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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the claimant against the judgment and decree dated 01.04.2008 made in MCOP
No. 578 of 2006 on the file of the Motor Accident Claims Tribunal, Principal District Judge, Salem.
Background facts in a nutshell are as follows:
On 27.02.2006 at about 7.30 a.m., the deceased Ragunathan met with motor vehicle accident. While, the deceased was proceeding in his TVS
Victor GL bearing Reg. No. TN30Y 2948 along with a pillion rider on Singarapet -Thiruvannamalai main road, a lorry bearing Registration No.
TN25A 0945 belonging to the first Respondent and insured with the second Respondent / New India Assurance Co. Ltd., came in a rash and
negligent manner and also at high speed and hit the deceased. Due to the said impact, the deceased fell down and died on the spot. The claimant is
the wife and the Respondents 3 & 4 are parents of the deceased. The wife of the deceased claimed a sum of Rs. 25,00,000/- as compensation.
The second Respondent-New India Assurance Co. Ltd. resisted the claim. On the basis of the pleadings, the Tribunal framed the following issues:
Whether the accident occurred due to the rash and negligent driving of the driver of the 1st Respondent?
Whether the claimant and Respondents 3 & 4 are entitled to compensation? If so, what is the quantum?
After considering the oral and documentary evidence, the Tribunal held that the accident occurred only due to the rash and negligent driving of the
driver of the lorry. Further, it was held by the Tribunal that the claimant has not specifically stated under which provision the claim petition was filed
and since the claim petition does not contain a specific provision as to whether it is filed u/s 163A or 166, the Tribunal has dismissed the claim
petition. Aggrieved by that order, the claimant has filed the present appeal.
The learned Counsel appearing for the claimant vehemently contended that the Tribunal ought not to have dismissed the claim petition and it
ought to have proceeded the matter and awarded the compensation u/s 166 of the Motor Vehicles Act. Mere non-striking one of the provision,
does not make the claim petition as not maintainable. Further, the Tribunal has also considered the evidence and fixed the monthly income of the
deceased at Rs. 6,500/- and given a specific finding in respect of the income. Therefore, the rejection of claim petition by the Tribunal is not in
accordance with law and the same has to be set aside.
The learned Counsel appearing for the second Respondent-Insurance company contended that the Tribunal has correctly dismissed the claim
petition on the ground that the claimant has not specifically mentioned under which provision the claim petition was filed. Therefore, the order
passed by the Tribunal is in accordance with law and the same has to be confirmed.
Heard the learned Counsel on either side and perused the documents on record. On the side of the claimant, P. Ws.1 & 2 were examined and
documents Exs.P1 to P7 were marked. P.W.1 - Mrs. Maheswari is the wife of the deceased. PW2-Mr. Murugesan is an eye witness to the
occurrence. Ex.P1 is the certified copy of the First Information Report. Ex.P2 is the certified copy of the postmortem report. Ex.P3 is the salary
certificate of the deceased. Ex.P4 is the certified copy of the legal heir certificate. Ex.P5 is the photo copy of the driving licence of Mr. Elumalai.
Ex.P6 is the photo copy of the driving licence of the deceased. Ex.P7 is the photo copy of the charge sheet. On the side of the Insurance
company, RW1-mother of the deceased was examined and Exs.R1 to R5 were marked. Ex.R1 is the appointment order of the deceased as
Secondary Grade Teacher. Ex.R2 is the degree certificate of the deceased. Ex.R3 is the degree certificate of the deceased. Ex.R4 is the
experience certificate. Ex.R5 is the identity card of the deceased.
The Tribunal ought not to have dismissed the claim on the technical ground. The Tribunal should have considered the case on merits and
proceeded the matter. In the present case, since the annual income of the claimant was more than Rs. 40,000/-, the petition filed u/s 163A cannot
be entertained and hence, the Tribunal should have proceeded with the case as it is filed u/s 166 of the Motor Vehicles Act. It is further seen that
all the documents have been filed by the claimant and the Tribunal also considered the same and fixed the income of the deceased. Therefore, the
Tribunal should have decided the matter and it is too late to remand the matter to the Tribunal for fixing the compensation. Both the counsel agreed
to take up the matter and fix the compensation on the basis of the available records. In view of the lapse of time, this Court decides to take up the
matter for determining the compensation.
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) ACC 601 and some adopting the
Davies method enunciated in Davies v. Powell Duffryn Associated Collieries ltd. (1942) ACC 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 there from 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 there from 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 there from 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
(emphasis supplied)
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. Veluswami4, 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 judgment cited supra, let me consider the evidence adduced in the present case.
In the evidence of P.W.1, it is stated that the age of the deceased was 40 years at the time of Accident. In Ex.P2 - Postmortem Certificate, the
age of the deceased was mentioned as 40 and 41 years. In Ex.P6 -Driving license, the date of birth was shown as 14.04.1965. After relying on all
these documents, the Tribunal fixed the age of the deceased as 40 years. Further in the evidence of PW1, she has stated that the deceased was
working as a typist and was earning a sum of Rs. 7,000/- p.m. Ex.P3 is the salary certificate, in which, it is stated that the deceased was earning a
sum of Rs. 6,500/- p.m. Therefore, considering the same, the salary of the deceased was taken as Rs. 6,500/- p.m. and annual income of the
deceased works out to Rs. 78,000/- (Rs. 6,500 x 12). Out of the said amount, deducting 1/3rd i.e. Rs. 26,000/- towards personal expenses and
the balance amount of Rs. 52,000/- was taken as annual contribution of the deceased to his family. Since the age of the deceased was taken as 40
years at the time of the accident, as per the schedule, the correct multiplier to be adopted is ""15"". Therefore, if the multiplier of ''15'' is adopted, the
loss of income works out to Rs. 7,80,000/-. The age of the widow of deceased was 37 years at the time of the accident. Therefore, it is
reasonable to award a sum of Rs. 10,000/- towards loss of consortium. In respect of the loss of love and affection, it is reasonable to award a sum
of Rs. 20,000/- under this head to the parents. Further, a sum of Rs. 5,000/- is awarded towards funeral as well as transport expenses. The details
of the compensation as per the above discussion are as under:
Loss of income - Rs.7,80,000/-
Loss of consortium - Rs. 10,000/-
Loss of love and affection - Rs. 20,000/-
Funeral & Transport expenses - Rs. 5,000/-
Total - Rs.8,15,000/-
Therefore, the claimants are entitled to the compensation of Rs. 8,15,000/- with interest at 7.5% p.a. from the date of petition.
Under these circumstances, the Insurance Company is directed to deposit the compensation of Rs. 8,15,000/- with interest at 7.5% within a
period of 6 weeks from the date of receipt of a copy of this order. On such deposit, the Appellant-claimant is permitted to withdraw 2/3rd share
of the above compensation with accrued interest thereon. Respondents 3 and 4, who are parents of the deceased and senior citizens, are permitted
to withdraw the remaining 1/3rd share of the compensation with accrued interest thereon. In respect of the Court Fee, the claimant is entitled to
receive the Court fee paid in accordance with law by making a proper application.
With the above modification, the Civil Miscellaneous appeal is disposed of. No costs.