M/s. United India Insurance Company Limited v. 1.Ammu alias Guruprabha

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 26.11.2008CORAMTHE HONOURABLE MR.JUSTICE R.SUDHAKARC.M.A.No.3640 of 2008andM.P.No.1 of 2008 M/s. United India Insurance Company Limited,TP Cell 38, Anna Salai,Chennai-2. ... Appellant/2nd Respondent vs.1.Ammu alias Guruprabha,2.Minor Mohana,3.Minor Vinneela,4.Minor Thangamani5.Rajan,6.S.Ramamohan Raju.(Minor 2 to 4 respondents are represented by first respondent) (6th respondent was ex partein the lower court) ... Respondents/Petitioners 1 to 5 and 1st RespondentCivil Miscellaneous Appeal is filed under Section 173 ofMotor Vehicles Act, 1988, against the award and decree dated25.10.2006 passed in M.C.O.P.No.12 of 2005 on the file of theMotor Accidents Claims Tribunal(Sub Judge), Tiruvallur.For appellant : M/s.K.S.Narasimhan and T.M.Venkataraman For respondentNos.1 to 5 : Mr.R.Neelakandan https://hcservices.ecourts.gov.in/hcservices/ JUDGMENTBy consent of both parties, the main appeal itself is takenup for disposal. 2. The Insurance company is on appeal challenging the awarddated 25.10.2006 passed in M.C.O.P.No.12 of 2005 on the file ofthe Motor Accidents Claims Tribunal(Sub Court), Tiruvallur.3. The only contention raised by the counsel for theappellant is on the quantum of compensation.4. It is a case of fatal accident. The brief facts of thecase is as follows:- The accident in this case happened on31.7.2004 at 14.30 hours. The deceased Moorthy said to be 33years old, running a tinkering shop, was travelling on amotorcycle and was hit by a lorry driven by its driver in a rashand negligent manner, insured with the appellant. In thataccident, the said Moorthy died on the spot. The wife aged 30years, two minor daughters aged 7 and 4 years respectively, oneminor son aged 2 years and father aged 60 years, claimedcompensation in a sum of Rs.6 lakhs, stating that the deceased wasearning a sum of Rs.10,000/- per month. 5. In support of the claim, the wife of the deceased wasexamined as P.W.1. One Kothandan, the eye witness, was examinedas P.W.2. Exs.A-1 to A-4 were filed, the details of which areas follows:-Ex.A-1 is the copy of F.I.R. dated 31.7.2004,Ex.A-2 is the copy of charge-sheet, dated 11.10.2004,Ex.A-3 is the post-mortem certificate dated 8.2.2004 andEx.A-4 is the copy of Motor Vehicle Inspector's Inspection Report dated 14.9.2004. No oral or documentary evidence was let in on behalf of theappellant insurance company, the second respondent before theTribunal. 6. The finding of negligence on the part of the driver ofthe lorry and the liability fixed on the appellant insurancecompany to compensate the claimants is not seriously disputed bythe appellant's counsel and the same is confirmed. 7. In the absence of any evidence to show the actual incomeof the deceased, the Tribunal fixed the income of the deceased atRs.3,000/- per month. After deducting 1/3 towards personalexpenses of the deceased, the Tribunal fixed the contribution to https://hcservices.ecourts.gov.in/hcservices/ the family of the deceased at Rs.2,000/- per month and Rs.24,000/-per annum. The age of the deceased was taken as 33 years based onEx.A-3, the post-mortem certificate. Following the secondschedule to the Motor Vehicles Act, the Tribunal adopted 17multiplier and granted a sum of Rs.4,08,000/- (Rs.24,000/- x 17 =Rs.4,08,000/-) towards pecuniary loss to the family of thedeceased. In addition, the Tribunal granted amounts underconventional heads. In all, the Tribunal granted the followingamounts as compensation with interest at 7.5% as follows:-Sl.No.HeadAmount granted bythe Tribunal1Loss of pecuniary benefits to thedependents of the deceased Rs.4,08,000/-2Loss of consortium to the wife on thedeath of her husbandRs. 20,000/-3Loss of love and affection to the twominor daughters, one minor son and thefather (Rs.10,000/- each) Rs. 40,000/-5Funeral expensesRs. 7,000/-TotalRs.4,75,000/- 8. The contention of the appellant's counsel is that theTribunal in this case has taken 17 multiplier and highercompensation was granted. He relied upon the Apex Court'sdecision in New India Assurance – vs.- Smt.Kalpana and othersreported in 2007 AIR SCW 1316 = 2007(1) Supreme 514. and statedthat lesser multiplier i.e., 13 should be adopted. 9. Learned counsel for the respondents 1 to 5/claimants onthe other hand stated that the accident in this case happened inthe year 2004. The deceased was engaged in tinkering work and wasearning Rs.10,000/- per month at the time of accident. TheTribunal has taken a paltry sum of Rs.3,000/- per month as incomeof the deceased. If the income is fixed based on the earningcapacity of the deceased and the living wages of the relevantperiod (i.e.) the date of of accident 31.7.2004, thecompensation, even if the multiplier is reduced, will be much morethan the amount granted by the Tribunal towards pecuniary loss. Hepleaded for dismissing the appeal and to confirm the award. 10. The short question for consideration in this appeal ison the multiplier that has been adopted by the Tribunal. 11. The choice of multiplier will depend upon the facts andcircumstances of each case. The Apex Court in General Manager,Kerala State Road Transport Corporation – vs. Susamma Thomas and https://hcservices.ecourts.gov.in/hcservices/ others reported in (1994)1 ACC 346 (SC) = AIR 1994 SC 1631 hasbroadly summarized the position in paragraph 11, which reads asfollows:- "11. It is necessary to reiterate that themultiplier method is logically sound andlegally well-established. There are some caseswhich have proceeded to determine thecompensation on the basis of aggregating theentire future earnings for over the period thelife expectancy was lost, deducted a percentagetherefrom towards uncertainties of future lifeand awarded the resulting sum as compensation.This is clearly unscientific. For instance, ifthe deceased was, say, 25 years of age at thetime of death and the life expectancy is 70years, this method would multiply the lost ofdependency for 45 years – virtually adopting amultiplier of 45 – and even if one-third orone-fourth is deducted therefrom towards theuncertainties of future life and for immediatelump sum payment, the effective multiplierwould be between 30 and 34. This is whollyimpermissible. We are aware that somedecisions of the High Courts and of this courtas well have arrived at compensation on somesuch basis. These decisions cannot be said tohave laid down a settled principle. They aremerely instances of particular awards inindividual cases. The proper method ofcomputation is the multiplier method. Anydeparture, except in exceptional andextraordinary cases, would introduceinconsistency of principle, lack of uniformityand an element of unpredictability and anelement of unpredictability for the assessmentof compensation. Some judgments of the HighCourts have justified a departure from themultiplier method on the ground that section110-B of the Motor Vehicles Act, 1939, in sofar as it envisages the compensation to be'just', the statutory determination of a 'just'compensation would unshackle the exercise fromany rigid formula. It must be borne in mindthat the multiplier method is the acceptedmethod of ensuring a 'just' compensation whichwill make for uniformity and certainty of theawards. We disapprove these decisions of theHigh Courts which have taken a contrary view. https://hcservices.ecourts.gov.in/hcservices/ We indicate that the multiplier method is theappropriate method, a departure from which canonly be justified in rare and extraordinarycircumstances and very exceptional cases.The multiplier represents the number ofyears' purchase on which the loss of dependencyis capitalised. Take, for instance, a casewhere annual loss of dependency isRs.10,000/-. If a sum of Rs.1,00,000/- isinvested at 10 per cent annual interest, theinterest will take care of the dependencyperpetually. The multiplier in this caseworks out to 10. If the rate of interest is 5per cent per annum and not 10 per cent, thenthe multiplier needed to capitalise the loss ofthe annual dependency at Rs.10,000/- would be20. Then the multiplier, i,e., the number ofyears' purchase of 20 will yield the annualdependency perpetually. Then allowance toscale down the multiplier would have to bemade taking into account the uncertainties ofthe future, the allowances for immediate lumpsum payment, the period over which thedependency is to last being shorter and thecapital feed also to be spent away over theperiod of dependency is to last, etc. Usuallyin English courts the operative multiplierrarely exceeds 16 as maximum. This will comedown accordingly as the age of the deceasedperson (or that of the dependents, whichever ishigher) goes up."However, in view of the Apex Court's decision in New IndiaAssurance – vs.- Smt.Kalpana and others reported in 2007 AIR SCW1316 = 2007(1) Supreme 514 and in The Managing Director, TNSTC –vs. - Sripriya & others reported in 2007(1) TN MAC 319(SC),considering the lump sum payment and the age of the deceased andtaking note of the fact that all the three children are minors,even though multiplier pleaded by the appellant's counsel is 13,this Court is inclined to adopt multiplier of 15 and fixed theloss of pecuniary benefits to the dependents of the deceased atRs.3,60,000/- (Rs.24,000/- x 15 = Rs.3,60,000/-). The amountgranted towards loss of love and affection to the two minordaughters and one minor son is very low. Therefore, a furthersum of Rs.15,000/- is granted towards loss of love and affectionto the two minor daughters and one minor son. The sum ofRs.10,000/- granted towards loss of love and affection to thefather and the sum of Rs.7,000/- granted towards funeral expenses https://hcservices.ecourts.gov.in/hcservices/ are just and reasonable and the same is confirmed. Accordingly,the award of the Tribunal stands modified as follows:- Sl.No.HeadAmount grantedby the TribunalAmount grantedby this Court1Loss of pecuniary benefitsto the family of thedeceased Rs.4,08,000/-Rs.3,60,000/-2Loss of consortium to thewife on the death of herhusbandRs. 20,000/-Rs. 20,000/-3Loss of love and affectionto the two minor daughters,one minor son (Rs.10,000/-each) Rs. 30,000/-Rs. 45,000/-4Loss of love and affectionto the father on the deathof his sonRs. 10,000/-Rs. 10,000/-5Funeral expensesRs. 7,000/-Rs. 7,000/-TotalRs.4,75,000/- Rs.4,42,000/- 12. Since the accident in this case happened in the year2004 and the award is passed in the year 2006, the interestgranted at 7.5% stands confirmed.13. The learned counsel for the appellant prays for eightweeks' time to deposit the amount as awarded by this Court.Learned counsel for the respondents 1 to 5/claimants prays forwithdrawal on such deposit.14. In the result, the Civil Miscellaneous Appeal is allowedin part as follows:- (i) The award of the Tribunal is reduced to Rs.4,42,000/-from Rs.4,75,000/-.(ii) The interest granted by the Tribunal at 7.5% standsconfirmed.(iii) The award amount is apportioned as follows:-Wife, the 1st respondent Rs.2,07,000/- with proportionateinterest and entire costThe two minor daughters and oneminor son (Rs.75,000/- each),the respondents 2 to 4Rs.2,25,000/- with proportionateinterest https://hcservices.ecourts.gov.in/hcservices/ Wife, the 1st respondent Rs.2,07,000/- with proportionateinterest and entire costThe father, the 5th respondent Rs.10,000/- with proportionateinterest(iv) The wife is permitted to withdraw her share amount withproportionate interest and entire costs,(v) The father is permitted to withdraw his share amount withproportionate interest. (vi) The share of the minor respondents 2 to 4/claimants 2to 4 shall be invested in any nationalised bank proximate to theplace of the resident of the first respondent/first claimant for aperiod of three years and renewable thereafter till the minorsattain majority. The mother of the minors is permitted towithdraw the accrued interest in respect of the share of theminors once in three months directly from the bank and for thesaid purpose the first respondent/first claimant shall open asavings bank account on the same branch and the interest amountshall be transferred to the account to be maintained by themother.(vii) The nationalised bank to which the amount will bedeposited, shall intimate to the first respondent/first claimantof such deposit and confirm the same to the Tribunal that thefirst claimant has been duly informed. The Tribunal to inform thebank accordingly. (viii) Since the deposit is in the case of minors, theTribunal is directed to send a report containing the details ofthe deposit to the High Court on such deposit.(ix) There will be no order as to cost. (x) Consequently, connected miscellaneous petition is closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.ts https://hcservices.ecourts.gov.in/hcservices/ ToThe Subordinate Judge,(The Motor Accidents Claims Tribunal), Tiruvallur. 1 cc to Mr.R. Neelakandan, Advocate, SR. 661381 cc to Mr.K.S. Narasimhan, Advocate, SR. 66734C.M.A.No.3640 of 2008CK (CO)kk 27/1