Honourable Mr. Justice R.M. Chhaya

1. The present appeal arises out of common judgment and award dated 15.11.1990 passed by Motor Accident Claim Tribunal (Main) Kutch - Bhuj in Motor Accident Claim Petitions No. 46 of 1984 and 66 of 1984. The present appeal is filed by the original claimants of Motor Accident Claim Petition No. 46 of 1984.

2. The facts arising out of this appeal are as under :

3. That deceased Prvinchandra Pragjibhai Vora was driving the motorcycle bearing RTO Registration No. 7416 belonging to one Shri Pradip Jagannath Jethi along with one pillion rider one Shri Ramesh Velji Bhansali at about 2.30 p.m. on 6.9.1983. It transpires from the record that the deceased came out from the main gate of Gujarat Electricity Board office compound, at that time, offending truck bearing RTO Registration No. GTY 5250 which was driven by respondent No. 1 herein at an excessive speed in rash and negligent manner dashed with the motorcycle and due to the said impact the deceased as well as pillion rider fell down from the motorcycle and sustained injuries on different parts of the body. It transpires that the deceased was taken to G.K. General Hospital, Bhuj, which is situated at a distance of 100 meters from the place of incident. However, before the deceased could be given any treatment, the deceased succumbed to the injuries received because of the accident on the way.

4. It bornes out from the record that the date of birth of the deceased was 29.3.1953. Hence, on the date of accident, the deceased was 30 years old. It further transpires that the deceased was educated up to S.S.C. and was a registered contractor with Gujarat Electricity Board, Public Works Department and was also an agent of Life Insurance Company of India. The legal heirs filed the present Claim Petition being father, mother, wife, two minor daughters and one minor son and claimed compensation of Rs. 21,77,000/-, which came to be registered as Motor Accident Claim Petition No. 46 of 1984.

5. The Tribunal framed issues at Exhibit 33 and after fulfledged hearing and on appreciation of the oral as well as documentary evidence adduced by the parties passed the impugned judgment and award, whereby the Tribunal was pleased to partly allow the application and passed the award of Rs. 5,25,000/- with interest @ 12% p.a. from the date of filing of the petition till the date of depositing the amount in the Tribunal.

6. Being aggrieved by the aforesaid judgment and award, the original claimants have preferred this appeal for enhancement under section 173 of the Motor Vehicles Act, 1988.

7. It may be noted that pending final hearing of this appeal, the original claimants No. 1 and 2 expired and original claimants No. 4, 5 and 6 being two daughters and one son became major. This Court vide order dated 22.9.2010 passed in Civil Application No. 4663 of 2010 was pleased to delete the original claimant No. 1 Shri Pragjibhai Vora and Smt. Viruben Pragjibhai Vora father and mother respectively of the deceased.

8. We have heard Mr. Nalin Thakkar, learned Counsel for the appellants-claimants and Shri Hasmukh Thakkar, learned Counsel for respondent No. 3 -Insurance Company and respondent nos.1 and 2 though served have not appeared before this Court. We have considered the Record and Proceedings.

9. Shri Nalin Thakkar, learned Counsel for appellants-original claimants has taken us through the impugned judgment and award as well as relevant oral and documentary evidence. Shri Thakkar submitted that the Tribunal has erred in deciding the quantum of the claim. Shri Thakkar submitted that deceased Prafulbhai was a registered contractor with Gujarat Electricity Board, Public Works Department and other institutions and had undertaken many works of contract. Mr. Thakkar also pointed out that the Tribunal has also not properly considered the evidence on record in relation to the earnings of deceased Prafulbhai as LIC Agent. Mr. Thakkar pointed out that deceased Prafulbhai himself was in fact working as contractor as well as LIC Agent and was also appointed as Supervisor by one company named G.R.C. and was paid salary of Rs. 3,000/- p.m. Mr. Thakkar vehemently submitted that thus the Tribunal has erred in calculating income only at Rs. 4,000/- p.m. He therefore submitted that the Tribunal ought to have taken into account income derived by deceased Prafulbhai from different sources and submitted that the monthly income of deceased Prafulbhai was more than Rs. 6,000/- p.m. Mr. Thakkar further submitted that the Tribunal has also erred in deducting the huge amount of Rs. 1,28,000/- towards lump sum payment and uncertainties of life. Mr. Thakkar submitted that Tribunal ought to have awarded the claim as prayed for. Mr. Thakkar for the appellant also relied upon the judgment of the Apex Court in the case of General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas and others, reported in : 1994 ACJ 1 [LQ/SC/1993/4] and in case of Renu Bala Kalita (Smt.) and others Vs. Dhiren Chakravarty and others, reported in : (1998) 8 SCC 363 [LQ/SC/1996/656] , and submitted that the Tribunal has committed an error in making deduction of Rs. 1,28,000/-. Mr. Thakkar therefore submitted that the appeal deserves to be allowed in toto and the judgment and decree be accordingly modified.

10. As against this, Mr. Hasmukh Thakkar, learned Counsel appearing for the Insurance Company has taken us through the relevant record, evidence and more particularly drawn our attention to Exhibits 64 and 67 to 74. Mr. Thakkar further submitted that there is no evidence on record to justify the claim raised by the claimants in relation to any income derived by deceased Prafulbhai in his capacity as a registered contractor. Mr. Thakkar for the Insurance Company further submitted that the claimants have not brought on record any cogent material to prove the quantum of income of deceased Prafulbhai. Mr. Thakkar also submitted that in fact the judgments cited by the learned Counsel for the claimants do not apply in the facts of the present case. Mr. Thakkar submitted that the Tribunal has on proper appreciation of the evidence on record has rightly come to the conclusion that the income derived by deceased Prafulbhai can be estimated at Rs. 4,000/- p.m. Mr. Thakkar submitted that on the contrary, the Tribunal has awarded higher multiplier than as provided under the Act. Mr. Thakkar also submitted that in absence of any cogent evidence to prove the quantum of income of deceased Prafulbhai and, therefore, the Tribunal has rightly deducted the one-third amount as deceased had more than four dependents on the date of accident. Mr. Thakkar further submitted that in fact, the Tribunal has awarded higher rate of interest than the prevailing banks rates. Mr. Thakkar, therefore, submitted that the appeal is devoid of any merits and same deserves to be dismissed.

11. We have perused and examined Record and Proceedings in light of the rival submissions made by both the sides.

12. It may be noted that there is no dispute as regards occurrence of accident as well as the date of birth of the deceased but the only point which is urged on behalf of the appellant is in relation to quantum of the compensation awarded by the Tribunal and non consideration of the evidence of income of the deceased adduced by the appellant-original claimants.

13. On re appreciation of the evidence on record, we find that Exhibit 61 is a communication addressed by in charge Superintending Engineer of Gujarat Electricity Board informing the deceased in the name of Shri P. P. Vora & Co. that his name has been registered under group IV, category D as an approved contractor. Exhibit 62 is a certificate issued by Branch Manager, The Gujarat Industrial Co-operative Bank Ltd., Bhuj Branch, dated 20.9.1982 to the effect that Shri P.P. Vora & Co., is solvent to the extent of Rs. 50,000/-. Exhibit 63 is a certificate dated 12.12.1978 issued by Executive Engineer, R & B Department, State of Gujarat, Bhuj-Kachchh, certifying that deceased Pravinchandra Pragjibhai Vora is registered E-2 category as contractor of Public Works Department for a period of one year. Exhibit 64 is certificate dated 31.12.1988 issued by Deputy Engineer (Construction), Gujarat Electricity Board certifying that deceased was working for Bharatiya Engineering Works as Supervisor. Exhibit 65 is certificate dated 1.7.1978 issued by Deputy Engineer, Nakhatrana Sub-division of Public Works Department certifying that deceased had completed works of supplying of Junction Boards amounting to Rs. 9,607/-. Exhibit 66 is a similar certificate dated 8.12.1978 certifying that deceased had completed work of supply of steel cage to the Sub Treasury at Nakhatrana amounting to Rs. 10,297/-. Exhibit 67 is an income certificate issued by Life Insurance Corporation, Rajkot Division dated 10.6.1980 certifying that total income of the deceased from Life Insurance Corporation of India during the period from 1.4.1979 to 31.3.1980 was Rs. 3986.75 Ps. Exhibit 68 is income certificate issued by Life Insurance Corporation, Rajkot Division, certifying that the income derived from Life Insurance Corporation by the deceased for the period from 1.4.1980 to 31.3.1981 was Rs. 5395.58 Ps. Exhibit 69 is also a certificate issued by Life Insurance Corporation of India, Rajkot Division, certifying that the income derived from Life Insurance Corporation by the deceased for the period from 1.4.1981 to 31.2.1982 by way of commission was Rs. 22,966.76 Ps. Exhibit 70, is a certificate issued by Life Insurance Corporation dated 21.6.1983 certifying that the income derived by way of commission by deceased between 1.2.1982 to 31.3.1983 was Rs. 18,854.16 Ps. Exhibit 71 is also certificate issued by Life Insurance Corporation, certifying that income derived by the deceased by way of commission for the period between 1.4.1983 to 5.9.1983 was Rs. 6261.81 Ps. We also find that the original claimants have also relied upon communication dated 16.5.1981 (Exh.72), Book-let issued by Life Insurance Corporation of India, Bhuj Branch (Exh.73), and Newspaper report (Exh.75), to bring regarding the fact that in the year 1980-81 the deceased had undertaken the work of insurance to the tune of Rs. 14,17,000/- and stood first in Kachchh district amongst LIC Agents. We find that the claimants have also relied upon the advice of payment received from Gujarat Electricity Board in the year 1982-83 being Exhibits 84 to 94. Except these the claimants have not adduced any independent evidence as regards income of the deceased. The claimants in order to prove the income of the deceased has also produced on record the acceptance of tenders being Exhibits 102 to 107. However, there is no evidence on record to justify the income derived by the deceased from any such contracts. We find that the appellants-claimants have not adduced any cogent evidence to establish that deceased Prafulbhai had income of Rs. 6,000/- p.m.

14. On perusal of the oral testimony of Pragjibhai Vora (Exh.108), we find that the witness has stated that the deceased was contractor in Public Works Department and Gujarat Electricity Board and was also working as LIC Agent. We find that this witness has further stated that deceased derived income of Rs. 3,000/- p.m. as supervisor of Bharatiya Engineering. This witness stated that he used to write accounts of deceased Pravinbhai and has produced the abstracts of the account of Shri P.P. Vora & Co. as well as Vora Engineering for S.Y. 2038 - 2039 (Exhibits 109 & 110). We find that this witness has admitted in cross examination that the deceased was not paying income tax.

15. On reading the oral testimony of the witness of the claimant Shri Upendra Ramniklal Vaishnav (Exh.116), we find that he was proprietor of Bharatiya Engineering Company and was engaged as contractor with Gujarat Electricity Board. This witness has clearly stated that the deceased had worked with him for six months on consolidated monthly salary of Rs. 3,000/- p.m.

16. Thus, from the above evidence we find that the claimants have not adduced any independent evidence to show that the monthly income of deceased was approximately Rs. 6,900/- p.m. as canvassed by learned Counsel Mr. Thakkar for the appellant-claimants. We find that the Tribunal on the basis of the evidence on record has rightly assessed the monthly income of the deceased at Rs. 4,000/- p.m. i.e. Rs. 4,800/- per year. However, we find that the Tribunal has erred in deducting 1/3rd from the said amount towards personal expenses. It transpires from the record that the deceased had in fact, six dependents i.e. father, mother, wife and three minor childrens. It would be advantageous to refer to judgment of the Honble Apex Court in case of Sarla Verma (Smt) and others Vs. Delhi Transport Corporation and Another, reported in : (2009) 6 SCC 121 [LQ/SC/2009/869] , wherein the Honble Apex Court has observed thus:

25. We have already noticed that the personal and living expenses of the deceased should be deducted from the income, to arrive at the contribution to the dependants. No evidence need be led to show the actual expenses of the deceased. In fact, any evidence in that behalf will be wholly unverifiable and likely to be unreliable. The claimants will obviously tend to claim that the deceased was very frugal and did not have any expensive habits and was spending virtually the entire income on the family. In some cases, it may be so. No claimant would admit that the deceased was a spendthrift, even if he was one.

26. It is also very difficult for the respondents in a claim petition to produce evidence to show that the deceased was spending a considerable part of the income on himself or that he was contributing only a small part of the income on his family. Therefore, it became necessary to standardise the deductions to be made under the head of personal and living expenses of the deceased. This lead to the practice of deducting towards personal and living expenses of the deceased, one-third of the income if the deceased was married, and one-half (50%) of the income if the deceased was a bachelor. This practice was evolved out of experience, logic and convenience. In fact one-third deduction, got statutory recognition under the Second Schedule to the Act, in respect of claims under Section 163-A of the Motor Vehicles Act, 1988 (the MV Act for short). But, such percentage of deduction is not an inflexible rule and offers merely a guideline.

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30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.

17. In the instant case, the deceased is survived by parents, wife and three minor children and therefore, we find that the Tribunal ought to have deducted only 1/4th towards personal and living expenses of the deceased. We find that the Tribunal has awarded multiplier of 20 which is on higher side as held by the Apex Court in case of Sarla Verma (supra). However, the insurance company has not filed any appeal and the present appeal is filed by the original claimants for enhancement. In this context it would be appropriate to refer to judgment of the Apex Court in the case of Rajrani And Others Vs. Oriental Insurance Company Limited And Others, reported in : (2009) 13 SCC 654 [LQ/SC/2009/1148] , wherein the Apex Court has disapproved the practice of deduction of lump sum payments from the amount of compensation awarded towards uncertainties of life. The Apex Court has observed thus :

20. The question now arise for consideration is as to whether the Tribunal could have made a further deduction of 1/3rd from the amount of compensation on the rationale that the amount is being paid in a lump sum. We do not think so. Few decisions of this Court may be noticed in this regard.

21. In National Insurance Co. Ltd. v. Swaranlata Das it was held :

SCC pp.745-46, para 8.

8. This is all the reasoning in the judgment. We are afraid that the reasoning is incomplete and cannot by itself support the enhancement. The appropriate method of assessment of compensation is the method of capitalisation of net income choosing a multiplier appropriate to the age of the deceased or the age of the dependants whichever multiplier is lower. It is, no doubt, true that as a rough and ready measure, the method of aggregating the total expected income for the remainder of the life expectancy with appropriate deductions towards uncertainties of life and for lump sum payments is also resorted to. But this method is now considered unscientific and is virtually obsolete. At all events wherever it is resorted to it would require to be cross-checked with the results of the appropriate and the more scientific method of capitalisation of the loss of dependency.

22. The practice of deduction for lump sum payments from the amount of compensation awarded in motor accident cases by the Tribunal has been disapproved by this Court in several other decisions. (See Hardeo Kaur v. Rajasthan STC, Renu Bala Kalita v. Dhiren Chakravarty and Urmilla Pandey v. Khalil Ahmad.) Thus, the High Court as well as the Tribunal have erred in deducting a further 1/3rd from the amount of compensation on the reasoning of payment of lump sum amount.

18. On appreciation of the evidence on record and considering the facts of this case, we find that the Tribunal could not be said as right in deducting 20% for lump sum payment of uncertainties of life. We may record that as per the decision of the Apex Court in case of Sarla Varma (supra) keeping the age of 50 years of the deceased in mind, the claimants could be said as entitled for compensation by applying multiplier of 17. Whereas the Tribunal has considered multiplier of 20 and thereafter has reduced 20%, therefore, the net figure comes at par with the compensation arrived at with the multiplier of 16. Under the circumstances, such aspect would meet with requirement of appropriate multiplier for awarding compensation, if multiplier of 17 is applied. Consequently taking Rs. 48,000/- as yearly income of the deceased after deducting 1/4th of it towards personal living expenses of the deceased and applying multiplier as 17 as awarded by the Tribunal, the total dependency loss would come to Rs. 6,12,000/-. Thus, the total compensation would be as under :

Rs. 6,12,000/- Dependency

Rs. 10,000/- For loss of expectation of life

Rs. 3,000/- For obsequies ceremonies.

Thus, we hold that the appellant-claimants are entitled to total compensation of Rs. 6,25,000/- as principal amount of compensation as against Rs. 5,25,000/- as awarded by the Tribunal. Hence, there shall be additional amount of compensation of Rs. 1,00,000/- than awarded by the Tribunal.

19. We find that the claimants be entitled to prevailing interest @ 9%, on the additional amount of compensation of Rs. 1,00,000/- from the date of application till realization. The interest awarded by Tribunal on Rs. 5,25,000/- is not disturbed since there is no appeal by insurance company or owner of the vehicle.

20. For the foregoing reasons, the appeal is partly allowed as aforesaid. The award stands modified accordingly. The cost awarded by the Tribunal is confirmed. However, in the facts and circumstances of the case, there shall be no order as to costs.

21. Respondents are directed to deposit the amount as per this judgment within a period of eight weeks from the receipt of the copy of this judgment.

22. Registry is directed to send back Record & Proceedings to the Tribunal forthwith.