NATIONAL INSURANCE CO. LTD. v. SMT, SHANTAMNIA ‘a SHANTAWWA

the tra.x sustained injuries including Sri.M.Shankarappa, who sustained grievous injuries, later he died on account of the said injuries. Contending that they had lost the bread-earner of the family, his legal representatives• filed a claim petition, seeking enhancement of cQmpensation on various heads.

3. The said petition was contested by the Insurance Company before the Tribunal. In support of their case the claimants let in evidence of three witnesses (PW 1 to PW3) and produced 9 documents, which are marked as Exs.Pl to P9 while the Insurance Company did not let in any evidence in the matter. On the basis of the said evidence, the Tribunal awarded compensation of Rs. 11,77,344/- with interest at the rate of 6’t p.a. from the date of petition till the date of deposit. Being aggrieved with the quantum of compensation awarded b the Tribunal the Insurance Company has filed this appeal.

4. 1 have heard the learned counsel for the appellant and also the learned counsel for the respondent-claimants.

5. It is contended on behalf of the appellant that the Tribunal while awarding the compen sation on the head of lOSS of dependency has not applied the split multiplier formula as enunciated by the Division Bench of this Court in the case of Union of India and Others Vs. K.S,Lakshmi Kumar and others reported ILR 2000 KAR 3809 as a result. compensation m arded on the head of loss of dcpe nclencv is exorbitant. Elaborating theY sai contention, he has’ stated that the deceased was employed in Government Service, He was working in EG ID Department at Dharwad. He was 55 years of ate and would have retired from service at the atte of 60 sears and the appropriate multiplier to be applied is 11. having regard to the decision of the Hon’ble Apex Court in the case of Sarla Verma (Smt) and Others Vs. Delhi Transport Corporation and Anothers reported in (2009j 6 Supreme Court Cases 12 ncc. the deceased would have retired at the age of 60 3 ( cWS and as alrcady 55 years at tile time ot death no enhan. vmeia in salary could be considered. But thc Tribunal on’ lit to hate taken the entire sahn for the. purpose of conlj)cIting the compensation on the head of loss of dependency by applt ing 5 multiplier and for the balanct multiplier of o the pensionan amount had been taken into consideration instead of entire salan. since, it is a fact that subsequent to retirement the deceased ould not have received salart. Pension amount w ould be roughly about 0° of the last salary drawn by the deceased. He therefo,v. submits that the multiplier of 11 applied in the instant cast the ciflire :‘molint of salary is incorreet. The split multiplier of 5 t u had to be applied and the same has not been done by the Tribunal and hence the compensatiun attarded is exorbitant.

6. Per rontra. learned counsel respondent claimants. thile supporting the judgnu n’ and award of the Tribun’l as brought to my notice, a dec ision ol the Apex Court iii thc Case of ILR.Madhusudan and others Vs. Administrative Officer and others reported in 2011 -6- AZ4R (Civil 393 to contend that the split multiplier applied by this Court. in the said decision has not been approved by the Kon’ble Apex Court and therefore, the decision of the Hon’ble Apex Court may be applied in the instant case and thereby the appeal has to be dismissed.

7. Having heard the learned counsel appearing on both sides and on perusal of the materials on record. the only point that arises for my consideration is: Whether the judgment and award passed by the Tribunal iritetfrrence in this appeal?

8. From the materials on record. it is not in dispute that the deceased had died at the age of 55 years and he was earning gross salary of Rs. 13,038/- per month and his annual salary as per Ex.P7 was Rs.l .56.456/-. In terms of the judgment of the Hon ble Apex Court in the case of Sarla Verma (Smt) and Others Vs. Delhi Transport Corporation and Anothers the appropriate multiplier is 11. Having regard to the age of the deceased and the date of retirement, it is noticed that he would have retired at 60 years in which event the total salary of the deceased to be considered for the period 4/ —1— during which the deceased would have been in service is from the age of 55 years to 60 years i.e., five years and for the balance six years. the pension has to be considered while arriving at the compensation on the head of loss of dependency. Normally, the pensionery amount would be 50% of the last drawn salary. This formula has been enunciated by the Division Bench of this Court in the case of Union of India and Others Vs. K.S.Lakshmi Kumar and others referred to above. In para Nos 16 and 17 of the judgment. it is stated as follows: i6. Where applicable the multiplier higher than the number of years of service which the deceased had before superannuation. contribution to the family (or loss of dependency) cannot obviously be calculated with the reference to the salary income, the entire period of multiplier. Let us illustrate. If a person aged 56 years (whose age of superannuation is 60 years) dies in an accident, leaving him surviving his vife and two children, how should the total loss of dependency he calculated? Let us assume that his salary was Rs.6.000.00 and after retirement, his pension would be Rs.3.000.00. Under the Davies method accepted and adopted by the Supreme -8- Court, the applicable multiplier will be ‘9’. But, deceased would have got salary for only 4 years and then he would get only pension. If deduction tovards personal and living expenses of the deceased is one third. the contribution to the family during the period of service (4 years period) would have been Rs.4,000/- (that is Rs.6000- 2000). But obviously the contribution to the family been Rs.4,000/- after his retirement. is from the 5th year onwards. When the pension is Rs.3000/- per month, after deducting one third as personal and living expenses. the contribution to the family will only to be Rs.2.000/- per month. Therefore, the loss of dependency cannot be taken as Rs.4.000/- per month for the entire period of 9 years representing the multiplier. It has to be taken as Rs.4,000/- per month for the first four years (when he would have been in service) and Rs.2,000/- per month for the remaining five years (when he would have received pension). The method adopted in the above illustration will have to be applied in this case.

17. In this case the deceased was aged 53 years at the time of death and she vould have attained the age of superannuation in about 7 years. The multiplier period is 9 years. After 7 years, income would

0. Li Rs.lb.832.W) per month. but onl roughI 30 it as eIisnn. :nd consequrntl the loss of dcpenclc nc ha e 50 . Rs. 1 .20..t;i H :•jji) ‘T •niiiui. Tlitas. to bt dependency ‘sill have calculated si:h reference ti) the salary income for a period Of 7 years and pension income for the remaining period of 2 sears. as tIn multiplier period is 49 y ear&. The Isv Rs. 1,20.000 00 x 7 plus Rs.60,000/00 x 2 i.e. Rs.M0.0(fl ‘.OO. riependcnn therefor’ 0 The rrtson for appl ing the split multiplier is having regard to the fact that the deceased ould not haw recei en salary income superannuation. Therefore, the rt ality of the situation has beci’ taken into consideration particularly when the deceased is working 1s a Government employee ot in any Public Sector I nit, sherc th’ age of the retirement on attaining superannuation is defined Ha 1nc r .%ai d to the Ian that in t’n instant C 1st deceased would ha e retired at no years and was aged 55 years at the time of death. the Tribunal ought to havt taken the split multiplier of (5 years - b years) is.. 5 sears between 55 to 60 years and h years thereafterjf the said formula is

4./ - 10 - applied then for five years superannuation, the compensation on the head of loss of dependency would be Rs.13,038/- x 12 x 5 / 1/3rd Rs.5,21,520/- and for the remaining period it would be Rs.13,038/2 x 12 x 6 x 1/3 = 3,12,912/-. The compensation on the head of loss of dependency would be Rs.8,34,432/-.

10. This is by considering 50% of salary for applying 6 multiplier, since the learned counsel the respondent- claimants has relied upon the decision of the Hon’ble Apex Court in the case of K.R.Madhusudan and others Vs. Administrative Officer and anthers, it would be necessary to advert to the said decision also in the said case. The said appeal was assailting the order of this Court. This High Court had observed as follows in para 6 of the judgment: “6. The appellants and the respondents both appealed against the award of the Tribunal to the High The appellants appeared for Court of Karnataka, enhancement and the respondents for reduction of the in its impugned amount awarded. judgment, reduced the compensation awarded by the The High Court, C IF1I HH i)OcIL Ps. 1 1 2 t)OO rek ant port 2 1 IiI Cour (jrdc r r ads H S 1o11o\ S. I Ia (d is aorkiic as S nior \ sistint it1 kltil ttino a sal;ir I Ps 1 .o t2 elfea iir k’dl( tiotis ba ards iome ars. the rIta SH r\ a I dteHsc 2 \voli.e I t Ps. 1 4.000 Lit H. 1 it H!id sot is tha cit (tH St ‘(1 1 II\ t lilad t I a I’ iIt. H iS tu I (Irdi lcl(d ua ilI persol I aspenses. Ps. 1 .200 would eni ira 1 he ix ix lii of the depat ida t Its. The d eea sad a as hout 32 ears. Th dec eased a ould ha\ a retired hv aS \ ears. Alter superalliluation, thu dead a aid eel pmisiotiilr\ inautnu in a sum tf Rs. 1)11(1 1 a s to ht (lu(l Ut ‘1(2 lox ards 1 t\pulist’s. Rs.4800 would entire 1 cnt I 2 Ow dept tidant s. pht niultiplit r a ould appl\ \fter superannuation. multiplier a a ould Fh rebure. I tic 1)1 dep( riot ti( \ hefor( superanhiuatiorl would lx Rs,S.Oo.400 (Ps. 1 1 200 Ineonle) X 12 (months) li_till i tl tart Tic I utal Inss (1 (iutic’fld(IH ‘It I) liSt tIL ia Iliut tue a- Rs.,t.2., P5-1500 (iiIaotflm \ 12 I I ‘—; (rn 111 iilier, Thr ‘n<1 las - depet eielx’\ a ould Ps. l I .5*000 ‘1 ix pelil Ic tars eat iliad a sum of Ps 230 ( 0 owards 01 expeetane\ Ps. I (2000 towards ft ineral expenses. In all ta I it tuners arc- ant ti 1(1: ft r a neal sam )t I. Rs. i •%..•( $H) n st&nst Rs. 1 4 74°•, ‘: :r. iir Tr’’iun iL i’he ;etititnirrs an’ (‘lit lit CI 01 :iten’st at b . and at pai. 11 S s opined as follows:

1. Iii ir ‘f t’s n idenur the Tril.nnial I cfl( ronsicinc d thc piospeet C I future sh U ‘ ilUOfl,( shi1e eOmputinu ec)mpensatlofl hut the Trilvtnnl has not done that. In the appeal. lilt Ii .‘dS heii b tht appellants bulbre tilt’ I hh (‘ourt, high Court instead matni silt ang the amount rompensation. 2rante(l by the Tribunal. reduced the same doiii’ so. the high Court had not given an’: In rcason. Thc High Court introduced the concept split multiplier and departed from the mul’ii;ier the Tribunal without disc IOSIIW tin reason thereforc The Hith Court eonsick red n )rroI V ,ra t we n idc’nn d out the Prc’9)I ‘t t I futurt aneremeni of the deceased. \heii liii’ awe of Ia aeeeased is ix twec n 31 and 55 sears thc mt..tiphc’r 1s 11. hahi is spc etiled in tht (‘c)Iiit.aii ifl 11’ IL $ehed’tk’ iii te Moror ‘Xe;. .‘nrl ‘hi’ Tribunal has i:’;’ nun:nitted ;nn ehtvles II error 1’ c’eepting the salt! rnuhiplier. [his Court also fails to apprec late why the High Court chose ‘o appI the m’ ihiphier of . a -13- 1 1. On understanding the observations of the Hon ble Apex Court, it becomes clear that the reason for applying split multiplier by this Court was not forthcoming in the reasons in the judgment of this Court. Further, when the deceased was aged about 53 years and the multiplier of 11 was to be applied, the High Court had applied only multiplier of 6 instead of 11. It is under those circumstances, the Honble Apex Court held that the High Court had applied the concept of split multiplier without assigning any reasons. The Apex Court rightly intervened in the matter and held that the multiplier of 11 would be applicable instead of multiplier of 6. In the present case, it is noticed that the Tribunal has rightly applied the multiplier of I 1, but has not applied the split multiplier formula 1w reckoning 50% of the salary after the age of retirement. Therefore, the decision of the Hon’ble Apex Court in the case of X.R.Madhusudan and others Va Administrative Officer and anthers is only with regard to the error committed by the High Court in not applying the appropnate mulnplieç ha the absence of reasons this Court .ot’, had applied the multiplier of 6 and not 11 in the said case. In 14 the instant nis thrrc is .nt dispi itt- ith regard to the- multiplier of 11 to bc applied.

12. (ounsri the appellant has relied upon the decision of the L)i ision Bern h of tills Court in the- ease of Union of India and Others Vs. IC.S.Lakshmi Kumar and others oiilv itli regard to splitting of multiplier for purpose of taking into ronside-ration the pensionery amount. subsequent to retirement rather than the entire salary. Therefore. the decision of the Division Bench in the case of Union of India and Others Vs. K.S.Lakshmi Kumar and others ;ould squax el apply to the present case also.

1.3. In that vms of the matter. the compensation awarded on the head of loss of dependene vou1cl have- to be reduced from Rs 11.47,344 to Rs.8,34.432 in addition total sum of Rs.5ft000/- would base to he asvarcled on cons entional he9ds instead ol Rs.30.000. awarded by the Tribunal Thus compcnsation ssould Rs.8.84.432’ instead Rs. 11.77.344. . The compensation shall can interest at the rate of 6 p a. from S the date of petition till the date of deposit. 1E 4, 10 T1i( r’siiIt 1p)e1 filed 1)\ the lnsurtnce Company is allon t’d in part. Parties to bear their on a eost. Satutor arnouin deposited shaH be transmitted to the Tribunal. I p Sd/ JUDGE