Motor Vehicles Act, 1988 – Compensation– Income of deceased, fixed considering minimum wages notification – Indian Evidence Act, 1872 – s.57 – Kerala Motor Transport Workers’ Payment of Fair Wages Act, 1971 – s.2 – Deceased met with a fatal accident in 2015 while riding his motorcycle, offending car was insured by respondent-Insurance Company – Tribunal fixed the total compensation of loss of dependency along with other heads at Rs. 32,39,000/- – High Court reduced the compensation to Rs. 19,70,000/- – On appeal, held: There exists sufficient evidence to show that the Deceased was a fish vendor-cum-driver with a valid license – No reason to doubt that he was a driver at the time of his death – In the absence of a salary certificate, the minimum wages notification along with some amount of guesswork that is not completely detached from reality shall act as a yardstick to determine the income of the deceased – Thus, judicial notice of the Kerala Fair Wages Act taken which classifies a driver as a “Skilled worker” – Reading this in conjunction with Notification prescribing minimum wages for skilled worker, that came into effect from 01.01.15 amending the Kerala Fair Wages Act, a ‘driver’ in Kerala earned a minimum of Rs. 15,600/- in 2015 – Thus, final notional income of the Deceased fixed at Rs.15,600 /- (Rs. 1,87,200/- p.a) – Since the Deceased was 32 years old at the time of his death, the multiplier applied is 16 – 40% of increase for future prospects added as he was self-employed – One-third of the Deceased’s income deducted towards his personal expense as he had three dependents – Hence, the compensation payable to the appellants under the head of loss of dependency is Rs.27,95,520/- – Upon adding the remaining amount granted by High Court under different heads, the total compensation comes to Rs. 29,73,520/-, to be paid by Insurance Company with 9% interest.
Motor Vehicles Act, 1988 – s.168 – Held: s.168 makes it imperative to grant compensation that appears to be just – Adequate compensation is considered to be fair and equitable compensation – Courts shoulder the responsibility of deciding adequate compensation on a case-to-case basis.
Motor Vehicles Act, 1988 – Just compensation – Factors to be established – Held: As laid down in Sarla Verma and Ors. v. DTC and Ors., the three factors are: (a) age of the deceased; (b) income of the deceased; and (c) the number of dependents.
Motor Vehicles Act, 1988 – Compensation – Loss of dependency – Issues to be determined by Tribunal – Held: The issues that are to be determined to arrive at the loss of dependency areadditions/deductions to be made for arriving at the income; the deduction to be made towards the personal living expenses of the deceased; and the multiplier to be applied with reference to the age of the deceased.
Motor Vehicles Act, 1988 – Compensation under non-conventional heads, if to be granted – Plea of Insurance Company that the High Court ought not to have granted any compensation to the appellants, under the ‘non-conventional heads’ which is impermissible as per the dictum of Supreme Court in Pranay Sethi – Held: Insurance Company chose not to file any appeal against the judgment of the High Court – Having acquiesced, the Insurance Company cannot turn around and question a paltry amount of compensation awarded under the said head – However, question of law kept open.
Partly allowing the appeal, the Court
HELD: 1.1 While determining compensation under the Motor Vehicles Act, 1988, section 168 of the Act makes it imperative to grant compensation that appears to be just. The Act being a social welfare legislation operates through economic conception in the form of compensation, which renders way to corrective justice. Compensation acts as a fulcrum to bring equality between the wrongdoer and the victim, whenever the equality gets disturbed by the wrongdoer’s harm to the victim. It also endeavors to make good the human suffering to the extent possible and to also save families which have lost their breadwinners from being pushed to vagrancy. Adequate compensation is considered to be fair and equitable compensation. Courts shoulder the responsibility of deciding adequate compensation on a case-to-case basis. However, it is imperative for the courts to grant such compensation which has nexus to the actual loss. This Court, in the case of Sarla Verma and Ors. v. DTC and Ors., laid down an objective formula for calculating just compensation. According to the dictum, the three factors that need to be established are: (a) age of the deceased;
(b) income of the deceased; and (c) the number of dependents. Further, the issues that are to be determined by the Tribunal to arrive at the loss of dependency are: (i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased.” The purpose of standardising these determinants was to bring uniformity to the decisions and settle claims without delay. Applying the parameters to the instant case, there exists sufficient evidence to show that the Deceased, undoubtedly, was a fish vendor-cum-driver with a valid license. The certificate issued by the Kerala Motor Transport Workers Welfare Fund Board, certifying the Deceased as the driver of light moto goods vehicle bearing Registration No. KL-36-B-7822 under the ownership of one ‘P’ has been proved on record. Further, the Deceased had also paid all his subscriptions to the Board from April 2012 until the month he died. The Court find no reason to doubt that the Deceased was a driver at the time of his death. In the absence of a salary certificate, the minimum wages notification along with some amount of guesswork that is not completely detached from reality shall act as a yardstick to determine the income of the deceased. In this context, keeping in view the import of section 57 of the Indian Evidence Act, 1872, judicial notice is taken of the provisions of the Kerala Fair Wages Act, especially section 2 thereof. [Paras 16-19][464-C-G; 465-A-C]
Chandra Alias Chanda Alias Chandraram and Anr. v. Mukesh Kumar Yadav and Ors. (2022) 1 SCC 198 : 2021 (9) JT 442 – relied on.
1.2 Schedule B-Category III of the Kerala Fair Wages Act classifies a driver as a “Skilled worker”. Reading this in conjunction with the Notification that came into effect from 01.01.2015 which amended Schedule A of the Kerala Fair Wages Act, prescribing a minimum pay scale of the workers listed in Schedule B, it is apparent that a ‘driver’ in Kerala earned a minimum of Rs. 15,600/- in 2015. It appears that the aforesaid Act and the notification issued thereunder were not brought to the notice of the Tribunal or the High Court. As a result thereto, the High Court could not be cognizant of the statutory mandate prescribing minimum wages for a skilled worker like ‘driver’, and thus, erred in fixing the income of the Deceased at Rs.10,000/-. The final notional income of the Deceased must thus be fixed at Rs.15,600/- (Rs.1,87,200/- per annum). Since the Deceased was of 32 years old at the time of his death, the multiplier applicable in the instant case would be 16, and 40% of increase for future prospects deserves to be added as the Deceased was self-employed. One-third of the Deceased’s income would be deducted towards his personal expense as he had three dependents. Hence, the compensation payable to the Appellants under the head of loss of dependency would amount to Rs.27,95,520/- (Rs. 15,600 x 140/100 x 12 x 16 x 2/3). Upon adding the remaining amount granted by the High Court under different heads, the total compensation granted to the Appellant comes to Rs. 29,73,520/- (Rs.27,95,520/- + Rs. 1,78,000/-). [Paras 20-22, 25][466-B-D, F-G; 467-C]
Ramachandrappa v. Manager, Royal Sundaram
Alliance Insurance Company Ltd. (2011) 13 SCC 236 : [2011] 9 SCR 922; Syed Sadiq and Ors. v. Divisional Manager, United India Insurance Co. Ltd. (2014) 2 SCC
735 : 2014 (1) JT 569 National Insurance Co. Ltd. v. Pranay Sethi and Ors. (2017) 16 SCC 680 : [2017] 13 SCR 100; Cholamandalam M/s General Insurance
Company Ltd. V. Aarifa & Ors. Civil Appeal No. 6020/2019 vide order dt. 01.08.2019; The New India Assurance Co. Ltd. V. Somwati & Ors SLP (Civil) Diary No. 30766/2019 vide order dt. 24.09.2019; Sarla Verma and Ors. v. DTC and Ors. (2009) 6 SCC 121 : [2009] 5 SCR 1098 – referred to.
See Gregory C. Keating, ‘Distributive and Corrective Justice in the Tort Law of Accidents’ (2000) 74 S Cal L Rev 193 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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