FA/686/2003 1/14 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL NO. 686 OF 2003 For Approval and Signature: HONOURABLE MR.JUSTICE A.M.KAPADIA HONOURABLE MR.JUSTICE R.H.SHUKLA ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the Civil Judge ? ====================================== NATIONAL INSURANCE CO. LTD. - Appellant(s) Versus HANSABEN LILESHKUMAR PATEL & ORS. - Respondent(s) ====================================== Appearance : Ms. Megha Jani for Appellant(s). Mr. Mehul S. Shah for Respondent(s) : 1 - 4. None for Respondent(s) : 5 - 9. Mr. Shalin Mehta for Respondent(s) : 10. ====================================== CORAM : HONOURABLE MR.JUSTICE A.M.KAPADIA and HONOURABLE MR.JUSTICE R.H.SHUKLA Date : 03/07/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.H.SHUKLA) FA/686/2003 2/14 JUDGMENT The present appeal has been filed by the appellant-Insurance Company challenging the judgement and award dated 24th July, 2002 passed in M.A.C.P. No.149 of 1994 by the Motor Accident Claims Tribunal (Auxiliary), Kachchh at Bhuj (“the Tribunal” for short), awarding the compensation to the tune of Rs.9,45,000/- together with interest at the rate of 9% per annum from the date of the petition till deposit with proportionate costs to the heirs of the deceased Lileshkumar Nanalal Patel. 2. The facts of the case briefly stated that that the deceased Lileshkumar was a taxi operator and on 2nd January, 1994, he was going from Bhuj to Dayapar with the car bearing Registration No. GJ-12-U- 1559 with the passengers travelling in the said taxi. The deceased was driving the taxi on the left side of the road with moderate speed. When the deceased reached near the Water Supply Tank between Ravapar and Matana Madh on Bhuj-Lakhpat road, respondent No.5-original opponent No.1 came with his tanker bearing Registration No. GJ-12-T-6502 in a rash and negligent manner with full speed. It was also the case of the claimants that respondent No.5-driver of the offending tanker lost control over the tanker and it went on the wrong side of the road and collided with the taxi, resulting into the unfortunate accident, as a result of which, the deceased sustained serious injuries and ultimately, succumbed to them. Therefore, the heirs of the deceased filed M.A.C.P. No.149 of 1994 for the untimely death of the deceased in the vehicular FA/686/2003 3/14 JUDGMENT accident claiming the compensation of Rs.15 Lakhs. 2.1 It was contended that at the time of the accident, the deceased was earning Rs.4,000/- per month by plying the taxi; the deceased was aged about 27 years and was hale and hearty and therefore, it was prayed to pass the award of Rs.15 Lakhs together with interest and costs thereon in favour of the claimants. 2.2 The opponent-Insurance Company contested the claim petition by filing the written statement on all counts and denied the factum and manner of the accident as well as income of the deceased and ultimately, prayed to dismiss the petition. 2.3 On basis of the pleadings of the parties, the Tribunal framed the issues and after considering the oral as well as documentary evidence adduced and produced by the parties and also considering the submissions advanced by the learned Advocates appearing for the parties, the Tribunal came to the conclusion that the accident was the result of rash and negligent driving on the part of respondent No.5 (original opponent No.1) – driver of the offending tanker. The Tribunal has considered the income of the deceased at Rs.4,000/- and also for future income for the purpose of dependency benefit, the datum figure was taken at Rs.6,000/- per month i.e. Rs.72,000/- per annum. Thereafter, the Tribunal, applying the multiplier of 18, awarded FA/686/2003 4/14 JUDGMENT Rs.12,96,000/- towards dependency benefits, out of which 1/3rd was deducted towards personal expenses. Therefore, the Tribunal awarded the net dependency benefit available to the claimants at Rs.8,64,000/-. Further, an amount of Rs.15,000/- towards pain, shock and suffering, Rs.15,000/- towards loss of estate, Rs.5,000/- towards funeral ceremony and Rs.46,000/- towards damages to the taxi were awarded. The Tribunal, therefore, partly allowed the claim petition awarding Rs.9,45,000/- to the heirs of the deceased. 2.4 It is this judgement which has been challenged in the present appeal under the provisions of Section 173 of the Motor Vehicles Act, 1988. 3. Ms. Megha, Jani, learned Advocate for the appellant, has contended that the Tribunal has materially erred in appreciating the evidence on record while arriving at the quantum of compensation and has awarded the amount of compensation on higher side. She contended that the Tribunal has erred in considering the prospective income for the purpose of dependency benefit and/or arriving at the datum figure and has wrongly taken the income of the deceased at Rs.6,000/- per month. It has also been contended that the Tribunal has adopted the multiplier of 18 which is also on higher side. She, therefore, submitted that the impugned judgement and award accordingly deserves to be modified. FA/686/2003 5/14 JUDGMENT 4. Per contra Mr. Mehul Shah, learned Advocate for the respondent Nos.1 to 4,original claimants, contended that the impugned judgement and award does not call for any interference of this Court as the Tribunal has rightly arrived at the dependency benefit considering the future prospective income of the deceased. He submitted that the deceased was plying the taxi and his income was Rs.4,000/- per month and therefore, considering the young age of about 27 years of the deceased and future prospectives, the Tribunal has arrived at the datum figure for the purpose of dependency benefit at Rs.6,000/- per month, i.e. Rs.72,000/- per annum and has adopted the multiplier of 18, which is just and proper. He also submitted that while making the award, the Tribunal has not awarded any amount towards the loss of consortium. Therefore, the award is just and proper and does not call for any interference. He, therefore, urges to dismiss the appeal. 5. We have considered the submissions advanced by Ms. Megha Jani, learned Advocate for the appellant-Insurance Company, and Mr. Mehul Shah, learned Advocate for the respondent Nos.1 to 4 - original claimants. We have also perused the judgement and award as well as oral and documentary evidence supplied by the learned Advocates appearing for the parties during the course of submissions. 6. It is not in dispute that the appellant has not challenged the finding of the Tribunal on the aspect of negligence of the driver of the FA/686/2003 6/14 JUDGMENT offending tanker. Therefore, we do not deem it expedient to examine on this aspect. 7. The only aspect, which is now required to be addressed, is the quantum of compensation. Therefore, the rival submissions made as regards the income of the deceased, including the prospective income assessed by the Tribunal for the purpose of dependency benefit, are required to be appreciated. As discussed and reflected in the judgement and award of the Tribunal, the deceased was earning Rs.4,000/- at the time of the accident. Therefore, considering the guidelines laid down by the Division Bench of this Court in the case of Smt. Rafia Sultan vs. O.N.G.C., reported in 19 85 (2) GLR 1315 , the present income is required to be doubled for consideration of the future prospective and taking the average thereof, the datum figure for the dependency benefit would come at Rs.6,000/- per month, i.e. Rs.72,000/- per annum. Out of this amount, one third is required to be deducted towards upkeeps and personal expenses to be incurred by the deceased as he was a married man. The net dependency benefit would, therefore, come to Rs.48,000/- per annum. Therefore, the only point which is required to be focused is applying proper multiplier. 8. The Honourable Apex Court, in the case of G.M. Kerala State Road Transport Corporation vs. Susamma Thomas, reported in 1994 ACJ 1, elucidating on the aspect of compensation and the method FA/686/2003 7/14 JUDGMENT for arriving at the dependency benefits, has made the observations and quoted the principle enunciated under the Fatal Accidents Act of 1846 and 1976. It has been quoted from the judgement in the case of Davies vs. Powell, (1942) AC 601 at page 609 as under: “Lord Wright in the same case said: The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death.” 8.1 The words of Lord Wright have been adopted and quoted as the principle applicable also under the Indian laws in Gobald Motor Service Ltd. vs. R.M.K.Veluswami, 1958-65 ACJ 179 (SC), where the Supreme Court has briefly observed as under: “the general principle is that the actual 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 dependent by the death must be ascertained.” 8.2 The Apex Court has discussed, elaborating on this aspect and this principle that as to how the dependency of the multiplicand could be adopted or arrived at, and has also quoted from Halsbury's Laws of England in Vol.34, para-98, again emphasising the same principle as under: FA/686/2003 8/14 JUDGMENT “(98) Assessment of damages under the Fatal Accident Act, 1976 - The courts have evolved a method for calculating the amount of pecuniary benefit that dependants could reasonably expect to have received from the deceased in the future. First the annual value to the dependants of those benefits (the multiplicand) is assessed. In the ordinary case of the death of a wage-earner that figure is arrived at by deducting from the wages the estimated amount of his own personal and living expenses. The assessment is split into two parts. The first part comprises damages for the period between death and trial. The multiplicand is multiplied by the number of years which have elapsed between those two dates. Interest at one-half the short- term investment rate is also awarded on that multiplicand. The second part is damages for the period from the trial onwards. For that period, the number of years which have based on the number of years that the expectancy would probably have lasted; central to that calculation is the probable length of the deceased's working life at the date of death." Further, as to the multiplier, Halsbury states that: "However, the multiplier is a figure considerably less than the number of years taken as the duration of the expectancy. Since the dependants can invest their damages, the lump sum award in respect of future loss must be discounted to reflect their receipt of interest on invested funds, the intention being that the dependants will each year draw interest and some capital (the interest element decreasing and the capital drawings increasing with the passage of years), so that they are compensated each year for their annual loss, and the fund will FA/686/2003 9/14 JUDGMENT be exhausted at the age which the court assesses to be the correct age, having regard to all contingencies. The contingencies of life such as illness, disability and unemployment have to be taken into account. Actuarial evidence is admissible, but the courts do not encourage such evidence. “ 8.3 The Honourable Apex Court, in this very judgement in the case of Susamma Thomas (supra), has discussed that though the method of multiplier is logically sound and legally well established, but, the calculation referring to the age of the deceased at the time of the accident and the expected life of years and adopting the higher multiplier has been disapproved. 8.4 In this very judgement, the Apex Court has also observed in paragraph 7 that: “7. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account any 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 that the deceased might have got better employment or income or might have lost his employment or income together. FA/686/2003 10/14 JUDGMENT 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. Much of the calculation necessarily remains in the realm of hypothesis 'and in that region arithmetic is a good servant but a bad master' since there are so often many imponderables. In every case 'it is the overall picture that matters', and the court must try to assess as best as it can the loss suffered.” 8.5 Further, this very judgement and the principle referred to has been followed in the subsequent judgements, including in the judgement in the case of Oriental Insurance Company Limited vs. Jashuben & Ors., reported in 2008 (2) SCALE 474. The Honourable Apex Court in this judgement in paragraph 13 has observed as under: “The amount of compensation indisputably should be determined having regard to the pecuniary loss caused to the dependents by reason of the death of the victim. It was necessary to consider the earnings of the deceased at the time of the accident. Of course, further prospect is not out of bound for such consideration. But the same should be founded on some legal principle.” FA/686/2003 11/14 JUDGMENT 8.6 Further, referring to the judgement and quoting from the judgement in the case of Susamma Thomas (supra), the Honourable Apex Court has again made the observations in paragraph 14 as under: “14. In General Manager, Kerala State Road Transport Corporation, Trivendrum vs. Susamma Thomas [(1994) 2 SCC 176], this Court held: 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.” Not only that, in the case of Oriental Insurance Company vs. Jashuben & Ors. (supra), the Honourable Apex Court has also referred to other judgements, including the observations made in paragraph 18 in the judgement in the case of T.N. State Transport Corporation Ltd. vs. S. Rajapriya & Ors., reported in (2005) 6 SCC 236, and in the case of U.P. State Road Transport Corporation vs. Krishna Bala & Ors., reported in (2006) 6 SCC 249, and observed as to how the multiplier method should be referred and in the case of the FA/686/2003 12/14 JUDGMENT deceased aged about 36 years, the multiplier of 13 was found to be just and proper. 8.7 As regards calculation of the dependency benefit arrived at on the basis of the income, the Honourable Apex Court, in the case of Oriental Insurance Company vs. Jashuben & Ors. (supra), has also referred to the case of Sarla Dixit & Anr. vs. Balwant Yadav & Ors. , reported in (1996) 3 SCC 179, and observed as to how the income could be arrived at. Thus, the principles/guidelines laid down by the Honourable Apex Court have been followed consistently as regards future prospective income as well as multiplier for the purpose of arriving at the dependency loss. 9. In light of the observations made by the Honourable Apex Court in the judgements reported in the case of Susamma Thomas (supra) and Oriental Insurance Company vs. Jashuben & Ors. (supra), the maximum multiplier that can be awarded for arriving at the dependency benefit is 15. Therefore, though the submissions have been made by Mr. Shah, learned Advocate for the claimants, that the deceased was aged about 27 years at the time of the accident, considering his young age and in light of the observations made by the Apex Court in the aforesaid judgement, we deem it proper that the maximum multiplier of 15 can be adopted. Therefore, the net dependency benefit would come to Rs.48,000/- x 15 = Rs.7,20,000/-. At the same time, as rightly pointed FA/686/2003 13/14 JUDGMENT out by the learned Advocate, Mr. Shah, no award has been made for the loss of consortium, which is required to be awarded. Therefore, as the Tribunal has not awarded any amount towards the loss of consortium, without going into much details, we propose to modify the award by rounding off the award amount to Rs.8,16,000/- instead of Rs.9,45,000/- as follows: Rs.7,20,000/- Towards loss of dependency benefits Rs. 15,000/- Towards pain shock and suffering Rs. 15,000/- Towards loss of estate Rs. 15,000/- Towards the loss of consortium Rs. 5,000/- Towards funeral expenses Rs. 46,000/- Towards damages to the taxi ------------------ Rs.8,16,000/- Total Accordingly, the present appeal deserves to be allowed. 10. Therefore, Rs.8,16,000/- is awarded as the total amount of compensation to the claimant instead of Rs.9,45,000/-. Accordingly, the claimants would be entitled to the compensation of Rs.8,16,000/- instead of Rs.9,45,000/-. 11. For the foregoing reasons, the appeal succeeds in part and is partly allowed with no order as to costs. The impugned judgement and award dated 24th July, 2002 passed by the Motor Accident Claims Tribunal (Auxiliary), Kachchh at Bhuj in M.A.C.P. No.149 of 1994, awarding compensation of Rs.9,45,000/-, is hereby modified by FA/686/2003 14/14 JUDGMENT awarding total compensation of Rs.8,16,000/- instead of Rs.9,45,000/- together with interest at the rate of 9% per annum from the date of the petition till the date of realisation with proportionate costs thereon. Rest of the directions contained in the impugned judgement and award are not disturbed and maintained. 12. At this stage, it is stated by Ms. Megha Jani, learned Advocate for the appellant, that in compliance of the impugned award, the appellant-Insurance Company has deposited the entire amount of compensation together with interest and costs thereon with the Tribunal. She requested that as this Court has modified the award, the excess amount of Rs.1.29 Lakh may be ordered to be refunded out of the amount lying deposited with the Tribunal. 13. In view of the above, the Motor Accident Claims Tribunal (Auxiliary), Kachchh at Bhuj is directed to refund the amount of Rs.1.29 Lakh out of the amount lying with it along with the interest accrued thereon. Award be drawn accordingly. [A. M. Kapadia, J.] [R. H. Shukla, J.] kamlesh*