MASTER KARTHIK.R v. NEXT FRIEND RAJABABU

Judgment

1. NATIONAL INSURANCE CO. LTD., CHIKKA MAGALUR BRANCH OFFICE CODE:604901 - 2 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 YASHORAM CHAMBERS, 2NF FLOOR, RATHNAGIRI ROAD, B.No.179-577101. REP: BY ITS BRANCH MANAGER.

2. DR.B.RAJANEESH, S/O K.T.BASAVARAJ, R/O LAKSHMI NILAYA, OPP:GOVT COLLEGE No.206, B.H.ROAD, KADUR TOWN, KADUR, CHIKKAMAGALUR DISTRICT, PIN-577 548. (BY SRI. ASHOK.N.PATIL, ADVOCATE FOR R-1; VIDE ORDER DATED:15/07/2022, NOTICE TO R-2 IS DISPENSED WITH.) …RESPONDENTS THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 29.04.2019 PASSED IN MVC No.198/2017 ON THE FILE OF THE MACT AND SENIOR CIVIL JUDGE, MULBAGAL, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. IN MFA No. 4124/2020 BETWEEN: SIDDU @ SIDDANNA, S/O MARTHANDAPPA, AGED AOBUT 8 YEARS, C/O LOKESH, No.853, CHUNCHAGATTA MAIN ROAD, BHEERAVESWARANAGAR, KONANAKUNTE POST, BENGALURU-560 062. - 3 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 …APPELLANT PERMANENT ADDRESS: HONNAL VILLAGE, BIRALABI POST, ANDONA HOBLI, KALABURGI DISTRICT-585 101. APPELLANT BEING MINOR REPRESENTED BY HIS FATHER, AND NATURAL GUARDIAN MARATHANDAPPA, S/O HUSANAPPA (BY SRI. GIRIMALLAIAH, ADVOCATE) AND:

1. THE NEW INDIA ASSURANCE COMPANY LTD., No.9/2, 2ND FLOOR, MAHALAKSHMI CHAMBERS, M.G.ROAD, BENGALURU-560 001.

2. MR. BHADRA REDDY.A. S/O ASWATH REDDY, MAJOR, (AGE NOT KNOWN TO APPELLANT) No.293, MURALI MEDICALS, ZUAUVADI, HOSUR TALUK, KRISHNAGIRI DISTRICT, TAMIL NADU-635 109. (BY SMT.GEETHA RAJ, ADVOCATE FOR R-1; VIDE ORDER DATED:23.05.2022, NOTICE TO R-2 IS DISPENSED WITH) …RESPONDENTS THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 31.12.2019, PASSED IN MVC No.2493/2018, ON THE FILE OF THE MEMBER, PRINCIPAL MACT AND CHIEF JUDGE, COURT OF SMALL CAUSES, BENGALURU, PARTLY ALLOWING THE CLAIM - 4 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. IN MFA No. 7008/2021 BETWEEN: SYED GHAZI ABBAS, S/O HASSAN ABBAS, AGED ABOUT 5 YEARS, No.96, SOUTH CROSS STREET, NEELASANDRA, BENGALURU-560 047. APPELLANT BEING MINOR REPRESENTED BY HIS MOTHER AND NATURAL GUARDIAN MRS NJUM FATHIMA.R. W/O HASSAN ABBAS. (BY SRI. GIRIMALLAIAH, ADVOCATE) AND:

1. ICICI LOMBARD GENERAL INSURANCE COMPANY LTD., No.121, THE ESTATE, 9TH FLOOR, DICKENSON ROAD, M.G.ROAD, BENGALURU-560 042 REPRESENTED BY ITS MANAGER.

2. SRI. NASIR, S/O LATE ABDUL RAJAK, MAJOR R/O HOLAVANAHALLI, 6TH BLOCK, KORATAGERE TALUK, TUMKUR DISTRICT-572 121. …APPELLANT (BY SRI. B.C.SHIVANNE GOWDA, ADVOCATE FOR R-1; VIDE ORDER DATED 28.09.2022, NOTICE TO R-2 IS DISPENSED WITH) …RESPONDENTS - 5 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 THIS MFA IS FILED UNDER SECTION 173(1) OF MC ACT AGAINST THE JUDGMENT AND AWARD DATED 01.10.2021 PASSED IN MVC No.6042/2019 ON THE FILE OF THE I ADDITIONAL SMALL CAUSED JUDGE AND MACT, BENGALURU FOR SCCH-11, COMPENSATION OF COMPENSATION. ALLOWING AND THE SEEKING ENHANCEMENT PETITION CLAIM THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR FOR JUDGMENT ON 12.06.2024, COMING ON PRONOUNCEMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE N S SANJAY GOWDA CAV JUDGMENT

1. For convenience, this order has been indexed as follows: Sl. Particulars

1. Bifurcation of death cases from that of injuries in the present batch of appeals. Page 06

2. Basic principles relating to assessment 09 of future income in respect of a minor.

3. Judgments of the Apex Court relating to payment of compensation. 11

4. The 1st Method — the multiplier 18 method.

4.1 Table—1 26 - 6 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021

5. The 2nd Method — adding the non- pecuniary damages stipulated in Master Mallikarjun’s case to the annual inflation rates.

5.1 Table—2

6. Inapplicability of compensation prescribed for injuries in the rules framed under the Railways Act. 28 30 31

7. Conclusion regarding the methodology 33 to be adopted.

8. Facts involved in these appeals and the 34 compensation payable. I. BIFURCATION OF DEATH CASES FROM THAT OF INJURIES IN THE PRESENT BATCH OF APPEALS:

In a batch of appeals disposed of by a separate order on 17.09.2024, this Court has elaborately detailed the manner in which compensation should be determined and paid to the parents in the unfortunate event of losing their minor child in a motor vehicle accident.

3. This Court has also reiterated the general principles that have been relating to compensation that would have - 7 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 to be paid to satisfy the two components of compensation, namely — the components of ‘pecuniary’ and ‘non- pecuniary’ loss.

4. For the pecuniary loss suffered by the parents i.e., the future dependency of the parents on their children, this Court has held that the compensation payable should be the average of the sum total of the compensation determined by the two methods of determining the compensation, namely — ‘the multiplier method’ indicated in the Second Schedule of the Motor Vehicles Act, 1988 (“the MV Act”), and ‘the lump sum amount’ prescribed in the Rules framed under the Railways Act, 1989.

5. However, while computing this sum, this Court has held in MFA 11440/2011 and connected matters that to the notional income of Rs.15,000/- and the lump sum compensation of Rs.4 lakhs, the recorded inflation rate for every year should be compounded annually. A ready reckoner of the compensation payable is also indicated therein in the form of 4 Tables. - 8 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021

6. The said judgment provides for determination of compensation for both pecuniary and non-pecuniary loss that the parents would entail in the event of their child being killed in a motor vehicle accident.

7. These batch of appeals relate to cases where minors have suffered injuries as a result of a motor vehicle accident. Thus, the manner in which the pecuniary and non-pecuniary loss that befalls a minor child, keeping in mind that compensation is granted only once, will have to be ascertained in this judgment.

8. The pecuniary loss — which would include the financial loss suffered by the parents of the minor and also other future losses that the minor may incur — will also have to be estimated. For this, the most appropriate method for determining these two losses, which together form the compensation payable to the minor, will have to be laid out in detail.

9. In fact, the present appeals were also heard along - 9 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 with the above mentioned batch of appeals relating to compensation payable for a minor’s death. Learned counsel appearing for the claimants as well as the learned counsel for the insurers were heard on several occasions and their views were elicited in relation to the manner in which compensation should be paid in cases relating to injuries suffered by minors.

10. Learned Counsel, on both sides, took the Court through the entire law relating to compensation payable under the MV Act and also rendered their valuable suggestions and placed on record all relevant citations relating to compensation payable to minors or their parents in cases of motor vehicle accidents. This Court places on record its appreciation for their contribution on this issue. II. BASIC PRINCIPLES RELATING TO ASSESSMENT OF FUTURE INCOME IN RESPECT OF A MINOR:

11. The only thing that is certain about the future is that it is uncertain. How the future would play out would only - 10 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 be in the realm of imagination and there is yet to be discovered a method where the future can be predicted with any degree of precision. However, given the background and present facts relating to a person, the probability of the person’s future can be estimated, though this estimation, by no means, would be fool-proof or guaranteed.

12. If the future can’t be predicted, then the question of predicting an income for a minor child would not also be possible. However, the possibility of a modicum of success of a minor can be assumed given the existing background of the minor, his family’s background and an intelligent guess can be made on the basis of these attendant circumstances.

13. One of provisions in the Directive Principles of State Policy i.e., Article 43 states that it shall be the endeavour of the State to secure not only work but also a living wage, conditions of work, a decent standard of life and full enjoyment of leisure. Living wages are, however, not - 11 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 defined either under the Constitution or under any other law. Living wages, as the name suggests, means a wage which enables a man to have a dignified life as compared to a minimum wage which, as the name suggests, is the bare minimum that would be required for sustenance. III. JUDGMENTS OF THE APEX COURT RELATING TO PAYMENT OF COMPENSATION:

14. In the appeals relating to the death of a minor child, the cases relating to both death and injury are stated. However, in this batch of appeals, only those case laws relating to injuries are being considered to render the proper context to the issues involved in this case.

15. In 2008, in Sapna’s case1, the Apex Court, for awarding compensation to 12 year old Sapna who was completely disabled and unable to walk, applied the multiplier method and adopted a notional income of Rs.15,000/- p.a. and added a sum of Rs.75,000/- and 1 Sapna v. United Insurance Co. Ltd. & Anr., (2008) 7 SCC 613. - 12 - NC: 2024:KHC:40725 MFA No. 426 of 2020 C/W MFA No. 4124 of 2020 MFA No. 7008 of 2021 awarded a total sum of Rs.3 lakhs as compensation for the injuries suffered by her.

16. In 2013, in Michael’s case2, for awarding compensation to Michael, an 8 year old who had suffered 16% disability, a total sum of Rs.4 lakhs was awarded, out of which Rs.2.8 lakhs was towards ‘Pain’, ‘Suffering’ and ‘Disability’, and Rs. lakh was for ‘Loss of Amenities’ and the remaining was for medical expenses.

17. In the case of Master Mallikarjun3 in 2014, for awarding compensation to a 12 year old who had suffered 18% disability, the Apex Court held as follows: “8. While considering the claim by a victim child, it would be unfair and improper to follow the structured formula as per the Second Schedule to the Motor Vehicles Act for reasons more than one. The main stress in the formula is on pecuniary damages. For children there is no income. The only indication in the Second Schedule for non-earning persons is to take the notional income as Rs 15,000 per year. A child