Document Fragment View
Fragment Information
Showing contexts for: multiplier method in Sh Om Prakash Mahendra & Ors. vs Sh Nasiruddin & Ors on 13 April, 2009Matching Fragments
4. A claim petition was filed on 6th April 1992 and an award was made on 4th December 2002. Aggrieved with the said award enhancement is claimed by way of the present appeal.
5. The appellants have assailed the said award on quantum of compensation. Sh. O. P. Mannie, Counsel for the appellants contended that the tribunal erred in passing a lump sum amount of Rs. 1,40,000/- without taking into consideration, the set principles of law and guidelines for computing the compensation payable to the claimants as laid down by the Apex Court and various High Court in various decisions. The case of the appellant is that after assessing the income of the deceased at Rs. 5,000/-per month as per the evidence on record, the Learned Tribunal should have taken into account the future prospects to assess the monthly income of deceased at Rs. 10,000/- per month and then should have assessed the just compensation according to the multiplier method. Further, the counsel submitted that the tribunal should have applied the multiplier of 17 looking at the young age of the deceased. The counsel also raised the contention that the rate of interest allowed by the tribunal is on the lower side and the tribunal should have allowed simple interest @ 12% per annum in place of only 9% per annum. The counsel contended that the tribunal erred in not awarding any sort of non pecuniary damages towards loss of love & affection, funeral expenses, loss of estate, loss of consortium, mental pain and sufferings and the loss of services, which were being rendered by the deceased to the appellants.
6. Nobody has appeared for the respondents although counter affidavit was filed by the respondents. The respondents in their counter submitted that the tribunal rightly allowed lumpsum compensation as in the absence of proof of income, multiplier method cannot be applied. It is also submitted that the deceased died due to his negligence and he was also not having a driver's licence at the time of the accident and therefore no interference should be made in the award.
In this regard in G.M., Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176 the Hon'ble Apex Court observed as under:
"12. There were two methods adopted for determination and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case3 and the second in Nance v. British Columbia Electric Railway Co. Ltd.
13. 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.
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 unpredictability 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 insofar 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."