Case: Laxmi Devi  Vs. Mohammad Tabbar

For this proposition the High Court held that the notional income of Rs.15,000/- in the Second Schedule was prescribed in the year 1994 while the accident had taken place in the year 2004. The second reason given by the High Court was that even an unskilled labourer, these days, can easily earn Rs.100/- per day and Rs.3,000/- per month and, therefore, the High Court held the income to be Rs.36,000/- per annum and by deducting 1/3rd of the income of the deceased for his personal expenses, the claimants’ dependency was assessed at Rs.24,000/- per annum. However, the High Court reduced the multiplier of 16 applied by the Tribunal to 12. For this action, the High Court relied on the aforementioned judgment in T.N. Transports Corporation’s case. The High Court thus applied the multiplier of 12 instead of 16 and ultimately the High Court arrived at the figure of Rs.2,88,000/- and to this the other compensation on account of funeral expenses, loss of consortium to the widow and loss of estate, which were granted by the Tribunal, were added and the total compensation of Rs.2,97,000/- was awarded by the High Court. The claimants, dissatisfied with this finding, have filed this appeal before us.5. Learned counsel for the claimants urged that the High Court erred in applying the multiplier of 12 particularly when the deceased was only 35 years old and none of the claimants was more than that age. Learned counsel further urged that the deceased had left behind four minor daughters along with a young wife. It was urged that considering the fact that only 6% interest was granted, the multiplier of 12 was not a proper multiplier and the multiplier as found by the Tribunal should have been retained. As against this, the learned counsel for the Insurance Company supported the order of the High Court and claimed that in fact the compensation granted by the High Court was on higher side.6. We have considered the contentions as well as the law laid down in T.N. Transport Corporation’s case (supra). In the said decision this Court, after considering the rulings in G.M. Kerala SRTC v. Susamma Thomas [(1994) 2 SCC 1760, U.P. SRTC v. Trilok Chandra [(1996) 4 SCC 362] as also the other English cases such as Davies v. Powell Duffryn Associated Collieries Ltd. [(1942) 1 All ER 657 (HL)] and Nance v. British Columbia Electric Rly. Co. Ltd., [(1951) 2 All ER 448] observed in para 12 that: “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.” This Court then observed in para 16 as under: “In Susamma Thomas case it was noted that the normal rate of interest was about 10% and accordingly the multiplier was worked out. As the interest rate is on the decline, the multiplier has to consequentially be raised. Therefore, instead of 16 the multiplier of 18 as was adopted in Trilok Chandra case appears to be appropriate.” It was also further observed by this Court that: “The highest multiplier has to be for the age group of 21 years to 25 years when an ordinary Indian citizen starts independently earning and the lowest would be in respect of a person in the age group of 60 to 70, which is the normal retirement age.” In para 17 of the judgment this Court came to the conclusion that the appropriate multiplier would be 12 and not 16 in case of a person where the deceased was 38 years old and the interest was granted at 9% per annum from the date of claim petition. The Court, therefore, reduced the multiplier from 16 to 12 and also reduced the rate of interest to 7.5% per annum. It seems that based on that findings the High Court has reduced the multiplier in the present case.7. Considering the above principles in this case, we must say that the High Court has definitely erred in bringing down the multiplier to 12. It is to be seen that in this case the deceased was 35 years old. The claimants are his wife and four minor daughters. Even as per the Second Schedule the multiplier in case of the persons between 35 to 40 years is 16. In the present case the rate of interest granted is only 6% considering the general rate of interest prevalent in 2004. In our opinion, therefore, the proper multiplier would be 14 as the value of the notional income has been increased. It was nobody’s case that the deceased was not working at all. His wife has entered in the witness box and had asserted that he earned Rs.140/- per day. Even if we ignore the exaggeration, the figure arrived at by the High Court at Rs.100/- per day and Rs.3,000/- per month appears to be correct. However, considering that the claimant would get only 6% interest, we would chose to grant the multiplier of 14 instead of 12. Accordingly the notional income as applied would be Rs.24,000 x 14 = Rs.3,36,000/- and to this will be added the other compensation like Rs.2,000/- as funeral expenses, Rs.5,000/- for the loss of consortium to the widow and Rs.2,000/- for the loss of estate. The claimants would, therefore, be entitled to a sum of Rs.3,45,000/-. The said sum shall carry the interest at the rate of 6% per annum from the date of claim petition.8. In view of the above, the

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We have considered the contentions as well as the law laid down in T.N. Transportcase (supra). In the said decision this Court, after considering the rulings in G.M. Kerala SRTC v. Susamma Thomas [(1994) 2 SCC 1760, U.P. SRTC v. Trilok Chandra [(1996) 4 SCC 362] as also the other English cases such as Davies v. Powell Duffryn Associated Collieries Ltd. [(1942) 1 All ER 657 (HL)] and Nance v. British Columbia Electric Rly. Co. Ltd., [(1951) 2 All ER 448] observed in para 12multiplier 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 toCourt then observed in para 16 asSusamma Thomas case it was noted that the normal rate of interest was about 10% and accordingly the multiplier was worked out. As the interest rate is on the decline, the multiplier has to consequentially be raised. Therefore, instead of 16 the multiplier of 18 as was adopted in Trilok Chandra case appears to bewas also further observed by this Courthighest multiplier has to be for the age group of 21 years to 25 years when an ordinary Indian citizen starts independently earning and the lowest would be in respect of a person in the age group of 60 to 70, which is the normal retirementpara 17 of the judgment this Court came to the conclusion that the appropriate multiplier would be 12 and not 16 in case of a person where the deceased was 38 years old and the interest was granted at 9% per annum from the date of claim petition. The Court, therefore, reduced the multiplier from 16 to 12 and also reduced the rate of interest to 7.5% per annum. It seems that based on that findings the High Court has reduced the multiplier in the present case.7. Considering the above principles in this case, we must say that the High Court has definitely erred in bringing down the multiplier to 12. It is to be seen that in this case the deceased was 35 years old. The claimants are his wife and four minor daughters. Even as per the Second Schedule the multiplier in case of the persons between 35 to 40 years is 16. In the present case the rate of interest granted is only 6% considering the general rate of interest prevalent in 2004. In our opinion, therefore, the proper multiplier would be 14 as the value of the notional income has been increased. It wascase that the deceased was not working at all. His wife has entered in the witness box and had asserted that he earned Rs.140/- per day. Even if we ignore the exaggeration, the figure arrived at by the High Court at Rs.100/- per day and Rs.3,000/- per month appears to be correct. However, considering that the claimant would get only 6% interest, we would chose to grant the multiplier of 14 instead of 12. Accordingly the notional income as applied would be Rs.24,000 x 14 = Rs.3,36,000/- and to this will be added the other compensation like Rs.2,000/- as funeral expenses, Rs.5,000/- for the loss of consortium to the widow and Rs.2,000/- for the loss of estate. The claimants would, therefore, be entitled to a sum of Rs.3,45,000/-. The said sum shall carry the interest at the rate of 6% per annum from the date of claim petition.