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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the appellant/claimant against the award dated 06.12.2001 made in MCOP No.
335 of 1999 by the Motor Accident Claims Tribunal, Additional District Judge-cum-Chief Judicial Magistrate, Cuddalore.
Background facts in a nutshell are as follows:
The deceased-Ayyasamy met with motor vehicle accident that took place on 18.06.1993 at about 1.15 hours. While the deceased was travelling
as a passenger in the third respondent-Transport Corporation bus bearing Regn. No. TN 49-N 0414, the lorry bearing registration No. TN-31-
8569, which came in an opposite direction in a rash and negligent manner, hit against the rear portion of the bus, where the deceased was seated.
As a result of which, the right hand of the claimant was cut off and immediately, he was admitted in Government Head Quarters Hospital,
Cuddalore and later referred to Thanjavur Medical Hospital. The injured died due to formation of septicaemia after the period of one year and two
months. Originally he claimed a sum of Rs. 7,00,000/- as compensation before the Tribunal. After the death, the claimants claimed comepnsation.
The claimants are wife, two sons and two daughters. The second respondent-Insurance Company and the third respondent-Transport Corporation
resisted their claim. On pleadings the Tribunal has framed the following issues:
By whose negligence and carelessness the accident has happened?
Whether the injured Ayyaswamy @ Appavu died due to the injuries received in the accident?
Whether the claimants are entitled to compensation. If so what is the amount?
After considering the oral and documentary evidence, the Tribunal held that the accident had occurred due to the rash and negligent driving of the
drivers of the bus and lorry and fixed the negligence of 70% on the second respondent-Insurance Company and 30% on the third respondent-
Transport Corporation and awarded a compensation of Rs. 2,41,000/- with interest at 9% per annum from the date of petition and the details of
the same are as under:
Loss of dependency Rs. 2,04,000/-
Pain and suffering and mental agony Rs. 5,000/-
Loss of love and affection Rs. 5,000/-
Loss of consortium Rs. 5,000/-
Funeral expenses Rs. 2,000/-
Medical expenses Rs. 20,000/-
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Total... Rs. 2,41,000/-
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Aggrieved by that award, the claimants have filed the present appeal for enhancement.
It is pertinent to note that the third respondent-Transport Corporation has also filed an appeal in CMASR No. 57167 of 2003 against the same
award. As the same was filed belatedly, it was dismissed by this Court.
The learned Counsel appearing for the claimants/appellants submitted that the compensation awarded by the Tribunal is very low and meagre
and the Tribunal ought to have awarded compensation as claimed by the claimant and the Tribunal has not followed the principles of assessment
before passing the award. Therefore, he submitted that the order passed by the Tribunal in not accordance with law and it is a fit case for
enhancement.
Learned Counsel appearing for the second respondent/ Insurance Company as well as the third respondent-Transport Corporation 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. On the side of the claimants, Pws. 1 and 2 were examined and documents Exs. P1 to P17 were marked. On the side of the
respondents RW1-Govindarajan, the driver of the third respondent''s bus was examined and no documents were marked to substantiate their
claim. PW1 is the wife of the deceased. PW2 is the eye witness to the occurrence. Ex. P1 is the certified copy of the First Information Report. Ex.
P2 is the Certified copy of the Motor Vehicle Inspector''s Report. Ex. P3 is the certified copy of wound certificate in the name of Ayyavu. Ex. P4
is the true copy of family identity card. Ex. P5 is the true copy of Seimens identity card. Ex. P6 is the discharge summary in the name of Ayyavoo.
Ex. P7 is the Thanjavur National Medical Centre. Ex. P8 are the National Medical Centre payment bills(two) Ex. P9 is the doctor''s
prescription(four). Ex. P10 is the certificate issued by the Doctor. Ex. P11 is the Directorate of Shipping Services Ticket. Ex. P12 is the Doctor''s
certificate. Ex. P13 is the death certificate. Ex. P14 is the legal heir certificate. Ex. P15 is the pay certificate. Ex. P16 is the xerox copy of the
National Insurance Company Limited Policy. Ex. P17 is the certified copy of order in I.A. No. 531 of 1999 in MCOP No. 335 of 1999 of
Additional District Judge-cum-Chief Judicial Magistrate, Cuddalore. After considering the above oral and documentary evidence, the Tribunal had
given a categorical finding that the accident had occurred only due to the rash and negligent driving of the drivers of the bus and lorry and fixed
70% negligence on the second respondent-Insurance Company and 30% on the third respondent-Transport Corporation. The finding is based on
valid materials and evidence.
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 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
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.
At the time of the accident, the deceased-Ayyasamy was aged about 50 years. He was working as Chief Cook in Shipping Corporation of
India, ISS, Yerewadi. The claimants claimed a sum of Rs. 7000/- per month. He is an Income Tax Assessee. PW1-the wife of the deceased
deposed in her evidence that the deceased was died due to the injury sustained in the accident and there was proximity between the injury received
in the accident and the death of the deceased, though the death occurs one year and two months after the accident. She further deposed that her
husband was earning Rs. 7000/- to 10,000/- per month and Ex. P15 is the certificate issued by the Shipping Corporation of India Limited
regarding the monthly wage of the deceased. Considering the above oral and documentary evidence, the Tribunal has taken the average monthly
wage of the deceased as Rs. 3500/-. From the said salary, the Tribunal has deducted 1/3 towards personal expenses and a sum of Rs. 300/-
towards pocket expenses and the balance sum of Rs. 1,700/- has been taken as the monthly contribution of the deceased to his family and fixed
the annual income at Rs. 20,400/- (Rs. 1,700/- x 12). Considering the age of the deceased at 50 years, the Tribunal has adopted the multiplier of
10 and determined the loss of dependency at Rs. 2,04,000/- (Rs. 20,400 x 10). The learned Counsel appearing for the claimant submitted that
there is calculation error in deducting personal expenses of the deceased. If the monthly income is fixed at Rs. 3,500/-, 1/3 amount would be Rs.
1167/- and the balance sum of Rs. 2333/- should be taken as the monthly contribution to the family of the deceased. But the Tribunal wrongly
arrived at Rs. 1,700/-. Further the Tribunal has deducted a sum of Rs. 300/- towards pocket expenses, which is without basis and justification.
Therefore, the monthly contribution is taken as Rs. 2,333/- and the annual income works out to Rs. 27,996/- (Rs. 2333 x 12). In this case the age
of the deceased was taken as 50 years and adopted the multiplier of 10. The learned Counsel appearing on either side has not disputed the same.
Hence, if the multiplier of 10 is adopted, the loss of income works out to Rs. 2,79,960/- (Rs. 27,996 x 10) as against Rs. 2,04,000/- awarded by
the Tribunal. The Tribunal has also awarded a sum of Rs. 20,000/- towards medical expenses. Ex. P6 is the series of medical bills. It is an actual
expenditure incurred by the deceased. Therefore, the amount awarded under this head is very reasonable and the same is confirmed. The Tribunal
has awarded a sum of Rs. 5,000/- towards loss of consortium. At the time of the accident, the age of the first appellant-second claimant, who is
the wife of the deceased was 42 years . Taking into consideration of the same, it would be reasonable to award a sum of Rs. 10,000/- under this
head as against Rs. 5,000/- awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 5,000/- towards loss of love and affection. The
claimants 3 to 6/appellants 2 to 5 are sons and daughters of the deceased. They lost their father. Considering the same, the amount awarded under
this head is very low and it would be reasonable to award a sum of Rs. 20,000/- under this head as against Rs. 5,000/- awarded by the Tribunal.
The Tribunal has awarded a sum of Rs. 5,000/- towards pain and suffering and mental agony, which I feel is very reaosnable and the same is
confirmed. The Tribunal has awarded a sum of Rs. 2,000/- towards funeral expenses, which is very low and it would be approriate to award a
sum of Rs. 5,000/- under this head as against Rs. 2,000/- awarded by the Tribunal. The details of the modified compensation as per the above
discussion are as under:
Loss of income Rs. 279,960/-
Medical expenses Rs. 20,000/-
Loss of consortium Rs. 10,000/-
Loss of love and affection Rs. 20,000/-
Pain and suffering and Mental agony Rs. 5,000/-
Funeral expenses Rs. 5,000/-
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Total... Rs. 3,39,960/-
Less: Already awarded amount Rs. 2,41,000/-
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Enhanced amount Rs. 98,960/-
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(rounded off to Rs. 99,000/-)
Therefore, the claimant is entitled to the enhanced compensation of Rs. 99,000/- with interest at 6% p.a. from the date of petition.
The second respondent-Insurance company is directed to deposit 70% of the enhanced compensation and the third respondent-Transport
Corporation is directed to deposit 30% of the enhanced compensation with interest at 6%p.a. from the date of petition within a period of six
weeks from the date of receipt of a copy of this order. The learned Counsel appearing for the appellants submitted that appellants 3 to 5/claimants
4 to 6 are attained majority. Therefore, on such deposit, appellants/claimants 2 to 6 are permitted to withdraw their shares as apportioned by the
Tribunal on making proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.