IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.12. 2008 CORAM:- Hon'ble Mr. Justice R. SUDHAKAR C.M.A.No.3151 of 2008 and M.P.No.1 of 2008 The Branch Manager, Oriental Insurance co.Ltd., 13, Salem Road, Coonoor, The Nilgiris-643 102 .. Appellant/3rd Respondent Vs. 1.A.Geetha 2. Yesammal 3. S.Mahesh 4. N.Ponnusamy .. Respondents /Petitioners 1 & 2 and Respondents 1 and 2 . . . Appeal filed under Section 173 of the M.V.Act against the award and decree dated 31.03.2006 made in M.C.O.P No.1110 of 2004 on the file of the Motor Accidents Claims Tribunal, (Additional District Judge), Coimbatore. . . . For Appellant : Mr. M.Krishnamoorthy For respondents : Mr.T.S.Sivagnanam(for R1 and R2) . . . J U D G M E N T The Insurance Company has filed this appeal challenging the award dated 31.03.2006 made in M.C.O.P No.1110 of 2004 on the file of the Motor Accidents Claims Tribunal, (Additional District Judge), Coimbatore. 2. It is a case of fatal accident. The accident in this case happened on03.03.2003. The deceased Suresh, 35 years old, a Junior Engineer in Southern Railways was travelling on a Motor Cycle when he was hit by a mini bus bearing registration No. TN-37-V-3615 and insured with the appellant. In that accident, he suffered grievous https://hcservices.ecourts.gov.in/hcservices/ injuries and died. The wife aged 30 years and mother aged 65 years filed a claim for compensation in a sum of Rs.25,00,000/- stating that the income of the deceased was Rs.10,659/- p.m 3. In support of the claim, the wife of the deceased was examined as P.W.1, one Narayanan, eye witness was examined as P.W.2. One Sanjaykumar, an employee of the Railway Departments was examined as P.W.3, and he spoke about the nature of employment and income of the deceased. Documents were marked as Exs.P.1 to P.16. Ex.P.1 is the Marriage invitation. Ex.P.2 is the Death Certificate.Ex.P.3 is the copy of the First Information Report. Ex.P.4 is the Motor Vehicle Inspector's report. Ex.P.5 is the copy of the Post Mortem Certificate. Ex.P.6 is the copy of the order in STR.No.670 of 2003 of Judicial Magistrate, Coonoor. Ex.P.7 is the copy of rough skektch.Ex.P.8 is the copy of inquest report. Ex.P.9 is the legal notice issued by the petitioner's counsel to the respondents.Ex.P.10 is the post acknowledgment. Ex.P.11 is the X Standard mark sheet of the deceased Suresh.Ex.P.12 is the B.E. Degree certificate of the deceased Suresh. Ex.P.13 (s) is the Merit Certificates. Ex.P.14 is the Legal heirship certificate. Ex.P.15 is the Driving Licence. Ex.P.16 is the Salary Certificate. No oral or documentary evidence was let in on behalf of the appellant/respondent before the Tribunal. 4. The finding of negligence on the part of the driver of the mini bus insured with the appellant and the liability fixed on the appellant to compensate the claimant is not disputed. Accordingly, the said finding is confirmed. 5. The only contention raised by the learned counsel for the appellant is on the quantum of compensation. The Tribunal decided the issue in paragraph 7 onwards. As per Ex.P.16, the deceased was drawing net salary of Rs.12,075/- per month. After some statutory deductions, the take home salary was Rs. 5,193/- per month. But the Tribunal noted that most of the deductions were of Provident Fund Savings. The Tribunal taking into consideration the promotional chances of the deceased and the possibility of earning higher income in future, fixed the income of the deceased at Rs.10,000/- per month i.e. Rs.1,20,000/- per annum. Based on that, the pecuniary loss to dependants was fixed at Rs.80,000/-per annum. By adopting multiplier of 16, based on the age of the deceased, who was 35 years old, and a Junior Engineer in the Southern Railway, the Tribunal granted a sum of Rs.12,80,000/- towards pecuniary loss. The Tribunal also granted 10,000/- towards transport and funeral expenses, Rs.20,000/- towards loss of consortium for the wife and Rs.10,000/- for the mother towards loss of love and affection. In all, the Tribunal granted the following amounts with interest at 7.5%.p.a. https://hcservices.ecourts.gov.in/hcservices/ Sl.No . Award Amount granted by the Tribunal 1 Pecuniary Loss Rs.12, 80, 000/- 2. Loss of consortium to the wife Rs. 20, 000/- 3 Loss of love and affection to the mother Rs 10, 000 /- 4 Transport expenses & Funeral expenses Rs. 10, 000/- Total Rs. 13,20,000/- 6. Learned counsel for the appellant pleaded that the multiplier 16 adopted by the Tribunal in this case is high and the compensation as well. He pleaded that the multiplier should be reduced as except the wife and mother, there are no other dependants. As the claimant will get lumpsum payment, the principle laid down by the Apex Court in the case of General Manager, Kerala State Road Transport Corporation VS Susamma Thomas and others reported in(1994) 1 ACC 346(SC) = AIR 1994 SC 1631 will apply and therefore, the multiplier has to be reduced. 7. The learned counsel for the appellant contended that the quantum of compensation should be reduced by reducing the multiplier to 13 as against 16 adopted by the Tribunal. Learned counsel further relied upon the decision of the Supreme Court in New India Assurance – vs.- Smt.Kalpana and others reported in 2007 AIR SCW 1316 = 2007(1) Supreme 514 and in The Managing Director, TNSTC – vs. - Sripriya and others reported in 2007(1) TN MAC 319 (SC). 8. Learned counsel for the claimants, Shri Sivagnanam on the other hand, submitted that the deceased still had 26 years of service and the possibility of the deceased getting promotion as Senior Divisional Engineer in Railways and the possibility of getting further monetary benefits should also be taken into consideration while determining the loss of pecuniary benefits. The deceased in this case - died 20 days after the marriage, leaving behind his young wife and mother in great distress. Therefore, the learned counsel pleaded that the compensation amounts as granted by the Tribunal should be confirmed. 9. The Apex court in General Manager, Kerala State Road Transport Corporation VS Susamma Thomas and others, held as follows: "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 https://hcservices.ecourts.gov.in/hcservices/ 5uncertainties of future life and awarded the resutling sum as compensation. This is clearly unscientific.For instance, if the deceased say, say, 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the cost 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 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 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 https://hcservices.ecourts.gov.in/hcservices/ 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." 10. In New India Assurance – vs.- Smt.Kalpana and others and The Managing Director, TNSTC – vs. - Sripriya and others (cited supra) the Apex Court, in the case of death of persons aged 33 and 37, adopted the multiplier of 13 and 12 respectively. In the present case, the deceased is a 35 years old, Junior Engineer in the Railways Department and he is in regular employment. He is highly qualified graduate in Engineering and had promotional prospects and consequent higher income by way of promotion as Senior Deputy Engineer. Therefore, the Tribunal has reasonably fixed the income of the deceased at Rs.10,000/- per month. Whereas the said amount should have been much more as his salary as per Ex.P.16 is Rs.12,075/- at the time of death. The deductions were towards Provident Fund. However, considering the lumpsum payment, which goes to the dependants and also keeping in mind the fact that there are no children, the multiplier is modified to 14 as against 16. Accordingly, the quantum of compensation towards pecuniary loss will be Rs.80,000 X14= Rs. 11,20,000/- The wife is entitled to a further amount of Rs.5,000/- towards loss of consortium, in all a sum of Rs.25,000/-. The mother is also entitled to a further sum of Rs.5,000/- totally Rs.15,000/- towards loss of love and affection. In all, the Award of the Tribunal is modified as follows with interest at 7.5%. Sl.No . Award Amount granted by the Tribunal Amount granted by This Court 1 Pecuniary loss Rs. 12, 80, 000/- Rs. 11,20,000/- 2. Loss of consortium Rs. 20,000/- Rs. 25,000/- 3 Loss of love and affection Rs 10, 000 /- Rs 15,000 /- https://hcservices.ecourts.gov.in/hcservices/ Sl.No . Award Amount granted by the Tribunal Amount granted by This Court 4 Transport and Funeral expenses Rs 10,000/- Rs 10,000/- Total Rs. 13,20,000/- Rs. 11,70,000/- Since the accident in this case happened in the year 2003 and the award was passed in the year 2006, the interest granted at 7.5% by the Tribunal stands confirmed. 11. In the result, the Civil Miscellaneous Appeal is allowed in part as follows: i. The award amount is reduced to Rs.11,70,000/- from Rs.13,20,000/- ii. The rate of interest at 7.5% granted by the Tribunal is confirmed. iii. . Learned counsel for the appellant stated that the entire amount has already been deposited. Therefore, the claimants are permitted to withdraw the amount as per the order of this Court as apportioned below: 1. Wife - Rs.10,00,000/- with proportionate interest and cost. 2. Mother -Rs.1,70,000/- with proportionate interest. iv.The appellant is permitted to withdraw the excess amount in deposit after settling the claimants. v. Connected miscellaneous petition is closed. vi. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ pal To The Motor Accidents Claims Tribunal, I Addl.Dist.Judge, Coimbatore. 1 cc To Mr.M.Krishnamoorthy, Advocate, SR.70768 1 cc To Mr.T.S.Sivagnanam, Advocate, SR.70883 Copy to: The Section Officer, VR Section, High Court, Madras. CMA No. 3151 of 2008 RSM(CO) SRA(02/02/2009) https://hcservices.ecourts.gov.in/hcservices/