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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
10.04.2004 made in M.C.O.P. No. 671 of 2003 on the file of the Motor Accidents Claims Tribunal, I Additional Sub Court, Tirunelveli.
Background facts in a nutshell are as follows:
The deceased-Manohara Valli met with motor traffic accident that took place on 13.05.2003 at about 5.15p.m. The said deceased was travelling
in a Car bearing Registration No. TN-72-H-3813 along with her family members from Tirunelveli to Trichy. When they were nearing
Rajapudukudi in Tirunelveli-Madurai main road, a bus bearing Registration No. TN-32-N-1213 belonging to the Appellant Transport Corporation
came in the opposite direction in a rash and negligent manner and hit the car. Due to the said impact, the deceased along with her daughter and
also the driver of the car died on the spot. The other passengers in the car also sustained grievous injuries. The claimants are the husband, the
minor son and the parents of the deceased. They claimed a sum of Rs. 25,00,000/-as compensation before the Tribunal. The Appellant-Transport
Corporation resisted the claim. On pleadings, the Tribunal framed the following issues:
Whether the accident had occurred due to the rash and negligent driving of the driver of the bus belonging to the Appellant-Transport
Corporation? or on the negligence of the injured and deceased persons who travelled in the car?
Whether the claimants are entitled for compensation?If so, what is the am o unt and from whom?
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. 11,22,500/-with interest at 9% per
annum from the date of petition. The details of the compensation are as under:
For loss of dependency Rs.10,88,000/-
For funeral expenses Rs. 2,000/-
For loss of consortium Rs. 5,000/-
For loss of love and
affection Rs. 25,000/-
For loss of estate Rs. 2,500/-
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Total Rs.11,22,500/-
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Aggrieved by that award, the Appellant-Transport Corporation has filed the present appeal. It is also pertinent to note that in respect of the
connected appeals i.e.C.M.A. Nos. 81 to 84 of 2005, this Court, by order dated 09.07.2009 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.
Learned Counsel appearing for the Appellant-Transport Corporation questioned only the quantum of compensation awarded by the Tribunal
and contended that the amount awarded by the Tribunal is excessive, exorbitant and also without any basis and justification. He further submitted
that the award of interest at 9%p.a. is excessive. 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 has 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. He further submitted that the Tribunal
has adopted the correct multiplier of ""17"" and also correctly awarded interest at 9% pa. It is a question of fact and also it is based on valid
materials and evidence. 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 Respondents-claimants, P.W.1 to P.W.3
were examined and documents Ex.P.1 to Ex.P.26 were marked. P.W.1-Vanamamalai is the husband of the deceased. P.W.2 is Mrs. Kamatchi.
P.W.3 is Mr. Ramachandran and P.W.4 is Thiru. Sankara Narayanan. On the side of the Appellant-Transport Corporation, R.W.1, Isakki, the
driver of the bus was examined and no document was marked to substantiate their claim. 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 Appellant-Transport Corporation. It is a question of fact and also it is also 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 wellestablished. 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.
The age of the deceased was 35 years at the time of accident. She was working as a Siddha Doctor and was also running Devi Hospital at
Kokkirakulam. In the evidence of P.W.1, it is stated that the deceased was earning a sum of Rs. 12,500/-per month. Further it is stated that it was
only the driver of the bus belonging to the Appellant-Transport Corporation has caused the accident and the driver was charge-sheeted by the
Kayathar Police Station in Cr. No. 95 of 2003 under Sections 279, 337, 338 and 304A I.P.C. Ex.P.6 is the Post Mortem Report, in which it is
stated that the age of the deceased was 35 years. The Tribunal has correctly fixed the age of the deceased as 35 years. The deceased was a
Siddha Doctor. Ex.P.12 is the Educational Certificate which corroborates the same. Even though the husband of the deceased stated that the
deceased was earning a sum of Rs. 12,500/-per month, the Tribunal has fixed the income of the deceased at Rs. 8,000/-per month on the basis of
the evidence of P.W.4 and also Ex.P.14-the Salary Certificate. After correctly fixing the monthly income of the deceased, the Tribunal has arrived
at the annual income at Rs. 96,000/-(Rs. 8,000/-x12). Out of the said sum, after deducting 1/3rd towards personal expenses of the deceased, the
Tribunal has arrived at the annual contribution of the deceased to the family at Rs. 64,000/-. After considering the age of the deceased at 35 years,
the Tribunal has adopted multiplier of 17 and arrived the loss of dependency at Rs. 10,88,000/-(Rs. 64,000/-x 17). Learned Counsel appearing
for the Appellant-Transport Corporation vehemently contended that the correct multiplier that should be adopted for the age group of 35 years is
16"" and he also relied upon the decision of Sarla Varma''s case cited supra. In the said decision, the Supreme Court fixed the multiplier of ""16"" for
the age group of 30 to 35 years. If ""16"" multiplier is adopted, the loss of dependency works out to Rs. 10,24,000/-(Rs. 64,000/-x 16). Therefore,
the claimants are entitled to the modified amount of Rs. 10,24,000/-towards loss of dependency against the sum of Rs. 10,88,000/-awarded by
the Tribunal. The Tribunal has awarded Rs. 2,000/-towards funeral expenses which is very reasonable and hence the same is confirmed. The
Tribunal has also awarded a sum of Rs. 5,000/-towards loss of consortium. The amount awarded by the Tribunal towards this head is very
reasonable and hence the same is confirmed. Further, the Tribunal has also awarded a sum of Rs. 25,000/-towards loss of love and affection. The
deceased is the only daughter of her parents. The minor son has lost the love of his mother. Therefore, amount awarded by the Tribunal towards
this head is very reasonable and hence, the same is confirmed. The Tribunal has also awarded a sum of Rs. 2,500/-towards loss of estate, which I
feel is very reasonable and hence the same is confirmed. The Tribunal has also awarded an interest of 9% p.a. from the date of petition. After
taking note of the date of accident, the date of award and also the prevailing rate of interest during the relevant period, the interest rate fixed by the
Tribunal at 9% p.a. from the date of petition is excessive and hence, the same is reduced to 7.5%p.a. from 9%p.a.
The details of the modified compensation as per the above discussion are as under:
For loss of dependency Rs.10,24,000/-
For funeral expenses Rs. 2,000/-
For loss of consortium Rs. 5,000/-
For loss of love and
affection Rs. 25,000/-
For loss of estate Rs. 2,500/-
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Total Rs.10,58,500/-
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Therefore, the claimant is entitled to the modified compensation ofRs.10,58,500/-with interest at 7.5% per annum from the date of claimpetition as
against the sum of Rs. 11,22,500/-with 9% interest per annum granted by the Tribunal.
It is stated that the Appellant has deposited the entire award amount and the claimants have also withdrawn 50% from the deposited amount.
Under the circumstances, the claimants/the Respondents 1, 3 and 4 are permitted to withdraw their respective shares as apportioned by the
Tribunal from the modified compensation of Rs. 10,58,500/-with 7.5% p.a. interest from the date of petition, less the amount already withdrawn,
on making proper application. In respect of the share of the minor/the second Respondent, the Tribunal is directed to keep the entire share amount
of minor in a fixed deposit in Reinvestment Scheme in any Nationalized Bank initially for a period of three years and the same shall be renewed till
the minor attains the age of majority. The father of the minor claimant is permitted to withdraw the accrued interest once in three months from the
bank on making proper application. If is further directed that if any situation arise with regard to medical treatment of the minor or his studies, the
father of the minor claimant shall withdraw the share amount of the minor on making proper application. The Appellant-Transport Corporation is
also permitted to withdraw the balance amount on making proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.