Sec 163A MV Act -Fixing Rs 15,000 Per Annum As Notional Income For Non-Earning Members Not Reasonable As Schedule II Not Yet Amended : Supreme Court

While dealing with a civil appeal preferred by appellant claimants aggrieved by the High Court of Jharkhand, Ranchi's judgement the Supreme Court observed that despite repeated directions, Schedule-II of the Motor Vehicles Act, 1988 has not been amended yet.

The bench of Justices R Subhash Reddy and Hrishikesh Roy in Kurvan Ansari alias Kurvan Ali & Anr. v. Shyam Kishore Murmu & Anr. while partly allowing the civil appeal observed that,

"In this case, it is to be noted that the accident was on 06.09.2004. In spite of repeated directions, Schedule-II is not yet amended. Therefore, fixing notional income at Rs.15,000/- per annum for non- earning members is not just and reasonable."

Factual Background

On September 6, 2004, the appellant claimant's son aged 7 years was dashed by a motorcycle (driven by Mr Sunil Gurum, owned by Respondent 1 and insured with Respondent 2) while he was standing by the side of the road. The said accident caused him grievous injuries resulting in his death.

The appellant claimants filed a claim petition u/s 163A of the Motor Vehicles Act, 1988 claiming compensation on account of the accident which resulted in their child's death.

Case Before Motor Accidents Claims Tribunal

The claimants had submitted that the accident had occured due to rash and negligent driving of the driver of the offending motorcycle and that the deceased was aged 7 at the time of accident.

Appreciating oral and documentary evidence on record, the Tribunal concluded that the accident had occurred due to rash and negligent driving of the motorcycle's driver viz., Sunil Gurum.

Considering notional income of the deceased at Rs.15,000/- per annum, by applying multiplier '15', the Tribunal awarded compensation of Rs.2,25,000/- with interest @6% per annum from the date of judgment.

Since the driver of the offending motorcycle Mr.Sunil Gurum was not possessing a valid driving licence at the time of accident, the Tribunal directed the -Insurance Company to pay the compensation to the claimants and recover the same from its owner.

Case Before High Court of Jharkhand, Ranchi

Pleading contributory negligence, the insurance company had preferred a miscellaneous appeal and the claimants preferred a miscellaneous application seeking enhancement of the compensation before the High Court.

The High Court on August 3, 2018 dismissed the appeals preferred by the Insurance Company and partly allowed claimant's appeal by awarding a further sum of Rs.15,000/- towards funeral expenses. The Court further held that the appellants were entitled to a sum of Rs.2,40,000/- towards compensation with interest as awarded by the Tribunal from the date of filing Claim Petition.

Submission of Counsels

Appearing for the appellants Advocate SN Bhat submitted that the compensation awarded by the Tribunal as confirmed by the High Court was on lower side and was not just and fair. It was also his contention that compensation was awarded by assuming income of the deceased notionally at Rs.15,000/- per annum as per Schedule-II of the Motor Vehicles Act, 1988 which was applicable to the claims made under Section 163-A of the Motor Vehicles Act, 1988. He also argued that in view of the provision under Section 163-A(3) of the Motor Vehicles Act 1988, though it was obligatory on the part of the Government to amend Schedule–II, same as fixed in the year 1994, continued since then. In this regard Counsel submitted that the notional income as fixed, was to be considered by taking into account increase in the cost of living.

Reliance was placed by appellant's counsel on the Puttamma & Ors. v. K.L. Narayana Reddy & Anr. (2013) 15 SCC 45, R.K. Malik & Anr. v. Kiran Pal & Ors. (2009) 14 SCC 1 and Kishan Gopal & Anr. v. Lala & Ors. (2014) 1 SCC 244 4 (2020) 7 SCC 256.

On the other hand, Advocate VS Chopra for the Insurance Company while relying on the Top Court's judgement in Rajendra Singh & Ors. v. National Insurance Company Limited & Ors. (2020) 7 SCC 256 submitted that there were no grounds to interfere with the High Court's impugned judgment.

Supreme Court's Analysis

Considering that the accident was on September 6, 2004 and discussing the law laid down in Puttamma & Ors. v. K.L. Narayana Reddy & Anr. (2013) 15 SCC 45, R.K. Malik & Anr. v. Kiran Pal & Ors. (2009) 14 SCC 1 and Kishan Gopal & Anr. v. Lala & Ors. (2014) 1 SCC 244 4 (2020) 7 SCC 256, the bench observed that it was a fit case to increase the notional income by taking into account the inflation, devaluation of the rupee and cost of living.

"We deem it appropriate to take notional income of the deceased at Rs.25,000/- (Rupees twenty five thousand only) per annum. Accordingly, when the notional income is multiplied with applicable multiplier '15', as prescribed in Schedule-II for the claims under Section 163-A of the Motor Vehicles Act 1988, it comes to Rs.3,75,000/- (Rs.25,000/- x Multiplier 15) towards loss of dependency. The appellants are also entitled to a sum of Rs.40,000/- each towards filial consortium and Rs.15,000/- towards funeral expenses," the bench added.

The bench in the judgement authored by Justice R Subhash Reddy also observed that the appellants were entitled for a sum of Rs.4,70,000/- towards total compensation with interest at 6% per annum from the date of claim petition till the date of realisation.

"The enhanced compensation shall be apportioned between the appellants as ordered by the Tribunal. The entire compensation shall be paid to the appellants by respondent No.2 - Insurance Company, and we keep it open to the Insurance Company to recover the same from respondent No.1 - owner of the motorcycle by initiating appropriate proceedings as the motorcycle was driven by the driver who was not possessing valid driving licence on the date of the accident," Court further said.

Case Title: Kurvan Ansari alias Kurvan Ali & Anr. v. Shyam Kishore Murmu & Anr.| Civil Appeal No.6902 Of 2021

Citiation:  LL 2021 SC 655

Coram: Justices R Subhash Reddy and Hrishikesh Roy

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