K.P. Singh vs Istyak Khan and Others

Kailash Gambhir, J.—The present appeal arises out of the award dated 5/5/99 of the Motor Accident Claims Tribunal whereby the Tribunal awarded a sum of Rs. 32,000/- along with interest @ 12% per annum to the claimants.

The brief conspectus of the facts is as follows:

That on 4.5.92 at about 10.25 a.m. the daughter of the appellant Sonia aged about 9 years was crossing Wazirabad Road, Gokulpuri Delhi when a truck bearing registration No. DEL-3978 coming from Nand Nagri side in a very rash and negligent manner hit the daughter of the appellant. The deceased was crushed under the wheels of the truck. As a result of this impact the deceased died at the spot.

A claim petition was filed on 11/5/1992 and an award was passed on 5/5/99. Aggrieved with the said award enhancement is claimed by way of the present appeal.

Sh. J.S. Kanwar Counsel for the appellants contended that the award passed by the learned Tribunal is inadequate and insufficient looking at the circumstances of the case. It is stated that deceased was a boy of 13 years at the time of accident, was studying in VI class and was to be given higher education. He was also helping his father in his work. The Counsel submitted that Ld. Tribunal erred in not awarding compensation proportionate to the loss resulted from the death to the parents and the mental pain, shock, suffering undergone by them. It is further submitted that Ld. Tribunal failed to observe the long life span in the family of the deceased. It is also stated that the inflation factor has also not been considered from the year 1983 till the date of award. The Counsel urged that the tribunal ought to have assessed the income of the deceased in accordance with the II Schedule to the MV Act.

Nobody has been appearing for the respondents.

I have heard the learned Counsel for the appellants and perused the record.

The assessment of damages to compensate the dependants is beset with difficulties because while doing so, many imponderables have to be taken in to account, 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. 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. In this relation, the Apex Court has held in plethora of judgments that the multiplier method is the best method.

In this regard in General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, the Hon''ble Apex Court observed as under:

There were two methods adopted for determination and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies cases and the second in Nance v. British Columbia Electric Railway Co. Ltd.

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. We are, aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier-method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. Some judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act, 1939 insofar as it envisages the compensation to be ''just'', the statutory determination of a ''just'' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier method is the accepted method of ensuring a ''just'' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases.

Thus, the tribunal erred in awarding a lumpsum amount to the appellants.

There are some aspects of human life, which are capable of monetary measurement, but the totality of human life is like the beauty of sunrise or the splendor of the stars, beyond the reach of monetary tape measure. The determination of damages for loss of human life is an extremely difficult task and it becomes all the more baffling when the deceased is a child and/or a non-earning person. The future of a child is uncertain. Where the deceased was a child, he was earning nothing but had a prospect to earn. The question of assessment of compensation, therefore, becomes stiffer. The figure of compensation in such cases involves a good deal of guesswork.

In cases of young children of tender age, in view of uncertainties abound, neither their income at the time of death nor the prospects of the future increase in their income nor chances of advancement of their career are capable of proper determination on estimated basis. The reason is that at such an early age, the uncertainties in regard to their academic pursuits, achievements in career and thereafter advancement in life are so many that nothing can be assumed with reasonable certainty. Therefore, neither the income of the deceased child is capable of assessment on estimated basis nor the financial loss suffered by the parents is capable of mathematical computation.

This case pertains to the year 1992 and at that time II Schedule to the Motor Vehicles Act was not brought on the statute books. The said schedule came on the statute book in the year 1994 and prior to 1994 the law of the land was as laid down by the Hon''ble Apex Court in Lata Wadhwa and Others Vs. State of Bihar and Others, .

In Lata Wadhwa''s case (supra) while computing compensation, the Apex Court made distinction between deceased children falling within the age group of 5 to 10 years and age group of 10 to 15 years. In the said case, the Apex Court had awarded Rs. 1,50,000/- as pecuniary damages and Rs. 50,000/- towards non-pecuniary damages to the claimants of the deceased children falling within the age group of 5 to 10 years and in case of the children falling within the age group of 10 to 15 years, the Court decided that the multiplier method should be applied and the contribution of the children to the family was taken to be at Rs. 24,000/-pa and then a multiplier of 15 was applied and over and above that the conventional compensation of Rs.50,000/- had been added to it, making the total compensation as Rs. 3,60,000/-.

In the light of the above discussion, I would assess the compensation in the instant case. It has come on record that the deceased at the time of the accident was of 9 years of age and was studying in IV standard. The father of the deceased deposed that the deceased was a healthy and an intelligent child and was to be given higher education. But nothing has come on record to prove the income of the deceased.

The tribunal should have atleast assessed the income as that of an skilled workman on the basis of the minimum wages notified under the Minimum Wages Act prevailing at the time of the accident i.e. at Rs. 1208/- pm.

Furthermore, it has been the consistent view of this Court that whenever aid of Minimum Wages Act is taken while computing income, then increase in minimum wages should also be considered. It is well settled that future prospects are not akin to increase in minimum wages. To neutralize increase in cost of living and price index, the minimum wages are increased from time to time. A perusal of the minimum wages notified under the Minimum Wages Act show that to neutralize increase in inflation and cost of living, minimum wages virtually double after every 10 years. For instance, minimum wages of skilled labourers as on 1.1.1980 was Rs. 320/- per month and same rose to Rs. 1,083/- per month in the year 1990. Meaning thereby, from year 1980 to year 1990, there there has been an increase of nearly 238% in the minimum wages. Thus, it could safely be assumed that income of the deceased would have doubled in the next 10 years.

Also, since in catena of cases the Apex Court has in similar circumstances made 1/3rd deductions. Therefore, 1/3rd deductions towards personal expenses is made.

Also, considering that this case pertains to the year 1992 and at that time II schedule to the Motor Vehicles Act had not been brought on the statute book. The age of the deceased at the time of the accident was 9 years and she is survived by her parents and the age of the father at the time of the accident was 41 years. In the facts of the present case I am of the view that after looking at the age of the claimants and the deceased and considering the multiplier applicable as per the II Schedule to the MV Act, the multiplier of 15 shall be applicable.

Also, compensation towards loss of love and affection is awarded at Rs. 20,000/-; compensation towards funeral expenses is awarded at Rs. 10,000/- and compensation towards loss of estate is awarded at Rs. 10,000/-.

On the basis of the discussion, the income of the deceased would come to Rs. 1,812/- after doubling Rs. 1,208/- to Rs. 2,416/- and after taking the mean of them. After making 1/3rd deductions the monthly loss of dependency comes to Rs. 1,208 and the annual loss of dependency comes to Rs. 14,496 per annum and after applying multiplier of 15 it comes to Rs. 2,17,440/-. Thus, the total loss of dependency comes to Rs. 2,17,440/-. After considering Rs. 40,000/-, which is granted towards non-pecuniary damages, the total compensation comes out as Rs. 2,57,440/-.

In view of the above discussion, the total compensation is enhanced to Rs. 2,57,440/- from Rs. 32,000/- with interest on the differential amount @ 7.5% per annum from the date of filing of the petition till realisation and the same shall be paid to the appellants by the respondent insurance company in the same proportion as awarded by the tribunal within 30 days of this order.

With the above directions, the present appeal is disposed of.