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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the claimants against the judgment dated 16.11.2001 made in MCOP No. 370 of
2000 on the file of the II Additional District Court, Madurai (Motor Accident Claims Tribunal).
Background facts in a nutshell are as follows:
The deceased-Rajaram met with motor traffic accident that took place on 09.02.1999 at about 12.15 p.m. The deceased was travelling in a city
bus bearing Registration No. TN-59-N-0427 from Kalavasal Bus Stop to Alanganallur Sugar Factory, belonging to the Respondent-Transport
Corporation. When the bus was stopped at Alanganallur Sugar Factory bus stop, the deceased was getting down from the bus. At that time, the
driver suddenly took the bus rashly and negligently without any signal. Due to the same, the deceased fell down from the bus and sustained head
injuries. Immediately he was taken to the Government Rajaji Hospital, Madurai and he died on the same day. The claimants are the wife and
daughters of the deceased. They claimed a sum of Rs. 20,00,000/- 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 Respondent-Transport
Corporation?
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 Respondent/Transport Corporation and awarded a sum of Rs. 9,00,000/- as compensation with interest at
12% p.a. from the date of petition. The details of the compensation are as follows:
Rupees Loss of income 8,28,036/-
Medical expenses 35,800/-
Funeral expenses 2,000/-
Transport expenses 2,000/-
Loss of estate 10,000/-
Loss of consortium to 5,000/-
the wife of the deceased
Loss of love & affection
to the daughters of the
deceased 17,000/-
------------------
8,99,836/-
==================
(Rounded off to Rs. 9,00,000/-)
Aggrieved by that award, the Appellants/claimants have filed the present appeal.
It is stated by the learned Counsel appearing for the Appellants/claimants that the Transport Corporation has also filed an appeal in CMA No.
22 of 2004 and the same was dismissed on 24.08.2010 for non-prosecution.
Learned Counsel for the Appellants/claimants has submitted that the Tribunal has awarded a very low and meagre sum of compensation. He
further submitted that the Tribunal ought to have awarded the compensation as claimed by the claimants. The Tribunal has not considered the
relevant materials and also not followed the principles of assessment before passing the award. Hence the award passed by the Tribunal is not in
accordance with law and this is a fit case for enhancement.
Heard the Counsel for the Appellants and perused the materials available on record. On the side of the claimants, P.W.1 to P.W.3 were
examined and Ex.P1 to P11 were marked. On the side of the Transport Corporation, R.W.1 was examined and no document was marked.
P.W.1 is the wife of the deceased. P.W.2 is the eye-witness to the accident. P.W.3 is the co-employee of the deceased. R.W.1 is the driver of the
bus. Ex.P1 is the first page of the SSLC book of the deceased. Ex.P2 is the Salary Certificate of the deceased. Ex.P3 are the Medical Bills. Ex.P4
is the Provisional Certificate issued by the University of Madras to the deceased. Ex.P5 is the copy of the First Information Report. Ex.P6 is the
copy of the charge sheet. Ex.P7 is the Motor Vehicle Inspection Report. Ex.P8 is the copy of Post Mortem Report. Ex.P9 is the Rough Sketch.
Ex.P10 is the statement regarding the salary and service. Ex.P11 is the office letter. 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 Respondent/Transport Corporation. It is a question of fact and it is based on valid materials and evidence. 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 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 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.
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 therefrom 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 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 accident, the deceased was 49 years old. He was working as Audit Officer in the Assistant Director of Co-operative Audit in
Madurai. P.W.1, the wife of the deceased, in her evidence, has stated that the claimant was earning Rs. 11,492/- per month. It is further stated
that only the driver of the bus caused the accident. Ex.P1 is the SSLC book of the deceased, in which the date of birth of the deceased is stated as
31.03.1949. Ex.P2 is the Salary Certificate given by the Assistant Director of Cooperative Audit, Madurai, in which it is stated that the deceased
was earning a sum of Rs. 11,492/- per month. Therefore, the Tribunal fixed the age of the deceased as 49 years old, and the monthly income as
Rs. 11,500/-. Thereafter the Tribunal deducted 1/3rd of the amount, i.e. Rs. 3,833/- towards personal expenses of the deceased and arrived at
Rs. 7,667/- as the monthly contribution of the deceased to the family and calculated the annual contribution at Rs. 92,004/- (Rs. 7,667/- x 12).
Since the retirement age of the deceased was 58 years, the Tribunal adopted the multiplier of 9 and determined the loss of income at Rs.
8,28,036/- (Rs. 92,004/- x 9). Learned Counsel for the Appellants/claimants vehemently contended that the Tribunal has not taken into
consideration the promotional aspect of the deceased, and the income that the deceased would have earned after retirement, since the deceased
was doing accounts work. Therefore, according to the learned Counsel for the Appellants/claimants, without considering these aspects, the
Tribunal has awarded the compensation. In this case, the age of the deceased was 49 years at the time of accident, and his retirement age was 58
years. It is seen from the records that the deceased would have been promoted as Assistant Director and the said promotion was due in the year
2007. Therefore, the period between his death and promotion, i.e. from the age of 49 years till promotion, which is for a period of 8 years, the loss
of income has to be computed. The Tribunal determined the annual contribution of the deceased to the family at Rs. 92,004/- which is not in
dispute. Since the number of years is 8 (from the age of 49 years till promotion), the same has to be multiplied with the annual contribution. If 8 is
multiplied with the annual contribution, the loss of income from the time of death till promotion, works out to Rs. 7,36,032/-. In respect of the
promotional aspect, if the deceased would have been alive, after promotion, he would be entitled to Rs. 15,899/-. Ex.P10-Statement regarding the
salary and service and Ex.P11-Office letter, corroborates the same. Out of the said sum of Rs. 15,899/-, if 1/3rd of the amount, i.e. Rs. 5,300/- is
deducted towards personal expenses of the deceased, the monthly contribution of the deceased to the family works out to Rs. 10,599/- and the
annual contribution works out to Rs. 1,27,188/- (Rs. 10,599/- x 12). The deceased would have retired at the age of 58 years. Therefore, from the
date of promotion till retirement, there was only one year. Therefore, the correct multiplier that should be adopted is 1. Hence, the loss of income
from the date of promotion till retirement, works out to Rs. 1,27,188/-. The further argument of the learned Counsel for the Appellants/claimants is
that the deceased would have earned some amount after retirement, since he was an M.A. Graduate and he was experienced in accounting.
Taking into consideration the facts and circumstances of the case, it would be reasonable to take the monthly income at Rs. 3,300/- as the earning
of the deceased after retirement, if he would have been alive. If 1/3rd is deducted towards personal expenses of the deceased, the contribution of
the deceased to the family works out to Rs. 2,200/- and the annual contribution works out to Rs. 26,400/- (Rs. 2,200/- x 12). There is no dispute
that the normal expectancy of the Indian life is 62 years. The retirement age is 58 years. Therefore, the correct multiplier that should be adopted is
If 4 multiplier is adopted, the loss of income in this respect works out to Rs. 1,05,600/- (Rs. 26,400/- x 4). Therefore, the total loss of income
works out to Rs. 9,68,820/- (Rs. 7,36,032/- + Rs. 1,27,188/- + Rs. 1,05,600/-). Therefore the claimants are entitled to a sum of Rs. 9,68,820/-
towards loss of income, as against Rs. 8,28,036/- awarded by the Tribunal.
The Tribunal has awarded a sum of Rs. 35,800/- towards medical expenses. Ex.P3 are the series of medical bills. It is an actual expenditure.
Also, the amount awarded towards this head is reasonable. Hence the same is confirmed. The Tribunal has awarded a sum of Rs. 2,000/- each
towards funeral expenses and transport expenses. The amounts awarded towards these heads are very low. It would be reasonable to award a
sum of Rs. 5,000/- each towards these heads. The Tribunal has awarded a sum of Rs. 10,000/- towards loss of estate. Taking into consideration
the facts and circumstances of the case, I feel that the amount awarded towards loss of estate is very reasonable and hence it is confirmed. The
Tribunal has awarded Rs. 5,000/- towards loss of consortium to the wife of the deceased, which I feel is very low. It would be reasonable to
award a sum of Rs. 15,000/- towards this head. The Tribunal has awarded a sum of Rs. 17,000/- towards loss of love and affection to the
daughters of the deceased, which I feel is very low. Because of the death of the deceased, the daughters have lost the love and affection of their
father. One daughter was minor at that time. Therefore, it would be appropriate and reasonable to award a sum of Rs. 35,000/- towards loss of
love and affection to the daughters of the deceased. The Tribunal has awarded interest rate at 12% 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 12% p.a. is very reasonable and hence the same is confirmed. The details of the modified compensation are as under:
Rupees Loss of income 9,68,820/-
Medical expenses 35,800/-
Funeral expenses 5,000/-
Transport expenses 5,000/-
Loss of estate 10,000/-
Loss of consortium 15,000/-
loss of love and affection 35,000/-
--------------
10,74,620/-
Less: Amount awarded by
the Tribunal 9,00,000/-
--------------
1,74,620/-
==============
(Rounded off to Rs. 1,75,000/-)
For the enhanced compensation, the claimants are entitled for an interest of 6% p.a. from the date of petition.
Under the circumstances, the claimants are entitled to the enhanced compensation of Rs. 1,75,000/- with interest at 6% p.a. from the date of
petition. The Respondent-Transport Corporation is directed to deposit the enhanced compensation of Rs. 1,75,000/- within a period of eight
weeks from the date of receipt of a copy of this order.
Learned Counsel for the Appellants/claimants has filed a memo stating that the first Appellant, the wife of the deceased, died on 15.06.2008.
He also further submitted that the third Appellant, has attained the age of majority. Therefore, the share in respect of the first Appellant, shall be
shared equally by the second and third Appellants. On deposit of the enhanced compensation by the Respondent-Transport Corporation, the
claimants are permitted to withdraw the same on making proper application.
With the above modifications, the Civil Miscellaneous Appeal is disposed of. No costs.