naturally, their future prospect would be presumed to be good and bright.
Since they were children, there is no yardstick to measure the loss of future
prospects of these children. But as already noted, they were performing well in
studies, natural consequence supposed to be a bright future. In the case of
Lata Wadhwa (supra) and M. S. Grewal (supra), the Supreme Court recognised such
future prospect as basis and factor to be considered. Therefore, denying
compensation towards future prospects seems to be unjustified. Keeping this in
background, facts and circumstances of the present case, and following the
decision in Lata Wadhwa (supra) and M. S. Grewal (supra), we deem it
appropriate to grant compensation of Rs. 75,000/- (which is roughly half of the
amount given on account of pecuniary damages) as compensation for the future
prospects of the children, to be paid 19 to each claimant within one month of
the date of this decision. We would like to clarify that this amount i.e. Rs.
75,000/- is over and above what has been awarded by the High Court.
33.
Besides,
the Courts have been awarding compensation for pain and suffering and towards
non-pecuniary damages. Reference in this regard can be made to R. D. Hattangadi
case (supra). Further, the said compensation must be just and reasonable. This
Court has observed as follows in State of Haryana v. Jasbir Kaur, (2003) 7 SCC
484, at 486:
"7. 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. The 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. Every 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."
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34.
So
far as the pecuniary damage is concerned we are of the considered view both the
Tribunal as well as the High Court has awarded the compensation on the basis of
Second Schedule and relevant multiplier under the Act. However, we may notice
here that as far as non-pecuniary damages are concerned, the Tribunal does not
award any compensation under the head of non-pecuniary damages. However, in
appeal the High Court has elaborately discussed this aspect of the matter and
has awarded non-pecuniary damages of Rs. 75,000. Needless to say, pecuniary
damages seeks to compensate those losses which can be translated into money
terms like loss of earnings, actual and prospective earning and other out of
pocket expenses. In contrast, non-pecuniary damages include such immeasurable
elements as pain and suffering and loss of amenity and enjoyment of life. In
this context, it becomes duty of the court to award just compensation for
non-pecuniary loss. As already noted it is difficult to quantify the
non-pecuniary compensation, nevertheless, the endeavour of the Court must be to
provide a just, fair and reasonable amount as compensation keeping in view all
relevant facts and circumstances into consideration. We have noticed that the
High Court in present case 21 has enhanced the compensation in this category
by Rs. 75, 000/- in all connected appeals. We do not find any infirmity in that
regard.
35.
With
respect to the interest, the Tribunal had directed for payment of interest for
only four years at the rate of 6% per annum from the date of filing of the
claim petition till the award and in case of payment was not made within 30
days then further interest at the rate of 6% from the date of award till
payment. In appeal, the High Court awarded 7 and = % per annum from the date of
filing of the petition till payment. We find the interest awarded by the High
Court as just and proper, so the same need not be disturbed.
36.
The
appeals are disposed of in terms of aforesaid order.
...............................J.
[S.B. Sinha]
................................J.
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