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Judgment
P.P.S. Janarthana Raja, J.—This appeal is preferred by the Appellant-Insurance Company against the judgment and Decree dated
01.12.2008 made in M.C.O.P No. 149 of 2000 on the file of Motor Accidents Claims Tribunal, Sub Judge, Sivakasi.
Background facts in a nutshell are as follows:
The deceased Muthu Selvam met with motor vehicle accident that took place on 16.01.1999 at about 07.30 p.m. The said deceased was
travelling in his Bajaj M-80 two-wheeler bearing Registration No. TN-67-X-8770 along with his friend from North to South direction in the
Sivakasi-Virudunagar Main Road. The said scooter was driven by the deceased and his friend was the pillion rider. While, they were proceeding
near 19 span bridge, a bus bearing Registration No. TN-02-L-1999 belonging to the sixth Respondent and insured with the Appellant-Insurance
Company, came from the opposite direction in a rash and negligent manner and hit the Bajaj M-80 and consequently, the bus ran over the
deceased. Due to the said impact, the deceased sustained multiple injuries. Immediately he was taken to the Graham Hospital, Sivakasi, where he
was declared as dead. The claimants are the wife, two minor children and parents of the deceased. They claimed a sum of Rs. 5,44,500/- as
compensation. The Appellant-Insurance company resisted the claim. On pleadings the Tribunal framed the following issues:
On whose negligence the accident took place?
What is the quantum of compensation, the claimants are entitled to?
After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to rash and negligent driving of the
driver of the bus belonging to the sixth Respondent and initially awarded a compensation of Rs. 3,00,000/- with interest at 9% p.a. by order dated
29.06.2005. Aggrieved by that award, the Appellant-Insurance Company filed an appeal before this Court in C.M.A. No. 931 of 2007,
contending that there is no specific finding in respect of the negligent aspect by the Tribunal. Therefore, this Court has set aside the award dated
29.06.2005 and remitted to the Tribunal with a direction to dispose of the same within a period of six weeks from the date of receipt of a copy of
that order. In consequence of the same, the matter was taken up by the Tribunal and the Tribunal, after hearing the arguments advanced on both
the sides, has 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. 4,33,000/- with interest at 7.5% per annum from the date of the claim petition till realisation, excluding the period from 01.01.2002 to
31.03.2005. The details of the compensation are as under:
Loss of dependency Rs. 4,08,000/-
Loss of love and affection Rs. 25,000/-
Total... Rs. 4,33,000/-
Aggrieved by that award, the Appellant-Insurance company has filed the present appeal.
When the matter came up for admission, the same was opposed by Mr. L.D. Sakkaravarthi, learned Counsel appearing for the Respondents 1
to 5/claimants and by consent of the learned Counsel on either side, this appeal is taken up for final disposal.
Learned Counsel appearing for the Appellant/Insurance Company submitted that the Tribunal has wrong in fixing the entire liability on the part of
the bus driver. It is also further contended that the award amount passed by the Tribunal is excessive, exorbitant and also without any basis and
justification. Learned Counsel for the Appellant/Insurance Company further contended that earlier, this Court only remitted the matter to the
Tribunal with a direction to consider only the negligent aspect, since there is no specific finding given by the Tribunal. Therefore, the Tribunal should
not have considered the quantum of compensation. Therefore, order passed by the Tribunal is not in accordance with law and hence the same
should be set aside.
Learned Counsel appearing for the Respondents 1 to 5/claimants has submitted that the Tribunal had considered all the facts and circumstances
of the case and also rightly came to the conclusion that the accident had occurred only due to the rash and negligent driving of the driver of the bus
and correctly awarded the compensation, which is just, fair and reasonable. Hence the order of the Tribunal is in accordance with law and the
same should be confirmed.
Heard the learned 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 P11 were marked. On behalf of the Insurance Company no one was examined and no document was marked
to substantiate their claim. P.W.1 Eben John Dhanarathinam, is the father of the deceased. P.W.2 Anand Emunal, is the pillion rider and also eye
witness to the accident. Ex.P1 is the certified copy of the First Information Report. Ex.P2 is the certified copy of the Charge Sheet. Ex.P3 is the
certified copy of the Post Mortem Certificate. Ex.P4 is the certified copy of the Motor Vehicles Inspector''s Report relating to the bus. Ex.P5 is
the certified copy of the Motor Vehicles Inspector''s Report relating to Bajaj M-80. Ex.P6 is the certified copy of the judgment is STC. No. 98/`.
Ex.P7 is the Death Certificate. Ex.P8 is the Mark Sheet of U.G. Ex.P9 is the Transfer Certificate. Exs.P10 and P11 are the technical certificates.
P.W.2 in his evidence, who is the eyewitness of the accident has stated that only the driver of the bus caused the accident. It is pertinent to note
that no one was examined on behalf of the Insurance company. 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 Thomas, M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181 5)
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 Muthuselvam was aged about 25 years. P.W.1, who was the father of the deceased, in his evidence
has stated that the deceased was a book binder and he was earning Rs. 5,000/- per month, but there is no concrete evidence available on record
to prove the same. After taking into consideration of the facts and circumstances of the case, the Tribunal fixed the monthly income of the
deceased at Rs. 3,000/-, and arrived at the annual income at Rs. 36,000/-(Rs. 3,000/-X12). Out of the said sum, the Tribunal deducted 1/3rd of
the amount towards miscellaneous expenses i.e., Rs. 12,000/- and arrived at Rs. 24,000/- as the annual contribution of the deceased to the family.
There is no dispute that the deceased was 25 years at the time of the accident. Therefore, the Tribunal has taken the age of the deceased as 25
years, adopted the multiplier of ''17'', and determined the loss of income at Rs. 4,08,000/- (24,000X17). The Tribunal has correctly determined
the monthly income and also the annual contribution of the deceased to the family and also adopted the correct multiplier and arrived at Rs.
4,08,000/towards loss of income. It is also very reasonable and hence the same is confirmed. Further, the Tribunal has awarded a sum of Rs.
25,000/towards loss of love and affection i.e., Rs. 5,000/- to each claimant, which is also very reasonable and hence the same is confirmed. It is
pertinent to note that earlier this Court in C.M.A. No. 931 of 2007 by order dated 10.10.2007 set aside the order made in M.C.O.P. No. 149 of
2000 with a direction to the Tribunal to take up the matter afresh and dispose of the same after giving opportunity to both the parties and pass
orders in accordance with law. Therefore, the earlier order of the Tribunal was set aside. Therefore, the Tribunal is correct in considering the
quantum of the compensation. Learned Counsel appearing for the Appellant-Insurance Company has submitted that the claimants are not entitled
to interest from the date of passing earlier order of this Court i.e., 10.10.2007 in C.M.A. No. 931 of 2007 to the date of order of the Tribunal i.e.,
01.12.2008. After considering the facts and circumstances of the case, this Court is of the view that the claimants are not entitled to interest during
the period from 10.10.2007 to 01.12.2008. It is also pertinent to note that in consequence of this Court''s earlier order, the Tribunal passed the
order, in which it is stated that the claimants are not entitled to interest for the period 01.01.2002 to 31.03.2005. Under the circumstances, the
claimants are entitled for the compensation of Rs. 4,33,000/- with interest at 7.5% p.a. from the date of petition excluding the periods stated above
i.e., 01.01.2002 to 31.03.2005 and from 10.10.2007 to 01.12.2008.
It is represented by the learned Counsel appearing for the Appellant-Insurance company that already the entire award amount has been
deposited . Under these circumstances, the major claimants are permitted to withdraw their respective shares as apportioned by the Tribunal, less
the amount already withdrawn, on making proper application. Now it is represented by the learned Counsel for the claimants that the father of the
deceased, the second Respondent died. Therefore, In respect of the share relating to the father, the legal representative, who is entitled to, in
accordance with law is permitted to withdraw the same, on making proper application. In respect of the Respondents 4 and 5 their shares shall
continue to be in the Nationalised Bank deposit till they attain majority. The first Respondent-wife of the deceased is permitted to withdraw the
accrued interest on the said deposit once in six months on making proper application. The Appellant-Insurance Company is also permitted to
withdraw the balance amount on making proper application.
With the above modifications, the Civil Miscellaneous Appeal is disposed of. Consequently, connected miscellaneous petition is closed. No
costs.