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Judgment
M.S. Shah, J.—This appeal is directed against the judgment and award dated 21.12.2005 passed by the Motor Accidents Claims Tribunal (Aux.), Vadodara in the MAC, Petition No. 417 of 1996 by which the Tribunal has awarded compensation of Rs. 13,82,000 to the claimants with proportionate costs and interest at the rate of 9 per cent per annum from the date of the claim petition till realisation.
Deceased Satishbhai Bhagat (Patel) was riding his Kinetic Honda scooter from Bodeli to Sankheda for office work on 1.3.1996 at about 12.45 p.m. At that time, Tempo insured by the appellant insurance company came from the opposite direction and in a collision between a Tempo and scooter, Satishbhai received serious head injuries. During the course of treatment, Satishbhai succumbed to the injuries and his widow and two minor children and his mother filed the claim petition and claimed compensation of Rs. 15,00,000 from the driver, owner and insurance company of Tempo.
On the question of negligence, after going through the oral and documentary evidence on record, the Tribunal held that the deceased died in a motor vehicle accident caused by rash and negligent driving of Tempo by original opponent No. 1.
Although Mr. Mehta, learned Counsel for the appellant insurance company made an attempt to assail the said finding, in the facts and circumstances of the case and the evidence on record, he has not been able to make any dent to the said finding and we do not think that any further discussion is called for on the question of negligence.
Coming to the question of quantum of compensation, the Tribunal gave the following reasoning to assess and award compensation for loss of future dependency at Rs. 13,65,000:
In support of her say, applicants have produced the income tax return at Exh. 26 in which the total income is shown as Rs. 89,989 round about Rs. 90,000 per annum, i.e., to say Rs. 7,500 per month and if he would have survived then he would have earned Rs. 10,000 per month and hence, to ascertain his monthly income (Rs. 10,000 + Rs. 7,500 = Rs. 17,500 divided by 2), which comes to Rs. 8,750 per month is the prospective income. Thus, Rs. 8,750 x 3 = Rs. 26,250 divided by 2 comes to Rs. 13,125, in which 1/3rd towards expenses of the deceased himself should be deducted which comes to Rs. 8,750 p.m. So, the annual income comes to Rs. 1,05,000 (Rs. 8,750 x 12). Looking to the School Leaving Certificate, Exh. 23, deceased was aged about 46 years at the time of accident. Therefore, as per Second Schedule to the Motor Vehicles Act, 1988, a multiplier of 13 is applied. Hence, the amount of Rs. 13,65,000 (Rs. 1,05,000 x 13) can be awarded for loss of future dependency.
Further awarding Rs. 10,000 as the conventional amount of compensation for loss of consortium, etc. and Rs. 5,000 towards funeral expenses and Rs. 2,000 towards transportation charges, the Tribunal made a total award of Rs. 13,82,000.
Mr. Mehta, learned Counsel for the insurance company has vehemently challenged the aforesaid reasoning and finding of the Tribunal on the score of compensation for loss of future dependency.
We find considerable substance in the said submission. Once, the Tribunal assessed the actual income of the deceased on the date of the accident at Rs. 7,500 per month, we fail to see how the learned Judge assessed the prospective income of the deceased at Rs. 8,750 then multiplied it by 3 and divided it by 2 to arrive at the figure of Rs. 13,125.
As per the principles laid down by this Court in several decisions for computing the prospective income, all that learned Tribunal is required to do is to double the present actual income, add it to the actual income and divide the total by two. In our view, the easiest method of calculating the future income or the prospective income is to take the actual income and add thereto 50 per cent of the actual income. On this basis, the prospective income of the deceased would be Rs. 7,500 + 50 per cent of Rs. 7,500 = Rs. 11,250. Deducting therefrom 1/3rd amount towards the expenses which the deceased would have incurred on himself, the actual dependency benefit would come to Rs. 7,500.
Thus, in view of the above, the loss of dependency benefit has to be assessed at Rs. 7,500 and multiplying the said amount by 12 months, the loss of annual dependency benefit would work out to Rs. 90,000.
The above calculations will also show that increasing the actual income by 50 per cent to arrive at the prospective income (i.e., multiplying the actual income by 3/2) and, thereafter, reducing the same by 1/3rd amount which the deceased would have spent on himself, remaining amount would be 2/3rd of the prospective income and this final figure would be the amount of dependency benefit which is being lost by the claimants on account of the death of the deceased in the motor vehicle accident. Hence, in a given case where the age, occupation and future career prospects of the deceased justify taking a higher amount as the prospective income of the deceased as compared to the actual income, from all practical purposes, the easiest method of computing the dependency benefit would be to take actual monthly/annual income of the deceased on the date of the accident itself as the monthly/annual dependency benefit, as the aforesaid calculations would clearly bear out.
Coming to the question of multiplier, Mr. Mehta has vehemently submitted that multiplier of 13 adopted by the Tribunal is on the higher side and has submitted that when the multiplicand is a high amount, the Apex Court as well as this Court have been adopting a multiplier lower than the figure indicated in the Second Schedule to the Motor Vehicles Act, 1988.
On the other hand, Mr. Hiren Modi, the learned advocate for the respondents-claimants has supported the judgment of the Tribunal and has submitted that the multiplier of 13 is as per the Second Schedule to the Act and, therefore, no reduction of the multiplier is called for.
Having heard the learned Counsel for the parties, we are of the view that even proceeding on the basis that when the multiplicand is on the higher side, the multiplier cannot be as high as the figure indicated in the Second Schedule, in the facts of the present case, we find that the deceased was not only employed with a private company, but he was also acting as a working partner in the firm called Patel Investment. In the facts and circumstances of the present case, therefore, it would be just and proper to adopt the multiplier of 12. Accordingly, the compensation for loss of dependency benefit would work out to Rs. 90,000 x 12 = Rs. 10,80,000. Adding thereto, Rs. 10,000 as the conventional amount for loss to the estate and another Rs. 10,000 for loss of consortium, plus Rs. 7,000 as awarded by the Tribunal for funeral expenses and transportation charges, the total amount of compensation would come to Rs. 11,07,000.
Mr. Mehta for the appellant insurance company states that pursuant to the order dated 23.3.2006 passed by this Court of Civil Application No. 3513 of 2006, the insurance company had deposited the amount of compensation as awarded by the Tribunal together with interest and costs, being Rs. 24,32,960 and that the amount was deposited as per the said interim order of this Court.
In view of the above discussion, the appeal is partly allowed in the following terms:
(A) Amount of compensation awarded by the Tribunal at Rs. 13,82,000 is reduced to Rs. 11,07,000. The amount of compensation shall be paid with proportionate costs and with interest at the rate of 9 per cent per annum from the date of the claim petition till the date of deposit. This award is made jointly and severally against all the opponents in the claim petition, i.e., the appellant insurance company as well as driver and owner of Tempo involved in the accident.
The amount of compensation, if any, paid or deposited u/s 140 of the Act shall be adjusted against the aforesaid amount awarded under this judgment.
(B) The Tribunal shall liquidate the fixed deposits and refund the differential amount being Rs. 2,75,000 with proportionate costs and interest thereon to the appellant insurance company within one month from the date of receipt of the writ of this Court.
(C) The balance amount shall be apportioned in favour of claimants, i.e., widow, daughter, son and mother of the deceased in the ratio of 70:10:10:10 respectively.
(D) After apportionment in favour of the claimants as aforesaid, the Tribunal shall invest the entire amount payable to claimant No. 1 (widow of the deceased) in fixed deposits with a nationalised bank near her residence for a period of five years with usual conditions about prohibition against the premature encashment/encumbrance, etc. of the deposits and with permission to the claimant No. 1 to withdraw the interest periodically accruing on such fixed deposits.
Out of the amounts payable to claimant Nos. 2, 3 and 4 and 50 per cent of the amounts shall be invested in fixed deposits with a nationalised bank near the residence of claimants for a period of five years with usual conditions about prohibition against premature encashment/encumbrance, etc. of the deposits and with permission to the respective claimants to withdraw the interest periodically accruing on such fixed deposits. The balance 50 per cent amount payable to claimant Nos. 2, 3 and 4 shall be disbursed to them by account payee cheques in favour of the respective claimants after proper verification and after informing the claimants about the amounts being disbursed to them, the amounts being invested and the conditions on which the investments are made.
Investments shall be made in more than one fixed deposits of varying amounts.
(E) In case the claimants require any further amounts on account of genuine need in future, it will be open to them to apply to the Tribunal for further disbursement. However, in such a case, the disbursement shall be made first from out of the amounts payable to claimant Nos. 2 and 3.
Since, the appeal is disposed of Civil Application No. 3513 of 2006 filed by the insurance company as well as Civil Application No. 10781 of 2006 filed by the claimants for disbursement do not survive and are accordingly disposed of as infructuous.