IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 8.12.2008 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR C.M.A.No.3272 of 2008 and M.P.NO.1 OF 2008 The Managing Director, TamilNadu State Transport Corporation ltd., Vellore-9. ... Appellant vs. 1.Kumudha 2.Minor V.Deepa 3.Minor V.Logesh 4.Minor V.Dinesh 5.Ponnammal . Respondents Civil Miscellaneous Appeal is filed under Section 173 of Motor Vehicles Act, 1988 against the decree and Judgment dated 3.12.2007 passed in M.C.O.P.No.524 of 2005 on the file of the Motor Accidents Claims Tribunal-cum-Additional District and Sessions Court (Fast Track CourtNo.3) Poonamallee. For appellant : Mr.N.Anand For respondents : Mr.V.K.Rajagopalan ----- JUDGMENT The Transport Corporation is on appeal challenging the award dated 3.12.2007 passed in M.C.O.P.No.524 of 2005 on the file of the Motor Accidents Claims Tribunal (Additional District and Sessions Judge (Fast Track Court No.3) Poonamallee. 2. This is a case of fatal accident. The accident in this case happened on 24.8.2005. The deceased D.Vadivel aged about 40 years a https://hcservices.ecourts.gov.in/hcservices/ Machine Operator, was riding a bicycle on the Grand Weldon Trunk Road,when he was hit by a bus belonging to the appellant Transport Corporation . In that accident, he suffered grievous injury and died. The wife aged about 33 years, minor daughter aged 15 years, two minor sons aged 13 and 11 respectively, mother aged about 55 years and father aged 60 years are the claimants. They claimed a sum of Rs. 10,03,000/- as compensation stating that the deceased was earning Rs.4000/- per month. 3. In support of the claim petition, the wife of the deceased was examined as P.W.1. One Boobalan, the brother of the deceased was examined as (P.W.2). Ex.P-1 is the photocopy of F.I.R. Ex.P-2 is the photocopy of post-mortem certificate. Ex.P-3 is the true copy of legal heir certificate. On behalf of the appellant Transport Corporation, one Angamuthu was examined as RW1 and no document was marked. 4. The finding of the Tribunal with regard to negligence on the part of the driver of the appellant Transport Corporation bus who is responsible for the accident and the death and consequential liability fixed on the appellant Transport Corporation to compensate the claimants is not disputed by the counsel for appellant and the same is confirmed. 5. The only contention raised by the learned counsel for the appellant is on the quantum of compensation. 6. As regards the compensation, the same was decided by the Tribunal from Paragraph 7 onwards. The age of the deceased was fixed at 40 years as per the Post-mortem Certificate Ex.P.2. As far as the income is concerned, as against Rs.4,000/- p.m, claimed by the claimants in the claim petition, in the absence of acceptable documents showing the income as Rs.4,000/-, the Tribunal fixed the monthly income as Rs.3,000/-and annual income as Rs.36,000/-. From which 1/3 was deducted towards personal expenses of the deceased and the contribution to the family was taken as Rs.24,000/- per annum. Based on the age of the deceased, the Tribunal adopting 16 Multiplier, granted Rs.3,84,000/- (Rs.24,000 x 16) as pecuniary loss. The Tribunal also granted compensation on conventional heads. In all the following amount was granted as compensation with interest at 7.5% p.a.:- https://hcservices.ecourts.gov.in/hcservices/ Sl. No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefits to the Rs.24,000 x 16 Rs.3,84,000/- 2 Loss of love and affection to wife and three children (Rs.20,000 each) Rs. 80,000/- 3 Loss of consortium to the wife Rs. 20,000/- 4 Funeral expenses Rs. 5,000/- Total Rs.4,89,000/- The tribunal also granted default interest at 10% with a future direction to recover the interest part from the officer who fails to take steps to deposit the award amount in time. 7. The contention of the learned counsel for the appellant is that the Tribunal granted excess compensation by adopting 16 Multiplier. Learned counsel for the appellant relied upon the decisions of the Apex 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), 2007 ACJ 825. He further contended that the wife of the deceased was granted Rs.20,000/- towards loss of consortium. Therefore, a sum of Rs.20,000/- granted to the wife of the deceased towards loss of love and affection is not sustainable. In any event, the said amount is excessive. 8. Learned counsel for the respondents/claimants pleaded that the dependents are the wife, three minor children, the aged parents of the deceased. Hence, the compensation need not be reduced. Since the income taken in this case is very low, higher multiplier is justified. 9. In General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas and others reported in (1194) 1 ACC 346 (SC) = AIR 1994 SC 1631, the parameter as to how the multiplier should be determined has been set out and in 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 https://hcservices.ecourts.gov.in/hcservices/ 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 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 https://hcservices.ecourts.gov.in/hcservices/ 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. Further, in view of the decision of the Apex Court in 2007 ACJ 825 (New India Assurance Co.Ltd., Vs. Kalpana and others) wherein the principle that the highest multiplier "18" has to be adopted for the age group of 21 to 25 years and the lower would be in respect of a person in the age group for 60 to 70 years that has been reiterated and also keeping in mind the uncertainty of life and the lump sum payment and the age of the deceased, the multiplier"16" cannot be justified in this case. Therefore, in the facts and circumstances of the present case, "14" multiplier will be appropriate. 11. As far as loss of consortium is concerned, a sum of Rs.20,000/- granted to the wife is confirmed. The three minor children will be entitled to Rs.20,000/- each for loss of love and affection on the death of their father. The mother will be entitled to Rs.7,500/- towards loss of love and affection on the death of her son. The sum of Rs.20,000/- granted towards loss of love and affection to the wife is however set aside. 10. 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.3,84,000/- Rs.3,36,000/- 2 Funeral expenses Rs. 5,000/- Rs. 5,000/- 3 Loss of Consortium to the wife Rs. 20,000/- Rs. 20,000/- 4 Loss of love and affection to the wife and three children (Rs.20,000/-each) Rs. 80,000/- -- 4(a) Loss of love and affection to three children(Rs.20,000 x 3) -- Rs. 60,000/- 4(b) Loss of love and affection to mother -- Rs. 7,500/- 5 Transport Expenses -- Rs. 2,000/- 6 Loss of Estate -- Rs. 2,500/- Total Rs.4,89,000/- Rs. 4,33,000/- 11. Since the accident in this case happened in the year 2005 and the award was passed in the year 2007, the interest granted at 7.5% stands confirmed following the decision of the Apex Court in Tamil Nadu State Transport Corporation - vs. - S.Rajapriya reported in 2005 (3) C.T.C. 373. 12.The default interest granted by the Tribunal at 10% is set aside as there is no provision for the same in the Act. The anguish of the Presiding Officer to curb the delay in deposit of the award amount only exposes the unnecessary time taken by the department to comply with the award of the Tribunal. It may be true in some cases, but unless it is brought to the attention of the Court by the affected party by proper affidavit and petition, direction of this nature in generality cannot be issued. 13. Learned counsel for the appellant states that a sum of Rs.4,50,000/- with proportionate interest and costs has been deposited as per order of this court dated 30.10.2008. 14. In the result, the Civil Miscellaneous Appeal is allowed in part as follows:- https://hcservices.ecourts.gov.in/hcservices/ (i) The award of the Tribunal is reduced to Rs.4,33,000/- from Rs.4,89,000/-. (ii) The interest granted by the Tribunal at 7.5% is confirmed. (iii) The default interest granted by the Tribunal at 10% is set aside. (iv) The award amount is apportioned among the claimants as follows:- Wife, the first respondent Rs.1,33,000/- with proportionate interest and entire cost Minor children, the respondents 2 to 4 (Rs.80,000/- each) Rs.2,40,000/- with proportionate interest Mother, the 5th respondent Rs.60,000/- with proportionate interest (v) The wife (1st respondent) and the mother (5th respondent) of the deceased are permitted to withdraw their share amounts as mentioned above. (vi) The share of the minor respondents 2 to 4/claimants 2 to 4 shall be invested in any nationalised bank proximate to the place of the residence of the first respondent/first claimant for a period of three years and renewable thereafter till the minor attains majority. The mother of 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 on the same branch and the interest amount shall be transferred to the account to be maintained by the mother. (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) The appellant insurance company is entitled to withdraw the balance amount in deposit with accrued interest after settling the claimants. https://hcservices.ecourts.gov.in/hcservices/ (x) There will be no order as to costs. (xi) Consequently, connected miscellaneous petition, is closed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar VJY To 1.The Motor Accidents Claims Tribunal Additional District and Sessions Court (Fast TrackCourtNo.3) Poonamallee. 2.The Record Keeper, V.R. Section, High Court, Madras. +1cc to Mr.N.Anand, Advocate SAr 69078 +1cc to Mr.V.K.Rajagopalan,Advocate Sr 68786 KA(CO) km/9.2. C.M.A.No.3272 of 2008 and connected M.P. https://hcservices.ecourts.gov.in/hcservices/