IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 08.02.2011 CORAM THE HONOURABLE MR. JUSTICE. P.P.S.JANARTHANA RAJA C.M.A.No.2587 of 2009 and Cross.Objn.No.166 of 2010 and M.P.No.1 of 2009 M/s.The Oriental Insurance Company Ltd. Bangalore. .. Appellant in C.M.A.No.2587/2009 and 1st respondent in Cross.Objn.No.166/2010 Vs 1. Tmt. Kokilarani 2. Mr.Karalagounder 3. Tmt.Palaniammal .. Respondents 1to 3 in C.M.A.No.2587/2009 and Cross objectors in Cross.Objn.No.166/2010 4. M/s.T.C.I.Limited, No.57-58, 2nd floor 2nd Cross Kalasipalayam, New Extension Bangalore-2, Karnataka State. 5. Thiru. S.Aswathanarayanachari .. Respondents 4 and 5 in C.M.No.2587 of 2009 and Respondents 2 and 3 in Cross Objn. No.166 of 2010 PRAYER (in C.M.A.No.2587 of 2009): Appeal filed under Section 173 of the Motor Vehicles Act, 1988 against the Judgment and decree dated 04.06.2008, made in MCOP No.699 of 2004 by the Motor Accident Claims Tribunal, Principal District Judge, Namakkal District. PRAYER (in Cross.Objn.No.166 of 2010): Cross Objection filed under Order XXXXI, Rule 22 of the C.P.C. against the Judgment and decree dated 04.06.2008, made in MCOP No.699 of 2004 by the Motor Accident Claims Tribunal, Principal District Judge, Namakkal District. https://hcservices.ecourts.gov.in/hcservices/ For appellant : Mr.J.Chandran in C.M.A.No.2587 of 2009 and for Ist Respondent in Cross.Objn.No.166 of 2010 For respondents : Mr.Ma.P.Thangavel for R1 to R3 in C.M.A.No.2587 of 2009 and for Cross Objection and Cross.Objn.No.166 of 2010 :No appearance for R5 in A.A.O.& Respondents 2 & 3 in Cross objection. C O M M O N J U D G M E N T Both the appeals are preferred by the appellant-Transport Corporation Ltd. and claimants respectively against the Judgment and decree dated 04.06.2008, made in MCOP No.699 of 2004 by the Motor Accident Claims Tribunal, Principal District Judge, Namakkal District 2.Both appeal and cross objection arisen out of the same Judgement, they are taken up together and disposed of by a common Judgement. 3. Background facts in a nutshell are as follows: The deceased Kanagaraj met with motor vehicle accident that took place on 02.10.2001, at about 3.00 a.m. While the deceased was getting down from the lorry bearing Registration No.TN28/2597 near Karungkuthi Check Post, Angamally, Ernakulam District, Kerala State, another TATA lorry bearing Registration No.KA21/4008, came from the left side at very high speed and in a rash and negligent manner and hit the deceased. The deceased fell down and the back wheel of the lorry ran over on the deceased. Due to the said impact, the deceased sustained multiple injuries. Immediately, he was admitted in Angamally Hospital. Later, he was admitted in the Ernakulam Trust Hospital for better treatment, wherein he died on 23.10.2001. The claimants are the wife and parents of the deceased. They claimed a compensation of Rs.10,00,000/-. The said TATA Lorry was insured with the appellant-Insurance Company, who resisted the claim. On pleadings the Tribunal framed the following issues:- "1. Whether the accident took place only due to the rash and negligent driving of the driver of the lorry bearing Registration No.KA21/4008 at the place of occurrence on 02.10.2001 at about 3.00 a.m. in question? 2. Whether the respondents 4, 5 and the appellant are jointly and severally liable to pay the https://hcservices.ecourts.gov.in/hcservices/ compensation to the claimants 1 to 3 in this petition? 3. How much amount of compensation the claimants 1 to 3 are entitled in this petition? 4. To what relief?" After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to rash and negligent driving of the driver of the lorry and awarded a compensation of Rs.7,25,000/- with interest at 7.5% per annum from the date of the claim petition and the details of the same are as under:- Loss of Income - Rs.6,00,000/- Medical expenses - Rs. 60,000/- Mental agony and loss of consortium - Rs. 30,000/- Loss of love and affection - Rs. 20,000/- Transport and funeral exp. - Rs. 15,000/- --------------- Total - Rs.7,25,000/- --------------- Aggrieved by that award, both the appellant in Civil Miscellaneous Appeal filed an appeal and the claimant filed Cross Objection for enhancement. 4. The learned counsel appearing for the Insurance Company vehemently contended that the Tribunal is wrong in holding that the Insurance Company is liable to pay the compensation. He further submitted that the award passed by the Tribunal is excessive, exorbitant and without basis and justification. He further vehemently argued that the Tribunal ought not to have fixed the monthly income at Rs.5,000/- and no basis for the same. Therefore, the award passed by the Tribunal is not in accordance with law and the same has to be set aside. 5. The learned counsel appearing for the claimants submitted that the Tribunal awarded low and meagre compensation and ought to have awarded compensation as claimed by the appellant. The Tribunal has not considered the principles of assessment while awarding compensation. Therefore, it is a fit case for enhancement. 6. Heard the counsel. On the side of the claimants, P.Ws.1 to 3 were examined and documents Exs.P1 to P12 were marked. On the side of the respondents, R.W.1 was examined and documents Ex.R1 and R2 were marked. P.W.1 – Karala Gounder is the father of the deceased. https://hcservices.ecourts.gov.in/hcservices/ PW2-Kandasamy is the cleaner. P.W.3 – Maheshwaran is the employer of the deceased. ExP1 is the First Information Report dated 02.10.2001. Ex.P2 is the Charge Sheet dated 16.11.2001. Ex.P3 is the postmortem certificate dated 24.10.2001. Ex.P4 is the accident intimation dated 02.10.2001. Ex.P5 is the Motor Vehicle Inspector's report dated 05.10.2001. Ex.P6 is the family card. Ex.P7 is the Hospital expenditure Bills dated 24.10.2001. Ex.P8 is the attested copy of the Driving Licence. Ex.P9 is the registration certificate dated 24.01.2000. Ex.P10 is the Insurance Policy dated 01.12.2000. Ex.P11 is the death certificate dated 08.07.2002. Ex.P12 is the salary certificate dated 20.03.2008. R.W.1-Tmt.S.Uma is the Administrative Officer, Oriental Insurance Company. Ex.R1 is the office copy of the letter dated 27.02.2008. Ex.R2 is the original reply letter dated 03.04.2008. P.W.2, in his evidence, has stated that while the deceased was getting down from the lorry, another TATA lorry came in a rash and negligent manner and hit the deceased. Further in the FIR, it is also stated that the TATA lorry came in a rash and negligent manner and caused the accident. The recitals of the FIR were not discredited by the appellant and respondents 4 and 5. In Ex.P2-Charge sheet, it is stated that the TATA Lorry driver alone is responsible for the accident. Ex.P5-Motor Vehicle Inspector's Report stated that the driver of the lorry alone is responsible for the accident. After considering the above oral and documentary evidence, the Tribunal has given categorical finding that the accident occurred only due to the rash and negligent driving of the driver of the TATA lorry. The finding given by the Tribunal is based on available materials and evidence and the same is confirmed. 7. In the case of SARLA VERMA AND OTHERS VS. DELHI TRANSPORT CORPORATION AND ANOTHER reported in (2009) 4 MLJ 997, the Apex Court has considered the relevant factors to be taken into consideration before awarding compensation and held as follows: "7. Before considering the questions arising for decision, it would be appropriate to recall the relevant principles relating to assessment of compensation in cases of death. Earlier, there used to be considerable variation and inconsistency in the decisions of Courts Tribunals on account of some adopting the Nance method enunciated in Nance V. British Columbia Electric Rly. Co. Ltd. (1951) AC 601 and some adopting the Davies method enunciated in Davies V. Powell Duffryn Associated Collieries ltd., (1942) AC 601. The difference between the two methods was considered and explained by this Court in General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas AIR 1994 SC 1631: (1994) 2 SCC 176. After exhaustive consideration, this Court preferred the Davies method to Nance method. We extract below the principles laid down https://hcservices.ecourts.gov.in/hcservices/ in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra). "In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependent as a result of the death. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have live or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether." " The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalised by multiplying it by a figure representing the proper number of year’s purchase." "The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants whichever 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. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last." https://hcservices.ecourts.gov.in/hcservices/ "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 award 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." In UP State Road Transport Corporation V. Trilok Chandra (1996) 4 SCC 362, this Court, while reiterating the preference to Davies method followed in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra), stated thus: "In the method adopted by Viscount Simon in the case of Nance also, first the annual dependency is worked out and then multiplied by the estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one-third to one-half of the dependency was reduced, depending on the life span taken. That is the reason why courts in India as well as England preferred the Davies formula as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas case, usually English courts rarely exceed 16 as the multiplier. Courts in https://hcservices.ecourts.gov.in/hcservices/ India too followed the same pattern till recently when tribunals/courts began to use a hybrid method of using Nance method without making deduction for imponderables..... Under the formula Advocated by Lord Wright in Davies, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier" (emphasis supplied) 8. In the case of SYED BASHEER AHAMED AND OTHERS VS. MOHAMMED JAMEEL AND ANOTHER reported in (2009) 2 Supreme Court Cases 225, the Apex Court has held as follows: "13. Section 168 of the Act enjoins the Tribunal to make an award determining “the amount of compensation which appears to be just”. However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression “which appears to be just” vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of compensation. 14. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons affected nor should it be punitive to the person(s) liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In a nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards. 15. In Kerala SRTC v. Susamma Thomas2, M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181, para 5) “5. … The determination of the quantum must answer what https://hcservices.ecourts.gov.in/hcservices/ contemporary society ‘would deem to be a fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing’. The amount awarded must not be niggardly since the ‘law values life and limb in a free society in generous scales’.” At the same time, a misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining the compensation. The object of providing compensation is to place the claimant(s), to the extent possible, in almost the same financial position, as they were in before the accident and not to make a fortune out of misfortune that has befallen them. 18. The question as to what factors should be kept in view for calculating pecuniary loss to a dependant came up for consideration before a three-Judge Bench of this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami4, with reference to a case under the Fatal Accidents Act, 1855, wherein, K. Subba Rao, J. (as His Lordship then was) speaking for the Bench observed thus: (AIR p.1) “In calculating the pecuniary loss to the dependants many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the dependants may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained.” 19. Taking note of the afore extracted observations in Gobald Motor Service Ltd. in Susamma Thomas it was observed that: (Susamma Thomas case, SCC p.182, para 9) “9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables e.g.the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances https://hcservices.ecourts.gov.in/hcservices/ that the deceased might have got better employment or income or might have lost his employment or income altogether.” 20. Thus, for arriving at a just compensation, it is necessary to ascertain the net income of the deceased available for the support of himself and his dependants at the time of his death and the amount, which he was accustomed to spend upon himself. This exercise has to be on the basis of the data, brought on record by the claimant, which again cannot be accurately ascertained and necessarily involves an element of estimate or it may partly be even a conjecture. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An appropriate multiplier is again determined by taking into consideration several imponderable factors. Since in the present case there is no dispute in regard to the multiplier, we deem it unnecessary to dilate on the issue." After considering the principles enunciated in the judgments cited supra, let me consider the facts of the present case. 9. At the time of accident, the deceased Kanagaraj was aged about 29 years. Ex.P3 is the Post-mortem report, in which, the age of the deceased was shown as 29 years at the time of accident. Ex.P8 is the driving licence, in which, the date of birth of the deceased was shown as 07.01.1972. Therefore, the Tribunal fixed the age of the deceased as 29 years at the time of accident. PW1, in his evidence, deposed that the deceased was a driver and earning a sum of Rs.5,000/- p.m. and also getting income of Rs.2,000/- p.m. from his agricultural land. P.W.3 is the owner of the lorry and the employer of deceased. In his evidence, he deposed that the deceased was earning a sum of Rs.5,000/- p.m. Ex.P12 is the salary certificate. After considering the oral and documentary evidence, the Tribunal has fixed the salary of the deceased at Rs.5,000/- p.m. Out of the said amount, the Tribunal has deducted a sum of Rs.1,000/- towards personal expenses and taken the balance sum of Rs.4,000/- towards monthly contribution of the deceased to his family members and determined the annual contribution of the deceased at Rs.48,000/- (Rs.4,000 x 12). After considering the age of the deceased, the Tribunal has adopted the multiplier of '18' and determined the loss of income at Rs.8,64,000/- (Rs.48,000/- x 18). But, the Tribunal, after considering the fluctuation in income and uncertainty in life, has reduced the loss of income at Rs.6,00,000/-. The learned counsel https://hcservices.ecourts.gov.in/hcservices/ appearing for the Insurance Company vehemently contended that there is no basis for fixing the salary of the deceased at Rs.5,000/- p.m. and also the Tribunal ought to have deducted 1/3rd amount towards personal expenses and ought not to have adopted the multiplier of '18' and the correct multiplier should be adopted in the present case is '1'7, and he relied on the decision of Supreme Court cited supra in the case of SARLA VERMA AND OTHERS VS. DELHI TRANSPORT CORPORATION AND ANOTHER reported in (2009) 4 MLJ 997, wherein in para 21, it has been held as follows: "21. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above (prepared by applying GENERAL MANAGER, KERALA STATE ROAD TRANSPORT CORPORATION VS. SUSAMMAL THOMAS (SUPRA), U.P. STATE ROAD TRANSPORT CORPORATION VS. TRILOK CHANDRA (SUPRA) AND NEW INDIA ASSURANCE COMPANY LIMITED VS. CHARLIE (SUPRA), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years." In the present case, the age of the deceased was 29 years at the time of accident. Following the above decision, for the age group of 26 to 30 years, the multiplier to be adopted in this case is 17. P.W.3- Maheswaran, who is the employer of the deceased, has deposed that the deceased was working under him and earning a sum of Rs.5,000/-. Ex.P12 is the salary certificate, which was also proved the income of the deceased. Therefore, this Court is of the view that the Tribunal is correct in fixing the monthly income of the deceased at Rs.5,000/- p.m. and the annual income works out to Rs.60,000/- (Rs.5,000/- x 12). The learned counsel for the Insurance Company further argued that in the present case, the Tribunal has deducted only a sum of Rs.1,000/- towards personal expenses. The family of the deceased consisting of three members. Hence, the Tribunal ought to have deducted 1/3 as against Rs.1,000/- towards personal expenses. From the annual income of Rs.60,000/-, if 1/3 of Rs.20,000/- is deducted towards personal expenses and the balance sum of Rs.40,000/- is taken as annual contribution of the deceased to his family. Considering the above facts, the loss of income is computed at Rs.6,80,000/- (Rs.40,000 x 17). The learned counsel for the claimants vehemently contended that the age of the deceased was 29 years at the time of accident and if he would alive, certainly, he would have earned more. Hence, the Tribunal ought to have awarded compensation towards future prospects. After taking into consideration the age of https://hcservices.ecourts.gov.in/hcservices/ the deceased and nature of the deceased's job, i.e. Driver, it is reasonable to award a sum of Rs.50,000/- towards future prospects. The claimants claimed a sum of Rs.1,11,674/- towards medical expenses. But the Tribunal awarded only a sum of Rs.60,000/-, which is very low. Immediately after the accident, the deceased was admitted in the Medical Trust Hospital and the claimants have spent a sum of Rs.1,11,674/- towards medical expenses. Ex.P7 is the series of medical bills. After considering the facts of the case, it is reasonable to award a sum of Rs.75,000/- towards medical expenses as against Rs.60,000/- awarded by the Tribunal. The Tribunal awarded a sum of Rs.30,000/- towards loss of consortium and mental agony. The age of the widow was 20 years at the time of accident. Therefore, the amount awarded by the Tribunal towards loss of consortium and mental agony is very reasonable and the same is confirmed. The Tribunal has awarded Rs.20,000/- towards loss of love and affection to the parents. The parents of the deceased lost their only son. Hence, the amount awarded by the Tribunal is reasonable and the same is confirmed. The Tribunal has also awarded a sum of Rs.15,000/- towards transport charges and funeral expenses, which is very reasonable and the same is confirmed. The Tribunal has awarded interest at the rate of 7.5% p.a. Taking into consideration the date of accident, date of award and the prevailing rate of interest during that period, the interest awarded by the Tribunal is very reasonable and the same is confirmed. The details of the modified compensation are as follows: Loss of Income - Rs.6,80,000/- Future prospects - Rs. 50,000/- Medical expenses - Rs. 75,000/- Mental agony and loss of