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CASE NO.:

Appeal (civil) 3670 of 2002

Appeal (civil) 3671 of 2002

PETITIONER:

H.S.AHAMMED HUSSAIN & ANR.

Vs.

RESPONDENT:

IRFAN AHAMMED & ANR.

DATE OF JUDGMENT: 09/07/2002

BENCH:

R.C.LAHOTI, B.N.AGRAWAL.

JUDGMENT:

Maqbool Pasha & Anr.Vs.

Irfan Ahammed & Anr.

J U D G M E N T

B.N.AGRAWAL, J.

Leave granted.

By the impugned judgments rendered by Karnataka High Court in two

separate appeals jointly preferred by the insurer as well as the insured, the same

have been partly allowed and compensation awarded by the Motor Accident

Claims Tribunal has been reduced viz. in one case from Rs. 3,13,000/- to

Rs. 1,71,000/- and in another from Rs. 3,49,000/- to Rs. 1,83,000/-. While

disposing of the appeals, the High Court directed that out of the compensation

awarded, 25% shall be payable to fathers of the respective victims and 75% to

their mothers together with proportionate interest. It was further directed that out

of the amount of compensation payable to the mothers of the victims,

Rs. 50,000/- shall be kept in fixed deposit in a nationalised bank for a period of

five years with liberty to draw the interest.

The short facts are that one Irfan Ahammed-respondent No. 1 owned a

lorry bearing No. CNG-6409 and Vazeer Ahamed and Rafeeq Ahamed , sons of

the appellants of these appeals were working as a coolie therein. On Ist June,

1996, when respondent No. 1 was driving the said vehicle in which the aforesaid

two persons were also travelling as coolie, the same met with an accident at

10.00 a.m. as a result of rash and negligent driving of the respondent No.1

resulting into the deaths of Vazeer and Rafeeq, for which two claims petitions

were filed before the Motor Accident Claims Tribunal by parents of each of the

victims for awarding compensation in their favour on account of death of their

sons under the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act').

Age of victim Rafeeq was 21 years and his father's age was 45 years whereas

that of his mother was 40 years. The age of another victim Vazeer was 22 years

and that of his father and mother was 53 years and 45 years respectively at the

time of the accident. The claimants in both the petitions claimed the income of

their respective sons to be Rs. 4500/- per month. The claim was contested by

the owner as well as the insurance company on grounds, inter alia, that the

accident had not taken place on account of any rash or negligent act on the part

of the owner in driving the vehicle. Both the cases were heard together. On

behalf of the claimants, two witnesses were examined. Father of Rafeeq was

examined as PW1 and that of Vazeer as PW2 and in their evidence, they stated

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that the monthly income of their sons was Rs. 3,000/-. The owner of the vehicle

was examined as RW1 who, in his deposition, denied payment of Rs. 3,000/- per

month to each of the victims. The Tribunal by a common judgment having found

the income of each of the victims to be Rs. 3,000/- per month, awarded

compensation to the tune of Rs. 3,49,000/- in favour of the parents of Rafeeq and

Rs. 3,13,000/- in favour of those of Vazeer together with interest thereon at the

rate of 6% per annum from the date of filing of the petition till realisation. Two

different appeals were preferred before the High Court against awards of the

Tribunal and each of the appeals was jointly filed by insurer as well as the

insured. The High Court was of the view that the evidence in relation to income

of the two victims was neither reliable nor satisfactory but found their income to

be Rs. 18,000/- per annum which was little more than Rs. 1500/- per month that

was prescribed as notional income as a non-earning person under the Second

Schedule to the Act. After deducting 1/3rd towards personal and living expenses

of the deceased, the contribution towards family was assessed at Rs. 12,000/-

per annum. According to the High Court in selecting multiplier, the age of

younger out of the two parents was required to be taken into consideration. As

the age of the mother of Rafeeq was found to be 40 years, the High Court held

that the multiplier to be applicable was 14 and compensation was reduced to Rs.

1,83,000/- from Rs. 3,49,000/-. So far Vazeer is concerned, as the age of his

mother was found to be 45 years, it was held that the multiplier applicable would

be 13 and consequently the compensation awarded by the Tribunal to the tune of

Rs. 3,13,000/- was reduced to Rs. 1,71,000/-. It was directed that 25% of

compensation shall be paid to the father of each of the victims and 75% to their

mothers and the compensation payable to the mothers shall be kept in fixed

deposit in a nationalised bank for a term of five years with liberty to draw the

interest. Hence, these appeals by special leave.

Ms. Kiran Suri, learned counsel appearing on behalf of the appellants in

these two appeals submitted that the High Court was not justified in entertaining

and allowing joint appeals preferred by insured and insurer both challenging the

quantum of compensation awarded by the Tribunal as insurer was entitled to

raise only such defences as are enumerated in Section 149(2) of the Act and

quantum of compensation is not a ground available to the insurer under Section

149(2) of the Act, therefore, allowing such appeals would defeat the very purpose

engrafted under Section 149(2) of the Act. A reference in this connection was

made to a decision of this Court in the case of Chinnama George and others v.

N.K.Raju and another (2000) 4 SCC 130 wherein against the quantum of

compensation, joint appeal was preferred before the High Court by the insurer as

well as the insured and the same was allowed in part and compensation awarded

by the Tribunal was reduced. When the matter was brought to this Court in

appeal on a special leave, the same was allowed and order of the High Court

was set aside on the ground that the joint appeal by the insurer as well as the

insured was not maintainable in view of the provisions of Section 149(2) of the

Act. On the other hand, learned counsel appearing on behalf of the respondents

heavily relied upon two decisions of this Court in the cases of Narendra Kumar

and another v. Yarenissa and others (1998) 9 SCC 202 and United India

Insurance Co. Ltd. v. Bhushan Sachdeva and others (2002) 2 SCC 265. In

Narendra Kumar (supra), which was a case under the Motor Vehicles Act,

1939(hereinafter referred to as '1939 Act'), against the award of the Tribunal, a

joint appeal was preferred by the insurer as well as the insured challenging the

quantum of compensation. A Single Judge of the Rajasthan High Court

dismissed the same on the ground that such appeal was not maintainable in view

of the fact that under Section 96(2) of the 1939 Act which is similar to Section

149(2) of the Act, only certain grounds were available to the insurer and quantum

of compensation is not a ground enumerated under Section 96(2) of the 1939

Act. The decision of the Single Judge was affirmed by Division Bench of the

High Court. Thereafter, when the matter was brought to this Court, reference

was made to the provisions of Section 110-C(2-A) of 1939 Act which provides

that where in the course of inquiry, the claims Tribunal is satisfied that there is

collusion between the person making the claim and the person against whom it is

made, or the person against whom the claim is made has failed to contest the

claim, it may, for reasons to be recorded by it in writing, direct that the insurer,

who may be liable in respect of such claim, be impleaded as a party to the

proceeding and the insurer so impleaded shall thereupon have the right to

contest the claim on all or any of the grounds available to the person against

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whom the claim was made. Ultimately, the court found that even in the case of a

joint appeal by insurer and the insured if an award has been made against the

tortfeasors as well as the insurer even though an appeal filed by the insurer is not

competent, it may not be dismissed as such. The tortfeasor can proceed with the

appeal after the cause title is suitably amended by deleting the name of the

insurer. Even though, this Court held that the appeal of the insured could

proceed on merit and could not have been dismissed merely because the insurer

joined therein, as it did not find any ground to interfere with the quantum of

compensation on merit, order of the High Court was not upset. In United India

Insurance Co. Ltd.(supra), which was a case under the Act against the order

awarding compensation, no appeal was preferred by the insured but only the

insurer filed petition under Article 227 of the Constitution of India before the High

Court. During the pendency of the said petition, a motion was made for the stay

of execution of the award but the High Court had only chosen to issue notice to

show cause why the revision petition be not entertained. Against the said order,

when the matter was brought to this Court, it was directed that the petition under

Article 227 of the Constitution filed by the insurer should be treated to be an

appeal under Section 173 of the Act. The Court relied upon the provisions of

Section 170 of the Act which lays down that where in the course of inquiry, the

Claims Tribunal is satisfied that there is collusion between the person making the

claim and the person against whom the claim is made, or the person against

whom the claim is made has failed to contest the claim, it may, for reasons to be

recorded in writing, direct that the insurer who may be liable in respect of such

claim, shall be impleaded as a party to the proceeding and the insurer so

impleaded shall thereupon have, without prejudice to the provisions contained in

sub-section (2) of Section 149, the right to contest the claim on all or any of the

grounds that are available to the person against whom the claim has been made.

This Court laid down that if the insured failed to prefer any appeal against the

award of the Tribunal, that would also amount to failure to contest the claim

within the meaning of Section 170 of the Act. Therefore, the decisions of this

Court in the cases of Narendra Kumar (supra) and Chinnama George (supra)

were distinguished on facts. That apart the case of Chinnama George (supra) is

otherwise also distinguishable as in that case, on behalf of the insured, no

argument was addressed whereas the appeal was argued only on behalf of the

insurer. That apart the provisions of Section 170 of the Act which have been

taken notice of in the case of United India Insurance Co. Ltd. (supra) were not

considered therein. In the present case, appeal was whole hog pressed on

behalf of the insured challenging the quantum of compensation awarded by the

Tribunal. Thus, the decision of this Court in the case of Chinnama George and

others(supra) can be of no avail to the appellant and we do not find any merit in

the submission that joint appeal by the insurer as well as the insured was not

maintainable. In such an eventuality, the course which a Court should adopt is

as noticed in the case of Narendra Kumar (supra) to delete name of the insurer

from the cause title and proceed with appeal of the insured and decide the same

on merit.

Learned counsel next submitted that the High Court was not justified in

interfering with finding recorded by the Tribunal to the effect that income of the

two victims was Rs. 3,000/- per month and holding that their income was

Rs. 1500/- per month. It appears that after taking into consideration the evidence

adduced by the parties, as the High Court did not find evidence adduced on

behalf of the claimants reliable and satisfactory, it fixed their income at Rs.

1500/- per month and this being a question of fact, it is not possible to interfere

with the same especially when it could not be pointed out that there was any

error therein.

Learned counsel then submitted that under Second Schedule to the Act

providing compensation based on a formula, the multiplier which was applicable

was 15 and not 13 as age of mother of victim Vazeer was 45 years in which case

the correct multiplier should have been 15 and not 13 whereas in the case of

victim Rafeeq, as age of his mother being 40 years, the correct multiplier should

have been 16 and not 14. On the other hand, learned counsel appearing on

behalf of the respondents submitted that compensation has been awarded in

accordance with the Second Schedule. It is well settled that life expectancy of

the deceased or the beneficiaries whichever is shorter is an important factor.

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Reference in this connection may be made to the decision of this Court in the

case of C.K.Subramonia Iyer and others v. T.Kunhikuttan Nair and others

AIR 1970 SC 376. In the case of National Insurance Co. Ltd. v. M/s

Swaranlata Das and others 1993 Suppl. (2) SCC 743, it was observed that "the

appropriate method of assessment of compensation is the method of

capitalisation of net income choosing a multiplier appropriate to the age of the

deceased or the age of the dependants whichever multiplier is lower." According

to the Second Schedule, if the age is above 40 years but not exceeding 45 years,

the multiplier applicable is 15 and if the age is above 35 years but not exceeding

40 years, the multiplier would be 16 but the High Court has taken the multiplier

as 13 and14 instead of 15 and 16 respectively. In the case of compensation to

the parents of Vazeer, the multiplier 15 should have been adopted instead of 13

and the compensation should not have been reduced from Rs. 3,13,000/- to

Rs. 1,71,000/- but the same should have been reduced to Rs. 1,95,000/-. In the

case of compensation to the parents of Rafeeq, the correct multiplier should have

been 16 and not 14 and the High Court was not justified in reducing the

compensation from Rs. 3,49,000/- to Rs. 1,83,000/- which should have been

reduced to Rs. 2,07,000/-. Thus, we hold that the parents of Vazeer are entitled

to total compensation to the tune of Rs. 1,95,000/- and that of Rafeeq to the tune

of Rs. 2,07,000/-.

Learned counsel thereafter submitted that the High Court was not justified

in upholding award of interest at the rate of 6% per annum and the same should

have been awarded at the rate of 9% per annum. Reliance in this connection

was placed upon a decision of this Court in the case of Kaushnuma Begum

(Smt.) and others v. New India Assurance Co. Ltd. and others(2001) 2 SCC 9

wherein this Court noticed that "earlier, 12% was found to be the reasonable rate

of simple interest. With a change in the economy and the policy of Reserve Bank

of India the interest rate has been lowered. The nationalised banks are now

granting interest at the rate of 9% per annum from the date of the claim."

Therefore, it was directed in that case that the claimant was entitled to interest at

the rate of 9% per annum. In our view, the submission is well founded and must

be accepted. Accordingly, we hold that the claimants shall be entitled to interest

on the aforesaid amount at the rate of 9% per annum from the date of filing of the

petitions till realisation.

Learned counsel for the appellant lastly submitted that the amount of

compensation payable to mothers of the victims should not have been directed to

be kept in fixed deposit in a nationalised bank. In the facts and circumstances of

the present case, we are of the view that the amount of compensation awarded

in favour of the mothers should not be kept in fixed deposit in a nationalised

bank. In case the amounts have not been already invested, the same shall be

paid to the mothers, but if, however, invested by depositing the same in fixed

deposit in a nationalised bank, there may be its premature withdrawal in case the

parties so intend.

In the result, the appeals are allowed in part and the judgments of the

High Court are modified to the extent as indicated above. In the circumstances

of the case, parties shall bear their own costs.