IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 4.12.2008 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKAR C.M.A.No.3779 of 2008 and M.P.No.1 of 2008 M/s. New India Assurance Company Ltd., 147, Salai Road, Ramanathapuram. ... Appellant/2nd Respondent vs. 1.Thenmozhi, 2.Vijayakumar, 3.Dhanalakshmi (alias) Poornima, 4.M.Ponnusamy. ... Respondents/Petitioners 1 to 3 and 1st Respondent Civil Miscellaneous Appeal is filed under Section 173 of Motor Vehicles Act, 1988, against the award and decree dated 11.1.2007 passed in M.C.O.P.No.305 of 2005 on the file of the Motor Accidents Claims Tribunal (Principal Sub Court), Gobichettipalayam. For appellant : Mr.R.Sivakumar For respondent Nos.1 to 3 : Mr.Ma.P.Thangavel JUDGMENT Respondents 1 to 3/claimants appear through counsel. 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 11.1.2007 passed in M.C.O.P.No.305 of 2005 on the file of the Motor Accidents Claims Tribunal (Principal Sub Court), Gobichettipalayam. https://hcservices.ecourts.gov.in/hcservices/ 3. It is a case of fatal accident. The brief facts of the case is as follows:- The accident in this case happened on 22.12.2004 at 21.00 hours. The deceased Rajamanickam, aged 40 years, said to be in-charge of ironing of garments in the Hosiery Unit of P.W.3, was going on a bicycle on Tiruppur to Avinashi Main Road. He was hit by a van insured with the appellant. In that accident, the said Rajamanickam suffered grievous injuries. He was taken to Tiruppur Government Hospital, however, he died. The case was registered as against the driver of the van. Consequent to the death of Rajamanickam, the wife aged 37 years, son aged 20 years and daughter aged 19 years filed a claim for compensation in a sum of Rs.9 lakhs, stating that the deceased was earning a sum of Rs.6,000/- per month. 4. In support of the claim, the wife of the deceased was examined as P.W.1. One Balakrishnan, the eye witness, was examined as P.W.2. The employer Doraisamy was examined as P.W.3. Exs.A-1 to A-8 were filed, the details of which are as follows:- Ex.A-1 is the copy of F.I.R. dated 22.12.2004, Ex.A-2 is the copy of post-mortem report dated 23.12.2004, Ex.A-3 is the Motor Vehicle Inspector's Inspection Report dated 28.12.2004. Ex.A-4 is the copy of rough sketch, Ex.A-5 is the copy of observation mahazar dated 23.12.2004, Ex.A-6 is the copy of charge-sheet dated 23.12.2004, Ex.A-7 is the legal heir certificate and Ex.A-8 is the salary certificate. No oral or documentary evidence was let in on behalf of the appellant insurance company, the second respondent before the Tribunal. 5. The finding of negligence on the part of the driver of the van and the liability fixed on the appellant insurance company to compensate the claimants is not disputed by the appellant's counsel and the same is confirmed. The only contention raised by the counsel for the appellant is with regard to quantum of compensation. 6. As regards the compensation, the same was decided by the Tribunal in paragraph 8 of the award in answer to point No.2. As per the post-mortem certificate Ex.A-2 and as per the pleadings, the age of the deceased was fixed as 40 years. As far as income of https://hcservices.ecourts.gov.in/hcservices/ the deceased is concerned, claimants relied upon Ex.A-8, salary certificate stating that the weekly salary of the deceased was Rs.1,150/- totalling to Rs.4,600/- per month which includes allowances. The Tribunal, however, fixed the income of the deceased at Rs.5,000/- per month and Rs.60,000/- per annum on the premise that the deceased was working in the hosiery manufacturing company in the Ironing Department. After deducting 1/3 towards personal expenses of the deceased, the Tribunal fixed the annual contribution to the family of the deceased at Rs.40,000/-. The Tribunal based on the second schedule to Section 163A of the Motor Vehicles Act, adopted the multiplier of 15, considering the age of the deceased who was 40 years old fixed the loss of contribution to the family of the deceased as follows:- Rs.40,000/- x 15 = Rs.6,00,000/-. 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.6,00,000/- 2 Loss of consortium to the wife on the death of her husband Rs. 15,000/- 3 Loss of love and affection to the son and daughter on the death of their father Rs. 5,000/- 4 Funeral expenses Rs. 5,000/- Total Rs.6,25,000/- 7. In appeal, the appellant's counsel contends that the higher income taken by the Tribunal is contrary to the oral and documentary evidence and the multiplier of 15 is on the higher side. Therefore, he sought for reduction in the quantum of compensation. 8. Counsel for the respondents 1 to 3/claimants on the other hand stated that the deceased was working in the Industrial Town of Tiruppur, engaged in hosiery and garments export. Therefore, the income of the deceased taken as Rs.5,000/- is justified and the multiplier 15 as per second schedule to Section 163A of the Motor Vehicles Act need not be interfered with as the compensation is just and reasonable. 9. Insofar as the income is concerned, the counsel for the appellant is justified in stating that the Tribunal was not correct in fixing the higher salary contrary to the oral and documentary evidence on record. The so-called employer P.W.3 has stated based https://hcservices.ecourts.gov.in/hcservices/ on Ex.A-8 that his weekly salary is Rs.1,150/- and Rs.4,600/- per month inclusive of allowances. The claimants on their part have not established by any evidence to show that the employment was on a regular basis. No documents, like salary payment slips, vouchers were filed to show that the deceased was in the regular employment and was receiving the salary on a regular basis. From the nature of the salary paid, it is not clear whether the deceased was on a regular employment as the wages were paid on a weekly basis. Therefore, considering the uncertainties in employment and also taking note of the fact that two of the claimants, viz., the son and daughter of the deceased are adults, the multiplier in this case has to be suitably fixed based on the dependency of the deceased. The wife alone can be stated to be the dependent of the deceased. Considering the lump sum payment that is being granted, which is consequent to the death of the deceased and also keeping in mind the principles enunciated in the decision of the Apex Court in General Manager, Kerala State Road Transport Corporation – vs. Susamma Thomas and others reported in (1994)1 ACC 346 (SC) = AIR 1994 SC 1631, the multiplier has to be fixed. In the above said case, the Apex Court 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 https://hcservices.ecourts.gov.in/hcservices/ 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. 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." https://hcservices.ecourts.gov.in/hcservices/ In view of the decision of the Apex Court as above, it will be appropriate to fix the multiplier of 14 as against 15 multiplier adopted by the Tribunal in this case. The income also stands modified to Rs.4,600/- per month as per pleading and evidence. Accordingly, the compensation towards pecuniary benefits stands modified as follows:- Loss of income per month Rs.4,600/- Loss of income per annum Rs.4,600/- x 12 = Rs.55,200/- After deduction of 1/3 towards personal expenses of the deceased, the contribution to the dependents of the deceased Rs.55,200/- minus 18,400/- = Rs.36,800/- Total pecuniary loss by adopting 14 multiplier Rs.36,800/- x 14 = Rs.5,15,200/- 10. The Tribunal granted a sum of Rs.5,000/- alone towards loss of love and affection to the two children which is on the lower side. A further sum of Rs.5,000/- alone is granted towards loss of love and affection to the son and the daughter on the death of their father. No amount has been granted for transport expenses and loss of estate. Accordingly, a sum of Rs.2,500/- is granted towards transport expenses and a sum of Rs.2,500/- is granted towards loss of estate. The sum of Rs.5,000/- granted towards funeral expenses is reasonable and the same is confirmed. Accordingly, the award of the Tribunal is modified as follows:- Sl. No. Head Amount granted by the Tribunal Amount granted by this Court 1 Loss of pecuniary benefits to the dependents of the deceased Rs.6,00,000/- Rs.5,15,200/- 2 Loss of consortium to the wife on the death of her husband Rs. 15,000/- Rs. 15,000/- 3 Loss of love and affection to the son and daughter on the death of their father Rs. 5,000/- Rs. 10,000/- 4 Funeral expenses Rs. 5,000/- Rs. 5,000/- 5 Transport expenses --- Rs. 2,500/- 6 Loss of estate --- Rs. 2,500/- Total Rs.6,25,000/- Rs.5,50,200/- 11. Since the accident in this case happened in the year 2004 and the award is passed in the year 2007, the interest granted at 7.5% stands confirmed. https://hcservices.ecourts.gov.in/hcservices/ 12. The learned counsel for the appellant prays for six weeks' time from the date of receipt of copy of this judgment to deposit the amount as awarded by this Court. Learned counsel for the respondents 1 to 3/claimants prays for withdrawal on such deposit and are allowed. 13. In the result, the Civil Miscellaneous Appeal is allowed in part as follows:- (i) The award of the Tribunal is reduced to Rs.5,50,200/- from Rs.6,25,000/-. (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.4,00,200/- with proportionate interest and entire cost The son and daughter, the respondents 2 and 3 (Rs.75,000/- each) Rs.1,50,000/- with proportionate interest (iv) The appellant is granted six weeks' time from the date of receipt of copy of the judgment to deposit the award amount. (v) On such deposit the claimants are permitted to withdraw their share amount as ordered by this court. (vi) There will be no order as to cost. (vii) Consequently, connected miscellaneous petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. ts https://hcservices.ecourts.gov.in/hcservices/ To The Principal Subordinate Judge, (The Motor Accidents Claims Tribunal), Gobichettipalayam. 1 cc to M/s. Ma.P. Thangavel, Sr. 68499 C.M.A.No.3779 of 2008 KSK (CO) kk 29/12 https://hcservices.ecourts.gov.in/hcservices/