Tag: #Compensation

S.no	Contents
1.	Introduction
2.	Definition of Section 74 of the Indian Contract Act
3.	Time Aspects and Other Dispositions
4.	Importance of Penalties
5.	Jurisdiction of Section 74 of the Act
6.	Analysis of Section 74 of the Act
7.	Principal of Mitigation
8.	Conclusion

Introduction

Since the passage of the colonial Indian Contract Act of 1872 (ICA)¹, much has changed or developed in the manner that commerce is done. Due to the act’s age, there are a few flaws that need to be reviewed and fixed to ensure efficient corporate operations. Unliquidated losses, which apply where a contract lacks a section addressing liquidated damages, are discussed in Section 74 discusses liquidated damages.

This clause deals with liquidated damages, however, the act doesn’t define them, and the courts have frequently issued contradictory rulings in various circumstances. These decisions are frequently viewed incorrectly or differently. This study aims to clear up any ambiguity about significant liquidated damages rulings. It is far more difficult to assert the liquidated damages since you have to demonstrate the extent of the losses the harmed party produced.

There are very few contracts where the damages in the event of a breach cannot be determined. In these kinds of circumstances, it might be challenging to assert liquidated damages that equal the actual harm. The ‘genuine prior estimate of losses’ provision, which the party who breaches the contract attempts to exploit, is given weight by the courts in determining whether liquidated damages are appropriate or not. Additionally, there is no distinction between a penalty and liquidated damages under Indian contract law because the awarded compensation cannot exceed the contract’s maximum value.

Definition of Section 74 of the Indian Contract Act

“The complaining party is entitled to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named, or the case may be, the penalty stipulated for when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty,”² according to the law.

Exception of Section 74

Any person who signs a bail bond, recognizance, or another similar document, or who offers a bond by law, a directive from the [Central Government] or a 3[State Government] for the accomplishment of a public duty or act in which the public is interested, is liable to pay the full sum specified therein if the condition of the document is broken.

Illustrations

1. In exchange for failing to pay B Rs. 500 on a specific day, A has agreed to pay B Rs. 1,000. On that day, A fails to pay B the sum of Rs. 500. A must pay B the amount of money the court finds appropriate, up to a maximum of Rs. 1,000.
   
2. A signs a recognizance obligating him to appear in court on a particular day in exchange for a fine of Rs. 500. His recognizance is lost. He is responsible for paying the entire fine.
   
3. A and B have an agreement that if A works as a surgeon in Calcutta, he would pay B Rs. 5,000. A is a surgeon who works in Calcutta. B is entitled to compensation that the Court deems appropriate, up to a maximum of Rs. 5,000.

Time Aspects and Other Dispositions

Time is a crucial component of this specific Section 74 of the ICA 1872. The Indian Contract Act of 1872 has significant repercussions that follow a delay, making it difficult for the party in default to immediately breach the contract. The important aspect of these actions is their profound philosophy. The contractual provision of a penalty is meaningless in the absence of any loss. 

The idea of taking advantage of rewards coming from a violation of a contract is mentioned in the Indian Contract of 1872. The bare act states that “When the vendor sells to the defaulting vendee is not eligible to receive the benefits of the later contract if the price is higher than the market price on the day of delivery.” This is accurate even if the vendor received the advantages of a different contract that was desirable to him in return for the loss of the contract that the defaulting vendee had breached.

Importance of Penalties

The essence of a penalty is the payment of the agreed-upon monetary recompense to the party who was wronged. The fundamental idea behind compensation is that the aggrieved party should regain its prior position before the contract’s performance. The landmark case Tata Iron & Steel Co Ltd v. Ramanlal Kandoi³ established this rule, stating that it is important to be aware of the events that caused the plaintiff’s loss of income. The innocent person needs to comprehend the damages.

A comprehensive analysis of the types of fines and damages is necessary. The mere use of terms like “loss” or “damages” does not make the defaulting party liable. A sequence of events must occur for the loss brought on by the contract’s breach to be fairly assessed. Section 74 of the Indian Contract Act abolishes the rather convoluted differences established under English Common Law between provisions allowing for the payment of liquidated damages and clauses in the form of penalties.

Jurisdiction of Section 74 of the Act

Bal Kishan Das v. Fateh Chand⁴, the Court explained the application of Section 74 by dividing situations involving damages into two categories:

1. First, whether the sum to be paid in the event of contract violation has been predetermined and 
2. Any further penalty clauses that may be included in the contract.

Analysis of Section 74 of the Act

When considering the application of Section 74 in Fateh Chand v. Bal Kishan Das⁵, The Court stated that it handles issues involving damages, which are divided into two categories. when the compensation due in the case of a contract violation is predetermined. Where penalties in the form of extra provisions may be included in the contract.

The Supreme Court noted that the expression is meant to embrace several sorts of contracts in Maula Bux v. Union of India⁶, It might not be practicable for the court to determine compensation in cases of contract breaches. If the sum agreed upon by the parties is a real pre-estimate and not a penalty, then it may be used in some circumstances as the benchmark for appropriate compensation.

The party seeking compensation must establish the loss incurred in cases when a monetary loss may be identified. In these situations, the courts must consider whether the amount sought is reasonable. The courts will do this while using the Section 73 principles. The magnitude of the damage incurred by a party must thus be shown in every instance. The obligation to establish the level of loss was waived in some instances, however, where the harm was difficult or impossible to demonstrate.

In Indian Oil Corporation vs. Messrs Lloyds Steel Industries Ltd⁷, the Delhi Court ruled that IOC was unable to receive liquidated damages since it had not experienced any losses as a result of the contractor’s construction and commissioning delays at the terminal in Jodhpur.

The court determined that the pipeline arrived at the Jodhpur port significantly later than the construction project’s completion date and that the terminal could not have been used for commercial purposes without the pipeline.

According to the Supreme Court’s decision in Oil & Natural Gas Corporation Ltd vs Saw Pipes Ltd⁸, when evaluating whether the party seeking damages is entitled to them, the conditions of the contract must be taken into account. unless it is determined that such an estimate of losses or compensation is excessive or acceptable, allowing for liquidated damages in the case of a contract violation.

The person who was harmed by a breach of contract may now obtain a decree without having to show that he experienced loss or damage thanks to Section 74. Even if no real loss is demonstrated to have been experienced as a result of the contract violation, the court is nonetheless permitted to award appropriate damages in such a situation.

If the damages are a true pre-estimate by the parties as the standard for fair damages, the court may nevertheless award them even if they are not a punishment or are reasonable. The court may find it challenging to determine the appropriate damages in some contracts.

Principal of Mitigation

According to the idea of mitigation, the complaint must make a concerted effort to accomplish considerably more in the typical court of commerce. The efforts he takes to remove himself in the case of a contract breach shouldn’t be measured on a high-tech scale. The complainant doesn’t need to endanger his assets, his reputation, or that of his business to reduce the damages that the defendant will be compelled to cover. In M Lachia Setty & Sons Ltd. v. Coffee Board Bangalore⁹, the Supreme Court decided that the mitigation principle should be the only consideration made while calculating damages rather than granting any rights to a party that violated the contract. In this case, it was determined that the complainant was required to do all reasonable efforts to limit the loss and that he was barred from pursuing claims for avoidable losses if he failed to do so.

According to the decision in Esso Petroleum Co. Ltd. v. Mardon¹⁰, the court has the jurisdiction to treat a prediction made concerning the subject of a contract at the pre-negotiation stage as more than just an expression of opinion and as a continuing guarantee. This is because the prognosis was provided to sway the other party into signing a contract. The person who produced the prediction may be held accountable for a breach of warranty if the estimate is subsequently found to have been prepared with complete negligence.

 In Murlidhar Chiranjilal v. Harishchandra Dwarkadas¹¹, according to the Supreme Court, there are two criteria used to determine damages when a contract for the sale of commodities is broken. The first step is to place the party that can prove the other party did not provide what they were promised in a position financially equivalent to what would have happened if the contract had been completed. The plaintiff is also not entitled to any damages resulting from failure to take reasonable efforts to mitigate the loss resulting from the breach.

Conclusion

Thus, it follows that the requirement that the loss sustained be shown violates the entire reason why liquidated damages provisions are included in contracts. The Act’s Section 74 emphasizes the need for fair pay. If the contract’s compensation was offered as a penalty, The consideration would be altered, and the party would only be eligible for damages reimbursement. However, if the compensation provided in the contract is a true pre-estimate of loss, which the party recognized at the time of contracting, there is no doubt as to how to prove such loss. In actuality, it is the opposing party’s responsibility to provide evidence that no loss is anticipated to result from such a breach.

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Endnotes:

1. Indian Contract Act 1872
2. Section 74 of the Indian Contract Act 1872
3. Tata Iron & Steel Co Ltd v. Ramanlal Kandoi, (1971) 2 Cal. Rep. 493, 528
4. Bal Kishan Das v. Fateh Chand, AIR 1963 SC 1405
5. Fateh Chand v. Bal Kishan Das, AIR 1963 SC 1405
6. Maula Bux v. Union of India, (1969) 2 SCC 554
7. Indian Oil Corporation vs. Messrs Lloyds Steel Industries Ltd, 2007 (144) DLT 659)
8. Oil & Natural Gas Corporation Ltd vs Saw Pipes Ltd, (2003) 5 SCC 705
9. M Lachia Setty & Sons Ltd. v. Coffee Board Bangalore, (1981) SCR (1) 884
10. Esso Petroleum Co. Ltd. v. Mardon, [1976] QB 801
11. Murlidhar Chiranjilal v. Harishchandra Dwarkadas, 1962 SCR (1) 653

This article is authored by Animesh Nagvanshi, a student at ICFAI University, Dehradun.

-Report by Himanshu Sahu

FACTS

Vinod Kumar, the deceased, embarked on a train journey on June 12, 2017, from Shahdara to Faridabad aboard a local train. Tragically, while the train was travelling between Faridabad and Tughlaqabad Station, specifically at KM 1514/13-11 JNC Yard, the deceased fell from the train due to a sudden jerk and the push of fellow passengers. Regrettably, he lost his life on the spot. Additionally, the journey ticket and the deceased’s belongings, including his bag, were also lost during the incident. Subsequently, the claimant filed a case in the tribunal seeking compensation, but the judge did not favour the claimant. As a result, an appeal has been made to the court for further consideration and potential compensation.

APPELLANT\’S CONTENTION

The counsel representing the appellants argued that the Tribunal failed to properly consider important factors, such as the contents of the final report by the Station House Officer (SHO) and the statements of witnesses. The SHO\’s report, along with the testimonies of witnesses, indicated that the death occurred due to a fall from the moving train. The appellants\’ counsel also emphasized that the mere absence of the journey ticket should not automatically lead to the dismissal of the compensation claim.
Furthermore, the testimony of a witness named Ramkeshwar Ram supported the appellants\’ case. Ramkeshwar Ram stated that the deceased had visited his brother-in-law before the incident and was carrying a bag of clothes. He had purchased a ticket for the deceased, who boarded the local train for Faridabad. This additional evidence strengthened the appellants\’ position in their pursuit of compensation.

RESPONDENT\’S CONTENTION

The counsel for the respondent, on the other hand, defended the judgment and requested the dismissal of the appeal or support the decision of the tribunal.

JUDGMENT

The court reviewed whether the incident could be categorized as an \”untoward incident\” according to Section 123(c) of the Railways Act, 1989. As the deceased\’s body was discovered on the railway track during the train journey, the court determined that it did meet the criteria for an untoward incident. The court consider the final report provided by the Station House Officer (SHO). Consequently, the court recognized the deceased as a legitimate passenger and the incident as an untoward incident. As a result, the appeal was granted, and the previous order was overturned. The case is now referred back to the Tribunal to determine the compensation amount in accordance with the law. The matter will be scheduled for the earliest available date on 10.07.2023. The compensation amount should be paid to the appellants/claimants within two weeks following the decision.

CASE NAME: SITA DEVI AND OTHERS Vs. UNION OF INDIA

-Report by Nehha Mishra

In the case of KALPANA DEVI VS UNION OF INDIA, the appellant failed to prove the situation as an ‘untoward incident’ defined under Section 123(c) of the Railways Act and was denied compensation by the Railway Claims Tribunal and was endorsed by the High Court of Delhi.

FACTS

The appellant claimed that her husband boarded the train after purchasing a rational 2^nd class superfast railway ticket for the train running from Agra Cantt to Hazrat Nizamuddin railway station. 

Her Husband was standing at the door of the compartment and fell accidentally from the moving train and died at the stop. The appellant claimed that her husband has died in an ‘untoward incident’ and she is entitled to get compensation.

The Railway Claims Tribunal decided that the appellant cannot claim compensation as the journey ticket was not recovered, proving he was not a bona fide passenger. After reading the thorough details of the material on record, it further concluded that the had not occurred due to falling from the moving train. 

The claim petition was dismissed by the Railway Claims Tribunal as they found the appellant non-suited on both counts. 

PETITIONER’S CONTENTION

Referring to the post-mortem report, the Learned counsel for the appellant contended that in the report, the cause of death was particularly expressed as ‘…possible in a railway track accident.’ The Tribunal has misjudged that the accident has not occurred due to the falling from a moving train.

He further contended that declaring him as a bona fide passenger is incorrect as the ticket was lost at the time of the accident.

RESPONDENT’S CONTENTION

A detailed analysis of the case record showed that the incident was first informed by a record that was made at 18:40 hours where it was expressed that one person was lying run over on the Ashram railway bridge whereas another record made at 19:50 hours mentioned that three dead bodies were found in the badly disfigured condition lying at the UP- line of Nizamuddin – Tughlakabad Section.

Adding to this fact, he said no eyewitness could confirm the incident and the appellant herself did not see her husband buying the tickets or boarding the train.

The cause of death was recorded as “a result of combined effects of craniocerebral damage and shock.”  Whereas, the post-mortem report did not mention anything to the matter related to brain damage but rather noted multiple crush injuries, fracture of skull bones, and fracture of the pelvis on both sides.

JUDGEMENT

The fact that 3 dead bodies were found at the place of the accident makes it difficult to conclude that all of them died by accidentally falling from the moving train at the same time. 

Supporting this fact, the journey ticket was not found, and the first information as well as the post-mortem report mentioned that the appellant’s husband was run over.

The appellant failed to make out a case of an ‘untoward incident.’ The court agreed to the decision of the Tribunal.

The Findings recorded were upheld by the court and the appeal was hence, dismissed.

READ FULL JUDGEMENT: https://bit.ly/3KFDokV

-Report by Harshit Yadav

This is an appeal filed under Section 173 of the Motor Vehicle Act, 1988 against the award passed by the Presiding Officer, MACT, North West District, Rohini Courts, Delhi in MACT No. 50797/2016. The case involves the death of Naresh due to injuries suffered in a motor vehicular accident that occurred on 08.05.2014 in front of the NDPL office, inside Shiv Vihar Road, Karala road, Delhi. Naresh was driving his engine-fitted rickshaw thela when a Tata Tempo, which was being driven by its driver in a rash and negligent manner, hit the rickshaw thela with great force. Due to the impact, Naresh fell and sustained grievous injuries which resulted in his death. An FIR was registered at PS Kanjhawala. The main issues involved in this appeal are whether the compensation awarded towards “loss of consortium” is justified and proper and whether the compensation awarded towards “loss of love and affection” would be payable or not.

FACTS

The case involves the death of Naresh, who died as a result of injuries suffered in a motor vehicular accident on 08.05.2014. Naresh was driving his engine-fitted rickshaw thela when suddenly a Tata Tempo bearing registration no. HR-46D-0998, which was being driven by its driver in a rash and negligent manner, hit the rickshaw thela of the deceased with great force. Due to the impact, Naresh fell and sustained grievous injuries which resulted in his death. The main issues involved in this appeal are whether the compensation awarded by the learned Tribunal towards “loss of consortium” is justified and proper and whether the compensation awarded towards “loss of love and affection” would be payable or not. The appellant’s counsel argued that the compensation towards the non-pecuniary heads shall be Rs. 70,000/- only in a lump sum and that the rate of interest awarded by the learned Tribunal is on the higher side and should be reduced to 6% per annum. The Tribunal had awarded a sum of Rs. 2,00,000/- towards loss of consortium and Rs. 2,50,000/- towards loss of love and affection to the respondents.

ISSUES RAISED

a) Whether the compensation awarded by the learned Tribunal towards “loss of consortium” is justified and proper?

b) Whether the compensation awarded towards “loss of love and affection” would be payable or not?

CONTENTIONS

The appellant argues that the learned Tribunal has erroneously awarded compensation towards loss of consortium and loss of love and affection. They contend that as per recent judgments and prevailing law, compensation towards loss of love and affection should not have been awarded. Furthermore, the compensation awarded towards the loss of consortium is excessive, and only the widow of the deceased is entitled to such compensation. The appellant also contends that the rate of interest awarded is on the higher side and should be reduced.

The respondent argues that the compensation awarded by the learned Tribunal towards loss of consortium and loss of love and affection is justified and proper. They contend that as per settled law, compensation towards loss of consortium should be awarded to all the claimants, including the children of the deceased. Furthermore, compensation towards loss of love and affection is also payable as per recent judgments. The respondent also contends that the rate of interest awarded is appropriate and should not be reduced.

JUDGEMENT

Based on the facts presented, the appeal was filed under Section 173 of the Motor Vehicle Act, 1988 against an award passed by the Presiding Officer, MACT, North West District, Rohini Courts, Delhi in MACT No. 50797/2016. The appeal sought to challenge the compensation awarded towards “loss of consortium” and “loss of love and affection.”

The accident occurred on May 8, 2014, in front of the NDPL office on Shiv Vihar Road, Karala road, Delhi, where the deceased was driving his engine-fitted rickshaw thela. A Tata Tempo, driven by the offending vehicle’s driver in a rash and negligent manner, hit the rickshaw thela, resulting in the deceased falling and sustaining grievous injuries, leading to his death. An FIR was registered at PS Kanjhawala under sections 279/304A IPC.

After hearing the counsel for the appellant and reviewing the award, the court found that the compensation awarded towards “loss of consortium” was justified and proper, as per the settled law that all claimants are entitled to compensation under this head. However, regarding the compensation awarded towards “loss of love and affection,” the court referred to the judgment of National Insurance Co Ltd. vs. Pranay Sethi & Ors. and reduced the compensation to Rs. 70,000/- only in a lump sum to be payable only to the widow of the deceased. The court also reduced the rate of interest from 9% to 6% per annum.

Therefore, the court dismissed the appeal in part, reduced the compensation awarded towards “loss of love and affection” to Rs. 70,000/- payable only to the widow of the deceased, and reduced the rate of interest to 6% per annum.

READ FULL JUDGEMENT: https://bit.ly/42OTwbY

-Report by Harsh Singh Rajput

In the case of Delhi Development Authority and Govt. of NCT of Delhi vs Batti and others, the respondents in this case i.e., Batti and others filed a writ petition in Delhi high court to claim the compensation of the land which was taken by them 20 years back for the development project and later the two authorities i.e., plaintiffs appeal before SC against the compensation requested by respondents.

FACTS:

Delhi development authority and Govt. of NCT of Delhi appeal before the SC with the Civil Appeal no 2402/2008. Under section 4 of the land acquisition act, 1894(for short ‘the Act’) an order was passed on 23-06-1989 for the acquisition of land measuring about 3,500 hectares for the development of part of Delhi and this order was further followed up by notification under sec 6 of ‘the Act’ on 20 June 1990.

The respondent was the wife of Mange Ram who was the son of the Late Harkesh. The issue was that the late Father-in-law of respondent i.e., Mr. Harkesh was asserted as the owner of the 1/12th share i.e., (01 bighas and 19 biswas and 03 biswansi from the land area measuring upto 23 bights and 2 biswas having khasra no. 281/4(10-11). 282/4(10-3) and 80(2-8)).

Now writ petition was filed by the respondent in 2015. They stated that the other party hasn’t paid them the compensation and also the possession of land hasn’t been taken and the acquisition has lapsed. But the high court stated that the land was handed over to the forest department as per the facts after the possession of the land was taken. And it was taken because the land comes under the ‘O’ zone. And HC also stated the fact that land was also vested in Gaon Sabha. Therefore, the respondent will not be given any compensation and due to the dispute over the titles regarding land, the issue related to compensation was kept open.

The constitution bench stated two conditions to prove the acquisition which are as follows:

1. Taking over the possession of the land or,
2. Payment of compensation

And the bench stated that from the facts, we came to know that the acquisition was done after the land was taken in possession, and due to the dispute in the title, the HC also had kept the question of title open.

The question of acquisition which was holdup by the Delhi high court in this case by relying upon the judgment of this court (SC) in the case of Pune municipal corporate and another’s case ‘supra’ was overruled by relying on the judgment of this court in the Indore Development Authority.

RESPONDENT’S CONTENTION:

Learned counsel on behalf of the respondent provided the facts that respondent no. 1 is the daughter-in-law of later. Harkesh. Harkesh was entitled to compensation as he was the owner of the land as per the records and he also have the Bhoomidari rights. And they submitted that the land was not been taken up also by the authorities.

JUDGEMENT:

The honourable Supreme Court allowed the present appeals of the plaintiff and stated that there will not be any compensation to the predecessor or respondent due to the dispute regarding the title of the land, also the land was found to be recorded in the name of Gaon Sabha.

Also, there were no records of any action or step for seeking compensation on behalf of the respondents and the person who owned the land 20 years ago. So by putting aside the impugned order of HC, the present appeals are allowed and the writ petition of respondents in HC is dismissed.

READ FULL JUDGEMENT: https://bit.ly/3ZdLcPQ

–Report by Arun Bhattacharya

A nearly two-decade-old issue of landowners who have been divested from their lands for the construction of Express Highway was relieved on receiving orders regarding due compensation by the hon’ble Supreme Court of India on Wednesday (15th February 2023) in the matter of RAVINDER KUMAR GOEL versus THE STATE OF HARYANA & ORS.

FACTS:

A certain extent of 798 Kanals and 2 Marlas of land were acquired by the Haryana Government Industries Department in 2005 due to the construction of Express highway Phase VII which would connect National Highway numbers 1,10,8 and 2. The District Revenue cum Land Acquisition Collector had declared an amount of approximately twelve lakh rupees per acre for the said lands. On seeking reference from the Reference Court, they were given a consideration of approximately forty-three lakh rupees per acre which was again enhanced by the High Court to nearly sixty-two lakh rupees per acre amount.

FIRST APPEAL:

Both the landowners and the State had filed appeals before the apex court under the title Surender Singh v. State of Haryana whereby the matters were remanded back to the Reference court which after further consideration revalued the amount of compensation to approximately twenty-two lakh rupees per acre. Appeals by both parties were again filed before the High Court which rectified the amount again to nearly fourteen lakh rupees per acre. On such occasion, the land losers filed another appeal to the apex court with the demand for further rectification of the said compensation value.

APPELLANT’S CONTENTION:

The appellants primarily contended the fact that the lands which were under consideration were part of an urban agglomeration and had served purposes other than merely agricultural and hence the determination of compensation on such lands assuming them to be purely agricultural would be faulty. They also highlighted their grievance regarding the Reference Court’s decision to deduction of 35 per cent as development charges. They argued that since the purpose of such acquisition was for the construction of roadways hence such acquisitions must be treated as sale deeds and compensation thereby must be determined in compliance with their market values.

RESPONDENT’S CONTENTION:

The Reference Court had relied upon certain Exemplars which were in connection to lands which amounted to 798 Kanals 2 Marlas while determining the compensation in the present case. This was pointed out to be unjustified due to the non-representation of the true value of such lands. They further pointed out that the Land Acquisition Officer was correct in his determination of compensation since he had relied upon nine sale Exemplars during the very same period wherein large extents of agricultural lands were sold and per acre value for those said transactions were lower than what was determined by the LAO.

JUDGEMENT:

The hon’ble apex court did an in-depth analysis of the contentions of both parties, relied upon different judgments like State of Gujarat vs. Kakhot SinghJi VajesinghJi Vaghela observed that “the principle that the price agreed between a willing seller and a willing purchaser would be the price which is generally prevailing in the market in respect of the lands having similar advantages which can be the basis to determine the market value of acquired lands if such sale instances are brought on record.” Considering all the valid points referred by the Reference Court, the apex court stated that since the purpose of such acquisition was the construction of roadways, it is prudent that development charges are bound to occur and declared that twenty-five per cent of charges must be paid in accordance to development cost which resulted in a deduction of nearly eight lakh rupees from the initial thirty-three lakhs. Thus the final amount to be paid in compensation was calculated to be twenty-five lakhs per acre approximately by the apex court concluding a nearly two-decades-long litigation.

READ FULL JUDGEMENT: https://bit.ly/40ZLYC9

-Report by Manya Sharma

The Supreme Court after considering the arguments of both the counsels and the income of the Defendant, directed an enhanced compensation of Rs.32,82,000/- with an interest rate of 7.5%, to the claimants.

FACTS 

An automobile accident caused the untimely death of the appellant’s wife. The deceased was 25 years old and worked as a homemaker at the time of her death. The Motor Accident Claim Tribunal concluded that the plaintiff was entitled to Rs.19,12,200 in total compensation, including 7.5% interest. Taking into account the Defendant’s monthly income of Rs. 1,500/­, the Learned Tribunal found that the loss of dependency was worth Rs. 3,24,000/­. The learned Tribunal ordered an additional Rs. 50,000/­ for the foetus. The High Court enhanced the amount of compensation to Rs.29,34,000/- under various heads. Feeling aggrieved by the distribution of the amount and the total amount, the aggrieved party went to the Supreme Court.

APPELLANT’S CONTENTION

It was contended that the calculation of the amount under different heads was not proper in the High Court’s judgment. The amount under the head’s loss of dependency was decided to be Rs.6,000/- keeping the income of the deceased in mind but this was not proper as even minimum wages payable to workers was more than that amount and also the prospects of the deceased were not taken into consideration while calculating the amount. It is also contended the High Court miscalculated the amount towards the foetus, the same being Rs.50,000/-, where it should be Rs.40,000/- each towards loss of consortium or loss of love and affection. 

RESPONDENT’S CONTENTION

The respondents contended that the deceased was only a housewife and therefore the High Court’s calculation of Rs.6,000/- towards loss of dependency was fair. The respondents also fairly conceded that the High Court should have considered the prospects while awarding loss of dependency.

COURT’S DECISION

The Court, after hearing the learned counsels of the appellants and the respondents, decided that after considering the income of the deceased, who was a 25 years old housewife, should be at least Rs.7,500/- per month. The position of law on the calculation of the amount under the head of loss of dependency provides that 40% of the income is to be added to prospects. The claimants will be entitled to an amount of Rs. 1 lakh for the loss of the foetus and an amount of Rs.40,000/- each for loss of consortium or loss of love and affection. Therefore, in total, an enhanced compensation of Rs.32,82,000/- with an interest rate of 7.5%, was awarded to the claimants.

-Report by Anette Abraham

In a Delhi HC ruling, Hon’ble Justices Suresh Kumar Kait and Saurabh Banerjee directed Kirori Mal College, to pay arrears to a faculty whose permanent appointment was inappropriately deterred. In this case, Kirori Mal College v. Dr. Kusum Lata, the Hindi Lecturer, who was expected to receive permanent employment under the provisions of the PWD quota was deprived of her post in a slight that occurred in 1998. 

FACTS

The lecturer, Dr. Kusum Lata, was visually impaired and fell under the provisions of the Persons with Disability Act, 1995. She applied to Kirori Mal College under the advertisement that posted two vacancies: one for the permanent Hindi Lecturer post and another for part-time Hindi Lecturer. She was given the post of part-time lecturer on 16^th July, 1997.

 In the year 2000, another advertisement was posted by the college which detailed the availability of two posts, one – the post of Permanent Hindi teacher under the Scheduled Caste category and the other – a temporary post against leave vacancy. Dr. Kusum was allotted the position of temporary post on 16^th April, 2001. Two more permanent posts for Permanent Lecturer were opened where one was reserved for candidates under Persons with Disability, the respondent was given the post of permanent employee on 4^th March, 2006. 

Kusum filed a writ petition in the year 2001, assailing the reservation that occurred in 2001 and contesting the lack of appointment she faced. The Court held that Kirori Mal College had failed to implement the reservation aptly and directed the college to pay for the arrears. 

The College was told to pay a sum of Rs. 8,84,583/- to Dr. Kusum to make up for the loss in income she suffered due to incorrect appointment. Further, they were instructed to provide a detailed calculation sheet for the arrears and put the funds in a Fixed Deposit that Dr. Kusum could access within eight weeks. This judgement was then modified slightly by the Delhi High Court where the college was only expected to pay arrears from the year 2001 forward when she was slighted of her position and also the year the petition was filed. 

APPELLANT’S ARGUMENT 

1. Learned counsel for the Petitioner has argued that the petition in which the impugned judgment was rendered was only filed in 2008, and that there was no challenge to the selection process undertaken in 1997, under which the Respondent was appointed on a part-time basis, prior to the filing of the said petition. Thus, the Petitioner’s challenge in the writ petition to the non-grant of the reservation to physically challenged category applicants in the 1997 selection process was greatly delayed and prevented by laches.
2. The Counsel proceeded to contend that Dr. Kusum’s petition did not stand under the ambit of reservation since the quota that she falls under, physically challenged, is a horizontal reservation (Article 16 (1) ) and that of the Scheduled Tribe Reservation is a vertical reservation (Article 16 (4) ). 
3. The appellant additionally claims that the respondent provided inaccurate calculation(s), citing inconsistencies in the values for “Transport Allowance” and “Dearness Allowance.” Finally, the appellant claims that the respondent is incorrectly claiming promotion to Reader with effect from January 1, 2007, as well as concomitant advantages accruing to the higher pay scale as a result of such promotion.

COURT’S DECISION

The Delhi HC held that the circumstances of the case and the court proceedings show that the college freely paid a sum of Rs. 8,84,583/- before the Registrar General, without providing any calculations and on its own free choice. Furthermore, the appellant hasn’t charged Dr. Kusum Lata with any fraud or deception, nor has it made the argument that the money it deposited was more than what was owed to the respondent or that it was an error on its side. Last but not least, the appellant has never requested release of the aforementioned deposited sum on its own and has only made a brief mention of it in its response to the respondent’s application without pressing the matter. 

Further, the Hon’ble Court held that, in light of the facts and the aforementioned conduct of the college, they strongly believe that the appellant, would have deposited the said amount of Rs. 8,84,583/- after making proper calculations and tallying it with the records available, to which it has not objected or raised a dispute. This caused the Court to draw the obvious conclusion that the respondent has a right to the aforementioned already-deposited sum of Rs. 8,84,453/-. Therefore, they concluded that the respondent is qualified to collect the aforementioned amount as the appellant had no good reason to voluntarily deposit it before the Registrar General. After more than four years have passed with no provocation or fault attributable to the respondent, the appellant cannot be permitted to undertake an improper endeavour to collect the previously voluntarily deposited sum. 

The Bombay High Court on Wednesday ordered the Federation of Indian Pilots to provide more information about the number of pilots who participated in the Vande Bharat Mission and other similar missions so that the Court can consider their claim for compensation for services rendered during the COVID-19 pandemic.

Senior Advocate Prasad Dhakephalkar said that Federation pilots were participating in the Central Government’s Vande Bharat Mission (VBM) and Air Bubble missions, which were used to evacuate stranded individuals from overseas and for the transportation of life-saving medicines. He submitted the report that COVID took the lives of roughly thirteen senior pilots, with some of them also suffering from long-term effects due to which they had lost their pilot license.

Chief Justice Dipankar Datta and Justice GS Kulkarni said that before they could evaluate the prayers of the petitions, they needed further information about the pilots. “We’d like facts and numbers, such as the number of pilots and which airline they work for, their salary and benefits, and how many flights were part in the Vande Bharat Mission or similar missions.”

They postponed the matter’s hearing for two weeks to give the Federation time to file an additional affidavit with these details. The Federation filed public interest litigation (PIL) requesting that the Maharashtra government and the Central government, through the Ministry of Civil Aviation, develop a policy or program providing adequate pay to pilots who were giving emergency services. The Federation also requested that the Ministry issue instructions to develop a comprehensive insurance policy that would cover all pilots. It was also suggested that the Ministry develop a special class of COVID first responders known as ‘Air Transportation Workers’ to receive priority in the vaccines. Finally, the Federation sought perks that could be granted to pilots, such as family employment to the family member of the pilots who succumbed to COVID.

The matter will be heard again after two weeks.

-Report by Eshan Sharma

Introduction

Any civil wrong for which the law provides a remedy is referred to as a tort. Torts compensate people and property for injuries caused by someone else’s negligence. Essentially implying, a tort is a civil wrong independent of a contract where the only remedy available is in the form of compensation. A tort is the French version of the English word “wrong” as well as the Roman law term “delict.” The term tort comes from the Latin word “tortum,” which denotes “twisted, crooked, or incorrect.” plays a role in disciplining organizations and individuals who cause harm to others through reckless and negligent behavior. The fundamental principle of tort law is Ubi Jus Ibi Remedium. The objective of tort is to recompense the victim whose legal right has been infringed or violated by the person who caused the damages in the first place, as well as to deter them from repeating the same breach in the future. In India, tort law is a relatively young common law development reinforced by codifying statutes, including damages statutes. Tort first appeared in India, which is still a developing country, with the establishment of British India. Following independence, India embraced British laws, including the distorted idea of tort law. While India generally takes the same strategy as the United Kingdom approach, there are some variances that could show judicial intervention, causing controversy. Because of conflicts about who should carry the economic burden of an accident and what damage should be compensable, there has always been concern over whether tort law should be restricted. Although statutes such as the Motor Vehicles Act of 1988, the Consumer Protection Act of 1986, and the Environment Protection Act of 1986 were enacted to establish tort liability in India, there is no official codification or formal legislation of tort law in our country. It has also been held that section 9 of the Code of Civil Procedure, 1908, which allows the civil court to try all civil matters, implicitly confers jurisdiction to apply tort law as a matter of justice, equity, and good conscience. As a result, the court can use its inherent powers under section 9 to expand this area of liability.

Law of Torts in Present Scenerio

A Brief Outline

COVID-19’s spread has clearly been one of the most challenging moments for the judiciary all over the world for administering justice. The judiciary in India, the world’s largest democracy, has always been challenged by the huge amount of litigation cases that come before courts every day. An Indian court can assume jurisdiction by being the site where the cause of action, the tort; occurred, according to India’s conflict of law provisions, which are yet uncodified. Analyzing the situation in other nations, India considered its own capacity to avert a pandemic, taking into account the limited resources available in a country with an inadequate health infrastructure.

With the current persistent provisions, the plaintiff(s) filing a lawsuit in an Indian court would have the onus of responsibility to prove that the Chinese government’s concealment of the virus’s nature and failure to take appropriate measures to contain it, creating an actionable act under both Chinese and Indian law, and thus the suit will be governed concurrently by both the Chinese and Indian tort law.

According to the House of Lords’ interpretation of common law principles, negligence is defined as a failure to exert the degree of care that should have been undertaken by the doer. As stated in Rajkot Municipal Corpn. vs. Manjulben Jayantilal Nakum, (1992 ACJ 792), Indian tort law is based on common law principles as;

1. that the defendant owed the plaintiff a “legal” obligation of duty and care
2. that the defendant breached this duty
3. the plaintiff suffered harm as a result of the defendant’s breach

The Liability of Spread of Virus

China’s ‘responsibility of care’ to India and its residents can be traced back to the relevant sections of the International Covenant on Economic, Social, and Cultural Rights and the International Health Regulations, 2005. This legal obligation to non-nationals can be extended to include a duty to other countries and their citizens. China has breached its duty of care to the countries by failing to notify the World Health Organization in accordance with the International Health Regulations of 2005 in a timely manner despite the given signs of a public health issue and the whistleblower being subjected to traumatic measures for threatening the name of the country in an international context.

“Using a constructive knowledge criterion holds liable individuals who actively avoid knowledge of infection even when suffering apparent indications of a disease,” it was determined in the case of Endres v. Endres. California’s courts had imposed culpability in another case, Doe v. Roe, even when the person spreading the disease believed they were not infected.

Although it has not been resolved whether a cause of action for negligently disseminating COVID-19 can exist, it appears that the individuals should be held accountable because they knew or should have known that they were carriers of the virus; those people had an obligation to avoid COVID-19 transmission and thus contain the spread ensuring the right to live of other individuals.

The Liability to ensure the public health

Suits have already been brought against cruise ship operators, nursing homes, and entertainment venues, alleging that someone wrongfully exposed me/my loved ones to COVID-19, and we/they became infected/died as a result. It may be simple to demonstrate causation in some cases (for example, some who are infected by the virus were in very closed locations such as nursing homes given the knowledge about incubation periods, it is reasonable to infer that they caught the coronavirus in that location). While causation may be simple to establish, for example, prisoners with coronavirus definitely caught the disease inside prisons, there may be no negligence with the institutions’ poor health and medical infrastructure.

Doctors who prescribe drugs to COVID-19 patients that the Regulatory Authority has approved for other applications should be insulated from liability by legislation if the drugs don’t work, as long as scientific evidence supports their usage for this purpose. Liability considerations have delayed the development of new vaccinations in the past, as seen by outbreaks of smallpox and other influenzas. In 1976, when President Gerald Ford launched an ambitious effort to immunize millions of people against a swine flu outbreak, insurers and manufacturers refused. Liability shields have allowed businesses to manufacture effective therapies swiftly while avoiding legal repercussions. However, taking complete responsibility for highly new items that are developed and licensed at breakneck speed is a dangerous endeavor for countries.

Although governments’ tortious culpability should be assimilated to that of citizens, ‘there are limits to the extent to which that is achievable because governments’ character and functions differ from those of individuals. Assessing the reasonableness or unreasonableness of government policy decisions is an unsuitable matter for judicial consideration in determining government tort liability. Considerations in the context of the COVID-19 pandemic and government culpability in negligence might include the potential of harm being caused to the public and the economic loss sustained as a result of putting in place contagion-control procedures.

Medical Negligence

The Hon’ble Supreme Court in Jacob Mathew vs. State of Punjab Appeal (Crl.) 144-145 of 2004 opined that;

Negligence is defined as a breach of duty caused by the failure to do something that a prudent and reasonable person would do, or by doing something that a prudent and reasonable person would not do, based on the principles that normally govern the conduct of human affairs.

Mismanagement, denial of proper care and medical help to patients, non-observance of safety rules have all been reported, putting the lives of both healthcare personnel and patients in jeopardy. These difficulties raise the issue of medical negligence reflecting the tortious liability. In light of the harsh conditions in which doctors work, there are suggestions that medical practitioners be temporarily exempt from liability for medical malpractice. Another intriguing viewpoint is to look into alternative dispute resolution processes in which the patient can be reimbursed financially to the degree possible.

Conclusion

Rather than basing our judicial thought on English laws, we need to develop new principles and norms that effectively address the difficulties of India thus indicating a need for our own jurisprudence. The spread of COVID-19 has undoubtedly been one of the most difficult times for humanity to accept, and because the number of cases is alarmingly high with various mutant variants taking a spread, it is the responsibility of each and every individual to act responsibly with the negligent people, as well as the ruling machinery, who must be held accountable for their actions. With one recent instance of the case of Johnsons & Johnsons Talc Powder Cancer Case in tort law where 22 women in the US state of Mississippi claimed to have developed ovarian cancer after using Johnson’s talcum powder, and the firm granted them $3.6 billion amplifies the importance of tort jurisprudential evolution in India where the aggrieved would have a justified resort to resolve the grievances.

This article is authored by Aathira Pillai a 5th year BLS LLB student of Dr. D. Y. Patil College of Law.

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