Munusamy Vs. The Managing Director, Tamil Nadu State Transport Corporation (Villupuram) Ltd. - Court Judgment

SooperKanoon Citationsooperkanoon.com/1192857
CourtSupreme Court of India
Decided OnFeb-09-2018
Case Number10034 / 2016
JudgeHON'BLE THE CHIEF JUSTICE, HON'BLE MR. JUSTICE A.M. KHANWILKAR, HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
AppellantMunusamy
RespondentThe Managing Director, Tamil Nadu State Transport Corporation (Villupuram) Ltd.
Advocates:G. Indira
Excerpt:
1 reportable           in the supreme court of india civil appellate jurisdiction civil appeal no.1754 of 2018 (arising out of slp (civil) no.12416 of 2016) munusamy & ors.                          versus ….   appellants the managing director, tamil nadu state    transport corporation (villupuram) ltd. ….respondent j u d g m e n t 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 2 that   the   high   court   has   not   provided   for   future   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.1, to 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   employment,   the tribunal rightly has taken the earning of the deceased at rs.4,000/­ per month and deducted 50% towards personal expenses since the deceased were bachelors. however, the proper multiplier to be adopted in the case must be 18, since the deceased were 21 and 20 years respectively. a sum of rs.20,000/­ to each of the claimants towards loss of love and   affection   and   a   further   sum   of   rs.5,000/­   towards transport expenses were granted.  accordingly, in c.m.a. no.2819 of 2012 compensation 9. payable would be as follows: (a) (b) (c) (d) loss of dependency  (rs.4,000/­×12×18) loss of love and affection  transport funeral rs.4,32,000/­ rs.   60,000/­  5,000/­ rs. rs.  2,000/­ 1 air 2017 sc 5157  3 (e) loss of estate rs.  2,500/­ total = rs.5,01,500/­”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 dependency’. the necessity to provide future prospects has been expounded by the constitution 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 apply the said principle to the self­employed 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   determination   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  sweep  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 acceptable   certainty.   but   to   state   that   the   legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the   purpose   of   computation   of   compensation   would   be inapposite.   it   is   because   the   criterion   of   distinction 4 between the two in that event would be certainty on the one hand and staticness on the other. one may perceive that   the   comparative   measure   is   certainty   on   the   one hand and uncertainty on the other but such a perception is fallacious. it is because the price rise does affect a self­ employed   person;   and   that   apart   there   is   always   an incessant effort to enhance one’s income for sustenance. the   purchasing   capacity   of   a   salaried   person   on permanent   job   when   increases   because   of   grant   of increments and pay revision or for some other change in service   conditions,   there   is   always   a   45   competing attitude in the private sector to enhance the salary to get better efficiency from the employees. similarly, a person who is self­employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities.   to   have   the   perception   that   he   is   likely   to remain   static   and   his   income   to   remain   stagnant   is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and   change   with   the   time.   though   it   may   seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of   a   person   having   a   permanent   job,   yet   the   said perception  does not really deserve acceptance. 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   who claim on behalf of the deceased who had a permanent job   than   a  person  who   is  self­employed  or  on  a   fixed salary. but not to apply the principle of standardization on the foundation  of perceived  lack of certainty would tantamount   to   remaining   oblivious   to   the   marrows   of ground reality. and, therefore, degree­test is imperative. unless the degree­test is applied and left to the parties to adduce   evidence   to   establish,   it   would   be   unfair   and inequitable.   the   degree­test   has   to   have   the   inbuilt concept of 46 percentage. taking into consideration the cumulative   factors,   namely,   passage   of   time,   the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of 5 life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 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 addition 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.  (iv) in case the deceased was self­employed or on a fixed salary,   an   addition   of   40%   of   the   established   income should be the warrant where the deceased was below the   age   of   40   years.   an   addition   of   25%   where   the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. the established income 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. tn­22 ap 5092 along with his friend, 6 one   haridass   as   a   pillion   rider,   from   tambaram   to chengalpattu   on   gst   road,   maraimalai   nagar,   opposite vikram   hotel,   when   they   collided   with   a   bus   bearing registration no. tn­21 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 grant 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   time   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 present 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 7 lakh four thousand eight 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 corporation 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 the court of additional district   &   sessions   judge,   fast   track   court­iv,   chennai (motor accident claims tribunal, chennai).  7. in   other   words,   the   compensation   payable   to   the appellants would be as follows: (a) (b) (c) (d) (e) loss of dependency  [rs.5,600 – 50% of 5600)×12×18]. loss of love and affection  transport funeral loss of estate total = rs.6,04,800/­ rs.   60,000/­   5,000/­ rs. rs.   2,000/­ rs.   2,500/­ rs.6,74,300/­ 8 8. as a result, the appeal stands allowed. the compensation 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 months towards meeting the needs of the minor. upon turning  18,  the  minor  appellant is  entitled  to withdraw  her respective share.  9 9.      accordingly,   the   appeal   is   allowed   in   the aforementioned terms with no order as to costs.    .………………………….cji.         (dipak misra)           …………………………..….j.       (a.m. khanwilkar)          new delhi; february 09, 2018. …………………………..….j.(dr. d.y. chandrachud)
Judgment:

1 REPORTABLE           IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1754 OF 2018 (Arising out of SLP (Civil) No.12416 of 2016) Munusamy & Ors.                          Versus ….   Appellants The Managing Director, Tamil Nadu State    Transport Corporation (Villupuram) Ltd. ….Respondent J U D G M E N T 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 2 that   the   High   Court   has   not   provided   for   future   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.1, to 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   employment,   the Tribunal rightly has taken the earning of the deceased at Rs.4,000/­ per month and deducted 50% towards personal expenses since the deceased were bachelors. However, the proper multiplier to be adopted in the case must be 18, since the deceased were 21 and 20 years respectively. A sum of Rs.20,000/­ to each of the claimants towards loss of love and   affection   and   a   further   sum   of   Rs.5,000/­   towards transport expenses were granted.  Accordingly, in C.M.A. No.2819 of 2012 compensation 9. payable would be as follows: (a) (b) (c) (d) Loss of Dependency  (Rs.4,000/­×12×18) Loss of love and affection  Transport Funeral Rs.4,32,000/­ Rs.   60,000/­  5,000/­ Rs. Rs.  2,000/­ 1 AIR 2017 SC 5157  3 (e) Loss of estate Rs.  2,500/­ Total = Rs.5,01,500/­”

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 dependency’. The necessity to provide future prospects has been expounded by the Constitution 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 apply the said principle to the self­employed 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   determination   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  sweep  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 acceptable   certainty.   But   to   state   that   the   legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the   purpose   of   computation   of   compensation   would   be inapposite.   It   is   because   the   criterion   of   distinction 4 between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that   the   comparative   measure   is   certainty   on   the   one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self­ employed   person;   and   that   apart   there   is   always   an incessant effort to enhance one’s income for sustenance. The   purchasing   capacity   of   a   salaried   person   on permanent   job   when   increases   because   of   grant   of increments and pay revision or for some other change in service   conditions,   there   is   always   a   45   competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self­employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities.   To   have   the   perception   that   he   is   likely   to remain   static   and   his   income   to   remain   stagnant   is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and   change   with   the   time.   Though   it   may   seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of   a   person   having   a   permanent   job,   yet   the   said perception  does not really deserve acceptance. 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   who claim on behalf of the deceased who had a permanent job   than   a  person  who   is  self­employed  or  on  a   fixed salary. But not to apply the principle of standardization on the foundation  of perceived  lack of certainty would tantamount   to   remaining   oblivious   to   the   marrows   of ground reality. And, therefore, degree­test is imperative. Unless the degree­test is applied and left to the parties to adduce   evidence   to   establish,   it   would   be   unfair   and inequitable.   The   degree­test   has   to   have   the   inbuilt concept of 46 percentage. Taking into consideration the cumulative   factors,   namely,   passage   of   time,   the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of 5 life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 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 addition 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.  (iv) In case the deceased was self­employed or on a fixed salary,   an   addition   of   40%   of   the   established   income should be the warrant where the deceased was below the   age   of   40   years.   An   addition   of   25%   where   the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income 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. TN­22 AP 5092 along with his friend, 6 one   Haridass   as   a   pillion   rider,   from   Tambaram   to Chengalpattu   on   GST   Road,   Maraimalai   Nagar,   opposite Vikram   Hotel,   when   they   collided   with   a   bus   bearing Registration No. TN­21 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 grant 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   time   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 present 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 7 lakh four thousand eight 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 Corporation 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 the Court of Additional District   &   Sessions   Judge,   Fast   Track   Court­IV,   Chennai (Motor Accident Claims Tribunal, Chennai).  7. In   other   words,   the   compensation   payable   to   the appellants would be as follows: (a) (b) (c) (d) (e) Loss of Dependency  [Rs.5,600 – 50% of 5600)×12×18]. Loss of love and affection  Transport Funeral Loss of estate Total = Rs.6,04,800/­ Rs.   60,000/­   5,000/­ Rs. Rs.   2,000/­ Rs.   2,500/­ Rs.6,74,300/­ 8 8. As a result, the Appeal stands allowed. The compensation 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 months towards meeting the needs of the minor. Upon turning  18,  the  minor  appellant is  entitled  to withdraw  her respective share.  9 9.      Accordingly,   the   appeal   is   allowed   in   the aforementioned terms with no order as to costs.    .………………………….CJI.         (Dipak Misra)           …………………………..….J.

       (A.M. Khanwilkar)          New Delhi; February 09, 2018. …………………………..….J.

(Dr. D.Y. Chandrachud)