IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.12.2008 CORAM:- THE HON'BLE MR. JUSTICE R. SUDHAKAR C.M.A.No.3659 of 2008 and M.P.No.1 of 2008 The Managing Director, Tamil Nadu State Transport Corporation Ltd., Division III, Kancheepuram. ... Appellant / Ist Respondent Vs. 1.M.Balamurali 2.Minor B.Janakiraman 3.Minor B.Thennarasu Minor Petitioners 2 & 3 rep. by their father M.Balamurali as Natural Guardian and Next Friend. 4.Anandan(died) 5.National Insurance Company Limited, C/o.Motor Third Party Claims Officers, No.751, Anna Salai, Chennai-6. 6.Ranganathan (given up) ... Respondents / Petitioners 1 to 3 and Respondents 3 and 4 Appeal filed under Section 173 of the Motor Vehicle Act against the award and decree dated 22.02.2008 in MCOP No. 2835 of 2003 on the file of the Motor Vehicles Accident Claims Tribunal,(IV Small Causes Court, Chennai. For Appellant : Mr.B.Vijayalakshmi For Respondents : Mr.T.G.Balachandran For R1 to 3 JUDGMENT The State Transport Corporation has filed this appeal challenging the award and decree dated 22.02.2008 in MCOP No. 2835 of 2003 on the file of the Motor Vehicles Accident Claims Tribunal (IV Small Causes Court, Chennai. https://hcservices.ecourts.gov.in/hcservices/ 2. It is a case of fatal accident. The accident in this case happened on 08.05.2003. The deceased Chitra, aged about 25 years working as a Tailor in P.S. Apparels Exports Company, Vandalur Road, Kancheepuram District, was travelling in a van, which was hit by the bus belonging to the appellant-Transport Corporation. In that accident, she suffered severe injuries and was taken to Government Hospital, Royapettah. In spite of medical treatment, she died. The husband aged 28 years and two minor sons aged 5 and 3 years respectively, are the claimants. They claimed a sum of Rs.8,00,000/- as compensation, stating that the income of the deceased was Rs.4,000/- p.m. According to the claimants, she was working as a Tailor in P.S.Apparels Exports Company, Vandalur Road, Kancheepuram District. 3. The Tribunal accepted the plea of the income of the deceased at Rs.4,000/- p.m. and after deducting 1/3rd towards personal expenses, fixed her contribution to the family at Rs.2,666/- per month. The Tribunal adopted 17 multiplier as per Second Schedule of the Motor Vehicle Act, taking into consideration the fact that the deceased was 25 years old at the time of accident. The Tribunal granted a sum of Rs.5,43,864/- as pecuniary loss. In all, the Tribunal granted the following amounts as compensation, with interest at the rate of 7.5% p.a. Sl.No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefits Rs. 5,43,864/- 2 Transportation Rs. 2,000/- 3 Loss of consortium Rs. 25,000/- 4 Funeral expenses Rs. 5,000/- 5 Loss of love and affection Rs. 15,000/- 6 Mental agony Rs. 15,000/- Total Rs. 6,05,864/- 4. In this appeal, it is contended that the multiplier '17' is at the high and the husband is not a dependent. The learned counsel for the appellant-Transport Corporation stated that a sum of Rs.15,000/- under the head of mental agony is not applicable to this case. 5. The multiplier though adopted as per Schedule should be reduced, and as far as the choice of multiplier is concerned, it will depend upon the facts and circumstances of each case. The Apex Court in General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas and others, reported in 1994 (1) ACC https://hcservices.ecourts.gov.in/hcservices/ 346 (SC) = AIR 1994 SC 1631 held as follows with regard to choice of multiplier. "16. 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 award 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 insofar 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. https://hcservices.ecourts.gov.in/hcservices/ 17. 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% 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 annum and not 10% 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." 6. In this case, the husband is not a dependent, the children of the deceased, however, need to compensate for the loss of the income of one of their parent. As far as the deceased mother is concerned, on her death, the children will lose financial support of the mother as well as her love and affection. Considering the lumpsum payment given to the claimants on the death of the mother, the multiplier can be suitably modified. Therefore, instead of '17' multiplier adopted by the Tribunal, '15' multiplier can be adopted and if calculated based on the same, the pecuniary loss will be at Rs.2,666/- x 12 x 15 = Rs.4,79,880/- rounded off to Rs.4,80,000/-. A sum of Rs.15,000/- granted for mental agony is set aside. However, the said amount is added towards loss of love and affection each to the two minor children. Therefore, the compensation for loss of love and affection to the two minor children is increased to Rs.30,000/- as against Rs.15,000/-. The amount awarded by the Tribunal towards loss of consortium at Rs.25,000/- and Rs.2,000/- towards Transportation, are confirmed. Accordingly, the award of the Tribunal is modified as follows:- https://hcservices.ecourts.gov.in/hcservices/ Sl.No. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits Rs.5,43,000/- Rs.4,80,000/- 2 Loss of consortium Rs. 25,000/- Rs. 25,000/- 3 Loss of love and affection (two minor children) Rs.15,000/- Rs. 30,000/- 4 Mental Agony Rs.15,000/- ---- 5 Funeral expenses Rs. 5,000/- Rs. 5,000/- 6 Transportation Rs. 2,000/- Rs. 2,000/- Total Rs.6,05,864/ Rs.5,42,000/- 7. Since the accident happened in the year 2003 and the award was passed by the Tribunal in the year 2008, the interest granted by the Tribunal at 7.5% p.a. is confirmed. 8. In the result, the civil miscellaneous appeal is partly allowed as follows:- (i) The Award of the Tribunal is reduced to Rs.5,42,000/- from Rs.6,05,864/-. (ii) The interest at 7.5% is confirmed. (iii) Learned counsel for the appellant seeks eight weeks time to deposit the award amount and the same is allowed. On such deposit, except the minors, other claimants are entitled to withdraw the amount. (iv) Out of the award amount of Rs.5,42,000/-, the husband of the deceased, viz., respondent No.1/claimant No.1 is entitled to withdraw a sum of Rs. 1,42,000/- together with interest and costs. (v) The two minor sons of the deceased, viz., respondent No.2 and 3/ claimant No.2 and 3, are entitled to a sum of Rs.2,00,000/- each, together with interest and costs. (vi) The share of the minors respondents 2 and 3/ claimants 2 and 3 shall be invested in any one of the nationalised bank proximate to the place of the residence of the first respondent/first claimant, initially for a period of three years, renewable thereafter till the minors attain majority. The father of https://hcservices.ecourts.gov.in/hcservices/ the minors, is permitted to withdraw the accrued interest in respect of the share of the minors, once in three months directly from the Bank and for the said purpose, the first respondent/first claimant shall open a Savings Bank Account in the same Branch and the interest amount shall be transferred to the account to be maintained by the father. (vii) The nationalised Bank to which the amount will be deposited, shall intimate to the first respondent/first claimant of such deposit and confirm the same to the Tribunal that the first claimant has been duly informed. The Tribunal to instruct the Bank accordingly. (viii) Since the deposit is in the case of minors, the Tribunal is directed to send a report containing the details of the deposit to the High Court on such deposit. (ix) There will be no order as to costs in this appeal. (x) Consequently, connected miscellaneous petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. rrg To The Motor Accident Claims Tribunal, (IV Court of Small Causes) Chennai. 1 cc to Mr.T.G.Balachandran, Advocate, Sr. 71160 1 cc to Mrs. B. Vijayalakshmi, Advocate, SR. 71127 CMA No.3659 of 2008 SR (CO) kk 5/2 https://hcservices.ecourts.gov.in/hcservices/