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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the claimants against the judgment and Decree dated 29.10.2007 made in
M.C.O.P. No. 200 of 2006 on the file of the Motor Accident Claims Tribunal, Principal Sub-Court at Gobichettipalayam, Erode District.
The background facts in a nutshell, are, as follows:
On 06.01.2006 at about 10.30 a.m. the deceased Shanmugam was riding a TVS 50 moped bearing Registration No. TN-33-U-7781 in Covai to
Perundurai NH 47 main road from west to east. When he was nearing Kankayampalayam pirivu road, at that time, a car bearing Registration No.
TN-36-Q-2930, belonging to the first Respondent herein, driven by its driver, namely the second Respondent herein, in a rash and negligent
manner, in a high speed from east to west and suddenly hit the moped. Due to the said impact, the deceased with moped was thrown away on the
road and sustained severe injuries on head, leg and all over the body and died on the spot. The claimants are the wife, son, daughter and mother of
the deceased. They claimed a sum of Rs. 10,00,000/-as compensation before the Tribunal. The said car was insured with the third Respondent-
Insurance Company, who resisted the claim. On pleadings, the Tribunal framed the following issues:
Who is responsible for the accident?
Whether the claimants are entitled to any claim? If so, the quantum of compensation?"" After considering the oral and documentary evidence, the
Tribunal held that the accident had occurred only due to the rider of the two wheeler/deceased fault and fixed the percentage of his negligence at
50% and that of the car at 50% as contributory negligence and awarded a compensation of Rs. 1,97,500/-with interest at 7.5% per annum from
the date of petition and the details of the same are as under:
Loss of income to the family Rs. 3,36,000/-
Less:50% contributory negligence Rs. 1,48,000/-
--------------------------
Total... Rs. 1,88,000/-
Funeral expenses Rs. 2,000/-
Loss of consortium Rs. 5,000/-
Loss of estate Rs. 2,500/-
---------------------------
Grand Total... Rs. 1,97,500/-
---------------------------
It is pertinent to note that the Tribunal ought to have deducted 50% contributory negligence at Rs. 1,68,000/-. But, by mistake deducted a sum of
Rs. 1,48,000/-and wrongly taken the balance sum of Rs. 1,88,000/-as loss of income to the family. Aggrieved by that award, the claimants have
filed the present appeal for enhancement.
Learned Counsel appearing for the claimants-Appellants questioned negligence as well as quantum of compensation awarded by the Tribunal
and submitted that the Tribunal ought to have awarded compensation as claimed by the claimants and the amount awarded under various heads is
very low and the Tribunal has not followed the principles of assessment before passing the award. He further submitted that the amount awarded
by the Tribunal is very low and meagre and seeks to enhance the compensation.
Learned Counsel appearing for the third Respondent/Insurance Company 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. On the side of the claimants, P. Ws.1 to 4 were examined and documents Exs.P.1 to P.11 were
marked. On the side of the Respondents, R.W.1 - Rajendran, who is the Officer from the Insurance Company was examined and the copy of the
Insurance policy of the car (TN-36-Q-2930) was marked as R.1. P.W.1 is the wife of the deceased. P.W.2 Manickam is an eye witness to the
occurrence. P.W.3 Thangavel is the employer of the deceased. P.W.4 Rasu is the Panchayat President. Ex.P.1 is the copy of the First Information
Report. Ex.P.2 is the copy of Post-mortem certificate. Ex.P.3 is the copy of rough sketch. Ex.P.4 is the copy of Motor Vehicle Inspector''s report
(car). Ex.P.5 is the original copy of Motor Vehicle Inspector''s report (TVS 50). Ex.P.6 is the copy of Charge sheet. Ex.P.7 is the copy of death
certificate. Ex.P.8 is the copy legal heir certificate. Ex.P.9 is the copy of ration card. Ex.P.10 is the copy of receipt. Ex.P.11 is the copy of Identity
card. It is pertinent to note that in the evidence of P.W.2, who is an eye witness to the accident, has stated that only the driver of the car caused
the accident. Ex.P.1 is the First Information Report, in which it is clearly stated that only the driver of the car caused the accident. Ex.P.3, rough
sketch and Ex.P.6, charge sheet also prove the same. The only dispute in the present case is whether the rider of the two wheeler/deceased had
possessed a valid driving licence at the time of accident or not. The evidence of R.W.1 show that the rider of the two wheeler did not possess the
driving licence to ride the said two wheeler. After considering the above oral and documentary evidence, the Tribunal had given a categorical
finding that the accident had occurred only due to the rider of the two wheeler/deceased fault and fixed the percentage of his negligence at 50%
and that of the driver of the car at 50% towards contributory negligence. The finding is based on valid materials and evidence and 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) ACC 601 and some adopting the
Davies method enunciated in Davies v. Powell Duffryn Associated Collieries Ltd., (1942) AC
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 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.
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''.
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 deceased was aged about 42 years. P.W.1, the wife of the deceased deposed that his husband was working in
Panchayat as Water man as well as Power loom worker and was earning a sum of Rs. 4,500/-per month. Ex.P.2, copy of Post-mortem report, in
which it is stated that, at the time of the accident the deceased was 42 years old. Therefore, the Tribunal fixed age of the deceased as 42 years at
the time of the accident. Even though it is stated that the deceased was earning a sum of Rs. 4,500/-per month, there is no concrete evidence
available to prove the same. Therefore, the Tribunal was of the view that the deceased would have earned not less than Rs. 3,000/-per month and
has fixed the monthly income of the deceased at Rs. 3,000/-and determined the annual income at Rs. 36,000/-(Rs. 3,000 x 12). Out of the said
sum, the Tribunal deducted 1/3rd i.e. Rs. 12,000/-(Rs. 36,000 x 1/3) towards personal expenses and taken the balance sum of Rs. 24,000/-(Rs.
36,000/--Rs.12,000/-) as the annual contribution to his family. After taking into consideration the age of the deceased, the Tribunal adopted the
multiplier of ''14'' and arrived at the loss of income at Rs. 3,36,000/-(Rs. 24,000/-x 14). It is pertinent to note that the Tribunal ought to have
deducted 50% contributory negligence at Rs. 1,68,000/-. But, by mistake deducted a sum of Rs. 1,48,000/-and wrongly taken the balance sum of
Rs. 1,88,000/-as loss of income to the family. The learned Counsel appearing for the Appellants/claimants vehemently contended that the Tribunal
wrongly fixed the monthly income as well as the annual income. Considering the same, it would be reasonable to fix a sum of Rs. 3,500/-as
monthly income of the deceased and the loss of annual income works out to Rs. 42,000/-(Rs. 3,500/-x 12). Out of the said sum 1/3rd was
deducted towards his personal expenses i.e. Rs. 14,000/-(Rs. 42,000/-x 1/3) and taken the balance sum of Rs. 28,000/-(Rs. 42,000/--
Rs.14,000/-) as annual contribution to his family. After taking into consideration, the age of the deceased, the Tribunal adopted the multiplier of
''14'' and the loss of income works out at Rs. 3,92,000/-(Rs. 28,000/-x 14). The Tribunal held that the rider of the two wheeler/deceased is also
responsible for the accident and fixed the percentage of his negligence at 50% and that of the car at 50% as contributory negligence. Hence, the
total loss of income at 50% works out to Rs. 1,96,000/-(Rs. 3,92,000/-x 50/100). Therefore, the claimants are entitled to the modified loss of
income of Rs. 1,96,000/-as against Rs. 1,88,000/-awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 2,000/-towards funeral
expenses. The amount awarded under this head is very low and the Tribunal has not awarded any amount under the head of transport expenses.
Considering the same, it would be reasonable to award a sum of Rs. 7,500/-under the head of transport as well as funeral expenses as against Rs.
2,000/-awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 5,000/-towards loss of consortium. At the time of the accident, the age
of the wife of the deceased is aged about 38 years, considering the same, it would be reasonable to award a sum of Rs. 10,000/-towards loss of
consortium as against Rs. 5,000/-awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 2,500/-towards loss of estate. Hence, the
amount awarded under this head is very reasonable and the same is confirmed. The Tribunal has not awarded any amount under the head of loss
of love and affection. The claimants are the wife, son, daughter and mother of the deceased. Considering the same, it would be reasonable to
award a sum of Rs. 20,000/-towards loss of love and affection. The Tribunal has awarded interest at the rate of 7.5% p.a from the date of Claim
Petition till date of realisation. The accident had occurred on 06.01.2006. Keeping in view the prevailing rate of interest at the time of the accident
and the date of award, I feel that the rate of interest awarded by the Tribunal is very reasonable and the same is confirmed. The details of the
modified compensation as per the above discussion are as under:
Loss of income to the family Rs. 3,92,000/-
Less:50% contributory negligence Rs. 1,96,000/-
----------------------
Total... Rs. 1,96,000/
Funeral & Transport expenses Rs. 7,500/-
Loss of consortium Rs. 10,000/-
Loss of estate Rs. 2,500/-
Loss of love and affection Rs. =20,000/-
-----------------------------
Total ... Rs. 2,36,000/-
Already awarded (-) Rs. 1,97,500/-
-----------------------------
Enhanced amount Rs. 38,500/
Therefore, the claimants are entitled to the enhanced compensation of Rs. 38,500/-with interest at 7.5% per annum from the date of Claim Petition
till date of realisation.
The third Respondent-Insurance company is directed to deposit the enhanced compensation of Rs. 38,500/-with interest at 7.5% from the date
of petition till date of realisation, less the amount, if any, already deposited, within a period of eight weeks from the date of receipt of a copy of this
order. On such deposit, the claimants are permitted to withdraw their shares as apportioned by the Tribunal, after adjusting the amount, if any,
already withdrawn on making proper application. It is represented by the learned Counsel appearing for the claimants that the mother of the
deceased, the fourth Respondent herein, was died and her legal representatives were brought on record. In these circumstances, the claimants are
permitted to withdraw her respective share as apportioned by the Tribunal from the above mentioned enhancement amount along with interest on
making proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.