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CASE NO.: Appeal (civil)  4725 of 2006

PETITIONER: New India Assurance Co. Ltd.

RESPONDENT: Satender and Ors.

DATE OF JUDGMENT: 08/11/2006

BENCH: ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T (Arising Out of S.L.P. (C) No.2529 of 2006)

ARIJIT PASAYAT, J.

       Leave granted.

                Challenge in this appeal is to the judgment rendered by a  learned Single Judge of the Delhi High Court in an appeal filed  by the appellant.  In the appeal, the quantum of compensation  awarded to the respondents 1 and 2 by the Motor Accidents  Claims Tribunal, Delhi (in short the ’MACT’) was questioned.    Factual background in a nutshell is as follows:

On 7.5.2002 a child-Anuj, aged about nine years was  knocked down by a truck which was the subject matter of  insurance with the appellant.  As a result of the accident, said  child died.  A claim petition was filed under Section 166 of the  Motor Vehicles Act, 1988 (in short the ’Act’) claiming  compensation. The MACT found that the child was not earning  and, therefore, the compensation has to be assessed on the  basis of notional income. MACT referred to the second  schedule to the Act and held that the notional income as per  the said schedule is Rs.15,000/- p.a., but the same was  unrealistic.  Accordingly the notional income was taken as  Rs.30,000/-p.a. After deducting 1/3rd towards personal  expenses, the financial dependency of the parents was fixed at  Rs.20,000/- p.a. Considering the age of the parents, multiplier  of 17 was adopted.  The total financial dependency was  calculated at Rs.3,40,000/- for financial loss and a sum of  Rs.1,00,000/- was added for emotional loss and adding a sum  of Rs.5,000/- for funeral expenses a sum of Rs.4,45,000/- was  awarded as compensation with interest at the rate of 9% p.a.  from the date of institution of the claim petition till payment.   An appeal was filed before the Delhi High Court by the  appellant which, by the impugned judgment, came to be  dismissed.

Learned counsel for the appellant submitted that the  quantum of compensation fixed is unrealistic.  If MACT made  a reference to the second schedule, it should have awarded the  amount on the basis of the amount indicated in the schedule.   By acting on mere surmises and conjectures, MACT should  not have held that the notional income is to be taken at  Rs.30,000/- p.a..  Multiplier adopted is also on the higher

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side.

There is no appearance on behalf of the claimants- respondents 1 and 2 in spite of notice.

Learned counsel appearing for the owner of the offending  vehicle and the driver supported the stand of the appellant- Insurance Company.

In Mallett v. McMonagle 1970 (AC) 166, Lord Diplock  analysed in detail the uncertainties which arise at various  stages in making a rational estimate and practical ways of  dealing with them.  In Davies v. Taylor (1974) AC 207, it was  held that the Court, in looking at future uncertain events,  does not decide whether on balance one thing is more likely to  happen than another, but merely puts a value on the chances.   A possibility may be ignored if it is slight and remote.  Any  method of calculation is subordinate to the necessity for  compensating the real loss.  But a practical approach to the  calculation of the damages has been stated by Lord Wright in  Davies v. Powell Duffryn Associated Colleries Ltd. (1942) 1 All  ER 657, in the following words:

"The starting point is the amount of  wages which the deceased was earning, the  ascertainment of which to some extent may  depend on the regularity of his employment.   Then there is an estimate of how much was  required to be spent for his own personal and  living expenses.  The balance will give a datum  or basic figure which will generally be turned  into a lump sum by taking a certain number of  years’ purchase."             In State of Haryana and Anr. v. Jasbir Kaur and Ors.   (2003(7) SCC 484) it was held as under:

"7.  It has to be kept in view that the Tribunal  constituted under the Act as provided in  Section 168 is required to make an award  determining the amount of compensation  which is to be in the real sense "damages"  which in turn appears to it to be "just and  reasonable". It has to be borne in mind that  compensation for loss of limbs or life can  hardly be weighed in golden scales. But at the  same time it has to be borne in mind that the  compensation is not expected to be a windfall  for the victim. Statutory provisions clearly  indicate that the compensation must be "just"  and it cannot be a bonanza; not a source of  profit; but the same should not be a pittance.  The courts and tribunals have a duty to weigh  the various factors and quantify the amount of  compensation, which should be just. What  would be ’just" compensation is a vexed  question. There can be no golden rule  applicable to all cases for measuring the value  of human life or a limb. Measure of damages  cannot be arrived at by precise mathematical  calculations. It would depend upon the  particular facts and circumstances, and  attending peculiar or special features, if any.  Every method or mode adopted for assessing  compensation has to be considered in the

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background of ’just" compensation which is  the pivotal consideration. Though by use of the  expression "which appears to it to be just" a  wide discretion is vested in the Tribunal, the  determination has to be rational, to be done by  a judicious approach and not the outcome of  whims, wild guesses and arbitrariness. The  expression ’just" denotes equitability, fairness  and reasonableness, and non-arbitrary. if it is  not so it cannot be just. (See Helen C. Rebello  v. Maharashtra SRTC (1999(1) SCC 90)

There are some aspects of human life which are capable  of monetary measurement, but the totality of human life is  like the beauty of sunrise or the splendor of the stars, beyond  the reach of monetary tape-measure.  The determination of  damages for loss of human life is an extremely difficult task  and it becomes all the more baffling when the deceased is a  child and/or a non-earning person.  The future of a child is  uncertain.  Where the deceased was a child, he was earning  nothing but had a prospect to earn.  The question of  assessment of compensation, therefore, becomes stiffer.  The  figure of compensation in such cases involves a good deal of  guesswork.  In cases, where parents are claimants, relevant  factor would be age of parents.

In case of the death of an infant, there may have been  no actual pecuniary benefit derived by its parents during the  child’s life-time. But this will not necessarily bar the parent’s  claim and prospective loss will find a valid claim provided  that the parents’ establish that they had a reasonable  expectation of pecuniary benefit if the child had lived. This  principle was laid down by the House of Lords in the famous  case of Taff Vale Rly. V. Jenkins (1913) AC 1, and Lord  Atkinson said thus:

".....all that is necessary is that a  reasonable expectation of pecuniary benefit  should be entertained by the person who sues.  It is quite true that the existence of this  expectation is an inference of fact - there must  be a basis of fact from which the inference can  reasonably be drawn; but I wish to express my  emphatic dissent from the proposition that it is  necessary that two of the facts without which  the inference cannot be drawn are, first that  the deceased earned money in the past, and,  second, that he or she contributed to the  support of the plaintiff. These are, no doubt,  pregnant pieces of evidence, but they are only  pieces of evidence; and the necessary inference  can I think, be drawn from circumstances  other than and different from them." (See Lata  Wadhwa and Ors. v. State of Bihar and Ors.  (2001 (8) SCC 197)

This Court in Lata Wadhwa’s case (supra) while  computing compensation made distinction between deceased  children falling within the age group of 5 to 10 years and age  group of 10 to 15 years.              In cases of young children of tender age, in view of  uncertainties abound, neither their income at the time of  death nor the prospects of the future increase in their income

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nor chances of advancement of their career are capable of  proper determination on estimated basis.  The reason is that  at such an early age, the uncertainties in regard to their  academic pursuits, achievements in career and thereafter  advancement in life are so many that nothing can be assumed  with reasonable certainty.  Therefore, neither the income of the  deceased child is capable of assessment on estimated basis  nor the financial loss suffered by the parents is capable of  mathematical computation.

       Applying the principles indicated in Jasbir Kaur’s case  (supra) to the facts of the present case we think award of a  sum of Rs.1,80,000/- would meet the ends of justice.  The  same shall carry interest at the rate of 7.5% from the date of  filing of petition till payment is made.  Payment shall be made  within a period of three months from today.  Amounts, if any,  already paid shall be adjusted from the aforesaid amount of  Rs.1,80,000/-   

       The appeal is allowed to the extent indicated above. There  will be no order as to costs.