IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:06.11.2008 CORAM: THE HON'BLE MR.JUSTICE R.SUDHAKAR CMA.NOS.3402 AND 3403 OF 2008 and M.P.NOS.1 AND 1 OF 2008 The Branch Manager United India Insurance Co., Ltd., Branch office No.11A, MC Road Ambur Post Vellore District. ...Appellant in both CMAs./ 2nd Respondent Vs. 1.Anuradha 2.C.Ramya 3.Minor Vasanth @ Vasanthakumar rep. by N.F.C.Anuradha ...Respondents in both CMAs./ 1,2 and 3 petitioners and 4th Respondent 4.Sabeer Ahmed (set exparte before MACT) Civil Miscellaneous Appeals are filed under Section 173 of Motor Vehicles Act against the award and decree dated 26.9.2006 made in MCOP.Nos. 82 and 83 of 2004 on the file of MACT (CJM-I)Dharmapuri at Krishnagiri. For Appellant : Mr.T.Ravichandran For Respondents: Mr.V.R.Annagandhi J U D G M E N T The United India Insurance company filed these appeals challenging the award dated 26.9.2006 made in MCOP.Nos. 82 and 83 of 2004 on the file of MACT(CJM-I) Dharmapuri at Krishnagiri. 2. This is a case of fatal accident. The deceased Chandrasekar and his wife Chamundeeswari were travelling in a https://hcservices.ecourts.gov.in/hcservices/ Maruthi Van aloing with two other persons on the Kulithali to Bangalore Highway Road. The said Omni van was hit by the lorry insured with the appellant. In the said accident, Chandrasekar and Chamundeeswari died. The two other occupants of the car also died. On the death of Chandrasekaran, his two daughters aged 25 and 20 years and the one minor son aged about 16 years filed a claim for compensation in a sum of Rs.25 lakhs in MCOP.No.82 of 2004. On the death of Chamundeeswari, two daughters and the one minor son as above filed a claim for compensation in a sum of Rs.15 lakhs in MCOP.No.83 of 2004. The claims as above were heard and decided by a common award along with two other claims. The compensation awarded in respect of the two other case of death has been accepted and the compensation has been settled. Appeals are filed in the present two cases only. 3. In support of the claim, daughter Anuradha was examined as PW2 and minor son was examined as PW3. Exs.A1 to A10 were marked. Ex.A1 is the copy of First Information Report EX.A2 is the postmortem certificate of one Pandian Chettiar EX.A3 is the Postmortem Certificate of one Pappathiammal EX.A4 is the legal heir certificate EX.A5 is the Insurance Policy EX.A6 is the Postmortem report of Chamundeeswari EX.A7 is the Postmortem report of Chandrasekar EX.A8 is the Income Tax receipts Ex.A9 is the Sales Tax receipts and EX.A10 is the receipt for payment for income tax. No oral or documentary evidence was let in on behalf of the appellant/respondent before the Tribunal. 4. There is no dispute with regard to negligence and liability fixed on the Insurance Company to pay the compensation to the claimant. The only contention is on the quantum of compensation. 5. MCOP.No,82 of 2004, relates to CMA.No.3402 of 2008. The income of the deceased Chandraseakar, 45 years old and a businessman dealing in plastic was fixed at Rs.7,000/- per month. (i.e.) Rs.84,000/- per Annum. By adopting 13 Multiplier, after deducting 1/3 amount towards his personal expenses, the Tribunal awarded the following amount as compensation. Sl. No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefits Rs.56,000 x 13 Rs..7,28,000/- 2 Funeral expenses Rs. 2,000/- 3 Loss of love and affection Rs. 5.,000/- 4 Damages to cloths Rs. 200/- https://hcservices.ecourts.gov.in/hcservices/ Sl. No. Head Amount granted by the Tribunal 5 Transport Expenses Rs . 800/- Total Rs.7,36,000/- In all, the Tribunal awarded compensation at Rs.7,36,000/- with 7.5 % interest. 6. In MCOP.NO.83 OF 2004 relating to CMA.No.3403 of 2008, the Tribunal fixed the income of the deceased Chamundeeswari aged 40 years , engaged in selling of textiles at Rs.6,000/- p.m (i.e.) Rs.72,000/- per annum. Out of which 1/3 was deducted and the loss of dependency was fixed as Rs.48,000/-. By adopting 15 Multiplier, the Tribunal awarded the following amount as compensation with 7.5% interest. Sl. No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefits (Rs.48,000x15) Rs..7,20,000/- 2 Funeral expenses Rs. 2,000/- 3 Loss of love and affection Rs. 5.,000/- 4 Damages to cloths Rs. 200/- 5 Transport Expenses Rs . 800/- Total Rs. 7,28,000/- 7. The contention of the appellant counsel in both the cases is that the income of the deceased is on the higher side. Therefore, the compensation should be suitably reduced. 8. Learned counsel for the claimant on the other hand submitted that the income is supported by documents Ex.A8 and EX.A10 respectively. He also pleaded that meagre amount has been granted for loss of love and affection to children, for transportation and funeral expenses. He therefore justified the award. 9. In this case, the Tribunal did not accept the income tax records holding that it was not relatable to the period of accident. The Tribunal in the absence of specific documents to prove the income, fixed the monthly income of deceased Chandrasekaran as Rs.7,000/- and Rs.6,000/- in the case of deceased lady Chamundeeswari. Both are self employed and they are dealing in plastic and textile business. The income from this source will stand reduced to the dependents to a great extent though not totally. https://hcservices.ecourts.gov.in/hcservices/ 10. For the purpose of determining the compensation, the following factors will be relevant for consideration. The accident in this case happened in the year 2003. Both the deceased are in business. The actual income during the relevant period i.e. in the year 2003, is not supported by income tax records. In any event, they have claimed a income of Rs.80,000/- p.m. In the absence of specific documentary evidence to show the actual income earned per month, the Tribunal is not justified in fixing the income at Rs.7,000/- in the case of deceased Chandrasekar and Rs.6,000/- in the case of deceased Chamundeeswari. However, considering the fact that they were supporting a family of two daughters and one minor son and running a plastic business, the income can be fixed in the case of deceased Chandrasekar at Rs.6,000/- and Rs.4,000/- in the case of Chamundeeswari said to be dealing in textiles. 11. As to the choice of Multiplier, the parameters has been emphazied by 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, Paragraph 11 of the said decision is extracted 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 https://hcservices.ecourts.gov.in/hcservices/ 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 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. In this case, the deceased Chandrasekar was 45 years old. Considering the parameters as above and in view of the Apex Court decisions in New India Assurance – vs.- Smt.Kalpana and others https://hcservices.ecourts.gov.in/hcservices/ 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), the Multiplier can be taken as 13 itself and the compensation can be determined accordingly. As far as Chamundeeswari is concerned, since she was 40 years old and employed, her contribution to the family will be more than the business. Accordingly, the Multiplier can be reduced. Therefore, the claim in respect of death of Chamundeeswari is concerned, the appropriate Multiplier will be 12 and not 15. 12. In both the cases, meagre amount has been granted for loss of love and affection to three children, for Funeral expenses and for transport expenses and no amount has been granted for Loss of Estate. 13. Considering all these aspects, the award in both the cases stand modified: CMA.No.3402 of 2008: Sl. No. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits Rs.6,000- 2000=Rs.4,000 x 12 x13= Rs.7,28,000/- Rs.6,24,000/- 2 Funeral Expenses Rs. 2,000/- Rs. 5,000/- 3 Transport Expenses Rs. 800/- Rs. 2,000/- 4 Loss of love and affection to three children (Rs.15000/- each) Rs. 5,000/- Rs. 45,000/- 5 Loss of Estate Rs. 15,000/- 6 Damage to cloths Rs. 200/- Rs 200/- Total Rs.7,36,000/=- Rs. 6,91,200/- rounded off to Rs.6,92,000/- https://hcservices.ecourts.gov.in/hcservices/ CMA.No.3403 of 2008, Sl.N o. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits Rs.6,000/- minus x 1/2 (Rs.2,000/- = Rs.4,000/- x 12 = Rs.48,000/- x 15 = Rs.7,20,000/-) Rs.7,20,000/- --- 2 Loss of pecuniary benefits (Rs.4,000/- x 12 = Rs.48,000/- minus 1/3 (Rs.16,000/-) = Rs.32,000/-) x 12 = 3,84,000/-) --- Rs.3,84,000/- 3 Funeral expenses Rs. 5,000/- Rs. 5,000/- 4 Transport expenses Rs. 2,000/- Rs. 2,000/- 5 Loss of love and affection to the two daughter and one minor son Rs. 60,000/- Rs. 60,000/- 6 Loss of estate Rs. 15,000/- Rs. 15,000/- 7 Damage to cloth Rs. 200/- Rs. 200/- Total Rs.7,28,000/- Rs.4,66,200/- rounded off to Rs.4,67,000/- 14. 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% stands confirmed following the decision rendered by the Apex Court in Tamil Nadu State Transport Corporation - vs. - S.Rajapriya reported in 2005 (3) C.T.C. 373. 15. In the result, the Civil Miscellaneous Appeals are allowed in part as follows:- (i) In CMA.No.3402 of 2002 the compensation awarded by the Tribunal is reduced to Rs.6,92,000/- from Rs.7,36,000/-. (ii) In CMA.No.3403 of 2008, the compensation awarded by Tribunal is reduced to Rs.4,67,000/- from Rs.7,28,000/-. (iii) The interest at 7.5% as ordered by the Tribunal is confirmed. (iv) The appellant seeks for eight weeks time to deposit the entire amount and the same is allowed. https://hcservices.ecourts.gov.in/hcservices/ (iv) The claimants will be entitled to withdraw the amount in equal proportion and the minor will be entitled to withdraw, after attaining majority. (vi) If the appellant already deposited the amount in excess, the same shall be refunded to the appellant in both the cases. (vii) There will be no order as to cost. Consequently, connected miscellaneous petitions are closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. VJY To MACT(CJM-I)Dharmapuri at Krishnagiri. 2 ccs to Mr.T. Ravichandran, Advocate, Sr. 62613 and 62614 1 cc to Mr.V.R. Annagandhi, Advocate, SR. 62267 CMA.NOS.3402 AND 3403 OF 2008 AND Connected M.Ps. RJ (CO) kk 5/2 https://hcservices.ecourts.gov.in/hcservices/