THE'HIGH COURT OF SIKKIM : GANGTOK M.A.C. APPEAL NO.10F 2005 I, (2A*hs.'nfio°vuetm°bfe::e2°o:d4erspadsasteedd4bt;DMerc.emB:erE.2°s°h4arar:, Member, Motor Accident claims Tribunal, South & West Districts at Namchi in M.A.C.T. Case Nos.6 and 4 of 2004) Mr. Gopi Krishna Kakrania S/o Late Ram Kumar Kakrania Mrs. Vimla Devi Kakrania ` W/o Mr. Gopi Kris`hna Kakragjagr ` Both R/o 336 Canal Street, P.O. Shree Bhumi, Kolkata - 48 West Bengal. versus Mr. Mahendra Pradhan S/o Mr. 8. 8. Pradhan, R/o Dentam Bazar, Westsikkim. . r ;, 2. Unitedlndial Abo've Cent:urion Hill Cart Road, Siliguri' Disc. Darjeeling, West Bengal. AND I..... Appellants I wh ..„.. Respondents M.A.C. APPEAL NO.2 0F 2005 2. Mr. Gopi Krishna Kakrania S/o Late Ram Kumar Kakrania Mrs. Vimla Devi Kakrania W/o Mr. Gopi Krishna Kakrania Both R/o 336 Canal Street, P.O. Shree Bhumi, L Kolkata -48 WestBengal. j{+ verst7s I r¥i,F i? ...... Appellants I &t~,O 2. Mr. Mahendra S/o Mr. a. 8. R/o Dentam West: Sikkim. unit:ed India Insurance Co. Ltd., Above Centurion Bank, Hill Cart Road, Siliguri, Disc. Darjeeling, West Bengal. ...... Respondents Fortheappellants : Mr. Ajay Rathi and Mr. Suraj Chettri, Advocat:es. . For the respor!dent no.1 : Mr. a. Pokhrel, Advocate. For the respondent no.2 : Mr. A.K. Upadryaya, Advocate. ' PF`ESENT: THE HON'BLE MF{. JuSTICE A. P. SuBBA, JUDGE. I fu. _, og±e_f\ring:t';¥ Last date .9th April, 2005. ` DATE OF JUDGMENT : 13" MAY, 2005. I ± E2 £ u E H I A. P. Subba, _J± Since both these appeals involve common question of law and fact, they are heard together and are being disposed I of by this common judgment. 2. ' The incident that gave rise to I:he cause of act:ion .' for filing of the two claim petitions before the MAC Tribunal 1' (South., & West) against whose orders/awards both these Court is the vehicular appeals have been preferred accident that occurred on road, West Sikkim on loth October, 2003. It is stated that the claimants' son and daughterin-law who met with death in the said accident were 3! inn traveling in the ill-fated vehicle which was on its way from Gyalshing t:o Siliguri on the fateful day. The claimants filed two claim p?titions sepa+ately in respect of their deceased son late Praveen Kakrania and daughter-in-law late Pragati @ Anita Kakrania before the Motor Accident Claims Tribunal (South & West) a.t Namchi against Mahendra Pradhan, respondent no.1 the owner of the vehicle and Unit:ed India Insurance Co. Ltd., respondent no.2 wit:h whom the vehicle was insured. The claim petition filed in respect of late Pragati @ Anita Kakrania the deceased daughteriin-law was registered as t . M.A.C.T. Case no. 6 of 2004. The ob'pbsit'e parties resisted the claim by` filing separate written objections challenging the maintain'ability of the claim petition filed by the claimants.. In his writ'ten objection, the respondent no.1 contended that the vehicle ''in question was insured with the respondent no.2 and I i that the claim for compensation, if any, lies ag'ainst the )I Insurance Co. only. In their written objection, the respondent I no.2 denied and disputed each and everything that `shall be contrary to and inconsistent therewith from what shall transpire I from records'. I c -H!-l ( After recording evidence and hearing the parties, the I learned Tribunal awarded an amount of Rs.1,65,700/- as y'' compensation in the fouowing manner. Pa.ra 16 of the .i impugn,ed order which shows how the compensation was worked out is as follows:- + ``16. It is seen from the claim petition as well as from the deposition of the claimar}t No.1 that the jRnsc.°6T8eoo;.fptehremg:i:.asidh:ipc|:i:tj6fKtahEracT;?mawnats on t:his score remained unchallenged. It is also ::a:a::::diho:3::::::,'hte)!i,ii.::p#iy:aH:::oc':,aa,:n:,tE: applied in this case. The monthly income of the deceased is Rs.6,800/-. Thus the annual Income of t:he deceased Pragati kakrania comes to Rs.81,600/- (i.e. Rs.6,800 x 12 = Rs.81,600) Considering the ages of the claimants and applying multiplier 3 in this case the am.ount comes to 3:.t2':f':Pig/-a(*:i:ts.:;3id°°,sX3o=b=S.::4d4u'c8t88/-i)i consideration of the expenses, which the victim would have incurred towards maintaining herself had she been alive which comes to Rs.81,600/- (i.e. Rs.2,44,809 + 3 = Rs.81,600/-). Hence, after deducting Rs.81,600/- out of the annual total income of the deceased compensation amount t:o be R:i.i,£%,£33.c'£:T8a[|:SooCO=m€S.]t,093?;6]o'/6_i:300(i.e. 4t' From the above amount of Rs.1,63,200/-;t, the amount of •#irdwas?` \ d was 'deducted which Rs.50,00Q/- already paid as interim left the balance of Rs.1,13,200/-. The claimant' was entitled to get simple!!interest @ 90/o p.a. on this amount. Over and above t:his an amount of Rs.50,000/~ was awarded as funeral expenses along with further amount of Rs.2,500/- for loss of estate bringing the total amount of compensation awarded at Rs.1,65,700/-. 3. The claim petition filed by the claimants in respect of Praveen Kakrania, the deceased son, was,, registered as : M.A.C.T. Case no.4 of 2004. The claiin was r,esisted by the •.i, :P:0:I:e::::'enso:°orfe2::4'easssa:rneatdhjE¢I*:arTa:e:r::onvdeas'nthe ' •|t' Aft:er recording evidence and hearing .ithe parties, the learned Tribunal granted an amount of Rs.4,10,500/- as compen;ation to the claimant:s fol!to]vyjng the game method of computation of the compensation a'5`"f)6llows:- ``16. It is seen from the claim petition as well as from the deposition of the claimant No.1 that the income of the deceased Praveen Kakrania was Rs.17,000/-per month. The claim of the claimants ori this score remained unchallenged. The monthly income of the deceased thus taken to be • ::i:Z,soeodo6-..ave::nkcaek.atnh,:.aon:::I,:nE:.T,eo4%otoh,: (i.e. Rs.17,000 x 12 = Rs.2,04,000/-). It is also seen that the age of the claimant No.1 is 74 and the claimant No.2 is 67. Considering the ages of t:he claimants and applying multiplier 3 in this case t:he amounts comes to Rs.6,12,000/-(i.e. 2,04,000 X 3 = RS.6,12,000/-). Out of this.iamount 1/3rd is I:o be deducted in consideration which the vict:im would .liav€ maintaining himself had he been a to Rs.2,04,000/- Rs.2,04,000,-). Rs.2,04,000/-outo,`,i;.g!j#i::: f the expens`es, curred towards ve which comes +3 after deducting nual total income o'f the deceased compensation amount to be paid to the claimants comes to Rs.4,08,000 (i.e. Rs.6,12,000 - Rs.2,04,000 = RS.4,08,090/-)." From the above amount of Rs.4,08,000/- an amount of Rs.50,000/-already received by the claimants as interim award ' was deducted leavin`g the balance of Rs.3,58,OOO/-. The claimants were allowed interest @ 9°/o p.a. on this amount. I I Over and above this, the learned Tribunal awarded further sums of Rs.50,000/- towards funeral expenses; and Rs.2,500/- for loss of estate thus bringing..the.'td}tal amount of compensationawarqedatRS.4J]°':Trei,¢!tT 4. Aggrieved by the awa-i-a;`,I,passed by the le'arned Tribunal in the above two claim petitions, the present a -e© 0 © I appella.nts who are the claimants have come up in the present appeals which have been registered as MAC Appeal nos.1 and 2 of 2005. i 5. Mr. Sura]. Chettri assisted by Mr. Ajay Rathi, learned counsel for the appellants, Mr. 8. .Pp{hrel, learned counsel for I the respondent no.1 and Mr. A. K. Upadhyaya, learned counsel for t:he respondent no.2. were heard. 6. The only point urged by the learned counsel for the appellants pertains to the application of multiplier 3 by the learned Tribunal in working out the amount of compensation in i both t|e cases. The submission of the learned counsel is that the ap?.lication of multip"er 3 by th{e learned Tribunal in arriving at the total amount c;f compensation in the impugned awards is arbitraiy and not appropriate in the circumstances of the case. It is, according to him, neither in cenforrnityJ:th the guidennes I laid down in schedule 11 of the Mo`tpbprr`Vehicles Act nor with the table of, higher multiplier evolved by the Division Bench of Karnat:aka High Court in Gulam Khader and another vs. Unit:ed India Insurance Company Limited and another reported in ILR 2000 K{ant. 4416 referred to and relied on by the Full Bench of t:he same Court in V.S. Gaudar vs. Oriental Insurance Company Ltd. an}i another reported in 2003 (3) TAC 343 (Kanu. 7. '` The mannerin which the compensation has been, ' worked, out by th`e learned Tribunal in thE two cases has already been noticed above. It is clear frqm the impugned t'1. awards, that in both the cases, the{![}8?`rnedTribunal has applied t, C'- ®6 '©D •.I 7 I I the multiplier 3. It may be noted that the claimants being same in both the cases, the ag6`}.,C:'f the claimant no.1 is 74 (,i years and age of claimant no.2 is 67 years. The learned 1',. Tribun.al has, after taking note of the age of the claimants, observed t:hat considering the age bf the claimants the multiplier 3 can safely be applied and accorflingly applied the same in both the cases. However, no n,ationale for choosing the `multiplier 3 is discernible from the discussion except t:hat in view `of the age of the claimants multiplie,r 3 can safely be applie`d. As st:ated above, the contention of the learned counsel 1' for the appellants is that the use of multi}plier 3 is in total •\ disregfird of the second schedule t9ftlthe Motor Vehicles Act and i ¢''`.. () ` the table of higher multiplier evolved by Karnataka High Court ; in Gula,in Khader's case (supra). 8. A perusal of the schedule 11 of the Motor Vehicles Act .shows that if the age of the claimant is above 65 years the multiplier to be applied would be 5 and as per the table of higher multiplier evolved by the Karn,ataka High Court the `3t multiplier in cases where the age of the claimant is above 65 \` years woijld be 7. It may be noted that the higher multiplier 7 would. be applicable to claims relating to a¢cidents that t:ook '1,i place ,pn or after 14" November, 1994 i.e. the date on which 1` .', the arhendment which incorporat`e:6J:!ections 163J-A and 163-8 I, came into force. In this regard, para 20 of the judgment in •,'rl. Gulam Khader's case (supra) in which the Karnataka High Court drew up the tabular form showing enhanced operative \ a-®o •® b I multiplier as per the decision of the Hon'ble Supreme Court in ' U.P.S.R.`.T.C. and others vs. Trilok Chandra and others reported in (1996) 4 SCC 362 would be relevant and,the same is reproduced as follows:- ' ``20. The position therefore is that in regard to the accidents which took place before 14th November, 1994 (introduction of Second Schedule by amendment of Motor Vehicles.Act), the operative multiplier will be 16 and in regard to accidents which occurred after 14th November, 1994, the operative multiplier will be 18. This Court in S:Yeecrt::ndoefcj:i:,lisp,:::Sjnsttha:ecdas::fqofrae:tc:::tnet:ptr|:: to 14th November, 1994 wil.I have to be determined ::t:rtrejfnere„n.CT:tgh:hned5P#-t`,:CjE:esse,'a:dupdr:rna:gtthhj: decision of the Suprem`e Court in Susamma Tfromas case, supra, and in cases of accidents on and after 14th November, 1994, the sele`c[ion of multiplier will be governed by the enhanced operative multipiier as per the decision in 7t/./ok Chandra's case, supra." The tabular form then drawn up by th,e Court showing appropriate multiplier for different age groups is as under:- Age of the deceased \ 18-2i2 years 23-27 years 28-32 years 1 33-37 years 38-42 years 43-47 years 48-52 years 53-57 years 58-62 years 63-67 years 68-72 years 73-]7 ve.flrs Multiplier t:o be applied ln regard to accidents` prior to 14t:h November, 1994 In regard to accident on or aft:er 14t,h November, 1994 16 15 14 13 , p.ri, 12 tG16|/, I 11' 10 09 08 07 06 05 ® .®6 .t, t' 9. k lt is, therefore, clearthatthe multiplier 3 chosen by I the le`.arned Tribunal is neither in conformity with the second schedule to the Motor Vehicles Act Tor in c§nformity wit:h the t:able bf higher multiplier evolved by the Karr`ataka High Court in Ghulam Khader's case (supra).'``},i,lying upon the observation I made by the Hon'ble Supreme Court in Tril6k Chandra's case (supra)'.\ 10. So far as the method oF arriving at `].ust' compensation is concerned, the Hon'ble Supreme Court in Trilok Chanqra's case (supra) has observed that multiplier method ls a sound method of assessing compensation. Referrihg to the earlier judgment of the Court in the case of G. M. KeFala SRTC vs. Susamma Thomas (1994) 2 SCC 176 the Hon'bl6+ Cour.t at paragraph 13 has observed a.:± follows:- "13. It was rightly clarified!!that there should .I, be no departure from ground that Section •ihii\*multipliE!r method on the 0-8, Motor Vehicles Act, 1939 (corresponding to the present provision of Section 168, Motor Vehicles Act, 1988) envisaged ), payment of `just' compensation since the multiplier method is the accepted method for determining and ensuring payment of just compensation and is expected to bring uniformity and certainty of t:he awards made all over the country." The above being the position of law, it hardly needs to be emphasised that while computing just compensation the I Tribun:-]s must adhere to the systemiof multiplier. No doubt, I the le:'.rned Tribunal in the present case has adopted the multipl|6r method while assessing the amount.':Df compensatlon, i However, it is evident t:hat the learned Tribunal ignored the i , i.!'i;5ii i I (, e' -a,et\ a 10 multiplier 5 given in the column no.2 of the schedule 11 and applied a .multiplier 3 on its own without cogent reasons thereby leading to award of inadeqiiate amount of compensation. As already noted above, the reasons for which t:he learned Tribunal chose the multiplier 3 is not clear from the award. 11. It is to be noted that the multiplier 3 does not. find place in the column two of the second schedule to the Motor Vehicles Act and also in the t:able of higher multiplier evolved by the Karnat:aka High Court. As already not:iced above, the multiplier shown in the table given in t:he ;econd schedule for t:he age range of the claimant.i.e. 65 years and above is 5 while the higher multiplier given in the tabular form evolved by the Karnataka High Court for the age range of claimants i,e. above 65 years and above is 7 (in regard to accident that took place on or after 14th October, 1994). It is, therefore, clear that not only the second schedule of t:he Motor Vehicles Act has been •1. completely ignored in the mat:ter of application Qf appropriate multiplier` for arriving at a just amount iof compensation but I not:e has also not been taken of the higher multiplier evolved by the Division Bench of t:he Karnataka High Court which is based on the guidelines laid down by the Hori'bie Supreme Court in Trilok Chandra's case (supra). It may be noted that the multiplier represents the number of years' purchase on whlch the loss of dependency ls capitalised. The Hon'ble Supreme Court in Susamma Thomas's 11 case (supra) has observed in paragraph 13 of the judgment that ``the choice of the multiplier is determined by the age of the deceased (or that of the claimants which ever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest:''. It has further been observed that ``in ascertaining this, regard should also be had to t:he fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last''. It would be convenient to reproduce the mathematical example taken as illustration of t:he principle as follows:- ``Take for instance a case where annual loss i 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 t:he rate of interest is 5% per annum and not loo/o then t:he multiplier needed to capitalise the loss of the annual dependency at Rs 10,000 would . be 20. Then the multiplier, i.e., t:he number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance t:o scale down the multiplier would have to be made taking into account t:he uncertainties of the future, the allowances for immediate lump sum payment, the period over which t:he dependency is to last being shorter and t:he capital feed also to be spent away over the period of dependency is to last et:c. Usually in English Courts the operat:ive multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependants, whichever is high.er) goes up." Thus, it becomes clear from the above that the choice of multlplier cannot be without any basis and arbitrary. In the \J •®0 9 ior` 12 lat:er decision of the Honfole Supreme Court rendered in United India Insurance Co. Lt:d. and others vs. Patricia Jean Mahajan and others reported in (2002) 6 SCC 281 it has been observed that th,ough the choice of multiplier may differ to some degree as observed in the case of Jyoti Kaul JT (2000) 7 SC 367 depending upon various facts and circumstances of the case, normally the multiplier as indicated in the second schedule should be applied as it is found to be a safe guide for the purpose of calculation of the amount of compensation. Therefore, deviation from the scheduled multiplier is permissible only on special reasons. 12. From the above, it also becomes clear that the multiplier method which is accepted method. of determining and ensuring payment of just compensation, needs to be adhered to for the purpose of bringing uniformity and certainty in the matter of assessment of compensation all over t:he country. Explaining the reasons as to why the Hon'ble Supreme Court thought it necessary to reit:erate the method of working out just compensation the Hon'ble Court in paragraph 15 of the judgment in Trilok Chandra's case (supra) has observed as fo I I ows : - "15. We thought it necessary to reiterat:e the method of working out `just' compensation because, of late, we have not:iced from the awards made by t:ribunals and courts that t:he DrinciDle on which the ..multiplier method was developed has been lost sight of and once again a hybrid met:hod based on t:he subjectivity of the Tribunal /Court has surfaced, introducing uncert:ainty and lack of reasonable uniformity in the matter of determination of t, -'eo e',h 13 compensat:ion. It must' be realized that t:he Tribunal/Court has to det:ermine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused." 13. On a perusal of the impugned awards in the light of t:he above principles and the guidelines laid down by t:he Hon'ble Supreme Court in the various decisions cited above it becomes clear that t:he learned Tribunal in the cases at: hand totally lost sight of the principle on which the multiplier met:hod has been developed and has thereby contributed t:owards uncertainty and lack of reasonable uniformity in the matter of determination of compensation. 14. It must. however to be noted that: before the amendment Act 54 of 1994 amending the Motor Vehicles Act:, 1988 the law did not provide for any notional fixation of income and the method of arriving at ].ust compensation in Motor Accident claim cases. Section 163(A) and the schedule prepared under it were introduced to the Motor Vehicles Act for ` the first t:ime by the Amendment Act of 1994. Prior to this no fault liability existed only to the ext:ent provided for in section 140 of the Act:. The provision of the new sections 163A and 1638 are, to borrow the phrase of t:he Full Bench of Karnat:aka High Court in V. S. Gowdar's case (supra), `extension of the philosophy underlying section 140 of the Act:'. No doubt, the structured formula provided in the second schedule to the Act was intended to be applicable only to no fault claims made under sect:ion 163A of the Mot:or Vehicles Act. However, note 14 must b'e taken of the fact that even though the structured formula was evolved for the purpose of section 163A the same has been taken as a safe guideline also for purposes of dealing with claims based on fault liability. In this regard, the following observation made by the same Full Bench of Karnataka High Court in the case of V. S. Gowdar (supra) is apposite. ``17 ...................... Suffice it to say, that even on a purely theoretical plane, t:he difference between claims based on no fault liability and that based on proof` of fault is slowly eroding. We t:here fore see no reason why t:he multiplier prescribed by t:he Parliament for det:erminat:ion of compensat:ion in no fault: cases should not: be applicable even to cases based on proof of fault." 15. Thus keeping in view the fact t:hat the schedule 11 brought into exist:ence by the 1994 Amendment would be a safe legislative guidelines for determining ].ust compensation both in fault claim cases as well as in no fault claim cases and also keeping in view t:he observation of the Hon'ble Supreme Court in Trilok Chandra's. case (supra) that the multiplier method if followed will ensure uniformity and certainty of awards to be made by the Tribunals, t:he importance and desirability of adhering t:o the` second schedule of the Motor Vehicles Act and the guidelines laid down ,by the Hon'ble Supreme Court in this regard cannot be over emphasised. It • thus follows that there can be no departure from the scheduled multiplier in the present cases so as to ensure fair compensation'and uniformity and certainty of the awards in similar cases. So far as the question of selecting appropriate Lt .90 .+` 9 15 multiplier in t:he present case is concerned it may be not:ed that the learned counsel for the appellants have no grievance if t:he multiplier 5 provided in t:he second schedule is applied in both the cases. 16. However, before embarking on trie calculation bf the compensat:ion as per schedule 11 it is necessary to deal with a specific grievance voiced by Mr. A, K. upadhyaya, the learned counsel for the respondent no.2 with regard to the amount awarded on'the head of funeral expenses. His submission in this regard is that t:he amount of Rs.50,000/: awarded by the Tribunal' for funeral expenses is far in excess of Rs.2,000/- which is a fixed sum provided in second schedule for funeral expenses. Bearing in mind the foregoing discussion, it is hardly necessary to examine this issue in any depth. Suffice it to say t:hat the learned Tribunal has exceeded t:he permissible amount thereby showing lack of awareness of the fixed amount:s prescribed in the schedule. Therefore, the amount awarded in excess of what is provided in .the schedule cannot `be sustained and the same must be slashed to bring it on a par with the amount provided for the specific head of funeral expenses in the schedule. 17. Thus working out the compensation payable using the multiplier 5 as provided in Schedule 11 of the Motor Vehicles Act the amount of fair and just compensation in MAC Appeal no.1 of 2005 comes to Rs.2,26,700/-as shown below. y a .:a ,t` ® 16 The annual income of the deceased which comes to Rs.81,600/-is not disputed. Now using the inultiplier 5 in place of 3 the total amount comes to Rs.4,08,000/-(Rs.81,600 x 5). On deduction of 1/3rq of this amount, the total amount comes to Rs..2,72,000/-. To this amount, further amount of Rs.2,000/- on funeral expenses and amount of Rs.2,50.0/- for I loss of estate may be added. This brings .the total amount to Rs.2,76,500/- (Rs.2,72,000 + Rs.2,000/- + Rs.2,500/-). .On deduction of the interim amount of Rs.`50,000/- already paid from this amount: the t:otal balance amount comes to RS.2,26,500/-(Rs.2,76,500 -Rs.50,000). Similarly, in MAC Appeal no. 2 of 2005 the amount payable as fair and just compensation comes to Rs.6,34,500/- as shown below. The annual income of tne deceased`which comes to Rs.2,04,000/- is not disputed. Now using the multiplier 5 in place of 3 t:he total amount comes to Rs.10,20,000/- (Rs.2,04,000 x 5). On deduction of .1/3rd of this.amount, the total amount comes to Rs.6,80,000/-. To this amount, further amount of Rs.2,000/- on funeral expenses and amount of Rs.2,500/- for loss