Karnataka High Court
T.S. Rukmini vs T.S. Channabasavaiah on 8 September, 1993
Equivalent citations: 1994ACJ600, ILR1993KAR2874, 1994(1)KARLJ283, 1995 A I H C 1251, (1994) 1 KANT LJ 283, (1994) 1 TAC 371, (1994) 1 CIVLJ 399, (1994) 1 ACC 305, (1994) 1 ACJ 600
JUDGMENT Krishnan, J.
1. These two Appeals arise from one claim case and therefore they are disposed of by this common Judgment
2. The wife, children and mother of one K.N.Hanumappa who died in a motor vehicle accident involving truck No. MYT-5578 on 11.1.1981 preferred the Claim Petition before the Motor Accidents Claims Tribunal, Chitradurga for recovery of compensation from the driver, owner and insurer of the said vehicle. The case put forward is, that the deceased was proceeding in the said goods truck as a hirer for transporting furniture and died as a result of the accident attributable to the rash or negligent driving of the truck and the Tribunal after holding in favour of claimants on the point of actionable negligence, awarded compensation of Rs. 57,000/- and directed all the three respondents before it to satisfy the award. The claimants, being dissatisfied with the quantum of compensation awarded, have preferred the 1st appeal viz, M.F.A.No. 1535 of 1985. The insurer disputing the finding that deceased was travelling in the said lorry as hirer and thereby further disputing its liability to satisfy the award, has preferred in M.F.A.No. 2169 of 1986.
3. The finding on the question of actionable negligence recorded by the Tribunal has reached its finality and the same is not in dispute in these Appeals.
4. The case put forward by the claimants is that, on the relevant day, deceased was transporting furniture meant to be given to his brother in the marriage, in the truck in question and that case has been accepted by the Tribunal. This finding has been disputed by the insurer.
5. On this aspect we have the testimony of P.W.1 the widow of deceased that their brother-in-law's marriage had been fixed on 10th May, at Bangalore, with her sister-in-law's daughter and her husband was transporting furniture for presentation to the couple and Ex.PIO is the bill in respect of the items purchased. It is significant to note that this statement made on oath has not been challenged in the course of cross-examination. P.W.2 has also stated about the furniture having been purchased by the deceased and transporting the same ki the lorry. The only contention that was advanced on behalf of the insurer was that the copy of the mahazar which has been marked as Ex.P7 does not indicate that any article of furniture was found in the lorry or near about the scene of accident and therefore, it falsifies the case put forward by the claimants in this regard. It is no doubt true that there is no mention in respect of the furniture being found in the lorry. If there was no other acceptable evidence, this circumstance would no doubt have enured to the benefit of the insurer, but as already pointed out, when the testimony of P.W.1 in this regard has not been challenged and there is no reason to disbelieve the testimony of P.W.2 which is also supported by the bill Ex.P10, the non-mention of the existence of furniture in Ex.P7 by itself cannot in our considered view be pressed into service to hold that the deceased was only a gratuitous passenger in the truck. On the other hand the finding recorded by the Tribunal that deceased was travelling in the truck as a hirer transporting furniture in the same must be affirmed. If that be so, it is clear the insurer's Appeal should be dismissed.
6. So far as the Appeal of the claimants for enhancement of compensation is concerned, it may be noticed that deceased was working as Second Division Clerk in Excise Department at Dharwad and according to the widow of the deceased he was drawing a salary of Rs. 700/- per month and he was not spending anything for himself. The salary certificate Ex.P1 shows that his monthly salary was Rs. 689/- in the pay scale of Rs. 300-700. The Tribunal has deducted Rs. 239/- towards personal expenses of the deceased and has taken Rs. 450/- per month as loss of dependency of the claimants, and it has also recorded a finding that the petitioners have been receiving family pension of Rs. 300/- per month and a sum of Rs. 50/- has therefore been deducted out of the monthly loss of dependency and the annual loss of dependency has been taken as Rs. 4,800/- and adopting the multiplier of '10' Rs. 48,000/- has been taken as the loss of dependency and deducted Rs. 2,500/- being the 1/3 of the insurance amount received by the petitioners and awarded Rs. 45,550/- towards loss of dependency in addition to a sum of Rs. 5,000/- towards loss of expectation of life and Rs. 5,000/- towards loss of consortium and Rs. 1,000 towards transportation of the dead body and Rs. 500/-towards funeral expenses, in all the Tribunal awarded Rs. 57,000/- as compensation at 6 per cent interest per annum and directed the insurer to satisfy the award.
7. The main contention that was advanced on behalf of the claimants is that, the Tribunal ought to have calculated the total loss of dependency upto 70th year of deceased and deducted something out of it towards uncertainties of life and the balance should have been awarded as compensation under the head of 'loss of dependency'. There are two methods of evaulating the loss of dependency. In the first method the ordinary life span of the deceased is taken note of and the amount he would have earned till that year if he had not met with the accidental dealth is calculated and as to how much he would have spared out of the same to his dependents is found out and a lumpsum deduction is made in it for the uncertainties of life. The second method is called the multiplier or capitalization method. In this method taking note of the age of the deceased at the time of the accident and his income and also as to how much he would have spared for the benefit of the dependents per year is capitalized by adopting a suitable multiplier which in turn depends upon the age of the deceased if he is elder than the claimants and the age of the dependents if they are elder than the deceased. After arriving at the figure by adopting a suitable multiplier, there would be no need to further scale down the amount of compensation so arrived at because, the choice of the operative multiplier would have taken note of all those aspects. The first method was adopted by Viscount Simon in the case of NANCE v. BRITISH COLUMBIA ELECTRIC RAILWAY CO. LTD., 1951 AC 601 The second method that is the multiplier method was adopted in the case of DAVIES v. POWELL DUFFRYN ASSOCIATED COLLIERIES LTD., 1942 AC 601 His Lordship M.N.Venkata-chalaiah J., (as he then was) has in H.T. BHANDARY v. MUNIYAMMA, has observed as follows:-
"Indeed there were two approaches in assessing damages, the first referred to in Davies -vs- Powell Duffryn Associated Collieries Limited (1942 A.C. 601) and other in Nance v. British Colonnelial Electric Railway Company Ltd. (1951 AC. 601). In DAVIES' case Lord Wright said :
"..... The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow might have again married and thus ceased to be dependant, and other like matters of speculation and doubt...."
These observations are now to be read subject to the later innovation that the deductions for the uncertainties and vicissitudes etc. are generally made by the adjustment in an moderation of the multiplier itself.
In Nance's case Viscount Simon stated :
"under the first head - indeed, for the purposes of both heads - it is necessary first to estimate what was the deceased man's expectation of life if he had not been killed when he was: let this be 'X' years and next what sums during these X years he would probably have applied to the support of his wife. In fixing X, regard must be had not only to his age and bodily health, but to the possibility of a premature determination of his life by a later accident......"
"...... Then a deduction must further be made for the benefit accruing to the widow from the acceleration of her interest in his estate on his death intestate in 1949 (she came into S 6,500, on third of his estate, X years sooner than she would otherwise have done) and of her interest in sums payable on a policy of S 1,000/- on his life : and a further allowance must be made for a possibility which might have been realized if he had not been killed but had embarked on his allotted span of X years, namely, the possibility that the wife might have died before he did....."
The DAVIES' method or the multiplier method as it has come to be known is now accepted as an appropriate working method; though, however, in principle, both the methods are essentially directed towards the same end."
This Decision is being uniformly followed by all the Courts in the State.
8. But a Division Bench of this Court in GENERAL MANAGER, K.S.R.T.C, v. KHATUJABEE, , followed the Nance's method for evaluating the compensation to be awarded under the head of 'loss of dependency'. It felt compelled to adopt the said method in contra distinction to the multiplier method adopted in Bhandary's case in view of the Decision of the Supreme Court in JYOTSNA DEY v. STATE OF ASSAM, 1987(1) ACJ 172 and RAJENDRA KUMARI Vs SHANTA TRIVEDI, , and this is what was observed in that Decision in relation to the method adopted in Bhandary's case:
"But since rendering of Bhandary's case this Court has been uniformly applying the ratio decidendi of that case as we have already stated, is put in doubt. The result is that the method adopted by the Supreme Court in Jyotsna's case has been followed by the other High Courts notably the High Court of Rajasthan, as seen from the case of NEW INDIA ASSURANCE CO. LTD. v. VIDYA DEVI AND ORS. Tills puts this Court in a very awkard situation. Accidents occurring in Karnataka resulting in the death of the bread earner of the family is compensated without any doubt by a lower sum to the claimants and dependents than in some other parts of the Country. If the difference was negligible this Court would not have troubled itself to ponder further over the matter. That the difference being considerable the loss to the people of Karnataka who have suffered mis-fortune in motor accidents resulting in the death of the bread earner of the family is considerable and therefore we have to re-examine whether we shall continue to apply the ratio decidendi or the multiplier arrived at by this Court in Bhandary's case or ignore it in the light of the Decision of the Supreme Court not only in Jyotsna's case but reiterated in the case of Smt. RAJENDRA KUMARI AND ANR. v. SMT. SHANTA TRIVEDI AND ORS."
The aspect whether Bhandary's case stood impliedly over-ruled in view of the Decision of the Supreme Court in Rajendra Kumari's case and Jyotsna Dey's case came up for consideration before a Full Bench of this Court in O.V. SHANTHAKUMARI v. KOKILA, ILR 1990 KAR 4325 and it was held that, Bhandary's case had not been over ruled by implication by the Decisions of Supreme Court in Rajendra Kumari's case and Jyotsna Dey's case and the contrary view taken in Khatujabee's case was over-ruled. Despite this authoritative pronouncement of the Full Bench it was tried to be contended on behalf of the claimants by Sri Balasumbramanyam that even subsequent to this Full Bench Decision, the Supreme Court has followed the Nance's method and nothing has been pointed out by the Supreme Court to say that the multiplier method or Davies method is the correct method to be adopted for evaluating the loss of dependency. Our attention was invited to the Decision of the Supreme Court in HARDEO KAUR AND ORS. v. RAJASTHAN STATE TRANSPORT CORPORATION AND ANR., wherein the Nance's method has been adopted for evaluating the amount awardable under the head of 'loss of dependency' and therefore it was urged by Sri Balasubramanyam that despite the Full Bench Decision of this Court adverted to already, there is no prohibition to follow the Nance method and it was also urged that the Supreme Court has not held that Davies method or the multiplier method was the only method to be followed in preference to the Nance's method and that practically in all other High Courts in our Country, Nance's method has been followed and life should not become cheaper in Karnataka and we should also fall in line with the other High Courts in awarding just compensation following the Nance's method.
9. It appears that it is quite unnecessary to refer to the Decisions relied upon by the learned Advocate for the claimants in any detail, because in the latest Decision of the Supreme Court in NATIONAL INSURANCE CO. LTD. v. SWARANLATA, , the Supreme Court has pointed out that the Nance method is only a rough ready measure and it is now considered unscientific and is virtually obsolete and even if it is resorted it would require to be cross checked with the results of the appropriate and more scientific method of capitalisation of toss of dependency. This is what has been observed by the Supreme Court at page 1261:
"The appropriate method of assessment of compensation is the method of capitalisation of net income choosing a multiplier appropriate to the age of the deceased or the age of the dependents whichever multiplier is lower. It is, no doubt, true that as a rough and ready measure, the method of aggregating the total expected income for the remainder of the life-expectancy with appropriate deductions towards uncertainties of life and for lump sum payments is also resorted to. But this method is now considered unscientific and is virtually obsolete. At all events wherever it is resorted to it would require to be cross-checked with the results of the appropriate and the more scientific method of capitalisation of the loss of dependency."
This Decision was rendered by the Supreme Court on 17.8.1992 and no other later Decision of the Supreme Court taking a different view has been brought to our notice by the learned Advocate for the claimants. The Decision in Hardeo Kaur v. Rajasthana RTC wherein the Nance method has been adopted was rendered on 13.2.1992 and other Decisions referred to earlier are much anterior to this Decision of the Supreme Court . When in the latest Decision the Supreme Court has referred to Nance method as unscientific and virtually obsolete and also observed that multiplier method is the appropriate one, it would be a futile exercise for any one to still contend that the Nance method should be adopted for calculation of the amount payable under the head of 'loss of dependency'.
10. In Bhandary's case where the multiplier method or the Davies method has been adopted taking basic multiplier of '20' and the operative multiplier of '16' for a case where the deceased was between 18 and 22 years and it is scaled down by one for every increase of age of the deceased by five years and this has been found to be mathematically precise in arriving at the amount awardable under the head of loss of dependency and also the fact that the amount awarded should also be exhausted by the time the deceased could have reached the last span of his life. It has also been checked with reference to the annuity table and found that the results arrived at are absolutely precise and when the said Decision has received the seal of approval by the Full Bench Decision of this Court and when in the latest Decision of the Supreme Court this method has been called a scientific method and the other method viz., the Nance method has been termed as unscientific and virtually obsolete method, there is no scope for this Court to adopt Nance method to award compensation under the head of 'loss of dependency'.
11. Then we should find out whether the Tribunal was right in assessing the amount of compensation payable under the head of 'loss of dependency' and whether it deserves to be enhanced and if yes by how much?
12. In Davies method me amount or wages the deceased was earning should be taken as the suiting point. The salary certificate-Ex.P1 pertaining to the deceased, shows that he was getting monthly salary of Rs. 689/- in the pay scale of Rs. 300-700. The Tribunal has deducted Rs. 239/- towards personal expenses of the deceased and has taken a sum of Rs. 450/- as loss of dependency. It may be noticed that there were as many as five dependents to the deceased. Having regard to the number of dependents of the deceased, it appears that deduction of Rs. 239/- towards personal expenses of the deceased is on a higher side and on the other hand we should deduct only a sum of Rs. 139/- towards personal expenses and the loss of dependency per month should be taken at Rs. 550/-.
13. P.W.1 the widow of deceased stated that she has been getting family pension at the rate of Rs. 300/- per month. Having regard to the family pension scheme she would be getting the pension at this rate for a specified number of years and later on she would be paid at a lesser rate and the Tribunal has deducted only Rs. 50/- in respect of family pension out of the loss of dependency per month. It appears to us that having regard to the amount that P.W.1 has been getting towards family pension and also the family pension scheme, a sum of Rs. 150/- should be deducted in the loss of dependency to calculate the net loss of dependency. It would work out at Rs. 400/-per month.
14. The appellants have placed before Court the revision of pay scales effected in respect of Government servants and that as per the said revision the deceased would have been fixed the basic pay at Rs. 700/- per month and his total emoluments would have been Rs. 1,031.51 p. with effect from 1.1.1982. It may also be noted that the date of death in this case is 10.4.1981 and there was immediate prospect of the deceased moving on to a higher scale and getting higher emoluments within less than a year from the date of his death. It is to be seen as to how any weightage has to be given oh account of this immediate prospect of the deceased getting higher emoluments. In an unreported Decision of this Court in NEW INDIA ASSURANCE CO. LTD. AND ANR v. AMRINDAR KAUR AND ORS., MFA No. 1924 of 1986 DD 11 -3-1987, His Lordship Justice M.N.Venkatachalaiah (as he then was) adverting to the principles enunciated in Bhandari's case has pointed out that -
"The prospects of advancement in career must be sounded in terms of money and put into the scales in estimating the multiplicand, if realistic results are to be achieved."
Having regard to the fact that deceased who was getting total emoluments of Rs. 689/- per month would have moved on to a higher scale and got total emoluments of Rs. 1031.50P. within less than a year and thereby his total emoluments would have increased by a sum of Rs. 342/- per month, it appears that to the loss of dependency calculated on the basis of the salary drawn by the deceased as on the date of his death, a sum of Rs. 250/- should be added as additional weightage and therefore the net loss of dependency would work out at Rs. 650/- per month. The annual loss of dependency comes to Rs. 7,800/-.
15. Having regard to the age of the deceased at the time of his death viz., 39 years, and the principles enunciated in Bhandari's case the operative multiplier to be adopted in the present case would work out at '12'. Hence, the amount awardable under the head of loss of dependency comes to Rs. 93,600/-. The Tribunal has deducted a sum of Rs. 2,500/.- on account of acceleration in respect of payment of insurance amount and nothing serious has been urged on either side not to adopt the same and if that is deducted the amount awardable under the head of 'loss of dependency' works out of Rs. 91,100/-.
16. A sum of Rs. 6,000/- towards loss of benefit to the estate of the deceased, Rs. 5,000/- towards loss of consortium and Rs. 2,000/-towards funeral expenses should be added to the above said sum of Rs. 91,100/-. Thus, the global compensation awardable to the claimants comes to Rs. 1,04,100/-.
17. In the result, M.F.A.No. 1535 of 1985 is allowed in part with costs throughout, in that, in substitution of the amount awarded by the Tribunal the claimants shall be paid a sum of Rs. 1,04,100/- with interest as ordered by the Tribunal and the entire award shall be satisfied by the insurer.
18. M.F.A.No. 2169 of 1986 is dismissed.