IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.11.2008 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR C.M.A.(NPD)No.3485 of 2008 The Branch Manager National Insurance Co.,Ltd., 4132,East Main Street, Pudukottai 622 001 ... Appellant/3rd Respondent vs. 1.Mrs.Palkani 2.Minor Suyamburaj 3.Minor Serma Vijaya 4.Mrs.Lingammal 5.K.Saravanan 6.Mrs.R.Dhanalakshmi 7.Ramasamy ...Respondents/ 8.The Managing Director, Claimants 1 to 4 State Express Transport Respondents 1,2,4 & 5 Pallavan Salai, Chennai 600 002. respondents 5,6 and 7 were set exparte by the claims Tribunal Civil Miscellaneous Appeal is filed under Section 173 of Motor Vehicles Act, 1988, against the Judgment and Decree dated 9th day of March 2007 made in MCOP.NO.118 OF 2006 on the file of the Motor Accidents Claims Tribunal (Additional District and Sessions Judge- Fast Track Court No.2), Coimbatore. For appellant : Mr.K.Padmanabhan For respondents 1 to 4 : Mr.N.Nicholos : Notice dispensed with for 5,6 & 7 respondents ----- JUDGMENT The National Insurance Company is on appeal challenging the award dated 9th day of March 2007 made in MCOP.NO.118 of 2006 on the https://hcservices.ecourts.gov.in/hcservices/ file of the Motor Accidents Claims Tribunal (Additional District and Sessions Judge-Fast Track Court No.2), Coimbatore. 2. This is a case of fatal accident. The accident in this case happened on 27.8.1997. The deceased subbudurai said to be 28 years old and owning a grocery shop was a passenger in the transport Corporation bus. Due to fault in the headlight, the bus was parked on the road. The deceased was sitting in the bus and a lorry insured with the appellant Insurance Company driven its driver by rash and negligent manner and hit the parked transport Corporation bus and in that accident, several persons sustained injuries and Subbudurai sustained grievous injuries. He was taken to hospital and in spite of medical aid, he died. First Information Report was laid against the driver of the lorry and he was charge sheeted and convicted for the said offence and he has also paid the fine. 3. The wife aged about 31 years, minor son aged 11 years and minor daughter aged about 6 years and the mother of the deceased aged about 53 years filed a claim in a sum of Rs.13,50,000/- for compensation . According to the claimants, the deceased was earning a sum of Rs.6,000/- per month from his business as a grocery shop owner. 4. In support of the claim, the wife of the deceased examined herself as P.W.1. One Vellathurai, an eye witness was examined as P.W.2 and P.W.3, one Kumaresan, another witness spoke about the income of the deceased.Exs.A1 to A13 were marked on behalf of the claimants. Ex.A1 is the Photo copy of First Information Report Ex.A2 is the Post-mortem certificate Ex.A.3 is the report of the Motor Vehicles Inspector Ex.A.4 is the Certified copy of the Charge sheet Ex.A.5 is the Judgment copy of the Judicial Magistrate, Virudhunagar, Ex.A.6 is the Notorised copy of legal heir certificate Ex.A.7 is the the record sheet of deceased Subbudurai Ex.A.8 is the Notorised copy of rough sketch Ex.A.9 is the notorised copy of Motor Vehicle Inspector Ex.A.10 is the copyof Policy Ex.,A.11 is the Chit book of deceased Subbudurai for receipt of money by Ponmalar Corporation Ex.A.12 is the chit company 's book for the year 1996. Ex.A.13 is the chit company's book for the year 1997. One Ranganathan was examined on behalf of the appellant before the Tribunal and no document was marked. 5. The finding of the Tribunal with regard to negligence on the part of the driver of the lorry who caused the accident and death and consequential liability fixed on the appellant Insurance Company, the insurer of the offending vehicle to compensate the claimants is not in dispute and the same is confirmed. 6. The only contention raised by the learned counsel for the appellant is on the quantum of compensation. https://hcservices.ecourts.gov.in/hcservices/ 7. As regards the compensation, the same was decided by the Tribunal from Paragraph 16 onwards. The school records Ex.A7 dated 17.8.1975 shows the date of birth of the deceased Subbudurai as 12.7.1968. Based on this, the Tribunal has come to the conclusion that the deceased was 30 years old. As far as income is concerned, though Rs.10,000/- was claimed as income, no document was filed in support of the same. However, PW3 stated that the deceased was contributing a sum of Rs.100/- per day which is supported by documents viz., Exs.A.11,12 and 13. This would go to show that the deceased was having reasonable income and was able to save some amount every day. In the absence of specific document to prove the actual income, based on exhibits Ex.A10,A11,A12 and A13 and also the evidence of PW3, the Tribunal came to the conclusion that even a Coolie will earn Rs.100 or 150 per day. Therefore, the income of the deceased was taken as Rs.150/- and the monthly income was taken as Rs.4,500/- per month (i.e. Rs.54,000/- per annum), out of which 1/3 was deducted towards personal expenses of the deceased and the Contribution per annum to the dependents was fixed as Rs.36,000/- per annum. While determining the pecuniary benefits to the dependents, taking note of the fact that two of the claimants are the minors and the wife was aged about 24 years at the time of death of the deceased and also the considering the age of the mother, the Tribunal adopted 18 Multiplier and granted a sum of Rs. 6,48,000/-towards loss of pecuniary benefits.(Rs.36,000 x 18). In addition to that, the Tribunal granted compensation on conventional heads. In all, the Tribunal granted the following amount as compensation with 7.5%: Sl. No. Head Amount granted by the Tribunal 1 Loss of dependency Rs.6,48,000/- 2 Loss of love and affection to all claimants Rs. 40,000/- 3 Transport Expenses Rs. 7,000/- 4 Funeral expenses Rs. 5,000/- Total Rs.7,00,000 /- 8. Learned counsel for the appellant pleaded that the age of the deceased was determined as 30 years. Therefore,the Multiplier of 18 is on the higher side and hence the compensation has to be reduced. He relied upon the Apex Court 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) and pleaded that the Multiplier in this case has to be reduced. 9. Counsel for the respondents on the other hand pleaded that the deceased in this case was supporting the family consisting of a wife, two minor children and parents. He was self employed and it was https://hcservices.ecourts.gov.in/hcservices/ supported by the evidence of PW3 and documents. He had specifically stated that the deceased was contributing an amount daily to the chit company. He was saving a sum of Rs.3,000/- per month and this evidence of PW3 is supported by documents Exs.P.11,12 and 13. The Tribunal ought to have fixed the income much higher than Rs.4,500/-. As the saving itself is Rs.3,000/- per month. A reasonable amount will be needed for running the family. This aspect has been overlooked by the Tribunal and therefore the compensation need not be reduced. 10.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 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 https://hcservices.ecourts.gov.in/hcservices/ 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" 11. The accident in this case happened in the year 1997. The deceased was aged about 30 years old. He was supporting the family consisting of his wife aged 24 years, two minor children and parents. He was running a grocery shop as evident from the evidence of PW3. It is also evident that from his income, a sum of Rs.100/- per day has been contributed for saving . The evidence of PW3 supported by documentary evidence as already stated above is not contraverted by the appellants before the Tribunal. The only factor that has to be considered is whether 18 Multiplier can be applied in this case or it should be reduced,in view of two Apex Court decisions cited supra,viz. 2007 AIR SCW 1316 = 2007(1) Supreme 514 and 2007(1) https://hcservices.ecourts.gov.in/hcservices/ TN MAC 319 (SC) where 13 Multiplier has been adopted in the case of deceased aged between 30 to 35 years. 12. In the present case, the accident happened in 1997 and the income was claimed at Rs.10,000/-, but the Tribunal has taken Rs.4,500/- per month stating that there is no proof for income of the deceased. The Tribunal has not taken into consideration the daily saving of Rs.100/- equivalent to Rs.3,000/- per month which was the savings of the deceased, even during the year 1997. Taking into consideration the said aspect and the two apex court decisions on multiplier in order to arrive at a just and reasonable compensation, the Multiplier has to be suitably modified so that the claimants are not deprived of their just and reasonable compensation. Considering the young age of the deceased and a minor son and daughter aged 11 and 6 years respectively and that of the mother of the deceased, the Multiplier that can be taken in this case is 16. Hence the pecuniary loss will be as follows: 1.Rs.4,500 x 12 = Rs.54,000 /- less 1/3 =Rs.36,000 x 16 =Rs.5,76,000/- Sl.No. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits Rs.6,48,000/- Rs.5,76,000/- 2(a) Loss of consortium to the wife ----- Rs. 15,000/- 2(b) Loss of love and affection to two minor (Rs.15,000/- each) Rs. 30,000/- 2 Loss of love and affection to all claimants Rs. 40,000/- --- 2(c) Loss of love and affection to mother ----- Rs. 10,000- 3 Funeral Expenses Rs. 5,000/- Rs. 5,000/- 4 Transport Expenses Rs. 7,000/- Rs. 7,000/- Total Rs.7,00,000/- Rs.6,43,000/- https://hcservices.ecourts.gov.in/hcservices/ Though the accident happened in the year 1997, since the award is passed in 2007, the interest awarded by the Tribunal at 7.5% stands confirmed. 13. In the result, the Civil Miscellaneous Appeal is allowed in part as follows: (i) The award of the Tribunal is reduced to Rs.6,43,000/-from Rs.7,00,000/- (ii) The interest granted by the Tribunal at 7.5% is confirmed. (iii) The counsel for appellant seeks for eight weeks' time to deposit the award amount as ordered by this Court and is granted. (iv) On such deposit, the claimants are entitled to the award amount as ordered by this Court as follows:- Wife/first claimant Rs.2,83,000/- with proportionate interest and entire cost as awarded by the Tribunal. Minor son and daughter/claimants 2 and 3 (Rs.1,50,000/-each) Rs.3,00,000/- with proportionate interest Mother/fourth claimant Rs.60,000/- with proportionate interest (v) The wife and the mother of the deceased, respondents 1 and 4 are permitted to withdraw the amount as mentioned above. (vi) The share of the minor respondents 2 and 3/claimants 2 and 3 shall be invested in any nationalised bank proximate to the place of the residence 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 instruct the bank accordingly. https://hcservices.ecourts.gov.in/hcservices/ (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 VJY To 1. Motor Accidents Claims Tribunal (Additional District and Sessions Judge- Fast Track Court No.2), Coimbatore. 2. The Record Clerk, VR.Section, High Court, Madras. 1 cc To Mr.V.Nicholas, Advocate, SR.63666 CMA.NO.3485 OF 2008 AND M.P.NO.1 OF 2008 VSV(CO) SRA(06/02/2009) https://hcservices.ecourts.gov.in/hcservices/