Madras High Court
National Insurance Company Limited vs Mrs.Sundari on 11 July, 2011
Author: P.P.S.Janarthana Raja
Bench: P.P.S.Janarthana Raja, M.M.Sundresh
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 11/07/2011
CORAM
THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA
and
THE HONOURABLE MR.JUSTICE M.M.SUNDRESH
C.M.A.(MD)No.330 of 2007
and
M.P.(MD)No.1 of 2007
National Insurance Company Limited,
No.12-A, Sub-Collector,
Office Road, Y.M.R.Patti,
Dindigul. .. Appellant
Vs.
1.Mrs.Sundari
2.Minor Vishnu
[Minor second respondent
represented by his mother and
natural guardian, the first respondent
herein]
3.Mrs.K.Nallammal .. Respondents
Appeal filed under Section 173 of the Motor Vehicles Act, 1988, as amended
by Act No.39 of 2001, against the fair and decretal order made in
M.C.O.P.No.2557 of 2000, dated 10.02.2004 on the file of the Motor Accident
Claims Tribunal (Additional District Court -cum- Fast Track Court No.II) at
Thiruchirappalli.
!For Appellant ... Mr.S.Srinivasa Raghavan
^For Respondents 1 and 2... Mr.V.Illanchezian
******
:JUDGMENT
(Judgment of the Court was delivered by P.P.S.JANARTHANA RAJA, J.) The appeal is preferred by the Insurance Company against the award made in M.C.O.P.No.2557 of 2000, dated 10.02.2004, on the file of the Motor Accident Claims Tribunal (Additional District Court -cum- Fast Track Court No.II) at Thiruchirappalli.
2.By consent of the learned counsel appearing for the appellant and the learned counsel appearing for respondents 1 and 2, the main appeal itself is taken up for final disposal.
3. Background facts in a nutshell are as follows:-
The deceased-Saravanan met with motor traffic accident that took place on 15.12.1999 at about 18.30 hours. The said deceased was working as a Clerk in Lakshmi Vilas Bank, Idayakkottai Branch at Dindigul. He was travelling along with his superiors in the bus bearing Registration No.TN-57-C-6966 belonging to the third respondent. The driver drove the bus in a rash and negligent manner and caused the accident. Due to the said impact, the deceased sustained grievous injuries. Immediately, he was taken to the Government Head Quarters Hospital, Dindigul and later, he was shifted to Government Rajaji Hospital at Madurai for better treatment. In spite of treatment, he died on 01.05.2000. The claimants are the wife and minor son of the deceased. They claimed a compensation of Rs.28,22,000/- before the Tribunal. The said bus was insured with the appellant insurance company, who resisted the claim. On pleadings, the Tribunal framed the following issues:-
1. Whether the accident had occurred only due to the rash and negligent driving of the driver of the bus belonging to the third respondent or not?
2. Whether the claimants are entitled to any compensation? If so, what is the quantum?
After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to the rash and negligent driving of the driver of the bus belonging to the third respondent herein and awarded a sum of Rs.12,40,000/- as compensation with interest at 9% p.a. from the date of petition. The details of the compensation are as follows:
Rupees Loss of income 12,24,000/-
Loss of consortium 25,000/- Loss of love and affection 25,000/- Medical expenses 11,000/- Transportation 2,000/- Funeral expenses 3,000/- ------------------------ 12,90,000/- Less Rs.50,000/- for benefits of group insurance 50,000/- -------------------------- Total... 12,40,000/- =============
Aggrieved by the award of the Tribunal, the appellant-Insurance Company has filed the present appeal.
4. Learned counsel for the appellant/Insurance Company questioned only the quantum of compensation awarded by the Tribunal and vehemently contended that the compensation awarded by the Tribunal is excessive, exorbitant and without any basis and justification. He further contended that the Tribunal ought to have fixed the multiplier of '16' as against '17'. He also relied on a decision of the Hon'ble Apex Court in SARLA VERMA AND OTHERS VS. DELHI TRANSPORT CORPORATION AND ANOTHER reported in (2009) 4 MLJ 997. Therefore, the award passed by the Tribunal is not in accordance with law and the same has to be set aside.
5. Learned counsel appearing for the respondents 1 and 2/ claimants has submitted that the Tribunal had considered all the relevant materials and evidence on record and came to a correct conclusion and awarded a just, fair and reasonable compensation. It is a question of fact and it is based on valid materials and evidence. Hence, the order of the Tribunal is in accordance with law and hence, the same has to be confirmed.
6. Heard the learned counsel on either side and perused the materials available on record. On the side of the claimants, the wife of the deceased, viz., the first claimant was examined as P.W.2 and documents Exs.P1 to P17 were marked. On the side of the Insurance Company, no witness was examined and no document was marked to support their claim. After considering the above oral and documentary evidence, the Tribunal had given a categorical finding that the accident had occurred only due to the rash and negligent driving of the driver of the bus belonging to the third respondent. The finding of the Tribunal is based on valid materials and evidence and it is a question of fact. Hence the same is confirmed.
7. In the case of SARLA VERMA AND OTHERS VS. DELHI TRANSPORT CORPORATION AND ANOTHER reported in (2009) 4 MLJ 997, the Apex Court has considered the relevant factors to be taken into consideration before awarding compensation and held as follows:
"7. Before considering the questions arising for decision, it would be appropriate to recall the relevant principles relating to assessment of compensation in cases of death. Earlier, there used to be considerable variation and inconsistency in the decisions of Courts Tribunals on account of some adopting the Nance method enunciated in Nance V. British Columbia Electric Rly. Co. Ltd. (1951) AC 601 and some adopting the Davies method enunciated in Davies V. Powell Duffryn Associated Collieries ltd., (1942) AC 601. The difference between the two methods was considered and explained by this Court in General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas AIR 1994 SC 1631: (1994) 2 SCC 176. After exhaustive consideration, this Court preferred the Davies method to Nance method. We extract below the principles laid down in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra).
"In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependent as a result of the death. 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 live 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."
" The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalised by multiplying it by a figure representing the proper number of year's purchase."
"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."
"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 award 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."
In UP State Road Transport Corporation V. Trilok Chandra (1996) 4 SCC 362, this Court, while reiterating the preference to Davies method followed in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra), stated thus:
"In the method adopted by Viscount Simon in the case of Nance also, first the annual dependency is worked out and then multiplied by the estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one- third to one-half of the dependency was reduced, depending on the life span taken. That is the reason why courts in India as well as England preferred the Davies formula as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas case, usually English courts rarely exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when tribunals/courts began to use a hybrid method of using Nance method without making deduction for imponderables..... Under the formula Advocated by Lord Wright in Davies, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier"
(emphasis supplied)
8. In the case of SYED BASHEER AHAMED AND OTHERS VS. MOHAMMED JAMEEL AND ANOTHER reported in (2009) 2 Supreme Court Cases 225, the Apex Court has held as follows:
"13. Section 168 of the Act enjoins the Tribunal to make an award determining "the amount of compensation which appears to be just". However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression "which appears to be just"
vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of compensation.
14. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons affected nor should it be punitive to the person(s) liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In a nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards.
15. In Kerala SRTC v. Susamma Thomas2, M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181, para 5) "5. ? The determination of the quantum must answer what contemporary society 'would deem to be a fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing'. The amount awarded must not be niggardly since the 'law values life and limb in a free society in generous scales'."
At the same time, a misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining the compensation. The object of providing compensation is to place the claimant(s), to the extent possible, in almost the same financial position, as they were in before the accident and not to make a fortune out of misfortune that has befallen them.
18. The question as to what factors should be kept in view for calculating pecuniary loss to a dependant came up for consideration before a three-Judge Bench of this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami4, with reference to a case under the Fatal Accidents Act, 1855, wherein, K. Subba Rao, J. (as His Lordship then was) speaking for the Bench observed thus: (AIR p.1) "In calculating the pecuniary loss to the dependants many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the dependants may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained."
19. Taking note of the afore extracted observations in Gobald Motor Service Ltd. in Susamma Thomas it was observed that: (Susamma Thomas case, SCC p.182, para 9) "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."
20. Thus, for arriving at a just compensation, it is necessary to ascertain the net income of the deceased available for the support of himself and his dependants at the time of his death and the amount, which he was accustomed to spend upon himself. This exercise has to be on the basis of the data, brought on record by the claimant, which again cannot be accurately ascertained and necessarily involves an element of estimate or it may partly be even a conjecture. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An appropriate multiplier is again determined by taking into consideration several imponderable factors. Since in the present case there is no dispute in regard to the multiplier, we deem it unnecessary to dilate on the issue."
After considering the principles enunciated in the judgments cited supra, let us consider the facts of the present case.
9. At the time of the accident, the age of the deceased was 34 years as stated in the claim petition. He was working as a Clerk in Lakshmi Vilas Bank, Idayakkottai Branch at Dindigul. In the evidence of P.W.2, it is stated that the deceased was earning a sum of Rs.6,048.24 per month. P.W.2, in her evidence, has also stated that the accident had occurred only due to the rash and negligent driving of the driver of the bus. In respect of the monthly income of the deceased at Rs.6,000/-, there is no dispute regarding the same. Ex.P.13 also supports the same. Therefore, the Tribunal has fixed the monthly income of the deceased at Rs.6,000/-. After fixing the same, the Tribunal, taking into consideration the age of the deceased at 35 years and also taking into account the future prospect and further, if there is no accident, he will retire only at the age of 58, has added another sum of Rs.3,000/- towards the salary and fixed the salary at Rs.9,000/- per month. There is no serious dispute regarding the same. The Tribunal adopted the multiplier of '17' and computed the loss of income as under:-
Rs.9,000/- x 12 months x 17 multiplier x 2/3 = Rs.12,24,000/-
10. Learned counsel for the appellant vehemently contended that as per the Sarla Verma's case cited supra, the multiplier to be adopted in the present case is '16' and relied on paragraph No.19 of the said judgment. As rightly pointed out by the learned counsel for the appellant, the correct multiplier to be adopted in the present case is '16' and if '16' is adopted as the multiplier, the loss of income is worked out as under:
Rs.9,000/- x 12 months x 16 multiplier x 2/3 = Rs.11,52,000/-
Accordingly, the loss of income stands modified from Rs.12,24,000/- to Rs.11,52,000/-. In respect of the other amounts awarded by the Tribunal, viz., loss of consortium, loss of love and affection, medical expenses, transportation, funeral expenses, there is no serious dispute raised by the appellant and hence, the same are confirmed. The Tribunal has correctly deducted a sum of Rs.50,000/- from the award amount on the ground that the claimant received the said sum from group insurance. The Tribunal also correctly awarded the interest at the rate of 9%, from the date of petition, considering the date of accident, date of award and also the prevailing rate of interest during that time.
11.The details of the modified compensation are as under:-
Rupees Loss of income 11,52,000/-
Loss of consortium 25,000/- Loss of love and affection 25,000/- Medical expenses 11,000/- Transportation 2,000/- Funeral expenses 3,000/- ------------------------ 12,18,000/- Less Rs.50,000/- for benefits of group insurance 50,000/- -------------------------- Total... 11,68,000/- =============
Therefore, the claimants are entitled to the modified compensation of Rs.11,68,000/- with interest at 9% p.a. from the date of petition.
12.Learned counsel for the appellant / Insurance Company has stated that the Insurance Company has deposited the entire award amount as per the order of this Court dated 21.03.2007 in M.P.(MD)No.1 of 2007 in C.M.A.(MD)No.330 of 2007. It is also stated that out of the said deposited amount, the first claimant/wife of the deceased has already withdrawn a sum of Rs.2,50,000/-. Therefore, the first claimant/wife of the deceased is permitted to withdraw her proportionate share from the modified amount, less the amount already withdrawn, on making proper application. In respect of the share of the minor child, the same shall continue to be deposited in the fixed deposit as per this Court's order dated 21.03.2007 and the mother of the minor child is permitted to withdraw the interest accrued on the deposited amount once in three months, on making proper application. Further, it is also clarified that if any situation warrants for the welfare of the child, liberty is given to the mother of the minor child to approach the Tribunal for withdrawal, on making proper application. The insurance company is also permitted to withdraw the balance amount, on making proper application.
13. With the above modifications, the Civil Miscellaneous Appeal is disposed of. Consequently, the connected miscellaneous petition is closed. No costs.
SML To The Motor Accident Claims Tribunal (Additional District Court -cum-
Fast Track Court No.II) at Thiruchirappalli.