IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 8.12.2008 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR C.M.A.No.2864 of 2006 and M.P.NO.1 OF 2006 National Insurance Company Ltd., Third Party Claims Office, No.786,Anna Salai, Chennai-2. ... Appellant/2nd Respondent vs. 1.Aananda Valli 2.Bakkiyaraj 3.Elumalai(Minor represented by mother & next friend the first respondent) 4.S.Sivakumar ... Respondents/Petitioners & 1st Respondent Civil Miscellaneous Appeal is filed under Section 173 of Motor Vehicles Act, 1988 against the award dated 1.2.2006 passed in O.P.No.1581 of 2004 on the file of the Motor Accidents Claims Tribunal (Chief Judge, Small Causes Court) Chennai. For appellant : Mr.D.Baskaran For respondents : Mr.A.Abdul Kani JUDGMENT The Insurance Company is on appeal challenging the award dated 1.2.2006 passed in M.C.O.P.No.1581 of 2004 on the file of the Motor Accidents Claims Tribunal (Chief Judge, Small Causes Court), Chennai. 2. This is a case of fatal accident. The accident in this case happened on 18.1.2004. The deceased Rajendran, driver by occupation and also said to be engaged in manufacturing corrugated Box was travelling in a motor cycle when he was hit by a Car insured with the appellant and in that accident, the said Rajendran died. The wife aged about 36 years, one son aged about 19 years and another son aged about 14 years are the claimants. They claimed a sum of Rs. 10 lakhs as compensation stating that the income of the deceased was Rs.10,000/- per month. https://hcservices.ecourts.gov.in/hcservices/ 3. In support of the claim petition, the wife of the deceased was examined as P.W.1. One Maria Selvam, an eye witness was examined as P.W.2. Ex.P-1 is the photocopy of F.I.R, Ex.P-2 is the photocopy of Plan, Ex.P-3 is the Balaji Hospital Record, Ex.P.4 is the copy of death report issued by police station, Ex.P.5 is the photo copy of death certificate, Ex.P.6 is the copy of Post mortem certificate, Ex.P.7 is the original driving licence of deceased, Ex.P.8 is the copy of legal heirship certificate, Ex.P.9 is the copy of Insurance Policy for car, Ex.P.10 series are labour bills, Ex.P.11 series are labour bill book and Ex.P.12 is the statement of Bank Account. On behalf of the appellant Insurance Company, no oral or documentary evidence was let in. 4. The finding of the Tribunal with regard to negligence on the part of the driver of the Car who is responsible for the accident and the death of the deceased and consequential liability fixed on the appellant Insurance Company to compensate the claimants is not in dispute 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 of the award in answer to Point No.2. Based on Ex.P.7 Driving licence of the deceased, the age of the deceased was fixed at 43 years and that is not in dispute. He is having valid licence to drive light motor vehicle and also the transport vehicle. PW1 deposed that the deceased was having one Van and three autorickshaws and he was employed as driver and therefore the income was claimed at Rs.10,000/- per month. PW1 also deposed that six employees were working under them and to support that she filed Ex.P10, the Labour bills issued by the deceased in favour of the standard packaging, Chennai .Ex.P.11 Labour book bill and Ex.P.12 statement of Bank Account. It is also mentioned by the Tribunal that after the death of the deceased. PW1 is continuing the above business. However,since there was no specific document to show the income of the deceased as Rs.10,000/- per month, the Tribunal based on the Division Bench Judgment in B.Anandhi Vs.R.Latha & another reported in 2002 ACJ 233 and also considering the period of accident viz. 18.1.2004, fixed the income of the deceased at Rs.4,500/- p.a.. This amount appears to be reasonable and logical. From this amount, 1/3 in a sum of Rs.1,500/- was deducted towards personal expenses of the deceased and the contribution to the dependents was taken as Rs.3,000/- p.m (ie.) Rs.36,000 per annum . The Tribunal fixed the Multiplier as 15, taking into consideration the age of the deceased as well as the wife and children of the deceased and granted a sum of Rs.5,40,000/- (Rs.3000 x 12 x 15) as compensation towards pecuniary loss. The Tribunal also granted compensation under conventional heads. In all, the Tribunal granted the following amount as compensation with 7.5% interest:- https://hcservices.ecourts.gov.in/hcservices/ Sl.N o. Head Amount granted by the Tribunal 1 Loss of dependency Rs.5,40,000- 2 Transport Charges Rs. 5,000/- 3 Loss of consortium to the wife Rs. 5,000/- 4 Loss of Love and Affection to the 2 sons Rs. 5,000/- 5 Funeral Expenses Rs. 5,000/- Total Rs.5,60,000 7. Learned counsel for the appellant pleaded that Multiplier 15 adopted by the Tribunal is on the higher side and it should be reduced to 12, considering the age of the deceased who was 43 years and also taking into consideration the lump sum payment which will enure to the claimants on the death of the deceased. 8. Learned counsel for the respondents 1 to 3 /claimants on the other hand pleaded that meagre amount has been granted for loss of love and affection to the children and meagre amount has been granted towards loss of consortium to the wife and no amount has been granted for loss of estate. 9. The choice of Multiplier 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 here under: "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 https://hcservices.ecourts.gov.in/hcservices/ 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 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 this case, considering the lump sum payment made and the age of the deceased who was 43 years and in view of the Apex Court https://hcservices.ecourts.gov.in/hcservices/ decisions 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), the Multiplier stands reduced to 13. The pecuniary loss will be accordingly modified. Since meagre amount has been granted for loss of consortium and loss of love and affection, that has to be enhanced and some amount has to be granted for loss of estate. 11. Accordingly, the award of the Tribunal is modified as follows:- Sl.N o. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits Rs.5,40,000/- Rs. 4,68,000/- 2 Transport Expenses Rs. 5,000/- Rs. 5,000/- 3 Loss of consortium to the wife Rs. 5,000/- Rs. 15,000/- 4 Loss of love and affection to the two children Rs. 5,000/- Rs. 20,000/- (Rs.10,000/- each) 5 Loss of Estate ------ Rs. 2,500/- 6 Funeral Expenses Rs. 5,000/- Rs. 5,000/- Total Rs. 5,60,000/- Rs. 5,15,500/- 12. Since the accident in this case happened in the year 2004 and the award was passed in the year 2006, the interest granted at 7.5% stands confirmed in view of the decision rendered by the Apex Court in Tamil Nadu State Transport Corporation - vs. - S.Rajapriya reported in 2005 (3) C.T.C. 373. 13. It is stated that entire amount has been deposited as per the award of the Tribunal. 14. In the result, the Civil Miscellaneous Appeal is allowed in part as follows:- (i) The compensation awarded by the Tribunal is reduced to Rs.5,15,500/- from Rs.5,60,000/-. (ii) The award amount shall carry interest at 7.5% from the date of claim petition till date of deposit as ordered by the Tribunal. (iii) The claimants will be entitled to withdraw the amount in the same proportion as ordered by the Tribunal. The appellant is entitled to withdraw the excess amount in deposit with interest after settling the claimants. https://hcservices.ecourts.gov.in/hcservices/ (vii) There will be no order as to cost. Consequently, connected miscellaneous petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. VJY To 1.The Motor Accidents Claims Tribunal (Chief Judge, Small Causes Court)Chennai. 2.The Record Keeper, V.R. Section, High Court, Madras. + 1 CC to Mr.D.Bhaskaran,Advocate,SR.68878 + 1 CC to Mr.M.Kother Adam,Advocate,SR.68840 C.M.A.No.2864 of 2006 BVN(CO) EM/13.2.09 https://hcservices.ecourts.gov.in/hcservices/