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Judgment
P.P.S. Janarthana Raja, J.—By consent, the main appeal itself is taken up for final disposal.
The appeal is preferred by the appellant-Transport Corporation against award dated 23.10.2008 made in MCOP No. 266 of 2007 by the
Motor Accident Claims Tribunal, (Principal District Judge), Vellore.
Background facts in a nutshell are as follows:
The deceased-Sankar met with motor vehicle accident that took place on 03.08.2006 at about 11.00 p.m. While the deceased was proceeding in
his two wheeler bearing registration No. TN-23 V. 0131 from Ranipet to Walaja, the bus belonging to the appellant-Transport Corporation
bearing registration No. TN-23-N-1519, which came from behind the deceased without blowing horn and tried to overtook the two wheeler in a
rash and negligent manner. During that process, the driver of the bus dashed against the deceased. Due to which, the deceased had sustained
multiple injuries. Immediately, he was admitted in Government Hospital, Walajapet, where he died on 06.08.2006. The claimants are wife, minor
daughter, mother and father the of the deceased. They claimed a sum of Rs. 5,00,000/- as compensation. The appellant-Transport Corporation
has resisted the claim. On pleadings the Tribunal framed the following issues:
1.Whether the accident had occurred due to the rash and negligent driving of the driver of the appellant-Transport Corporation or not?
Whether the claimants are entitled to any claim?
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 appellant-Transport Corporation and awarded a compensation of Rs. 4,52,000/- with interest at 9% per annum from the date of
petition and the details of the same are as under:
Loss of income Rs. 4,32,000/-
Funeral expenses Rs. 5,000/-
Loss of love and affection Rs. 10,000/-
Loss of estate Rs. 5,000/
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Total... Rs. 4,52,000/-
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Aggrieved by that award, the appellant-Transport Corporation has filed the present appeal.
4.The learned Counsel appearing for the appellant/Transport Corporation questioned only quantum of compensation awarded by the Tribunal and
contended that the amount awarded by the Tribunal is excessive, exorbitant, without basis and justification and also the rate of interest at 9%
awarded by the Tribunal is excessive and that 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 order of the Tribunal is in accordance
with law and the same has to be confirmed.
Heard the counsel. On the side of the claimants, PWs.1 and 2 were examined and documents Exs.P1 to P4 were marked. On the side of the
respondents RW.1-Munivelu, who is the driver of the bus was examined and no document was marked to substantiate their claim. PW1 is the wife
of the deceased. PW2-one Dinesh kumar is the eye witness to the occurrence. Ex.P1 is the certified copy of the First Information Report. Ex.P2 is
the attested copy of the First Information Report. Ex.P3 is the certified copy of the post mortem certificate. Ex.P4 is the legal heirship 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 appellant-Transport Corporation and the finding is 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.
At the time of the accident, the deceased-Sankar was aged about 27 years. PW1, who is the wife of the deceased, has deposed that at the time
of the accident the deceased was working as Mason and was earning Rs. 4500/- per month. Ex.P3 is the post mortem certificate, in which, the
age of the deceased was mentioned as 27 years. Though PW1 has deposed that the deceased was earning Rs. 4500/- per month, she has not
produced any document to prove her claim. Therefore, the Tribunal was of the view that the deceased would have earned Rs. 100/- per day and
fixed the monthly income at Rs. 3,000/- per month. Out of the said sum, the Tribunal has deducted 1/3 of Rs. 1,000/- (Rs. 3,000x 1/3) towards
personal expenses and taken the balance sum of Rs. 2,000/- towards monthly contribution to his family and determined the annual income at Rs.
24,000/-. The Tribunal considering Ex.P3-post mortem certificate, taken the age of the deceased at 27 years and adopted the multiplier of 18 and
arrived at the loss of income at Rs. 4,32,000/- (Rs. 24,000/- x 18). The Tribunal has correctly determined the monthly as well as annual income
and also adopted the correct multiplier of 18 as per schedule. Therefore, the amount awarded by the Tribunal under the head loss of income is
very reasonable and the same is confirmed. The Tribunal has awarded a sum of Rs. 10,000/- towards loss of love and affection. The claimants are
the wife, daughter and parents of the deceased. Hence, the amount awarded under this head is also very reasonable and the same is confirmed.
The Tribunal has awarded a sum of Rs. 5,000/- towards funeral expenses, which I feel is very reasonable and the same is confirmed. The Tribunal
has also awarded a sum of Rs. 5,000/- towards loss of estate. At the time of the accident, the age of the wife was 25 years, daughter-2 years,
mother-55 years and father-65 years. Considering the same, I feel that the amount awarded under this head is very reasonable and the same is
confirmed. The finding is based on valid materials and evidence. There is no error or illegality in the order of the Tribunal so as to warrant
interference by this Court. It is a question of fact. It is not a perverse order. It is in accordance with law and therefore, the award passed by the
Tribunal is confirmed. Accordingly, the Civil Miscellaneous Appeal is dismissed. No costs. Consequently, MP. Nos. 1 and 2 are also dismissed.
The Tribunal has awarded interest at the rate of 9% per annum. The date of accident was 03.08.2006. Keeping in view the prevailing rate of
interest at the time of the accident, I feel that the rate of interest awarded by the Tribunal is very excessive and it would be reasonable to award
interest at 7.5% per annum from the date of petition as against 9% awarded by the Tribunal.
It is represented by the learned Counsel appearing for the appellant-Transport Corporation that already entire award amount has been
deposited as per order of this Court dated 23.07.2009. The claimants are entitled to the compensation of Rs. 4,52,000/- with interest at 7.5% per
annum from the date of petition as apportioned by the Tribunal. Claimants 1, 3 and 4 are permitted to withdraw their shares with accrued interest
thereon as apportioned by the Tribunal, after adjusting the amount, if any, already withdrawn on making proper application. In respect of minor
2nd claimant is concerned, her share shall be continued in the fixed deposit in the Nationalised Bank till she attaining majority. The first claimant is
also permitted to withdraw accrued interest thereon once in three months. The appellant-Transport Corporation is permitted to withdraw the
balance amount, if any, on making proper application.