Kerala High Court
M.D. Chacko vs N. Sreedharan And Ors. on 26 October, 1989
Equivalent citations: 1990ACJ439
JUDGMENT Radhakrishna Menon, J.
1. Not satisfied with the amount of compensation awarded by the Tribunal, the claimant has come up in appeal.
2. On 17.4.1980 the auto-rickshaw in which the appellant was travelling collided with a K.S.R.T.C. bus bearing registration No. KRT 9905, going along the M.G. Road at Trivandrum from north to south, from behind when the bus suddenly stopped. In that accident the appellant suffered injuries.
3. The claim petition of the appellant, which is a sequel to the accident, contains claims falling under two different heads. They are: (1) pain and suffering, permanent disability and loss of earning capacity; compensation claimed, Rs. 50,000/-, (2) special damages; compensation claimed, Rs. 10,000/-. Thus a total compensation of Rs. 60,000/- was claimed. The Tribunal was of the view that the drivers of both the bus as also the auto-rickshaw were negligent and consequently awarded a sum of Rs. 9,800/- as special damages and a sum of Rs. 20,000/- towards the compensation falling under the first count. The appeal is against the disallowed part of the compensation claimed under the first head.
4. Before we go into the merits of the case set up in the appeal we would like to refer to certain well established principles pertaining to the entitlement of a person physically injured in a road accident for compensation falling under Section 110-B of Motor Vehicles Act, 1939. He can claim compensation under two heads, 'pecuniary losses' and 'non-pecuniary losses'. 'Pecuniary losses' consist of two separate items: (1) 'the loss of earnings and other gains' which he could have made had he not been injured; and (2) the medical and other expenses he had to meet as a result of the injury. It is seen from judicial pronouncements that the 'non-pecuniary losses' have been sub-divided into three items: (1) pain and suffering; (2) loss of amenities of life; and (3) loss of expectation of life. Compensation under the head 'non-pecuniary losses' cannot precisely or with mathematical accuracy, be fixed "because, as far as money goes, the loss is imponderable and any amount awarded must be in the nature of a conventional sum". [See State of Kerala v. Vijayakumaran Nair, 1982 ACJ 451 (Kerala)].
5. We shall now consider the claim falling under the sub-head "loss of earning capacity and other gains". On a perusal of the award it could be seen that the basis for fixing the quantum under this head is nothing but the feeling of what is fair. Is this the correct way of fixing the quantum? is the question, we have before us. This question, apparently simple, is not that easy to decide. A probe into the common law of England is indispensable because the law in this regard has not so far been codified. [See McGregor on Damages, 14th Edn., p. 797]. The oft-quoted general principle settled by judicial pronouncements, namely, that, the victim is entitled to such a sum, as will make good the financial loss which he has suffered, shall be borne in mind while searching for an answer to this question. It is therefore necessary to find out a methodology to determine the quantum. A satisfactory method that can be adopted in this regard is by arriving at a multiplicand and multiplying this by the multiplier and then making adjustments and variations for elements like inflation and taxation etc.
6. In the calculation of the multiplicand, the basic factor to be taken into account is the diminution in annual earnings. The starting point in the calculation in this regard is the amount that the claimant was earning at the time of the accident or would have earned at the date of the accident, had he not been injured. From this, the amount he is capable of earning in the future is deducted. However, if total incapacity is the result of the injury then nothing falls to be deducted. To determine the earnings of the claimant per annum in the case of a salaried employee there shall not be any difficulty because the pay/wage structure provides the basis. In the case of a self-employed, the calculation may appear rather complex. The claimant falling under this category shall establish his earnings with clear and convincing evidence. But in the case of an unemployed, calculation would bristle with difficulties. In such cases the calculation will be conjectural. The courts would have to estimate his prospects of gaining employment in the future and at what level and assess the earnings accordingly. And the situation is different if the claimant was not working, being supported by a relative, as in the case of an injured child, wife etc. In the case of a child incapacitated for life, the court is bound to make what is called a 'guesstimate' of how the child, if not injured, would have fared as an earner on attaining adulthood. The status of family of which the child is a member is a relevant factor. Similarly, in the case of the dependants or the relatives the calculation of the loss of earnings necessarily depends upon the evidence which claimants produce in regard to the prospects of their getting employment in future. Adjustments for variations in annual earnings or loss also require to be taken into account in calculating the multiplicand. For instance, the amount which the claimant was earning at the relevant time may not be the amount which he would have continued to earn in the future. May be that the claimant's earnings would have increased over the years as he prospered in his career. May be that his earnings might get diminished in the future due to old age, as, when he was in an occupation with a height of unemployment etc. After determining the annual earnings adopting the procedure mentioned above the income tax and other liabilities, whether it be statutory or otherwise, require to be deducted. The balance thus arrived at is the multiplicand. The period of years of the claimant's disability is the basic factor that should be taken into account in the calculation of the multiplier. The starting point in this regard therefore is the number of years that it is anticipated, the claimant's disability will last. The calculation requires medical testimony. The medical report as far as possible must be based on an examination of the claimant as near as possible to the time of the trial. Having understood the principle regarding the calculation of 'multiplicand' and the 'multiplier' thus, we have to consider an incidental question, namely, will the court be justified in multiplying the 'multiplicand', i.e., if the claimant's annual loss by the number of years during which his incapacity is expected to last? The answer is: no; because this would clearly overcompensate the claimant "as it would put the future loss into his hands long before he would otherwise receive them, and would enable him to enjoy the interest accruing in the intervening period". To avoid such happenings the courts have, though the same is more a haphazard approach, been making a somewhat arbitrary deduction in the 'multiplier' to be applied to the figure of annual loss. This process is known as 'discount for lump sum' payment. Similarly, some of the collateral benefits the claimant gets, are also to be deducted from the annual loss. For instance, if it is established that when a claimant is paid wages as of right by his employer during incapacity, the said payment shall be taken into account in the of assessment damages. [See Perry v. Cleaver 1969 ACJ 363 (HL, England). So is the case with wages, sick pay and half pay, though the moneys received under the insurance policy are not to be taken into account in assessing the damages for the injury covered by the policy. Pension money is also treated on par with the insurance money for the purpose of assessing the damages. Similarly gratuitous payments, privately conferred as a mark of sympathy and assistance are also not taken into account while assessing damages.
7. To easily understand the above principle we shall give an illustration: If the earnings of the claimant per month after all deductions is 'A' then that should be multiplied by 12 to get at the annual earnings. Thus 'A' X 12 will be the annual earnings. This will be the annual earnings in the case of total disablement. In case of partial disablement the annual earnings will be 'A' X 12 = the annual earnings X the percentage of permanent disability by 100. In other words if the monthly earnings is Rs. 2,000/- and the permanent disability is 12 per cent, the multiplicand will be Rs. 2,000 X 12 X 12/100 = Rs. 2,880/- This Rs. 2,880/- will be the multiplicand. This multiplicand must be multiplied by the multiplier. If the multiplier calculated, following the procedure indicated above, is 24 (assuming life expectancy is 70 years-this is approved by the Supreme Court) the compensation amount under this head will be Rs. 69,120/-.
8. We shall now consider the question whether the appellant has been awarded adequate compensation. The facts relevant in this context are: That the appellant is a teacher receiving a sum of Rs. 718/- as salary is not disputed. He is also having an annual agricultural income of Rs. 10,000/-. The evidence available on record would show that the appellant, in any event, at the date of the accident had been earning Rs. 1,500/- per month. It is also established that the disability was 100 per cent for four months, 50 per cent for two months and 12 per cent permanent. Of the above items of disabilities the disability of 100 per cent for four months and 50 per cent for two months have already been considered and compensation awarded under the head 'special damages'. The dispute that survives for consideration is the one pertaining to the 12 per cent permanent disability suffered by the appellant.
9. Coming to the computation of the damages under this head it is necessary first to fix the life expectancy of the victim. The claimant at the time of the accident was 46 years old. The learned counsel for the appellant submits that going by judicial pronouncements of the apex court, the life expectancy of a citizen of this country can be fixed at 70 years. [See Jyotsna Dey v. State of Assam 1987 ACJ 172 (SC)]. The appellant at the time of the accident was keeping good health and as such the counsel submits, he can expect to live, in any event, upto 70 years. If that be the position the multiplier shall be 26 (Sic. 24). Any person who will be having sufficient earning after superannuation can expect to get sufficient income for a period of, going again by the Supreme Court ruling, ten years. [See State Insurance Officer, Trivandrum v. Thankamma John 1981 ACJ 77 (Kerala) and Vasanthy G. Kamath v. Kerala State Road Trans. Corporation 1981 ACJ 353 (Kerala)]. Taking all these aspects into account, particularly the discount for lump sum payment, we are of the view that the multiplier can be fixed at 20. The damages calculated on the basis of the multiplicand by 20 years of purchase value would be Rs. 32,800/-.
10. Coming to the claim for compensation for pain and suffering and loss of amenities of life falling under the category 'non-pecuniary losses': It is next to impossibility to give any guidance in this regard because the amount of compensation varies as it does with particular injury. In other words the assessment of damages under this head should necessarily be conjectural. However, the fact that the injured has had at the time of the accident substantial and secured private income is irrelevant to the assessment of damages under this head. Why it is said so because, as observed by Diplock, L.J. in Fletcher v. Autocar and Transporters Ltd. 1969 ACJ 99 (CA, England), "high though his deprivation ranks, I cannot think that it ranks any higher because the plaintiff, before the accident, was a rich man. Had an ordinary working man, who like the plaintiff had led before the accident a full, active and useful life in his own sphere, sustained the same injuries with the same physical and mental results, he would in my view have been entitled to monetary compensation of the same order as the plaintiff for the transformation of his life into a passive, empty and useless existence." Compensation awarded under this head shall therefore be fair and reasonable. Such compensation is "an acknowledgment of regret for having caused a hurt that is imponderable rather than a compensation properly so called." Compensation under this head therefore can be fixed, taking into account the facts and circumstances of the case, at Rs. 7,000/-. The net amount thus will be Rs. 39,800/-. For convenience we round it off at Rs. 40,000/-.
11. The Tribunal has awarded only Rs. 20,000/-. In the light of our discussion above, the appellant is entitled to get Rs. 20,000/- more as damages under the head 'loss of earnings and other gains'. The appellant is entitled to get interest at 12 per cent on the total amount of damages from the date of filing of the claim till realisation. However, the Tribunal has allowed only 6 per cent. The said direction therefore is set aside and it is declared that the appellant is entitled to get interest at 12 per cent on the total amount of compensation from the date of filing of the claim petition till realisation.
12. The appeal is allowed to the extent indicated above. No costs.