caselaws
Supreme Court of India
Shashikala & Ors vs Gangalashmamma & Anr on 13 March, 2015Author: R Banumathi
Bench: V. Gopala Gowda, R. Banumathi
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2836 OF 2015
(Arising out of S.L.P. (Civil) No. 6016/2014)
SHASHIKALA & ORS. … Appellants
Versus
GANGALAKSHMAMMA & ANR. ..Respondents
J U D G M E N T
R. BANUMATHI, J.
Leave granted.
2. This appeal arises out of judgment in M.F.A. No.136/2009 (MV)
dated 15.7.2013 passed by the High Court of Karnataka, in and by which, the
High Court modified the award passed by the Motor Accident Claims
Tribunal, Bangalore (for short ‘the tribunal’) by enhancing the
compensation to Rs.14,69,372/- from Rs.7,85,000/- awarded by the tribunal.
3. Appellant No.1 is the wife, appellants No.2 to 4 are children
and appellants No.5 to 6 are the parents of the deceased Late Shri H.S.
Ravi. The appellants have filed a claim petition under the Motor Vehicles
Act on account of death of deceased Sri H.S. Ravi who had met with an
accident on 14.12.2006. On the fateful day, the deceased Ravi was
proceeding in a motor cycle as a pillion rider. The rider of the motor
cycle applied sudden brake due to which both rider and pillion rider fell
down and both sustained grievous injuries. The rider of the motor cycle
died on the spot. Ravi who was a pillion rider sustained grievous
injuries and was immediately rushed to the hospital. However, after six
days i.e. on 20.12.2006, deceased-Ravi succumbed to the injuries. Deceased-
Ravi was aged 45 years and he was engaged in a transport business of
supplying newspapers from the Head Office destination to other places. The
deceased was paying income-tax and was an income-tax assessee. Stating
that the deceased was the only earning member of the family and that they
have lost the support of the bread winner of the family, the claimants
filed a claim petition claiming compensation of Rs.33,90,000/-.
4. The tribunal has taken the income of the deceased-Ravi at
Rs.75,000/- per annum and deducting 1/3rd towards the personal expenses of
the deceased, the tribunal calculated the loss of dependncy at
Rs.50,000/- per annum. Taking the age of the deceased as 46 years, the
tribunal adopted multiplier 13 and awarded compensation of Rs.6,50,000/-
(Rs.50,000/- x 13) towards loss of dependency. In addition to this, the
tribunal awarded conventional damages of Rs.35,000/-(Rs.10,000/- towards
loss of consortium, Rs.10,000/- towards loss of love and affection,
Rs.10,000/- towards loss of estate and Rs.5,000/- towards funeral expenses)
and Rs.1,00,000/- towards medical expenses as against the claim of
Rs.1,82,150/-. Thus, the tribunal has awarded total compensation of
Rs.7,85,000/-.
5. Aggrieved by the said award of the tribunal, the appellants
filed appeal before the High Court seeking enhancement of compensation. The
High Court modified the award by recalculating the income of the deceased.
Taking the income tax returns of the deceased for the assessment years 2005-
06 and 2006-07, the High Court calculated average of the same and taken
the income at Rs. 1,55,812/- per annum. After making deductions towards
income-tax, professional tax and income from house property, the High
Court calculated the net income of deceased at Rs.1,17,831/- per annum.
The High Court deducted 1/4th towards personal expenses and to the
remaining amount of Rs.88,373/- applied multiplier of 14 and accordingly re-
determined the loss of dependency at Rs.12,37,222/- as against Rs.6,50,000/-
awarded by the tribunal. Awarding conventional damages at Rs. 45,000/-
and medical expenses at Rs.1,87,150/-, the High Court enhanced the
compensation to Rs.14,69,372/-. Still aggrieved by the quantum of
compensation, appellants have filed this appeal.
6. Learned counsel for the appellants-claimants contended that the
compensation awarded by the High Court was neither just nor reasonable. It
was submitted that the High Court erred in calculating the average of the
income from the income of the assessment years 2005-06 and 2006-07. It was
further submitted that as per the decision in the case of Rajesh and Ors.
vs. Rajbir Singh & Ors[1]., the High Court ought to have made an addition
of 30% of the net income of the deceased in computation of future
prospects as in the instant case deceased-Ravi was being in the age group
of 40-50 years. It was also submitted that the courts below ought to have
awarded Rs.1,00,000/- towards loss of consortium and substantial amount of
compensation to the children-appellants No. 2 to 4 towards loss of love and
affection.
7. Learned counsel for the respondent-insurance company
submitted that in Reshma Kumari & Ors. vs. Madan Mohan & Anr[2]., this
Court has held that where the deceased was self-employed, it would be
appropriate not to make any addition to income for future prospects and
the High Court rightly declined to make addition towards future prospects.
It was submitted that the deceased was engaged in the business and was
not earning fixed income and has filed returns for different years showing
different income viz., gross income of Rs.1,08,713/- for the assessment
year 2005-06 and Rs.2,02,911/- for the assessment year 2006-07 which only
indicates the disparity in income of the deceased. To strike a balance,
High Court has rightly taken the average and rightly deducted 10% towards
income tax and other deductions. It was submitted that the compensation
awarded by the High Court is just and reasonable and no grounds have been
made out by the claimants for enhancement of the compensation whatsoever.
8. I have carefully considered the rival contentions and perused
the impugned judgment as also the award and the materials on record.
9. The deceased was doing transport business of supplying
newspapers from the Head Office to the other destinations as per the
agreement entered into between the group of newspapers and himself. It is
also not in dispute that the deceased was an income tax assessee and he has
filed income tax returns for the assessment years 2005-06 and 2006-07. The
claimants had filed income tax returns of the deceased for the assessment
years 2005-06 and 2006-07 with gross total income of Rs.1,08,713/- and
Rs.2,02,911/- respectively including the income from the house property.
Total income of both the years comes to Rs.3,11,624/- and the High Court
has taken the average of it which comes to Rs.1,55,812/-. High Court
deducted 10% of the said amount towards income-tax and taken the balance
amount to Rs.1,40,231/-. The High Court had further deducted Rs.2,400/-
towards professional tax and income from the house property shown as
Rs.20,000/- and the net income was calculated at Rs.1,17,831/-. Since the
claimants are six in numbers as per the decision in Sarla Verma & Ors. vs.
Delhi Transport Corporation & Anr[3]., one-fourth(1/4th ) deduction was
made towards personal expenses. The loss of dependency was thus calculated
at Rs.88,373/-. Taking the age of deceased at 45 years, the High Court
adopted multiplier 14 and calculated the total loss of dependency at
Rs.12,37,222/-.
10. The deceased was aged 45 years and was doing transport
business. Though the claimants have filed income tax returns for two
assessment years 2005-06 and 2006-07, as per the income tax returns for
the year 2006-07, the income of the assessee was Rs.2,02,911/-. Tribunal
did not take the income of the deceased for the assessment year 2006-07 on
the ground that only xerox copy was filed and the claimants have failed to
examine income-tax authorities to prove the same. Instead of taking the
income of the deceased as per the assessment year 2006-07, the High Court
has chosen to calculate the average of the income for two assessment years
2005-06 and 2006-07. Considering the age of the deceased and the nature of
business he was doing, in my considered view, the High Court was not
justified in so taking the average of income of the two assessment years.
The deceased was aged 45 years and doing business. Admittedly, he was also
owning agricultural lands. Even though agricultural income was not shown
in the income tax return, it emerges from the evidence that the deceased
was also doing agricultural work.
11. Onbehalf of the claimants, reliance was placed upon Rajesh’s
case (supra) to contend that even in the case of self-employed persons or
persons with fixed wages, there must be an addition to the income of
the deceased towards future prospects. In Sarla Verma’s case (supra), this
Court held that in case of salaried persons additions have to be made
depending upon the age of the deceased to the actual income of the deceased
while computing future prospects. In Santosh Devi vs. National Insurance
Company Ltd. & Ors[4]., Sarla Verma was explained and it was held that
the benefit of making addition to total income of persons who are self-
employed or getting fixed wages was permissible.
12. The principles laid down in Santosh Devi’s case (supra) were
reiterated in Rajesh and Ors. vs. Rajbir Singh & Ors. (supra), wherein
this Court held that the case of self-employed persons or persons with
fixed wages, the actual income of the deceased must be enhanced for purpose
of computation viz.(i) by 50% where his age was below 40 years; (ii) by 30%
where he belonged to age group of 40 to 50 years, and (iii) by 15% where
he was between age group of 50 to 60 years. However, it was observed that
no such addition/enhancement was permissible where deceased exceeded the
age of 60 years. Further, in Rajesh (supra), this Court while reiterating
the meaning of “just compensation” with reference to settled principles
observed that, at the time of fixing such compensation, the court should
not succumb to the niceties or technicalities to grant just compensation
in favour of the claimant. It is the duty of the court to equate, as far
as possible, the misery on account of the accident with the compensation so
that the injured or the dependants should not face the vagaries of life on
account of discontinuance of the income earned by the victim, and the
court’s duty is to award just, equitable, fair and reasonable compensation,
irrespective of claim made.
13. Considering the question of making addition to the income of
the deceased towards the future prospects in cases of salaried persons vis-
-vis in cases where the deceased was self-employed or on a fixed
wage/salary, in Reshma Kumari and Ors. vs. Madan Mohan and Anr[5]., this
Court held as under :-
“39. The standardization of addition to income for future prospects shall
help in achieving certainty in arriving at appropriate compensation. We
approve the method that an addition of 50% of actual salary be made to the
actual salary income of the deceased towards future prospects where the
deceased had a permanent job and was below 40 years and the addition should
be only 30% if the age of the deceased was 40 to 50 years and no addition
should be made where the age of the deceased is more than 50 years. Where
the annual income is in the taxable range, the actual salary shall mean
actual salary less tax. In the cases where the deceased was self-employed
or was on a fixed salary without provision for annual increments, the
actual income at the time of death without any addition to income for
future prospects will be appropriate. A departure from the above principle
can only be justified in extraordinary circumstances and very exceptional
cases.”
14. The decision in Reshma Kumari’s case was rendered at earlier
point of time (2.04.2013) and Rajesh’s case was pronounced subsequently
(12.04.2013). Pointing out the divergent opinion expressed in the above
cases and expressing the view that regarding the manner of addition of
income for future prospects in case of self-employed or on fixed wages
there should be an authoritative pronouncement, in National Insurance
Company vs. Pushpa {S.L.P (C) No.16735/2014}, the matter has been referred
to a larger Bench by the order dated 2.07.2014, in which one of us (Hon’ble
Mr. Justice V. Gopala Gowda) was a member, which is pending consideration.
15. Section 168 of the Motor Vehicles Act enjoins the
courts/tribunals to make award determining the amount of compensation which
appears to be just and reasonable. The wide amplitude of such power does
not empower the tribunal to determine the compensation arbitrarily,
although the Act is a beneficial legislation, it can neither be allowed as
a source of profit nor as a windfall to the persons affected.
Determination of compensation has to be fair and reasonable and acceptable
by the legal standards. In Nagappa vs. Gurudayal Singh & Ors[6]., this
Court held as under:-
“10. Thereafter, Section 168 empowers the Claims Tribunal to “make an award
determining the amount of compensation which appears to it to be just”.
Therefore, the only requirement for determining the compensation is that it
must be “just”. There is no other limitation or restriction on its power
for awarding just compensation”.
The same principle was reiterated in the decisions of Oriental Insurance
Company Ltd. vs. Mohd. Nasir[7] and Anr., and Ningamma and Anr. vs. United
India Insurance Company Ltd[8].
16. Without adverting to the issue whether additions are to be
made towards future prospects or not, as it is obligatory on the part of
the Court to award just compensation, considering the age of the deceased
and the nature of business he was doing, in my view, the income of the
deceased as stated in the income tax return for the year 2006-07 i.e. Rs.
2,02,911/- may be taken as the income of the deceased. Ten per cent of
the said amount i.e. Rs.20,290/- is to be deducted towards income tax and
the remaining comes to Rs.1,82,620/-. The amount to be deducted for
professional tax is Rs.2,400/- and after deducting the same, the balance
comes out to Rs. 1,80,220/-. The income from the house property for the
year 2006-07 is shown to be Rs.20,000/- and after deducting the same, the
net amount comes to Rs.1,60,220/-. Deducting 1/4th (one/fourth) towards
personal expenses which comes out to Rs.40,055/-, the loss of
dependency/loss of contribution is arrived at Rs.1,20,165/- per annum.
17. Insofar as appropriate multiplier, the date of birth of the
deceased as per driving licence was 16.6.1961. On the date of accident
i.e. 14.12.2006, the deceased was aged 45 years, 5 months and 28 days and
the tribunal has taken the age as 46 years. Since the deceased has
completed only 45 years, the High Court has rightly taken the age of the
deceased as 45 years and adopted multiplier 14 which is the appropriate
multiplier and the same is maintained. Total loss of dependency is
calculated at Rs.16,82,310/- (Rs.1,20,165/- x 14).
18. With respect to the award of compensation towards conventional
heads, the tribunal has awarded only Rs.10,000/- towards loss of
consortium and Rs.10,000/- towards love and affection, Rs.10,000/- towards
loss of estate and Rs.5,000/- towards funeral charges. The High Court
totally awarded Rs.45,000/- towards conventional heads such as loss of
estate, loss of love and affection, loss of consortium, transportation of
dead body and funeral expenses. In various decisions, this Court has held
that substantial compensation is to be awarded towards conventional damages
like loss of consortium, loss of love and affection and funeral expenses.
In Rajesh And Ors. vs. Rajbir Singh & Ors., (supra) and Jiju Kuruvila &
Ors. vs. Kunjujamma Mohan & Ors[9]., this Court has awarded substantial
amount of Rs.1,00,000/- towards loss of consortium and Rs.1,00,000/-
towards loss of love and affection and Rs.25,000/- towards funeral
expenses. Following the same, Rs.1,00,000/- is awarded towards loss of
consortium and Rs.1,00,000/- towards loss of love and affection to the
minor children and Rs.25,000/- towards funeral expenses and Rs.25,000/-
towards loss of estate totalling to Rs.2,50,000/-. Thus, the compensation
awarded to the claimants is enhanced to Rs.19,32,310/-.
19. In the result, the compensation awarded to the claimants is
enhanced and the compensation is awarded at Rs.19,32,310/-. The enhanced
compensation of Rs.4,62,938/- is payable with interest at the rate of 9%
per annum from the date of the claim petition till the date of realisation.
Out of enhanced compensation of Rs.4,62,938/-, Rs.3,12,938/- alongwith
accrued interest shall be paid to the first appellant-wife of the deceased,
balance Rs.1,50,000/- alongwith accrued interest shall be apportioned
amongst the claimants 2 to 4. If the appellants 2 to 4 are still minors
claimants, their share of the enhanced compensation shall be invested in a
nationalized bank on the same terms as directed by the High Court. In
case, the appellants No. 2 to 4 have already attained majority, they are
permitted to withdraw their entire share of apportioned compensation.
20. The impugned judgment of the High Court is modified and the
appeal is allowed. In the facts and circumstances of the case, no order
as to costs.
………………………J.
(R.
BANUMATHI)
New Delhi;
March 13, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2836 OF 2015
(Arising Out of SLP (C) No. 6016 of 2014)
SHASHIKALA & ORS. ….APPELLANTS
VERSUS
GANGALAKSHMAMMA & ANR. ……RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
I have perused the judgment written by my learned Sister Mrs.Justice R.
Banumathi in the above-mentioned matter. I am in respectful agreement with
all the points which are answered in favour of the appellants-claimants,
except for the non-consideration on the question of making addition to the
income of the deceased towards the future prospects in the case of salaried
persons vis–vis where the deceased was self employed or on fixed wages
after adverting to the judgments of this Court in
Reshma Kumari & Ors. v. Madan Mohan & Anr.1, Rajesh & Ors. v. Rajbir Singh
& Ors.2, the relevant paragraphs of which are extracted hereinafter.
After considering the legal principles laid down by this Court in the case
of (1) General Manager, Kerala State Road Transport Corporation, Trivandrum
& Ors. v. Susamma Thomas & Ors.3 ; (2) Sarla Dixit & Anr. v. Balwant Yadav
& Ors.4 and (3) Abati Bezbaruah v. Dy. Director General, Geological Survey
of India & Anr.5, this Court, on the question of future prospects in the
case of Sarla Verma & Ors. v. Delhi Transport Corporation & Anr.6 has held
as follows:-
“24. In Susamma Thomas, this Court increased the income by nearly 100%, in
Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the
income was increased by a mere 7%. In view of the imponderables and
uncertainties, we are in favour of adopting as a rule of thumb, an addition
of 50% of actual salary to the actual salary income of the deceased towards
future prospects, where the deceased had a permanent job and was below 40
years. (Where the annual income is in the taxable range, the words “actual
salary” should be read as “actual salary less tax”). The addition should be
only 30% if the age of the deceased was 40 to 50 years. There should be no
addition, where the age of the deceased is more than 50 years. Though the
evidence may indicate a different percentage of increase, it is necessary
to standardise the addition to avoid different yardsticks being applied or
different methods of calculation being adopted. Where the deceased was self-
employed or was on a fixed salary (without provision for annual increments,
etc.), the courts will usually take only the actual income at the time of
death. A departure therefrom should be made only in rare and exceptional
cases involving special circumstances.”
3. Interestingly, in Reshma Kumari & Ors. (supra), which was ultimately
decided in 2.4.2013 by a three judge Bench, which arose out of the matter
referred by the order of two judge Bench dated 23.7.2009. That order had
referred two questions:-
“(1) Whether multiplier specified in the Second Schedule appended to the
Motor Vehicles Act, 1988 (for short “the 1988 Act”) should be scrupulously
applied in all cases? And
(2) Whether for determination of the multiplicand, the 1988 Act provides
for any criterion, particularly as regards determination of future
prospect.”
4. The referring Bench (in Reshma Kumari & Ors.-supra) had in fact,
envisioned a situation where future prospects in private employment too,
were to be taken into consideration (although in a slightly different
context). The relevant paragraph of the referring Bench of this Court in
the case of Reshma Kumari & Ors. is extracted hereunder:-
“46. In the Indian context several other factors should be taken into
consideration including education of the dependants and the nature of job.
In the wake of changed societal conditions and global scenario, future
prospects may have to be taken into consideration not only having regard to
the status of the employee, his educational qualification; his past
performance but also other relevant factors, namely, the higher salaries
and perks which are being offered by the private companies these days…”
Ultimately, the question of future prospects was decided in the Larger
Bench judgment of this Court in Reshma Kumari’s case. The relevant
paragraph is extracted hereunder:
“39. The standardisation of addition to income for future prospects shall
help in achieving certainty in arriving at appropriate compensation. We
approve the method that an addition of 50% of actual salary be made to the
actual salary income of the deceased towards future prospects where the
deceased had a permanent job and was below 40 years and the addition should
be only 30% if the age of the deceased was 40 to 50 years and no addition
should be made where the age of the deceased is more than 50 years. Where
the annual income is in the taxable range, the actual salary shall mean
actual salary less tax. In the cases where the deceased was self-employed
or was on a fixed salary without provision for annual increments, the
actual income at the time of death without any addition to income for
future [pic]prospects will be appropriate. A departure from the above
principle can only be justified in extraordinary circumstances and very
exceptional cases.”
5. In Santosh Devi v. National Insurance Co. Ltd. & Ors.7, a two judge
Bench of this Court had earlier doubted the decision with respect to future
prospects in Sarla Verma (supra) and interpreted the limiting of grant of
compensation amount to a person who is self-employed, privately employed or
is engaged on fixed wages if he /she becomes victim of an accident. The
relevant paragraphs as discussed by this Court in Santosh Devi’s case is
extracted hereunder:-
“14. We find it extremely difficult to fathom any rationale for the
observation made in para 24 of the judgment in Sarla Verma case that where
the deceased was self-employed or was on a fixed salary without provision
for annual increment, etc., the courts will usually take only the actual
income at the time of death and a departure from this rule should be made
only in rare and exceptional cases involving special circumstances. In our
view, it will be nave to say that the wages or total emoluments/income of
a person who is self-employed or who is employed on a fixed salary without
provision for annual increment, etc., would remain the same throughout his
life.
15. The rise in the cost of living affects everyone across the board. It
does not make any distinction between rich and poor. As a matter of fact,
the effect of rise in prices which directly impacts the cost of living is
minimal on the rich and maximum on those who are self-employed or who get
fixed income/emoluments. They are the worst affected people. Therefore,
they put in extra efforts to generate additional income necessary for
sustaining their families.
16. The salaries of those employed under the Central and State Governments
and their agencies/instrumentalities have been revised from time to time to
provide a cushion against the rising prices and provisions have been made
for providing security to the families of the deceased employees. The
salaries of those employed in private sectors have also increased manifold.
Till about two decades ago, nobody could have imagined that salary of Class
IV employee of the Government would be in five figures and total emoluments
of those in higher echelons of service will cross the figure of rupees one
lakh.
17. Although the wages/income of those employed in unorganised sectors has
not registered a corresponding increase and has not kept pace with the
increase in the salaries of the government employees and those employed in
private sectors, but it cannot be denied that there has been incremental
enhancement in the income of those who are self-employed and even those
[pic]engaged on daily basis, monthly basis or even seasonal basis. We can
take judicial notice of the fact that with a view to meet the challenges
posed by high cost of living, the persons falling in the latter category
periodically increase the cost of their labour. In this context, it may be
useful to give an example of a tailor who earns his livelihood by stitching
clothes. If the cost of living increases and the prices of essentials go
up, it is but natural for him to increase the cost of his labour. So will
be the cases of ordinary skilled and unskilled labour, like, barber,
blacksmith, cobbler, mason, etc.
18. Therefore, we do not think that while making the observations in the
last three lines of para 24 of Sarla Verma judgment, the Court had intended
to lay down an absolute rule that there will be no addition in the income
of a person who is self-employed or who is paid fixed wages. Rather, it
would be reasonable to say that a person who is self-employed or is engaged
on fixed wages will also get 30% increase in his total income over a period
of time and if he/she becomes the victim of an accident then the same
formula deserves to be applied for calculating the amount of compensation.”
6. In Rajesh & Ors. (supra), a three judge Bench decision of this Court,
which took into consideration the decisions of this Court in the cases of
Sarla Verma & Ors. and Santosh Devi (supra) held thus:
“8. Since, the Court in Santosh Devi case actually intended to follow the
principle in the case of salaried persons as laid down in Sarla Verma case
and to make it applicable also to the self-employed and persons on fixed
wages, it is clarified that the increase in the case of those groups is not
30% always; it will also have a reference to the age. In other words, in
the case of self-employed or persons with fixed wages, in case, the
deceased victim was below 40 years, there must be an addition of 50% to the
actual income of the deceased while computing future prospects. Needless to
say that the actual income should be income after paying the tax, if any.
Addition should be 30% in case the deceased was in the age group of 40 to
50 years.”
7. Further, in National Insurance Company Ltd. v. Pushpa, this Court in
SLP No. 16735 of 2014 (arising out of CC No. 8058 of 2014) vide order dated
2.7.2014 made a reference to a larger Bench in view of the seeming conflict
between the legal principles with respect to future prospects laid down by
this Court in the cases of Reshma Kumari & Ors. and Rajesh & Ors. (supra).
The relevant para from the National Insurance Company case (supra) is
extracted hereunder:-
“Be it noted, though the decision in Reshma (supra) was rendered at earlier
of time, as is clear, the same has not been noticed in Rajesh (supra) and
that is why divergent opinions have been expressed. We are of the
considered opinion that as regards the manner of addition of income of
future prospects there should be an authoritative pronouncement. Therefore,
we think it appropriate to refer the matter to a larger Bench.”
Though, I am a party to the above reference, at the same time, it is worth
mentioning that the reference even in the case of a perceived conflict or
disagreement with the views of a two judge (or even a three judge) Bench
does not permit a lower Bench formation to refer the matter straightway to
a five Judge Bench. This principle was stated in Bharat Petroleum
Corporation Ltd. v. Mumbai Shramik Sangha & Ors.8. In that judgment, the
Constitution Bench held that a decision of a Constitution Bench binds
Benches of two and three learned Judges of this Court and that judicial
discipline obliges them to follow it, regardless of their doubts about its
correctness. At the most, they can direct that the matter to be heard by a
Bench of three learned Judges. In Pradip Chandra Parija & Ors. v. Pramod
Chandra Patnaik & Ors.9, a Bench of two learned judges expressed
reservations with the judgment of a three judge Bench and directed the
matter to be placed before a larger Bench of five judges. The Constitution
Bench held that the rule of ‘judicial discipline and propriety’ as well as
the theory of precedents permitted only a Bench of the same quorum to
question the correctness of the decision by another Bench of co-ordinate
strength upon which the matter can be placed for consideration by a Bench
of larger quorum. A Bench of lesser quorum cannot thus, express
disagreement with, or question the correctness of, the view of a Bench of a
larger quorum. Central Board of Dawoodi Bohra Community & Anr. v. State of
Maharashtra & Anr.10 summarized, for future guidance, the correct approach
in such matters. The relevant para of the said case is extracted hereunder:-
“12. Having carefully considered the submissions made by the learned Senior
Counsel for the parties and having examined the law laid down by the
Constitution Benches in the abovesaid decisions, we would like to sum up
the legal position in the following terms:
(1) The law laid down by this Court in a decision delivered by a Bench of
larger strength is binding on any subsequent Bench of lesser or coequal
strength.
(2) A Bench of lesser quorum cannot disagree or dissent from the view of
the law taken by a Bench of larger quorum. In case of doubt all [pic]that
the Bench of lesser quorum can do is to invite the attention of the Chief
Justice and request for the matter being placed for hearing before a Bench
of larger quorum than the Bench whose decision has come up for
consideration. It will be open only for a Bench of coequal strength to
express an opinion doubting the correctness of the view taken by the
earlier Bench of coequal strength, whereupon the matter may be placed for
hearing before a Bench consisting of a quorum larger than the one which
pronounced the decision laying down the law the correctness of which is
doubted.
(3) The above rules are subject to two exceptions:
(i) the abovesaid rules do not bind the discretion of the Chief Justice in
whom vests the power of framing the roster and who can direct any
particular matter to be placed for hearing before any particular Bench of
any strength; and
(ii) in spite of the rules laid down hereinabove, if the matter has already
come up for hearing before a Bench of larger quorum and that Bench itself
feels that the view of the law taken by a Bench of lesser quorum, which
view is in doubt, needs correction or reconsideration then by way of
exception (and not as a rule) and for reasons given by it, it may proceed
to hear the case and examine the correctness of the previous decision in
question dispensing with the need of a specific reference or the order of
the Chief Justice constituting the Bench and such listing. Such was the
situation in Raghubir Singh and Hansoli Devi.”
8. Hence, I am of the opinion that the Rajesh & Ors. (supra) itself
applied the Santosh Devi (supra) case, even while clarifying that for self
employed individuals, age is also a determining factor, as is seen in the
observation in the case of Rajesh & Ors. (supra) that in the case of self-
employed or persons with fixed wages, in case, the deceased victim was
below 40 years, there must be an addition of 50% to the actual income of
the deceased while computing future prospects.
In fact, this gives shape to the view that future prospects are to
be taken into account even in case of self employment and also that there
cannot be a set formula for determining such compensation. The best
application of this view may be seen in Sanjay Verma v. Haryana Roadways11
where the facts were noticed as follows :
“12. The appellant was a self-employed person. Though he had claimed a
monthly income of Rs.5000/-, the income tax returns filed by him
demonstrate that he had paid income tax on an annual income of Rs.41,300/-.
No fault, therefore, can be found in the order of the High Court which
proceeds on the basis that the annual income of the claimant at the time of
the accident was Rs 41,300/-…”
Then, this Court after noticing the decisions of this Court in the
cases of Sarla Verma & Ors., Santosh Devi, and the three Judge Bench of
this Court in Reshma Kumari & Ors. and Rajesh & Ors. (supra) applied the
law in the following manner in Sanjay Verma’s case (supra):-
“16. Undoubtedly, the same principle will apply for determination of loss
of income on account of an accident resulting in the total disability of
the victim as in the present case. Therefore, taking into account the age
of the claimant (25 years) and the fact that he had a steady income, as
evidenced by the income tax returns, we are of the view that an addition of
50% to the income that the claimant was earning at the time of the accident
would be justified.
17. Insofar as the multiplier is concerned, as held in Sarla Verma or as
prescribed under the Second Schedule to the Act, the correct multiplier in
the present case cannot be 15 as held by the High Court. We are of the view
that the adoption of the multiplier of 17 would be appropriate.
Accordingly, taking into account the addition to the income and the higher
multiplier the total amount of compensation payable to the [pic]claimant
under the head “loss of income” is Rs.10,53,150/- (Rs.41,300/- + Rs.20,650/-
= Rs.61,950/- 17).”
The clarification of the position, by a three judge Bench, in Rajesh &
Ors., ipso facto could not have led to the conclusion that there was a
conflict between the views of various Benches, since Santosh Devi itself
had noticed Sarla Verma, the logic of which in respect of limiting
compensation for non-permanent employment was clarified.
9. The above facts recount the position as emerging from a combined reading
of various orders and judgments. What is clear is that a two judge Bench as
was the formation in the case of National Insurance Company Ltd. v. Pushpa
(supra) could not, having regard to the settled legal principle outlined in
the decision of this Court in Central Board of Dawoodi Bohar Community
(supra) have referred the matter to a larger Bench. The correct view would
have been to place the matter before a Bench of co-ordinate strength which
decided Reshma Kumari & Ors. and Rajesh & Ors. (supra), i.e. three judges.
10. However, I agree that the matter in relation to future prospects to be
added to the annual income to determine the compensation towards loss of
dependency cannot be finally decided by us and has to be ultimately
referred to a larger Bench – because I was a party to the reference in
National Insurance Co. Ltd. v. Pushpa (supra) and more importantly, cannot
in propriety recall that reference while I am part of another Bench
presently. In view of the observations, the matter has to be placed before
the Hon’ble Chief Justice of India for appropriate orders towards the
constitution of a suitable larger Bench in accordance with law.
…………………………………………………J.
(V. GOPALA GOWDA)
March 13, 2015,
New Delhi. IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 2836 OF 2015
(Arising out of S.L.P.(C) No. 6016 of 2014
SHASHIKALA & ORS. … APPELLANT(S)
VERSUS
GANGALAKSHMAMMA & ANR …RESPONDENT(S)
O R D E R
Since we have disagreed only insofar as the addition towards the
future prospects in case of self-employed or fixed wages to be added to the
compensation towards the dependency, the matter may be placed before the
Hon’ble the Chief Justice of India for appropriate orders towards the
constitution of a suitable larger Bench to decide the said issue.
Pendente lite the said issue, the enhanced compensation of Rs.
4,62,938/- along with interest at the rate of 9% p.a. from the date of the
claim petition till the date of realisation shall be paid within four weeks
from today by way of a demand draft or be deposited before the Motor
Accident Claims Tribunal, Bangalore, to enable the appellants herein to
withdraw the same.
………………………J.
(V. GOPALA GOWDA)
……………………..J.
(R. BANUMATHI)
NEW DELHI,
MARCH 13, 2015
———————–
[1]
[2] (2013) 9 SCC 54
[3] [4] (2013) 9 SCC 65
[5] [6] (2009) 6 SCC 121
[7] [8] (2012) 6 SCC 421
[9] [10] (2013) 9 SCC 65
[11] [12] (2003) 2 SCC 274
[13] [14] (2009) 6 SCC 280
[15] [16] (2009) 13 SCC 710
[17] [18] (2013) 9 SCC 166
1
(2013) 9 SCC 65
2 (2013) 9 SCC 54
3 (1994) 2 SCC 176
4 (1996) 3 SCC 179
5 (2003) 3SCC 148
6 (2009) 6 SCC 121
7 (2012) 6 SCC 421
8 (2001) 4 SCC 448
9 (2002) 1 SCC 1
1 0 (2005) 2 SCC 673
1 1 ((2014) 3 SCC 210
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