Ahmadi, C.J.I - (1.) -Special leave granted.
(2.) The principal judgment that has been impugned in the 8 matters grouped together is the one dated 26-4-1993 in the case of New India Assurance Co. Ltd v. Kamlaben Sultansinh Hakumsinh Jadav in First Appeal No. 61 of 1979 of the High Court of Gujarat 1993 (1) Gujarat Law Reporter 779. The Full Bench, in that case, was called upon to decide the following questions referred by the Division Bench: "(i) What would be the extent of liability of the insurer under Section 95 (2) [of the Motor Vehicles Act, 1939] in respect of death or bodily injury to the passengers carried for hire or reward in a truck (ii) Which clause amongst (a), (b) or (c) will apply (iii) Whether the judgment of the Division Bench in Oriental Fire and General Insurance Co. Ltd. v. Husseinbhai Abdullbhai Sheikh, First Appeal No. 851 of 1977, decided on 26th July 1983, is correctly decided and is correctly followed in some other cases - The Full Bench reframed the questions and at the end of the adjudication on these points the Court posed to itself the following question: "whether compensation amount should be paid in lump sum or by periodical instalments." The High Court took note of the contention that where lost earnings are still to be anticipated, or where the action is brought by dependents of someone killed in an accident, a large part of the award is for future loss of earnings, and it is hard to see how it is appropriate to compensate these by a lump sum payment. A lump sum could be invested, according to this contention, to provide an income or used to purchase an annuity. Another important factor to be considered was that the recipient of the lump sum compensation could be quite inexperienced in the handling of large sums of money, and they may dissipate the money, or fall a prey to confidence tricksters or invest it in reckless and hopeless enterprises. The judgment then goes on refer to the Supreme Court decision in the case of Bishan Devi v. Sirbaksh Singh, AIR 1979 SC 1862 and quotes paragraph 21 of that judgment, which is as under: "The insurance companies are now nationalised and the necessity for awarding lump sum payment to secure the interest of the dependants is no longer there. Regular monthly payments could be made through one of the nationalised banks nearest to the place of residence of the dependants. Payment of monthly instalments and avoidance of lump sum payment would reduce substantially the burden on the insurer and consequently of the insured. Ordinarily in arriving at the lump sum payable, the Court takes the figure at about 12 years payment. Thus, in the case of monthly compensation of Rs. 250 payable, the lump sum arrived at would be between 30,000 and 35,000. Regular monthly payment of Rs. 250 can be made from the interest of the lump sum alone and the payment will be restricted only for the period of dependency of the several dependants. In most cases it is seen that a lump sum payment is not to the advantage of the dependants as large part of it is frittered away during litigation and by payment to person assisting in the litigation. It may also be provided that if the dependants are not satisfied with the minimum compensation payable they will be at liberty to pursue their remedies before the Motor Accidents Claims Tribunal. (Emphasis supplied)" The High Court then proceeds to refer to its own judgment in the case of Muljibhai v. United India Insurance Co. Ltd. (1982) 23 (1) Guj LR 756, and places reliance on the following part of that judgment: "We are distressed to note that Claims Tribunals do not realise that it is not sufficient to award compensation to the victim of the accident or his legal representatives, as the case may be, but it is also its duty to ensure that the amount awarded is not frittered away. It must be remembered that lump sum compensation is paid to the claimants who are either the victims of the accident or their legal representatives by applying an appropriate multiplier with a view to providing for his or their future. In other words, instead of spreading out the amount of compensation over a number of years having regard to the estimated future life span, as a measure of convenience, lump sum payment is ordered. If the whole or substantial part of the compensation money is paid to claimants who have never handled such huge amounts in their lives there is the danger of their frittering away the amount for want of fiscal discipline in their lives. If the amount is squandered away, which in all probability may happen, the socio-economic objective intended to be achieved by the award of compensation will be wholly defeated. We are, therefore, of the opinion that in such cases it is imperative on the claims Tribunal to protect such claimants, no matter they are adults, by directing the investment of lump sum compensation awarded to them."
(3.) The impugned judgment goes on to say that the Court in Muljibhai's case (supra) had indicated broad guidelines which the Claims Tribunal should follow while disposing of the claim applications arising under the Motor Vehicles Act, 1939 to scotch complaints of misapplication of compensation money and that as per those guidelines the compensation money should be invested in a nationalised bank as a fixed deposit and the interest thereon should be paid directly to the claimant or his guardian, as the case may be. The Court observed that despite the compensation amount being deposited in banks unscrupulous persons by various means could get the money released from the bank thereby frustrating the intention of the Court to protect the interest of the accident victim or the heirs of a deceased in case of a fatal accident. The High Court pointed out that it was necessary to see: (i) that the major part of the compensation amount reaches the victims or their dependents; (ii) large part of the compensation amount is not frittered away; (iii) victims or their dependents are not again left at the mercy of the Society; and (iv) the amount, which is paid by the nationalised Insurance Companies, serves its purpose and the socio-economic object of the legislation is not defeated. ;