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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the Transport Corporation against the judgment and decree passed in MCOP No.
69 of 2006 dated 11.04.2007 on the file of the Motor Accident Claims Tribunal, Sub-Judge, Devakottai.
When the matter is taken up for admission, the same was opposed by Mr. J. Anandkumar, the counsel for the Respondents 1 to 4 / claimants,
and by consent of the learned Counsel of both the parties, the Civil Miscellaneous Appeal is taken up for final disposal.
Background facts in a nutshell are as follows:
The deceased-Mariadoss met with motor vehicle accident that took place on 27.04.2004 at about 5.00 p.m. The said deceased was proceeding
to his village in his cycle in the Thiruvadanai-Thondi Main Road, after completing his office work. At that time, a bus bearing Registration No. TN-
67-N-0055, belonging to the Appellant-Transport Corporation, came from the opposite direction in a rash and negligent manner at high speed and
hit the cyclist. Due to the said impact, the deceased was thrown out of the vehicle and sustained grievous injuries. Immediately he was taken to the
Government Hospital, Thiruvadanai and he died in the hospital on the same day. The claimants are the parents and brothers of the deceased. They
claimed a sum of Rs. 10,00,000/- as compensation. The Appellant-Transport Corporation resisted the claim. On pleadings, the Tribunal framed
the following issues:
Whether the accident took place due to the rash and negligent driving of the driver of the bus belonging to the Appellant-Transport Corporation
or not?
Whether the claimants are entitled to compensation? If so to what extent?
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 bus belonging to the Appellant-Transport Corporation and awarded a sum of Rs. 2,20,000/- as compensation with interest at 9%
p.a. from the date of petition. The details of the compensation are as follows:
Rupees
Loss of income 1,92,000/-
Loss of love and affection 20,000/-
Transport expenses 2,000/-
Damages to the cycle 1,000/-
Funeral expenses 5,000/-
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Total... 2,20,000/-
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Aggrieved by the award of the Tribunal, the AppellantTransport Corporation has filed the present appeal.
Learned Counsel for the Appellant/Transport Corporation questioned only the quantum of compensation awarded by the Tribunal and
vehemently contended that the compensation awarded by the Tribunal is excessive, exorbitant and without any basis and justification. Further, it
was contended that the Tribunal awarded the compensation by adopting the multiplier of 16 on the basis of the age of the deceased and not on the
basis of the age of the claimants. Therefore, the award passed by the Tribunal is not in accordance with law and the same has to be set aside.
Learned Counsel appearing for the Respondents 1 to 4 / claimants 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 learned Counsel on either side and perused the materials available on record. On the side of the claimants, P.W.1 and P.W.2 were
examined and Ex.P1 to P5 were marked. On the side of the Insurance company, R.W.1 was examined and no document was marked. P.W.1 is
the father of the deceased. P.W.2 is the co-employee of the deceased and also an eye witness of the accident. Ex.P1 is the copy of the First
Information Report. Ex.P2 is the copy of charge sheet. Ex.P3 is the copy of Post Mortem Report. Ex.P4 is the copy of Motor Vehicle Inspector''s
Report. Ex.P5 is the Salary Certificate of the deceased. R.W.1 is the driver of the bus. 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 driver of the
bus belonging to the Appellant-Transport Corporation. The finding of the Tribunal is 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 Thomas2, 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 judgments cited supra, let me consider the facts of the present case.
At the time of the accident, the age of the deceased was 20 years old. P.W.1, in his evidence, has stated that the deceased was engaged in
Centering Work and he was also working as a mechanic. P.W.1 further stated in his evidence that the deceased was earning a sum of Rs. 3,000/-
per month. Further it was stated that only the driver of the bus caused the accident and a case has been registered against the driver by Thondi
Police Station under Sections 279 and 337 IPC and was charge-sheeted u/s 304-A IPC. There is no concrete evidence available on record to
show that the deceased was earning Rs. 3,000/- per month. Therefore, the Tribunal was of the view that the deceased would have earned not less
than Rs. 1,500/- per month and fixed the monthly income at Rs. 1,500/- and calculated the annual income at Rs. 18,000/-(Rs. 1,500/- x 12).
Thereafter, the Tribunal deducted 1/3rd of the amount towards personal expenses of the deceased and arrived at Rs. 12,000/- as the annual
contribution of the deceased to the family. After taking into consideration of the age of the deceased as 20 years, the Tribunal adopted the
multiplier of 16 as per the Second Schedule and determined the loss of income at Rs. 1,92,000/-(Rs. 12,000/- x 16). The Tribunal has correctly
fixed the monthly and annual income of the deceased and also adopted the correct multiplier and arrived at Rs. 1,92,000/- towards loss of income.
After taking into consideration that the Tribunal has not awarded any amount towards loss of future prospects, this Court is of the considered view
that the amount awarded by the Tribunal towards loss of income at Rs. 1,92,000/- is very reasonable and hence the same is confirmed. The
Tribunal has awarded a sum of Rs. 20,000/- towards loss of love and affection to the parents as well as the brothers of the deceased. The amount
awarded towards this head is very reasonable and hence the same is confirmed. With regard to the amounts awarded by the Tribunal towards
transport expenses at Rs. 2,000/-, funeral expenses at Rs. 5,000/- and damages to cycle at Rs. 1,000/-, the same are not seriously disputed by the
other side. Also these amounts are very reasonable and hence the same are confirmed. The Tribunal has awarded interest at 9% p.a., from the
date of petition. Considering the date of accident, date of award and also the prevailing rate of interest during that time, I am of the view that the
interest rate fixed by the Tribunal at 9% p.a. is excessive and it would be appropriate to fix the interest rate at 7.5% p.a. Accordingly, the interest
rate stands modified from 9; p.a. to 7.5% p.a. from the date of petition.
Therefore, the claimants are entitled to the compensation of Rs. 2,20,000/-, but the interest rate alone is reduced to 7.5% p.a from the date of
petition.
Under the circumstances, the Appellant-Transport Corporation is directed to deposit a sum of Rs. 2,20,000/- with interest at 7.5% p.a. from
the date of petition, less the amount if any already deposited, within a period of eight weeks from the date of receipt of a copy of this order. It is
stated that all the claimants are majors. Hence, on such deposit of compensation by the Tribunal, all the claimants are permitted to withdraw their
shares, on making proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. Consequently, M.P.(MD) No. 1 of 2010 is closed. No costs.