AI Structured Summary
Not yet generated for this judgment
Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the appellant/Transport Corporation against the award and decreetal order of the
Motor Accidents Claims Tribunal (Chief Judicial Magistrate) Villupuram in M.A.C.T.O.P. No. 34 of 2002 dated 06.04.2004.
Background facts in a nutshell are as follows:
On 07.09.1996 at about 01.030 a.m. the deceased Arumugam met with an motor vehicle accident. While the deceased along with his nephew one
Ramesh were travelling in a bus bearing Registration No. TN32 N 0659 in Route No. 176 from Chennai to Senthurai, the bus was driven in rash
and negligent manner and proceeding G.S.T. Road near State Bank of India and went out of control and hit against lamp post. Due to which, the
deceased thrown out of the bus and died on the spot. The claimants are wife, son and daughters. They claimed the compensation of Rs.
3,00,000/-. 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?
What is the compensation, the claimants are entitled to?
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 bus and awarded a compensation of Rs. 3,19,700/- with interest at 9% from the date of petition and the details of the same are as
under:
Loss of income Rs. 3,10,200/-
Loss of consortium and
Funeral expenses Rs. 9,500/-
--------------
Total Rs. 3,19,700/-
--------------
Aggrieved by that award, the Transport Corporation has filed the present appeal.
The 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 basis and justification and that therefore, the
award passed by the Tribunal is not in accordance with law and the same has to be set aside.
In spite of notice, there is no representation on behalf of the respondents.
Heard the Counsel and perused the document on record. On the side of the claimants, P.Ws.1 and 2 were examined and documents Exs.P1 to
P4 were marked. On the side of the respondents, no witnesses were examined and no documents were marked. PW.1-Poongavanam is the wife
of the deceased. PW2-Ramesh is an eye witness to the accident. Ex.P1 is the xerox copy of the first information report. Ex.P2 is the xerox copy
of post mortem certificate. Ex.P3 is the xerox copy of the death report. Ex.P4 is the salary certificate. After considering the 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 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 dependents 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 dependents, the amount that the deceased would have earned during the
remainder of his life, the amount that he would have contributed to the dependents during that period, the chances that the deceased may not have
live or the dependents 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 dependents, 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 dependents. 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 there from 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 there from 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 dependents 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 dependents 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 2, 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 4, 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 dependents many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss
to the dependents 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 dependents 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 dependents, the amount that the deceased would have earned during the
remainder of his life, the amount that he would have contributed to the dependents during that period, the chances that the deceased may not have
lived or the dependents 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
dependents 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 aged about 55 years at the time of the accident. Ex.P2 is the post mortem report in which, it is stated that the age of the
deceased was 55 years. Therefore, the Tribunal is correct in fixing the age of the deceased. The claimants claimed that the deceased was earning
Rs. 2,700/ - per month. PW1-the wife of deceased deposed that the deceased was working as an office assistant in the Highways Department.
Ex.P4 is the salary certificate, in which, it is stated that the deceased was earning Rs. 3,550/ - per month. After considering the above oral and
documentary evidence, the Tribunal fixed the monthly income of the deceased at Rs. 3,550/ -. Out of the said sum, the Tribunal has deducted
1/3rd towards personal expenses i.e. Rs. 1,200/ - and balance amount of Rs. 2,350/ - has been taken as the monthly contribution to his family and
determined the annual contribution at Rs. 28,200/ - (2350x12). Considering the age of the deceased at 55 years, the Tribunal adopted the
multiplier of 11 and determined the loss of income at Rs. 3,10,200/ - (Rs. 2,350x12x11). The Learned Counsel for the appellant contended that
the deceased was aged about 55 years and his retirement age is 58 and after retirement, it would be reasonable that he would get 40% of the
gross salary as income and the multiplier should be adopted is ''8'' for the remaining 3 years. This Court by order dated 10.06.2010 in C.M.A.
No. 2270 of 2003 considered the similar issue where the deceased was aged about 57 years and 9 months at the time of accident and in para 10
and 11 it has held as follows:
Coming to the choice of multiplier, the Tribunal going by the second schedule, adopted multiplier 8. Ex.P7 is the service register of the
deceased, from which, it is seen that the date of birth was 24.08.1943. In his evidence, PW2 has stated that the date of birth of the deceased was
24.08.1943. PW2 has also stated that the deceased would have attained the age of superannuation at 60 years. At the time of accident i.e. on
19.05.2001, the deceased was aged 57 years 9 months. He would have continued to be in service only for a further period of two years. While
so, the Tribunal was not right in adopting multiplier 8 by taking the annual loss of dependency at Rs. 2,06,798/ -. Adopting multiplier 8 for the
entire annual income would amount to giving the entire life span of 8 years and while adopting the same annual income, the Tribunal erred in not
keeping in view that the deceased would have attained the age of superannuation after the period of two years. The annual income of the deceased
ought to have been taken only for the initial period of two years. Adopting multiplier 2 for the period of two years, during which the deceased
would have been in service, the annual loss of dependency is calculated at Rs. 5,26,668/ - (Rs. 2,63,334/ - x 2 = Rs. 5,26,668/ -)
For the remaining period of six years, the deceased would have retired and would have only getting pension. As per the decision in National
Insurance Company Ltd. v. Shanthi Pandiyan and Ors. 2008(2) TNMAC 73, the Division Bench of this Court has adopted the method that in
case of Government Servant, 40% of the gross salary has to be taken as income of the deceased. Adopting 40% of the gross salary of the
deceased, the income of the deceased after his retirement is calculated at Rs. 1,58,000/ - (40% of Rs. 3,95,000/ -) After deducting 1/3 rd amount
for personal expenses I.e. Rs. 52,666/ -, the annual loss of dependency is calculated at Rs. 1,05,334/ -. For the remaining multiplier 6, the total
loss of dependency is calculated at Rs. 6,32,004/ - (Rs. 1,05,334/ - x 6 = Rs. 6,32,004/ -. The total loss of dependency is calculated at Rs.
11,58,672/ - (Rs. 5,26,668 + Rs. 6,32,004 = Rs. 11,58,672/ -) rounded off to Rs. 11,60,000/ -.
In the present case, the age of the deceased was 55 years at the time of the accident. Therefore, considering the retirement age at 58, the
remaining period of 3 years is considered as multiplier. Hence, it is reasonable to adopt the multiplier of 3. By following the above judgment, the
loss of income is determined as follows: 3550x12x3=Rs. 1,27,800/ -. Out of the said sum, if 1/3 of Rs. 42,600/ - is deducted towards personal
expenses the loss of income before retirement period would be Rs. 85,200/ -. In the present case, after retirement, the deceased would have taken
private tuition. After considering the judgment cited above, I am of the view that the deceased would have earned 40% of the salary, and the same
works out to Rs. 1,420/ - (Rs. 3550 x 40/100) and the loss of income after retirement is determined as follows:
Rs. 1420 x 12 x 8= Rs. Rs. 1,36,320/ -.
Out of the said sum, if 1/3 of Rs. 45,440/ - (Rs. 1,36,320 x 1/3) is deducted, the balance sum of Rs. 90,880/ - (Rs. 1,36,320/ - - Rs. 45,440/ -)
is taken as the loss of income after retirement and the total loss of income would be at Rs. 1,76,080/ - (Rs. 85200 + 90880). Accordingly, the loss
of income is modified to Rs. 1,76,080/ - as against Rs. 3,10,200/ - awarded by the Tribunal. The Tribunal has not awarded under the head loss of
love and affection. The claimants 2 to 4 are mother, 2 daughters and 1 son, Therefore it is reasonable to award a sum of Rs. 40,000/ - towards
loss of love and affection. The Tribunal has awarded Rs. 9,500/ - towards loss of consortium and funeral expenses. The first respondent/widow is
the wife of the deceased, aged about 50 years at the time of the accident. Hence, it is reasonable to award a sum of Rs. 15,000/ - towards loss of
consortium and Rs. 7,500/ - towards funeral expenses. The Tribunal has not awarded any sum towards transport charges and it would be
reasonable to award Rs. 7,500/ - towards transport charges. The Tribunal has awarded interest at 9% per annum. The accident occurred on
07.09.1996. Considering the prevailing rate of interest, during that period, the interest awarded by the Tribunal is very reasonable and the same is
confirmed. As per the above discussion, the modified amount of compensation are as follows:
Loss of income Rs. 1,76,080/ -
Loss of love and affection Rs. 40,000/ -
Loss of consortium Rs. 15,000/ -
Funeral expenses Rs. 7,500/ -
Transport charges Rs. 7,500/ -
---------------
Total Rs. 2,46,080/ -
---------------
rounded to Rs. 2,46,100/ -
The claimant is entitled to the modified compensation of Rs. 2,46,100/ - with interest at 9% per annum as against Rs. 3,19,700/- awarded by the
Tribunal.
It is stated that the appellant/Transport Corporation has already deposited the entire award amount with interest as per the order of this Court
dated 19.09.2006 and this Court also already permitted the respondents to withdraw 50% of the share with accrued interest. Under such
circumstances, the claimants are permitted to withdraw their shares from the modified compensation of Rs. 2,46,100/- with 9% interest less the
amount already withdrawn as apportioned by the Tribunal on making proper application. The appellant-Transport Corporation is also permitted to
withdraw the balance amount on making proper application.
With the above observation, the Civil Miscellaneous Appeal is dismissed. No costs.