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Judgment
P.P.S. Janarthana Raja, J.—The appeal is preferred by the claimants against the award dated 04.03.2004 made in MCOP No. 859 of
2002 by the Motor Accident Claims Tribunal (Chief Judge, Court of Small Causes), Chennai.
Background facts in a nutshell are as follows:
The deceased Ashok Kumar met with motor vehicle accident that took place on 19.08.2001 at about 16.10 hours. While he was travelling as a
pillion rider in a motor cycle bearing registration No. TN-20-W-9938 from South to North at ECR Road, the rider/owner Satish kumar drove the
said vehicle in a rash and negligent manner and hit the stationed TATA Sumo bearing registration No. TN-09-9122. Due to which, the motor cycle
was capsized and the deceased sustained grievous injuries. Immediately he was taken to Malar hospital, Chennai, where he died on the same day.
The claimants are mother and father of the deceased. They claimed a sum of Rs. 10,00,000/- as compensation. The second respondent-Insurance
company resisted the claim. On pleadings the Tribunal framed the following issues:
Whether the accident occurred due to the rash and negligent driving of the rider of the motor cycle N-20-W-9938?
Whether the petition is to be dismissed for non-joinder of necessary parties?
Whether the petitioners are entitled for the compensation as claimed for?
To what relief?
After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to rash and negligent driving of the
rider of the motor cycle, which was insured with the second respondent-Insurance company and also held that there was no necessity to implead
the owner and insurer of the parked car and awarded a compensation of Rs. 4,23,855/- 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 to the family Rs. 3,90,000/-
Medical expenses Rs. 13,855/-
Loss of expectation of life Rs. 7,500/-
Loss of love and affection Rs. 7,500/-
Funeral expenses Rs. 5,000/-
Total. Rs. 4,23,855/-
Aggrieved by that award, the claimants have filed the present appeal for enhancement.
The learned Counsel appearing for the appellants/claimants questioned only the quantum of compensation awarded by the Tribunal and
contended that the compensation awarded by the Tribunal is very low and meagre and the Tribunal ought to have awarded compensation as
claimed by the claimants and the Tribunal has not followed the principles of assessment before passing the award and the amount awarded by the
Tribunal is very low and meagre and seeks enhancement of the compensation.
Learned Counsel appearing for the second respondent-Insurance Company 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. Hence the order of the Tribunal is
in accordance with law and the same has to be confirmed.
Heard the counsel. On the side of the claimants PWs.1 to 3 were examined and documents Exs.P1 to P11 were marked. On the side of the
respondents no one was examined and no document was marked to substantiate their claim. PW1 is the mother of the deceased Suresh. PW2 is
an eye witness to the accident. PW3 is the employer of the deceased. Ex.P1 is the copy of the First Information Report. Ex.P2 is the copy of the
charge sheet. Ex.P3 is the death report. Ex.P4 is the copy of Post Mortem certificate. Ex.P5 is the medical receipts series. Ex.P6 is the copy of
legal heirship certificate. Ex.P7 is the transfer certificate. Ex.P8 is the B.E. Degree certificate. Ex.P9 is the salary certificate. Ex.PIO is the Xerox
copy of identity card. Ex.P11 is the copy of confirmation letter 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 rider of the motor cycle 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,1 M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181, para 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 Suresh was aged about 24 years. He was a degree-holder in Bachelor of Mechanical Engineering and
was working as Software Engineer. He was earning Rs. 4,000/- per month. PW3, who is the employer of the deceased, has deposed that the
deceased was a permanent employee and Ex.P11 is the confirmation letter given by the employer and Ex.P9 is the salary certificate. PW1, the
mother of the deceased, deposed that the accident occurred due to rash and negligent driving of the rider of the motor cycle. The evidence of
PW2 also corroborated the same. Immediately after the accident, the deceased was admitted in Malar Hospital, where he died on the same day.
The Tribunal, considering the oral and documentary evidence and also future prospects of the deceased, has fixed the monthly income at Rs.
5,000/- and following the unreported judgment of this Court in the case of Ananda Oil Corporation and Anr. v. M. Subramani and Anr. CMA.
182/02 and 252/01 held that the parents of the bachelor deceased are entitled to 50% of the income of the deceased and fixed the monthly
dependency at Rs. 2,500/- (Rs. 5000 x 50%). The Tribunal, taking into consideration the age of the mother as 49 years, adopted the multiplier of
13"" and awarded a sum of Rs. 3,90,000/-(2,500 x 12 x 13) towards loss of dependency. Learned Counsel appearing for the claimants
vehemently contended that the multiplier adopted by the Tribunal is not in accordance with law and relied on the decision of Sarla Verma and Ors.
v. Delhi Transport Corporation and Anr. reported in (2009) 4 MLJ 997, wherein the Apex Court considered the scope of awarding compensation
towards future prospects and held that where the deceased had a permanent job and was below 40 years, an addition of 50% of actual salary to
the actual salary income of the deceased towards future prospects would be given and para 11 reads as follows:
In Susamma Thomas, this Court increased the income by nearly 100%, in Sarla Dixit, the income was increased only by 50% and in Abati
Bezbaruah the income was increased by a mere 7%. In view of imponderable and uncertainties, we are in favour of adopting as a rule of thumb, an
addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job
and was below 40 years. (Where the annual income is in the taxable range, the words ''actual salary'' should be read as ''actual salary less tax'').
The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more
than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different
yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary
(without provision for annual increments, etc.), the Courts will usually take only the actual income at the time of death. A departure therefrom
should be made only in rare and exceptional cases involving special circumstances.
In the present case the salary of the deceased was Rs. 4000/- p.m. There is no dispute regarding the same. Taking into consideration the principles
enunciated in the judgment cited above, if 50% of the salary of the deceased is added, the salary of the deceased would be at Rs. 6,000/- p.m.
(Rs. 4,000 + 2000). As per the said judgment, since the deceased is a bachelor, 50% of the salary of Rs. 3,000/- (Rs. 6,000 x 50%) is to be
deducted towards personal expenses and the balance sum of Rs. 3,000/- is taken as the monthly contribution to the family of the deceased and the
annual contribution works out to Rs. 36,000/- (Rs. 3000x12). In the present case, the claimants are the parents and, since the deceased is a
bachelor, the Tribunal is correct in adopting the multiplier of ''13'' considering the age of the mother and the loss of income works out to Rs.
4,60,000/- (Rs. 3000 x 12 x 13) as against Rs. 3,90,000/- awarded by the Tribunal. The Tribunal awarded a sum of Rs. 13,855/- towards
medical expenses. Immediately after the accident, he was admitted in Malar Hospital, Chennai. Ex.P5 is the series of medical receipts. It is the
actual expenditure incurred by the deceased. Hence, the amount awarded under this head is very reasonable and the same is confirmed. The
Tribunal has awarded a sum of Rs. 7,500/- towards loss of expectation of life, which is very low. Taking into consideration the age of the
deceased was 24 years at the time of the accident, it would be reasonable to award a sum of Rs. 25,000/- under this head as against Rs. 7500/-
awarded by the Tribunal. The Tribunal has awarded a sum of Rs. 7500/- towards loss of love and affection. The claimants are parents of the
deceased. They lost their only son. After taking into consideration the above fact and also considering the age of the parents, I feel that it would be
reasonable to award a sum of Rs. 50,000/- (Rs. 25,000/- each) under this head as against Rs. 7,500/- awarded by the Tribunal. The Tribunal has
awarded a sum of Rs. 5,000/- towards funeral expenses, which I feel is very reasonable and the same is confirmed. The Tribunal has not awarded
any amount towards transport charges. Immediately after the accident the claimant was admitted in the hospital. Therefore, it would be reasonable
to award Rs. 5,000/- towards transport charges. The Tribunal has awarded interest at 9% p.a from the date of petition. The date of accident is
18.08.2001. Keeping in view the prevailing rate of interest at the time of the accident and the date of award, I feel that the rate of interest awarded
by the Tribunal is very reasonable and the same is confirmed. The details of the modified compensation as per the above discussion are as under:
Loss of income to the family Rs. 4,60,000/-
Medical expenses Rs. 13,855/-
Loss of expectation of life Rs. 25,000/-
Loss of love and affection Rs. 50,000/-
Funeral expenses Rs. 5,000/-
Transport charges Rs. 5,000/-
Total Rs. 5,58,855/-
Less: Already awarded amount Rs. 4,23,855/-
Enhanced amount Rs. 1,35,000/-
Therefore, the appellants/claimants are entitled to the enhanced compensation of Rs. 1,35,000/- with interest at 7.5% from the date of petition.
The second respondent/Insurance company is directed to deposit the enhanced compensation of Rs. 1,35,000/- with interest at 7.5% from the
date of petition within a period of six weeks from the date of receipt of a copy of this order. On such deposit, the appellants-claimants are
permitted to withdraw the same on proper application.
With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.