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2005 DIGILAW 353 (GAU)

Anita Rani Saha v. Partha Roy Barman

2005-05-03

I.A.ANSARI, TINLIANTHANG VAIPHEI

body2005
JUDGMENT I.A. Ansari, J. 1. This appeal is preferred under Section 173 of the Motor Vehicles Act, 1998 (hereinafter referred to as "the MV Act") against the award, dated 25.6.1998, passed by the learned Member, Motor Accident Claims Tribunal, West Tripura, Agartala. 2. The material facts leading to the present appeal may be set out as follows : (i) The appellants, as legal representatives of deceased Manik Lal Saha, made an application, under Section 166 of the MV Act, seeking compensation Rs. 5,90,000 for the death of the said deceased, which arose out of a motor vehicular accident, the case of the claimants being, in brief, thus : On 4.3.1997, when Manik Lal Saha was proceeding as a pillion rider on a scooter bearing registration No. TR-01-1617, driven by one Dilip Chandra Dey (since deceased) and passing through damdamia, a truck, bearing No. TR-01-1617, came at a high speed from the opposite direction and knocked down both the riders of the scooter. Both Dilip Chandra Dey and Manik Lal Saha sustained grievous injuries and succumbed to the injuries before they could be shifted to the hospital. (ii) The learned Tribunal, having found that the accident had taken place due to rash and negligent driving of vehicle No. TR-01-1617, calculated that the claimants were entitled to receive, in all, Rs. 5,01,160, as compensation and directed the same to be paid by the insurer of the offending vehicle with interest @ 12% p.a. from the date of making of the claim application. Challenging that the amount of compensation, so awarded, is grossly inadequate, the claimants have preferred this appeal. 3. We have heard Mr. S. Deb, learned senior counsel, assisted by Mr. BB Saha, learned counsel for the appellants, and Mr. T Ali, learned counsel for the respondent-insurance company. None has appeared on behalf of the owner of the offending vehicle. 4. Since the present appeal challenges merely the adequacy of the quantum of compensation determined by learned Tribunal, it is pertinent to note that deceased Manik Lal Saha was, admittedly, a constable serving the Government of Tripura and his pay and allowances were, according to the salary certificate (Ext. 1), to the tune of Rs. 4,198 per month, his basic pay being Rs. 1,550. The learned Tribunal, having found that the net salary of the said deceased was Rs. 1), to the tune of Rs. 4,198 per month, his basic pay being Rs. 1,550. The learned Tribunal, having found that the net salary of the said deceased was Rs. 4,118 per month, multiplied the same by 12 to arrive at the annual income of the said deceased and since the said deceased was aged about 43 years at the time of the accident, the learned Tribunal used 15 as the multiplier and when the total amount came to Rs. 7,41,240, the learned Tribunal deducted from the said amount of Rs. 7,41,240, 1/3rd of the said amount as personal expenses of the said deceased and concluded that Rs. 4,94,160 was the compensation payable to the claimants. To this amount, the learned Tribunal added a sum of Rs. 2,000 towards cost of funeral expenses of the said deceased and a sum of Rs. 5,000 as loss of consortium in favour of the widow of the said deceased and, accordingly, held the claimants entitled to receive Rs. 5,01,160 as compensation. 5. While considering the question of determination of compensation in respect of an application made under Section 166 of the MV Act, what needs to be noted is that the Tribunal is required to, first, determine the multiplicand and the multiplicand, so determined, is, then, required to be multiplied by an appropriate multiplier depending upon the age of the deceased or the claimant, whichever is higher, and by calculating as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield by way of annual interest. The law as regards the determination of multiplicand, though well settled, has not been consistently followed by the Tribunals, in general, and in the case at hand, in particular. 6. The law as regards the determination of multiplicand, though well settled, has not been consistently followed by the Tribunals, in general, and in the case at hand, in particular. 6. While the Tribunals have been, more or less, following the multipliers mentioned in the structured formula given in the Schedule to Section 163A for the purpose of determining the multiplier applicable to cases arising out of the applications made under Section 166 of the MV Act and, at times, even the multiplicand is chosen by the Tribunal in terms of the said structured formula for the cases arising out of the applications made under Section 166 of the MV Act, what is important to note is that while determination of multiplier has become, more or less, stable, the ascertainment of multiplicand is dependent on a variety of contingencies of the future. When a deceased has stable income, it is not improper to take a reasonably liberal view of the prospects of his future career and calculate the loss of dependency by taking into account the prospective income of the deceased; rather, in such cases, it will be unreasonable to estimate the loss of dependency on the basis of the actual income of such a deceased. 7. In General Manager, Kerala SRTC v. Susamma Thomas, reported in AIR 1994 SC 1631 , the Apex Court, dealing with the question as to how compensation has to be determined in a vehicular accident, observed and laid down as follows : "12. There were two methods adopted for determination and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case (1942) ACJ 601 : (1942) 1 All ER 657 (HL) and the second in Nance v. British Columbia Electric Railway Co. Ltd. ((1951) ACJ 601 : (1951) All ER 448 (PC)). 13. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalising 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. 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." 8. It is also worth noticing that in Susamma Thomas (supra), the Apex Court calculated compensation for the legal representatives of a young man, who died at the age of 39 years, having an income of Rs. 1,032 per month. Since the determination of compensation in Susamma's case can very well be made illustrative for determination of compensation, in general, we quote, hereinbelow, the relevant observations made and conclusions reached by the Apex Court in Susamma's case (supra) :- "19. In the present case the deceased was 39 years of age. His income was Rs. 1,032 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 choice 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. 1,032 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. 2,000 as the gross income. 1,032 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. 2,000 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 capitalise with the appropriate multiplier. In the present case we can take about Rs. 1,400 per month or Rs. 17,000 per year as the loss of dependency and if capitalised 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. We shall, however, refer to the case of Susamma Thomas (supra) a little later for the purpose of yet another component of compensation, which needs to be kept in mind by the Tribunals. 10. Close on heels of the decision in Susamma Thomas (supra), a three-Judge Bench in U.P. State Road Transport Corporation v. Trilok Chandra, reported in (1996) 4 SCC 362 , having noticed that the principles on which the multiplier method had developed was being lost sight of and a hybrid method, based on the subjectivity of the Tribunal, had surfaced introducing uncertainty and lack of reasonable uniformity in the matter of determination of just compensation, laid down the method for calculation of compensation in the following words : "15. We thought it necessary to reiterate the method of working out 'just' compensation because of late, we have noticed from the awards made by tribunals and courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/Court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realised that the Tribunal/Court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused. The two English decisions to which we have referred earlier provide the guidelines for assessing the loss occasioned to the victims. Under the formula advocated by Lord Wright in Davies 1942 ACJ 601 : (1942) 1 All ER 657 the deceased, then deducting therefrom the amount spent on the loss has to be ascertained by first determining the monthly income of deceased, and thus assessing the loss to the dependents of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier. Let us illustrate : X, male, aged about 35 years, dies in an accident. He leaves behind his widow and 3 minor children. His monthly income was Rs. 3,500. First, deduct the amount spent on X every month. The rough and ready method hitherto adopted where no definite evidence was forthcoming, was to break up the family into units, taking two units for an adult and one unit for a minor. Thus, X and his wife make 2+2=4 units and each minor one unit, i.e., 3 units in all, totalling 7 units. Thus the share per unit works out to Rs. 3,500/7 = Rs. 500 per month. It can thus be assumed that Rs. 1,000 was spent on X. Since he was a working member some provision for his transport and out-of-pocket expenses has to be estimated. In the present case we estimate the out-of-pocket expense at Rs. 250. Thus, the amount spent on the deceased X works out to Rs. 1,250 per month leaving a balance of Rs. 3,500 - 1,250 = Rs. 2,250 per month. This amount can be taken as the monthly loss to X's dependents. The annual dependency comes to Rs. 2,250 x 12 = Rs. 27,000. This annual dependency has to be multiplied by the use of an appropriate multiplier to assess the compensation under the head of loss to the dependents. Take the appropriate multiplier to be 15. The compensation comes to Rs. 27,000 x 15 = Rs. 4,05,000. To this may be added a conventional amount by way of loss of exception of life. Earlier this conventional amount was pegged down to Rs. Take the appropriate multiplier to be 15. The compensation comes to Rs. 27,000 x 15 = Rs. 4,05,000. To this may be added a conventional amount by way of loss of exception of life. Earlier this conventional amount was pegged down to Rs. 3,000 but now having regard to the fall in the value of the rupee, it can be raised to a figure of not more than Rs. 10,000. Thus, the total comes to Rs. 4,05,000 + 10,000 = Rs. 14,15,000." 11. From a combined reading of the observations made in Susamma Thomas (supra), it is clear that the Tribunal shall determine the monthly income of the deceased and, then, after deducting therefrom such amount, which can be reasonably inferred as personal expenditure of the deceased, shall assess the loss to the dependents of the deceased. The determination of income of a deceased is, however, not free from difficulty. While considering this aspect of the matter, it needs to be noted that if the deceased was a person having bright prospects in future and has stable income, determination of his income may be different from a person, whose income, according to the facts of given case, is not stable or who had not perceivable future prospects of better or improved earning. 12. Bearing in mind the above broad principles of the law governing determination of compensation payable to the dependents of deceased, let us, now, apply the same to the factual matrix of the present case. 13. In the case at hand, the deceased was a young man aged about 43 years and he was, admittedly, a State Government employee functioning as a constable and drawing salary @ Rs. 4,198 per month, his basic pay being Rs. 1,550 per month. The scale of pay of the deceased was, admittedly, Rs. 950 - 2,180 as per the ROP Rules, 1988. This shows that the deceased was almost at the middle of the scale of pay, which was available to constable, for, when 950 is added to Rs. 2,180 and the total sum thereof is divided by two, the basis pay would come to Rs. 1,565. This scale of pay was, however, revised, under ROP Rules, 1988, to Rs. 3,200 - 6,030 w.e.f. 1.1.1996. Since the said deceased met with death on 1.4.1997, it logically follows that had he remained alive, he would have received the benefit of the revised scale. 1,565. This scale of pay was, however, revised, under ROP Rules, 1988, to Rs. 3,200 - 6,030 w.e.f. 1.1.1996. Since the said deceased met with death on 1.4.1997, it logically follows that had he remained alive, he would have received the benefit of the revised scale. At any rate, his pre-revised basic pay at the time of his death was Rs. 1,550 per month, the optimum basic pay being Rs. 2,180 and his pay scale, as already indicated hereinabove, being Rs. 950 - 2,180. Bearing in mind this aspect of the matter, if we take into account the revised pay scale, it clearly follows that the basic pay of the deceased, w.e.f. 1.1.1996, would have come to approximately Rs. 4,615 (i.e., Rs. 3,200 + 6,030 - 2 = Rs. 4,615). From this monthly income, which would have been available to the deceased w.e.f. 1.1.1996, l/3rd of the income needs to be deducted towards the personal living expenses of the said deceased and treat the balance as the amount likely to have been spent on the members of the family and the dependents. If the l/3rd amount from the income of Rs. 4,615 is deducted as the personal living expenses of the deceased, the loss of dependency turns out to be to the tune of approximately Rs. 3,000 per month. This monthly loss of dependency of Rs. 3,000 when multiplied by 12, shows that the annual loss of dependency is to the tune of Rs. 36,000. This loss of dependency, which is the multiplicand, needs to be, now, capitalised by an appropriate multiplier. 14. In the case at hand, as the said deceased was 43 years old, the learned Tribunal correctly used 15 as the multiplier. Thus, when the annual loss of dependency of Rs. 36,000 is multiplied by 15 as the multiplier, the compensation works out to be Rs. 5,40,000. The learned Tribunal has added Rs. 5,000 as loss of consortium for the widow and a sum of Rs. 2,000 as funeral expenses of the said deceased. The adequacy of these amounts are also challenged under the present appeal. While considering this aspect of the matter, it deserves to be noted that though the MV Act, (as amended), shows in the schedule to Section 163A, a sum of Rs. 2,000 as funeral expenses and Rs. 2,000 as funeral expenses of the said deceased. The adequacy of these amounts are also challenged under the present appeal. While considering this aspect of the matter, it deserves to be noted that though the MV Act, (as amended), shows in the schedule to Section 163A, a sum of Rs. 2,000 as funeral expenses and Rs. 5,000 as loss of consortium, it needs to be noted that while considering an application under Section 166 of the MV Act, the Tribunal has to take into account the fall in the value of the rupee in fixing the loss of consortium or expenses for funeral. 15. Notwithstanding the fact that in Susamma Thomas (supra), the Supreme Court held that conventionally, a sum of Rs. 15,000 shall be added to the compensation amount for loss of consortium and another amount of Rs. 15,000 for the loss of the estate of the deceased, the Supreme Court in Trilok Chandra (supra), which is a latter decision rendered by a three-Judge Bench, pointed out that while determining the conventional amount, the Court shall keep in view the fall in the value of the rupee. In the case of Lata Wadhwa v. State of Bihar, reported in (2001) IILLJ 1559 SC, a three-Judge Bench has held that the conventional figure to be added to the compensation shall be Rs. 50,000. In Lata Wadhwa (supra), the Supreme Court has taken the view that Rs. 25,000 as conventional figure is on the lower side and held Rs. 50,000 shall be added as the conventional figure. 16. In the light of the decision given in Lata Wadhwa (supra), the Tribunal, in the present case, was required to add to the said compensation amount a sum of Rs. 50,000 as the loss of consortium, etc. 17. We must, however, bear in mind that the loss of consortium and loss of estate of the deceased are to be calculated with reference to the date of the accident. Hence, though, normally, the conventional amount shall be fixed with reference to the date of the death, we notice that in Lata Wadhwa (supra), the accident took place in 1989 and the Apex Court, while fixing the compensation, added, as indicated hereinbefore, an amount of Rs. 50,000 as conventional figure. In the face of this decision, there can be no escape from the conclusion that a sum of Rs. 50,000 as conventional figure. In the face of this decision, there can be no escape from the conclusion that a sum of Rs. 50,000 needs to be added as the conventional figure. In all, thus, a sum of Rs. 5,90,000 works out as the amount, which, to our mind, is the fair, just and reasonable compensation in the facts and circumstances of the present case. Since the respondent-insurer has already paid Rs. 5,01,160 as compensation, the claimant-appellants deserve to be paid the balance amount of Rs. 88,840. 18. Though the learned Tribunal has awarded, 12% interest on the awarded amount as compensation, we are of the view that since the respondent-insurance company has already paid the said amount, the interest shall be reduced, looking at the presently prevalent rate of interest, to 9% per annum from the date of filing of the claim application until payment of the said balance amount of Rs. 88,840 as determined by this Court. 19. Considering, therefore, the matter in its entirety and in the interest of justice, it is hereby directed that the respondent-insurance company, as insurer of the offending vehicle, shall pay to the claimant-appellants a sum of Rs. 88,840 as the balance amount of compensation with interest @ 9% per annum from the date of filing of the claim application until payment of the awarded amount. 20. With the above modifications in the amount already awarded by the impugned award and with the directions contained hereinabove, this appeal shall stand disposed of. 21. No order as to costs. 22. Send back the LCRs.