- IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
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Constitution of India, 1950 – Article 21 – Criminal Procedure Code, 1973 – Section 357A – Victim Compensation Scheme – Court on its own motion – Death of 24 students and one Tour Operator by drowning in river.
# IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWPIL No. 7 of 2014
Decided on: 02.01.2016
Court on its own motion …Petitioner. Versus State of Himachal Pradesh and others …Respondents. Coram The Hon’ble Mr. Justice Mansoor Ahmad Mir, Chief Justice. The Hon’ble Mr. Justice Tarlok Singh Chauhan, Judge.
For the petitioner: Mr. Dilip Sharma, Senior Advocae, as Amicus Curiae, with Mr. Manish Sharma, Advocate. For the respondents: Mr. Shrawan Dogra, Advocate General, with Mr. Anup Rattan, Additional Advocate General, and Mr. J.K. Verma, Deputy Advocate General, for respondents No. 1 to 3, 5 to 9 and 12. Mr. Shrawan Dogra and Mr. Satyen Vaidya, Senior Advocates, with Mr. Satish Sharma, Advocate, for respondents No. 4, 10 and 11. Mr. Rajnish Maniktala, Advocate, for respondents No. 13, 23 and 24. Mr. V. Pattabhi and Mr. Rajnish Maniktala, Advocates, for respondent No. 22. Mr. Tek Chand Sharma, Advocate, for respondents No. 14 and 15. Mr. Bimal Gupta, Senior Advocate, with Mr. Vineet Vashisth, Advocate, for respondents No. 16 and 17. Mr. J.S. Bhogal, Senior Advocate, with Mr. Lovneesh Kanwar, Advocate, for respondent No. 18. Mr. Lalit K. Sharma, Advocate, for respondent No. 19. Mr. Bipin C. Negi, Senior Advocate, with Mr. Pranay Pratap Singh, Advocate, for respondent No. 20. Mr. Ajeet Sharma, Advocate, for respondent No. 21. Mr. S.C. Sharma, Advocate, for the applicant in CMP No. 9126 of 2014. Mr. Ajay Mohan Goel and Mr. Suneet Goel, Advocates, for the interveners. Mr. Ashok Sharma, Assistant Solicitor General of India, with Mr. Nipun Sharma, Advocate, for Union of India. Mansoor Ahmad Mir, Chief Justice.
1. We are dealing with an unfortunate case, of which cognizance has been taken by this Court suo motu while going through a news item contained in Amar Ujala of issue, dated 09.06.2014. The news was so shocking and pricking that it shattered everyone. It was an unfortunate incident which has snatched away 24 budding Engineers alongwith one tour conductor. All the 24 students were undergoing the course of B. Tech in Electronic and Instrumentation in respondent No. 13College in Hyberabad, which is one of the first grade Engineering College.
2. In terms of directions, dated 09.06.2014, status report was filed and FIR No. 61 of 2014 was registered at Police Station Aut, District Mandi, under
# Sections 336 and 304A of the Indian Penal Code
(for short “IPC”). The investigation was conducted by the police and by now, it has been taken to its logical end by presenting final report (challan) under
# Section 173 of the Code of Criminal Procedure
(for short “CrPC”) before the Court of competent jurisdiction.
3. The VNR Vigyan Jyoti Institute of Engineering and Technology, Hyderabad (for short “the College”) came to be arrayed as partyrespondent No. 13 in the array of respondents. Respondents No. 14 to 24 were also arrayed as partyrespondents in terms of the orders passed by this Court from time to time.
4. The inquiry report was submitted by respondent No. 12Divisional Commissioner in the open Court on 19.06.2014, in presence of respondents No. 4, 10 and 11.
5. Interim compensation to the tune of ₹5,00,000/ came to be granted in favour of the parents of each of the deceased students vide order, dated 25.06.2014. The H.P. State Electricity Board Limited (for short “the Board”) and the College were saddled with the liability in equal shares.
6. The State authorities have filed status reports from time to time. Respondents have also filed replies and affidavits, which are at pages No. 11 and 43 of the paper book, including the inquiry report at pages No. 52 to 152 of the paper book.
7. Respondent No. 1Chief Secretary to the Government of Himachal Pradesh has also filed photocopy of the instructions issued by the Board, which were to be observed by the officials before discharge of water from the barrage/reservoir, which are at page No. 23 of the paper book.
8. After noticing the unfortunate incident, respondent No. 3Principal Secretary (Power) to the Government of Himachal Pradesh has issued instructions relating to the issue, which are contained at page No. 41 of the paper book.
9. The inquiry report contains the details relating to the negligence, prima facie, committed by the incharge officers/ officials of the Board at the relevant point of time . The said finding is recorded at page 77 of the paper book. It also contains suggestions to avoid such lapses/ recurrences and incidents, at pages No. 91 to 98 of the paper book.
10. Respondents filed response/objections/rejoinder to the said inquiry report, which are at pages No. 283, 417, 532 and 541 of the paper book.
11. In compliance to order, dated 25.06.2014, respondent No. 1Chief Secretary to the Government of Himachal Pradesh has filed compliance report/affidavit, which is at page No. 575 of the paper book alongwith the inquiry report submitted by the Chief Engineer (Electrical), Directorate of Energy, H.P., Shimla, who was appointed as Inquiry Officer to enquire into the matter regarding the functioning of the H.P. State Load Discharge Centre (for short “HPSLDC”) and The Northern Region Load Discharge Centre (for short “NRLDC”), which finds place at page No. 579 of the paper book, containing the details of the provisions of the Indian Electricity Act, 2003 (for short “Act”) relating to the National Load Dispatch Centre (for short “NLDC”), Regional Load Dispatch Centre (for short “RLDC”) and State Load Discharge Centre (for short “SLDC”); applicability of the provisions of the Rules and Regulations and the findings relating to the working of NRLDC, how State is running and manning the projects, its control and how the projects in the State continue to run on full or in some cases more than the capacity.
12. The said inquiry report also discloses the details of the working of HPSLDC, at pages No. 618 to 635 of the paper book; analysis of power availability, at pages No. 636 to 638 of the paper book; findings on functioning of SLDC relating to the incident specifically, at pages No. 639 to 642 of the paper book and the issues of importance and suggested remedial measures, at pages No. 643 to 646 of the paper book.
13. Respondents No. 5, 8 and 9 have filed status report of the case FIR No. 61 of 2014, at pages No. 866 to 871 of the paper book. Respondent No. 1 Chief Secretary to the Government of Himachal Pradesh has filed compliance report/affidavit (pages No. 873 to 891 of the paper book), in compliance to order, dated 09.07.2014, alongwith the minutes of the meeting held on 21.07.2014, to review implementation of Government instructions pursuant to the inquiry conducted by the Divisional Commissioner, Mandi and the inquiry report submitted by the Chief Engineer, Directorate of Energy, H.P., Shimla, contained at pages No. 880 to 888 of the paper book.
14. The responses/affidavits/status reports/compliance affidavits/additional documents/suggestions filed by the respective respondents are contained at pages No. 892 to 1606 of the paper book.
15. Respondent No. 13College has also placed on record proposal with regard to integrated, intelligent, safety management system for monitoring the reservoir regulation.
16. One Shri Om Prakash Sharma had submitted a letter/suggestions in the open Court, contained at page No. 1446 of the paper book, which stands replied by respondent No. 4Managing Director, HPSEBL at pages No. 1501 to 1504 of the paper book.
17. The unfortunate parents, by the medium of CMP No. 2792 of 2015, have placed on record the material relating to the placement, remunerations, fees and other emoluments, the students of the respondent College were being afforded by the companies at the time of their placement, contained at pages No. 1505 to 1520 of the paper book, which is practice prevalent in the said College, but unfortunately, their bright future stands snatched away, rather cut short and the parents stand deprived of the said source/income, hope and help in old age. They have also tried to assess the average loss to the parents per year. It is apt to reproduce para 2 of CMP No. 2792 of 2015 herein:
“2. That the applicants/intervenors seek to place on record the information regarding the placement of the students who have passed out from respondent No. 13 i.e. VNR Vignana Jyothi Institute of Engineer & Technology, Hyderabad. The yearwise campus placements of the students over the past few years is being placed on record as has been obtained by the applicants from the website of respondent No. 13 and the yearwise compilation w.e.f. 2006 till 2014 is being filed herewith as AnnexureI1. the highest salary offered to the students who had passed out from respondent No. 13 institute in the year 2006 was Rs. 3.60 lacs and in the year 2014 the maximum salary offered was Rs. 7.10 lacs. the salary certificate issued by a US based firm in favour of Cherukuri Sandeep, who studied B. Tech in Electronic and Instrumentation branch of the respondent No. 13 show that the income of the said student is US $70,000/ per anum. The said certificate is filed along with the provisional certificate of the said student. The 24 deceased students were also studying B. Tech in Electronics and Instrumentation Branch and had similar ambition to go to US which has bright and promising career ahead of them which was cut short on account of the tragedy.”
18. The perusal of the information placed on record by the parents of the deceased students does disclose as to what is the status of the College, ranking of the students, which plays vital role in getting placement in job and also in society and other benefits. Thus, the compensation may not redress their grievances, but, may be a solace.
19. The question is whether this Court has jurisdiction to entertain this writ petition and exercise powers under Article 226 of the Constitution of India to grant compensation?
20. The law has gone through a sea change and the Courts are intervening by invoking the jurisdiction under Article 226 of the Constitution of India and granting compensation.
21. In the cases titled as
# Nilabati Behera (Smt) alias Lalita Behera (through the Supreme Court Legal Aid Committee) versus State of Orissa and others, reported in (1993) 2 Supreme Court Cases 746
# Chairman, Grid Corporation of Orissa Ltd. (GRIDCO) and others versus Sukamani Das (Smt) and another, reported in (1999) 7 Supreme Court Cases 298
# Tamil Nadu Electricity Board versus Sumathi and others, reported in (2000) 4 Supreme Court Cases 543,
the Apex Court has also laid down the parameters and held that the Court can grant compensation without relegating the parties to civil litigation provided there is prima facie proof on the file that the said incident/accident has taken place due to negligence of the respondentsauthorities. It has further been held that the petitions under Article 226 of the Constitution of India are maintainable and the Courts are within their jurisdiction to intervene. It would be profitable to reproduce para 17 of the judgment in Nilabati Behera’s case (supra) herein:
“It follows that ‘a claim in public law for compensation’ for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is ‘distinct from, and in addition to the remedy private law for damages for the tort’ resulting from the contravention of the fundamental right. The defence of sovereign immunity being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Arts. 32 and 226 of the Constitution. This is what was indicated in Rudul Sah (AIR 1983 SC 1086) and is the basis of the subsequent decisions in which compensation was awarded under Arts. 32 and 226 of the Constitution, for contravention of fundamental rights.”
22. The Apex Court in the cases titled as
# Syad Akbar versus State of Karnataka, reported in (1980) 1 Supreme Court Cases 30
has dealt with the issue. It is apt to reproduce paras 24 and 25 of the judgment herein:
“24. Though some decision, particularly of Courts in England, are inclined to adopt a somewhat different approach, the predominant view held by Courts in United States, Australia and Canada (See Temple v. Terrace and Co., (1966) 57 DLR 2 d 63; G. I. O. v. Fredrichberg, (1968) 11 CLR 403; United Motors Service v. Hutson, 1937 SCR 294) seems to be that the maxim res ipsa loquitur raises only a ‘Permissive Presumption’ exemplifying merely “the general principle of inferring a fact in issue from circumstantial evidence where the circumstances are meagre but significant.” On this reasoning, Fleming has opined that “the maxim is based merely on an estimate of logical probability in a particular case not on any overriding legal policy that controls initial allocation of the burden of proof or, by means of mandatory presumptions, its reallocation regardless of the probabilities of the particular instance.” Fleming, then illustrates this proposition, by giving an example, which for our purpose, is pertinent : If a Truck suddenly swerves across the road and knocks into a car drawn up on the shoulder of the opposite side, this would without more raise an inference of negligence against the driver. Yet the plaintiff would fail, if the trier of the fact at the end of the case deems it no less probable that the accident was caused by an unexpectable break of the steering arm than by culpable maintenance of the wheel assembly.”
25. From what has been said above, it is clear that even in an action in torts, if the defendant gives no rebutting evidence but a reasonable explanation, equally consistent with the presence as well as with the absence of negligence, the presumptions or inferences based on res ipsa loquitur can no longer be sustained. The burden of proving the affirmative, that the defendant was negligent and the accident occurred by his negligence, still remains with the plaintiff; and in such a situation it will be for the Court to determine at the time of judgment whether the proven or undisputed facts, as a whole, disclose negligence. [See Ballard’s case (supra);
# The Kite, (1933) P. 154
Per Evatt J. in
# Davis v. Bunn (1936) 56 CLR 246, 267
# Mummary v. Irvings proprietary Ltd. (Australia), (1956) 96 CLR 99
# Winnipeg Electrical Co. Ltd. v. Jacob Geat, AIR 1932 PC 246
See also :
# Brown v. Rolls Royace Ltd., (1960) 1 All ER 577
# Hendersons v. Henry E. Jenkins and Sons, (1970) AC 282
23. The Apex Court and the other High Courts have discussed and explained the doctrine of res ipsa loquitor and have held that such a remedy is available in public law based on strict liability for breach of Fundamental Rights.
24. In the case titled as
# M.C. Mehta and another versus Union of India and others, reported in (1987) 1 Supreme Court Cases 395
the Apex Court, in para 31, held as under:
“31. We must also deal with one other question which was seriously debated before us and that question is as to what is the measure of liability of an enterprise which is engaged in an hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or are injured. Does the rule in
# Rylands v. Fletcher, (1868) LR 3 HL 330 : 19 LT 220 : (186173) All ER Rep 1
apply or is there any other principle on which the liability can be determined? The rule in Rylands v. Fletcher was evolved in the year 1866 and it provides that a person who for his own purposes being on to his land and collects and keeps there anything likely to do mischief if it escapes must keep it at his peril and, if he fails to do so, is prima facie liable for the damage which is the natural consequence of its escape. The liability under this rule is strict and it is no defence that the thing escaped without that person’s wilful act, default or neglect or even that he had no knowledge of its existence. This rule laid down a principle of liability that if a person who brings on to his land and collects and keeps there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused. Of course, this rule applies only to nonnatural user of the land and it does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the thing which escapes is present by the consent of the person injured or in certain cases where there is statutory authority. Vide Halsbury Laws of England, Vol. 45 para 1305. Considerable case law has developed in England as to what is natural and what is nonnatural use of land and what are precisely the circumstances in which this rule may be displaced. But it is not necessary for us to consider these decisions laying down the parameters of this rule because in a modem industrial society with highly developed scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to carry out part of the developmental programme. This rule evolved in the 19th Century at a time when all these developments of science and technology had not taken place cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure. We need not feel inhibited by this rule which was evolved in this context of a totally different kind of economy. Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. As new situations arise the law has to be evolved in order to meet the challenge of such new situations. Law cannot afford to remain static. We have to evolve new principles and lay down new norms which would adequately deal with the new problems which arise in a highly industrialised economy. We cannot allow our judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any other foreign country. We no longer need the crutches of a foreign legal order. We are certainly prepared to receive light from whatever source it comes but we have to build up our own jurisprudence and we cannot countenance an argument that merely because the new law does not recognise the rule of strict and absolute liability in cases of hazardous or dangerous liability or the rule as laid down in Rylands v. Fletcher as is developed in England recognises certain limitations and responsibilities. We in India cannot hold our hands back and I venture to evolve a new principle of liability which English courts have not done. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concommitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and nondelegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part. Since the persons harmed on account of the hazardous or inherently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm must be held strictly liable for causing such harm as a part of the social cost for carrying on the hazardous or inherently dangerous activity. If the enterprise is permitted to carry on an hazardous or inherently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its overheads. Such hazardous or inherently dangerous activity for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherently dangerous activity regardless of whether it is carried on carefully or not. This principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards. We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate visavis the tortious principle of strict liability under the rule in Rylands v. Fletcher (supra).
25. In the case titled as
# Indian Council For Envirolegal Action and others versus Union of India and others, reported in (1996) 3 Supreme Court Cases 212
the Apex Court held as under:
“65. On a consideration of the two lines of thought (one adopted by the English Courts and the other by the Australian High Court), we are of the opinion that any principle evolved in this behalf should be simple, practical and suited to the conditions obtaining in this country. We are convinced that the law stated by this Court in
# Oleum Gas Leak Case (AIR 1987 SC 1086)
is by far the more appropriate one apart from the fact that it is binding upon us. (We have disagreed with the view that the law stated in the said decision is obiter). According to this rule, once the activity carried on is hazardous or inherently dangerous, the person carrying on such activity is liable to make good the loss cost to any other person by his activity irrespective of the fact whether he took reasonable care while carrying on his activity. The rule is premised upon the very nature of the activity carried on. In the words of the constitution bench, such an activity : (SCC p. 421, para 31)
“……….can be tolerated only on the condition that the enterprise engaged in such hazardous or inherently dangerous activity, indemnifies all those who suffer on account of the carrying on of such hazardous or inherently dangerous activity regardless of whether it is carried on carefully or not”. The Constitution Bench has also assigned the reason for stating the law in the said terms. It is that the enterprise (carrying on the hazardous or inherently dangerous activity) alone has the resource to discover and guard against hazards or dangers and not the person affected and the practical difficulty (on the part of the affected person) in establishing the absence of reasonable care or that the damage to him was foreseeable by the enterprise.”
26. A Division Bench of this Court, while dealing with a case of similar nature in the case titled as
# Deep Chand Sood and others versus State of H.P. and others, reported in 1996 (2) Sim. L.C. 332
after discussing the ‘public law’, doctrine of ‘res ipsa loquitor’ and other attending factors, held that the Court has jurisdiction to grant compensation and granted compensation to the tune of ₹5,00,000/ (Rupees five lacs) to the parents of each of the deceased students.
27. The said judgment was questioned before the Apex Court in the case titled as
# M.S. Grewal and another versus Deep Chand Sood and others, reported in (2001) 8 Supreme Court Cases 151
The Apex Court, after examining all aspects, has virtually affirmed the reasons given by this Court, also supplemented the reasoning and held that the Courts have to intervene in view of the development of law and other factors. It is apt to reproduce paras 8, 9 and 18 to 21 of the judgment herein:
“8. Incidentally, this Court in
# C. K. Subramania Iyer v. T. Kunhikuttan Nair, (1969) 3 SCC 64
while dealing with the matter of fatal accidents laid down certain relevant guidelines for the purpose of assessment of compensation. Paragraph 13 of the report would be relevant on this score and the same is set out hereinbelow: (SCC p. 70, para 13)
“13. The law on the point arising for decision may be summed up thus : Compulsory damages under Section 1A of the Act for wrongful death must be limited strictly to the pecuniary loss to the beneficiaries and that under Section 2, the measure of damages is the economic loss sustained by the estate. There can be no exact uniform rule for measuring the value of the human life and the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor. Since the elements which go to make up the value of the life of the deceased to the designated beneficiaries are necessarily personal to each case, in the very nature of things, there can be no exact or uniform rule for measuring the value of human life. In assessing damages, the Court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable. As a general rule parents are entitled to recover the present cash value of the prospective service of the deceased minor child. In addition they may receive compensation for loss of pecuniary benefits reasonably to be expected after the child attains majority. In the matter of ascertainment of damages, the Appellate Court should be slow in disturbing the findings reached by the Courts below, if they have taken all the relevant facts into consideration.”
9. The observations as above, undoubtedly lays down the basic guidance for assessment of damages but one redeeming feature ought to be noted that compensation or damages cannot be awarded as a solatium but to assess the same with reference to loss of pecuniary benefits. In the decision last noted [(Subramania Iyer), (1969) 3 SCC 64], this Court placed strong reliance on two old decisions of the English Courts, to wit:
# Franklin v. South Eastern Rly. Co., 157 ER 448 : (1858) 3 H&N 211
wherein Pollock, C. B. stated :
“We do not say that it was necessary that actual benefit should have been derived, a reasonable expectation is enough and such reasonable expectation might well exist, though from the father, not being in need, the son had never done anything for him. On the other hand a jury certainly ought not to make a guess in the matter, but ought to be satisfied that there has been a loss of sensible and appreciable pecuniary benefit which might have been reasonably expected from the continuance of life.”
xxx xxx xxx
18. Be it noted that the doctrine of ‘vicarious liability’ has had a fair amount of judicial attention in the English Courts. By the end of 18th century, the idea began to grow up that some special importance ought to be attached to the relationship of master and servant and in 1849 it was officially held that existence of that relationship was essential. Thereafter, though primary liability on the part of anyone could be established on proof of direct participation in the tort, such direct participation was not even theoretically required to make a master liable for his servant’s torts. The liability is derived from the relationship and is truly vicarious. At the same time, the phrase ‘implied authority’ which had been the cornerstone of the master’s primary liability gives way gradually to the modern “course of employment” (vide Winfield and Jolowicz on Tort, 15th Edn.).
19. In recent years, the tendency has been however, towards more liberal protection of third party and so in establishing a particular ‘course of employment’ the Court should not dissect the employees basic task into component parts but should ask in a general sense : What was the job at which he was engaged for his employer ? And it is on this perspective Lord Wilberforce in
# Kooragang Investments Pty. Ltd. v. Richardson & Wrench Ltd., 1982 AC 462
stated : (All ER p. 69ae)
“Negligence is a method of performing an act : instead of it being done carefully, it is done negligently. So liability for negligent acts in the course of employment is clear. Cases of fraud present at first sight more difficulty : for if fraudulent acts are not directly forbidden, most relationship would carry an implied prohibition against them. If committed for the benefit of the employer and while doing his business, principle and logic demand that the employer should be held liable, and for some time the law rested at this point. The classic judgment of Wills J. in
# Barwick v. English Joint Stock Bank, (1867) LR Exch 259
Exch. at p. 266 stated the principle thus :
“In all these cases it may be said …. that the master has not authorised the act. it is true, he has not authorised the particular act but he has put the agent in his place to do that class of acts and he must be answerable for the manner in which the agent has conducted himself in doing the business which it was the act of his master to place him in.”
That was a case where the wrong was committed for the master’s (viz., the bank’s) benefit, and Willes J. stated this as an ingredient of liability (Exch at p. 265):
“……the master is answerable for every such wrong of the servant or agent as is committed in the course of the service and for the master’s benefit, though no express command or privity of the master be proved.”
20. But a sharp distinction has been made as regards the group of cases which is concerned with the use of motor vehicles. These are the cases Lord Wilberforce observed : (All ER p. 70ac)
“(i) where a servant has, without authority, permitted another person to drive the master’s vehicle;
(ii) where a servant has, without authority, invited another person on to the vehicle, who suffers injury;
(iii) where a servant has embarked on an unauthorised detour, or , as lawyers like to call it, a “frolic of his own.”
These cases have given rise to a number of fine distinctions, the Courts in some cases struggling to find liability, in others to avoid it, which it is not profitable here to examine. It remains true to say that, whatever exceptions or qualifications may be introduced, the underlying principle remains that a servant, even while performing acts of the class which he was authorised, or employed, to do, may so clearly depart from the scope of his employment that his master will not be liable for his wrongful acts.”
21. The English law, therefore, takes a softer attitude in cases where motor vehicles are involved in the matter of foisting of liability so far as the employer is concerned the reason obviously being if the concerned employee acts in a manner contrary to the course of employment and on a “frolic of his own” why should the employer be made responsible. It seems logical but obviously there are cases and cases on the basis wherefor the liability of the employer ought to be fixed. The Privy Council in Kooragang Ltd. attributed “frolic of his own” to be the exonerating factor but this frolic has also to be considered from facts to facts in the matter of foisting of liability on to the employer. In any event, we need not devote much of our time to the excepted cases, since we have in this country several legislations covering the “excepted categories”. The recognition of broader approach however, stands undisputed and has also our concurrence herewith.”
28. An important case has arisen before the Apex Court titled as
# Delhi Jal Board versus National Campaign for Dignity and Rights of Sewerage and Allied Workers and others, reported in (2011) 8 Supreme Court Cases 568
It is apt to reproduce paras 38 and 39 of the judgment herein:
“38. In view of the principles laid down in the aforesaid judgments, we do not have any slightest hesitation to reject the argument that by issuing the directions, the High Court has assumed the legislative power of the State. What the High Court has done is nothing except to ensure that those employed/engaged for doing work which is inherently hazardous and dangerous to life are provided with life saving equipments and the employer takes care of their safety and health.
39. The State and its agencies/ instrumentalities cannot absolve themselves of the responsibility to put in place effective mechanism for ensuring safety of the workers employed for maintaining and cleaning the sewage system. The human beings who are employed for doing the work in the sewers cannot be treated as mechanical robots, who may not be affected by poisonous gases in the manholes. The State and its agencies/ instrumentalities or the contractors engaged by them are under a constitutional obligation to ensure the safety of the persons who are asked to undertake hazardous jobs. The argument of choice and contractual freedom is not available to the Appellant and the like for contesting the issues raised by Respondent No. 1.”
29. It would also be profitable to reproduce para 92 of the judgment rendered by the Apex Court in the case titled as
# Charan Lal Sahu versus Union of India, reported in (1990) 1 Supreme Court Cases 613
“92. It was urged before us that there was an absolute and strict liability for an enterprise which was carrying on dangerous operations with gases in this country. It was further submitted that there was evidence on record that sufficient care and attention had not been given to safeguard against the dangers of leakage and protection in case of leakage. Indeed, the criminal prosecution that was launched against the Chairman of Union Carbide Mr. Warren Anderson and others, as indicated before, charged them along with the defendants in the suit with delinquency in these matters and criminal negligence in conducting the toxic gas operations in Bhopal. As in the instant adjudication, this court is not concerned with the determination of the actual extent of liability, we will proceed on the basis that the law enunciated by this court in
# M. C. Mehta v. Union of India, (1987) 1 SCC 395
case is the decision upon the basis of which damages will be payable to the victims in this case. But then the practical question arises: what is the extent of actual damages payable, and how would the quantum of damages be computed? Indeed, in this connection, it may be appropriate to refer to the order passed by this court on 4/05/1989 giving reasons why the settlement was arrived at at the figure indicated. This court had reiterated that it had proceeded on certain prima facie undisputed figures of death and substantially compensating personal injury. This court has referred to the fact that the High court had proceeded on the broader principle in M. C. Mehta case and on the basis of the capacity of the enterprise because the compensation must have deterrent effect. On that basis the High court had proceeded to estimate the damages on the basis of Rs. 2 lakhs for each case of death and of total permanent disability, Rs. 1 lakh for each case of partial permanent disability and Rs. 50,000. 00 for each case of temporary partial disability. In this connection, the controversy as to what would have the damages been if the action had proceeded, is another matter. Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment. Penal redress, however, involves both compensation to the person injured and punishment as deterrence. These problems were highlighted by the House of Lords in England in
# Rookes v. Bamard, 1964 AC 1129 : (1964) 1 All ER 367
which indicate the difference between aggravated and exemplary damages. Salmond on the Law of Torts, emphasises that the function of damages is compensation rather than punishment, but punishment cannot always be ignored. There are views which are against exemplary damages on the ground that these infringe in principle the object of law of torts, namely, compensation and not punishment and these tend to impose something equivalent to fine in criminal law without the safeguards provided by the criminal law. In
# Rookes v. Bamard, 1964 AC 1129 : (1964) 1 All ER 367
the House of Lords in England recognised three classes of cases in which the award of exemplary damages was considered to be justifiable. Awards must not only, it is said, compensate the parties but also deter the wrongdoers and others from similar conduct in future. The question of awarding exemplary or deterrent damages is said to have often confused civil and criminal functions of law. Though it is considered by many that it is a legitimate encroachment of punishment in the realm of civil liability, as it operates a restraint on the transgression of law which is for the ultimate benefit of the society. Perhaps, in this case,had the action proceeded, one would have realised that the fall out of this gas disaster might have been the formulation of a concept of damages, blending both civil and criminal liabilities. There are, however, serious difficulties in evolving such an actual concept of punitive damages in respect of a civil action which can be integrated and enforced by the judicial process. It would have raised serious problems of pleading, proof and discovery, and interesting and challenging as the task might have been, it is still very uncertain how far decision based on such a concept would have been a decision according to ‘due process of law acceptable by international standards. There were difficulties in that attempt But as the provisions stand these considerations do not make the Act constitutionally invalid. These are matters on the validity of settlement. The Act, as such does not abridge or curtail damage or liability whatever that might be. So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.”
30. The Apex Court in the case titled as
# Chairman, Railway Board and others versus Chandrima Das (Mrs) and others, reported in (2000) 2 Supreme Court Cases 465
held that writ petition under Article 226 of the Constitution of India against the State or its instrumentalities for payment of compensation is maintainable irrespective of availability of alternative remedies. It is apt to reproduce paras 6, 7 and 9 to 11 of the judgment herein:
“6. We may first dispose of the contention raised on behalf of the appellants that proceedings under Article 226 of the Constitution could not have been legally initiated for claiming damages from the Railways for the offence of rape committed on Smt. Hanuffa Khatoon and that Smt. Hanuffa Khatoon herself should have approached the Court in the realm of Private Law so that all the questions of fact could have been considered on the basis of the evidence adduced by the parties to record a finding whether all the ingredients of the commission of tort against the person of Smt. Hanuffa Khatoon were made out, so as to be entitled to the relief of damages. We may also consider the question of locus standi as it is contended on behalf of the appellants that Mrs. Chandrima Das, who is a practicing Advocate of the High Court of Calcutta, could not have legally instituted these proceedings.
7. The distinction between “public law” and “private law” was considered by a three Judge Bench of this Court in
# Common Cause. A Regd. Society v. Union of India, (1999) 6 SCC 667 : AIR 1999 SC 2979 : (1999) 5 JT (SC) 237 : 1999 AIR SCW 2899)
in which it was, inter alia, observed as under: (SCC p. 701, paras 3940)
“39. Under Article 226 of the Constitution, the High Court has been given the power and jurisdiction to issue appropriate Writs in the nature of Mandamus, Certiorari, Prohibition, QuoWarranto and Habeas Corpus for the enforcement of Fundamental Rights or for any other purpose. Thus, the High Court has jurisdiction not only to grant relief for the enforcement of Fundamental Rights but also for “any other purpose” which would include the enforcement of public duties by public bodies. So also the Supreme Court under Article 32 has the jurisdiction to issue prerogative writs for the enforcement of Fundamental Rights guaranteed to a citizen under the Constitution.
40. Essentially, under public law, it is the dispute between the citizen or a group of citizens on the one hand and the State or other public bodies on the other, which is resolved. This is done to maintain the rule of law and to prevent the State or the public bodies from acting in an arbitrary manner or in violation of that rule. The exercise of constitutional powers by the High Court and the Supreme Court under Article 226 or 32 has been categorised as power of “judicial review”. Every executive or administrative action of the State or other statutory or public bodies is open to judicial scrutiny and the High Court or the Supreme Court can, in exercise of the power of judicial review under the Constitution, quash the executive action or decision which is contrary to law or is violative of Fundamental Rights guaranteed by the Constitution. With the expanding horizon of Article 14 read with other Articles dealing with Fundamental Rights, every executive action of the Govt. or other public bodies, including Instrumentalities of the Govt., or those which can be legally treated as “Authority” within the meaning of Article 12, if arbitrary, unreasonable or contrary to law, is now amenable to the writ jurisdiction of this Court under Article 32 or the High Courts under Article 226 and can be validly scrutinised on the touchstone of the Constitutional mandates.”
9. Various aspects of the public law field were considered. It was found that though initially a petition under Article 226 of the Constitution relating to contractual matters was held not to lie, the law underwent a change by subsequent decisions and it was noticed that even though the petition may relate essentially to a contractual matter, it would still be amenable to the writ jurisdiction of the High Court under Article 226. The Public Law remedies have also been extended to the realm of tort. This Court, in its various decisions, has entertained petitions under Article 32 of the Constitution on a number of occasions and has awarded compensation to the petitioners who had suffered personal injuries at the hands of the officers of the Govt. The causing of injuries, which amounted to tortious act, was compensated by this Court in many of its decisions beginning from
# Rudul Sah v. State of Bihar, (1983) 3 SCR 508 : (1983) 4 SCC 141 : AIR 1983 SC 1086.
# Bhim Singh v. State of J&K, (1985) 4 SCC 577
# Peoples’ Union for Democratic Rights v. State of Bihar, (1987) 1 SCC 265
# Peoples’ Union for Democratic Rights v. Police Commr., Delhi Police Headquarters, (1989) 4 SCC 730
# Saheli, A Women’s Resources Centre v. Commr. of Police, (1990) 1 SCC 422
# Arvinder Singh Bagga v. State of U.P., (1994) 6 SCC 565
# P. Rathinam v. Union of India, 1989 Supp (2) SCC 716
# Death of Sawinder Singh Grower in re, 1995 Supp (4) SCC 450
# Inder Singh v. State of Punjab, (1995) 3 SCC 702
# D.K. Basu v. State of W.B., (1997) 1 SCC 416.)
10. In cases relating to custodial deaths and those relating to medical negligence, this Court awarded compensation under public law domain in
# Nilabati Behera v. State of Orissa, (1993) 2 SCC 746 : (1993) 2 SCR 581 : AIR 1993 SC 1960 : (1993 AIR SCW 2366)
# State of M. P. v. Shyamsunder Trivedi; (1995) 4 SCC 262 : 1995 (3) SCALE 343 : (1995 AIR SCW 2793)
# People’s Union for Civil Liberties v. Union of India, (1997) 3 SCC 433 : AIR 1997 SC 1203 : (1997 AIR SCW 1234)
# Kaushalya v. State of Punjab, (1996) 7 SCALE (SP) 13
# Supreme Court Legal Aid Committee v. State of Bihar, (1991) 3 SCC 482
# Dr. Jacob George v. State of Kerala, (1994) 3 SCC 430 : 1994 (2) SCALE 563 : (1994 AIR SCW 2282)
# Paschim Banga Khet Mazdoor Samity v. State of West Bengal, (1995) 4 SCC 37 : AIR 1996 SC 2426 : (1996 AIR SCW 2964)
# Mrs. Manju Bhatia v. N.D.M.C., (1997) 6 SCC 370 : AIR 1998 SC 223 : (1997) 4 SCALE 350 : (1997 AIR SCW 4190).
11. Having regard to what has been stated above, the contention that Smt. Hanuffa Khatoon should have approached the Civil Court for damages and the matter should not have been considered in a petition under Article 226 of the Constitution, cannot be accepted. Where public functionaries are involved and the matter relates to the violation of Fundamental Rights or the enforcement of public duties, the remedy would still be available under the public law notwithstanding that a suit could be filed for damages under private law.”
31. The Apex Court in the case titled as
# M.P. Electricity Board versus Shail Kumari and others, reported in (2002) 2 Supreme Court Cases 162
has held that a person undertaking an activity involving hazardous or risky exposure to human life, is liable under law of torts to compensate for the injury suffered by any other person irrespective of any negligence or carelessness. It is apt to reproduce paras 7, 8, 11 and 13 of the judgment herein:
“7. It is an admitted fact that the responsibility to supply electric energy in the particular locality was statutorily conferred on the Board. If the energy so transmitted causes injury or death of a human, being, who gets unknowingly trapped into if the primary liability to compensate the sufferer is that of the supplier of the electric energy. So long as the voltage of electricity transmitted through the wires is potentially of dangerous dimension the managers of its supply have the added duty to take all safety measures to prevent escape of such energy or to see that the wire snapped would not remain live on the road as users of such road would be under peril. It is no defence on the part of the management of the Board that somebody committed mischief by siphoning such energy of his private property and that the electrocution was from such diverted line. It is the look out the managers of the supply system to prevent such pilferage by installing necessary devices. At any rate, if any live wire got snapped and fell on the public road the electric current thereon should automatically have been disrupted. Authorities manning such dangerous commodities have extra duty to chalk out measures to prevent such mishaps.
8. Even assuming that all such measures have been adopted, a person undertaking an activity involving hazardous or risky exposure to human life, is liable under law of torts to compensate for the injury suffered by any other person, irrespective of any negligence or carelessness on the part of the managers of such undertakings. The basis of such liability is the foreseeable risk inherent in the very nature of such activity. The liability cast on such person is known, in law, as “strict liability”. It differs from the liability which arises on account of the negligence or fault in this way i.e. the concept of negligence comprehends that the foreseeable harm could be avoided by taking reasonable precautions. If the defendant did all that which could be done for avoiding the harm he cannot be held liable when the action is based on any negligence attributed. But such consideration is not relevant in cases of strict liability where the defendant is held liable irrespective of whether he could have avoided the particular harm by taking precautions.
11. The rule of strict liability has been approved and followed in many subsequent decisions in England. A recent decision in recognition of the said doctrine is rendered by the House of Lords in
# Cambridge Water Co. Ltd. v. Eastern Counties Leather Plc., (1994) 1 All ER 53 (HL).
The said principle gained approval in India, and decisions of the High Courts are a legion to that effect. A Constitution Bench of this Court in
# Charan Lal Sahu v. Union of India (1990 (1) SCC 613)
and a Division Bench in
# Gujarat SRTC v. Ramanbhai Prabhatbhai (1987 (3) SCC 234)
had followed with approval the principle in
# Rylands v. Fletcher, (1868) 3 HL 330.
By referring to the above two decisions a two Judge Bench of this Court has reiterated the same principle in
# Kaushnuma Begum v. New India Assurance Co. Ltd., (2001 (2) SCC 9
13. In the present case, the Board made an endeavour to rely on the exception to the rule of strict liability (Rylands v. Fletcher) being “an act of stranger”. The said exception is not available to the Board as the act attributed to the third respondent should reasonably have been anticipated or at any rate its consequences should have been prevented by the appellant Board. In
# Northwestern Utilities, Ltd. v. London Guarantee and Accident Company, Ltd. (1936 AC 108)
the Privy Council repelled the contention of the defendant based on the aforecited exception. In that case a hotel belonging to the plaintiffs was destroyed in a fire caused by the escape and ignition of natural gas. The gas had percolated into the hotel basement from a fractured welded joint in an intermediate pressure main situated below the street level and belonging to the defendants which was a public utility company. The fracture was caused during the construction involving underground work by a third party. The Privy Council held that the risk involved in the operation undertaken by the defendant was so great that a high degree care was expected of him since the defendant ought to have appreciated the possibility of such a leakage.”
32. In the case titled as
# Sube Singh versus State of Haryana and others, reported in (2006) 3 Supreme Court Cases 178
the Apex Court held that the Courts may award compensation under Article 226 of the Constitution of India and the award of compensation against the State is an appropriate and effective remedy. It is apt to reproduce para 38 of the judgment herein:
“38. It is thus now well settled that award of compensation against the State is an appropriate and effective remedy for redress of an established infringement of a fundamental right under Article 21, by a public servant. The quantum of compensation will, however, depend upon the facts and circumstances of each case. Award of such compensation (by way of public law remedy) will not come in the way of the aggrieved person claiming additional compensation in a civil court, in enforcement of the private law remedy in tort, nor come in the way of the criminal court ordering compensation under section 357 of Code of Criminal Procedure.”
33. The Apex Court in the case titled as
# Union of India versus Prabhakaran Vijaya Kumar and others, reported in (2008) 9 Supreme Court Cases 527
laid down the same proposition. It would be profitable to reproduce paras 22 to 36, 38, 41 to 43 and 48 to 52 of the judgment herein:
“22. Strict liability focuses on the nature of the defendants’ activity rather than, as in negligence, the way in which it is carried on (vide Torts by Michael Jones, 4th Edn. p. 247). There are many activities which are so hazardous that they may constitute a danger to the person or property of another. The principle of strict liability states that the undertakers of these activities have to compensate for the damage caused by them irrespective of any fault on their part. As Fleming says “permission to conduct such activity is in effect made conditional on its absorbing the cost of the accidents it causes, as an appropriate item of its overheads” (see Fleming on ‘Torts’ 6th Edn p. 302).
23. Thus in cases where the principle of strict liability applies, the defendant has to pay damages for injury caused to the plaintiff, even though the defendant may not have been at any fault.
24. The basis of the doctrine of strict liability is two fold:
(i) The people who engage in particularly hazardous activities should bear the burden of the risk of damage that their activities generate and
(ii) it operates as a loss distribution mechanism, the person who does such hazardous activity (usually a corporation) being in the best position to spread the loss via insurance and higher prices for its products (vide ‘Torts’ by Michael Jones 4th Edn p. 267).
25. As pointed out by Clerk and Lindsell (see ‘Torts’, 14th Edn):
“The fault principle has shortcomings. The very idea suggests that compensation is a form of punishment for wrong doing, which not only has the tendency to make tort overlap with criminal law, but also and more regrettably, implies that a wrongdoer should only be answerable to the extent of his fault. This is unjust when a wholly innocent victim sustains catastrophic harm through some trivial fault, and is left virtually without compensation”.
26. Many jurists applaud liability without fault as a method for imposing losses on superior risk bearers. Their argument is that one who should know that his activity, even though carefully prosecuted, may harm others, and should treat this harm as a cost of his activity. This cost item will influence pricing, and will be passed on to consumers spread so widely that no one will be seriously effected (vide Article by Prof. Clarence Morris entitled ‘Hazardous Enterprises and Risk Bearing Capacity’ published in Yale Law Journal, 1952 p. 1172).
27. The rule in
# Rylands vs. Fletcher, (1868) LR 3 HL 330
was subsequently interpreted to cover a variety of things likely to do mischief on escape, irrespective of whether they were dangerous per se e.g. water, electricity, explosions, oil, noxious fumes, colliery spoil, poisonous vegetation, a flagpole, etc (see ‘Winfield and Jolowicz on ‘Tort”, 13th Edn., p 425) vide
# National Telephone Co. vs. Baker, (1893) 2 Ch 186
# Eastern and South African Telegraph Co. Ltd. vs. Cape Town Tramways Co. Ltd. (1902) AC 381
# Hillier vs. Air Ministry, (1962) CLY 2084
etc. In America the rule was adapted and expressed in the following words ” one who carried on an ultra hazardous activity is liable to another whose person, land or chattels the actor should recognize as likely to be harmed by the unpreventable miscarriage of the activity for harm resulting thereto from that which makes the activity ultra hazardous, although the utmost care is exercised to prevent the harm” (vide Restatement of the Law of Torts, Vol. 3, p. 41).
28. Rylands vs. Fletcher (supra) gave English Law one of its most creative generalizations which, for a long time, looked destined to have a successful future. Yet, after a welcome start given to it by Victorian Judges the rule was progressively emasculated, until subsequently it almost became obsolete in England. According to Dias and Markesins (see ‘Tort Law’ 2nd Edn., p. 355) one reason for this may well be that as a generalization justifying a shift from fault to strict liability it may have come prematurely. The 19th Century had not yet fully got over laissez faire, and it was only in the 20th Century that the concepts of social justice and social security, as integral parts of the general theory of the Welfare State, were firmly established.
29. As already mentioned above, the rule of strict liability laid down by Blackburn J. in Rylands vs. Fletcher (supra) was restricted in appeal by Lord Cairns to nonnatural users, the word ‘natural’ meaning ‘that which exists in or by nature, and is not artificial’, and that was the sense in which it was used by Lord Cairns. However, later it acquired an entirely different meaning i.e. that which is ordinary and usual, even though it may be artificial’ vide
# Rickards vs. Lothian, (1913) AC 263
# Read vs. Lyons, (1947) AC 156.
Thus the expression ‘nonnatural’ was later interpreted to mean ‘abnormal’, and since in an industrial society industries can certainly not be called ‘abnormal’ the rule in Rylands vs. Fletcher (supra) was totally emasculated in these subsequent rulings. Such an interpretation, as Prof. Newark writes, ‘would have surprised Lord Cairns and astounded Blackburn, J’ (see article entitled ‘Nonnatural User and Rylands vs. Fletcher,’ published in Modern Law Review, 1961 vol. 24, p. 557).
# Read v. J. Lyons & Co. Ltd., (1947) AC 156
which was a case of injury due to a shell explosion in an ammunitions factory, Lord Macmillan while rejecting the claim of the plaintiff made further restrictions to the rule in Rylands vs. Fletcher (supra) by holding that the rule “derives from a conception of mutual duties of neighbouring landowners”, and was therefore inapplicable to personal injuries. He also held that to make the defendant liable there should be escape from a place under the defendant’s control and occupation to a place outside his occupation, and since the plaintiff was within the premises at the time of the accident the injury was not due to escape therefrom. In this way
# Read v. J. Lyons & Co. Ltd., (1947) AC 156
destroyed the very spirit of the decision in Rylands vs. Fletcher (supra) by restricting its principle to the facts of that particular case, instead of seeing its underlying juristic philosophy.
31. Apart from the above, some other exceptions carved out to the rule in Rylands vs. Fletcher (supra) are :
(a) consent of the plaintiff;
(b) common benefit;
(c) Act of stranger;
(d) Act of God;
(e) Statutory authority;
(f) default of plaintiff etc.
# Dunne vs. North Western Gas Board, (1964) 2 QB 806
Sellers L.J. asserted that the defendant’s liability in
# Rylands vs. Fletcher, (1868) LR 3 HC 330
“could simply have been placed on the defendants’ failure of duty to take reasonable care”, and it seems a logical inference from this that the Court of Appeals considered the rule to have no useful function in modern times. As Winfield remarks, the rule in Rylands vs. Fletcher (supra), by reason of its many limitations and exceptions, today seldom forms the basis of a successful claim in the Courts (see Winfield and Jolowicz on Tort, 13th Edn., p. 442), and it seems that the rule “has hardly been taken seriously by modern English Courts”, vide
# Attorney General v. Geothermal Produce N.Z. Ltd., (1987) 2 NZLR 348
33. As Winfield remarks, because of the various limitations and exceptions to the rule “we have virtually reached the position where a defendant will not be considered liable when he would not be liable according to the ordinary principles of negligence” (see Winfield on Tort, 13th Edn., p. 443).
34. This repudiation of the principle in Rylands vs. Fletcher (supra) is contrary to the modern judicial philosophy of social justice. The injustice may clearly be illustrated by the case of
# Pearson vs. North Western Gas Board, (1968) 2 All ER 669
In that case the plaintiff was seriously injured and her husband was killed by an explosion of gas, which also destroyed their home. Her action in Court failed, in view of the decision in
# Dunne vs. North Western Gas Board (1964) 2 QB 806
Thus the decline of the rule in Rylands vs. Fletcher (supra) left the individual injured by the activities of industrial society virtually without adequate protection.
35. However, we are now witnessing a swing once again in favour of the principle of strict liability. The Bhopal Gas Tragedy, the Chernobyl nuclear disaster, the crude oil spill in 1988 on to the Alaska coast line from the oil tanker Exxon Valdez, and other similar incidents have shocked the conscience of people all over the world and have aroused thinkers to the dangers in industrial and other activities, in modern society.
36. In England, the Pearson Committee recommended the introduction of strict liability in a number of circumstances (though none of these recommendations have so far been implemented, with the exception of that related to defective products).
38. The Court also observed that this strict liability is not subject to any of the exceptions to the rule in Rylands vs. Fletcher.
41. In America the U.S. Supreme Court in
# Lairds vs. Nelms, 32 L Ed 2d 499 : 406 US 797 (1971)
following its earlier decision in
# Dalehite vs. U.S., 97 L Ed 1427 : 346 US 15 (1952)
held that the U.S. was not liable for damages from supersonic booms caused by military planes as no negligence was shown. Schwartz regards this decision as unfortunate (see Schwartz Administrative Law, 1984). However, as regards private enterprises the American Courts award huge damages (often running into millions of dollars) for accidents due to hazardous activities or substances.
42. In France, the liability of the State is without fault, and the principle of strict liability applies (see C.J. Hanson “Government Liability in Tort in the English and French Legal Systems”)
43. In India, Article 38(1) of the Constitution states “the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life”.
xxx xxx xxx
48. It is recognized that the Law of Torts is not stagnant but is growing. As stated by the American Restatement of Torts, Art. 1; vide D.L. Lloyd: Jurisprudence:
“The entire history of the development of the tort law shows a continuous tendency, which is naturally not uniform in all common law countries, to recognize as worthy of legal protection, interests which were previously not protected at all or were infrequently protected and it is unlikely that this tendency has ceased or is going to cease in future.”
49. There are dicta both ancient and modern that the known categories of tort are not closed, and that novelty of a claim is not an absolute defence. Thus, in
# Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat, (1994) 4 SCC 1 : JT (1994) 3 SC 492
the Supreme Court observed: (SCC p. 10, para 8)
“8. …..law of torts being a developing law its frontiers are incapable of being strictly barricaded”.
# Ashby vs. White, (1703) 2 Ld Raym 938
it was observed (vide Pratt C.J.):
“Torts are infinitely various, not limited or confined”.
# Donoghue vs. Stevenson, 1932 AC 562
it was observed by the House of Lords (per Macmillan, L.J.): (All ER p. 30A)
“…..the conception of legal responsibility may develop in adaptation to altering social conditions and standards. The criterion of judgment must adjust and adapt itself to the changing circumstances of life.”
The above view was followed in
# Rookes vs. Barnard, 1964 AC 1129
# Home Office v. Dorset Yacht Co. Ltd., 1970 AC 1004
52. In view of the above, we are of the opinion that the submission of learned counsel for the appellant there was no fault on the part of the Railways, or that there was contributory negligence, is based on a total misconception and hence has to be rejected.”
34. Coming to the facts of the case, the Inquiry Officer has given the details, at pages 55 to 76 of the paper book, how the Board Authorities have not taken due care, has recorded findings on the cause of incident and the officers/officials responsible for the same, at pages 77 to 84 of the paper book. He has given post incidental activities, reactions and suggested remedial measures, at page 91 of the paper book.
35. While going through the inquiry report, one comes to prima facie conclusion that all the authorities, i.e. the Board, College and State, have prima facie contributed to the cause of incident. The said report and other factors are the foundation of this order.
36. The Inquiry Officer has prima facie come to the conclusion that it is the negligence, carelessness and recklessness of the authorities, which fact has been refuted by the authorities by the medium of affidavits, replies and other documents on the file.
37. The question is whether the authorities have taken due care? What does ‘due care’ mean? It means that one has to take all steps to make every effort to save the lives of the public at large. They should also know that in case, ‘due care’ is not taken, what would be the result and consequences. The place of incident was unknown to the students, who were on tour/excursion. Had the authorities put boards, hoardings, sirens, signals and taken precautions at the relevant time, while discharging the water from the barrage/reservoir, the incident would have been avoided and the precious lives of all the students, who were at their budding age, would have been saved.
38. Due care in this case means that the authorities were supposed to take precautions while performing their duties, which, according to the Inquiry Officer, they have not taken.
39. The expression ‘due care’ has been discussed by the Apex Court and other High Courts in various judgments, as discussed hereinabove. It is profitable to reproduce paras 14 to 17 of the judgment rendered by the Apex Court in M.S. Grewal’s case (supra) herein:
“14. Negligence in common parlance mean and imply ‘failure to exercise due care, expected of a reasonable prudent person’. It is a breach of duty and negligence in law ranging from inadvertence to shameful disregard of safety of others. In most instances, it is caused by heedlessness or inadvertence, by with the negligent party is unaware of the results which may follow from his act. negligence is thus a breach of duty or lack of proper care in doing something, in short, it is want of attention and doing of something which a prudent and a reasonable man would not do (vide Black’s Law Dictionary). Though sometimes, the word ‘inadvertence’ stands and used as a synonym to negligence, but in effect negligence represents a state of the mind which however is much serious in nature than mere inadvertence. There is thus existing a differentiation between the two expressions whereas inadvertence is a milder form of negligence, ‘negligence’ by itself mean and imply a state of mind where there is no regard for duty or the supposed care and attention which one ought to bestow. Clerk and Lindsell on Torts (18th Ed.) sets out four several requirements of the tort of negligence and the same read as below :
“(1) The existence in law of a duty of care situation, i.e. one in which the law attaches liability to carelessness. There has to be recognition by law that the careless infliction of the kind of damage in suit on the class of person to which the claimant belongs by the class of person to which the defendant belongs is actionable.
(2) Breach of the duty of care by the defendant, i.e. that it failed to measure up to the standard set by law.
(3) A casual connection between the defendant’s careless conduct and the damage.
(4) That the particular kind of damage to the particular claimant is not so unforeseeable as to be too remote.”
15. While the parent owes his child, a duty of care in relation to the child’s physical security, a teacher in a School is expected to show such care towards a child under his charge as would be exercised by a reasonably careful parent. In this context, reference may be made to a decision of Tucker, J. in
# Ricketts v. Erith Borough Council, (1943) 2 All ER 629 : 113 LJKB 269 : 169 LT 396
as also the decision of the Court of Appeal in
# Prince v. Gregory, (1959) 1 WLR 177 : (1959) 1 All ER 133 (CA)
16. Duty of care varies from situation to situation whereas it would be the duty of the teacher to supervise the children in the playground but the supervision, as the children leave the school, may not be required in the same degree as is in the playfield. While it is true that if the students are taken to another school building for participation in certain games, it is sufficient exercise of diligence to know that the premises are otherwise safe and secure but undoubtedly if the students are taken out to playground near a river for fun and swim, the degree of care required stands at a much higher degree and no deviation therefrom can be had on any count whatsoever. Mere satisfaction that the river is otherwise safe for swim by reason of popular saying will not be sufficient compliance. As a matter of fact the degree of care required to be taken specially against the minor children stands at a much higher level than adults : children need much stricter care.
17. Incidentally, negligence is an independent tort and has its own strict elements specially in the matter of children the liability is thus absolute visaviz the children. The school authorities in the contextual facts attributed negligence to the two teachers who stands convicted under Section 304A of the Indian Penal Code as noticed above and Mr. Bahuguna appearing in support of the appeal during the course of hearing, however, also in no uncertain terms attributed utter negligence on the part of the teachers and thus conceded on the issue of negligence Concession, if any, as noticed above, though undoubtedly a good gesture on the part of the school authority but can the school absolve its responsibility and corresponding culpability in regard to the incident : Would they be termed to be a joint tort feasors or would it be a defence that the school has taken all due care having regard to its duty and it is irrespective thereof by reason of utter neglect and callous conduct on the part of the two of the teachers escorting them that has caused the injury Mr. Bahuguna contended that the school cannot be made liable under any stretch of imagination by reason of the happening of an event which is not within the school premises and has, in fact, happened by reason of the neglect of two of the teachers. It is on this score that Mr. Malhotra rather emphatically contended that the liability cannot simply be obliterated by reason of plea of utter neglect on the part of the two of the teachers : School concerned can be said to be liable even as a joint tortfeasor and in any event, Mr. Malhotra contended that applicability of the doctrine of vicarious liability cannot be doubted or be brushed aside, in any way whatsoever and since the issue of vicarious liability has been more emphatic and pronounced than the issue of joint tortfeasor, we deem it expedient to deal with the second of twin issues first as noticed above.”
40. It was also the duty of the State to monitor the functioning of the projects. They have taken the steps and provided the guidelines and instructions, which have been issued thereafter, as discussed hereinabove, are suggestive of the fact that they had not taken due care and precaution, not to speak of their negligence and recklessness. Even otherwise, there is enough material on the record to prima facie hold that they have not taken due care, which is sufficient to grant compensation.
41. The Apex Court in the case titled as
# Rajkot Municipal Corporation versus Manjulben Jayantilal Nakum and others, reported in (1997) 9 Supreme Court Cases 552
has discussed what is negligence.
42. In the latest case titled as
# V. Krishnakumar versus State of Tamil Nadu & Ors., reported in JT 2015 (6) SC 503
the issue of negligence has come up for consideration before the Apex Court, in which the Apex Court was dealing with a case of doctors’ negligence and it has been held that as to what is due care, what is negligence and how the concerned doctors have given a gobye to all precautions, which they were required to take. It is apt to reproduce paras 12 and 13 of the judgment herein:
“12. Having given our anxious consideration to the matter, we find that no fault can be found with the findings of the NCDRC which has given an unequivocal finding that at no stage, the appellant was warned or told about the possibility of occurrence of ROP by the respondents even though it was their duty to do so. Neither did they explain anywhere in their affidavit that they warned of the possibility of the occurrence of ROP knowing fully well that the chances of such occurrence existed and that this constituted a gross deficiency in service, nor did they refer to a paediatric ophthalmologist. Further it may be noted that Respondent Nos. 3 & 4 have not appealed to this Court against the judgment of the NCDRC and have thus accepted the finding of medical negligence against them. Deficiency in Service 13. In the circumstances, we agree with the findings of the NCDRC that the respondents were negligent in their duty and were deficient in their services in not screening the child between 2 to 4 weeks after birth when it is mandatory to do so and especially since the child was under their care. Thus, the negligence began under the supervision of the Hospital i.e. Respondent No.2. The Respondent Nos. 3 and 4, who checked the baby at his private clinic and at the appellant’s home, respectively, were also negligent in not advising screening for ROP. It is pertinent to note that Respondent Nos. 3 and 4 carried on their own private practice while being in the employment of Respondent No. 2, which was a violation of their terms of service.”
43. While applying the tests to the instant case, the material on the record does disclose that the authorities have not taken all steps, as were required, and that was the reason for issuing additional guidelines as to what steps and precautions were to be taken in order to avoid recurrence.
44. The Apex Court was also dealing with such type of cases in
# Dheeru versus Government of NCT of Delhi and others, reported in 2010 ACJ 2593
# Municipal Corporation of Delhi, Delhi versus Uphaar Tragedy Victims Association and others, reported in (2011) 14 Supreme Court Cases 481
# Sanjay Gupta and others versus State of Uttar Pradesh and others, reported in (2015) 5 Supreme Court Cases 283
45. It would be profitable to reproduce paras 21 to 24 of the judgment in Dheeru’s case (supra) herein:
“21. The concept of compensation under public law, for injuries caused due to the negligence inaction or indifference of public functionaries or for the violation of fundamental rights is not a novelty in Indian jurisprudence. The power of the High Courts and the Supreme Court under Article 226 and Article 32 respectively, to mould the relief so as to compensate the victim has been affirmed by the Supreme Court on numerous occasions including
# Common Cause, A Registered Society v. Union of India, (1999) 6 SCC 667
# Chairman, Railway Board v. Chandrima Das, (2000) 2 SCC 465
# Delhi Domestic Working Women’s Forum v. Union of India, (1995) 1 SCC 14
# D.K. Basu v. State of W.B., (1997) 1 SCC 416
# Rudul Shah v. State of Bihar, (1983) 4 SCC 141
The concept of compensation under public law must be understood as being different from the concept of damages under private law. Compensation under public law must not be merely seen as the moneyed equivalent of the injury caused, but must be understood in the context of the failure of the State to protect the valuable rights of the citizens, more so in the case of the marginalized and the oppressed.
22. It has long been established that the right to life enshrined in Article 21 is not a right to mere vegetative (“animal”) existence, but to a life with dignity and a decent standard of living. The injury, which an individual or citizen incurs as a result of the State or its agencies neglect to perform its duties, is as actionable in public law, as in tort. In this background the failure of the State to prevent the occurrence of negligent acts by its employees, or those who are accountable to it, within promises under its control, strikes at the very root of the right guaranteed under Article 21 of the Constitution of India.
# Chandrima Das, (2000) 2 SCC 465
the Supreme Court mentioned about obligation of the States to ensure that women are not victims of violence, including rape and held that this right is consistent with the right to life under Article 21, of all who are protected by our Constitution. In that case, the aggrieved was a victim of rape committed upon her in a railway compartment. The Court brushed aside the Central Government’s disclaimer of liability, and declared that the right of the victim under Article 21 had been violated. It awarded Rs. 10 lakh as public law damages. It is noteworthy to see that the Court did not see who was the real perpetrator, or what duty he owed to the Government; it was held sufficient that the wrong occurred in a railway coach, which was under the control of the railway authorities.
 It would also be useful to notice the observations of the Supreme Court, in
# Nilabati Behera v. State of Orissa, (1993) 2 SCC 746
at page 762:
“‘a claim in public law for compensation’ for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is ‘distinct from, and in addition to, the remedy in private law for damages for the tort’ resulting from the contravention of the fundamental right. The defence of sovereign immunity being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle, which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers.”
As far as the argument of the respondents to the efficacy of the writ remedy, under Article 226 of the Constitution of India is concerned, the Supreme Court held, in
# ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC 553
that merely because one party to the litigation raises a dispute in regard to the facts of the case, the Court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the disputants to a suit. The Court observed that in an appropriate case, the Court has the jurisdiction to entertain a writ petition involving disputed questions of fact, since there is no absolute bar for entertaining such cases.”
46. While applying the test to the instant case, the ratio laid down in these cases is applicable to the case in hand, which duly finds place in the inquiry report submitted by the Divisional Commissioner and the other officers, who have filed the inquiry reports.
47. The question is how to grant compensation in such cases?
48. The Apex Court in the case titled as
# Syed Basheer Ahamed and others versus Mohammed Jameel and another, reported in (2009) 2 Supreme Court Cases 225
# Nagar Council, Rajpura versus Tajinder Singh and others, reported in (2012) 12 Supreme Court Cases 273
has discussed the issue.
49. Keeping in view the doctrine of res ipsa loquitor, public law, remedy available to the victims in public law, breach of guidelines, snatching the young Engineering students from their parents, the placements of other similarly situated students and their earning capacity are to be kept in mind while assessing the just compensation.
50. The Courts in the entire world, particularly in USA, UK and India, have tried to evolve the method to award compensation. An aggrieved person can file a civil suit and claim compensation. A workman can invoke the statutory remedy and can approach the Labour Court for compensation. A victim of traffic accident can approach Motor Accident Claims Tribunals (for short “the Tribunals”), which is now developing a new concept and really achieving its aim and object and compensation is being awarded after examining the prima facie negligence.
51. Now, the question is what is the method, which is being applied, rather followed in order to grant compensation to the persons, who became or are becoming the victims of either the negligence or carelessness of the State, instrumentalities of the State, institutions, colleges, schools and other similarly situated bodies?
52. As discussed hereinabove, the Courts have discussed the strict liability and remedies of public law. In some cases the Courts have granted lumpsum compensation and in some cases, they have just exercised the guess work.
53. It is apt to reproduce para 54 of the judgment in Deep Chand Sood’s case (supra) herein:
“54. Question is what compensation should be awarded to the parents of the deceased children, although, the loss sustained by the parents due to the negligence of the school management, Chairman and the staff is of great magnitude and cannot be exactly compensated in terms of money, however, we feel that awarding of reasonable amount of compensation may set off their agony to some extent. Therefore, taking into consideration all the facts and circumstances of this case, submissions of respective parties, the Chairman and management of the school are directed to pay compensation of Rs. 5,00,000/ to each parent of 14 students who died in this tragedy due to their sheer negligence and Rs. 30,000/ each to the parents of Varun Sharma and Utsav Mehrotra who could be saved but had to suffer tremendously. The amounts of compensation be paid within two months with interest at the rate of 12 per cent per annum from 28.5.1995 by depositing the same in the Registry of this Court.”
54. It would also be profitable to reproduce para 12 of the judgment rendered by the Apex Court in M.S. Grewal’s case (supra) herein:
12. As noticed above, a large number of decisions were placed before this Court as regards the quantum of compensation varying between 50,000 to one lakh in regard to unfortunate deaths of young children. We do deem it fit to record that while judicial precedents undoubtedly have some relevance as regards the principles of law, but the quantum of assessment stands dependent on the factsituation of the matter before the Court, than judicial precedents. As regards the quantum no decision as such can be taken to be of binding precedent as such, since each case has to be dealt with on its own peculiar facts and thus compensation is also to be assessed on the basis thereof though however the same can act as a guide : Placement in the society, financial status differ from person to person and as such assessment would also differ. The whole issue is to be judged on the basis of the factsituation of the matter concerned though however, not on mathematical nicety.
55. In another case titled as
# Lata Wadhwa and others versus State of Bihar and others, reported in (2001) 8 Supreme Court Cases 197
the concept was also discussed and it has been held by the Apex Court that the Courts have to intervene. It is apt to reproduce paras 8 and 9 of the judgment herein:
“8. So far as the determination of compensation in death cases are concerned, apart from the three decisions of Andhra Pradesh High Court, which had been mentioned in the order of this Court dated 1512-1993, this Court in the case of
# G.M., Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176
exhaustively dealt with the question. It has been held in the aforesaid case that for assessment of damages to compensate the dependants, it has to take into account many imponderables, as to 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. The Court further observed that 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 himself, as regards both selfmaintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants, and thereafter it should be capitalised by multiplying it by a figure representing the proper number of year’s purchase. It was also stated that much of the calculation necessarily remains in the realm of hypothesis and in that region arithmetic is a good servant but a bad master, since there are so often many imponderables. In every case, “it is the overall picture that matters,” and the Court must try to assess as best as it can, the loss suffered. On the acceptability of the multiplier method, the Court observed :
“The multiplier method is logically sound and legally well established method of ensuring a ‘just’ compensation which will make for uniformity and certainty of the awards. A departure from this method can only be justified in rare and extraordinary circumstances and very exceptional cases.”
The Court also further observed that the proper method of computation is the multiplier method and any departure, except in exceptional and extraordinary cases, would introduce in consistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. The Court disapproved the contrary views taken by some of the High Courts and explained away the earlier view of the Supreme Court on the point. After considering a series of English decisions, it was held that the multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants, whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed up over the period for which the dependency is expected to last. In view of the aforesaid authoritative pronouncement of this Court and having regard to the determination made in the report by Shri Justice Chandrachud, on the basis of the aforesaid multiplier method, it is difficult for us to accept the contention of Ms. Rani Jethmalani, that the settled principle for determination of compensation, has not been followed in the present case. The further submission of the learned counsel that the determination made is arbitrary, is devoid of any substance, as Shri Justice Chandrachud has correctly applied the multiplier, on consideration of all the relevant factors. Damages are awarded on the basis of financial loss and the financial loss is assessed in the same way, as prospective loss of earnings. The basic figure, instead of being the net earnings, is the net contribution to the support of the defendants, which would have been derived from the future income of the deceased. When the basic figure is fixed, then an estimate has to be made of the probable length of time for which the earnings or contribution would have continued and then a suitable multiple has to be determined (a number of year’s purchase), which will reduce the total loss to its resent value, taking into account the proved risks of rise or fall in the income. In the case of
# Mallett v. McMonagle, 1970 AC 166
Lord Diplock gave a full analysis of the uncertainties, which arise at various stages in the estimate and the practical ways of dealing with them. In the case of
# 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 a passage which is frequently quoted, in
# Davis v. Powell Duffryn Associated Collieries Ltd. (1942) 1 All ER 657
to the following effect : (All ER p. 665 AB)
“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 or expended 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 year’ purchase.”
9. It is not necessary for us to further delve into the matter, as in our opinion, Shri Justice Chandrachud, has correctly arrived at the basic figure as well as in applying the proper multiplier, so far as the employees of the TISCO are concerned, but the addition of conventional figure to the tune of Rs. 25,000/ appears to us to be inadequate and instead, we think the conventional figure to be added should be Rs.50,000/.”
56. It would also be profitable to reproduce para 40 of the judgment rendered by the Apex Court in Delhi Jal Board’s case (supra) herein:
“40. We shall now consider whether the High Court was justified in issuing interim directions for payment of compensation to the families of the victims. At the outset, we deprecate the attitude of a public authority like the Appellant, who has used the judicial process for frustrating the effort made by Respondent No. 1 for getting compensation to the workers, who died due to negligence of the contractor to whom the work of maintaining sewage system was outsourced. We also express our dismay that the High Court has thought it proper to direct payment of a paltry amount of Rs. 1.5 to 2.25 lakhs to the families of the victims.”
57. Before we determine what should be the compensation in the instant case, we deem it proper to discuss what are the latest pronouncements made by the Courts relating to granting of the compensation in the
# Motor Vehicles Act, 1988
(for short “MV Act”) which are to be kept in mind while assessing just compensation.
58. Expression “just” has been elaborated by the Apex Court in
# State of Haryana and another vs. Jasbir Kaur and others, reported in AIR 2003 Supreme Court 3696.
It is apt to reproduce para 7 of the said decision hereunder:
“7. It has to be kept in view that the Tribunal constituted under the Act as provided in S. 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 the compensation must be “just” and it cannot be a bonanza; nor 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 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 on 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 nonarbitrary. If it is not so it cannot be just. (See
# Helen C. Rebello v. Maharashtra State Road Transport Corporation, AIR 1998 SC 3191
59. Similar view has been taken by the Apex Court in a case titled as
# The Divisional Controller, K.S.R.T.C. versus Mahadeva Shetty and another, reported in AIR 2003 Supreme Court 4172
60. The Apex Court in the case titled as
# Oriental Insurance Co. Ltd. versus Mohd. Nasir & Anr., reported in 2009 AIR SCW 3717
laid down the same principle while discussing, in para 27 of the judgment, the ratio laid down in the judgments rendered in the cases titled as
# Nagappa v. Gurudayal Singh & Ors, (2003) 2 SCC 274
# Devki Nandan Bangur and Ors. versus State of Haryana and Ors. 1995 ACJ 1288
# Syed Basheer Ahmed & Ors. versus Mohd. Jameel & Anr., (2009) 2 SCC 225
# National Insurance Co. Ltd. versus Laxmi Narain Dhut, (2007) 3 SCC 700
# Punjab State Electricity Board Ltd. versus Zora Singh and Others (2005) 6 SCC 776
# A.P. SRTC versus STAT and State of Haryana & Ors. versus Shakuntla Devi, 2008 (13) SCALE 621
61. The Apex Court in another case titled as
# Ningamma & another versus United India Insurance Co. Ltd., reported in 2009 AIR SCW 4916
held that it is the bounden duty of the Court to award “Just Compensation” in favour of the claimants to which they are entitled to, irrespective of the fact whether any plea in that behalf was raised by the claimants or not. It is profitable to reproduce para 25 of the judgment herein:
“25. Undoubtedly, Section 166 of the MVA deals with “Just Compensation” and even if in the pleadings no specific claim was made under section 166 of the MVA, in our considered opinion a party should not be deprived from getting “Just Compensation” in case the claimant is able to make out a case under any provision of law. Needless to say, the MVA is beneficial and welfare legislation. In fact, the Court is duty bound and entitled to award “Just Compensation” irrespective of the fact whether any plea in that behalf was raised by the claimant or not. However, whether or not the claimants would be governed with the terms and conditions of the insurance policy and whether or not the provisions of Section 147 of the MVA would be applicable in the present case and also whether or not there was rash and negligent driving on the part of the deceased, are essentially a matter of fact which was required to be considered and answered at least by the High Court.”
62. The Apex Court in the judgments delivered in the cases titled as
# A.P.S.R.T.C. & another versus M. Ramadevi & others, reported in 2008 AIR SCW 1213
# Sanobanu Nazirbhai Mirza & others versus Ahmedabad Municipal Transport Service, reported in 2013 AIR SCW 5800
has discussed as to what is the ‘just compensation’ in a Claim Petition filed under the Motor Vehicles Act. It is apt to reproduce para 9 of the judgment rendered in Sanobanu’s case (supra) herein:
“9. In view of the aforesaid decision of this Court, we are of the view that the legal representatives of the deceased are entitled to the compensation as mentioned under the various heads in the table as provided above in this judgment even though certain claims were not preferred by them as we are of the view that they are legally and legitimately entitled for the said claims. Accordingly we award the compensation, more than what was claimed by them as it is the statutory duty of the Tribunal and the appellate court to award just and reasonable compensation to the legal representatives of the deceased to mitigate their hardship and agony as held by this Court in a catena of cases. Therefore, this Court has awarded just and reasonable compensation in favour of the appellants as they filed application claiming compensation under Section 166 of the M.V. Act. Keeping in view the aforesaid relevant facts and legal evidence on record and in the absence of rebuttal evidence adduced by the respondent, we determine just and reasonable compensation by awarding a total sum of Rs. 16,96,000/ with interest @ 7.5% from the date of filing the claim petition till the date payment is made to the appellants.”
63. The Apex Court in the case titled
# Santosh Devi versus National Insurance Company Ltd. and others, reported in (2012) 6 SCC 421
discussed the issue of assessing compensation in regard to the salaried employees and the selfemployed persons. It is profitable to reproduce para 11 and 14 to 18 of the said judgment herein:
“11. We have considered the respective arguments. Although, the legal jurisprudence developed in the country in last five decades is somewhat precedentcentric, the judgments which have bearing on socioeconomic conditions of the citizens and issues relating to compensation payable to the victims of motor accidents, those who are deprived of their land and similar matters needs to be frequently revisited keeping in view the fast changing societal values, the effect of globalisation on the economy of the nation and their impact on the life of the people.
14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma’s case that where the deceased was selfemployed 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 naïve to say that the wages or total emoluments/income of a person who is selfemployed 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 selfemployed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put 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 lac.
17. Although, the wages/income of those employed in unorganized 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 selfemployed and even those 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 cloths. 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 paragraph 24 of Sarla Verma’s 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 selfemployed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is selfemployed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he / she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation.
64. It is apt to record herein that the law laid down in the case titled as
# Sarla Verma (Smt.) and others versus Delhi Transport Corporation and another, reported in AIR 2009 SC 3104
was referred to larger Bench by another coordinate Bench and was upheld in the case titled as
# Reshma Kumari and others vs. Madan Mohan and another, 2013 AIR (SCW) 3120
65. The Apex Court in case titled
# National Insurance Co. Ltd. versus Indira Srivastava and others, reported in 2008 ACJ 614
has explained the term ‘income’, and has held in paragraphs 8, 9, 17 and 18 as under:
“8. The term ‘income’ has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetory terms.
9. Section 168 of the Act uses the word ‘just compensation’ which, in our opinion, should be assigned a broad meaning. We cannot, in determining the issue involved in the matter, lose sight of the fact that the private sector companies in place of introducing a pension scheme takes recourse to payment of contributory Provident Fund, Gratuity and other perks to attract the people who are efficient and hard working. Different offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of the entire family. If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be determined. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased :
“BASIC : 63,400.00 CONVEYANCE ALLOWANCE : 12,000.00 RENT CO LEASE : 49,200.00 BONUS (35% OF BASIC) : 21,840.00 TOTAL : 1,45,440.00 In addition to above, his other entitlements were : Con. to PF 10% Basic Rs. 6,240/ (p.a.) LTA reimbursement Rs. 7,000/ (p.a.) Medical reimbursement Rs. 6,000/ (p.a.) Superannuation 15% of Basic Rs. 9,360/ (p.a.) Gratuity Cont. 5.34% of Basic Rs. 3,332/ (p.a.) Medical Policyself & Family @ Rs. 55,000/ (p.a.) Education Scholarship @ Rs.500 Rs. 12,000/ (p.a.) Payable to his two children Directly”. 10 to 16. ………..
17. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted.
18. The term ‘income’ in P. Ramanatha Aiyar’s Advanced Law Lexicon (3rd Ed.) has been defined as under :
“The value of any benefit or perquisite whether convertible into money or not, obtained from a company either by a director or a person who has substantial interest in the company, and any sum paid by such company in respect of any obligation, which but for such payment would have been payable by the director or other person aforesaid, occurring or arising to a person within the State from any profession, trade or calling other than agriculture.”
It has also been stated :
‘INCOME’ signifies ‘what comes in’ (per Selborne, C., Jones v. Ogle, 42 LJ Ch.336). ‘It is as large a word as can be used’ to denote a person’s receipts ‘(per Jessel, M.R. Re Huggins, 51 LJ Ch.938.) income is not confined to receipts from business only and means periodical receipts from one’s work, lands, investments, etc. AIR 1921 Mad 427 (SB). Ref. 124 IC 511 : 1930 MWN 29 : 31 MLW 438 AIR 1930 Mad 626 : 58 MLJ 337.”
66. The Apex Court in the cases titled as
# Oriental Insurance Company Ltd. vs. Jashuben & Ors., reported in 2008 AIR SCW 2393
# V. Subbulakshmi and others versus S. Lakshmi and another, reported in (2008) 4 SCC 224
while taking the similar view, has held that it was not relevant to take into account the fact as to what would have been the income of the deceased at the time of retirement, had he retired on attaining the age of superannuation.
67. The Apex Court in another case titled as
# Amrit Bhanu Shali and others versus National Insurance Company Ltd. and others, reported in (2012) 11 SCC 738
has laid down the principles how to grant compensation, how to reach the victim of a vehicular accident and granted ₹9.50 lacs as compensation.
68. The Apex Court in the case titled as
# Savita versus Bindar Singh & others, reported in 2014 AIR SCW 2053
has held that it is the duty of the Court to award just compensation to the victims of a vehicular accident and while assessing the just compensation, the Court should not succumb to the niceties or technicalities of law. It is apt to reproduce paragraph 6 of the said judgment hereunder:
“6. After considering the decisions of this Court in Santosh Devi as well as Rajesh v. Rajbir Singh , we are of the opinion that it is the duty of the Court to fix a just compensation. 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. Therefore, it will be the bounden duty of the Tribunal to award just, equitable, fair and reasonable compensation judging the situation prevailing at that point of time with reference to the settled principles on assessment of damages. In doing so, the Tribunal can also ignore the claim made by the claimant in the application for compensation with the prime object to assess the award based on the principle that the award should be just, equitable, fair and reasonable compensation.”
69. The Apex Court has also discussed this issue in the cases titled as
# Radhakrishna and another versus Gokul and others, reported in 2014 AIR SCW 548
# Kalpanaraj and others versus Tamil Nadu State Transport Corporation, reported in (2015) 2 SCC 764
and held that the Courts, while granting compensation to the victims of a vehicular accident, have to keep in view all factors including income. It was also held that the monthly income of the deceased can be assessed on the basis of income tax returns. It is apt to reproduce para 8 of the judgment in Kalpanaraj’s case (supra) herein:
“8. It is pertinent to note that the only available documentary evidence on record of the monthly income of the deceased is the income tax return filed by him with the Income Tax Department. The High Court was correct therefore, to determine the monthly income on the basis of the income tax return. However, the High Court erred in ascertaining the net income of the deceased as the amount to be taken into consideration for calculating compensation, in the light of the principle laid down by this Court in the case of
# National Insurance Company Ltd. v. Indira Srivastava and Ors, (2008) 2 SCC 763
The relevant paragraphs of the case read as under:
“14. The question came for consideration before a learned Single Judge of the Madras High Court in National Insurance Co. Ltd. v. Padmavathy and Ors. wherein it was held:
‘7 ..Income tax, Professional tax which are deducted from the salaried person goes to the coffers of the government under specific head and there is no return. Whereas, the General Provident Fund, Special Provident Fund, L.I.C., Contribution are amounts paid specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the Legal Representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the Legal Representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can make only statutory deductions such as Income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contribution made by the employee during his life time, form part of the salary and they should be included in the monthly income, while computing the dependency compensation.’
15. Similar view was expressed by a learned Single Judge of Andhra Pradesh High Court in S. Narayanamma and Ors. v. Secretary to Government of India, Ministry of Telecommunications and Ors. holding:
12 .In this background, now we will examine the present deductions made by the tribunal from the salary of the deceased in fixing the monthly contribution of the deceased to his family. The tribunal has not even taken proper care while deducting the amounts from the salary of the deceased, at least the very nature of deductions from the salary of the deceased. My view is that the deductions made by the tribunal from the salary such as recovery of housing loan, vehicle loan, festival advance and other deductions, if any, to the benefit of the estate of the deceased cannot be deducted while computing the net monthly earnings of the deceased. These advances or loans are part of his salary. So far as House Rent Allowance is concerned, it is beneficial to the entire family of the deceased during his tenure, but for his untimely death the claimants are deprived of such benefit which they would have enjoyed if the deceased is alive. On the other hand, allowances, like Travelling Allowance, allowance for newspapers / periodicals, telephone, servant, clubfee, car maintenance etc., by virtue of his vocation need not be included in the salary while computing the net earnings of the deceased. The finding of the tribunal that the deceased was getting Rs.1,401/ as net income every month is unsustainable as the deductions made towards vehicle loan and other deductions were also taken into consideration while fixing the monthly income of the deceased. The above finding of the tribunal is contrary to the principle of ‘just compensation’ enunciated by the Supreme Court in the judgment in Helen’s case. The Supreme Court in Concord of India Insurance Co. v. Nirmaladevi and Ors, 1980 ACJ 55 held that determination of quantum must be liberal and not niggardly since law values life and limb in a free country ‘in generous scales’.”
70. In view of the above, just compensation can be granted while keeping in view the status of the parents, the prospects of the deceased students and loss of income to the parents, rather loss of source of dependency.
71. Admittedly, as discussed hereinabove, these students, after obtaining Engineering degree from the said reputed College, would have got better placements. It is known to everyone that an Engineer of said discipline and cadre would have been earning not less than about ₹ten lacs per annum.
72. If we take a lenient view by, prima facie, holding that the deceased students, after obtaining the degree, would have become Government employees in the cadre of Assistant Engineer, meaning thereby, they would have been earning not less than ₹30,000/ per month as salary. Even if they would have failed to get a better placement or appointment in Government employment, at least, they could have obtained their job in private firms and by guess work, it can be safely said and held that their monthly salary would not have been less than ₹25,000/.
73. The multiplier method, as discussed hereinabove, is the best method to assess the compensation. As per the law laid down by the Apex Court in the latest judgment rendered in the case titled as
# Munna Lal Jain and another versus Vipin Kumar Sharma and others, reported in 2015 AIR SCW 3105
the age of the deceased is the criterion for applying the multiplier method.
74. Admittedly, all the deceased students were 19 and 20 years of age at the relevant point of time. Thus, keeping in view the Second Schedule appended with the MV Act read with the judgments in Sarla Verma, Reshma Kumari and Munna Lal Jain’s cases (supra), multiplier of ’15’ is just and appropriate.
75. All the deceased students were unmarried, thus, 50% is to be deducted while keeping in mind the ratio laid down by the Apex Court in the judgments (supra). Viewed thus, it can be safely held that the parents have lost source of income/ dependency to the extent of 50%, i.e. ₹12,500/ per month in each case.
76. In the cases of the like nature, the Apex Court and the other High Courts have granted lumpsum compensation. But at that point of time, the method of assessing compensation by applying multiplier method in claim cases under MV Act was in its infancy. Applying the same principle, how and what amount of compensation was granted by the Apex Court and other High Courts from 1960 upto 2014 has to be seen and what should be the compensation as on today.
77. This Court in Deep Chand Sood’s case (supra) granted ₹5 lacs in lumpsum to the parents of each of the deceased students in the year 1996 and the same was upheld by the Apex Court in M.S. Grewal’s case (supra).
78. The Apex Court in Dheeru’s case (supra) has awarded ₹ten lacs as compensation. In Uphaar Tragedy Victims Association’s case (supra), the Apex Court awarded ₹ten lacs in case of the persons aged above 20 years, 7.5 lacs in case of those who were 20 years or below.
79. In the case titled as Dinesh Singh versus Bajaj Allianz General Insurance Company Limited and another, reported in (2014) 9 Supreme Court Cases 241, where an Engineer suffered permanent disability, the Apex Court awarded compensation to the tune of ₹33 lacs.
80. It is to be kept in mind that the Apex Court in a latest judgment in Sanjay Gupta’s case (supra), after discussing all the aspects, granted ₹5 lacs as an interim, then what should be the amount at the final stage.
81. The Courts have to take into view the changing inflation in price rise, the pressing demands, family background of the deceased and other attending factors.
82. The Apex Court in the case titled as
# Gobald Motor Service Ltd. and another versus R.M.K. Veluswami and others, reported in AIR 1962 SC 1
has held how the compensation is to be granted and what is to be kept in mind. It is apt to reproduce paras 7 and 8 of the judgment herein:
“7. The next question is whether the courts below were right in awarding compensation of Rs. 25,200 for the pecuniary loss sustained by the respondents 2 to 7 by reason of the death of Rajaratnam, under S. 1 of the Act. Section 1 of the Act reads:
“Whenever the death of a person shall be caused by wrongful act, neglect or default, and the act, neglect or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable if death had not ensued shall be liable to an action or suit for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime.
Every such action or suit shall be for the benefit of the wife, husband, parent and child, if any, of the person whose death shall have been so caused, and shall be brought by and in the name of the executor administrator or representative of the person deceased; and in every such action the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought; and the amount so recovered, after deducting all costs and expenses, including the costs not recovered from the Defendant, shall be divided amongst the before mentioned parties, or any of them, in such shares as the Court by its judgment or decree shall direct.”
This section is in substance a reproduction of the English Fatal Accidents Acts 9 and 10 Vict. Ch. 93, known as the Lord Campbell’s Acts. The scope of the corresponding provisions of the English Fatal Accidents Acts has been discussed by the House of Lords in
# Davies v. Powell Duffryn Associated Collieries Ltd., 1942 AC 601.
There Lord Russell of Killowen stated the general rule at p. 606 thus:
“The general rule which has always prevailed in regard to the assessment of damages under the Fatal Accidents Acts is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account. Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separately.”
Lord Wright elaborated the theme further thus at p. 611:
“The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible to money value. In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered . . . .. . .. The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other any pecuniary advantage which from whatever source comes to him by reason of the death.”
The same principle was restated with force and clarity by Viscount Simon in
# Nance v. British Columbia Electric Railway Co. Ltd., 1951 AC 601.
There, the learned Lord was considering the analogous provisions of the British Columbia legislation, and he put the principle thus at p. 614:
“The claim for damages in the present case falls under two separate heads. First, if the deceased had not been killed, but had eked out the full span of life to which in the absence of the accident he could reasonably have looked forward, what sums during that period would he probably have applied out of his income to the maintenance of his wife and family?”.
Viscount Simon then proceeded to lay down the mode of estimating the damages under the first head. According to him, at first the deceased man’s expectation of life has to be estimated having regard to his age, bodily health and the possibility of premature determination of his life by later accident; secondly, the amount required for the future provision of his wife shall be estimated having regard to the amounts he used to spend on her during his lifetime, and other circumstances; thirdly, the estimated annual sum is multiplied by the number of years of the man’s estimated span of life, and the said amount must be discounted so as to arrive at the equivalent in the form of a lump sum payable on his death; fourthly further deductions must be made for the benefit accruing to the widow from the acceleration of her interest in his estate; and, fifthly, further amounts have to be deducted for the possibility of the wife dying earlier if the husband had lived the full span of life; and it should also be taken into account that there is the possibility of the widow remarrying much to the improvement of her financial position. It would be seen from the said mode of estimation that many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the respondents may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death that is, the balance of loss and gain to a dependant by the death must be ascertained.
8. The burden is certainly on the plaintiffs to establish the extent of their loss. Both the courts below found, on the evidence, the following facts: (i) The family owned a building worth Rs. 2,00,000/ at Palni, and 120 acres of nanja land worth about Rs.1,000/ per acre.(2) It was engaged in the business of manufacturing Indian patent medicines from drugs and had been running a Siddha Vaidyasalai at Palni for a period of 30 years and had also branches in Colombo and Madras. (3) Rajaratnam studied in the Indian School of Medicine for two years and thereafter set up his own practice as a doctor, having registered himself as a practitioner in 1940. (4) He took over the management of the family Vaidyasalai at Palni. (5) Rajaratnam was earning in addition Rs.200/ to Rs.250 per month in his private practise. (6) He had a status in life, being Muncipal Councillor of Palni and sometimes its ViceChairman,and was maintaining a fairly good standard of life and owned motor cars. (7) He was aged 34 years at the time of his death and,therefore, had a reasonably long span of life before him. If the accident had not taken place. On the said findings the High court summarized the position thus:
“……….the position is that there is here a man of age 34 carrying on business as a Doctor, with reasonable prospects of improving in his business. He was living in comfort and by his early death plaintiffs 2 to 7 have lost their prospects of education, position in society and even possible provision in their favour. Under the circumstances, the award of Rs. 25,000/ as damages must be accepted as quite reasonable.”
When the courts below have, on relevant. material placed before them, ascertained the said amount as damages under the first head, we cannot in second appeal disturb the said finding except for compelling reasons. Assuming that Rajaratnam had not died, he would have spent, having regard to his means and status in life, a minimum of Rs. 250/ on respondents 2 to 7; and his income, as indicated by the evidence, would certainly be more than that amount. The yearly expenditure he had to incur on the members of the family would have been about Rs. 3,000/ and the sum of Rs. 25,200/would represent the said expenditure for just over 8 years.”
83. The Apex Court in the case titled as
# Santosh Devi versus National Insurance Company Ltd. and Ors., reported in 2012 AIR SCW 2892
held that Courts should keep in mind the inflation of price rise, socioeconomic conditions and other attending factors, while awarding compensation. It is apt to reproduce para 11 of the judgment herein:
“11. We have considered the respective arguments. Although, the legal jurisprudence developed in the country in last five decades is somewhat precedentcentric, the judgments which have bearing on socioeconomic conditions of the citizens and issues relating to compensation payable to the victims of motor accidents, those who are deprived of their land and similar matters needs to be frequently revisited keeping in view the fast changing societal values, the effect of globalisation on the economy of the nation and their impact on the life of the people.”
84. The Apex Court in V. Krishnakumar’s case (supra) has laid down the same principle. It is apt to reproduce para 24 of the judgment herein:
“24. This Court has referred to case law from a number of other major common law jurisdictions on the question of accounting for inflation in the computation of awards in medical negligence cases. It is unnecessary to discuss it in detail. It is sufficient to note that the principle of apportioning for inflationary fluctuations in the final lump sum award for damages has been upheld and applied in numerous cases pertaining to medical negligence. In the United States of America, most states, as in Ireland and the United Kingdom, require awards for future medical costs to be reduced to their present value so that the damages can be awarded in the form of a onetime lump sum. The leading case in the United States, which acknowledges the impact of inflation while calculating damages for medical negligence was
# Jones & Laughlin Steel Corporation v. Pfeifer, 1983 462 US 523
wherein that court recognized the propriety of taking into account the factors of present value and inflation in damage awards. Similarly, in
# O’Shea v Riverway Towing Co., (1982) 677 F.2d 1194
at 1199 (7th Cir), Posner J., acknowledged the problem of personal injury victims being severely undercompensated as a result of persistently high inflation.
# Taylor v. OConnor, 1971 AC 115
Lord Reid accepted the importance of apportioning for inflation:
“It will be observed that I have more than once taken note of present day conditions in particular rising prices, rising remuneration and high rates of interest. I am well aware that there is a school of thought which holds that the law should refuse to have any regard to inflation but that calculations should be based on stable prices, steady or slowly increasing rates of remuneration and low rates of interest. That must, I think, be based either on an expectation of an early return to a period of stability or on a nostalgic reluctance to recognise change. It appears to me that some people fear that inflation will get worse, some think that it will go on much as at present, some hope that it will be slowed down, but comparatively few believe that a return to the old financial stability is likely in the foreseeable future. To take any account of future inflation will no doubt cause complications and make estimates even more uncertain. No doubt we should not assume the worst but it would, I think, be quite unrealistic to refuse to take it into account at all.”
24.2. In the same case Lord Morris of BorthyGest also upheld the principle of taking into account future uncertainties. He observed:
“It is to be remembered that the sum which is awarded will be a oncefor all or final amount which the widow must deploy so that to the extent reasonably possible she gets the equivalent of what she has lost. A learned judge cannot be expected to prophesy as to future monetary trends or rates of interest but he need not be unmindful of matters which are common knowledge, such as the uncertainties as to future rates of interest and future levels of taxation. Taking a reasonable and realistic and common sense view of all aspects of the matter he must try to fix a figure which is neither unfair to the recipient nor to the one who has to pay. A learned judge might well take the view that a recipient would be illadvised if he entirely ignored all inflationary trends and if he applied the entire sum awarded to him in the purchase of an annuity which over a period of years would give him a fixed and predetermined sum without any provision which protected him against inflationary trends if they developed.”
24.3. More recently the Judicial Committee of the UK Privy Council in
# Simon v. Helmot, 2012 UKPC 5
has unequivocally acknowledged the principle, that the lump sum awarded in medical negligence cases should be adjusted so as to reflect the predicted rate of inflation.”
85. Keeping in view the value of money in 1980s, 1990s and as on today, prima facie, it can be safely held that ₹2025 lacs can be awarded as compensation in favour of the parents of each of the deceased students.
86. It is also to be kept in mind that the unfortunate parents of the said students have relegated themselves to the remedy in hand, have given up, rather have waived off their right to press or lay a claim for seeking compensation by invoking any other remedy available to them, in addition to which is to be awarded by this Court. Meaning thereby, they have closed the doors for themselves to get compensation from other sources.
87. In the cases discussed hereinabove, the claimants had not given up the other remedies, but in the instant case, the parents of the deceased students have given up their remedies. Thus, this factor is also to be kept in mind, while awarding the compensation.
88. This Court, vide order, dated 25.06.2014, awarded interim compensation to the tune of ₹five lacs. The College and the Board were saddled with liability in equal shares. They have satisfied the same.
89. Having said so, we are of the view that the multiplier method adopted by the Tribunals and the Appellate Courts, i.e. the Apex Court and the High Courts, is the best method to assess the compensation without any ambiguity and on the basis of the prima facie findings, in this case also and award just, reasonable and appropriate compensation.
90. Thus, it can be safely said that the parents of the deceased students are entitled to compensation to the tune of ₹12,500/ x 12 x 15 = ₹22,50,000/ under the head ‘loss of income/dependency’. They are also entitled to ₹10,000/ each under the heads ‘loss of love and affection’, ‘loss of estate’ and ‘funeral expenses’.
91. Having said so, the parents of the deceased students are entitled to compensation to the tune of ₹22,50,000/ + ₹10,000/ + ₹10,000/ + ₹10,000/ = ₹22,80,000/ with interest from the date of the accident.
92. But, keeping in view the observations made hereinabove and the amount, which was awarded by the Apex Court and other High Courts in the cases of the like nature, we deem it proper to award ₹20,00,000/ in lumpsum to the parents of each of the students with interest @ 7.5% per annum from the date of the accident till its final realization.
93. The next question is who has to satisfy the award and in which ratio?
94. The following facts are admitted: (i) The cause of accident; (ii) All the deceased students were the students of a prestigious college; (iii) They would have got better placement; and (iv) Death was because of sudden discharge of water from the barrage/reservoir.
95. The College and the Board Authorities had to exercise due care. In view of the inquiry report, as discussed hereinabove, it was a sheer carelessness of the Board Authorities and the College Authorities. Had they taken the precautions, as discussed hereinabove, had the College Authorities and the officers/officials, who were with the students anticipated where the students are going and what will be the result of the same, may be, their lives would have been saved.
96. Keeping in view the facts of the case read with the inquiry report, the other reports and the attending factors, one comes to prima facie conclusion that the Board Authorities and the College Authorities have not exercised due care.
97. The Board is an authority of the State. We have discussed hereinabove the action of the State Authorities and the officers in charge of the concerned department having issued the guidelines how to prevent such accidents/incidents and what steps are to be taken in future. Had the State Authorities taken these steps earlier, perhaps, this incident would not have been occurred.
98. The Board is the instrumentality of the State, it was the duty of the State to see whether the Boards and the other Authorities working under the State are functioning and discharging their duties properly, has failed to do so, thus, the State is also, prima facie, liable.
99. The Apex Court has discussed the ‘strict liability’ and who is liable, in the cases discussed hereinabove reported in (2002) 2 Supreme Court Cases 162, (2011) 8 Supreme Court Cases 568, (2011) 14 Supreme Court Cases 481, (2015) 5 Supreme Court Cases 283, and JT 2015 (6) SC 503. It would be profitable to reproduce para 27 of the judgment in V. Krishnakumar’s case (supra), reported in JT 2015 (6) SC 503, herein:
“27. It is settled law that the hospital is vicariously liable for the acts of its doctors vide
# Savita Garg vs. National Heart Institute, (2004) 8 SCC 56
also followed in Balram Prasad’s case. Similarly in
# Achutrao Haribhau Khodwa v. State of Maharashtra, 1996 2 SCC 634
this court unequivocally held that the state would be vicariously liable for the damages which may become payable on account of negligence of its doctors or other employees. By the same measure, it is not possible to absolve Respondent No. 1, the State of Tamil Nadu, which establishes and administers such hospitals through its Department of Health, from its liability.”
100. Applying the test to the instant case, all the three, i.e. the Board, the College and the State, are to be saddled with the liability.
101. The next question is in what proportion the Board, the College and the State are to be saddled with the liability?
102. The Uphaar Tragedy Victims Association’s case (supra) contains the guidelines how to fix the percentage.
103. It would also be profitable to reproduce para 10 of the judgment rendered by the Apex Court in the case titled as
# DAV Managing committee and another versus Dabwali Fire Tragedy Victims Association and others, reported in (2013) 10 Supreme Court Cases 494
“10. The High Court while examining the correctness and percentage of liability of compensation modified the percentage confined upon the appellants and respondent no.8 from 80% to 55% confining the negligence aspect upon the appellants and respondent no.8 has not been annulled. No doubt the composite negligence is fastened upon the appellants and respondent no.8, State of Haryana, the Haryana State Electricity Board and Municipal Committee Dabwali for the reasons recorded by the High Court. The correctness of the said finding not only examined in this appeal as the same is not questioned either by the appellants or by respondent No.8. While recording the finding on issue no.3 and reducing the liability of compensation to 55% out of 80% awarded by the Inquiry Commission, the High Court has held that the appellants and respondent no.8 namely Rajiv Marriage Palace would be jointly and severally liable to pay 55% of the total compensation payable to the claimants, the remaining tortfeasors referred to supra. It is not possible for this Court to apportion the liability of compensation between the appellants and respondent no.8, particularly in the absence of the material evidence on record either before the Inquiry Commission or before the High Court and particularly having regard to the fact that what is stated that economic capacity of the partners of Rajiv Marriage Palace. In the absence of such findings it is not proper for this Court to frustrate the judgment of the High Court which is based on the Commission of Inquiry Report submitted by a retired Judge of Allahabad High Court and further on behalf of respondent no.8 it is stated that out of six family members, two persons, namely Kewal Krishan and Chander Bhan died on account of the burn injuries in the said function and further the land where the Rajiv Marriage Palace was built up has been taken over by the District authorities and the same has been converted into ‘Shahid Smarker Park’ and what is the other properties left out of the partners of the Rajiv Marriage Palace and the evidence is not forthcoming by this Court or before the High Court or in these proceedings. In this way, in the absence of the same it is not possible for this Court to apportion the liability of compensation and confine the same upon the appellants and respondent no.8 out of 55% of the liability of compensation confined and holding both the appellants and respondent No.8 responsible for jointly and severally.”
104. The Apex Court in the cases, discussed hereinabove, has also laid down the principles what is the role of the State in the given circumstances and how State is to be fixed with liability.
105. Keeping all these factors in view read with the inquiry report of the Divisional Commissioner, the Board Authorities had the major role and they have failed to exercise due care and caution, thus, are to be saddled with liability at least to the extent of 60%.
106. The unfortunate students were on excursion and the role of the College Authorities was also important. They should have ascertained all facts including the circumstances and other factors prevailing in the area, where they were planning to visit.
107. In Deep Chand Sood’s case (supra), the school had arranged picnic for the students, 15 boys met with the same fate and the Court held that the school concerned is also liable, even though the school was not falling under the definition of State or instrumentality of the State as per the mandate of Article 12 of the Constitution of India.
108. Accordingly, we deem it proper to hold that the College is liable to the extent of 30%.
109. In view of the above, the State is also saddled with liability to the extent of 10%.
110. Learned Amicus Curiae and the learned counsel representing the parents of the deceased students have placed on record the material, which do disclose that in addition to ₹5,00,000/ awarded as interim compensation, the insurance amount, the exgratia by the States of Himachal Pradesh, Andhra Pradesh and Telangana and also tuition fee has been refunded by the College, the details of which are as under:
|Sl. No.||Details||Amount (per student)|
|1.||State of H.P.||₹1.50 lac|
|2.||State of Telangana||₹5.00 lac|
|3.||State of Andhra Pradesh||₹5.00 lac|
|4.||Insurance amount||₹2.00 lac|
|5.||Refund of tuition fee||₹45,000/ ₹1.74 lac|
111. The question is whether this amount is to be adjusted towards the total amount of compensation? The answer is in the negative for the following reasons:
112. This issue was raised before the Apex Court and other High Courts in the cases discussed hereinabove and it was held that the perks, fee, the insurance amount and other such amounts cannot be deducted.
113. The tuition fee and the insurance amount was their own money. The other amounts granted by the State Governments of Telangana and Andhra Pradesh as exgratia have no role to play. It is just the gesture of the State Governments.
114. Applying the ratio laid down by the Apex Court and the other High Courts, this amount is to be excluded from the amount of compensation.
115. Having glance of the above discussions, ₹20,00,000/, including the interim compensation to the tune of ₹5,00,000/, with interest @ 7.5% per annum from today till its final realization is awarded in favour of the parents of each of the deceased students and against the Board, College and the State of Himachal Pradesh in the ratio of 60:30:10.
116. They are directed to deposit the amount after making deduction of ₹5,00,000/ awarded as interim compensation paid by the Board and the College within eight weeks before the Registry of this Court.
117. On deposition of the amount, the same be released in favour of the parents through payee’s account cheque or by depositing in their respective accounts, the details of which shall be furnished by the learned Amicus Curiae or the learned counsel representing the parents of the deceased students, in the Registry.
118. It is made clear that the findings recorded hereinabove are only prima facie in nature in order to grant compensation, as per the discussions made hereinabove, cannot be made basis for recording judgment(s) in any civil suit, criminal proceedings or departmental proceedings.
119. Before parting with, we deem it proper to place on record a word of appreciation for the valuable assistance rendered by the learned Amicus Curiae, learned Advocate General, learned Advocates who appeared in this case, the Divisional Commissioner Inquiry Officer and the other officers, who have assisted this Court.
120. Having said so, the lis is disposed of alongwith all pending applications, as indicated hereinabove,