M.Y. Eqbal, J.
1. Since these two appeals arose out of common judgment and award, the same are being heard and disposed of by this common order.
2. M.A. No. 22 of 2004, has been filed by the claimants for enhancement of compensation awarded by the Motor Vehicles Accident Claims Tribunal, Latehar in M.V. Claim Case No. 01 of 2003, whereas M.A. No. 78 of 2004 has been filed by the appellant, National Insurance Company Limited challenging the quantum of compensation awarded by the tribunal in the said case.
3. The fact of the case lies in a narrow compass.
4. The appellants of M.A. No. 22 of 2004 (hereinafter referred to as the claimants) filed the aforementioned claim case under Section 166 of the Motor Vehicles Act, 1988, claiming compensation to the tune of Rs, 23,00.000/- for the death of Rajshri Nagesh in a motor vehicle accident. The claimants' case is that on 20.9.2002 the deceased Rajshri Nagesh was going to Chandwa to offer Puja along with her husband claimant No. 1 and Bodyguard by their own vehicle bearing registration No. BR -18-9545 and when they reached near village-Jagaldaga one ' Tanker bearing No. JH-01C-2766 was coming from opposite direction at a high speed and dashed the car of the deceased resulting several grievous injuries to the occupants of the car. The deceased-Rajshri Nagesh was shifted to hospital and in course of treatment she died. The claimants' case is that the claimant 'no. 1 is a judicial Officer and his salary on First September, 2002 was nearly Rs. 30,000/- per month. The claimants also alleged that the deceased was looking after the cultivation work and her annual income from agriculture was approximately Rs. 1,25,000/-. The insurer of the tanker, namely, appellant National Insurance Company Limited contested the claim by filing written statement denying and disputing the income of the deceased and also the income of claimant No. 1.
5. The tribunal framed the following 9 issues for consideration :
'(i) Whether the claim case as framed is maintainable?
(ii) Whether the applicants have valid cause of action for the case?
(iii) Whether the accident took place on 22.9.2002 as alleged in the application for compensation?
(iv) Whether the death of Rajshree Nagesh, wife of the Applicant No. 1 was the result of aforesaid accident?
(v) Whether the vehicles involved in the aforesaid accident was insured with the O.P. No. 3 and 4 respectively during the period of accident as required under M.V. Act 1988?
(vi) Whether the opposite party members are liable to pay compensation jointly or severally? If so whether the insurance company may be made liable to pay compensation to the applicants?
(vii) Whether the amount of compensation claimed is just and proper? What should be the quantum of compensation under the circumstances of the case?
(viii) Whether the Applicants are entitled to interest from the date of accident/date of filing application?
(ix) Are the applicants entitled to the reliefs as prayed for or any other relief?
6. While deciding issue Nos. 3, 4 and 5 the Tribunal held that the accident took place resulting grievous injuries to the deceased Rajshree Nagesh who died in Apollo Hospital. The tribunal also answered issue No. 1 by holding that the claim application filed by the claimants is maintainable. In answering issue No. 7, 8 and 9 the tribunal recorded a finding that deceased was 52 years of age and was a domestic lady who had no income prior to accident. The tribunal therefore proceeded to decide the quantum of compensation by applying second schedule of the Motor Vehicle Act, according to which notional income for compensation to those who had no income then 1/3rd.of the income of the earning surviving spouse shall be the basis for compensation. The tribunal therefore, calculated the compensation by taking 1/3rd of the monthly salary of claimant No. 1 which comes to Rs. 8700/-. Accordingly, annual income was assessed at Rs. 1,04,400/- and applying multiplier of 11 years the compensation assessed at Rs. 11,48,000/-. Out of the aforesaid amount, 1/3rd was deducted being the expense which would have incurred towards maintaining the deceased and finally compensation was assessed at Rs. 7,66,000/-. The tribunal also awarded Rs. 2,000/- as funeral expenses, Rs. 5000/- against loss of consortium and Rs. 2500/- towards loss of Estate.
7. Mr. Alok Lal, learned counsel for the Appellant Insurance company assailed the impugned award mainly on the ground that the tribunal has committed error of law in applying second schedule of the Act, while computing compensation. Learned counsel submitted that the tribunal also committed serious illegality in not appreciating the evidence available on record that the basis pay of claimant No. 1 was Rs. 17,150/- and not Rs. 26,118/- is wholly unsustainable in law. Learned counsel submitted that the deceased wife of claimant No. 1 was having no independent earning and she was simply a house wife. In that view of the matter, the compensation awarded by the tribunal is wholly erroneous and exorbitant.
8. On the other hand Mr. Arvind Kumar Lal, learned counsel appearing for the claimants submitted that the amount of compensation assessed by the tribunal is in a very low side and is liable to be enhanced. According to the learned counsel, monthly income of claimant No. 1 is near about Rs. 29,633/-'and the amount of compensation ;ought to have been assessed taking this amount as the monthly earning of claimant No. 1. Learned counsel submitted that the tribunal has erred in law in not applying the provisions of Section 163A read with second schedule of the Motor Vehicle Act, 1988, according to which multiplier of 13 has been, prescribed for calculating the amount of compensation for the age group between 45 to 50 years.
9. Before considering the rival submissions of the learned counsel, I would first like to point out that the tribunal has recorded a finding that the deceased was house wife and she had no independent income prior to accident. Neither in the memo of appeal the said finding has been assailed by the claimants nor any argument was advanced by the counsel appearing for the claimant. Therefore, I shall proceed further on the basis of aforesaid finding which has attended its finality.
10. As noticed above, the tribunal calculated compensation on the basis of guidelines provided in second schedule of the Act, taking 1/3rd of the earning of claimant No. 1 being the surviving spouse,
11. Section 163A of the Motor Vehicles Act, was inserted in the year 1994 by Act No. 54 of 1994, which came into force from 14.11.1994. The said provision has been inserted to provide for new pre-determined structured formula for payment of compensation to road accident victim on the basis of age and/or income of the deceased.
12. Section 163A of the Act, reads as under:
Special provisions as to payment of compensation on structured formula basis.-(1) Notwithstanding anything contained in this Act, or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be,
(2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.
13. Second Schedule referred to in Section 163A of the Act, provides for a structured formula for the purpose of grant of compensation of third party involvedin the fatal accident. According to this schedule, compensation amount is required to be calculated having regard to the age of the victim and his annual income. Clause 6 of Second Schedule however, provides guidelines for calculating compensation in cases where deceased had no income prior to accident Clause 6 of Second Schedule reads as under:
THE SECOND SCHEDULE
Clause 1 to 5............ ..............
Clause 6: National income for compensation to those who had no income prior to accident :
Fatal and disability in non-fatal accident:
(a) Non-earning persons - Rs. 15,000 p.a.
(b) Spouse - 1/3rd income of the earning surviving spouse.
14. In the instant case, the tribunal has applied sub-clause (b) of Clause 6 of the Second Schedule for the purpose or assessment of compensation.
15. Section 163A and Second Schedule of the Act, came for consideration before the Supreme Court in the case of U.P. State Road Transport Corporation and Ors. v. Trilok Chandra and Ors., (1996) 4 SCC 362 and their Lordships held that calculation of compensation and the amount-worked out in the second schedule suffers from several defects, Their Lordships observed :
'We must at once point out that the calculation of compensation and the amount worked out in the Schedule suffer from several defects. For example, in Item I for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicant is shown to be Rs. 3000. The total' should be 3000x15=45,000 but the same is worked out at Rs. 60,000, Similarly, in the second item the multiplier is 16 and the annual income is Rs. 9000; the total should have been Rs. 1,44,000 but is shown to be Rs. 1,71,000. To put it briefly, the table abounds in such mistake. Neither the tribunals nor the courts can go by the ready reckoner. It can only be used as a guide. Besides the selection of multiplier cannot in all cases be solely dependant on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose to emphasis is that the multiplier cannot exceed 18 years purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16. We thought it necessary to state the correct legal position as courts and tribunals are using higher multiplier as in the present case where the Tribunal used the multiplier of 24 which the High court raised to 34, there showing lack of awareness of the background of the multiplier system in Davies case.
16. In the case of The Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala, AIR 2001 SC 1832 again second schedule of the Act, came for consideration before the Supreme Court and their Lordships reiterated that the second schedule suffers from serious defects and the Central Government was directed to make correction in the said schedule. It was held :
'In addition, the learned counsel also pointed out that in case of fatal accident and disability, in non-fatal accident, it has been provided that notional income for the claimant who had no income prior to accident shall be Rs. 15000/- per annum and still however the Second Schedule provides table of income ranging from Rs. 3000/- to Rs. 40000/- and the breakup also does not provide any calculation for Rs. 15000/- as the columns in the Schedule inter alia provide for compensation for a person having income of Rs. 12000/- and thereafter straightway at Rs. 18000/-. The learned counsel also submitted that despite the specific provision in Section 163A that the Central Government may, keeping in view the cost of living, by notification in Official Gazette from time to time amend the Schedule, nothing has been done so far. Further, by Order dated 30.8.2000, this Court again noticed number of anomalies in the Second Schedule and, therefore, thought if fit to have assistance of either the Attorney General of India or the Solicitor General of India. When the matter was called out on 15.12.2000, Mr. Altaf Ahmad, ASG, stated before the Court that the order passed by this Court on 30.8.2000 has already engaged serious attending of the Ministry of Surface Transport Department and the Government was considering the matter for bringing necessary correction in the Second Schedule of the Motor Vehicles Act: Thereafter, we again sought assistance of the Additional Solicitor General on the interpretation of Section 163A and also to verify whether there are corrections in the Second Schedule. Learned Additional Solicitor General stated that amendment .might take some time. In this view of the matter, we think it would be appropriate if the Central Government takes necessary action as early as possible under Section 163A(3).
17. Recently, in the case of Deepai Grishbhai Soni and Ors. v. United Insurance Company Ltd., AIR 2004 SC 2107, while considering the provisions of Section 163A of the Act, and the Second Schedule their Lordships of the Supreme Court after considering the earlier decision finally held that since the provisions of Section 163A being the social security provisions, the benefit of which is available only to those whose annual income is upto Rs. 40,000/-. All other claims are required to be determined in terms of Chapter XII of the Act. Their Lordships observed :
'We, therefore, are of the opinion that Kodala, (supra) has correctly been decided. However, we do not agree with the findings in Kodala, (supra) that if a person invokes provisions of Section 163A the annual income of Rs. 40,000/per annum shall be treated as a cap. In our opinion, the proceeding under Section 163A being a social security provision, providing for a distinct scheme, only those whose annual income is up to Rs'; 40,000/- can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act.
18. Coming back to the instant case, it has not been disputed by the claimants that claim application was filed under Section 166 of the Motor Vehicles Act, 1988 for the grant of compensation and not under Section 163A of the Act, which is also evident from the impugned judgment which shows that the tribunal decided the claim application of the claimants under Section 166 of the Act. In my opinion therefore, instead the Tribunal ought to have assessed compensation on the basis of guidelines provided under Clause 6 of the Second Schedule of the Act, which applies in such cases where claim application is filed under Section 163A of the Act. Otherwise also claim application can be considered under Section 163A read with Clause 6(b) of the Act, where the annual income of the claimant is upto Rs. 40,000/- as held by the Supreme Court in the case of Deepal Girishbhai Soni v. United Insurance Company Ltd., (supra). In my considered opinion therefore the Tribunal, has committed error of law in calculating compensation on the basis of second schedule of the Act, in a claim application filed under Section 166 of the Act.
19. Now the question arose as to what should be the just and reasonable compensation for.the death of house wife who had no independent earning.
20. Admittedly, the deceased Rajshree Nagesh was the wife of claimant No. 1 who is a judicial officer in the Subordinate Judicial Service. The deceased died leaving behind one son and three daughters, Because of the death of the deceased certainly all the claimants not only suffer mental pain and agony but also suffered loss on different accounts. In such circumstances, taking into consideration the status of the deceased and the status of her family members, claimants are entitled to get compensation for the pain and agony and loss of enjoyment as also for the loss of love and affection from the deceased. It appears from paragraph 8 of the judgment that a sum of Rs. 2,48,000/- has been reimbursed to the claimant No, 1 for the medical treatment of the deceased by the Health Department, Govt. of Jharkhand, Ranchi, Hence, cost of treatment claimed by the claimant was not allowed by the Tribunal.
21. Taking into consideration the entire facts of the case, we are of the opinion that a lump sum amount of Rs. 5,00,000/- (rupees five lacs) would be just and reasonable compensation which the claimants are entitled on account of loss of love and affection, loss of consortium and for the death of the deceased. The claimants have already received from Rs. 50,000/- for the no fault liability from the respondents/Insurance company but the said amount shall not be deducted out of the final compensation assessed by this Court as Rs. 5,00,000/- (rupees five lacs).
22. For the reasons aforesaid, Misc. Appeal No. 78 of 2004 is allowed and the amount of compensation is reduced to Rs. Rs, 5,00,000/- (rupees five lacs) which shall be paid together with interest at the rate of 6% p.a. from the date fixed by the tribunal. Consequently. Misc. Appeal No. 22 of 2004 is dismissed.
Vishnudeo Narayan, J.
23. I agree.