IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.11.2008 CORAM: THE HON'BLE MR.JUSTICE R.SUDHAKAR CMA.NO.2742 OF 2008 Divisional Officer, National Insurance Co.,Ltd., Pondicherry ...Appellant/2nd Respondent Vs. 1.Kuppammal 2.Mangalakshmi 3.Vasantha 4.Devi 5.Virudambal 6.Venkatesn 7.A.Janakiraman ...Respondents/Claimants 1 to 6 & 1st Respondent This Civil Miscellaneous Appeal filed against the Judgment and decree dated 11.11.2003 and made in MACTOP.No.783 of 2002 on the file of the Motor Accident Claims Tribunal, Tindivanam (Principal Subordinate Court),Tindivanam For Appellant : Mr.S.Vadivel For Respondents 1 to 6: Mr.T.Dhanyakumar J U D G M E N T The Insurance Company is on appeal challenging the award dated 11.11.2003 passed in MACTOP.NO.783 of 2002 on the file of Motor Accident Claims Tribunal, Tindivanam (Principal Subordinate Court),Tindivanam. 2. It is a case of fatal accident. The accident in this case happened on 11.7.2002. The deceased Veerabathiran aged about 55 years, a milk vendor, flower merchant and agriculturist was walking in the road when he was hit by a Van insured with the appellant. In that accident he died. The wife, four daughters and one son (1).Kuppammal, wife aged 50 years, (2)Mangalakshmi, daughter aged 32 years, (3).Vasantha, daughter, aged 30 years, (4)Devi, daughter aged 28 years, (5)Viruthambal, daughter, aged 26 years and (6) Venkatesh, son aged 24 years have filed the claim for compensation in a sum of Rs..5 lakhs stating that the income of the deceased was at Rs.6,000/- per month. https://hcservices.ecourts.gov.in/hcservices/ 3. The Tribunal in the absence of any relevant record fixed the income at Rs.3,000/- and by adopting 11 Multiplier, granted compensation towards loss of pecuniary benefits in a sum of Rs.2,64,000/-. The Tribunal also granted compensation on conventional heads. In all, sum of Rs.3,96,000/- with 9% interest was granted as compensation. 4. The finding of the Tribunal with regard to negligence on the part of the driver of the Van who is responsible for the accident and the death and consequential liability fixed on the appellant Insurance Corporation to compensate the claimants is not in dispute and the same is confirmed. 5. The only contention raised by the learned counsel for the appellant is on the quantum of compensation. 6. In support of the claim petition, the wife of the deceased was examined as PW1, one Kanniappan, an eye witness was examined as PW2 and one Subramani, an eye witness was examined as PW3.Ex.A1 and A2 were marked on behalf of the appellant . Ex.A1 is the Photocopy of First Information Report and Ex.A2 is the Postmortem Certificate and no oral or documentary evidence were marked on behalf of the appellant Insurance Corporation. 7. As far as the age of the deceased is concerned, the Tribunal fixed the same as 55 years based on Ex.P.2 Postmortem certificate. As far as income is concerned, the Tribunal rejected the plea of Rs.6,000/- as income stating that no documentary evidence was let in, but , however fixed the income of the deceased as Rs.6,000/- of which 1/3 was deducted towards personal expenses and the contribution was taken as Rs.24,000/- per annum.The Tribunal adopted 11 Multiplier by following the second schedule to the Motor Vehicles Act and fixed the amount as follows: Sl. No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefit (24,000 x 11 ) Rs.2,64,000/- 2 Loss of Consortium to wife Rs. 30,000/- 3 Loss of Love and Affection to five children (Rs.20,000 x 5) Rs.1,00,000/- 4 Funeral expenses Rs. 2,000/- Total Rs.3,96,000/- https://hcservices.ecourts.gov.in/hcservices/ 8. The appellant counsel states that the 11 multiplier is on the higher side. The amount granted towards loss of consortium and loss of love and affection has to be reduced, as also interest at 9%.p.a. 9. Learned counsel for the claimant on the other hand pleaded that the income of the deceased was taken at Rs.3,000/- is very low, considering the fact that he was actually engaged in milk vending, selling of flowers and in agriculture. Therefore, the income should be marginally higher. 10. In the absence of document to show some income,the Tribunal was justified in fixing the income of the deceased at Rs.3,000/-. As far as multiplier is concerned, the Apex Court in General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas and others reported in (1194) 1 ACC 346 (SC) = AIR 1994 SC 1631, set out certain parameters that has to be considered. Paragraph 11 of the said decision is set out hereunder: "11. It is necessary to reiterate that the multiplier method is logically sound and legally well established. There are some cases which have proceeded to determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a percentage therefrom towards uncertainties of future life and awarded the resulting sum as compensation. This is clearly unscientific. For instance, if the deceased was, say, 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the loss of dependency for 45 years - virtually adopting a multiplier of 45 - and even if one-third or one-fourth is deducted therefrom towards the uncertainties of future life and for immediate lump sum payment, the effective multiplier would be between 30 and 34 . This is wholly impermissible. We are aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. Some Judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act. 1939, in so far as it envisages the compensation to be 'just', the https://hcservices.ecourts.gov.in/hcservices/ statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases. The multiplier represents the number of years' purchase on which the loss of dependency is capitalised. Take, for instance, a case where annual loss of dependency is Rs.10,000/-. If a sum of Rs.1,00,000/- is invested at 10 per cent annual interest, the interest will take care of the dependency perpetually. The multiplier in this case works out to 10. If the rate of interest is 5 per cent per annum and not 10 per cent, then the multiplier needed to capitalise the loss of the annual dependency at Rs.10,000/- would be 20. Then the multiplier, i.e. the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last, etc., Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependents, whichever is higher) goes up." 11. In view of the fact that the deceased was 55 years old and since all the children are majors, the dependency will not arise in this case. Therefore, multiplier of 9 will be appropriate. Therefore, towards pecuniary loss, the claimant shall be entitled to Rs.24,000 x 9 = Rs.2,16,000/-.Towards loss of consortium and loss of love and affection, the Tribunal has granted very huge amount. No reason has been stated as to why the compensation on this head has been deviated from normal thumb rule adopted for granting compensation under conventional heads. The said amount has to be reduced. Therefore, the compensation stands modified as follows: https://hcservices.ecourts.gov.in/hcservices/ Sl. No. Head Amount granted by this Court 1 Loss of pecuniary benefits (Rs.24,000 x 9) Rs.2,16,000/- 2 Loss of consortium to the wife Rs. 25,000/- 3 Loss of love and affection to five children (Rs.15,000/- each) Rs. 75,000/- 4 Funeral Expenses Rs. 2,000/- 5 Transport Expenses Rs. 2,500/- 6 Loss of Estate Rs. 2,500/- Total Rs. 3,23,000/- 12. Since the accident happened in the year 2002 and the award passed in the year 2003, the interest awarded by the Tribunal at 9% stands reduced to 7.5%,in view of the apex Court decision reported in 2005 (3) C.T.C. 373 (Tamil Nadu State Transport Corporation vs. S.Rajapriya). 13. In the result, the Civil Miscellaneous Appeal is allowed in part as follows: (i) The compensation awarded by the Tribunal is reduced to Rs. 3,23,000/- as against Rs.3,96,000/- . (ii) The interest is reduced to 7.5% from 9%. (iii) The learned counsel for the appellant prays eight weeks time to deposit the award amount as per the order of this Court and is allowed. (iv) The learned counsel for the respondents/claimants prays for withdrawal of the amount in deposit as per order of this Court. Hence, on such deposit, the first respondent-wife is permitted to withdraw 75% of the amount as awarded by the Court with proportionate interest and entire cost thereon. The rest of the respondents are entitled to withdraw the balance equally. (v) There will be no order as to costs. Consequently, connected M.P. is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. https://hcservices.ecourts.gov.in/hcservices/ VJY To 1. The Motor Accidents Claims Tribunal (Principal Subordinate Court,) Tindivanam. + 1 cc to Mr.S.Vadivel,Advocate,SR.No.65842 + 1 cc to Mr.T.Dhanyakumarm,Advocate,SR.No.66509 C.M.A.No. 2742 of 2008 and M.P.NO.1 OF 2008 VSV(CO) EM/27.1.09 https://hcservices.ecourts.gov.in/hcservices/