Munusamy & Ors. v. the Managing Director, Tamil Nadu State Transport Corporation (villupuram) Ltd.

A. M. KHANWILKAR, J. 1. This appeal emanates from the judgment and order passed by the High Court of Judicature at Madras dated 16.04.2013 in C.M.A. No.2819 of 2012. The High Court allowed the prayer for grant of enhanced compensation amount in favour of the appellants. The appellants seek further enhancement of compensation amount on the ground that the High Court has not provided for futu re prospects, while computing the compensation amount. The appellants rely upon the recent decision of the Constitution Bench of this Court in the case of National Insurance Company Ltd. Vs. Pranay Sethi and Ors.1to buttress their submission. 2. Before we deal with the grievance of the appellants, it is apposite to reproduce the relevant extract of the impugned judgment which reads thus: “7. We have heard the learned counsel for the respondent on the above submission. 8. In the absence of specific proof of employmen t, the Tribunal rightly has taken the earning of the decea sed at Rs.4,000/- per month and deducted 50% towards perso nal expenses since the deceased were bachelors. However , the proper multiplier to be adopted in the case must be 18, sin ce the deceased were 21 and 20 years respectively. A s um of Rs.20,000/- to each of the claimants towards loss of love and affection and a further sum of Rs.5,000/- towards tran sport expenses were granted. 9. Accordingly, in C.M.A. No.2819 of 2012 compensation payable would be as follows: (a) Loss of Dependency Rs.4,32,000/- (Rs.4,000/-×12×18) (b) Loss of love and affection Rs. 60,000/- (c) Transport Rs. 5,000/- (d) Funeral Rs. 2,000/- (e) Loss of estate Rs. 2,500/- Total = Rs.5,01,500/-” 1AIR 2017 SC 5157 MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE TRANSPORT CORPN.(VILLUPURAM) LTD. 3. On perusal of the judgment under appeal, it is evident that the High Court has not provided for future prospects while computing the compensation amount under the head ‘loss of depende ncy’. The necessity to provide future prospects has been expounded by the Con- stitution Bench of this Court in National Insurance Company Ltd. (supra). It will be useful to reproduce paragraph No.59 of the said judgment, which reads thus: “59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to app ly the said principle to the self-employed or a person who is on a fixed 44 salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determina tion of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sw eep of just compensation as postulated under Section 168 of the Act . In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acce ptable certainty. But to state that the legal representati ves of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of compu tation of compensation would be inapposite. It is because the criterion of distinction between the two in that even t would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certai nty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise d oes affect a self-employed person; and that apart there is alw ays an incessant effort to enhance one’s income for sustenance. Th e purchasing capacity of a salaried person on permane nt job when increases because of grant of increments and p ay revision or for some other change in service conditions, there is always a 45 competing attitude in the private se ctor to enhance the salary to get better efficiency from the employ ees. Similarly, a person who is self-employed is bound to ga rner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likel y to 633 remain static and his income to remain stagnant is cont rary to the fundamental concept of human attitude which al ways intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cann ot be certainty in addition of future prospects to the existing i ncome unlike in the case of a person having a permanent j ob, yet the said perception does not really deserve acceptan ce. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives w ho claim on behalf of the deceased who had a permanent job t han a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the found ation of perceived lack of certainty would tantamount to rem aining oblivious to the marrows of ground reality. And, th erefore, degree-test is imperative. Unless the degree-test i s applied and left to the parties to adduce evidence to establish, it woul d be unfair and inequitable. The degree-test has to h ave the inbuilt concept of 46 percentage. Taking into consid eration the cumulative factors, namely, passage of time, the changi ng society, escalation of price, the change in price i ndex, the human attitude to follow a particular pattern of life, etc ., an addition of 40% of the established income of the de ceased towards future prospects and where the deceased was be low 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.” Again, in the concluding paragraph No.61 the Court observed thus: “61. In view of the aforesaid analysis, we proceed to record our conclusions:- * * * (iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addi tion should be 30%, if the age of the deceased was 48 between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax. MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE TRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.] (iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income shou ld be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was betwe en the age of 40 to 50 years and 10% where the deceased w as between the age of 50 to 60 years should be regarded as the necessary method of computation. The established in come means the income minus the tax component.” 4. On 03.03.2007, the deceased (Palani), who was only around 21 years of age at the time, was riding a motorcycle bearing Registration No. TN-22 AP 5092 along with his friend, one Haridass as a pillion rider, from Tambaram to Chengalpattu on GST Road, Maraimalai N agar, opposite Vikram Hotel, when they collided with a bus bearing Registration No. TN-21 N 0943 belonging to the respondent Transport Corporation, which was driven in a rash and negligent manner. The deceased was unmarried and working as a contract worker in Hyundai Car Company, Sriperumbudur. Applying the dictum of the Constitution Bench referred to above, the appellants are justified in insisting for g rant of future prospects at the rate of 40% of the established income. The High Court has held that the earning of the deceased at the relevant t ime can be taken as Rs.4,000/- per month. The High Court did not provide 40% towards future prospects on the established income of the deceased. Thus, the monthly loss of dependency, in the facts of the pre sent case would be Rs.4,000 + 1,600 = Rs.5,600/-. 5. In other words, instead of amount awarded by the High Court towards loss of dependency in the sum of Rs.4,32,000/-, the same will stand modified to Rs.6,04,800/- (Rupees six lakh four thousand e ight hundred only) along with interest at the rate of 9% (nine percent) per annum. We are not disturbing the other directions given by the High Court in respect of other heads. 6. Accordingly, the respondent Transport Corporatio n must deposit the additional amount of compensation of Rs.1,72,800/- (Rupees one lakh seventy two thousand eight hundred only) along with interest, as awarded in the preceding paragraph, within a period of eight weeks from the date of receipt of the copy of this judgment in th e Court of Additional District & Sessions Judge, Fast Track Court-IV, Che nnai (Motor Accident Claims Tribunal, Chennai). 635 7. In other words, the compensation payable to the appellant s would be as follows: (a) Loss of Dependency Rs.6,04,800/- [Rs.5,600 – 50% of 5600)×12×18] (b) Loss of love and affection Rs. 60,000/- (c) Transport Rs. 5,000/- (d) Funeral Rs. 2,000/- (e) Loss of estate Rs. 2,500/- Total = Rs.6,74,300/- 8. As a result, the Appeal stands allowed. The compensat ion awarded by the High Court is enhanced from Rs.5,01, 500/- to Rs.6,74,300/- [Rupees six lakh seventy four thousand three hundred only]. The respondent Transport Corporation is directed to deposit the entire award amount as indicated above with interest at 9% (nine percent) per annum less the amount already deposited if any, within a period of eight weeks from the date of receipt of a copy of this judgment and the appellants shall be entitled to the compensation in the proportion specified by the Tribunal. The first and second appellants are entitled to withdraw the amount deposited upon verification of due application and the share of the third appellant (minor) shall be deposited in any of the nationalised banks till she attains majority and the second claimant/mother is entitled to withdraw interest thereon once in three mont hs towards meeting the needs of the minor. Upon turning 18, the minor appellant is entitled to withdraw her respective share. 9. Accordingly, the appeal is allowed in the aforementioned terms with no order as to costs. Divya Pandey Appeal allowed. MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE TRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.]