TMI Blog2010 (7) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. The said Section has been quoted in the earlier part of the judgment by brother Singhvi, J. therefore, I refrain from quoting the same. The Second Schedule which is referred to in the said Section has several clauses. Clause 6 of the said Schedule provides for notional income of those who had no income prior to accident. Clause 6 has been divided into two classes of persons, (a) non-earning persons, and (b) spouse. Insofar as the spouse is concerned, the income of the injured in fatal and non-fatal accident has been categorized as 1/3rd of the income of the earning and surviving spouse. It is, therefore, assumed if the spouse who does not earn, which is normally the woman in the house and the homemaker, such a person cannot have an income more than 1/3rd of the income of the person who is earning. This categorization has been made without properly appreciating the value of the services rendered by the homemaker. To value the income of the home-maker as one- third of the income of the earning spouse is not based on any apparently rational basis. 4. This bias is shockingly prevalent in the work of Census. In the Census of 2001 it appears that those who are doing household d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally engaged in home making, bringing up children and also in production of goods and services which are not sold in the market but are consumed at the household level. Thus, the work of women mostly goes unrecognized and they are never valued. 11. therefore, in the categorization by the Census what is ignored is the well known fact that women make significant contribution at various levels including agricultural production by sowing, harvesting, transplanting and also tending cattles and by cooking and delivering the food to those persons who are on the field during the agriculture season. 12. Though, Census operation does not call for consideration in this case but reference to the same has been made to show the strong bias shown against women and their work. We hope and trust that in the on-going Census operation this will be corrected. 13. The same gender bias has been reflected in the judgment of the High Court whereby the High Court has accepted the tribunal's reasoning of assessing the income of the victim at ₹ 1,250/- per month. Even if we go by the formula under Clause 6 of the Second Schedule, income of the victim comes to ₹ 5,000/- per month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the work of a caregiver, for after all , the home is the basic unit on which our civilised society rests.... 17. The Madras High Court in its very illuminating judgment in Minor Deepika (supra) has further referred to various methods by which the assessment of work of a homemaker can be made and the relevant portion from para 10 of the said judgment is extracted below: ...that there have been efforts to understand the value of a homemaker's unpaid labour by different methods. One is, the opportunity cost which evaluates her wages by assessing what she would have earned had she not remained at home, viz., the opportunity lost. The second is, the partnership method which assumes that a marriage is an equal economic partnership and in this method, the homemaker's salary is valued at half her husband's salary. Yet another method is to evaluate homemaking by determining how much it would cost to replace the homemaker with paid workers. This is called the Replacement Method. 18. Various aspects of the nature of homemaker's job have been described in para 11 which are very relevant and are extracted below: 11. The role of a housewife includes managing budgets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re an important and valuable form of production. It is possible to put monetary value to these services as for instance, the monetary value of cooking for family members could be assessed in terms of what it would cost to hire a cook or to purchase ready cooked food or by assessing how much money could be earned if the food cooked for the family were to be sold in the locality. 24. Jayati Ghosh (Uncovering Women's Work) has referred to National Sample Surveys and according to her, the survey showed 57% of rural women and 19% of urban women were engaged in the free collection of fuel wood for household consumption. Activities related to food processing, such as husking and grinding grain, were engaged in by around 15% of women. Other unpaid activities such as maintaining kitchen gardens and looking after livestock and poultry also occupied a majority of women - 60% in rural areas and 24% in urban areas. These are all economic activities which in developed societies are typically recognized as such because they are increasingly delegated by women and performed through paid contracts. 25. Alternative to imputing money values is to measure the time taken to produce these se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... road accident and who does not have regular source of income is the question which arises for determination in this appeal filed against the judgment of the Division Bench of Allahabad High Court which declined to enhance the compensation awarded to the appellants by Motor Accident Claims Tribunal, Shahjahanpur (for short, 'the Tribunal'). 31. Smt. Renu Agrawal (wife of appellant No. 1 - Arun Kumar Agrawal and mother of appellant No. 2 - Suwarna Agrawal) died in a road accident when the car driven by appellant No. 1 was hit by truck bearing No. UGK- 489 in village Pachkora, District Hardoi, U.P. The appellants filed a petition under Section 166 of the Motor Vehicles Act, 1988 (for short, 'the Act') for award of compensation of ₹ 19,20,000/- by asserting that the accident was caused due to rash and negligent driving of the truck which was owned by respondent No. 2, Mohd. Farooq and was insured with respondent No. 1. They pleaded that the deceased was 39 years of age at the time of accident and due to her death, life of appellant No. 1 had become miserable inasmuch as being a government servant he was unable to look after his minor child. They further pleade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd this is only based on notional income. The amount of compensation is too much and as such a lesser multiplier could be adopted in the present case. In the circumstances of this case, the claimants are entitled to ₹ 2,50,000/- as compensation from the insurance company. This issue is accordingly decided with the above observation. 34. The High Court dismissed the appeal preferred by the appellants by making the following observations: At the time of accident claimant No. 1 Arun Kumar Agrawal was getting monthly salary of ₹ 15,416/- and at time of filing the appeal ₹ 24,042/- per month. Claimant Arun Kumar Agarwal and his son aged about seven years are the only legal representatives of the deceased. Neither of the claimants were dependents upon the deceased. The services rendered by Renu Agrawal, the deceased as house wife may be estimated at ₹ 1250.00 per month and thus the annual contribution by rendering services comes to ₹ 15,000/- and applying the multiplier of 15 it comes to ₹ 2,25,000/- and adding the amount of ₹ 3000.00 as funeral expenses, ₹ 7,000.00 due to loss of love and affection to the son and ₹ 15,000.00 du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Manager Kerala State Road Transport Corporation v. Susamma Thomas (Mrs.) and Ors. (1994) 2 SCC 176 this Court considered the legitimacy of multiplier method evolved and applied by the British Courts and approved the same. The relevant paragraphs of that judgment are extracted below: 9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether. 10. The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have justified a departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act, 1939 insofar as it envisages the compensation to be 'just', the statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases. (emphasis supplied) 39. In U.P. S.R.T.C. v. Trilok Chandra (1996) 4 SCC 362 a three- Judge Bench referred to the principles evolved by British Courts for award of damages and reiterated the multiplier method spelt out in General Manager Kerala State Road Transport Corporation v. Susamma Thomas (supra). The Court then took note of the stark inconsistencies in the approach adopted by the motor accident claims tribunals and courts in awarding compensation, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appropriate multiplier to assess the compensation under the head of loss to the dependants. Take the appropriate multiplier to be 15. The compensation comes to ₹ 27,000x15=₹ 4,05,000. To this may be added a conventional amount by way of loss of expectation of life. Earlier this conventional amount was pegged down to ₹ 3000 but now having regard to the fall in the value of the rupee, it can be raised to a figure of not more than ₹ 10,000. Thus the total comes to ₹ 4,05,000+10,000= ₹ 4,15,000. 17. The situation has now undergone a change with the enactment of the Motor Vehicles Act, 1988, as amended by Amendment Act 54 of 1994. The most important change introduced by the amendment insofar as it relates to determination of compensation is the insertion of Sections 163A and 163B in Chapter XI entitled Insurance of Motor Vehicles against Third Party Risks . Section 165-A begins with a non obstante clause and provides for payment of compensation, as indicated in the Second Schedule, to the legal representatives of the deceased or injured, as the case may be. Now if we turn to the Second Schedule, we find a table fixing the mode of calculation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterated the principles laid down in General Manager Kerala State Road Transport Corporation v. Susamma Thomas (supra), referred to the subsequent judgment in U.P. S.R.T.C. v. Trilok Chandra (supra) and then observed: 16. Compensation awarded does not become just compensation merely because the Tribunal considers it to be just. For example, if on the same or similar facts (say the deceased aged 40 years having annual income of ₹ 45,000 leaving his surviving wife and child), one Tribunal awards ₹ 10,00,000 another awards ₹ 5,00,000, and yet another awards ₹ 1,00,000, all believing that the amount is just, it cannot be said that what is awarded in the first case and the last case is just compensation. Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well-settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit. 17. Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 there from should be made only in rare and exceptional cases involving special circumstances. The Court then considered the nature and extent of deduction for personal and living expenses and laid down the following principles: 30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permanent disability shall have the same meaning and extent as in the Workmen's Compensation Act, 1923 (8 of 1923). (2) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule. Clause 6 of the Second Schedule 6. Notional income for compensation to those who had no income prior to accident: Fatal and disability in non-fatal accidents: IMAGES In case of other injuries only general damage as applicable. 42. Section 163A contains a special provision for payment of compensation on the basis of a structured formula as indicated in the Second Schedule, which contains a table prescribing the compensation to be awarded with reference to the age and income of the deceased. The note appended to column (1) of the Second Schedule makes it clear that from the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The scheme envisaged under Section 163A, in our opinion, leaves no manner of doubt that by reason thereof the rights and obligations of the parties are to be determined finally. The amount of compensation payable under the aforementioned provisions is not to be altered or varied in any other proceedings. It does not contain any provision providing for set-off against a higher compensation unlike Section 140. In terms of the said provision, a distinct and specified class of citizens, namely, persons whose income per annum is ₹ 40,000 or less is covered there under whereas Sections 140 and 166 cater to all sections of society. 44. In Oriental Insurance Co. Ltd. v. Meena Variyal (2007) 5 SCC 428 a two-Judge Bench referred to an apparent inconsistency in the judgments of three-Judge Bench in Minu B. Mehta v. Balkrishna Ramchandra Nayan (1977) 2 SCC 441 and two-Judge Bench in Gujarat SRTC v. Ramanbhai Prabhatbhai (1987) 3 SCC 234 and observed: We think that the law laid down in Minu B. Mehta v. Balkrishna Ramchandra Nayan was accepted by the legislature while enacting the Motor Vehicles Act, 1988 by introducing Section 163A of the Act providing for payment of compensation n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the Second Schedule appended to the Act is not applicable in strict sense in a case under Section 166, whenever the Court has to apply the appropriate multiplier several factors including the income of the deceased, his family background will have to be taken into consideration (paragraph 15). The same view was reiterated in Ningamma and Anr. v. United Insurance Company Limited (2009) 13 SCC 710 (paragraph 32). 47. We may now deal with the question formulated in the opening paragraph of this judgment. In Kemp and Kemp on Quantum of Damages, (Special Edition - 1986), the authors have identified various heads under which the husband can claim compensation on the death of his wife. These include loss of the wife's contribution to the household from her earnings, the additional expenses incurred or likely to be incurred by having the household run by a house-keeper or servant, instead of the wife, the expenses incurred in buying clothes for the children instead of having them made by the wife, and similarly having his own clothes mended or stitched elsewhere than by his wife, and the loss of that element of security provided to the husband where his employment was insecure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I think the plaintiff has not made extensive inquiries in this regard. Possibly the expense involved in getting more help is a factor which has deterred him. Whatever be the reason, the plain fact is that the deceased's services at the weekend have not been replaced. They are lost to the plaintiff and to the boys.... He then proceeded to observe: I have been referred to a number of cases in which judges have felt compelled to look upon the task of assessing damages in cases involving the death of a wife and mother with strict disregard to those features of the life of a woman beyond her so-called services, that is to say, to keep house, to cook the food, to buy the clothes, to wash them and so forth. In more than one case, an attempt had been made to calculate the actual number of hours it would take a woman to perform such services and to compensate dependants upon that basis at so much an hour and so relegate the wife or mother, so it seems to me, to the position of a housekeeper. While I think that the law inhibits me from, much as I should like to, going all the way along the path to which Lord Edmund-Davies pointed, I am, with due respect to the other judges to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made of the services of housewife/mother. In that context, the term 'services' is required to be given a broad meaning and must be construed by taking into account the loss of personal care and attention given by the deceased to her children as a mother and to her husband as a wife. They are entitled to adequate compensation in lieu of the loss of gratuitous services rendered by the deceased. The amount payable to the dependants cannot be diminished on the ground that some close relation like a grandmother may volunteer to render some of the services to the family which the deceased was giving earlier. 53. In Lata Wadhwa v. State of Bihar (supra) this Court considered the various issues raised in the writ petitions filed by the petitioners including the one relating to payment of compensation to the victims of fire accident which occurred on 3.3.1989 resulting in the death of 60 persons and injuries to 113. By an interim order dated 15.12.1993, this Court requested former Chief Justice of India, Shri Justice Y.V. Chandrachud to look into various issues including the amount of compensation payable to the victims. Although, the petitioners filed objection to the report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Anr. v. Deep Chand Sood and Ors. (2001) 8 SCC 151 for confirming the award of compensation of ₹ 5 lacs in a case involving death of school children by drowning due to negligence of teachers of the school. In Municipal Corporation of Greater Bombay v. Laxman Iyer and Anr. (2003) 8 SCC 731 a two-Judge Bench while deciding the issue of award of compensation under Sections 110-A and 110- B of the Motor Vehicles Act, 1939, referred to the judgments in Lata Wadhwa's case and M.S. Grewal's case. 55. In A. Rajam v. M. Manikya Reddy 1989 ACJ 542 (Andhra Pradesh HC), M. Jagannadha Rao, J. (as he then was) advocated giving of a wider meaning to the word 'services' in cases relating to award of compensation to the dependents of a deceased wife/mother. Some of the observations made in that judgment are extracted below: The loss to the husband and children consequent upon the death of the housewife or mother has to be computed by estimating the loss of 'services' to the family, if there was reasonable prospect of such services being rendered freely in the future, but for the death. It must be remembered that any substitute to be so employed is not likely to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f motor vehicle, but the forum therefore has been provided, as also the mode and manner in which the compensation to be awarded therefore. In such a situation, it would be inappropriate to rely upon a decision of the Apex Court, which had been rendered in an absolutely different fact situation and in relation whereto there did not exist any statutory compensation. Lata Wadhwa (supra) was decided in a matter where a fire occurred during a celebration. The liability of the Tata Iron Steel Co. Ltd. was not disputed. Compensation was awarded having regard to the peculiar feature obtaining in that case which has got nothing to do with the statutory compensation payable under the provisions of the Motor Vehicles Act. 59. In Amar Singh Thukral v. Sandeep Chhatwal (supra), the learned Single Judge of Delhi High Court adopted the yardstick of minimum rates of wages for the purpose of award of compensation in the case of death of a housewife and then proceeded to observe 'since there is no scientific method of assessing the contribution of a housewife to her household, in cases such as the present, resort should be had to the wages of a skilled worker as per the minimum rates of wag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt the same. Notwithstanding this, the Tribunal and the High Court altogether ignored the income of the deceased. The Tribunal did advert to the Second Schedule of the Act and observed that the income of the deceased could be assessed at ₹ 5,000/- per month (₹ 60,000/- per annum) because the income of her spouse was ₹ 15,416/- per month and then held that after making deduction, the total loss of dependency could be ₹ 6 lacs. However without any tangible reason, the Tribunal decided to reduce the amount of compensation by observing that the deceased was actually non-earning member and the amount of compensation would be too much. The High Court went a step further and dismissed the appeal by erroneously presuming that neither of the claimants was dependent upon the deceased and the services rendered by her could be estimated as ₹ 1250/- per month. 62. In our view, the reasons assigned by the Tribunal for reducing the amount of compensation are wholly untenable and the approach adopted by the High Court in dealing with the issue of payment of compensation to the appellants was ex facie erroneous and unjustified. 63. In the result, the appeal is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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