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Judgment
P.P.S. Janarthana Raja, J.—Since both the appeals are arising out of the same accident, they are taken up together and dispose of the same
by a common Judgment.
These appeals are preferred by the Insurance Company against the award dated 13.2.2004 made in MCOP No. 1010 of 2003 and M.C.O.P.
No. 1008 of 2003 respectively by the Motor Accident Claims Tribunal (Subordinate Judge) Krishnagiri.
Background facts in a nutshell in both appeals are as follows:
The deceased minor girl Nadhiya (C.M.A No. 1476 of 2005) and one Kanthammal (C.M.A. No. 3567 of 2005) met with motor vehicle accident
on 21.5.2001 at about 9.00 hours. Both deceased and others were travelling in the Tractor bearing Registration No. TN 29 X 0896 and the trailor
bearing Registration No. TN 29 X 0897 from Chinnakothur to Kurubarapalli Koot Road. When the said Tractor was proceeding on the extreme
left side of the road, a lorry bearing Registration No. KA 05 A900 belonging to the first respondent and insured with the second respondent was
driven by its driver in a rash and negligent manner and at a high speed and hit behind the trailor. Due to the same, the trailor capsized on the road
and both the deceased Kanthammal and minor Nadhiya died on the spot. In C.M.A. No. 1476 of 2005, the parents of the deceased minor girl
claimed compensation of Rs. 4,00,000/- and C.M.A. No. 3567 of 2005, the son of the deceased claimed compensation of Rs. 5,00,000/-. The
lorry was insured with the appellant/Insurance Company, who resisted the claim. On pleadings the Tribunal framed the following issues:
Who is responsible for the accident?
Whether the claimants in both appeals are entitled to compensation as claimed?
What other reliefs, the claimants are entitled to?
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 lorry and awarded a compensation of Rs. 2,22,500 (CMA No. 1476 of 2005) and Rs. 3,24,500/- (CMA No. 3567 of 2005)
with interest at 9% per annum from the date of claim petitions and the details of the same are as under:
C.M.A. No. 1476 of 2005:
Loss of dependency Rs. 2,00,000/-
Mental agony Rs. 10,000/-
Loss of love and affection Rs. 10,000/-
Funeral expenses Rs. 2,500/-
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Total .... Rs. 2,22,500/-
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C.M.A. No. 3567 of 2005:
Loss of income Rs. 3,12,000/-
Mental agony Rs. 5,000/-
Loss of love and affection Rs. 5,000/-
Funeral expenses Rs. 2,500/-
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Total Rs. 3,24,500/-
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Aggrieved by that award, the Appellant Insurance Company has filed the present appeals.
The learned Counsel appearing for the appellant/Insurance questioned only quantum of compensation awarded by the Tribunal and vehemently
contended that the amount awarded by the Tribunal is excessive, exorbitant and without basis and justification. 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/claimants 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 award of the Tribunal is in accordance
with law and the same has to be confirmed.
Heard the learned Counsel appearing on either side and perused the materials available on record. On the side of the claimants in C.M.A. No.
1476 of 2005, the father of the minor deceased girl was examined as P.W.5 and marked Ex P11 - post mortem certificate. On the side of the
claimant in C.M.A. No. 3567 of 2005, the son of the deceased was examined as P.W.2 and marked Ex P1 First Information report; Ex-P3
Policy ; Ex P5 - lorry permit; Ex P6 - driving license; Ex P7 - post mortem report. On behalf of the Insurance Company, one Maheswaran,
Officer of the Insurance Company was examined as R.W.10 and marked Exs R1 to R4. Ex R1 - Policy; Ex R2 - Lorry permit; Ex R3 - Lorry
Permit and Ex R4 - Policy. 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 lorry and awarded a compensation and it is a question of fact
and based on valid materials and evidence.
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.
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.
C.M.A. No. 1476 of 2005:
At the time of the accident, the deceased minor Nadhiya was aged about 12 years. She was studying 7th Standard. The claimants are the parents
of the deceased. The father of the deceased was examined as P.W.5. In his evidence, he deposed that the accident had occurred due to rash and
negligent driving of the driver of the lorry and the driver has also chargesheeted by the Kurubarapalli Police Station, in crime No. 328 of 2001
under Sections 279, 337 and 338 and 304(A) of IPC. Ex P11 is the post mortem report. Ex P13 is the Transfer Certificate. The Tribunal has
awarded a consolidate amount of Rs. 2,00,000/- towards loss of dependency. The Tribunal has also awarded a sum of Rs. 10,000/- towards
mental agony and sufferings; The Tribunal has awarded another sum of Rs. 10,000/- towards loss of love and affection. The parents lost their
minor daughter. The Tribunal has awarded a sum of Rs. 2,500/- towards funeral expenses. In the case of R.K. Malik and Anr. v. Kiran Pal and
Ors. 2009(1) TNMAC 593 (SC), wherein the Supreme Court has considered the award of compensation in respect of the school children.
Following the principles enunciated in the above Judgment, the compensation amount awarded by the Tribunal is very reasonable and the same is
confirmed, The Tribunal has awarded interest at 9% p.a. After taking into consideration, the prevailing rate of interest during that period, the date
of award and the interest awarded by the Tribunal is very reasonable and the same is confirmed.
C.M.A. No. 3567 of 2005:
The deceased was 40 years at the time of accident. The son of the deceased was examined as P.W.2. In his evidence, he has stated that the
deceased was flower vendor and was earning Rs. 4,000/- per month. Further in his evidence, he has stated that the accident has occurred due to
rash and negligent driving of the driver of the lorry and a case has been registered against him by Kurubarapalli Police Station, in crime No. 328 of
2001 under Sections 279, 337 and 338 and 304(A) of IPC. Ex P8 is the receipt for doing flower business, in which it is stated that the deceased
was earning a sum of Rs. 4,000/- by selling flower and there is no valid proof to show that the deceased was earning a sum of Rs. 4,000/- per
month. Therefore, the Tribunal has fixed a sum of Rs. 3,000/- per month and out of the said amount, the Tribunal has deducted Rs. 1000/-
towards her personal expenses and taken Rs. 2,000/- per month towards monthly contribution to the family and determined the annual income of
the deceased at Rs. 24,000/- The age of the deceased was 50 years and on the basis of the post mortem certificate Ex P7 and following the
second schedule of Motor Vehicles Act, the Tribunal has adopted the multiplier of 13 and determined the loss of income of the deceased at Rs.
3,12,000( 24,000 x 13). I do not find any illegality or error in fixing the loss of income at Rs. 3,12,000/- by the Tribunal and hence the amount
awarded by the Tribunal under this head is very reasonable and the same is confirmed. The Tribunal has also awarded a sum of Rs. 5,000/-
towards mental agony and another sum of Rs. 5,000/- towards loss of love and affection and also another sum of Rs. 2,500/- towards funeral
expenses. The amounts awarded by the Tribunal under these heads are very reasonable and the same are confirmed. The Tribunal has awarded
interest at 9% p.a. After taking into consideration, the date of accident, the date of award and prevailing rate of interest during that period, the
interest awarded by the Tribunal is very reasonable and the same is confirmed. I do not find any error or illegality in the order of the Tribunal
warranting interference. The finding given by the Tribunal is based on valid materials and evidence. It is a question of fact and it is not a perverse
order. Therefore, the award passed by the Tribunal in both the appeals are in accordance with law and the same is confirmed. Accordingly, the
appeals are dismissed. No costs.
It is represented by the learned Counsel appearing for the appellant/Insurance company that the entire award in both the appeals amount have
been deposited as per the orders of this Court made in C.M.P. No. 8444 of 2005 in C.M.A. No. 1476 of 2005 dated 22.6.2005 and in C.M.P.
No. 18023 of 2005 in C.M.A.NPD No. 3567 of 2005 dated 15.11.2005 respectively and the claimants in both appeals were also permitted to
withdraw 50% of the amount as apportioned by the Tribunal. Therefore, the claimants are permitted to withdraw the balance award amounts, after
adjusting the amounts already withdrawn, on making proper application.