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Judgment
The appeal is preferred by the claimants against the judgment and decree made in MCOP No. 2 of 2001 dated 24.03.2005 on the file of the
Motor Accidents Claims Tribunal (Sub Court), Sivagangai.
Background facts in a nutshell are as follows:
The deceased-Sathuragiri met with motor traffic accident that took place on 24.06.2000 at about 15.45 hours. He was working as driver under
the second Respondent. He travelled in a mini-van bearing Registration No. TN-63-B-4136. The said van proceeded to Sivagangai from
Nagaragudi Village after unloading the stones. Thereafter, when the van reached near Athikarai Vilakku, due to some dust particles which affected
the eye-sight of the van driver, he lost control over the van and the van hit against the western side of the road. Due to the said impact, the
deceased who travelled in the cabin sustained grievous multiple injuries all over the body and the other loadmen travelled behind also sustained
injuries. Immediately the deceased was taken to the Government Hospital, Paramakudi and later he was referred to the Government Rajaji
Hospital, Madurai, where he was declared dead. The claimants are the wife and minor children of the deceased. They claimed a compensation of
Rs. 7,00,000/-before the Tribunal. The said van was insured with the third Respondent-Insurance Company, who 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 mini-van belonging to the second Respondent 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 mini-van belonging to the second Respondent and awarded a sum of Rs. 2,35,000/-as compensation with interest at 9% p.a. from
the date of petition. The details of the compensation are as follows:-
Rupees
Loss of dependancy 2,04,000/-
Funeral expenses 2,000/-
Loss of love and affection 25,000/-
Other miscellaneous expenses 4,000/-
Total.... 2,35,000/-
==============
Aggrieved by that award, the Appellants / claimants have filed the present appeal.
Learned Counsel for the Appellants / claimants has submitted that the Tribunal has awarded a low and meagre sum of compensation and it
ought to have awarded the compensation as claimed by the claimants. The Tribunal has not considered the relevant materials and it has not
followed the principles of assessment. Therefore the award passed by the Tribunal is not in accordance with law and this is a fit case for
enhancement.
Learned Counsel for the third Respondent / Insurance Company has submitted that the Tribunal had considered all the facts and circumstances
of the case and awarded the compensation which is just, fair and reasonable and also it is based on valid materials and evidence. Hence the order
passed by the Tribunal is in accordance with law and the same should be confirmed.
Heard the 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 documents Ex.P1 to P6 were marked. On the side of the Insurance Company, R.W.1-Sethumani, the official of the Insurance Company has
been examined and document Ex.R1-Insurance Policy was marked. P.W.1 is the wife of the deceased. P.W.2 is one Vinodh, who is the loadman
and also eye-witness of the accident. Ex.P1 is the copy of the FIR. Ex.P2 is the copy of Post Mortem Report. Ex.P3 is the copy of Motor Vehicle
Inspection Report. Ex.P4 is the copy of Charge Sheet. Ex.P5 is the judgment rendered by Judicial Magistrate Court, Ilayankudi. Ex.P6 is the
Salary Certificate. 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 mini van belonging to the second Respondent. It is a question of fact and it is
based on valid materials and evidence, and hence the same is confirmed.
In the case of Sarla Verma and Ors. v. Delhi Transport Corporation and Anr. (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 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.
The deceased was 27 years old at the time of accident. Ex.P2 is the Post Mortem Report, in which it is stated that deceased was 32 years old.
Therefore, the Tribunal fixed the age of the deceased as 32 years at the time of accident. Further, P.W.1 in her evidence has stated that the
deceased was earning a sum of Rs. 3000/-per month. Ex.P6 is the Certificate given by the employer of the deceased stating that the deceased was
earning Rs. 3000/-per month, but the Tribunal rejected the same and notionally fixed the income of the deceased at Rs. 1500/-and determined the
annual income at Rs. 18000/-. After taking into consideration the age of the deceased as 32 years, the Tribunal adopted the multiplier of 17 and
determined the loss of income at Rs. 3,06,000/-(Rs. 18000/-x 17). Out of the said sum, the Tribunal deducted 1/3rd of the amount towards
personal expenses and calculated the loss of dependancy at Rs. 2,04,000/-(Rs. 3,06,000/-minus Rs. 1,02,000/-). Learned Counsel for the
claimants vehemently contended that the Tribunal is wrong in rejecting the Salary Certificate i.e. Ex.P6 and when the Salary Certificate shows that
he was earning Rs. 3000/-per month, it should be accepted. He further stated that even in the claim petition and also in the evidence of P.W.1, it is
stated that the deceased was earning Rs. 3000/-per month. Considering the above argument advanced by the learned Counsel for the claimants,
this Court is of the view that the Tribunal is wrong in rejecting Ex.P6-Salary Certificate on the ground that it is not a registered one. The Tribunal
should have accepted the Salary Certificate. Even for unemployed persons, the Courts used to fix the income on the basis of minimum wages at
Rs. 3000/-. After taking into consideration the facts and circumstances of the case, it would be reasonable to fix the monthly income of the
deceased as Rs. 3000/-on the basis of Ex.P6. Out of the said sum, if 1/3rd of the amount is deducted towards personal expenses of the deceased,
the monthly contribution of the deceased to the family works out to Rs. 2000/-and the annual contribution works out to Rs. 24,000/-(Rs. 2,000/-x
12). In this case, there is no dispute regarding the age. Therefore, the Tribunal has correctly adopted 17 multiplier. If 17 multiplier is adopted, the
loss of dependancy works out to Rs. 4,08,000/-. Therefore, the loss of dependancy is modified to Rs. 4,08,000/-as against the sum of Rs.
2,04,000/-awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 2,000/-towards funeral expenses, Rs. 4,000/-towards other
miscellaneous expenses including damage to the clothes and Rs. 25,000/-towards loss of love and affection. The amounts awarded towards these
heads are very reasonable and hence they are confirmed. The Tribunal has awarded interest rate at 9% 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 9% p.a. is very reasonable and hence the same is confirmed. The details of the modified compensation are as under:
Rupees
Loss of dependancy 4,08,000/-
Funeral expenses 2,000/-
Loss of love and affection 25,000/-
Other miscellaneous expenses 4,000/-
4,39,000/-
Less: Compensation awardedby the Tribunal 2,35,000/-
==============
2,04,000/-
==============
Therefore, the claimants are entitled to the enhanced compensation of Rs. 2,04,000/-. For the enhanced compensation, the interest shall be at
7.5% p.a. from the date of petition.
The third Respondent-Insurance Company is directed to deposit the enhanced compensation of Rs. 2,04,000/-with interest at 7.5% p.a. from
the date of petition, within a period of eight weeks from the date of receipt of a copy of this order. On such deposit, the first Appellant-wife of the
deceased is permitted to withdraw her proportionate share from the deposit on making proper application. In respect of the minors, their shares
shall be deposited in a Nationalised Bank under Reinvestment Scheme till they attain the age of majority, and the first Appellant-wife of the
deceased, is permitted to withdraw the accrued interest from the bank every three months, on making proper application.
With the above modifications, the Civil Miscellaneous Appeal is disposed of. No costs.