HON'BLE SRI JUSTICE P.S. NARAYANA M.A.C.M.A.No.2738 of 2005 28th April, 2010 Between :- Paturu Kathyavani & another .. Appellants And B.Rami Reddy & another .. Respondents HON'BLE SRI JUSTICE P.S. NARAYANA M.A.C.M.A.No.2738 of 2005 JUDGMENT:- This M.A.C.M.A. is filed by the claimants in O.P.No.301/2001 on the file of the Motor Accident Claims Tribunal (District Judge), Nellore (hereinafter, in short, referred to as ‘the Tribunal’ for the purpose of convenience). The said O.P. was under Section 166 of the Motor Vehicles Act (hereinafter, in short, referred to as ‘the Act’ for the purpose of convenience) claiming compensation of Rs.5 lakhs for the death of the deceased Paturu Nagaraja Rao who died in the road accident, which had taken place on 14-11-2000 at about 11.00 a.m., at Radhakrishna Medical Shop, Balaji Nagara, Nellore town, Nellore District. The Tribunal in the light of the respective stands taken by the parties, having settled the Issues, recorded the evidence of P.W.1, P.W.2, marked Ex.A.1 to Ex.A.6 and Ex.B.1 and ultimately allowed the O.P. partly directing respondents 1 and 2 to pay a sum of Rs.2,15,000/- with interest at 9% per annum from the date of the petition till the date of realization and no doubt certain further directions also had been made. The claimants being aggrieved of that portion of the award, negativing the rest of the reliefs, had preferred the present M.A.C.M.A. 2. The 2nd respondent in the present M.A.C.M.A. – United India Insurance Company Ltd. had not chosen to prefer any appeal and hence so far as the award relates to the compensation which had been already granted by the Tribunal in a way, the same had attained finality. 3. Sri M.Subrahmanyam, the learned Counsel representing the appellants would maintain that the Tribunal totally erred in taking multiplier as ‘5’. The learned Counsel also would maintain that the Tribunal ought to have followed Section 163-A of the Act and the II- Schedule and inasmuch as the age of the deceased is not in serious controversy being ‘55’ years, the Tribunal should have adopted ‘11’ multiplier and hence inasmuch as wrong multiplier had been applied, the compensation payable had been substantially reduced by virtue of which serious prejudice had been caused to the appellants-claimants. The learned Counsel also would maintain that it is true that the owner of the vehicle is shown as ‘not necessary party’ in the M.A.C.M.A. but however in the absence of such party also, since the M.A.C.M.A. survives, the matter to be decided on merits. The learned Counsel also would maintain that the 1st respondent in M.A.C.M.A., the owner of the vehicle, had not chosen to contest the matter even before the Tribunal. Even otherwise the contention that in the absence of the owner, the M.A.C.M.A. cannot be decided on merits, cannot be accepted in the light of the view expressed by the Division Bench of this Court in M.CHAKRA RAO v. Y.BABU RAO[1]. While further elaborating his submissions, the learned Counsel also relied on several other decisions and would maintain that in the facts and circumstances of the case ‘11’ multiplier to be applied and the compensation to be enhanced accordingly. 4. Per contra, Sri Rama Krishna Reddy, the learned Counsel representing the 2nd respondent – United India Insurance Company Ltd., had raised a preliminary objection relating to the very maintainability of the M.A.C.M.A. in the absence of the owner and would maintain that the United India Insurance Company Ltd., cannot be fastened with any liability whatsoever either by enhancing the compensation or otherwise in the absence of the owner and hence the M.A.C.M.A. to be dismissed in limini. While further elaborating his submissions, the learned Counsel also would point out that even otherwise the decision of the Division Bench relied upon by the learned Counsel representing the appellants is distinguishable on facts for the reason that that was a case where the party was impleaded but the appeal was dismissed for default but here is a case where the owner was shown as a party but specified as ‘not necessary’ and when that being so, the question of enhancing the compensation amount in the absence of such party would not arise at all. While further elaborating his submissions, the learned Counsel also would maintain that when the income exceeds Rs.40,000/-, the II- Schedule has no applicable at all and in the light of the same, the multiplier applied by the Tribunal is in accordance with law since the correct multiplier is only ‘5’. The learned Counsel also pointed out to the factual matrix and the evidence available on record and would maintain that Ex.A.6 is only an attested copy of the salary certificate which was not duly proved. Even if the respective ages of the claimants are to be carefully observed or examined, it can be safely concluded that the deceased, a retired LIC employee, was in between ’56 to 60’ years and if such a case, at the best, may be ‘8’ would be the correct multiplier. The learned Counsel also would maintain that in the absence of the owner, since there would be nothing for insurer to indemnify, this principle always to be kept in mind by the Courts and the said aspect to be viewed with all seriousness. The learned Counsel also would maintain that this M.A.C.M.A. was presented with an application for condonation of delay and on delay being condoned, the same was numbered and this aspect also may have to be considered especially in the context of deciding the percentage of interest to be granted. The learned Counsel relied on several decisions to substantiate his submissions. 5. Heard the Counsel, perused the oral and documentary evidence available on record and the findings recorded by the Tribunal as well. 6. The respective submissions made by the Counsel on record already had been referred to supra. In the light of the same, the following points arise for determination in this M.A.C.M.A.:- 1) Whether the findings recorded by the Tribunal applying ‘5’ multiplier to be confirmed or to be disturbed in the facts and circumstances of the case? 2) If so, what is the correct multiplier to be applied in the light of the decisions placed before this Court and also the evidence available on record and if any other multiplier to be applied, what would be the enhancement of compensation to which the appellants-claimants be entitled to? 3) If so, to what relief the parties would be entitled to? 7. POINTS 1 AND 2:- For the purpose of convenience, the parties would be referred to as shown in O.P.No.301/2001 aforesaid. It is needless to say that the claimants filed the present M.A.C.M.A. claiming enhancement of compensation. The 2nd claimant was added as per orders made in I.A.No.599/2003, dt.11-8-2003 before the Tribunal. It is not in controversy that the claim was made under Section 166 of the Act claiming compensation of Rs.5,00,000/- for the death of deceased – Paturu Nagaraja Rao, who died in road accident, which had taken place on 14-11-2000 at about 11.00 a.m., at Radhakrishna Medical Shop, Balaji Nagar, Nellore. The details of the compensation claimed by the claimants are as hereunder:- SPECIAL DAMAGES:- Medical expenses and transport expenses Rs.2,000/- Loss of earning forever Rs.4,00,000/- GENERAL DAMAGES:- Compensation for pain and suffering and compensation for loss of earning power Rs.98,000/- . TOTAL Rs.5,00,000/- It is the case of the appellants-claimants that on 14-11-2000 at about 11.00 a.m., while the deceased Paturu Nagaraja Rao was proceeding in a rickshaw to go to Central Bank situated at Jonnalgaddavari Street, Nellore and when the rickshaw reached near Radhakrishna Medical Stores, Balaji Nagar, Nellore, a bus bearing No.AP-26-U-1969 owned by the 1st respondent and insured wt 2nd respondent came from NTR Nagar, being driven by its driver in rash and negligent manner without blowing horn and having lost control over the same, dashed the rickshaw and consequently, the deceased fell down and received grievous injuries and immediately the deceased was shifted to Dr.Ramachandra Reddy’s Hospital, Nellore, where he was declared dead. The deceased was a retired employee in Life Insurance Corporation of India, Nellore and was drawing pension of Rs.5,153/- per month besides earning Rs.2,000/- per month by doing repairing work to the T.Vs. But due to his death in the accident, the petitioners who are his daughters suffered both physical and mental agony and also lost their earning source. The Police, Balaji Nagar Police Station registered a case under Section 304-A I.P.C. against the driver of the bus for his rash and negligent driving. Since the accident was due to the rash and negligent driving of the driver of the bus bearing registration No.AP-26-U-1969, the 1st respondent the owner of the bus and the 2nd respondent the insurer, are jointly and severally, liable for compensation. 8. The 1st respondent – owner of the vehicle had not chosen to contest the matter. It is also pertinent to note that though the said party was shown as 1st respondent in the present M.A.C.M.A., it was specified that this party is not a necessary party and as already aforesaid, elaborate submissions had been made relating to the maintainability of the appeal in the absence of the owner by the respective Counsel representing the parties. 9. The 2nd respondent – Insurance Company filed counter denying the allegations. The Insurance Company did not specifically admit the undernoted averments made in the O.P.:- 1) narration of the accident; 2) involvement of deceased and his consequential death in the accident; 3) age, income and avocation of the deceased; 4) rash and negligent driving of the driver of the bus; 5) driving licence of the driver of the bus. Further specific stand had been taken that at any rate the compensation claimed is highly excessive. 10. On the strength of these pleadings before the Tribunal, the following Issues were settled:- 1) Whether the alleged accident occurred due to the rash and negligent driving of the vehicle bearing registration No.AP- 26-U-1969 by its driver? 2) Whether the petitioner is entitled to compensation and if so to what amount and from which of the respondents? 3) To what relief? 11. The Tribunal recorded the evidence of P.W.1 – the 1st claimant and P.W.2 and Ex.A.1 – certified copy of first information report in Crime No.129/2000 of Balaji Nagar Police Station, Nellore, Ex.A.2 – certified copy of charge sheet, Ex.A.3 – certified copy of Motor Vehicles Inspector’s report, Ex.A.4 – certified copy of post-mortem examination report, Ex.A.5 – certified copy of inquest report and Ex.A.6 – attested Xerox copy of letter dt.25-8-2000 of Life Insurance Corporation of India, Divisional Office, Nellore addressed to the deceased also had been marked. As already specified supra, certain contentions had been made in relation to Ex.A.6. None had been examined on behalf of the Insurance Company but however Ex.B.1 – the copy of Insurance Policy relating to the offending vehicle had been marked. 12. The Tribunal while answering issue No.1, referred to certain decisions, appreciated the evidence available on record and recorded certain reasons at para 8 and ultimately came to the conclusion that the accident occurred not only out of use of the motor vehicle but also due to rash and negligent driving of the bus driver and hence the said issue was found in favour of the claimants. While answering issue No.2, the Tribunal appreciated the evidence of P.W.1, P.W.2, Ex.A.1 to Ex.A.6 and also Ex.B.1, referred to certain decisions as well land taking the age of the deceased as ‘55’ years, came to the conclusion that the appropriate multiplier to be applied being ‘5’, determined the compensation as Rs.2,00,000/- for loss of dependency and Rs.15,000/- for loss of estate, comprising of loss of expectation of life, pain and suffering and loss of amenities of the claimants and thus awarded Rs.2,15,000/- with interest at 9% per anum as already aforesaid while answering issue No.3. 13. It is no doubt true that normally though the owner of the vehicle had not chosen to contest the O.P. when the claimants preferred an appeal, such owner to be impleaded as a party. Certain submissions were made in relation to an appeal where the owner was impleaded as a party and the appeal was dismissed for default and a case where the owner was not impleaded as a party at all. This may not seriously alter the situation. This Court is of the considered opinion that normally, inasmuch as, the terms and conditions of the Insurance Policy to be enforced as against the Insurance Company, the owner also to be impleaded. However, strong reliance was placed on the decision of the Division Bench of this in M.Chankra Rao’s case (referred above) wherein the learned Division Bench at para 9 observed as hereunder:- “If the Claims Tribunal records a finding that the accident had taken place due to rash or negligent driving of the driver of the motor vehicle and if such finding is not challenged either by the insurance company or by the owner of the motor vehicle, the question that arises in appeal filed against the orders of the Tribunal by the claimants is only with regard to the determination of just, fair and reasonable quantum of compensation and, therefore, there cannot be any bar to decide the quantum of compensation against the insurance company even in the absence of owner of the vehicle to the extent of the statutory liability of the insurance. But the quantum of compensation cannot be decided over and above the statutory liability of the insurance company in the absence of the owners, but the question of the statutory liability of the insurance company survives for consideration at the appellate stage.” In the light of the said decision, even in the absence of the owner, especially in the light of the fact that the owner had not chosen to contest the O.P. even before the Tribunal, this Court is not inclined to accept the contention of Sri Ramakrishna Reddy, the learned Counsel representing the 2nd respondent that the M.A.C.M.A. itself is not maintainable and on that ground alone the M.A.C.M.A. to be dismissed. It is again made clear that to be more careful and cautious, it would be always just and proper to implead the owner as well. Sri Ramakrishna Reddy, the learned Counsel representing the 2nd respondent placed strong reliance on the decision of the Division Bench in A.VIJAYA AND OTHERS v. VEGURLA RAJAIAH AND OTHERS[2] wherein the Division Bench held “the ultimate conclusion arrived at by the learned Single Judge is structured formulae can be taken as a necessary assistance and guidance in arriving at the compensation even in cases that are to be decided under Section 168 of M.V.Act. It is no where held that the multiplier mentioned in column No.2 of the structured formulae is made to be applicable strictly even in cases where the annual income of the victim is more than Rs.4,\0,000/- . Therefore, there is no substance in the contention of the learned Counsel for the appellants/claimants. The Supreme Court has repeatedly held that the structured formulae in the second schedule appended to the Act is only for those whose annual income is upto Rs.40,000/- and all other claims are required to be determined in terms of Chapter XII of the Act. In case of higher income the prescribed multiplier in column No.2 of the structured formulae of the second schedule is only a guidance. The deceased was aged about 50 years as on the date of the accident. The proper multiplier as per the decision reported in Bhagwan Das’s case is 7.68. The Tribunal has adopted the multiplier as 8.25 keeping in view various factors of the case. Therefore, the multiplier adopted by the Tribunal is not required to be disturbed. The learned Tribunal has properly assessed the total loss of dependency to the claimants at Rs.9,86,799/- with interest @ 12 per cent from the date of petition till the date of realization. There is no valid ground to enhance the loss of dependency.” 14. Reliance also was placed on the under-noted decisions:- “D.M., UNITED INDIA INSURANCE CO.LTD. v. NARALA VENKATA SUBBAMMA[3]; HASEENA SULTHANA v. NATIONAL THERMAL POWER CORPN.LTD.[4]; and UNITED INDIA INSURANCE CO.LTD. v. MOKKALA CHANDRAMMA[5]. 15. Sri Ramakrishna Reddy also placed strong reliance on the under-noted decisions in relation to the loss of dependency and the quantum of compensation to be determined:- “DILIP KUMAR MOSES v. V.J.CYRICE AND OTHERS[6]; ANDHRA PRADESH STATE ROAD TRANS.CORPN. v. P.RAGHAVAIAH[7]; and CHAMPABAI v. BAJPAI ROAD LINES[8].” 16. Sri Subrahmanyam, the learned Counsel representing the appellants-claimants strongly relied on the decision of the Apex Court i n MG.DIR., BANGALORE METROPOLITAN TPT.CORP. v. SAROJAMM AND ANOTHER[9] wherein the Apex Court observed at paras 5,6, 7 and 8 as hereunder:- “Section 163-A of the Act was inserted by Act no.54 of 1994 with effect from 14-11-1994. For invoking the said provision, it is not necessary for a claimant to establish any act of negligence on the part of the driver. It is not necessary even to plea that the death had occurred owing to any wrongful act or neglect or default of owner of the vehicle. Quantum of compensation is to be determined in terms of the Schedule II appended thereto. In terms thereof, apart from the amount of compensation as provided for therein only funeral expenses, loss of consortium (if beneficiary is the spouse), loss of estate, medial expenses, would be payable. As the Schedule II provides for a structured formula, ordinarily, the same has to be adhered to. The structured formula itself stipulates reduction of income of the deceased by one-third in consideration of the expenses which he would have incurred towards maintaining himself, had he been alive. Whereas in determining an application for grant of compensation under Section 166 of the Act, the Tribunal may be entitled to find out actual loss of damages suffered by the claimants, the formula having not envisaged such a contingency, we are of the opinion that ordinarily one-third should be deducted from the income of the deceased and not the half thereof. For determining the amount of compensation, the most relevant factor, therefore, is the income of the deceased. He was a tutor. He was admitted in the Army Teachers Training institute. He had the requisite potential of becoming a teacher. His income, thus, having been estimated at Rs.3,000/- p.m. cannot to be said on a very high side.” Reliance also was placed on the decision in P.ANNAMMA AND OTHERS v. N.N.A.PATRICK AND ANOTHER[10] where the learned Judge of this Court referred to A.VIJAYA v. VEGURLA RAJAIAH (2005 (4) ALD 725); ASHA v. UNITED INDIA INSURANCE CO.LTD (I (2004) ACC 533 (SC); BHAGWAN DAS v MOHD.ARIF (1987 (2) ALT 137); BM, ORIENTAL FIRE AND GENERAL INSURANCE CO.LTD v. DR.C.C.O.REDDY (2004 (4) ALD 883); G.M., K.S.R.T.CORPN., TRIVANDRUM v. SUSAMMA THOMAS (AIR 1994 S.C., 1631); K.MATURA BAI AND OTHERS v. A.SHIVA NAGESWAR RAO (2004 (3) ALD 658); L.K.KOUSALYADEVI v. COMMISSIONER, MUNICIPAL CORPORATION (2006 (1) ALD 597); M.V.JAYADEVAPPA v. ORIENTAL FIRE AND GENERAL INSURANCE COMPANY LTD. (I (2005) ACC 472 (S.C.); NATIONAL INSURANCE CO.LTD. v. BOMMITHI SUBBHAYAMMA (2005 ACJ 721); NEW INDIA ASSURANCE CO.LTD. v. G.LAKSHMI (1995 (1) ALD 299); R.VENKATESHWARA RAO v. SMT.T.USHA RANI (1995 (3) ALD 490 (DB); UNITED INDIA INSURANCE CO.LTD., v. MOKKALA CHANDRAMMA (2002 (3) ALD 817); UNITED INDIA INSURANCE CO.LTD., v. PATRICIA JEAN MAHAJAN (2004 (4) ALD 118 (SC); UNITED INDIA INSURANCE CO.LTD., v SALAMMAL (1998 (6) ALT 155); UNITED INDIA INSURANCE CO.LTD. v. TILAK SINGH (2006 (3) ALD 75 (S.C.) and came to the conclusion at para 22 as hereunder:- “In view of the above judgments the contention of the Counsel for the Insurance Company that the structured formula appended to the Act cannot be made applicable to the applications under Section 166 of the Act and as the income is more than Rs.40,000/- is not tenable and the same is rejected and the issue framed in this regard is answered in the affirmative.” Further strong reliance was placed on the decision of the Apex Court i n SARLA VERMA AND OTHERS v. DELHI TRANSPORT CORPORATION[11] wherein the Apex Court in elaboration had discussed the scope and ambit of Sections 168, 166, 163A, Schedule II, the working out of the multiplier while awarding compensation and the principles relating to determination of liability and quantum of compensation and several other principles relating thereto. The Apex Court, in fact, had referred to the under-noted decisions:- “ABATI BEZBARUAH v. DY.DIRECTOR GENERAL, GEOLOGICAL SURVEY OF INDIA (2003 (3) SCC 148); DAVIES v. POWELL DUFFIYN ASSOCIATED COLLIERIES LTD. (1942 AC 601); FAKEERAPPA v. KARNATAKA CEMENT PIPE FACTORY (2004 (2) SCC 473); GENERAL MANAGER, KERALA STATE ROAD TRANSPORT CORPORATION v. SUSAMMA THOMAS (1994 (2) SCC 176); NANCE v. BRITISH COLUBIA ELECTRIC RLY.CO.LTD. (1951 AC 601); NEW INDIA ASSURANCE CO.LTD. v. CHARLIE (2005 (10) SCC 720); ORIENTAL INSURANCE CO.LTD. v. MEENA VARIYAL (2007 93) ALD 99 (SC); SARLA DIXIT v. BALWANT YADAV (1996 (3) SCC 179); TN STATE ROAD TRANSPORT CORPORATION LTD. v. RAJAPRIYA (2005 (6) SCC 236); UP STATE ROAD TRANSPORT CORPORATION v. KRISHNA BALA (2006 (6) SCC 249) and UP STATE ROAD TRANSPORT CORPORATION v. TRILOK CHANDRA (1996 (4) SCC 362).” At the outset, it may be stated that the Apex Court at para 18 observed as hereunder:- “The principles relating to determination of liability and quantum of compensation are different for claims made under section 163a of MV Act and claims under section 166 of MV Act. (See : Oriental Insurance Co. Ltd. vs. Meena Variyd 2007 (5) SCC 428 ). Section 163a and Second Schedule in terms do not apply to determination of compensation in applications under Section 166. In Trilok Chandra, this Court, after reiterating the principles stated in Susamma Thomas, however, held that the operative (maximum) multiplier, should be increased as 18 (instead of 16 indicated in Susamma Thomas), even in cases under section 166 of MV act, by borrowing the principle underlying section 163a and the Second Schedule. This court observed: "section 163-A begins with a non obstante clause and provides for payment of compensation, as indicated in the Second Schedule, to the legal representatives of the deceased or injured, as the case may be. Now if we turn to the second Schedule, we find a table fixing the mode of calculation of compensation for third party accident injury claims arising out of fatal accidents. The first column gives the age group of the victims of accident, the second column indicates the multiplier and the subsequent horizontal figures indicate the quantum of compensation in thousand payable to the heirs of the deceased victim. According to this table the multiplier varies from 5 to 18 depending on the age group to which the victim belonged. Thus, under this Schedule the maximum multiplier can be up to 18 and not 16 as was held in Susamma Thomas case. . . . . Besides, the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependents are his parents, age of the parents would also be relevant in the choice of the multiplier. . . . . . What we propose to emphasise is that the multiplier cannot exceed 18 years' purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16. . . " In the light of these decisions, the same being binding precedent, this court is of the opinion that the principles relating to determination of liability and quantum of compensation are different for claims made under Section 163-A of the Act and the claims made under Section 166 of the Act. It is not in controversy that this claim was made usn166 of the Act and not under Section 163-A of the Act. However, the Apex Court at paras 19, 20 and 21 specified certain principles while working out the multiplier to be applied as hereunder:- “In New India Assurance Co. Ltd. vs. Charlie