Madras High Court
The United India Insurance Co. Ltd vs S.Muniandi Santha (Died) on 27 June, 2013
Author: P.Devadass
Bench: N.Paul Vasanthakumar, P.Devadass
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 27/06/2013
Coram
THE HONOURABLE MR.JUSTICE N.PAUL VASANTHAKUMAR
AND
THE HONOURABLE MR.JUSTICE P.DEVADASS
C.M.A (MD)No.670 of 2009
and
M.P.(MD) No.1 of 2009
and
M.P.(MD) No.1 of 2011
and
M.P.(MD) No.1 of 2012
1.The United India Insurance Co. Ltd.,
through its Regional Manager,
7A, West Veli Street,
Madurai.
2.The United India Insurance Co. Ltd.,
through its Branch Manager,
No.28, Second Floor, Mallam Road,
Tindivanam,
Villupuram District. ... Appellants
Vs.
1.S.Muniandi Santha (died)
2.S.Vikneswaran Trevor
3.S.Muneeswaran Trevor
4.Sr.S.M.Rajasekar
5.Sri.R.Venkatakrishnan ... Respondents
(R2 & R3 are declared Major & R1 is discharged from guardianship as per order
dated 1.12.2010 in M.P.(MD)Nos.1 to 4 of 2010)
PRAYER
Civil Miscellaneous Appeal filed under Section 173 of Motor Vehicles
Act,1988 against the Judgment and Decree, dated 18.12.2008 passed in
M.C.O.P.No.659 of 2001 of the Motor Accident Claims Tribunal (I Additional
District Judge), Madurai.
!For Appellants .. Mr.G.Prabhu Rajadurai
^For Respondent Nos. 2 & 3 .. Mr.S.Srinivasa Raghavan
For Respondent No.4 .. No Appearance
:JUDGMENT
P.DEVADASS, J.
The appeal:
1. In this appeal, the insurer of the vehicle involved in a road accident, questions the quantum of compensation awarded.
Facts in brief:
2. On 11.01.1999, Shanmugam and certain others have travelled in the van, belonging to the fourth respondent, which has been insured with the first appellant. On the Madurai-Tirunelveli National Highway, near Thalaiyuthu, accident took place. In this, Thuraisingam, Manoharan and Anbalagan sustained injuries, while Shanmugam lost his life. In this appeal, we are concerned with M.C.O.P.No.659 of 2001, filed by the dependants of the deceased.
Award amount:
3. On 18.12.2008, the Tribunal awarded Rs.52,56,440/- with 9% interest per annum. Its break-up figures are as under:
Sl.
No. Description Amount
1. Loss of dependency
(1700 Singapore Dollars per month x
Rs.25.3745 = Rs.43,136.65 x 12 = Rs.5,17,644
x 15 - 1/3) =Rs. 51,76,440
2. Cremation expenses =Rs. 10,000
3. Travel expenses to the 1st respondent =Rs. 20,000
4. Loss of love and affection (10,000 x 3) =Rs. 30,000
5. Loss of consortium to the 1st respondent =Rs. 20,000
Total =Rs. 52,56,440
Contention: Insurer
4. The learned Counsel for the appellant contended that even P.W.2 admits that then her deceased husband was not working, however, 1700 Singapore Dollars has been taken as his monthly income by the Tribunal. The deceased lived in Singapore, where cost of living is very high. However, towards pleasure and other expenses of the deceased, the Tribunal deducted only 1/3 from his income.
Singapore is one of the countries where personal taxation is very high. Salary means actual salary, that is less income tax. In this respect, the learned Counsel for the appellant cited ORIENTAL INSURANCE CO. LTD., vs. RAM PRASAD VARMA AND OTHERS [2009 (2) SCC 712]; SHYAMWATI SHARMA AND OTHERS vs. KARAM SINGH AND OTHERS, [2010 ACJ 1968]; SARLA VERMA AND OTHERS vs. DELHI TRANSPORT CORPORATION AND ANOTHER [2009 (6) SCC 121]. However, no amount towards income tax has been deducted from the said income. The learned counsel also contended that the Tribunal took the multiplier '15'. The deceased earned in a foreign country in foreign currency and in view of the disparity in economic situation in Singapore and in India a lesser multiplier is required to be adopted. In this respect, the learned Counsel cited DR.P.SHANMUGHARAJ AND OTHERS vs. SUBRAMANIAM AND OTHERS, [2005-3-L.W. 375] and an unreported decision of a Division Bench of this Court in UNITED INDIA INSURANCE CO. LTD., vs. S.MALARVIZHI, [C.M.A.No.2623 of 2009, dated 06.06.2013]. The learned Counsel also contended that in the facts and circumstances of the case, awarding of 9% interest per annum is excessive. In this respect, the learned Counsel cited KAUSHNUMA BEGUM AND OTHERS vs. NEW INDIA ASSURANCE CO. LTD., AND OTHERS [2001 (2) SCC 9]; TAMIL NADU STATE TRANSPORT CORPORATION LTD., vs. S.RAJAPRIYA AND OTHERS [2005 (1) TN MAC 341 (SC)].
Contention : Claimants
5. The learned Counsel for the claimants contended that considering the relevant aspects, such as age of the deceased, income after allowable deductions, the Tribunal arrived at the compensation. The learned counsel also contended that in choosing appropriate multiplier, there cannot be different yardstick as between an Indian and a foreigner/non-resident Indian, killed in a road accident. Principles of determination of compensation is same for both. Switching over from one employer to another, where pay is more is not uncommon abroad. Rarely they will keep themselves idle, because without a job it is very difficult to thrive abroad. In these circumstances, the Tribunal had taken his last known income as yardstick to compute loss of dependency. The learned counsel also contended that there will be increase in the earnings of the deceased and thus certain percentage of income has to be added for loss of future prospects. However, in this case, the Tribunal had overlooked this. In this respect, the learned Counsel cited SARLA VERMA AND OTHERS vs. DELHI TRANSPORT CORPORATION AND ANOTHER [2009 (6) SCC 121]; SANTOSH DEVI vs. NATIONAL INSURANCE CO. LTD., AND OTHERS [2012 (6) SCC 421]; RESHMA KUMARI AND OTHERS vs. MADAN MOHAN AND ANOTHER [2013 (1) TN MAC 481 (SC)]; RAJESH AND OTHERS vs. RAJBIR SINGH AND OTHERS [CDJ 2013 SC 485]. The learned Counsel also contended that only a reasonable rate of interest has been awarded by the Tribunal.
6. We have anxiously considered the rival submissions, perused the entire materials on record, impugned award of the Tribunal and the decisions cited.
Just compensation:
7. By the sudden loss of life of the sole bread-winner of the family, the plight of the road accident victims becomes pitiable. They undergo untold miseries. They have to be compensated in terms of money to tide over from the crisis.
8. The victims must be granted 'just compensation'. It is the 'statutory duty' of the Tribunals constituted under the Motor Vehicles Act. In doing so, in addition to the principles ingrained in the statute, they can also take into account common law principles of law of Torts developed in long course of time.
9. The Tribunals must make endeavour to put back the victims as nearly as possible to the position they were, when they have lost their bread-winner.
10. In this connection, in SARLA VERMA (supra), the Hon'ble Apex Court observed as under:
"16. .... "Just compensation" is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well-settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit.
17. Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision-making process and the decisions. While it may not be possible to have mathematical precision or identical awards in assessing compensation, same or similar facts should lead to awards in the same range. When the factors/inputs are the same, and the formula/legal principles are the same, consistency and uniformity, and not divergence and freakiness, should be the result of adjudication to arrive at just compensation."
11. Whether the person killed in the road accident is employed in India or abroad, whether he received the salary in foreign currency or in Indian currency, they must be awarded 'just compensation'. There cannot be second thought over it. In both the countries, principles for determination of compensation may not largely differ. However, while assessing compensation, in view of economic disparities between both the countries, there shall not be a bonanza or a throw away sum as compensation to the victims of road accident.
Relevant factors:
12. In fatal accident claims, in arriving just compensation, the Tribunal must determine and compute the loss of dependency in monetary terms. In doing so, it must ascertain the age of the deceased at the time of his death, income of the deceased, his contribution to the family, it must make allowable deductions from his income, choose appropriate multiplier with reference to the age of the deceased. It must also consider grant of pecuniary, non-pecuniary and conventional damages. It must recoup them the expenses which they were made to meet because of the tortious act committed by the tort-feasor/wrong doer/erring driver of the insured vehicle and ultimately make his mater vicariously liable and statutorily call upon the insurer of the offending vehicle to indemnify the insured, so that the victims may not be left with paper decrees.
13. Now keeping the above broad basic principles in our view, let us proceed to determine the just compensation payable to the claimants in this case.
Age of the deceased:
14. On 11.01.1999, Shanmugam got killed in the accident. He married the first respondent in Singapore on 17.08.1984 (see Ex.P12-Marriage certificate). Their first son (second respondent), and their second son (third respondent) were born in 1988 and 1991 respectively in Singapore (see Exs.P13 and P14 Birth certificates). In Ex.P11-Post-mortem Certificate, the age of the deceased has been mentioned as 40. In the claim petition, it is mentioned that he was then 42 years old. As per Ex.P19, (birth certificate), his date of birth is 11.10.1957. In her evidence, P.W.2, Santha, the widow of the deceased admits that then her husband was 42 years old. In the circumstances, the Tribunal has rightly determined his age at 42.
Income of the deceased:
15. In the claim petition, it is mentioned that the deceased was a driver in Econ Piling Private Limited in Singapore and was earning 3000 Singapore Dollars per month, which is equivalent to Rs.78,000/- in Indian currency.
However, in her chief-examination, P.W.2 stated that her husband earned 5,000 Singapore Dollars per month. The insurance company engaged a private investigator in Singapore to gather his employment details. As per Exs.R2 and R3 Investigator's reports, the deceased was a driver in the said company and his gross monthly salary was 1700 Singapore Dollars.
16. As per the evidence of P.W.7, Sankaran, Manager, Exchange Department, Reserve Bank of India, the exchange rate of one Singapore Dollar was Rs.25.3745 (see Ex.P32 letter). The Tribunal converted 1700 Singapore Dollars into Indian currency at Rs.43,137/-.
17. As per Exs.R2 and R3, the deceased had resigned his job on 03.09.1998. In her cross-examination, P.W.2, also admits this. The deceased, was born, brought up and employed in Singapore. There is evidence that he was a driver in a company in Singapore fairly for a long time. At the time of his death, he was 42 years old. Prior to his death, he was permanently residing in Singapore. He made pilgrimage to India and lost his life in a tragic road accident. He was employed in a foreign country. He did not reach the age of superannuation or was held to be unfit for further employment. In foreign countries, employees going for greener pastures is not an uncommon event. They will go wherever good salary is paid. And getting employment is also not so difficult as in India. In the circumstances, the earning capacity/potentiality of the deceased in terms of money was thus rightly determined by the Tribunal at 1700 Singapore Dollars per month.
Compensation for loss of future prospects:
18. Salaries, wages of employees cannot be static. It is bound to change. It is because of wage increase, promotion, pay revision etc. It is also because of inflation, increase in cost of living. For a long time, the Tribunals took the last known income of the deceased as a basis to calculate loss of dependency regardless of upward increase in their pay, income had the deceased lived upto his eligible employment period.
19. This aspect has been noticed by the Hon'ble Apex Court in SARLA VERMA AND OTHERS vs. DELHI TRANSPORT CORPORATION AND ANOTHER [2009 (6) SCC 121]. The Hon'ble Apex Court held that when the deceased was upto 40 years 50% of his last salary has to be added for loss of future prospects and if he is above 40 and below 50, then it will be 30% and beyond 50, no addition under this head could be made. But, the Court had restricted this only to persons employed permanently. It did not extend this item of compensation to self-employed and persons on consolidated wages with exception in rare and exceptional cases involving special circumstances. Subsequently, in SANTOSH DEVI vs. NATIONAL INSURANCE CO. LTD., AND OTHERS [2012 (6) SCC 421], the Hon'ble Apex Court extended the benefit of loss of future prospects also to the dependents of self employed and persons employed in unorganised sectors. Recently, on 12.04.2013, a Three-Judge Bench of the Hon'ble Apex Court in RAJESH AND OTHERS vs. RAJBIR SINGH AND OTHERS [CDJ 2013 SC 485] by way of clarification, confirmed the extension of giving compensation for loss of future prospects also to self employed and persons employed in unorganised sectors and it had also extended this item of compensation for the deceased in the age group of 50-60 by providing 15% of their last income as addition to their last income under this item of compensation.
20. Now, in the case before us, the deceased was then 42 years old. He was employed in Singapore. As in India, in foreign countries also salaries/income is bound to change, increase. There also provision for increase in pay, upliftment in employment status/job. There is also price rise. There is also inflation. Of course, it may not be like in India. The idea of granting compensation for loss of future prospects is to grant compensation for upward revision of wages in future. The same principles apply to persons employed in foreign countries also.
21. In UNITED INDIA INSURANCE CO. LTD., AND OTHERS vs. PATRICIA JEAN MAHAJAN AND OTHERS [2002 (6) SCC 281], which dealt with compensation to dependants of a person of Indian Origin in America killed in road accident in India. Then there was no occasion for the Hon'ble Apex Court to consider grant of compensation for loss of future prospects. Further, SARLA VERMA (supra), SANTOSH DEVI (supra) and RAJESH (supra) were all decided much later to PATRICIA JEAN MAHAJAN (supra). Thus, then the Hon'ble Apex Court could not consider grant of compensation for loss of future prospects to persons employed abroad because then that item of compensation was not even available to persons employed in India, who were killed in road accidents. So, the field is left open. None of the decisions seen above prohibit this item of compensation to persons employed abroad, killed in India, nor restrict it only to persons employed in India, who were killed in road accidents.
22. Article 14, Constitution of India, guarantees equality before law and also equal application of law to one and all, whether he is an Indian, employed in India or abroad. Therefore, as regards awarding of compensation under the head loss of future prospects, there cannot be distinction between a deceased employed abroad and a deceased employed in India. In this perspective of the matter, to the income of the deceased, 30% of his last known income shall be added to his income for loss of future prospects.
Deduction - Personal Expenses:
23. The Tribunal deducted 1/3 from the said income of the deceased towards his pleasure and other expenses. To spend, a person has to earn. To live, a person has to spend. After it, the balance goes to the family. It is his contribution to his family/dependants and that would be the loss to the family due to the death of the deceased. This is loss of dependency. Thus, deduction towards pleasure and other expenses of the deceased from his income has come to stay.
24. Such deduction arises only in death/fatal claim cases. It depends on the marital status and also the size of the family of the deceased. This aspect also has been considered by the Hon'ble Apex Court in SARLA VERMA (supra). As per the Hon'ble Apex Court, if the deceased was married, the deduction shall be 1/3 when the dependants are 2 to 3, it is 1/4, when the dependants are 4 to 6 and it is 1/5 if the dependants exceeds 6. In case of a bachelor, the deduction is 50%. However, even in his case, if the size of his family is huge including his widowed mother and other non-earning sisters or brothers, then a lesser rate of deduction can be made. Recently, in RESHMA KUMARI (supra) a Three-Judge Bench of the Hon'ble Apex Court confirmed the said Rule in SARLA VERMA (supra).
25. Now, the question is when the deceased was employed abroad, whether a higher rate of deduction has to be made towards his pleasure and other expenses.
26. In PATRICIA JEAN MAHAJAN (supra), an American national of Indian origin employed in America got killed in India, when his dependants claimed compensation, from his income, towards his pleasure and other expenses 2/3 of his income has been deducted by the Tribunal. However, in appeal, the High Court reduced it to 1/3. It was not disturbed by the Hon'ble Apex Court.
27. Recently, in UNITED INDIA INSURANCE CO. LTD., vs. MALARVIZHI [C.M.A.No.2623 of 2009, dated 06.06.2013] [unreported], a person of Indian origin employed in Singapore lost his life in a road accident in India and when his dependants claimed compensation, the Tribunal deducted 60% of his income towards his pleasure and other expenses and took the remaining 40% alone as his contribution to the family. However, a Division Bench of this Court did not approve it. In this regard, the Division Bench held as under: "15. The aspect regarding deduction towards personal expenses is no longer res integra. The Hon'ble Supreme Court in several decisions held that 1/3rd amount has to be deducted towards personal expenses and the same is the ordinary Rule in India. In 2009 (1) TNMAC 629 (SC) : 2009 (8) SCALE 194 (Oriental Insurance Company Ltd., vs. Deo Patodi and Others), the Supreme Court held that "deduction of one-third towards personal expenses is the ordinary rule in India".; Like wise in 2004(1) TNMAC 190 (SC): 2004(2) SCC 473, the Supreme Court deducted one-third towards personal expenses from the income of the bachelor.
Similar view was taken by the Supreme Court in 2008 (1) TNMAC 307 (SC) : 2008 (4) SCC 259 [Bilkish v. United India Insurance Company Ltd., and another] and 2009 (2) TNMAC 118 (SC) : 2008 (5) SCC 142 [Bangalore Metropolitan Transport Corporation vs. Sarojamma and another]. Therefore, under normal circumstances, the Tribunal should have adopted 1/3rd deduction for personal expenses, but in the instant case, the Tribunal has deducted 60% of the salary towards personal expenses of the deceased."
28. In the case before us, the deceased was employed in Singapore. The living expenses is high in foreign countries especially in Singapore. The deceased in this case lived with his family in Singapore. He cannot and shall not eat major/substantial portion of his income to himself. He has to contribute substantial part of his income to his family. In the circumstances, the Tribunal has rightly deducted 1/3 from his income towards his pleasure and other expenses.
Deduction - Income Tax:
29. The Tribunal arrived at the income of the deceased. But, it did not make any deduction towards income-tax.
30. In ORIENTAL INSURANCE CO. LTD., vs. RAM PRASAD VARMA AND OTHERS [2009 (2) SCC 712], the Hon'ble Apex Court held that income for determining compensation exclude income-tax and professional tax (also see NATIONAL INSURANCE CO. LTD., V. INDIRA SRIVASTAVA, 2008 (2) SCC 763). In SHYAMWATI SHARMA AND OTHERS vs. KARAM SINGH AND OTHERS, [2010 ACJ 1968] from the income arrived at 30% has been deducted towards income tax and surcharge. In SARLA VERMA (supra), it was held that income for determining compensation means actual salary, that is, income less income-tax. Recently, this has also been reiterated in RAJESH (supra).
31. In India, incidence of personal taxation is at 30%. Of course, it depends on level of taxable income. Exs.P16 and P17 shows that the deceased was an assessee and was paying income-tax. But, we have no data relating to exact rate of tax. It is seen that out of his income, he was paying income-tax. Singapore is not a less taxed country. In the circumstances, towards income-tax we hold that 30% shall be deducted from his income.
Multiplier:
32. The deceased was then 42 years old. The Tribunal took the multiplier '15'. As per column (4) in the schedule given in SARLA VERMA, for persons in the age group of 41 to 45 years, it is '14'. Under II Schedule to Motor Vehicles Act, it is '15'. In PATRICIA JEAN MAHAJAN (supra) the Hon'ble Apex Court held that to arrive at proper amount of compensation, multiplier method is the best method. This has been reiterated in SARLA VERMA (supra) also.
33. Calculating the actual income, as determined by us, after deductions, there comes huge amount. It is also because of his earnings in Singapore currency being converted in Indian currency. It is to be noted that the economic situation in Singapore and in India are not one and the same.
34. In PATRICIA JEAN MAHAJAN (supra) an American Doctor of Indian origin who was 42 years old when died in a road accident, the Tribunal adopted the multiplier '7'. The High Court raised it to '13'. On appeal, the Hon'ble Apex Court referring to earnings of persons in abroad and in India reduced it to '10'. In this connection, the Hon'ble Apex Court observed as under:
"19. In the present case we find that the parents of the deceased were 69/ 73 years. Two daughters were aged 17 and 19 years. Main question, which strikes to us in this case is that in the given circumstances the amount of multiplicant also assumes relevance. The total amount of dependency as found by the learned Single Judge and also rightly upheld by the Division Bench comes to 226297 Dollars. Applying multiplier of 10, the amount with interest and the conversion rate of Rs. 47 comes to Rs. 10.38 crores and with multiplier of 13 at the conversion rate of Rs. 30 the amount came to Rs. 16.12 crores with interest. These amounts are huge indeed. Looking to the Indian economy, fiscal and financial situation, the amount is certainly a fabulous amount though in the background of American conditions it may not be so. Therefore, where there is so much of disparity in the economic conditions and affluence of the two places viz. the place to which the victim belongs and the place where the compensation is to be paid, a golden balance must be struck somewhere, to arrive at a reasonable and fair mesne. Looking by the Indian standards they may not be much too overcompensated and similarly not very much under compensated as well, in the background of the country where most of the dependent beneficiaries reside. Two of the dependants namely, parents aged 69/73 years live in India, but four of them are in the United States. Shri Soli J. Sorabjee submitted that the amount of multiplicand shall surely be relevant and in case it is a high amount, a lower multiplier can appropriately be applied. We find force in this submission. Considering all the facts and factors as indicated above, to us it appears that application of multiplier of 7 is definitely on the lower side. Some deviation in the figure of multiplier would not mean that there may be a wide difference between the multiplier applied and the scheduled multiplier which in this case is 13. The difference between 7 and 13 is too wide. As observed earlier, looking to the high amount of multiplicand and the ages of the dependants and the fact that parents are residing in India in our view application of multiplier of 10 would be reasonable and would provide a fair compensation i.e. purchase factor of 10 years, We accordingly hold that multiplier of 10 as applied by the learned Single Judge should be restored instead of multiplier of 13 as applied by the Division Bench, We find no force in the submission made on behalf of the claimants that in no circumstances the amount of multiplicand would be a relevant consideration for application of appropriate multiplier. We have already given our reasons in the discussion held above."
35. In DR.SHANMUGHARAJ AND OTHERS vs. SUBRAMANIAM AND OTHERS, [2005-3-L.W. 375], a lady Doctor of Indian origin employed in U.S.A. about 38 years old died in an accident in India, for determining compensation to her dependants, the High Court took the multiplier '10' and the Hon'ble Apex Court referred to PATRICIA JEAN MAHAJAN (supra) and reduced the multiplier to '7' since there was disparity in wage earning in both the countries and since her income in US Dollars when converted to Indian currency also resulted in a huge amount. In MALARVIZHI (supra) a person employed in Singapore aged about 32 years when died in India, the Tribunal took a lesser multiplier of '10' and the Division Bench referring to PATRICIA JEAN MAHAJAN (supra) and noticing the huge income arrived at based on the conversion of foreign salary to Indian rupees upheld the lesser multiplier adopted by the Tribunal.
36. In the case before us, the deceased died at the age of 42. To determine his loss of dependency, appropriate multiplier has to be adopted. The Tribunal adopted '15'. Since we have taken the earnings of the deceased abroad in foreign currency and converted it into Indian rupees huge amount comes. The economic situation in Singapore and in India are not same. Considering the principles laid down in the earlier decisions, the facts and circumstances of this case, the young age of the widow as well as her children, who were then minors and that they have no other source of income except the income of the deceased, we adopt the multiplier '10' instead of '15'. Loss of dependency:
37. 1700 Singapore Dollars x 25.3745 = Rs.43,136.65/- rounded off to Rs.43,137/- and the annual income comes to Rs.5,17,644/-. Applying the multiplier '10', it comes to Rs.51,76,440/-. To this 1/3 of the income viz., Rs.17,25,480/- is added for loss of future prospects. Totally, it comes to Rs.69,01,920/-. From this, towards income-tax 30% viz., Rs.20,70,576/- is deducted. The balance is Rs.48,31,344/-. It is in this case.
Other items of compensation
38. Towards cremation expenses, travel expenses, for loss of love and affection, for loss of consortium only reasonable amounts were awarded by the Tribunal. Thus, there will be no change in these items.
Interest:
39. The Tribunal awarded 9% interest per annum on the award amount. In RAJAPRIYA (supra), the Hon'ble Apex Court reduced the rate of interest from 9% p.a. to 7.5% p.a. It is pertinent to note that in RAJAPRIYA (supra), the Tribunal adopted the multiplier '12'. In our case, we have reduced the multiplier that has resulted in less compensation amount. In KAUSHNUMA BEGUM AND OTHERS vs. NEW INDIA ASSURANCE CO. LTD., AND OTHERS [2001 (2) SCC 9], the Hon'ble Apex Court held as under:
"24. Now, we have to fix up the rate of interest. Section 171 of the MV Act empowers the Tribunal to direct that "in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf". Earlier, 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants."
40. In Dr.Shanmugharaj (supra), the Hon'ble Apex Court held as under:
"18. Though an argument was advanced, namely, that the rate of interest i.e., 9 per cent is excessive, considering the fact that the accident occurred on 19.12.1994 and the Tribunal disposed of the claim petitions on 31.12.2002, we are of the view that the interest at the rate of 9 per cent for the award amount is reasonable and acceptable and it requires no enhancement or reduction."
41. In the case before us, the accident took place in 11.01.1999. The claim petition was filed in 2000. After several years, only on 18.12.2008, the Tribunal awarded them compensation. In the facts and circumstances, 9% interest per annum awarded by the Tribunal is reasonable and acceptable. Modified compensation
42. The compensation awarded by the Tribunal is modified as under:
Sl. Amount Amount No. Description awarded by awarded by Tribunal this Court 1. Loss of dependency =Rs. 51,76,440 Rs.48,31,344 2. Cremation expenses =Rs. 10,000 No change 3. Travel expenses for the widow =Rs. 20,000 No change 4. Loss of love and affection (10,000 x 3) =Rs. 30,000 No change 5. Loss of consortium to widow=Rs. 20,000 No change Total =Rs. 52,56,440 Rs.49,11,344 Net result
43. This Civil Miscellaneous Appeal is allowed in part. The common award of the Tribunal dated 18.12.2008 insofar as M.C.O.P.No.659 of 2001 is modified. Respondents 1 to 3 are awarded a total compensation of Rs.49,11,344/- with 9% interest per annum from the date of filing the petition till deposit and with costs. Within four weeks from the date of receipt of a copy of this judgment, the first appellant shall deposit the entire award amount less the amount already deposited. On such deposit, on their proper application before the Tribunal, since the 1st respondent had died, subsequently, respondents 2 and 3 shall share the entire amounts equally. Each party shall bear their respective cost in this appeal. Consequently, the connected miscellaneous petitions are closed.
srm/smn2 To
1.The Motor Accidents Claim Tribunal, (I Additional District Judge) Madurai.
2.The Section Officer, V.R. Section, Madurai Bench of Madras High Court, Madurai.