IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT & THE HONOURABLE MR. JUSTICE N.K.BALAKRISHNAN TUESDAY, THE 19TH JULY 2011 / 28TH ASHADHA 1933 MACA.No. 2794 of 2009() ----------------------------------- OP(MV).99/1997 of ADDL. MOTOR ACCIDENT CLAIMS TRIBUNAL, PALAKKAD .................... APPELLANT(S): 2ND RESPONDENT ---------------------------------------------------- UNITED INDIA INSURANCE COMPANY LIMITED, UDUMALPET, NOW REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE,"SHARANYA",HOSPITAL ROAD, KOCHI-11. BY SRI.MATHEWS JACOB, SENIOR ADVOCATE BY ADV. SRI.P.JACOB MATHEW RESPONDENT(S): PETITIONERS 3 TO 8 ---------------------------------------------------------- 1. LALITHA,D/O.KUNJU,HOUSE NO.348,WARD 5, PALIAODE KOLLUPARAMBA,VERKOLI.P.O,POLPULLY, PALAKKAD DISTRICT. 2. LAKSHMIKUTTY, D/O.KUNJU, -DO- -DO- 3. OMANA, D/O.KUNJU, DO. DO. 4. CHANDRAN,S/O.KUNJU DO. DO. 5. MANIKKAN,S/O.KUNJU DO. DO. 6. PREMA,D/O.KUNJU DO. DO. R1 TO R6 BY ADV. SRI.JACOB SEBASTIAN THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts R. BASANT & N.K.BALAKRISHNAN, JJ. ---------------------------------------------------- M.A.C.A.No.2794 of 2009 ---------------------------------------------------- Dated this the 19th day of July, 2011 Judgment Basant, J. How is the amount of compensation payable in respect of death to be computed under Section 163A of the Motor Vehicles Act? This question arises for consideration in this case. 2. Facts are simple and are not in dispute. The first claimant, being the mother is the only Class I heir of the deceased under the Hindu Succession Act. Certain others are, of course, joined as claimants. The deceased was aged 26 years on the date of his death. He was engaged as a cleaner in a motor vehicle and his monthly income was accepted by the Tribunal to be Rs.3000/-. 3. After thus coming to a specific finding on the age of the deceased as also his monthly income, the Tribunal appears to have proceeded to ascertain the quantum of compensation MACA 2794/09 2 payable. The Tribunal directed payment of an amount of Rs.4,36,500/- as per the details shown below: 1. Loss of dependency(3000 x 12 x 2/3 x 18) - Rs.4,32,000/- 2. Funeral expenses - Rs.2,000/- 3. Loss of estate - Rs.2,500/- ---------------- Total - Rs.4,36,500/- ========== 4. The claimants appear to have accepted the award. They have not preferred any appeal. The insurance company has preferred this appeal. The appeal is directed only against the quantum of compensation awarded. We have heard counsel. 5. Called upon to explain the nature of the challenge which the appellant wants to mount against the impugned award, the learned counsel for the appellant submits that the Tribunal erred in reckoning 18 as the multiplier. The claimant mother was aged 64 years. The claimant father was aged 76 years and the two other claimants who are siblings who joined as claimants were aged 42 years and 31 years. In any view of the matter, 18 could not have been adopted as the multiplier, contends the learned counsel for the appellant. 6. Obvious confusion appears to exist in the mind of the MACA 2794/09 3 Tribunal as also in the minds of all concerned. For the purpose of clarity, we extract Section 163A of the Motor Vehicles Act. “163-A. Special provisions as to payment of compensation on structured formula basis :- (1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. Explanation- For the purposes of this sub- section,”permanent disability” shall have the same meaning and extent as in the Workman's Compensation Act, 1923 (8 of 1923). (2) in any claim for compensation under sub- section(1), the claimant shall not be required to plead or establish that the death or permanent disablement MACA 2794/09 4 in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.”(emphasis supplied) 7. The Parliament chose to introduce Section 163A into the statute book obviously with the intention of providing a structured formula for ready and easy computation of compensation payable. The long queues for compensation before the Tribunals appear to have vexed and tormented the minds of the legislature. Prescription of an easy ready reckoner method of ascertaining the compensation and making the same available to the victims/their legal heirs was sought to be achieved by introduction of Section 163A. 8. We may straightaway take note of certain salient features. Section 163A imposes an absolute statutory liability. It is not dependent on the traditional norms of fixation of liability. MACA 2794/09 5 The law of torts does not appear to have any specific application to the liability under Section163A of the M.V.Act. The liability is independent of any negligence. Negligence is irrelevant while ascertaining the liability under Section 163A of the Act. It is no more necessary to prove negligence as the foundation of liability in a claim under Section 163A. Absolute statutory liability is imposed. In a claim under Section 163A, the court is only to ascertain whether there is death or permanent disablement due to accident arising out of the use of a motor vehicle. In that event, the owner of the motor vehicle or the authorised insurer is liable to pay compensation as per the structured formula specified in the Second Schedule to the legal heirs of the victim or the victim as the case may be. The language of the statutory provision (S.163A) is most important. The principles under the general law relating to computation of compensation have no relevance, going strictly by the statutory provision extracted above. The sweeping non obstante clause with which S.163A opens is a clarion call to all concerned to keep aside the traditional and prevailing norms and be prepared for the declaration of absolute statutory liability which follows. MACA 2794/09 6 9. It will be apposite straightway to note that the legislature wanted unnecessary litigation to be avoided. Even precise findings of fact regarding age and income appear to be irrelevant. Ranges of age and income are specified under the entries against the relevant columns. Range of age has to be ascertained precise to a range of 5 years. After so ascertaining the range, the relevant entry has to be chosen. Regarding income also, specific income does not appear to be relevant. The columns prescribed ranges of income. The first column must be reckoned as applicable to persons having the range of income upto Rs.3000/- only. The second column relates to the income above Rs.3000/- upto Rs.4200/-. Like that ranges of income upto Rs.40,000/- are specified in the Second Schedule. 10. To us what appears to be crucial is that ranges of income and ranges of age alone have to be ascertained to arrive at the quantum of compensation payable under the Second Schedule. Once we identify the relevant age group and the relevant income group, we need only ascertain the precise figure which represents rupees in thousands given against the relevant columns. Thereafter, in accordance with the note to the chart MACA 2794/09 7 given in the Second Schedule, one third of the amount specified has to be deducted towards the personal expenses of the deceased. The balance would be the amount payable under clause 1 of the Second Schedule. 11. After accepting the age of the deceased to be in the range of above “25 but not exceeding 30 years” and after ascertaining the income group as Rs.36,000/-, the only job left for the Tribunal was to ascertain the relevant entry against these. For persons earning the income upto Rs.36,000/- belonging to the age group of 25 to 30 years, the amount prescribed is Rs.6,12,000/-. From this, one-third has to be deducted. That would mean that an amount of Rs.4,08,000/- is the amount payable as compensation for fatal accidents under clause 1 of the Second Schedule. If one carefully studies clause 1 of the Second Schedule, no trace of doubt can survive about the manner in which compensation payable has got to be ascertained. 12. It is true that earlier there was some doubt about the precise manner in which compensation has to be ascertained. Ordinarily, under the multiplier-multiplicand method, the Tribunals have to ascertain the relevant multiplier. While MACA 2794/09 8 identifying the relevant multiplier, the multiplier applicable in respect of the deceased and the multiplier applicable in respect of the claimant will necessarily have to be identified and only the lesser of those two multipliers can be taken into consideration. That is only while ascertaining the compensation payable under the law of torts which is the foundation of liability under Section 166 of the Act. But so far as a claim under Section 163 A is concerned, there can be no question of identifying the multiplier. The Tribunals are not expected to press into service the multiplier shown in the chart/table under the Second Schedule while ascertaining the compensation payable in respect of fatal accidents. There the Tribunals are expected only to ascertain the amount in thousands prescribed by the relevant entry against the relevant columns. 13. We find that the Tribunals often commit the mistake of pressing into service the multiplier as shown in the second column of the table/chart while attempting to ascertain the quantum of compensation payable in respect of death. This definitely betrays want of proper application of mind. It appears that the whole confusion arises because multiplier applicable to MACA 2794/09 9 the relevant age group is given in the table/chart under clause 1 of Second Schedule which deals with compensation payable for fatal accidents. But a careful reading of clause 1 of the Second Schedule clearly reveals that the multiplier has been shown against the relevant age group only for ascertaining the compensation payable for non-fatal accidents under clause 5. It has no application whatsoever while ascertaining the compensation payable in case of death. It is crucially relevant to note that there is common heading for all the income groups. Those entries relate to compensation in case of death. Merely because the multiplier to be chosen for the purpose of ascertaining the compensation payable consequent to the disability suffered by the claimants in non-fatal accidents under clause 5 is also shown against the table/chart under clause 1, it cannot be assumed that the multiplier has relevance for the purpose of computing compensation payable in the case of death of a victim. Instead of repeating the relevant age group and the multiplier under clause 5, the framers of the statute appear to have found it more convenient to include that information also in the table/chart given under clause 1. This cannot justify an MACA 2794/09 10 attempt by the Tribunals/Courts to ascertain compensation payable in the case of death by pressing into service the multiplier shown in vertical column 2. We repeat that the multiplier is irrelevant while ascertaining the compensation in the case of death under Section 163A. In the case of death all that is relevant is the relevant figure which represents rupees in thousands given against the relevant horizontal and vertical column. Multiplier is relevant only while computing compensation for non-fatal accidents under clause 5 of the Second Schedule. There can be no surviving doubt or confusion on this aspect and we expect all the Tribunals to follow this method of computation of compensation in the case of death. 14. That there can virtually be no doubt on this aspect is now very clear from the decision in National Insurance Co. Ltd. v. Gurumallamma (2009 ACJ 2660). Justice S.B.Sinha for the Bench in paragraph 8 lays to rest the last trace of doubt, if any possible, on the question. We extract paragraph 8 below: “ Multiplier stricto sensu is not applicable in the case of fatal accident. The multiplier would be applicable only in case of disability in non-fatal MACA 2794/09 11 accidents as would appear from the serial No.5 of the Second Schedule. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - As the Second Schedule provides for a structured formula, the question of determination of payment of compensation by application of judicial mind which is otherwise necessary for a proceeding arising out of a claim petition filed under section 166 would not arise. Tribunal in a proceeding under section 163-A of the Act is required to determine the amount of compensation as specified in the Second Schedule. It is not required to apply the multiplier except in a case of injuries and disabilities.” In Reshma Kumari and others v. Madan Mohan and another (JT 2009(10) SC 90) the Bench which referred the matter to a Larger Bench had also made it clear that the multiplier is irrelevant while ascertaining the quantum of compensation in respect of death of persons. Paragraph 41 makes the position crystal clear. We extract paragraph 41 also for the purpose of further clarity: MACA 2794/09 12 “Section 163A of the 1988 Act does not speak of application of any multiplier. Even the Second Schedule, so far as the same applies to fatal accident, does not say so. The multiplier, in terms of the Second Schedule, is required to be applied in a case of disability in non fatal accident. Consideration for payment of compensation in the case of death in a 'no fault liability' case vis-a-vis the amount of compensation payable in a case of permanent total disability and permanent partial disability in terms of the Second Schedule is to be applied by different norms. Whereas in the case of fatal accident the amount specified in the Second Schedule depending upon the age and income of the deceased is required to be paid wherefor the multiplier is not to be applied at all. But in a case involving permanent total disability or permanent partial disability the amount of compensation payable is required to be arrived at by multiplying the annual loss of income by the multiplier applicable to the age of the injured as on MACA 2794/09 13 the date of determining the compensation and in the case of permanent partial disablement such percentage of compensation which would have been payable in the case of permanent total disablement as specified under item (a) of the Second Schedule.” 15. We reiterate that multiplier is irrelevant while ascertaining the quantum of compensation payable under Section 163A of the M.V.Act in case of death of any person. We assert that multiplier is relevant only while computing the compensation payable for disablement suffered in non-fatal accident cases under clause 5. 16. The learned counsel for the appellant has relied on the decision in Ramesh Singh v. Satbir Singh [2008(1) KLT 614 (SC) ] in support of his contention that even in a claim under Section 163A of the Act, the multiplier has to be pressed into service. We have gone through the judgment in detail. The judgment does not indicate precisely that the claim was one under Section 163A of the Act. Of course, we notice that in paragraph 3 of the judgment the following lines appear: “However, as regards the application of the MACA 2794/09 14 multiplier, the learned counsel heavily relied on the Second Schedule and contends that this was the case under S.163A of the Motor Vehicles Act and since the age of the deceased was only 22 years, the multiplier of 16 was liable to be made applicable.” We do not reckon this as sufficient to come to a positive conclusion that the said claim was under Section 163A of the M.V.Act and the Tribunal was considering such a claim under Section 163A. We are unable to accept that the Supreme Court by the said decision wanted the Tribunals not to follow the Second Schedule and to independently calculate the compensation payable under Section 163A by resorting to the multiplier multiplicand method ignoring the scheme under the Schedule. A reading of the said decision as well must definitely suggest that the claim that was being considered was not one under Section 163A. At any rate, we are of the opinion that the later decision in National Insurance Co. Ltd. v. Gurumallamma (supra) in paragraph 8 considered the question specifically and resolved the dispute. The observations in Reshma Kumari and others v. Madan Mohan and another MACA 2794/09 15 (supra) also clearly support our conclusion. 17. Coming back to the facts, the Tribunal obviously erred in ascertaining the quantum of compensation payable by applying the multiplier multiplicand method in this case where the claim is lodged under Section 163A. The legal heir/second claimant was hence entitled only for an amount of Rs.4,12,500/- as per the details given below: 1. Compensation for death(6,12,000x2/3) - Rs.4,08,000 2. Funeral expenses - Rs.2000 3. Loss of estate - Rs.2500 ---------------- Total - Rs.4,12,500/- ========== 18. We note that no amount has been claimed for medical expenses. The claim for loss of consortium does not arise. All other heads under clause 3, are provided as above. 19. The appeal can, in these circumstances, succeed only to the above extent. 20. In the result: a) This appeal is allowed in part. b) The claimant/legal heir of the deceased is found to be entitled for a total amount of Rs.4,12,500/- as shown above. MACA 2794/09 16 c) All the directions of the Tribunal regarding payment of interest and cost is upheld. d) The sole legal heir of the deceased victim having now expired, the amount of compensation shall be payable to the legal heirs of the said legal heir/mother equally. R. BASANT, JUDGE. N.K.BALAKRISHNAN, JUDGE. srd MACA 2794/09 17 MACA 2794/09 18 MACA 2794/09 19