Indian Latex Fibre Corporation Vs Smt. Gayatri Devi and Others

S.C. Mohapatra, J.

Owner is the appellant in this appeal u/s 110-D of the Mator Vehicles Act, 1939 (for short, the Act'').

After stating the facts and contentions of the counsel, His Lordship observed :

10. Normally, Courts in appeal are not to interfere with the quantum fixed. However, having found that the quantum has not been determined reasonably I am required to examine the materials to determine the just compensation to be awarded in this case.

11. The basis of the claim of the legal representatives of the deceased in this case is only the loss of dependency, in the claim petition, it has been stated as follows :

The particulars of compensation claimed is given blow:

"The average age of the deceased he would have survived is 60 years. His yearly income is Rs. 9,600/- (nine thousand six hundred) and for 29 years the deceased would have earned Rs. 2,78,400/- (two lakhs seventy-eight thousand four hundred)".

In item 21 of the claim petition dealing with the statement of amount of claim, it is stated : o

"Rs. 2,78,400/-(two lakhs seventy-eight thousand and four hundred) only but the applicants hereby waive Rs. 1,78,400/- and claim Rs. 1,00,000/- (one lakh) only".

12. As has been held by a Division Bench of this Court in a decision reported in 1967 A.C.J. 278 (Amulya Patnaik v. The; State of Orissa), the following factors are to be taken into consideration in determining the quantum of damages :

i) The amount of wages which the deceased was earning, the ascertainment of which may, to some extent, depend upon the regularity of his employment;

ii) An estinate is to be made as to how much of that earning was required or spent for his personal and living expenses;

iii) The balance will furnish the basis which will be turned into a lump sum by capitalising it ; and

iv) This capitalised sum would be taxed down having due regard to uncertainties.

13. At the time of death the deceased was earning Rs 800/- per month. Ext, 2 is the certificate of the High School Certificate Examination which indicates that the deceased was placed in the third division. He was in private employment which had no security of service Even at the age of 31, he had to earn his livelihood by employment which indicates that he would have depended on such service only throughout his working life He was earning Rs. 800/- per month. In the absence of any other materials. it can legitimately be inferred that as a family of husband and wife only, the contribution was half to the family and the balance half was his expenses. Thus, Rs. 400/- per month brings the annual contribution to Rs. 4,800 - which is determined as the annual loss of dependency in this case.

14. The Act does not provide for any method of capitalisation. One method accepted by Courts is the determination of the period for which the dependency would have continued and multiply the same to the annual amount of dependency. From the amount so determined, a percentage is deducted towards the benefit of lump sum payment and future uncertainties. Courts have found yet another method by applying the multiplier principle in which the annual purchase which is increased by 10, 15 or 20 times. A third method is to determine the amount which would be sufficient for earning that much which would be the annual loss of dependency.

15. The Act casts a duty on the tribunal u/s 110-B to determine the just compensation. The same power is to be exercised in appeal just compensation is one which does not become a source of profit to the claimants on account of the accident sustained. Keeping this in view the amount is to be capitalised by applying one of the methods which would depend upon the facts and circumstances of each case. There is a decision of the Supreme Court reported in N. Sivammal and Others Vs. Managing Director, Pandian Roadways Corporation and Another, where income of the deceased was taken to be the loss of dependency but the same is to be confined to the facts of that case. It is sufficient to state that each of the methods is applied to determine the just compensation and no method can be blamed to be illegal or unreasonable

16. While rejecting the plea of the owner for determining the just compensation by applying the method of bank rate of interest equivalent to the annual loss of dependency, this Court in a decision reported in 47 (1979) CLT 368 (Orissa Road Transport Corporation Limited v. Sibananda Patnaik) discarded the same on the ground that rate of interest varies and there is no provision under the Motor Vehicles Act to obtain review of the compensation once awarded on the basis of variance of the rate of interest. That apart the persons entitled to compensation should have the control over the compensation amount and there can be no justification to keep it cut of their reach and make an annuity available to them. In a later decision of this Court reported in Commissioner, N.C.C. Group Vs. Smt. Nirmala Moharana and Others, R. N. Misra, C. J. (as His Lordship then was)awarded compensation accepting the average bank rate of interest. His Lordship observed :

"The average bank rate of interest has been 10 per cent on term-deposit for a term of 3 years and above. If Rs. 25,000/- is deposited, it would earn interest of Rs. 2,500/- a year and. that should adequately compensate the claimants taking into account the possibility of variation of the rate of interest and the losing value of the rupee on account of deflation."

His Lordship was a member of the Division Bench while not approving the bank rate as a basis to be a general rule in 47 (1979) CLT 368 (supra)

17. The question is whether the principle applied in the later Single judge decision reported in Commissioner, N.C.C. Group Vs. Smt. Nirmala Moharana and Others, would have any weight over the disapproval of the principle in the earlier Division Bench decision reported in 47 (1979) CLT 368 (supra). The Division Bench decision was rendered in 1979 keeping in mind the situation prevailing during a period when the bank rate of interest was varying. Besides, the fact that the claimant would have no control over the compensation weighed with the Division Bench. Now, for a long time, the bank rate of interest has remained constant and there is chance of increase of the same. Therefore, merely because the Division Bench in the particular circumstances expressed in one way would not have any binding effect on me in a different situation. In the Division Bench absence of control over the compensation money was a circumstance. In case provision is made to avoid the same, the Division Bench decision would have no application which would be confined to the facts and circumstances of that case. Moreover one of the Hon''ble Members of the Division Bench in a later decision has adopted the method of determination by avoiding the absence of control commented upon by the Division Bench, His Lordship has also kept in mind the devaluation of rupee currency.

18. In the back ground of the aforesaid discussion; it can safely be concluded that the authorities under the Act are to make endeavour to award compensation which would be just in the circumstances available from the materials on record. In no decision compensation basing on the bank rate of interest available to a sum has been discarded as unreasonable. All that has been said that it cannot be accepted as a general rule, Mr. Samantaray intimates, that in June 1984, Rs, 50,000/- payable by the insurer has been deposited which has also been withdrawn by the claimants. Therefore, there is no necessity of reducing the compensation already received. The owner, therefore, would have no liability to pay any further sum.

19. Taking the loss of dependency to be Rs. 48,000/- annually, purchase of postal certificate would make the amount double within six years. However, the liberal view would be term deposit for three years which would carry interest at 10% per annum. Therefore, Rs. 48,000/- would be just compensation in this case.

20. In the result, the appeal is allowed. There shall, however, be no order as to costs.