Madan B. Lokur, J.
1. There are three Letters Patent Appeals which we propose to decide by this common judgment.
2. The first is LPA No.179/2001 by Patricia Jean Mahajan, her two daughters and a son and her father-in-law and mother-in-law (hereinafter called the Appellants). This LPA is directed against the judgment and order dated 13th March, 2001 passed by a learned Single of this Court in FAO No.273/1998. In brief, the grievance of the Appellants is that the compensation granted by the learned Single Judge deserves to be enhanced.
3. The second is LPA No.225/2001 filed by United India Insurance Co. Ltd. (for short the Insurance company). The challenge in this appeal is to findings recorded in the judgment and order dated 13th March, 2001 passed by a learned Single Judge of this Court in FAO No.366/1998. The question raised, though not pressed by the learned Attorney General, concerns the finding of negligence of the driver of the truck involved in the accident which led to the death of the husband of Patricia Jean Mahajan.
4. The third is LPA No.236/2001 filed by the Insurance company directed against the judgment and order dated 13th March, 2001 in FAO No.273/1998. According to the Insurance company, the compensation awarded by the learned Single Judge should be reduced, and not enhanced as prayed for in LPA No.179/2001.
5. All these appeals were heard by us on 23rd, 24th and 27th August, 2001 when judgment was reserved. Thereafter, learned counsel for the Appellants mentioned LPA No.179/2001 for the purposes of placing certain exhibited documents on record. These documents were earlier exhibited before the learned Motor Accident Claims Tribunal (for short the MACT). No one appeared on behalf of the Insurance company or the other Respondents, despite prior notice said to have been given by learned counsel for the Appellants. Consequently, on 7th September, 2001, we took the documents on record.
6. An application for stay of the impugned order was then moved by the Insurance company in LPA No.236/2001. This application was allowed on 12th September, 2001. For all practical purposes, thereforee, the hearings before us came to an end on 12th September, 2001.
7. Having given this summation of the proceedings, it is now necessary to detail the facts of the case which have led to the filing of these three LPAs.
8. Dr. Sudesh Mahajan, an American national of Indian origin died in a road accident on the Delhi-Jaipur highway on 3rd February, 1995.
9. The Appellants applied to the learned MACT for compensation in terms of Section 166 read with Section 140 of the Motor Vehicles Act, 1988 (for short the Act). The claim was registered as Suit No.325/1995. The claim was initially contested by the private Respondents and later by the Insurance company.
10. The learned MACT framed the following issues for its consideration:-
'1. Whether the deceased received injuries because of rash and negligent driving of truck no.HR-29-D-1125 by respondent No.1?
2. Whether the petitioners are entitled to compensation and if so, to what amount and from whom?
3. Relief.'
11. The Appellants examined two witnesses in support of their claim. Patricia Jean Mahajan was examined as PW-1. Her deposition was, primarily, with reference to the income of her husband (the deceased). Gulsher Ahmed, the driver of the vehicle in which Dr. Sudesh Mahajan was traveling, was examined as PW-2.
12. On behalf of the Respondents, the driver of the truck (Bal Kishan) involved in the road accident, was examined as RW-1. The evidence of the Respondents (other than the Insurance company) was then closed.
13. It appears that the Insurance company carried out its own investigations concerning the road accident on 3rd February, 1995. Apparently pursuant to these investigations and other conclusions arrived at, the Insurance company moved an application on 12th August, 1997 to contest the claim of the Appellants on merits. This application was moved under Section 149 read with Section 170 of the Act. It was allowed by the learned MACT on 30th September, 1997.
14. No appeal or any other proceedings were instituted challenging the order dated 30th September, 1997.
15. The Insurance company examined as many as seven witnesses, being RW-3/1 to RW-3/7.
16. Eventually, after considering the documentary and oral evidence on record, the learned MACT gave its Award on 6th July, 1998.
17. Among other things, the learned MACT held that the deceased received injuries and died because of the rash or negligent driving of the truck involved in the accident. Issue No.1 was accordingly decided.
18. With regard to the award of compensation, the learned MACT concluded that the deceased was about 47/48 years of age at the time of his death; that the Appellants were his legal representatives; that on the basis of his income tax returns, his carry-home income was USD 309,204 per annum.
19. On the question of the loss of dependency, the learned MACT concluded that 'the deceased was applying two-third of his actual income on his own upkeep/pleasures and on the payment of debts incurred by him for various purposes...'
20. As regards the 'choice of multiplier', the learned MACT adopted a multiplier of 7. In this regard, the learned MACT was 'guided by the age of the deceased and the yield which would come by way of interest.'
21. In appeals filed before him, the learned Single Judge came to the conclusion that the carry-home income of the deceased was not USD 309,204 per annum but was USD 339,445 per annum. There is now no dispute about this figure.
22. The learned Single Judge upheld the finding that the driver of the truck was negligent in his duties, which resulted in the fatality of Dr. Sudesh Mahajan.
23. As regards the loss of dependency, it was held that only 1/3rd deduction could be made for self expenses. Consequently, the dependency of the Appellants was USD 226,297 per annum (2/3rd of 339,445). The multiplier adopted by the learned Single Judge was 10 instead of 7 (accepted by the learned MACT).
24. As a result of the above calculations, the Appellants were held entitled to an enhanced amount by way of compensation. While the learned Single Judge so concluded, he declined to grant interest on the enhanced amount.
25. A dispute was raised with regard to the rate of exchange for the Indian Rupee vis-a-vis the US Dollar. The learned Single Judge took the conversion rate on the date of the judgment (Rs.47/- to a Dollar) and calculated the compensation accordingly.
26. Given this background, the Appellants contended that there was no reason why interest should be denied to them on the enhanced amount awarded by the learned Single Judge.It was also contended that the appropriate multiplier should be 13 and not 10. On the other hand, the learned Attorney General appearing for the Insurance company objected to the conversion rate for the US Dollar. According to him the correct rate of conversion should have been Rs.30/- to a Dollar and not Rs.47/- to a Dollar as awarded by the learned Single Judge.
INTEREST
27. So far as the payment of interest to the Appellants on the enhanced amount is concerned, we find no difficulty in accepting the contention of learned counsel for the Appellants. Quite clearly, the Appellants were denied their legitimate due. If that be so, there is no reason why they should not be adequately compensated by the award of interest, on an amount wrongly withheld from them.
28. The Supreme Court has held, quite recently, in Devi Dayal Kansal & Ors. v. Raj Roop & Anr., : (2000)10SCC314 that 'Once the High Court has thought it fit to enhance in appeal compensation payable to the dependents of the deceased, in fairness, interest should have been granted on the enhanced compensation unless there was any cogent reason for denying them the benefit which does not exist in the facts of the present case and the High Court has also not noted the same.'
29. Following this view of the Supreme Court, we find no reason to deny the benefit of interest to the Appellants. Indeed, the learned Attorney General did not seriously (if at all) contest this position. We, thereforee, conclude that the Appellants are entitled to interest on the entire enhanced compensation, whether it be relatable to the multiplier or the loss of dependency.
30. We must, at this stage, state that we were told that pursuant to the order of the learned MACT, the Insurance company deposited a sum of Rs.1.66 crores, which has since been withdrawn by the Appellants. Quite clearly, the Appellants will not be entitled to any interest on the amount already withdrawn and utilized by them.
31. The next question is with regard to the rate of interest. Learned counsel for the Appellants has placed before us some judgments of the Supreme Court and a sort of a chart, which indicates that the Supreme Court has been consistently awarding interest at 12% per annum on the enhanced compensation. (See, for example, General Manager, Kerala State Road Transport Corporation v. Susamma Thomas & Ors., : AIR1994SC1631 , Hardeo Kaur & Ors. v. Rajasthan State Transport Corporation & Anr., : [1992]2SCR272 , S.Chandra & Ors. v. Pallavan Transport Corporation, : (1994)2SCC189 , Dr.K.R.Tandon v. Om Prakash & Anr., : (1998)8SCC421 , Devi Dayal Kansal & Ors. v. Raj Roop & Anr., : (2000)10SCC314 and Sarla Dixit & Anr. v. Balwant Yadav & Ors., : (1993)IILLJ664SC .)
32. It has, however, also been brought to our notice that in A. Robert v. United Insurance Co. Ltd., : AIR1999SC2977 the Supreme Court awarded interest at 6% from the date of the application till actual payment to the claimant. In Kaushnuma Begum (Smt.) & Ors. v. New India Assurance Co. Ltd. & Ors. : [2001]1SCR8 , the Supreme Court awarded interest at 9% per annum. It was held that:-
'Earlier, 12% was found to be the reasonable rateof simple interest. With a change in economy andthe policy of Reserve Bank of India the interestrate has been lowered. The nationalised banks arenow granting interest at the rate of 9% on fixeddeposits for one year. We, thereforee, direct thatthe compensation amount fixed hereinbefore shallbear interest at the rate of 9% per annum from thedate of the claim made by the appellants.'
33. In any case, the rate of interest is not in dispute before us. The learned MACT had awarded interest at 12% per annum (which finding was not disturbed by the learned Single Judge). Consequently, we do not think it appropriate to set aside the award of interest at 12% per annum on the enhanced amounts due to the Appellants.
34. In terms of Section 171 of the Act, the interest will be calculated as simple interest from the date of the claim by the Appellants, till its realization.
RATE OF EXCHANGE
35. The next important contention is with regard to the rate of conversion of the US Dollar to the Indian Rupee.
36. This contention has to be dealt with in two stages. The first stage is with reference to the amount awarded by the learned MACT. As we have noticed earlier, the Insurance company deposited Rs.1.66 crores pursuant to the order of the learned MACT. This amount was deposited taking the conversion rate of a Dollar at Rs.30/-. This amount has since been withdrawn by the Appellants. In other words, for the amount awarded by the learned MACT, the Appellants had accepted the conversion rate of Rs.30/- to a Dollar. Whether this conversion rate is correct or not, is now really academic. Today, its a closed chapter and need not be re-opened.
37. What, thereforee, survives for adjudication is the second stage or the conversion rate for the enhanced amount.
38. Strong reliance was placed by learned counsel for the Appellants and the learned Attorney General on the interpretation of Forasol v.Oil and Natural Gas Commission, : [1984]1SCR526 .
39. One of the questions that arose in Forasol was with reference to the rate of exchange of French Francs vis-a-vis the Indian Rupee. The Supreme Court identified five possible dates for fixing the rate of conversion. (We are not concerned with the sixth possible date). These five dates have been identified in paragraph 24 of the Report.
40. After laying down the groundwork, the Supreme Court said in paragraph 40 of the Report:-
'The court must select a date which puts theplaintiff in the same position in which he wouldhave been had the defendant discharged hisobligation when he ought to have done, bearing inmind that the rate of exchange is not a constantfactor but fluctuates, and very often violentlyfluctuates, from time to time.'
41. It was then stated in paragraph 43 of the Report:-
'A decree crystallizes the amount payable by thedefendant to the plaintiff and it is the decreewhich entitles the judgment-creditor to recoverthe judgment debt through the process of law. Anobjection which can, however, be taken toselecting this date is that the decree of thetrial court is not the final decree for there maybe appeals or other proceedings against it insuperior courts and by the time the matter isfinally determined, the rate of exchangeprevailing on that date may be nowhere near thatwhich prevailed at the date of the decree of thetrial court. To select the date of the decree ofthe trial court as the conversion date would,therefore, be to adopt as unrealistic a standardas the 'breach date'.This difficulty is,however, easily overcome by selecting the datewhen the action is finally disposed of, in thesense that the decree becomes final and bindingbetween the parties after all remedies against itare exhausted. This can be achieved by the courtwhich hears the appeal providing that the date ofits decree or other proceedings in which thedecree is challenged would be the date forconversion of the foreign currency sum into Indianrupees in cases where the decree has not beenexecuted in the mean time.'
42. Eventually, in paragraph 53 of the Report, the Supreme Court concluded:-
'This then leaves us with only three dates fromwhich to make our selection, namely, the date whenthe amount became payable, the date of filing ofthe suit and the date of the judgment, that is,the date of passing the decree. It would befairer to both the parties for the Court to takethe latest of these dates, namely, the date ofpassing the decree, that is, the date of thejudgment.'
43. The learned Attorney General, however, drew our attention to paragraph 22 of the claim petition wherein the compensation claimed is in INR and is Rs.54 crores. Similarly, in paragraph 23(iv) of the claim petition, it was stated that 'the total loss to the estate of the deceased will be about 1,80,00,000 Dollars equivalent to about Rs.54 crores calculated at the rate of Rs.30/- per dollar.' Also, in the prayer clause, the Appellants have claimed 'a sum of Rs.54 Crores (Rupees Fifty Four crores) with costs and interest calculated at the rate of 18% per annum from the date of accident till realization. The said sum may be paid to petitioners 1 to 4 in US Dollars with the permission of Reserve Bank of India.'
44. Our attention was also drawn by the learned Attorney General to paragraph 70 of the Report in Forasol.
45. What was sought to be contended was that the claim of the Appellants was in INR. Consequently, the claim has to be adjudicated in INR and not in USD.
46. The Supreme Court has made it clear in paragraph 70 of the Report in Forasol that any claimant (such as the Appellants) has two alternatives available. A claimant can either claim the amount in INR or in foreign currency payable to him.
47. In the case at hand, the Appellants took the first alternative and claimed an amount in INR. If they had chosen the second alternative,
'...the proper prayer for the plaintiff to make inhis plaint would be for a decree that thedefendant do pay to him the foreign currency sumclaimed in the plaint subject to the permission ofthe concerned authorities under the ForeignExchange Regulation Act, 1973, being granted andthat in the event of the foreign exchangeauthorities not granting the requisite permissionor the defendant not wanting to make payment inforeign currency even though such permission hasbeen granted or the defendant not making paymentin foreign currency or in Indian rupees, whethersuch permission has been granted or not, thedefendant do pay to the plaintiff the rupeeequivalent of the foreign currency sum claimed atthe rate of exchange prevailing on the date of thejudgment.'
48. It was further stated by the Supreme Court that:-
'For the purposes of court-fees and jurisdictionthe plaintiff should, however, value his claim inthe suit by converting the foreign currency sumclaimed by him into Indian rupees at the rate ofexchange prevailing on the date of the filing ofthe suit or the date nearest or most nearlypreceding such date, stating in his plaint whatsuch rate of exchange is. He should further givean undertaking in the plaint that he would makegood the deficiency in the court-fees, if any, ifat the date of the judgment, at the rate ofexchange then prevailing, the rupee equivalent ofthe foreign currency sum decreed is higher thanthat mentioned in the plaint for the purposes ofcourt-fees and jurisdiction.'
49. A perusal of the claim petition shows, quite clearly, that the Appellants did not choose the second alternative. The prayer clause does not reflect acceptance of the second alternative. There was also no undertaking to pay the deficit court fee on the basis of the rate of exchange prevailing on the date of the decree.
50. The contention of learned counsel for the Appellants that his clients have given or are willing to give an undertaking at this stage has to be rejected. The claim has to be specific and the undertaking is required to be given in the first instance, and not at the appellate stage. A contrary view will, effectively, nullify the dictum of the Supreme Court in Forasol.
51. The Appellants are, thereforee, entitled to enhanced compensation on the basis that one USD equals INR 30, that is, the rate of exchange on the date of the claim petition.
52. Whether the Government permits the Appellants to convert and repatriate the amount of compensation awarded is not in issue before us. We, thereforee, say nothing about this.
53. Forasol came up for discussion in Renusagar Power Co. Ltd. v. General Electric Co., : AIR1994SC860 . The Supreme Court held in paragraph 133 of the Report that Forasol did not require reconsideration.The law, thereforee, stands settled on this score.
MULTIPLIER
54. It was contended by learned counsel for the Appellants that the multiplier arrived at by the learned MACT as well as the learned Single Judge was inadequate. The age of the deceased was about 47/48 years. His parents were still alive and their age was 69/73 years.
56. The learned MACT was of the view, after considering various decisions of the Supreme Court, that 'Ordinarily the multiplier should not exceed 16 as maximum and this will come down accordingly as the age of the deceased or that of his dependents whichever is higher goes up.' It was noted that in Susamma Thomas, the Supreme Court adopted a multiplier of 12 and the deceased therein was 39 years of age. Considering this, as well as the fact that some of the children of the deceased were not dependent on him, the learned MACT adopted a multiplier of 7 as the appropriate multiplier in the case. In doing so, the learned MACT stated that it has 'only been guided by the age of the deceased and the yield which would come by way of interest.' The learned MACT took an annual interest of USD 87,000/- if invested at 12% per annum on the capital sum arrived at.
57. The learned Single Judge, however, differed with the learned MACT in the following words:-
'There is no doubt that multiplier applied by theTribunal was far low in the facts andcircumstances of the case considering that thedeceased was 47 and that age of his parents rangedbetween 69/73 years. It is also well establishedthat a suitable multiplier was to be selected byconsidering the age of the deceased and that ofhis parents and now also by taking in regard thechart contained in the Second Schedule appended toSection 163-A of MVA which provides a guide-linefor selecting the multiplier as held by theSupreme Court in Trilok Chandra's case : (1996)4SCC362 . That being so, a multiplier of 10 wouldbe appropriate and ought to be applied in thecircumstances.'
58. Learned counsel for the Appellants relied on Section 163-A of the Act read with the Second Schedule thereof to contend that the multiplier should really be 13 and not 7 or 10.
59. Before examining this question, it is necessary to state three facts. Firstly, the Second Schedule to the Act came into effect from 14th November, 1994. The fatal accident took place on 3rd February, 1995. Thirdly, learned counsel for the Appellants flooded us with judgments relating to the multiplier to be adopted but only two of them advert to the Second Schedule to the Act. These decisions are Rattan Lal Mehta v. Rajinder Kapoor Delhi and U.P. State Road Transport Corporation & Ors. v. Trilok Chandra & Ors., : (1996)4SCC362 .
60. In Trilok Chandra, the fatal accident occurred in 1977. However, the Supreme Court did deal with the Second Schedule to the Act and held in paragraph 18 of the Report as follows:-
'We must at once point out that the calculation ofcompensation and the amount worked out in theSchedule suffer from several defects... ...To putit briefly the table abounds in such mistakes.Neither the tribunals nor the courts can go by theready reckoner. It can only be used as a guide.Besides, the selection of multiplier cannot in allcases be solely dependant on the age of thedeceased. For example, if the deceased, abachelor, dies at the age of 45 and his dependantsare his parents, age of the parents would also berelevant in the choice of the multiplier. Butthese mistakes are limited to actual calculationsonly and not in respect of other items. What wepropose to emphasise is that the multiplier cannotexceed 18 years purchase factor. This is theimprovement over the earlier position thatordinarily it should not exceed 16.'
61. In Rattan Lal Mehta, a Division Bench of this Court (to which one of us, Anil Dev Singh, J. was a party) held in paragraphs 38 and 39 of the Report that:
'38. If the above procedure enunciated by usbased on the statutory multiplier provided byParliament is applied, we can steer clear ofconflicts in the multipliers applied by courts onthe judicial side in several cases. This approachof ours will help in rationalising awards, removead hocism in selection of multipliers based onindividual preferences.A whole range ofdiscrimination between case and case can easily beavoided. That is why we have taken pains to givereasons as to why the statutory multiplier Tableprovided for prospective use can also be used foraccidents which occurred before 14.11.1994.
39. In fact, if ad hoc multipliers like 26, etc.,are used for pre-14.11.1994 accidents and onlymaximum multiplier of 18 as per the Table is boundto be used for post-14.11.1994 accidents, therewill be undue overpayment in regard to accidentsprior to 14.11.1994 i.e., in the seventies oreighties, when survival rates were far less thanin 1994. Our view will eliminate any suchanomaly.'
62. The facts of the present case show that the deceased was 47/48 years of age. His parents were still alive and aged 69/73 years. One has to take a pragmatic view of life expectancy based on the available evidence. There is nothing on record which suggests, or tends to suggest, that the deceased would have prematurely passed away, despite the accident.
63. In this view of the matter, we see no justification for denying to the Appellants the benefit of the maximum multiplier (relevant to the age of the deceased) in the Second Schedule to the Act. We, thereforee, hold that the appropriate multiplier in this case will be 13 as contended by learned counsel for the Appellants.
64. Our view is supported by two recent decisions of the Supreme Court.
65. In Kaushnuma Begum, the Supreme Court considered a claim made in respect of a death which occurred in 1986. Notwithstanding this, the Supreme Court stated in paragraph 22 of the Report that:
'In calculating the amount of compensation in thiscase we lean ourselves to adopt the structuredformula provided in the Second Schedule of the MVAct. Though it was formulated for the purpose ofSection 163A of the MV Act, we find it a saferguidance for arriving atthe amount ofcompensation than any other method so far as thepresent case is concerned.'
Similarly, in Oriental Insurance Co. Ltd. v. Hansrajbai V. Kodala & Ors., : [2001]2SCR999 the Supreme Court described the structured formula provided in the Second Schedule to the Act as being 'based on relevant criteria for determining compensation and the procedure of paying compensation after determining the fault is done away.' (Paragraph 15 of the Report). The Supreme Court also had no quarrel with the various views expressed when Section 163-A (and, thereforee, the Second Schedule to the Act) was brought into effect that, in regard to payment of compensation, it was 'more liberal and rational.'
66. We are conscious of the fact that in Oriental Insurance Co. Ltd., the Supreme Court has limited the benefit that can be availed of by a claimant 'only by restricting his claim on the basis of income at a slab of Rs.40,000 which is the highest slab in the Second Schedule which indicates that the legislature wanted to give benefit of no-fault liability to a certain limit'. (paragraph 15 of the Report).
67. But, once the principles laid down in the Second Schedule to the Act (subject to some arithmetical anomalies) are accepted as 'rational' and 'based on relevant criteria' and 'a safer guidance for arriving at the amount of compensation,' we see no reason to reject the multiplier prescribed therein. This is all the more so when the Supreme Court has accepted the principles laid down in the Second Schedule to the Act in Kaushnuma Begum and a Division Bench has also accepted these principles in Rattan Lal Mehta. Both these cases pertained to a fatal accident before 14th November, 1994.
68. It is true that in Trilok Chandra, the Supreme Court said that the Second Schedule 'can only be used as a guide.' But in the absence of a more 'rational' or a 'safer' guide, it is not possible to completely ignore the multiplier prescribed therein.
69. The learned MACT arrived at a multiplier of 7 based on the age of the deceased and the yield that would come to the Appellants by way of interest quantified at USD 87,000/-. We are of the view that the learned MACT erred, with respect, in its approach to the question. Provision for the age of a person, deceased in a road accident, has been taken care of by Parliament while accepting the Second Schedule to the Act. Similarly, Parliament has (so we are entitled to assume) considered the yield that would accrue to the dependents of a person deceased in an accident. It is after taking all these factors into consideration that Parliament fixed a multiplier depending on the age of the deceased.
70. There is also nothing on record to show that the Appellants will earn interest in America at 12% per annum on the compensation awarded. thereforee, the supposed yield of USD 87,000 is entirely hypothetical.
71. Insofar as the learned Single Judge is concerned, he proceeded on the basis that the Second Schedule to the Act merely provides a guideline for selecting a multiplier. This view of the learned Single Judge is undoubtedly correct as held in Trilok Chandra. We are, however, of the view that the learned Single Judge erred, with respect, in not adhering to this guideline, in as much as there was no evidence to hold that a multiplier less than 13 ought to have been accepted. It is for this reason that we beg to differ with the learned Single Judge on this score.
DEPENDENCY
72. Another issue raised in this case was with regard to the dependency of the Appellants. The learned MACT held that:-
'Nothing was brought on record to show that thedeceased was spending a particulate (sic) sum ofthe education/expenses of his children besides theallowances being made by him for his wife. In theabsence of these details it has rather becomedifficult to ascertain the pecuniary loss sufferedby each member of the family of the deceased onaccount of his death. However, keeping in viewthe American life style to which the deceased hadalso subscribed to, as he had borrowed asubstantial money for purchase of house, hospitaland possibly for car/furniture etc. It would bereasonable to hold that the assumptions that thedeceased might be spending one-third of his totalincome on his own upkeep and the remainingtwo-third on the upkeep of his family cannot applyin this case.'
Reliance was placed by the learned MACT on a decision of the Punjab & Haryana High Court in the case of Vijay Chopra & Ors. v. Udhai Singh & Ors., 1989 ACJ 589. That case related to the death of a British national of Indian origin. For awarding compensation, the High Court took into consideration the cost of living in Great Britain and assumed 'that the deceased was spending 50 per cent of his income for his maintenance'.
73. Partly using this decision as a basis, the learned MACT concluded:-
'In the present case, however, apart from the highcost of living in America, allowance has also beto given to the American life style of spending inthe present by deferred payments. Having given mycareful and anxious thoughts to all these facts, Iam of the considered opinion that in the presentcase, it must be held that the deceased wasapplying two-third of his actual income on his ownupkeep/pleasures and on the payment of debtsincurred by him for various purposes as notedabove. That left the deceased with one-third ofhis actual income which we may assume was beingapplied towards the upkeep of the peters (sic).This would thus be the loss of dependency to thepeters. (sic)'
74. The learned Single Judge rejected this view of the learned MACT and held that it had 'unnecessarily diverted to the American life style to presume that an American national was spending more on himselfand less on his family/dependents.' It was further held that the learned MACT 'had devolved into American life style for nothing to propound a new formula/method applicable to foreign nationals who become accident victims in this country.' The learned Single Judge then concluded that the view of the learned MACT merits rejection as being '...a specious thesis of hi-fi American life style.' The learned Single Judge consequently held that only one-third deduction could be made for self-expenses.
75. In Susamma Thomas, the Supreme Court held that 'In the absence of evidence it is not unusual to deduct one-third of the gross income towards the personal living expenses and treat the balance as the amount likely to have been spent on the members of the family and the dependents.'
76. Learned counsel for the Appellants submitted, with reference to American Jurisprudence Volume 22A that self-expenses in America were deducted at a rate between 15% and 29%. This has, according to learned counsel, been noticed by the learned Single Judge in the impugned judgment and order but no conclusion has been expressed in this regard. The material available to us in this regard is too tenuous to come to any firm conclusion.
77. Apart from the view expressed by the Supreme Court in Susamma Thomas, we also find that the Second Schedule to the Act lays down a guideline for determining what are called self-expenses. In the note below the Second Schedule, it is stated as follows:
'Note: The amount of compensation so arrived atin the case of fatal accident claims shall bereduced by 1/3rd in consideration of the expenseswhich the victim would have incurred towardsmaintaining himself had he been alive.'
78. There is, thereforee, sufficient judicial and statutory material to conclude that the deceased would have spent only 1/3rd of his income on his maintenance. If the case of the Insurance company was that he spent more than 1/3rd on his maintenance, it was required to prove this fact. The onus for proving an expenditure higher than 1/3rd was entirely on the Insurance company. No evidence was led by the Insurance company on this score. Consequently, the presumption laid down by the Supreme Court in Susamma Thomas read with the guideline given in the note to the Second Schedule to the Act will be fully applicable.
79. The learned Single Judge was right in holding that we cannot import our little knowledge of the so-called American life style to make a judicial pronouncement which is not supported by cogent evidence. We, thereforee, respectfully disagree with the assumption made by the Punjab & Haryana High Court in Vijay Chopra.
80. There are two other factors which require consideration so far as this aspect of the case is concerned. The first is that the deduction of 1/3rd is being made from the net income of the deceased and not from his gross income which was USD 900,000. This factor would, by itself, make a material difference in the quantum of compensation to be awarded.
81. The second factor is that a person is fully entitled to effect savings for a rainy day. In the present case, savings were made towards insurance and social security benefits. The fact that the Appellants are subsequently required to beat back a storm by relying on those very savings, cannot be used to deny them adequate compensation. After all, the savings were made for such an eventuality, though unforeseen at that time. We find it difficult to accept the proposition that the more one saves, the lesser will be the entitlement of his legal representatives to compensation.
82. Reference may also be usefully made to Helen C. Rebello (Mrs.) & Ors. vs. Maharashtra State Road Transport Corporation & Ors., : AIR1998SC3191 . In that case the question raised was one of 'great importance'. The question was framed in paragraph 2 of the Report as follows:-
'The question is, whether the life insurance moneyof the deceased is to be deducted from theclaimants' compensation receivable under the MotorVehicles Act, 1939'.
83. After considering various aspects of the case, the Supreme Court in paragraph 33 of the Report held as under:-
'If the words 'pecuniary advantage' from whateversource are to be interpreted to mean any form ofdeath under this Act, it would dilute all possiblebenefits conferred on the claimant and would becontrary to the spirit of the law. If the'pecuniary advantage' resulting from death meanspecuniary advantage coming under all forms ofdeath then it will include all the assetsmoveable, immoveable, shares, bank accounts, cashand every amount receivable under any contract.In other words, all heritable assets includingwhat is willed by the deceased etc. This wouldobliterate both, all possible conferment ofeconomic security to the claimant by the deceasedand the intentions of the legislature. By such aninterpretation, the tortfeasor in spite of hiswrongful act or negligence, which contributes tothe death, would have in many cases no liabilityor meagre liability.'
84. Thereafter, in para 35 of the Report the Supreme Court considered the question about receipt of provident fund in the case of accidental death and family pension received otherwise than in an accidental death. Eventually while dealing with life insurance, cash, bank balance, shares, fixed deposits etc. the Supreme Court held as follows:-
'Similarly, life insurance policy is receivedeither by the insured or the heirs of the insuredon account of the contract with the insurer, forwhich the insured contributes in the form ofpremium. It is receivable even by the insured ifhe lives till maturity after paying all thepremiums. In the case of death, the insurerindemnifies to pay the sum to the heirs, again interms of the contract for the premium paid.Again, this amount is receivable by the claimantnot on account of any accidental death butotherwise on the insured's death. Death is only astep or contingency in terms of the contract, toreceive the amount. Similarly any cash, bankbalance, shares, fixed deposits, etc. though areall a pecuniary advantage receivable by the heirson account of one's death but all these have nocorrelation with the amount receivable under astatute occasioned only on account of accidentaldeath. How could such an amount come within theperiphery of the Motor Vehicles Act to be termedas 'pecuniary advantage' liable for deduction.When we seek the principle of loss and gain, ithas to be on a similar and same plane havingnexus, inter se, between them and not to whichthere is no semblance of any correlation. Theinsured (deceased) contributes his own money forwhich he receives the amount which has nocorrelation to the compensation computed as againstthe tortfeasor for his negligence on account ofthe accident. As aforesaid, the amount receivableas compensation under the Act is on account of theinjury or death without making any contributiontowards it, then how can the fruits of an amountreceived through contributions of the insured bededucted out of the amount receivable under theMotor Vehicles Act.'
85. Consequently, the Supreme Court answered the question posed by holding that amounts paid or payable under a life insurance policy are not deductible from the compensation computed under the Motor Vehicles Act, 1939.
86. The learned Attorney General had some doubt about the correctness of this view of the Supreme Court. While we are obliged to follow the view expressed by the Supreme Court, we leave this question open (on the specific request of the learned Attorney General) to enable him to agitate this issue before the Supreme Court.
87. We only need say that we are not persuaded to take a different view with regard to the interpretation of the Act. Apart from the conclusive reasons given by the Supreme Court, it has also been held in Rebello that the Motor Vehicles Act, 1939 (which was replaced by the Act) is a beneficial legislation. Consequently, it has to be liberally construed. Moreover, the language of Section 110-B of the Motor Vehicles Act, 1939 which was under consideration in Rebello is more or less similar to Section 168(1) of the Act.
88. Reference to the income tax returns of the deceased is really with the intention of showing his income, rather than an attempt to show what he spent on himself. Looked at in this light, one can gather the income of the deceased (which is not seriously disputed). The law requires us to deduct 1/3rd thereof towards self-expenses (unless there is something to the contrary).
89. Keeping this salutary formula in mind, and in the absence of anything which may suggest otherwise, we are inclined to accept the dependency of the Appellants as being 2/3rd of the income of the deceased.
MAINTAINABILITY OF APPEAL BY INSURANCE COMPANY
90. The last issue raised in this case is with regard to the maintainability of the appeal filed by the Insurance company. It is contended that the Insurance company had failed to take any of the statutory defenses available to it under Section 149 of the Act and, thereforee, could not be treated as a person aggrieved.
91. This may be so. However, it is worthwhile to recall that the Insurance company was given permission by the learned MACT to contest the case by an order dated 30th September, 1997. This order was not challenged by the Appellants by instituting any proceedings.
92. Even the learned Single Judge while dealing with the appeal filed by the Insurance company (FAO No.366/1998), was of the view that the preliminary objection taken by the Appellants regarding the maintainability of the appeal 'casts thick cloud'. Notwithstanding this, the learned Single Judge dealt with the appeal of the Insurance company on merits.
93. We are of the view that the facts of this case are somewhat peculiar. The Insurance company was permitted to contest the claim petition by the learned MACT despite any alleged statutory prohibition. This permission was not challenged by the Appellants. The learned Single Judge also dealt with the appeal of the Insurance company on merits. Consequently, it may not be appropriate for us (in virtually a second appeal) to non-suit the Insurance company on the ground of the maintainability of its appeal. It is in this light that we have dealt with the various submissions made by learned counsel for the Appellants as well as by the learned Attorney General appearing on behalf of the Insurance company.
94. We are conscious of the fact that a lack of jurisdiction will straightaway non-suit the Insurance company. We have, however, been told that this case involves the highest compensation ever to have been claimed in this country. We have, thereforee, felt it more prudent to tread cautiously, and weigh all aspects of the case, rather than base our decision on an objection about the maintainability of the appeal. Moreover, by their conduct, the Appellants appear to have acquiesced in the Insurance company contesting their claim.
95. Consequently, we are of the view that the Insurance company ought to have been (and was) heard on the merits of the case.
96. We conclude, thereforee, by holding that the learned Single Judge was right in correcting the carry-home income of the deceased to USD 339,445. The deduction towards self-expenses of the deceased could only be 1/3rd of this amount and, thereforee, the dependency of the Appellants works out to USD 226,297 per annum. Since we have accepted the multiplier as 13, the compensation amount would come to USD 2,941,861 (226,297x13). We are also of the view that the learned Single Judge rightly refused to deduct USD 322,900 on account of social security benefits and life insurance. The Appellants have already received USD 398,576 out of the total amount. The balance due to the Appellants is, thereforee, (2,941,861 - 398,576) USD 2,543,285. The conversion rate for USD to INR will be taken as Rs.30/- per USD, which was the rate prevailing when the claim petition was filed. The Appellants, of course, will not be entitled to any interest on the amounts which they have already withdrawn. The Appellants will be entitled to 12% interest on the enhanced amount. There is no dispute with regard to the ratio in which the amounts are required to be paid to the Appellants.
97. The Insurance company is given four weeks time to deposit the amount calculated by us before the learned MACT which will then disburse the amount to the Appellants. The Appellants will be entitled to apply to the appropriate authorities for converting the amount deposited by the Insurance company into USD. The parties should appear before the learned MACT on 20th November, 2001.
98. Consequently, LPA No.179/2001 is allowed. LPA No.225/2001 is dismissed. LPA No.236/2001 is partly allowed.
99. Under the circumstances, there will be no order as to costs.