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Judgment
P.P.S. Janarthana Raja, J.—This appeal is preferred by the Appellant-Transport Corporation against the judgment and Decree dated
19.03.2004 made in M.C.O.P No. 117 of 2001 on the file of the Motor Accidents Claims Tribunal, Additional District & Sessions Court, Fast
Track Court No. IV, Madurai.
Background facts in a nutshell are as follows:
The deceased-Nagaraj met with motor vehicle accident that took place on 21.05.2001 at about 7.45 p.m. The said deceased was travelling as a
pillion rider in the M-80 two-wheeler, bearing Registration No. TN-60-9634, which was driven by his brother-in-law. They were proceeding in
the Theni to Madurai Main Road. At that time a bus bearing Registration No. TN-58-N-0247 belonging to the Appellant-Transport Corporation,
came in a rash and negligent manner and also at high speed and hit the M-80 two-wheeler. Due to the same, the deceased sustained multiple
injuries all over the body. Immediately he was admitted in the Government Hospital, Theni and he died in the hospital on the same day. The
claimants are the wife, minor daughter and parents of the deceased. They claimed a sum of Rs. 6,00,000/-as compensation. The Appellant-
Transport Corporation, resisted the claim. On pleadings, the Tribunal framed the following issues:
Whether the accident had occurred only due to the rash and negligent driving of the driver of the bus belonging to the Appellant/Transport
Corporation?
Whether the claimants are entitled to claim any compensation, if so how much?
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 Appellant-Transport Corporation and awarded a compensation of Rs. 4,00,800/-with interest at 9% p.a.
from the date of the claim petition. The details of the compensation are as under:
Loss of income Rs. 3,84,000/-
Loss of consortium Rs. 10,000/-
Funeral expenses Rs. 2,000/-
Loss of love and affection Rs. 4,000/-
Damages to clothes Rs. 300/-
Transport charges Rs. 500/-
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Total.. Rs. 4,00,800/-
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Aggrieved by that award, the Appellant-Transport Corporation has filed the present appeal.
Learned Counsel appearing for the Appellant/Transport Corporation questioned only the quantum of compensation awarded by the Tribunal
and vehemently contended that the amount awarded by the Tribunal is excessive, exorbitant and also without any basis and justification. Therefore,
the award passed by the Tribunal is not in accordance with law and hence the same has to be set aside.
Learned Counsel appearing for the Respondents-claimants has submitted that the Tribunal has 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 counsel on either side and perused the materials available on record. On the side of the claimants P. Ws.1 and 2 were examined and
documents Exs.P1 to P3 were marked. On behalf of the Appellant/Transport Corporation one Selvaraj, the driver of the bus was examined as
R.W.1 and no document was marked to substantiate their claim. P.W.1-Annakodi, is the wife of the deceased. P.W.2-Ilangovan, is the rider of
the two-wheeler. Ex.P1 is the certified copy of the First Information Report. Ex.P2 is the certified copy of the Post Mortem Report. Ex.P3 is the
certified copy of the Charge Sheet. 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. The finding of the Tribunal is based on valid materials
and evidence and it is a question of fact. 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 Thomas2, M.N. Venkatachaliah, J. SCC p.181, para 5 (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.
At the time of the accident, the deceased-Nagaraj was aged about 38 years. P.W.1, the wife of the deceased, in her evidence has stated that
the deceased was the owner of a Coconut Grove and he was earning a sum of Rs. 10,000/-per month. Further, in her evidence, she stated that
only the driver of the bus caused the accident and the driver was also charge sheeted by Theni Police Station in Crime No. 324 of 2001. Ex.P-2 is
the Postmortem Report, in which it is stated that the age of the deceased was 38 years at the time of the accident. Therefore, the Tribunal has fixed
the age of the deceased as 38 years. There is no evidence available on record to show that the deceased was earning a sum of Rs. 10,000/-per
month. Therefore, the Tribunal has fixed the daily income of the deceased at Rs. 100/-and determined the monthly income at Rs. 3,000/-. After
taking into consideration of the age of the deceased, the Tribunal has adopted the multiplier of ''16'' and determined the loss of income at Rs.
3,84,000/-(Rs. 3,000X12X2/3X16). Learned Counsel appearing for the Appellant-Transport Corporation has vehemently contended that the
Tribunal is wrong in adopting the multiplier of ''16''. He relied on the Apex Court judgment in the case of SARLA VERMA And Ors. v. DELHI
TRANSPORT CORPORATION and Anr. reported in (2009) 4 MLJ 997, cited supra, in support of his contention, and stated that the correct
multiplier that should be adopted in the present case is ''15''. As rightly pointed out by the learned Counsel for the Appellant the correct multiplier
that should be adopted in the present case is ''15'', as per the principles enunciated in sarla Verma''s Case(cited supra). If multiplier ''15'' is
adopted the loss of income works out to Rs. 3,60,000/-(Rs. 3,000X12X2/3X15). Therefore, the claimants are entitled to the modified
compensation of Rs. 3,60,000 /-towards loss of income as against Rs. 3,84,000/-awarded by the Tribunal. The Tribunal has awarded a sum of
Rs. 10,000/-towards loss of consortium. The wife of the deceased was 29 years at the time of the accident. After taking into consideration of the
same, I am of the view that the amount awarded under this head is very low. It would be reasonable to award a sum of Rs. 15,000/-towards loss
of consortium as against Rs. 10,000/-awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 4,000/-towards loss of love and affection.
The minor daughter has lost the love and affection of her father and the parents also have lost the love and affection of their son. After considering
the same, it would be reasonable to award a sum of Rs. 20,000/-towards loss of love and affection as against Rs. 4,000/-awarded by the
Tribunal. The Tribunal has awarded a sum of Rs. 500/-towards transport charges and another sum of Rs. 300/-towards damages to clothes. After
considering the facts and circumstances of the case, the amounts awarded under these heads are very reasonable and hence the same are
confirmed. The Tribunal has awarded a sum of Rs. 2,000/-towards funeral expenses, which is very low. After considering the facts and
circumstances of the case, it would be reasonable to award a sum of Rs. 5,000/-towards funeral expenses as against Rs. 2,000/-awarded by the
Tribunal. The Tribunal has fixed the interest rate at 9% per annum. After taking into consideration of the date of accident, date of award and the
prevailing rate of interest during that time, the interest rate fixed by the Tribunal at 9% p.a from the date of petition is very excessive. It would be
reasonable to award the interest rate at 7.5% p.a from the date of petition. The details of the modified compensation as per the above discussion
are as under:
Heads Amount
Loss of income Rs. 3,60,000/-
Loss of consortium Rs. 15,000/-
Funeral expenses Rs. 5,000/-
Loss of love and affection Rs. 20,000/-
Transport charges Rs. 500/-
Damages to clothes Rs. 300/-
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Total... Rs. 3,90,800/-
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(Rounded off to Rs. 3,90,000/-)
Therefore, the claimants are entitled to the modified compensation compensation of Rs. 3,90,000/-with interest at 7.5% p.a. from the date of
petition.
Learned Counsel appearing for the Appellant-Transport Corporation has submitted that the entire award amount along with the accrued interest
has already been deposited and the claimants were also permitted to withdraw the 50% from the deposited amount. Under the circumstances, the
claimants are now entitled to the modified compensation of Rs. 3,90,000/-with interest at 7.5% p.a from the date of petition. In respect of the
major claimants i.e., Respondents 1,3 and 4, they are permitted to withdraw their respective shares from the deposit, less the amount already
withdrawn, on making proper application. In respect of the minor claimant i.e., the second Respondent, her shares shall continue to be in the
Nationalised Bank deposit till she attain the age of majority. The mother of the minor is permitted to withdraw the accrued interest on the said
deposit once in three months, on making proper application. The Appellant-Transport Corporation is also permitted to withdraw the balance
amount on making proper application.
With the above modifications, the Civil Miscellaneous Appeal is disposed of. No costs.