G.P. Mittal, J.@mdashAppellant Oriental Insurance Company Limited impugns the judgment dated 11.02.2014 passed by the Motor Accidents Claims Tribunal (the Claims Tribunal) whereby compensation of Rs. 7,06,608/- was awarded for the death of Chhotey @ Chhotey Lal, a bachelor who suffered fatal injuries in a motor vehicular accident which took place on 21.11.2006 within the jurisdiction of Police Station Sahibabad, Ghaziabad.
2. During inquiry before the Claims Tribunal, it was claimed that the deceased was working as an auto rickshaw (TSR) driver and was earning Rs. 7,500/- per month. It was further claimed that the deceased used to give a sum of Rs. 6,000/- per month to his mother, Respondent No. 1 out of his earnings. It was stated that the accident was caused on account of rash and negligent driving of bus bearing registration No. DL-1PA-4549 by its driver.
3. On appreciation of evidence, the Claims Tribunal found that the accident did take place on account of rash and negligent driving of the driver of earlier stated bus. The Claims Tribunal declined to believe that the deceased was working as a driver and thus, refused to accept the income of Rs. 7,500/- per month as claimed by Respondent No. 1. At the same time, the Claims Tribunal proceeded to award compensation taking minimum wages of a skilled worker ( Rs. 3736/- per month) to compute the loss of dependency.
4. The Claims Tribunal while relying on the judgments in
5. While submitting that the compensation awarded is exorbitant and excessive, the following contentions are raised on behalf of the Appellant Insurance Company:-
(i) Deceased Chhotey @ Chhotey Lal was a bachelor, Respondent No. 1/mother who was aged 59 years at the time of the accident was the only dependant. The multiplier ought to have been taken as per the age of the Claimant. Reliance is placed on
(ii) There was no evidence with regard to better future prospects, therefore, addition of 50% towards future prospects was not permissible. Reliance is placed on a three Judge Bench decision of the Supreme Court in
6. On the other hand, Learned counsel appearing for Respondent No. 1 supports the impugned judgment. He states that the recent trend is to adopt the multiplier for computation of loss of dependency as per the age of the deceased. Age of the Claimant has lost significance. In support of the contention, reliance is placed on
7. I have given my thoughtful consideration to the contentions raised on behalf of the parties.
8. The question of selection of multiplier was dealt with at great length by me in
9. I had discussed the law laid down in the earlier stated judgments and had further referred to the judgments in
10. Learned counsel for Respondent No. 1 has submitted that in view of the three Judge Bench decision in Reshma Kumari and Ors. and a later judgment of the Supreme Court in M. Mansoor and Anr., the judgment in Vijay Laxmi (supra) of this Court needs to be revisited and the multiplier has to be as per the age of the deceased and age of the Claimant is not at all relevant for selection of the multiplier.
11. Section 168 of the Motor Vehicles Act, 1988 (the Act) enjoins a Claims Tribunal to determine the amount of compensation which is just and reasonable. It can neither be a source of profit nor should be a pittance. In other words, it should not be meager nor should be a windfall. In this connection, a reference may be made to the report of the Supreme Court in
"7. It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which is to be in the real sense ''damages'' which in turn appears to it to be ''just and reasonable''. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be ''just and it cannot be a bonanza; not a source of profit; but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be ''just'' compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of ''just'' compensation which is the pivotal consideration. Though by use of the expression ''which appears to it to be just'' a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. The expression ''just'' denotes equitability, fairness and reasonableness, and non- arbitrary. If it is not so it cannot be just."
12. Initially, the trend of the Courts was to ascertain the life expectancy, deduct the age of the deceased and to award the compensation on the basis of the residual life span. The Courts started deducting certain sums out of the sum as arrived above on account of lump sum payment.
13. However, in
"8. The measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant. Thus "except where there is express statutory direction to the contrary, the damages to be awarded to a dependant of a deceased person under the Fatal Accidents Acts must take into account any pecuniary benefit accruing to that dependant in consequence of the death of the deceased. It is the net loss on balance which constitutes the measure of damages." (Per Lord Macmillan in Davies v. Powell [(1942) AC 601, 617 : (1942) 1 All ER 657 (HL) ] .) 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". These words of Lord Wright were adopted as the principle applicable also under the Indian Act in
9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many 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 altogether."
14. The Supreme Court referred to Davies v. Powell, (1942) AC 601 and Nance v. British Columbia Electric Railway Company Limited, (1951) AC 601 and in paras 13 and 14 of the report in Susamma Thomas (Mrs.) , the Supreme Court observed as under:-
"13. 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.
14. The considerations generally relevant in the selection of multiplicand and multiplier were adverted to by Lord Diplock in his speech in Mallett case [Mallett v. McMonagle, (1970) AC 166 : (1969) 2 All ER 178 (HL) ] where the deceased was aged 25 and left behind his widow of about the same age and three minor children. On the question of selection of multiplicand Lord Diplock observed:
"The starting point in any estimate of the amount of the ''dependency'' is the annual value of the material benefits provided for the dependants out of the earnings of the deceased at the date of his death. But there are many factors which might have led to variations up or down in the future. His earnings might have increased and with them the amount provided by him for his dependants. They might have diminished with a recession in trade or he might have had spells of unemployment. As his children grew up and became independent the proportion of his earnings spent on his dependants would have been likely to fall. But in considering the effect to be given in the award of damages to possible variations in the dependency there are two factors to be borne in mind. The first is that the more remote in the future is the anticipated change the less confidence there can be in the chances of its occurring and the smaller the allowance to be made for it in the assessment. The second is that as a matter of the arithmetic of the calculation of present value, the later the change takes place the less will be its effect upon the total award of damages. Thus at interest rates of 4� per cent the present value of an annuity for 20 years of which the first ten years are at � 100 per annum and the second ten years at � 200 per annum, is about 12 years'' purchase of the arithmetical average annuity of � 150 per annum, whereas if the first ten years are at � 200 per annum and the second ten years at � 100 per annum the present value is about 14 years'' purchase of the arithmetical mean of � 150 per annum. If therefore the chances of variations in the ''dependency'' are to be reflected in the multiplicand of which the years'' purchase is the multiplier, variations in the dependency which are not expected to take place until after ten years should have only a relatively small effect in increasing or diminishing the ''dependency'' used for the purpose of assessing the damages.""
15. The purpose of adopting the multiplier as per the age of the deceased or as per the age of the Claimant whichever is higher was that if the Claimant is of much higher age, particularly in case of death of a bachelor where the mother or for that matter the parents may be double the age of the deceased, the dependency is to come to an end in a much lesser period as against the dependency of a widow or minor children of a deceased. In any case, the deceased was not to support more than his own life span and thus, by providing the dependency to the Claimants, it was held that the dependency has to be as per the age of the deceased or the Claimant whichever is higher.
16. The law laid down in Susamma Thomas (Mrs.) (supra) with regard to adoption of multiplier method and selection of multiplier according to the age of the deceased or the Claimant whichever is higher was affirmed by a three Judge Bench decision in
"18. ...Besides, the selection of multiplier cannot in all cases be solely dependant on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier..."
17. There was some confusion as to the selection of the multiplier because of the multiplier table as given in the Second Schedule of the Act under Section 163-A which was inserted w.e.f. 14.11.1994. Some of the cases had adopted the multiplier as given in the Second Schedule. Although, the three Judge Bench in Trilok Chandra (supra) had noticed some clerical mistakes in the multiplier table as given in the Second Schedule, it stated that the said table can be taken as a guide. Noticing the wide variations in the selection of multiplier, a two Judge Bench of the Supreme Court in
18. The Supreme Court with a view to having a uniform multiplier held that the multiplier as given in Column (4) of the above table should be usually followed. In paras 41 and 42 of the report in Sarla Verma (Smt.) , the Supreme Court observed:-
"41. Tribunals/courts adopt and apply different operative multipliers. Some follow the multiplier with reference to
42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying
19. It may be noted that the Supreme Court had gone into the history of adoption of multiplier method and referred to Nance v. British Columbia Electric Railway Company Limited, (1951) AC 601 and Davies v. Powell, [(1942) AC 601.
20.
21. However, in
22. On account of divergence of opinion in the earlier cases, a reference to a larger Bench was made by a two Judge Bench in
"1.1. Whether the multiplier specified in the Second Schedule appended to the Motor Vehicles Act, 1988 (for short "the 1988 Act") should be scrupulously applied in all cases" and
1.2. Whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as regards determination of future prospects?"
23. While answering the points, in Para 43, the Supreme Court observed as under:-
"43. In what we have discussed above, we sum up our conclusions as follows:
43.1. In the applications for compensation made under Section 166 of the 1988 Act in death cases where the age of the deceased is 15 years and above.
43.2. In cases where the age of the deceased is up to 15 years.
43.3. As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act.
43.4. The Claims Tribunals shall follow the steps and guidelines stated in para 19 of
24. In
25. Of course, in
26. However, there is a three Judge Bench decision of the Supreme Court in
27. Also, in the latest judgment of the Supreme Court in
"11. The deceased was a diligent and outstanding student of medicine who could have pursued his MD after his graduation and reached greater heights. Today, medical practice is one of the most sought after and rewarding professions. With the tremendous increase in demand for medical professionals, their salaries are also on the rise. Therefore, we have no doubt in ascertaining the future income of the deceased at Rs. 25,000 p.m. i.e. Rs. 3,00,000 p.a. Further, deducting 1/3rd of the annual income towards personal expenses as per
28. Thus, right from the two Judge Bench decision in
29. In the instant case, the deceased was aged 30 years on the date of his death whereas the mother of the deceased was aged 59 years on the date of his death (as per the ration card 53 years in the year 2000) . Thus, the appropriate multiplier in the instant case will be ''9'' as against ''17'' adopted by the Claims Tribunal.
MULTIPLICAND
30. As stated earlier, in the claim petition the claimant stated that deceased Chhotey @ Chhotey Lal was working as an auto rickshaw driver and was earning Rs. 7,500/- per month. In her Affidavit Ex.PW1/A, these facts were reiterated. In cross- examination, a bare suggestion was given that the claimant did not possess any document with regard to deceased''s income. No suggestion was given to PW-1 that deceased Chhotey @ Chhotey Lal was not an auto driver. In fact, the accident took place while the deceased was driving the three-wheeler bearing no. UP-14Y-9213. Thus, from the manner of accident and the unchallenged testimony of PW-1 with regard to deceased''s profession, it is established that the deceased was an auto rickshaw driver by profession. The profession having been established, an attempt ought to have been made by the Claims Tribunal to make an assessment of the deceased''s income instead of taking the minimum wages of a skilled worker to compute the loss of earning. I tend to make a guess work and hold that the deceased must at least be earning Rs. 200/- per day or in other words earning about Rs. 6,000/- per month.
31. As far as addition of 50% towards inflation is concerned, the question was gone into at great length by this Court in HDFC Ergo General Insurance Co. Ltd. v. Smt. Lalta Devi and Ors. MAC APP No. 189/ 2014 decided on 12.01.2015, wherein relying on three Judge Bench decision of the Supreme Court in
32. Following Sarla Verma(supra) as affirmed in Reshma Kumari(supra) , loss of dependency comes to Rs. 3,24,000/- ( Rs. 6,000/- x 1/2 x 12 x 9) .
33. In view of three Judge Bench decision of the Supreme Court in
34. The overall compensation comes to Rs. 4,59,000/-.
35. Consequently, the amount of compensation is reduced from Rs. 7,06,608/- to Rs. 4,59,000/-.
36. Excess amount of Rs. 2,47,608/- along with proportionate interest shall be refunded to the Appellant Insurance Company.
37. The compensation held payable shall be held in Fixed Deposit, which shall be released periodically in terms of the orders passed by the Claims Tribunal.
38. The appeal is allowed in above terms.
39. Pending applications also stand disposed of.
40. Statutory amount, if any, deposited shall be released to the Appellant Insurance Company.
