Devi & Others Vs. Mohammad Tabbar & another  INSC 500 (25 March 2008)
S.B. Sinha & V.S. Sirpurkar (Arising out of SLP (C) No.16034 of 2007) V.S. SIRPURKAR,J.
1. Leave granted.
2. This appeal is filed by the widow and five children of one Rajendra Singh
who died in an accident on 12.4.2004 when he was riding on his bicycle and was
given a dash by the offending vehicle, a Canter Truck bearing Registration
No.UA-04-1486. Rajendra Singh died on the spot. The driver of the offending vehicle was caught on the spot. The claimants,
therefore, filed the claim before the Motor Accidents Claims Tribunal on the
basis that Rajendra Singh used to earn Rs.140/- per day and Rs.4200/- per month
and that his age at the time of accident was barely 35 years. In support of the
claim, three witnesses including Laxmi Devi, the wife of the deceased were
examined and the Tribunal, on the basis of the evidence, held that the deceased
Rajendra Singh died on account of the injuries sustained by him in the accident
on 12.4.2004 which accident had occurred due to rash and negligent driving of
the offending vehicle. As regards the income, the Tribunal assessed the same at
Rs.15,000/- per annum on the basis of the notional income prescribed in Second
Schedule under Section 163-A of the Motor Vehicles Act. After deducting 1/3rd
of the said amount as the personal expenses of the deceased, the claimants
dependency was assessed at Rs.10,000/- per month and by multiplying the annual
dependency of Rs.10,000/- with the multiplier of 16, the compensation was
worked out to Rs.1,60,000/-. The other claims were also awarded being
Rs.2,000/- for funeral expenses, Rs.5,000/- for loss of consortium to the widow
and Rs.2,000/- for loss of estate. Thus a total sum of Rs.1,69,000/- was
awarded as compensation to the claimants. The Tribunal directed the payment of
interest on the amount of compensation at the rate of 6% per annum from the
date of claim petition.
3. An appeal came to be filed before the High Court by the claimants. No appeal, however, was filed by the Insurance Company or the owner of the
vehicle. It was contended before the High Court that there was no basis for
arriving at the notional income at Rs.15,000/- per annum and in fact the income
was much more than that for which the evidence of Laxmi Devi was led.
Therefore, the enhanced compensation was claimed in the appeal. As against this
it was argued that the Tribunal had erred in applying the higher multiplier of
16. Reliance was placed on a reported decision of this Court in T.N. State
Transort Corporation Ltd. vs. Rajapriya and [(2005) 6 SCC 236].
4. The High Court confirmed the earlier findings regarding the negligence of
death. However, the High Court came to the conclusion that though the claim of
the income of Rs.4200/- per month was not reliable, the notional income should
have been held to be Rs.36,000/- per annum, i.e., Rs.3,000/- per month. For
this proposition the High Court held that the notional income of Rs.15,000/- in
the Second Schedule was prescribed in the year 1994 while the accident had
taken place in the year 2004. The second reason given by the High Court was
that even an unskilled labourer, these days, can easily earn Rs.100/- per day
and Rs.3,000/- per month and, therefore, the High Court held the income to be Rs.36,000/-
per annum and by deducting 1/3rd of the income of the deceased for his personal
expenses, the claimants dependency was assessed at Rs.24,000/- per annum.
However, the High Court reduced the multiplier of 16 applied by the Tribunal to
12. For this action, the High Court relied on the aforementioned judgment in
T.N. Transports Corporations case. The High Court thus applied the multiplier of 12 instead of 16 and
ultimately the High Court arrived at the figure of Rs.2,88,000/- and to this
the other compensation on account of funeral expenses, loss of consortium to
the widow and loss of estate, which were granted by the Tribunal, were added
and the total compensation of Rs.2,97,000/- was awarded by the High Court. The
claimants, dissatisfied with this finding, have filed this appeal before us.
5. Learned counsel for the claimants urged that the High Court erred in
applying the multiplier of 12 particularly when the deceased was only 35 years
old and none of the claimants was more than that age. Learned counsel further
urged that the deceased had left behind four minor daughters along with a young
wife. It was urged that considering the fact that only 6% interest was granted,
the multiplier of 12 was not a proper multiplier and the multiplier as found by
the Tribunal should have been retained. As against this, the learned counsel
for the Insurance Company supported the order of the High Court and claimed
that in fact the compensation granted by the High Court was on higher side.
6. We have considered the contentions as well as the law laid down in T.N.
Transport Corporations case (supra). In the said decision this Court,
after considering the rulings in G.M. Kerala SRTC v. Susamma Thomas [(1994) 2
SCC 1760, U.P. SRTC v. Trilok Chandra [(1996) 4 SCC 362] as also the other
English cases such as Davies v. Powell Duffryn Associated Collieries Ltd.
[(1942) 1 All ER 657 (HL)] and Nance v. British Columbia Electric Rly. Co.
Ltd., [(1951) 2 All ER 448] observed in para 12 that: 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.
This Court then observed in para 16 as under:
In Susamma Thomas case it was noted that the normal rate of interest
was about 10% and accordingly the multiplier was worked out. As the interest
rate is on the decline, the multiplier has to consequentially be raised.
Therefore, instead of 16 the multiplier of 18 as was adopted in Trilok Chandra
case appears to be appropriate. It was also further observed by this Court
that: The highest multiplier has to be for the age group of 21 years to 25
years when an ordinary Indian citizen starts independently earning and the
lowest would be in respect of a person in the age group of 60 to 70, which is
the normal retirement age. In para 17 of the judgment this Court came to
the conclusion that the appropriate multiplier would be 12 and not 16 in case
of a person where the deceased was 38 years old and the interest was granted at
9% per annum from the date of claim petition. The Court, therefore, reduced the
multiplier from 16 to 12 and also reduced the rate of interest to 7.5% per
annum. It seems that based on that findings the High Court has reduced the
multiplier in the present case.
7. Considering the above principles in this case, we must say that the High
Court has definitely erred in bringing down the multiplier to 12. It is to be
seen that in this case the deceased was 35 years old. The claimants are his
wife and four minor daughters. Even as per the Second Schedule the multiplier
in case of the persons between 35 to 40 years is 16. In the present case the
rate of interest granted is only 6% considering the general rate of interest
prevalent in 2004. In our opinion, therefore, the proper multiplier would be 14
as the value of the notional income has been increased. It was nobody is
case that the deceased was not working at all. His wife has entered in the witness box and had asserted that he earned
Rs.140/- per day. Even if we ignore the exaggeration, the figure arrived at by
the High Court at Rs.100/- per day and Rs.3,000/- per month appears to be
correct. However, considering that the claimant would get only 6% interest, we
would chose to grant the multiplier of 14 instead of 12. Accordingly the notional income as applied would be Rs.24,000 x 14 =
Rs.3,36,000/- and to this will be added the other compensation like Rs.2,000/-
as funeral expenses, Rs.5,000/- for the loss of consortium to the widow and
Rs.2,000/- for the loss of estate. The claimants would, therefore, be entitled
to a sum of Rs.3,45,000/-. The said sum shall carry the interest at the rate of
6% per annum from the date of claim petition. 8. In view of the above, the appeal is allowed. There would be no order as