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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the appellant-Transport Corporation against the award dated 29.04.2002 made in
MCOP No. 120 of 2000 by the Motor Accident Claims Tribunal (Sub Court), Mettur.
Background facts in a nutshell are as follows:
On 24.10.1999 at about 6.10p.m the deceased Chinnusamy was proceeding in his Rajdoot bike bearing registration No. TAL8916 from Omalur
to Dharmapuri Main Road. While he was nearing Alankar Theatre, a bus bearing registration No. TN-27-H-1041 belonging to the appellant-
Transport Corporation, which proceeded in the same direction in a rash and negligent manner, tried to overtook and hit the deceased. Due to the
said impact, the deceased died on the spot. The claimants are the wife and son of the deceased. They claimed a sum of Rs. 7,00,000/- before the
Tribunal. The appellant-Transport Corporation resisted the claim. On pleadings the Tribunal framed the following issues:
In whose negligence, the accident had occurred?
Whether the petitioners are entitled to claim compensation from the respondents?
If so, what is the compensation the claimants are is 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, which belonged to the appellant-Transport Corporation and awarded a compensation of Rs. 3,96,000/- with interest at 9% per
annum from the date of the claim petition and the details of the same are as under:
Loss of income Rs. 3,84,000/-
Loss of consortium Rs. 5,000/-
Loss of estate Rs. 5,000/-
Funeral expenses Rs. 2,000/-
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Total Rs.3,96,000/-
Aggrieved by that award, the appellant-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, without basis and justification. He further submitted that the
Tribunal is wrong in fixing the monthly income at Rs. 6,000/- and there is no document to prove the same and that therefore, the award passed by
the Tribunal is not in accordance with law and the same has to be set aside.
Inspite of notice, there is no representation on behalf of the respondents/claimants.
Heard the counsel. On the side of the claimants PWs.1 to 3 were examined and documents Exs.P1 to P16 were marked. On the side of the
appellant/Transport Corporation RW1-Shanmugam, the driver was examined and no document was marked to substantiate their claim. PW1 is
the wife of the deceased. PW2-Parthiban is the son of the deceased. PW3-Sravanan is the eye witness to the accident. Ex.P1 is the true copy of
the First Information Report. Ex.P2 is the xerox copy of the post mortem certificate. Ex.P3 is attested copy of the pension certificate. Ex.P4 is the
chitta. Ex.P5 is the adangal relating to fasli-1409. Ex.P6 is the adangal relating to fasli-1411. Ex.P7 is the original driving licence. Ex.P8 is the true
copy of the legal heirship certificate. Ex.P9 is the attested copy of the Tamil Nadu Government Small Scale permanent registration certificate.
Ex.P10 is the certificate relating to the pension. Ex.P11 is the attested copy of the invoice. Ex.P12 is the attested copy of accounts sheet. Ex.P13
is the original pass book of the State Bank. Ex.P14 is the identity card relating to widow''s pension. Ex.P15 is the Income tax return. Ex.P16 is the
telephone bill. 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 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
(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 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 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 Chinnasamy was aged about 55 years. He was Ex-serviceman. In his driving licence, the date of birth
was mentioned as 09.12.1940. As per the said document, the age of the deceased was 59 years at the time of the accident. Considering the same,
the Tribunal has taken the age group from 55 to 60 and adopted the multiplier of ""8"". PW1, the wife of the deceased, in her evidence has stated
that the deceased was getting pension at Rs. 4,485/- and Rs. 5,000/- from Agriculture and also Rs. 6,000/- from Aristo Equipments, in which, he
invested some amount. To prove the agricultural income, the claimants filed Exs.P4 to P6, Chitta and Adangal. Considering the oral and
documentary evidence, the Tribunal has fixed the monthly income of the deceased at Rs. 6,000/- which inclusive of pension and estimate of Rs.
1500/- towards agriculture income and determined the annual income at Rs. 72,000/- and determined the loss of income at Rs. 5,76,000/-
(Rs.72,000 x 8). Out of the said amount, the Tribunal has deducted 1/3 of Rs. 1,92,000/- towards personal expenses and the balance sum of Rs.
3,84,000/- was taken as the loss of income. The learned Counsel appearing for the appellant-Transport Corporation vehemently contended that
the Tribunal ought not to have taken Rs. 1500/- towards agricultural income and there is no evidence available on record. After taking into
consideration the materials on record, it is reasonable to fix the monthly income of the deceased at Rs. 5400/-. If 1/3 of Rs. 1800/- is deducted
towards personal expenses, the balance sum of Rs. 3,600/- is taken as the monthly contribution to the family of the deceased and the annual
income works out to Rs. 43,200/-. There is no dispute regarding the multiplier adopted by the Tribunal. If multiplier 8 is adopted, the loss of
income to the family would come to Rs. 3,45,600/- as against Rs. 4,08,000/- awarded by the Tribunal. The Tribunal has awarded a sum of Rs.
5,000/- towards loss of consortium. Taking into consideration the age of the wife was 55 years at the time of the accident, it is very reasonable and
the same is confirmed. The Tribunal has awarded a sum of Rs. 5,000/- towards loss of estate, which is very reasonable and the same is confirmed.
The Tribunal has awarded a sum of Rs. 2000/- towards funeral expenses, which is very low and it is reasonable to award Rs. 5,000/- under this
head as against Rs. 2,000/- awarded by the Tribunal. The Tribunal has not awarded any amount towards loss of love and affection and transport
charges. The claimants are the wife and son. Considering the same, it would be reasonable to award Rs. 5,000/- towards loss of love and affection
and Rs. 2,500/- towards transport charges. The Tribunal has fixed the rate of interest at 9% p.a from the date of petition. The date of accident is
24.10.1999. Keeping in view the prevailing rate of interest at the time of the accident, I feel that the interest awarded by the Tribunal is reasonable
and the same is confirmed. The details of the modified compensation as per the above discussion are as under:
Loss of income Rs. 3,45,600/-
Loss of consortium Rs. 5,000/-
Loss of estate Rs. 5,000/-
Funeral Expenses Rs. 5,000/-
Loss of love and affection Rs. 5,000/-
Transport charges Rs. 2,500/-
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Total Rs. 3,68,100/-
Therefore, the claimants are entitled to the modified compensation of Rs. 3,68,100/- as against Rs. 3,96,000/- awarded by the Tribunal.
It is represented by the learned Counsel appearing for the appellant-Transport Corporation that already the award amount has been deposited
as per the order of this Court. In such circumstances, Respondents 1 and 2/claimants are permitted to withdraw the modified award amount of Rs.
3,68,100/- with interest at 9% per annum from the date of petition, after adjusting the amount already withdrawn, on making proper application.
The appellant-Transport Corporation is also permitted to withdraw the balance amount on making proper application.