IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.11.2008 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR C.M.A.No.3640 of 2008 and M.P.No.1 of 2008 M/s. United India Insurance Company Limited, TP Cell 38, Anna Salai, Chennai-2. ... Appellant/2nd Respondent vs. 1.Ammu alias Guruprabha, 2.Minor Mohana, 3.Minor Vinneela, 4.Minor Thangamani 5.Rajan, 6.S.Ramamohan Raju. (Minor 2 to 4 respondents are represented by first respondent) (6th respondent was ex parte in the lower court) ... Respondents/Petitioners 1 to 5 and 1st Respondent Civil Miscellaneous Appeal is filed under Section 173 of Motor Vehicles Act, 1988, against the award and decree dated 25.10.2006 passed in M.C.O.P.No.12 of 2005 on the file of the Motor Accidents Claims Tribunal(Sub Judge), Tiruvallur. For appellant : M/s.K.S.Narasimhan and T.M.Venkataraman For respondent Nos.1 to 5 : Mr.R.Neelakandan https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT By consent of both parties, the main appeal itself is taken up for disposal. 2. The Insurance company is on appeal challenging the award dated 25.10.2006 passed in M.C.O.P.No.12 of 2005 on the file of the Motor Accidents Claims Tribunal(Sub Court), Tiruvallur. 3. The only contention raised by the counsel for the appellant is on the quantum of compensation. 4. It is a case of fatal accident. The brief facts of the case is as follows:- The accident in this case happened on 31.7.2004 at 14.30 hours. The deceased Moorthy said to be 33 years old, running a tinkering shop, was travelling on a motorcycle and was hit by a lorry driven by its driver in a rash and negligent manner, insured with the appellant. In that accident, the said Moorthy died on the spot. The wife aged 30 years, two minor daughters aged 7 and 4 years respectively, one minor son aged 2 years and father aged 60 years, claimed compensation in a sum of Rs.6 lakhs, stating that the deceased was earning a sum of Rs.10,000/- per month. 5. In support of the claim, the wife of the deceased was examined as P.W.1. One Kothandan, the eye witness, was examined as P.W.2. Exs.A-1 to A-4 were filed, the details of which are as follows:- Ex.A-1 is the copy of F.I.R. dated 31.7.2004, Ex.A-2 is the copy of charge-sheet, dated 11.10.2004, Ex.A-3 is the post-mortem certificate dated 8.2.2004 and Ex.A-4 is the copy of Motor Vehicle Inspector's Inspection Report dated 14.9.2004. No oral or documentary evidence was let in on behalf of the appellant insurance company, the second respondent before the Tribunal. 6. The finding of negligence on the part of the driver of the lorry and the liability fixed on the appellant insurance company to compensate the claimants is not seriously disputed by the appellant's counsel and the same is confirmed. 7. In the absence of any evidence to show the actual income of the deceased, the Tribunal fixed the income of the deceased at Rs.3,000/- per month. After deducting 1/3 towards personal expenses of the deceased, the Tribunal fixed the contribution to https://hcservices.ecourts.gov.in/hcservices/ the family of the deceased at Rs.2,000/- per month and Rs.24,000/- per annum. The age of the deceased was taken as 33 years based on Ex.A-3, the post-mortem certificate. Following the second schedule to the Motor Vehicles Act, the Tribunal adopted 17 multiplier and granted a sum of Rs.4,08,000/- (Rs.24,000/- x 17 = Rs.4,08,000/-) towards pecuniary loss to the family of the deceased. In addition, the Tribunal granted amounts under conventional heads. In all, the Tribunal granted the following amounts as compensation with interest at 7.5% as follows:- Sl. No. Head Amount granted by the Tribunal 1 Loss of pecuniary benefits to the dependents of the deceased Rs.4,08,000/- 2 Loss of consortium to the wife on the death of her husband Rs. 20,000/- 3 Loss of love and affection to the two minor daughters, one minor son and the father (Rs.10,000/- each) Rs. 40,000/- 5 Funeral expenses Rs. 7,000/- Total Rs.4,75,000/- 8. The contention of the appellant's counsel is that the Tribunal in this case has taken 17 multiplier and higher compensation was granted. He relied upon the Apex Court's decision in New India Assurance – vs.- Smt.Kalpana and others reported in 2007 AIR SCW 1316 = 2007(1) Supreme 514. and stated that lesser multiplier i.e., 13 should be adopted. 9. Learned counsel for the respondents 1 to 5/claimants on the other hand stated that the accident in this case happened in the year 2004. The deceased was engaged in tinkering work and was earning Rs.10,000/- per month at the time of accident. The Tribunal has taken a paltry sum of Rs.3,000/- per month as income of the deceased. If the income is fixed based on the earning capacity of the deceased and the living wages of the relevant period (i.e.) the date of of accident 31.7.2004, the compensation, even if the multiplier is reduced, will be much more than the amount granted by the Tribunal towards pecuniary loss. He pleaded for dismissing the appeal and to confirm the award. 10. The short question for consideration in this appeal is on the multiplier that has been adopted by the Tribunal. 11. The choice of multiplier 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 https://hcservices.ecourts.gov.in/hcservices/ others reported in (1994)1 ACC 346 (SC) = AIR 1994 SC 1631 has broadly summarized the position in paragraph 11, which reads as follows:- "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 lost 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 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. https://hcservices.ecourts.gov.in/hcservices/ 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." However, in view of the Apex Court's decision 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 & others reported in 2007(1) TN MAC 319(SC), considering the lump sum payment and the age of the deceased and taking note of the fact that all the three children are minors, even though multiplier pleaded by the appellant's counsel is 13, this Court is inclined to adopt multiplier of 15 and fixed the loss of pecuniary benefits to the dependents of the deceased at Rs.3,60,000/- (Rs.24,000/- x 15 = Rs.3,60,000/-). The amount granted towards loss of love and affection to the two minor daughters and one minor son is very low. Therefore, a further sum of Rs.15,000/- is granted towards loss of love and affection to the two minor daughters and one minor son. The sum of Rs.10,000/- granted towards loss of love and affection to the father and the sum of Rs.7,000/- granted towards funeral expenses https://hcservices.ecourts.gov.in/hcservices/ are just and reasonable and the same is confirmed. Accordingly, the award of the Tribunal stands modified as follows:- Sl. No. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits to the family of the deceased Rs.4,08,000/- Rs.3,60,000/- 2 Loss of consortium to the wife on the death of her husband Rs. 20,000/- Rs. 20,000/- 3 Loss of love and affection to the two minor daughters, one minor son (Rs.10,000/- each) Rs. 30,000/- Rs. 45,000/- 4 Loss of love and affection to the father on the death of his son Rs. 10,000/- Rs. 10,000/- 5 Funeral expenses Rs. 7,000/- Rs. 7,000/- Total Rs.4,75,000/- Rs.4,42,000/- 12. Since the accident in this case happened in the year 2004 and the award is passed in the year 2006, the interest granted at 7.5% stands confirmed. 13. The learned counsel for the appellant prays for eight weeks' time to deposit the amount as awarded by this Court. Learned counsel for the respondents 1 to 5/claimants prays for withdrawal on such deposit. 14. In the result, the Civil Miscellaneous Appeal is allowed in part as follows:- (i) The award of the Tribunal is reduced to Rs.4,42,000/- from Rs.4,75,000/-. (ii) The interest granted by the Tribunal at 7.5% stands confirmed. (iii) The award amount is apportioned as follows:- Wife, the 1st respondent Rs.2,07,000/- with proportionate interest and entire cost The two minor daughters and one minor son (Rs.75,000/- each), the respondents 2 to 4 Rs.2,25,000/- with proportionate interest https://hcservices.ecourts.gov.in/hcservices/ Wife, the 1st respondent Rs.2,07,000/- with proportionate interest and entire cost The father, the 5th respondent Rs.10,000/- with proportionate interest (iv) The wife is permitted to withdraw her share amount with proportionate interest and entire costs, (v) The father is permitted to withdraw his share amount with proportionate interest. (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 resident of the first respondent/first claimant for a period of three years and renewable thereafter till the minors attain 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 inform 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 cost. (x) Consequently, connected miscellaneous petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. ts https://hcservices.ecourts.gov.in/hcservices/ To The Subordinate Judge, (The Motor Accidents Claims Tribunal), Tiruvallur. 1 cc to Mr.R. Neelakandan, Advocate, SR. 66138 1 cc to Mr.K.S. Narasimhan, Advocate, SR. 66734 C.M.A.No.3640 of 2008 CK (CO) kk 27/1 https://hcservices.ecourts.gov.in/hcservices/