Madhya Pradesh High Court
State Of Madhya Pradesh And Anr. vs Smt. Jyoti Kaul And Ors. on 18 August, 1994
Equivalent citations: 1995ACJ608, AIR1995MP108, AIR 1995 MADHYA PRADESH 108, (1995) 1 ACJ 608 (1995) 1 TAC 631, (1995) 1 TAC 631
JUDGMENT S.K. Dubey, J.
1. These two appeals arise out of the award dated 26-6-1993 in Case No. 52 of 1988, passed by the Motor Accidents Claims Tribunal, Guna, for short, the 'Tribunal' awarding compensation of Rs. 3,65,400/- to the widow and two minor children for the death of Amar Kishan Kaul, an Executive Engineer, in Gopi Sagar Division, Guna, who died of motor accident on 6th July, 1988 by the use of Government Jeep No. CRZ 3958, owned by the Government of Madhya Pradesh and driven by Basheer Khan, the driver.
2. The State of Madhya Pradesh has challenged the award of compensation being excessive, while the claimants have filed the appeal for enhancement of the compensation.
3. The facts relating to the accident caused by rash and negligent driving by the driver are not disputed, nor the finding of the Tribunal, holding the driver being rash and negligent have been challenged. Hence, it is not necessary to state the circumstances in which the accident occurred. As there is a serious challenge to the quantum of compensation, it would be appropriate t6 state that deceased was aged 50 years, 3 months and 6 days at the time of his unfortunate and untimely death and employed as an Executive Engineer in the Irrigation Department of Government of Madhya Pradesh, drawing monthly salary of Rs. 3,729/- and after deduction of the amount of provident fund of Rs. 740/-, Group Insurance Rs. 80/-, House Rent Rs. 105/-, Vehicle charges Rs. 90/-, the deceased was getting in hand in all Rs. 2,714/-as is proved by Ex.P/7. However, from Service Book (Ex.P/10), proved by AW 8, Jyoti Kumar Sharma, Executive Engineer, of the-deceased, who stated that on revision of the pay scale, the pay of the deceased was fixed in the scale of Rs. 2,650--4,200 and the last Pay Certificate was issued showing the substantive pay of the deceased as Rs. 3,300/-and Dearness Allowance Rs. 759/-, in all Rs.4,059/-. AW 6, Smt. Jyoti Kaul, the widow of the deceased, in her statement, has stated that her husband used to give her Rs.2,714/- per month for meeting out the expenses of the family. She has also admitted that after the death of her husband, she got all final payments of provident fund, family benefit fund, gratuity, leave encashment, ex-gratia payment and is getting the family pension of Rs. 1,650/- besides the Dearness Allowance.
4. The Tribunal, on the evidence adduced in the case, after deducting the 1 / 3rd amount of personal expenses of the deceased from Rs. 3,044/-, calculated the monthly dependency at Rs.2,030/- and yearly, Rs. 24,360/-and by applying the multiplier of 15, determined the compensation of Rs. 3,65,400/-,a deduction of Rs. 15,000/- towards ex-gratia payment was made. Thus, the Tribunal directed the State of Madhya Pradesh to pay Rs. 3,50,400/- with interest at the rate of 15% per annum from the date of the application till payment.
5. Shri J. D. Suryavanshi, Government Advocate, for the State and Shri K. K. Lahoti and Shri P. C. Jain, learned counsel for the claimants were heard.
6. Learned Government Advocate submitted that the deceased was more than fifty years of age, the age of superannuation being 58 years, the multiplier applied of 15 is on a higher side. The multiplier ought to have been applied, at best, of 8. It was also submitted that the deceased was an Executive Engineer and was maintaining his own personal Fiat car, as is admitted by AW 6, and, therefore, looking to the status of the deceased, fifty per cent of the personal living expenses ought to have been deducted. After deducting 50% of the personal living expenses, the amount of monthly dependency comes to Rs. 1,357/-; multiplied by 12, the amount of multiplicand comes to Rs. 16,284/- and on applying the multiplier of 8, the compensation comes to Rs. 1,30,272/-. Therefore, the award is of over-compensation which is against the principle of assessment and hence deserves to be reduced.
7. On the other hand, learned counsel for the respondents claimants, submitted that the award is inadequate and too low as the deceased was a Government servant who was enjoying security of tenure of service, his earning and health care for longevity besides retiral benefits and, therefore, in his case, compensation ought to have been assessed differently, to the best advantage of the claimants because the deceased was also to be promoted and by taking into account the increments, promotional salary till the date of superannuation of which a statement was produced on record; and from that amount, after deducting 1/2 of the amount of the deceased's own expenses, the compensation should have been awarded. Learned counsel placed reliance on a decision of the Supreme Court in the case of Manjushri v. B.L. Gupta, AIR 1977 SC 1158, and a decision of this Court in the case of Union of India v. Vijaya Sundari, 199! (2) MPJR 177 : AIR 1991 MP 328. Alternatively, it was submitted that the Tribunal has erred in not taking into consideration the revised pay scale of Rs. 4,059/ -which is proved by the Last Pay Certificate. The living expenses of the deceased were only Rs. 400/- per month as statedly the widow, the span of life of the deceased's family, as has come on record, is of 75 years, therefore, the multiplicand at least ought to have been taken into consideration of Rs. 3,653/- monthly, multiplied by 12 = Rs. 43,836/- and by applying the multiplier of 20, the compensation ought to have been calculated at Rs. 8,76,720/- besides the amount of consortium and loss of estate. The interest ought to have been awarded at the rate of 18% per annum. In support of the contention, counsel cited the decisions of the Supreme Court and of this Court in C. V. Subramania Iyer v. T. Kunhi Kuttan Nair, 1970 ACJ 110 (SC): (AIR 1970 SC 376); Jyotsna Dey v. State of Assam, 1987 ACJ 172 (SC); Rukmani Devi v. Om Prakash, 1990 ACJ 687 (SC); R. L. Gupta v. Jupitor General Insurance Co., (1990) 1 SCC 356; Lajwanti v. Keshav Prasad Soni, 1984 ACJ 664; Kusumlata Trivedi v. The State of M.P., (1992) 1 ACC 686 (DB); MPSRTC v. Nirmala, 1991 (2) MPWN 175; Noor-mohammad v. Masidkhan, 1992 (2) MPWN 109.
8. Recently, the Supreme Court, in the case of General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, (1994) 2 SCC 176, after considering the earlier decisions of the Supreme Court and of High Courts and also English decisions, have ruled that for ensuring the 'just' compensation under Section 110-B of the Motor Vehicles Act, 1939 and Section 168 of the Motor Vehicles Act, 1988, the multiplier method is logically sound and well-settled and accepted method and disapproved the decisions which took a contrary view. It would be appropriate to refer paras 16, 17, 18 and 19 from the judgment, which we quote;
"16. 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. We are aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unredictability for the assessment of compensation. 'Some judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act, 1939 in so far as it envisages the compensation to be 'just', the statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases.
17. The multiplier represents the number of years' purchase on which the loss of dependency is capitalised. Take for instance a case where annual loss of dependency is Rs. 10,000/-. If a sum of Rs. 1,00,000/- is invested at 10% annul interest, the interest will take care of the dependency, perpetually. The multiplier in this case works out to 10. If the rate of interest is 5% per annum and not 10% then the multiplier needed to capitalise the loss of the annual dependency at Rs. 'l0,000/- would be 20. Then the multiplier, i.e., the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last etc. Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependents, whichever is higher) goes up.
18. Here we may say a word on Picket v. British Rail Engineering Ltd., (1979) 1 All ER 774 (HL), referred to by the High Court. In an action for damages for personal injuries, the House of Lords overruling the decision of the Court of Appeal in Oliver v. Ashman, (1961) 3 All ER 323, held that damages for loss of future earnings should include the whole period of earning life and not merely the post-accident expectancy. In other words, the plaintiff was held entitled to claim damages for lost earnings of lost years when the accident shortened his expectation of working life. On the same lines, the House of Lords in Gammell v. Wilson, (1981) 1 All ER 578, held that in addition to conventional and moderate damages for loss of expectation of life, damages for loss to the estate should include damages for loss of earnings of the lost years. Gammell case (supra) was followed by a Division Bench of the Madhya Pradesh High Court in Ramesh Chandra v. M. P. State Road Transport Corpn., (1962) MPLJ 426. It was pointed out that the decision in Gammell case (supra) was in line with die Supreme Court's decision in Gobald Motor Service Ltd. v. R.M.K. Veluswami, AIR 1962 SC 1, in which it was held that "the capitalised value of his income subject to relevant deductions would be loss caused to the estate of the deceased". The annual loss to the estate was computed in Gammell case (supra) to be the amount that the deceased would have been able to save, spend or distribute after meeting the cost of his living, and damages for loss to the estate were computed after applying a suitable multiplier to the annual loss. So, in computation of annual loss the amount that the deceased would have spent on dependants was not taken into account. The result of such a computation was that in cases where the dependants were not the persons to whom the estate devolved, there was likelihood of duplication of damages. To remove this risk, Parliament amended in 1982 the Law Reforms (Miscellaneous Provisions) Act, 1934, by providing that damages recoverable for the benefit of the estate will not include any damages for loss of income in respect of any period after the victim's death (Administration of Justice Act, 1982, Section 4; Winfield & Jolowicz, Tort, Twelfth Edn. pp. 659-60).
19. In the present case the deceased was 39 years of age. His income was Rs. 1032 per month. Of course, the future prospects of advancement in life and career should also be sounded in terms of money to augment the multiplicand. While the chance of the multiplier is determined by two factors, namely, the rate of interest appropriate to a stable economy and the age of the deceased or of the claimant whichever is higher, the ascertainment of the multiplicand is a more difficult exercise. Indeed, many factors have to be put into the scales to evaluate the contingencies of the future. All contingencies of the future need not necessarily be baneful. The deceased person in this case had a more or less stable job. It will not be inappropriate to take a reasonably liberal view of the prospects of the future and in estimating the gross income it will be unreasonable to estimate the loss of dependency on the present actual income of Rs. 1032 per month. We think, having regard to the prospects of advancement in the future career, respecting which there is evidence on record, we will not be in error in making a higher estimate of monthly income at Rs. 2000 as the gross income. From this has to be deducted his personal living expenses, the quantum of which again depends on various factors such as whether the style of living was spartan or bohemian. In the absence of evidence it is not unusual to deduct one-third of the gross income towards the personal living expenses and treat the balance as the amount likely to have been spent on the members of the family and the dependents. This loss of dependency should capitalize with the appropriate multiplier. In the present case we can take about Rs. 1400 per month or Rs. 17,000 per year as the loss of dependency and if capitalized on a multiplier of 12, which is appropriate to the age of the deceased, the compensation would work out to (Rs. 17,000 x 12 = Rs. 2,03,000) to which is added the usual award for loss of consortium and loss of the estate each in the conventional sum of Rs. 15,000."
9. Therefore, now it is trite law that for determining the 'just' compensation under Section 110-B of the Motor Vehicles Act, 1939, or under Section 168 of the Motor Vehicles Act, 1988, the multiplier method is the logically sound and legally well-settled method, the other mode of calculation of compensation can only bejustified in rare and extraordinary and very exceptional circumstances. Though the decisions relied by Shri Lahoti take a different view, but, the present case being not of any rare and extraordinary circumstances, particularly because the tenure of service of the deceased, i.e., of superannuation is less than 8 years, therefore, the multiplier method, applied by the Tribunal following a decision of this Court in the case of Asha Devi, 1988 Jab LJ 485 : (AIR 1989 MP 93), which is in line with the decision of the Supreme Court in Susamma Thomas's case (supra), is according to the established and accepted norms for the assessment of compensation. We are also of the view that for ensuring the 'just' compensation, it would be proper to determine the compensation in the manner laid down in the case of Susamma Thomas (supra), wherein, in para 19, quoted above, the Supreme Court has observed that in case of an employee who is in a stable job, it will not be inappropriate to take reasonably a liberal view of the prospects of the future and in estimating the gross income, it will be unreasonable to estimate the loss of dependency on the actual income of the deceased at the time of his death and prospects of advancement in future career are also to be considered, of which there is evidence on record, a higher estimate of monthly gross income may be taken into consideration. As the deceased was an Executive Engineer and at the time of his death, was getting Rs. 3,044/- whose pay was revised to Rs. 4,059/ -, the deceased was also likely to be promoted as Supreintending Engineer, hence, it 'would be appropriate to estimate gross monthly income to Rs. 4,500/-, out of that, 1 / 3rd of the amount deserves to be deducted towards the persona) living expenses of the deceased of which balance comes to Rs. 3,000/-, which should be considered as the monthly dependency and yearly as Rs. 36,000/-. As the deceased was of 50 years and was to retire at the age of 58, it would be appropriate to take into consideration and to apply the multiplier of 10, the compensation would work out to Rupees 3,60,000/- to which is added the usual award for loss of company and loss of estate each in the conventional sum of Rs. 15,000/-. Thus, the total amount which the claimants are entitled is Rs.3,90,000/-.
10. After the death of the deceased, the claimants have, however, received all retiral benefits of the deceased, i.e., Provident Fund, Gratuity, Family Benefit Fund, ex-gratia payment etc. and the said amounts are not deductible from the amount of compensation except the ex gratia payment of the amount of Rs. 15,000/-. See, the decisions of this Court in the case of Kashmiran Mathur v. S. Rajendra Singh, 1982 MPLJ 803 (FB): (AIR 1982 MP 24) and the Division Bench decision in the case of Kusumiata (supra). Therefore, after deducting Rs. 15,000/- from the compensation so calculated, the claimants are entitled to Rs. 3,75,000/ - with interest at the rate of 12 per cent per annum from the date of the application till payment. Higher rate of interest is not awardable. For that, we rely on the case of Susamma (supra) and a Full Bench decision of this Court in the case of Prakramchand v. Chattan, (1991 JLJ 733) : AIR 1991 MP 280.
11. The State of Madhya Pradesh shall deposit the said amount before the Tribunal within a period of two months, failing which, that shall camy interest at the rate of 18% per annum. Of course, the amount already deposited under the interim award or at the time of the filing of this appeal and in pursuance of the order of stay, shall be given due credit with the proportionate interest. On deposit, the Tribunal shall distribute the amount keeping in mind the guidelines laid down by the Supreme Court in Susamma's case (supra).
12. In the result, the award of the Tribunal is modified in the manner indicated above, the appeals shall stand disposed of with a further direction to State to pay the costs of these appeals to the claimants which we quantify to be Rs. 2,000/-, if pre-certified.