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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the Insurance Company against the judgment and decree made in MCOP No. 946
of 2007 dated 29.01.2009 on the file of the Motor Accidents Claims Tribunal, Additional District & Sessions Judge, Fast Track Court No. 3,
Madurai.
Background facts in a nutshell are as follows:
The deceased-Ganapathy Subramanian met with motor traffic accident that took place on 06.12.2006 at about 11.00 p.m. The deceased was
walking along the Palanganatham-Jeyavilas Main Road from West to East Direction, keeping the left side of the road. At that time, an auto-
rickshaw bearing Registration No. TN-59-M-2530, driven by its driver in a rash and negligent manner, came from behind and hit the deceased.
Due to the same, the deceased sustained grievous injuries all over the body. Immediately he was taken to the Government Raja ji Hospital,
Madurai for treatment. He died on the next day in the hospital. The claimants are the parents of the deceased. They claimed compensation of Rs.
3,00,000/-before the Tribunal. The third Respondent is the owner of the said auto-rickshaw. The auto-rickshaw was insured with the Appellant /
Insurance Company, who resisted the claim. On pleadings, the Tribunal framed the following issues:
Who is liable for the accident?
Whether the auto-rickshaw bearing Registration No. TN-59-M-2530 was involved in the accident?
Whether the claimants are entitled to compensation? If so to what amount?
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-rickshaw bearing Registration No. TN-59-M-2530 belonging to the third Respondent and awarded a sum of Rs. 2,79,000/-
as compensation with interest at 9% p.a. from the date of petition. The details of the compensation are as follows:
Rupees
Loss of dependency 2,24,000/-
Loss of love and affection 50,000/-
Funeral expenses 5,000/-
--------------
Total.... 2,79,000/-
==============
Aggrieved by that award, the Appellant / Insurance Company has filed the present appeal.
Learned Counsel for the Appellant / Insurance Company vehemently contended that the Insurance Company is not liable to pay any
compensation to the claimants. Further, it is submitted that the auto-rickshaw as alleged in the claim was not involved in the accident. Further it is
contended that the compensation awarded by the Tribunal is excessive, exorbitant and without any basis and justification. Hence the order passed
by the Tribunal is not in accordance with law and the same has to be set aside.
Learned Counsel for the Respondents 1 and 2 / claimants has submitted that the Tribunal had considered all the materials and evidence available
on record and awarded the compensation which is just, fair and reasonable and it is also based on valid materials and evidence. Hence the order
passed by 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 claimants, P.W.1 was examined and documents Exs.P1 to
P9 were marked. On the side of the Insurance Company, R.W.1 was examined and documents Exs.R1 to R12 were marked. P.W.1 is the father
of the deceased. R.W.1 is the Investigating Officer of the Insurance Company. Ex.P1 is the certified copy of the F.I.R. Ex.P2 is the certified copy
of the Motor Vehicle Inspection Report. Ex.P3 is the certified copy of the Charge Sheet. Ex.P4 is the certified copy of the Post Mortem
Certificate. Ex.P5 is the certified copy of the Legal Heir Certificate. Ex.P6 is the Provisional National Trade Certificate. Ex.P7 is the Transfer
Certificate. Ex.P8 is the xerox copy of Lease Agreement. Ex.P9 is the LIC Policy. Ex.R1 is the Investigation Report. Ex.R2 is the xerox copy of
the Confession Statement of auto-driver. Ex.R3 is the xerox copy of 161(3) Cr.PC Statement of Ravindran. Ex.R4 is the xerox copy of 161(3)
Cr.PC Statement of Arumugam. Ex.R5 is the xerox copy of the Charge Sheet. Ex.R6 is the xerox copy of AIR Form. Ex.R7 is the xerox copy of
Inquest Report. Ex.R8 is the xerox copy of 161(3) Cr.PC Statement of Pandithurai. Ex.R9 is the xerox copy of another statement of Pandithurai.
Ex.R10 is the xerox copy of 161(3) Cr.PC Statement of Rajaram. Ex.R11 is the xerox copy of further statement of Rajaram. Ex.R12 is the xerox
copy of Remand Report of the Police. The main contention of the counsel for the Appellant is that, there is a discrepancy with regard to the
Registration Number of the auto-rickshaw involved in the accident, and even in the F.I.R., there is no mention about the Registration Number of
the auto-rickshaw which was involved in the accident, and hence, the finding given by the Tribunal that the auto-rickshaw bearing Registration No.
TN-59-M-2530 is not correct. Ex.R2 is the confession statement given by one Selvam, the driver of the auto-rickshaw which was involved in the
accident, after 22 days from the date of the alleged accident which reveals that the involved vehicle was bearing Registration No. TN-59-N-2330,
but the statements recorded by the Police u/s 161 Cr.PC reveals that only the vehicle bearing Registration No. TN-59-M-2530 was involved in
the accident. Ex.P3 and Ex.R5 are the charge sheets. Relying on Ex.P3 and Ex.R5, the Tribunal had given a categorical finding that the auto-
rickshaw which was involved in the accident, was bearing only Registration No. TN-59-M-2530. The finding given by the Tribunal are based on
valid materials and evidence, and it is a question of fact. Hence the same is confirmed.
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 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 there from 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. Veluswami, with reference to a case under the dents 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 was 37 years old at the time of accident. P.W.1 is the father of the deceased. In his evidence he has stated that the deceased was
running a bakery shop and he was earning a sum of Rs. 5000/-per month. Further it is stated that only the driver of the auto-rickshaw caused the
accident and the driver was charge-sheeted u/s 304A IPC in Crime No. 735 of 2006 on the file of the Avaniapuram Police Station. The claimants
are the parents of the deceased. The age of the mother of the deceased was 60 years old at the time of accident. In the evidence of P.W.1 it is
stated that the deceased was earning Rs. 5000/-per month. Ex.P8 is the copy of Lease Agreement entered into between the deceased and one
Sundar in connection with leasing of the premises. The deceased has also taken an Insurance Policy. Ex.P9 is the Insurance Policy, which shows
that he had insured his life for Rs. 25,000/-. The deceased was a bachelor. Therefore, the Tribunal has taken the age of the mother (60 years) and
adopted the multiplier of 8. In respect of earning, there is no concrete evidence available on record to prove the same. Ex.P6 is the certificate
relating to the technical qualification of the deceased. After considering the above oral and documentary evidence, the Tribunal was of the view that
the deceased would have earned Rs. 3,500/-per month. After considering the age of the mother of the deceased, the Tribunal arrived at the loss of
dependancy as under:
Rs. 3,500/-x 12 x 2/3 x 8 multiplier = Rs. 2,24,000/-Learned Counsel for the Appellant vehemently contended that the Tribunal is wrong in taking
the monthly income at Rs. 3,500/-and also wrong in deducting 1/3rd of the amount towards personal expenses and the correct deduction that
should be made is 50% as the deceased was a bachelor. In Sarla Verma''s case (cited supra), the Supreme Court has held that in the case of a
bachelor, 50% deduction should be made towards personal expenses. In respect of monthly income, the Tribunal has correctly fixed the monthly
income at Rs. 3,500/-. If 50% of the amount is deducted, the monthly contribution of the deceased works out to Rs. 1750/-and the annual
contribution works out to Rs. 21,000/-. The Tribunal has adopted the correct multiplier of 8 after taking into consideration the age of the mother of
the deceased. If 8 multiplier is adopted the loss of dependancy works out to Rs. 1,68,000/-(Rs. 21,000/-x 8). Therefore, the loss of dependancy
is modified from Rs. 2,24,000/-to Rs. 1,68,000/-. The Tribunal has awarded a sum of Rs. 50,000/-towards loss of love and affection, i.e. Rs.
25,000/-each to the parents of the deceased, which I feel is very reasonable and hence the same are confirmed. The Tribunal has awarded a sum
of Rs. 5000/-towards funeral expenses. It is also very reasonable and hence it is confirmed. The Tribunal has not awarded any amount towards
transport expenses. It would be appropriate and reasonable to award a sum of Rs. 5,000/-towards transport expenses. The Tribunal has not taken
into consideration the loss of future prospects. The deceased was 37 years old at the time of accident. Even though there is no evidence on record
to show that he was running a bakery, it would be reasonable to award Rs. 22,000/-towards loss of future prospects. The Tribunal has awarded
interest rate at 9% p.a., from the date of petition. Taking into consideration the date of accident, date of award and also the prevailing rate of
interest during the relevant time, the rate of interest fixed by the Tribunal at 9% p.a. is excessive and it would be reasonable to fix the interest rate
at 7.5% p.a. from the date of petition. Hence, the interest rate fixed by the Tribunal at 9% p.a. is modified to 7.5% p.a. from the date of petition.
The details of the modified compensation are as under:
Rupees
Loss of dependancy 1,68,000/-
Loss of love and affection 50,000/-
Funeral expenses 5,000/-
Transport expenses 5,000/-
Loss of future prospects 22,000/-
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Total.... 2,50,000/-
==============
The claimants are entitled to the modified compensation of Rs. 2,50,000/-with interest at 7.5% p.a. from the date of petition.
Under the circumstances, the Insurance Company is directed to deposit the modified compensation of Rs. 2,50,000/-with interest at 7.5; p.a.
from the date of petition, less the amount if any already deposited, within a period of 8 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 modifications, the Civil Miscellaneous Appeal is disposed of. Consequently, M.P.(MD) No. 2 of 2010 is closed. No costs.