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Judgment
P.P.S. Janarthana Raja, J.—The Civil Miscellaneous Appeal is preferred by the Appellants-claimants against the judgment and Decree
dated 01.06.2004 made in M.A.C.O.P. No. 403 of 2002 on the file of the Motor Accidents Claims Tribunal, Additional District Sessions
Judge(Fast Track Court), Dindigul.
Background facts in a nutshell are as follows:
The deceased Bahima Jahana who was a minor met with motor traffic accident which took place on 27.01.2002 at about 8.45a.m. When the
deceased was crossing the Aadinatanmai Compound Water Tank Road at dindigul, an Auto bearing Registration No. TN-57-C-5902 belonging
to the first Respondent, came in a rash and negligent manner and at high speed and hit the deceased. Due to the said impact, the deceased died on
the spot. The claimants are the parents of the deceased. They claimed a sum of Rs. 2,50,000/- as compensation. The said auto was insured with
the Insurance Company/the second Respondent herein, who resisted the claim. On pleadings, the Tribunal framed the following issues:
Whether the accident had occurred due to the rash and negligent driving of the driver of the auto insured with the second Respondent Insurance
Company?
Whether the claimants are entitled for compensation? If so, what is the amount and from whom?
After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to the rash and negligent driving
of the driver of the auto. Further, the Tribunal of the view that there was contributory negligence on the part of the mother of the minor child.
Therefore, after awarding a sum of Rs. 1,55,000/- as compensation, a sum of Rs. 55,000/- was reduced on the ground that there was contributory
negligence on the part of the mother of the deceased and the Tribunal has awarded a total compensation of Rs. 1,00,000/- with interest at 9% per
annum from the date of petition. The details of the compensation are as follows:
For loss of income Rs. 1,50,000/-
For funeral expenses Rs. 5,000/-
-----------------
Total Rs. 1,55,000/-
Less: Contributory
negligence on the part
of the mother of the
deceased Rs. 55,000/-
-------------------
Total Rs. 1,00,000/-
-------------------
Aggrieved by that award, the Appellants-claimants have filed the present appeal for enhancement of the compensation awarded by the Tribunal.
Learned Counsel appearing for the Appellants-claimants has submitted that the Tribunal has awarded a very low and meagre sum of
compensation and the Tribunal ought to have awarded the amount as claimed by the claimants. The Tribunal has not considered all the relevant
materials and it has not followed the principles of assessment before passing the award and therefore this is a fit case for enhancement.
Learned Counsel appearing for the second Respondent-Insurance Company has submitted that the Tribunal had considered all the relevant
materials and evidence on record and came to the right conclusion and awarded a just, fair and reasonable compensation. Hence the order of the
Tribunal is in accordance with law and the same has to be confirmed.
Heard the counsel and perused the materials available on record. On the side of the Appellants-claimants, P.W.1, the mother of the deceased
was examined and documents Exs.P.1 to P.6 were marked. Ex.P.1 is the First Information Report. Ex.P.2 is the Postmortem Report. Ex.P.3 is
the Motor Vehicle Inspector''s Report. Ex.P.4 is the Charge Sheet. Ex.P.5 is the copy of the judgment in C.C. No. 143 of 2002. Ex.P.6 is the
Legal Heir certificate. On the side of the second Respondent/Insurance Company no one was examined and no document was marked to
substantiate their case. Even though, the Tribunal had fixed the liability on the driver of the auto, it had deducted a sum of Rs. 55,000/- from the
compensation on the ground that the mother of the deceased had not taken enough care and she should not have allowed the minor child to cross
the road.
In the case of Sarla Verma and Ors. v. Delhi Transport Corporation and Anr. reported in (2009) 4 MLJ 997, the Apex Court has considered
the relevant factors to be taken into consideration before awarding compensation and held as follows:
Before considering the questions arising for decision, it would be appropriate to recall the relevant principles relating to assessment of
compensation in cases of death. Earlier, there used to be considerable variation and inconsistency in the decisions of Courts Tribunals on account
of some adopting the Nance method enunciated in Nance v. British Columbia Electric Rly. Co. Ltd. (1951) AC 601 and some adopting the
Davies method enunciated in Davies v. Powell Duffryn Associated Collieries Ltd. (1942) AC 601. The difference between the two methods was
considered and explained by this Court in General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas
and others, . After exhaustive consideration, this Court preferred the Davies method to Nance method. We extract below the principles laid down
in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas (supra).
In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependent as a result of the death.
The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account
many imponderables, e.g., 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 live 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 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 self-maintenance and pleasure,
and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be
capitalised by multiplying it by a figure representing the proper number of year''s purchase.
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.
It is necessary to reiterate that the multiplier method is logically sound and legally well-established. There are some cases which have proceeded to
determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a
percentage therefrom towards uncertainties of future life and award the resulting sum as compensation. This is clearly unscientific. For instance, if
the deceased was, say 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the loss of dependency
for 45 years - virtually adopting a multiplier of 45 - and even if one-third or one-fourth is deducted therefrom towards the uncertainties of future life
and for immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible.
In U.P. State Road Transport Corporation and Others Vs. Trilok Chandra and Others, , this Court, while reiterating the preference to Davies
method followed in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas (supra), stated thus:
In the method adopted by Viscount Simon in the case of Nance also, first the annual dependency is worked out and then multiplied by the
estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a
bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased
earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made
assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one-third to one-half of the
dependency was reduced, depending on the life span taken. That is the reason why courts in India as well as England preferred the Davies formula
as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas case, usually English courts rarely
exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when tribunals/courts began to use a hybrid method of using
Nance method without making deduction for imponderables Under the formula Advocated by Lord Wright in Davies, the loss has to be
ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus
assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an
appropriate multiplier.
In the case of Syed Basheer Ahamed and Others Vs. Mohd. Jameel and Another, , the Apex Court has held as follows:
Section 168 of the Act enjoins the Tribunal to make an award determining ""the amount of compensation which appears to be just"". However,
the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression
which appears to be just"" vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude
of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of
compensation.
Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons
affected nor should it be punitive to the person(s) liable to pay compensation. The determination of compensation must be based on certain data,
establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In a
nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards.
In Kerala SRTC v. Susamma Thomas, M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181, para 5)
...The determination of the quantum must answer what contemporary society ''would deem to be a fair sum such as would allow the wrongdoer
to hold up his head among his neighbours and say with their approval that he has done the fair thing''. The amount awarded must not be niggardly
since the ''law values life and limb in a free society in generous scales''.
At the same time, a misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining the compensation. The object of
providing compensation is to place the claimant(s), to the extent possible, in almost the same financial position, as they were in before the accident
and not to make a fortune out of misfortune that has befallen them.
The question as to what factors should be kept in view for calculating pecuniary loss to a dependant came up for consideration before a three-
Judge Bench of this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami, with reference to a case under the Fatal Accidents Act, 1855,
wherein, K. Subba Rao, J. (as His Lordship then was) speaking for the Bench observed thus: (AIR p.1)
In calculating the pecuniary loss to the dependants many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss
to the dependants 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.
Taking note of the afore extracted observations in Gobald Motor Service Ltd. in Susamma Thomas it was observed that: (Susamma Thomas
case, SCC p.182, para 9)
The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account
many imponderables e.g. 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.
Thus, for arriving at a just compensation, it is necessary to ascertain the net income of the deceased available for the support of himself and his
dependants at the time of his death and the amount, which he was accustomed to spend upon himself. This exercise has to be on the basis of the
data, brought on record by the claimant, which again cannot be accurately ascertained and necessarily involves an element of estimate or it may
partly be even a conjecture. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon
himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An
appropriate multiplier is again determined by taking into consideration several imponderable factors. Since in the present case there is no dispute in
regard to the multiplier, we deem it unnecessary to dilate on the issue.
After considering the principles enunciated in the judgments cited supra, let me consider the facts of the present case.
The deceased minor was 6 years old at the time of the accident. She was studying in First Standard. She was the only child of the claimants.
After considering the facts and circumstances of the case, the Tribunal has fixed the notional income at Rs. 15,000/- per annum. After deducting a
sum of Rs. 5,000/- towards personal expenses (1/3rd of the amount), the Tribunal arrived at a sum of Rs. 10,000/- as the annual contribution of
the deceased to the family. After considering the age of the deceased child, the Tribunal fixed the multiplier of ""15"" and arrived at the loss of
income at Rs. 1,50,000/-. The award of the Tribunal is very reasonable and the Tribunal also has correctly fixed the notional income for non-
earning members and also correctly adopted multiplier of ""15"" which is in accordance with law. The Tribunal has also awarded a sum of Rs.
5,000/- towards funeral expenses. It is also very reasonable and hence, the same is confirmed. Further, the Tribunal was of the view that the
mother of the deceased should have taken proper care and should not have allowed the minor daughter to cross the road. Therefore, the Tribunal
has held that there is negligence on the part of the mother of the deceased and deducted a sum of Rs. 55,000/- from the compensation of Rs.
1,55,000/- (Rs. 1,50,000/- + Rs. 5,000/-) and awarded a compensation of Rs. 1,00,000/-.
The learned Counsel appearing for the Appellants vehemently contended that the Tribunal is wrong in deducting a sum of Rs. 55,000/- on the
ground that there is a negligence on the part of the mother of the deceased and the same should be set aside.
In the present case, the minor child suddenly crossed the road and there was an accident. So, under these circumstances, the Tribunal is wrong
in fixing the contributory negligence on the part of the mother of the deceased. Therefore, the deduction of Rs. 55,000/- is unwarranted and hence,
the same is deleted. Therefore the claimant is entitled to a compensation of Rs. 1,55,000/- as against a sum of Rs. 1,00,000/- awarded by the
Tribunal.
Learned Counsel appearing for the Appellants-claimants also submitted that the Tribunal has not awarded any amount towards loss of future
prospects.
In the case of R.K. Malik and Anr. v. Kiran Pal and Ors. reported in 2009 (1) TNMAC 593 (SC), the Supreme Court has also considered
that the Tribunal should award a reasonable amount towards future prospects. The paragraph 32 of the above judgment wherein it held as follows:
In view of discussion made hereinbefore, it is quite clear the claim with regard to future prospect should have been addressed by the Courts below.
While considering such claims, child''s performance in school, the reputation of the school, etc., might be taken into consideration. In the present
case, records shows that the children were good in studies and studying in a reasonably good school. Naturally, their future prospect would be
presumed to be good and bright. Since they were children, there is no yardstick to measure the loss of future prospects of these children. But as
already noted, they were performing well in studies, natural consequence supposed to be a bight future. In the case of Lata Wadhwa (supra) and
M.S. Grewal (supra), the Supreme Court recognised such future prospect as basis and factor to be considered. Therefore, denying compensation
towards future prospects seems to be unjustified. Keeping this in background, facts and circumstances of the present case, and following the
decision of Lata Wadhwa(supra) and M.S. Grewal (supra), we deem it appropriate to grant compensation of Rs. 75,000/- (which is roughly half
of the amount given on account of pecuniary damages) as compensation for the future prospects of the children, to be paid to each claimant within
one month of the date of this decision. We would like to clarify that this amount i.e. Rs. 75,000/- is over and above what has been awarded by the
High Court.
After considering the principles enunciated in the judgment cited supra, it is reasonable to award a sum of Rs. 75,000/- towards loss of future
prospects. The Tribunal has awarded interest at 9% per annum. After taking note of the date of accident, the date of award and also the prevailing
interest during the period, the interest rate fixed by the Tribunal at 9%p.a. from the date of petition is very reasonable and hence, the same is
confirmed.
The details of the modified compensation as per the above discussion are as under:
For loss of income Rs. 1,50,000/-
For funeral expenses Rs. 5,000/-
For loss of future prospects Rs. 75,000/-
-------------------
Total Rs. 2,30,000/-
Less the amount awarded
by the Tribunal Rs. 1,00,000/-
Enhanced amount Rs. 1,30,000/-
For the enhanced compensation, the interest rate shall be at 7.5%. Therefore, the claimant is entitled to the enhanced compensation of Rs.
1,30,000/- with interest at 7.5% from the date of claim petition.
The second Respondent/Insurance Company is directed to deposit the enhanced compensation of Rs. 1,30,000/- with interest at 7.5% p.a.
from the date of petition, within a period of eight weeks from the date of receipt of a copy of this order. On such deposit, the claimants are
permitted to withdraw the same on making proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.