P.S. Somanathan and
Ors. Vs District Insurance Officer and ANR.
J U D G M E N T
GANGULY, J.
1.
Delay
condoned.
2.
Leave
granted.
3.
One
Suresh Chandra Babu, was walking along the side of Alappuzha-Kollam National Highway
near Punnapra junction on 25.07.1994, when a lorry (bearing registration No. KL
4/6802) which was being driven rashly suddenly hit him. As a result of which he
sustained serious injuries and died on the spot. The lorry which was insured
with the first respondent was owned by the second respondent.
4.
The
appellants (claimants) who are the family members of the deceased filed a claim
petition before the Motor Accident Claims Tribunal (MACT), claiming Rs.1,75,000/-
as compensation. The same was contested by the first and second respondents.
5.
Before
the MACT, the following issues were framed:
i.
"Whether
the accident was due to the rash and negligent driving of the second respondent
herein?
ii.
Whether
the petitioners were entitled to get any compensation and if so, what was the quantum
and who all were liable?"
6.
Based
on the evidence on record, MACT concluded that the accident had occurred in view
of the rash and negligent driving of the second respondent and it awarded a
total compensation of Rs.1,71,600/- together with interest at the rate of 12%
p.a. and cost of Rs.1,500/-. It calculated the same as follows: "...Suresh
Chandra Babu aged 33 years died due to injuries sustained in the accident. PW1 swears
that at the time of accident Suresh Chandra Babu was working as an operator in Motherland
Industries, Punnapra and was getting Rs.4,500/- p.m. In Ext. A1 FIR, it is stated
that Suresh Chandra Babu was working as a mechanic operator in Motherland Industries
Company. PW1 swears that Suresh Chandra Babu was unmarried and he was looking after
the affairs of the family. Considering the nature of the work done by deceased
Suresh Chandra Babu, his monthly income can be assessed as Rs.1,200/- for the purpose
of calculating just compensation. After deducting his personal expenses he would
be contributing Rs.800/- p.m. to his mother- the first petitioner. In this manner,
the annual dependency of the first petitioner of the deceased comes to Rs.9,600/-.
In this case 16 can be determined as suitable multiplier. Therefore, the amount
of compensation on account of loss of dependency comes to Rs.1,53,000/-. Rs.15,000/-
can be awarded towards compensation for pain and suffering. Rs.1,900/- can be awarded
towards transportation charges and Rs.2,000/- can be awarded towards funeral expenses.
Thus, in total, the petitioner is entitled to get Rs.1,71,600/- as compensation.
7.
The
first respondent appealed against the judgment of the MACT before the High Court
of Kerala at Ernakulam.
8.
The
High Court, vide its impugned judgment, reduced the compensation to Rs.85,000/-
along with interest at the rate of 12% p.a., the relevant portion of High Court
judgment reads as follows: "Heard both sides. The learned Government Pleader
submits that father was aged about 70 years even at the time of the accident and
therefore the Tribunal had committed an error in fixing the multiplier at 16 whereas
it has to only apply a multiplier of
In the award, the age
of first claimant is not shown but the daughter of the first claimant namely Leela
has filed an affidavit before this Court for getting impleaded as I.A. 1407/06
where her age is shown as 61 years. So it is clear that she would be 49 years at
the time of the accident and therefore even if the minimum age that can be fixed
for the mother will be 67 years and not less. The mother is the real legal representative
and others cannot claim the status of legal representative and therefore the appropriate
multiplier to be used in this case is only..
It is true that the Tribunal
has taken his income at Rs.1,200/- per month whereas claimants claimed that the
deceased was getting an amount of Rs.1,500/- as his income. We fix it at Rs.1,500/-
deduct 1/3rd for personal expenses and applying a multiplier of 5 the loss of dependency
compensation would come to Rs.60,000/-. The Tribunal has awarded Rs.15,000/- towards
pain and suffering, Rs.1,000/- towards transportation charges and Rs.2,000/- for
funeral expenses. They are only just and reasonable and we do not find any ground
to interfere with the same. But the Tribunal has not awarded any amount towards
love and affection. Hence, we grant an amount of Rs.5,000/- under that head and
also award a sum of Rs.2,500/- towards loss of estate. Therefore, the total compensation
that the claimants are entitled to will be Rs.85,000/-.
9.
Aggrieved
with the judgment of the High Court, the appellants (claimants) filed a Special
Leave Petition before this Court.
10.
On
the question of fixing the quantum of compensation in motor accident claim cases,
this Court has laid down several guidelines.
11.
In
the case of Concord of India Insurance Co. Ltd. v. Nirmala Devi [(1979) 118 ITR
507(SC)], Justice Krishna Iyer, speaking for a Bench of this Court, observed that
the determination of compensation must be liberal, not niggardly since the law
values life and limb in a free country in generous scales.
12.
In
the case of General Manager, Kerala State Road Transport Corporation,
Trivandrum v. Mrs. Susamma Thomas and Ors. [AIR 1994 SC 1631], this Court held
that: "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 together. 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 capitalized by multiplying it by a figure representing
the proper number of year's purchase. Much of the calculation necessarily remains
in the realm of hypothesis "and in that region arithmetic is a good servant
but a bad master" since there are so often many imponderables. In every case
"it is the overall picture that matters" and the court must try to
assess as best as it can the loss suffered."
13.
The
Bench also observed that the proper method of computation is the multiplier-method,
which was an accepted method of arriving at `just' compensation. Any departure,
save in exceptional and extraordinary cases, would introduce inconsistency of principle,
lack of uniformity and an element of unpredictability for the assessment of compensation.
Further, the Bench held that the multiplier was determined by two factors,
namely, the rate of interest appropriate to a stable economy and the age of the
deceased or of the claimant whichever was higher.
14.
The
principles laid down in Susamma (supra) were upheld in the case of U.P. State Road
Transport Corporation and Ors. v. Trilok Chandra and Ors. [(1996) 4 SCC 362].
15.
In
the case of Tamil Nadu State Transport Corporation Ltd. v. S. Rajapriya Ors.
[AIR 2005 SC 2985], this Court observed that the choice of the multiplier was
to be determined by the age of the deceased (or that of the claimants whichever
is higher) and by the calculation as to what the capital sum, if invested at a rate
of interest appropriate to a stable economy, would yield by way of annual interest.
In ascertaining this, regard was also to be had to the fact that ultimately the
capital sum would also be consumed-up over the period for which the dependency
was expected to last.
16.
In
United India Insurance Co. Ltd. v. Bindu & Ors. [(2009) 3 SCC 705], this Court
again reiterated that the choice of the multiplier was to be determined by the
age of the deceased (or that of the claimants whichever is higher) and by the calculation
of a capital sum which, if invested at a rate of interest appropriate to a stable
economy, would yield by way of annual interest.
17.
In
Supe Dei (Smt) & Ors. v. National Insurance Co. Ltd. & Anr. [(2009) 4 SCC
513], the Court observed that while considering the question of just compensation
payable in a case all relevant factors including appropriate multiplier had to be
considered, and that the Second Schedule under Section 163-A to the Motor Vehicles
Act, 1988, which gave amount of compensation to be determined for purpose of claim
under the section, could be taken as a guideline while determining the
compensation under Section 166 of the Act.
18.
In
Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr. [(2009)
6 SCC 121], this Court formulated the principles very lucidly and which are
quoted below:"Basically only three facts need to be established by the
claimants for assessing compensation in the case of death:
a. age of the deceased;
b. income of the
deceased; and the
c. the number of
dependents. The issues to be determined by the Tribunal to arrive at the loss of
dependency are:
i.
additions/deductions
to be made for arriving at the income;
ii.
)
the deduction to be made towards the personal living expenses of the deceased;
and
iii.
the
multiplier to be applied with reference of the age of the deceased. If these determinants
are standardized, there will be uniformity and consistency in the decisions. There
will lesser need for detailed evidence.
It will also be
easier for the insurance companies to settle accident claims without delay. To have
uniformity and consistency, the Tribunals should determine compensation in
cases of death, by the following well-settled steps:Step 1 (Ascertaining the
multiplicand)The income of the deceased per annum should be determined. Out of the
said income a deduction should be made in regard to the amount which the deceased
would have spent on himself by way of personal and living expenses.
The balance, which is
considered to be the contribution to the dependant family, constitutes the
multiplicand. Step 2 (Ascertaining the multiplier) Having regard to the age of the
deceased and period of active career, the appropriate multiplier should be selected.
This does not mean ascertaining the number of years he would have lived or
worked but for the accident. Having regard to several imponderables in life and
economic factors, a table of multipliers with reference to the age has been identified
by this Court. The multiplier should be chosen from the said table with reference
to the age of the deceased. Step 3 (Actual calculation) The annual contribution
to the family (multiplicand) when multiplied by such multiplier gives the `loss
of dependency' to the family."
19.
Further,
this Court considered the principles laid down in Susamma (supra), Trilok Chandra
(supra) and New India Assurance Co. Ltd. v. Charlie & Anr. [(2005) 10 SCC 720]
and gave the following table for multiplier: Age of Multiplier Multiplier Multiplier
Multiplier Multiplier the Scale as Scale as Scale in specified actually used Deceased
envisaged adopted by Trilok in Second in Second in Susamma Trilok Chandra as Column
in Schedule to Thomas Chandra clarified the Table the MV Act (as in Charlie in
Second seen from the Schedule quantum of to the MV compensation) Act (1) (2) (3)
(4) (5) (6) Up to - - - 15 20 15 yrs 15 to 16 18 18 16 19 20 yrs21 to 15 17 18 17
1825 yrs26 to 14 16 17 18 1730 yrs31 to 13 15 16 17 1635 yrs36 to 12 14 15 16 1540
yrs41 to 11 13 14 15 1445 yrs46 to 10 12 13 13 1250 yrs51 to 9 11 11 11 1055
yrs56 to 8 10 09 8 860 yrs61 to 6 08 07 5 665 yrs Above 5 05 05 5 565 Yrs
20.
In
the present case, the claimants had filed for compensation under Section 166 of
the Motor Vehicles Act, 1988. The original claim petition had been filed by the
mother and brother of the deceased and the deceased was 33 years of age when
he died in the accident.
21.
For
the purpose of calculating the multiplier, the High Court held that mother was the
real legal representative and others could not claim to be the legal representatives
of the deceased, and accordingly applied a multiplier of 5, whereas the Tribunal
had calculated compensation by considering a multiplier of 16.
22.
This
Court is of the opinion that the law as has been laid correctly in the case of Sarla
Varma (supra), in a very well considered judgment, is to be followed.
23.
The
High Court unfortunately took a very technical view in the matter of applying the
multiplier. The High Court cannot keep out of its consideration the claim of the
daughter of the first claimant, since the daughter was impleaded, and was 49 years
of age. Admittedly, the deceased was looking after the entire family. In determining
the age of the mother, the High Court should have accepted the age of the mother
at 65, as given in the claim petition, since there is no controversy on that. By
accepting the age of mother at 67, the High Court further reduced the multiplier
from 6 to 5, even if we accept the reasoning of the High Court to be correct. The
reasoning of the High Court is not correct in view of the ratio in Sarla Verma (supra).
Following the same the High Court should have proceeded to compute the
compensation on the age of the deceased.
24.
Thus,
the finding of the High Court is contrary to the ratio in Sarla Verma (supra),
which is the leading decision on this question and which we follow.
25.
This
Court, therefore, cannot sustain the High Court judgment and is constrained to set
aside the same. The award of MACT is restored.
26.
The
appeal is allowed. No costs.
.....................J.
(G.S. SINGHVI)
.....................J.
(ASOK KUMAR GANGULY)
New
Delhi
February
17, 2011
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