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2009 DIGILAW 3698 (MAD)

Tamilarasi & Others v. C. Natarajan & Another

2009-09-11

P.P.S.JANARTHANA RAJA

body2009
Judgment :- The appeal is preferred by the claimants against the fair and decreetal order made in MCOP No.179 of 2006, dated 18.02.2008 by the Motor Accident Claims Tribunal, Sub Court Tiruvarur. 2. Background facts in a nutshell are as follows: On 011. 2003 at about 10.45 a.m., one deceased Kaliyamoorthy met with a motor traffic accident. It is a fatal accident. The deceased was going by a bicycle on the left side of the road from Thirupalathurai Village to western side. At that time, a lorry bearing Registration No.TN-28-J-9006 belonging to the first respondent herein and insured with the second respondent herein came in a rash and negligent manner and dashed against the cyclist/deceased. Due to the same, the deceased died on the spot. The claimants are wife and children of the deceased. They claimed a sum of Rs.15,00,000/-as compensation. On pleadings the Tribunal framed the following issues:- "1. Whether the accident had occurred due to the rash and negligent driving of the respondent-lorry driver or not? 2. Whether the claimant is entitled to any claim? If so, how much?" After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to the rash and negligent driving of the lorry driver belonging to the first respondent and awarded a compensation of Rs.4,60,000/-with interest at 7.5% per annum from the date of petition and the details of the same are as under:- Funeral expenses Rs. 10,000/-Loss of love and affection and loss of consortium Rs. 34,000/- Loss of income Rs.4,16,000/- Total Rs.4,60,000/- Aggrieved by that award, the claimants have filed the present appeal for enhancement. 3. The learned counsel appearing for the claimants-appellants questioned negligence as well as quantum of compensation awarded by the Tribunal submitted that the Tribunal ought to have awarded compensation as claimed by the claimants and the amount awarded under various heads are very low and the Tribunal has not followed the principles of assessment before passing the award. Further, he contended that the Tribunal wrongly deducted GPF amount from the salary, while computing the loss of income to the family and therefore, the amount awarded by the Tribunal is very low and meagre and seeks for enhancement of the compensation. 4. Further, he contended that the Tribunal wrongly deducted GPF amount from the salary, while computing the loss of income to the family and therefore, the amount awarded by the Tribunal is very low and meagre and seeks for enhancement of the compensation. 4. Learned counsel appearing for the respondent/Insurance Company submitted that the Tribunal had considered all the relevant materials and evidence on record and came to the right conclusion and awarded a just, fair and reasonable compensation. Hence the order of the Tribunal is in accordance with law and the same has to be confirmed. 5. Heard the counsel. On the side of the claimants, P.Ws.1 to 3 were examined and documents Exs.P1 to P6 were marked. P.W.1 is the wife of the deceased. P.W.2 is one Mr.Karunanidhi, who is the eyewitness to the accident. P.W.3 is one Mr. Ravichandran, who is working as an Assistant in Primary Health Centre. Ex.P.1 is the attested copy of the First Information Report. Ex.P.2 is the attested copy of the Postmortem report. Ex.P.3 is the attested copy of the Motor Vehicles Inspectors Report. Ex.P.4 is the attested copy of the Judgement of the Criminal Court. Ex.P.5 is the Legal heir certificate. Ex.P.6 is the salary certificate. On the side of the respondents/Insurance Company, no one was examined and no documents were marked to substantiate their claim. After considering the above oral and documentary evidence, the Tribunal had given a categorical finding that the accident had occurred only due to the rash and negligent driving of the lorry driver belonging to the first respondent. The finding is based on valid materials and evidence and the same is hereby confirmed. 6. In the case of SARLA VERMA AND OTHERS VS. DELHI TRANSPORT CORPORATION AND ANOTHER reported in (2009) 4 MLJ 997, the Apex Court has considered the relevant factors to be taken into consideration before awarding compensation and held as follows: "7. Before considering the questions arising for decision, it would be appropriate to recall the relevant principles relating to assessment of compensation in cases of death. Earlier, there used to be considerable variation and inconsistency in the decisions of Courts Tribunals on account of some adopting the Nance method enunciated in Nance V. British Columbia Electric Rly. Co. Ltd. (1951) AC 601 and some adopting the Davies method enunciated in Davies V. Powell Duffryn Associated Collieries ltd., (1942) AC 601. Earlier, there used to be considerable variation and inconsistency in the decisions of Courts Tribunals on account of some adopting the Nance method enunciated in Nance V. British Columbia Electric Rly. Co. Ltd. (1951) AC 601 and some adopting the Davies method enunciated in Davies V. Powell Duffryn Associated Collieries ltd., (1942) AC 601. The difference between the two methods was considered and explained by this Court in General Manager, Kerala State Road Transport Corporation Vs. Susamma Thomas AIR 1994 SC 1631 : (1994) 2 SCC 176 . After exhaustive consideration, this Court preferred the Davies method to Nance method. We extract below the principles laid down in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra). "In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependent as a result of the death. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables, e.g., the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have live or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether." "The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalised by multiplying it by a figure representing the proper number of year’s purchase." "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. Then that should be capitalised by multiplying it by a figure representing the proper number of year’s purchase." "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." "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 there from 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." In UP State Road Transport Corporation V. Trilok Chandra (1996) 4 SCC 362 , this Court, while reiterating the preference to Davies method followed in General Manager, Kerala State Road Transport Corporation V. Susamma Thomas (supra), stated thus: "In the method adopted by Viscount Simon in the case of Nance also, first the annual dependency is worked out and then multiplied by the estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as, premature death of the deceased or the dependent, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one-third to one-half of the dependency was reduced, depending on the life span taken. That is the reason why courts in India as well as England preferred the Davies formula as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas case, usually English courts rarely exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when tribunals/courts began to use a hybrid method of using Nance method without making deduction for imponderables..... Under the formula Advocated by Lord Wright in Davies, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting there from the amount spent on the deceased, and thus assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier" (emphasis supplied) 8. In the case of SYED BASHEER AHAMED AND OTHERS VS. MOHAMMED JAMEEL AND ANOTHER reported in (2009) 2 Supreme Court Cases 225, the Apex Court has held as follows: "13. Section 168 of the Act enjoins the Tribunal to make an award determining “the amount of compensation which appears to be just”. However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression “which appears to be just” vests a wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily, or to ignore settled principles relating to determination of compensation. 14. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons affected nor should it be punitive to the person(s) liable to pay compensation. 14. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit, nor as a windfall to the persons affected nor should it be punitive to the person(s) liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In a nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards. 15. In Kerala SRTC v. Susamma Thomas, M.N. Venkatachaliah, J. (as His Lordship then was) had observed that: (SCC p.181, para 5) “5. … The determination of the quantum must answer what contemporary society ‘would deem to be a fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing’. The amount awarded must not be niggardly since the ‘law values life and limb in a free society in generous scales’.” At the same time, a misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining the compensation. The object of providing compensation is to place the claimant(s), to the extent possible, in almost the same financial position, as they were in before the accident and not to make a fortune out of misfortune that has befallen them. 18. The question as to what factors should be kept in view for calculating pecuniary loss to a dependant came up for consideration before a three-Judge Bench of this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswam, with reference to a case under the Fatal Accidents Act, 1855, wherein, K. Subba Rao, J. (as His Lordship then was) speaking for the Bench observed thus: (AIR p.1) “In calculating the pecuniary loss to the dependants many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the dependants may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Therefore, the actual extent of the pecuniary loss to the dependants may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained.” 19. Taking note of the afore extracted observations in Gobald Motor Service Ltd. in Susamma Thomas it was observed that: (Susamma Thomas case, SCC p.182, para 9) “9. The assessment of damages to compensate the dependants is beset with difficulties because from the nature of things, it has to take into account many imponderables e.g. the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income altogether.” 20. Thus, for arriving at a just compensation, it is necessary to ascertain the net income of the deceased available for the support of himself and his dependants at the time of his death and the amount, which he was accustomed to spend upon himself. This exercise has to be on the basis of the data, brought on record by the claimant, which again cannot be accurately ascertained and necessarily involves an element of estimate or it may partly be even a conjecture. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An appropriate multiplier is again determined by taking into consideration several imponderable factors. The figure arrived at by deducting from the net income of the deceased such part of income as he was spending upon himself, provides a datum, to convert it into a lump sum, by capitalising it by an appropriate multiplier (when multiplier method is adopted). An appropriate multiplier is again determined by taking into consideration several imponderable factors. Since in the present case there is no dispute in regard to the multiplier, we deem it unnecessary to dilate on the issue." After considering the principles enunciated in the judgements cited supra, let me consider the facts of the present case. 7. At the time of the accident, the deceased was aged about 47 years. He was a ward worker in Government Primary Health Centre, Kabisthalam and was earning a sum of Rs.5,436/- per month. Ex.P.2 is the Postmortem report, in which it is stated that the age of the deceased was at 48 years at the time of accident. Even in the Ex.P.6 salary certificate, in which also it is stated that the date of birth of the deceased was on 20.05.1956 at the time of accident. Hence, the Tribunal has fixed the age of the deceased at 47 years. P.W.1 is the wife of the deceased and in her evidence, she stated that the deceased was earning a sum of Rs.5,436/-per month. P.W.3 is one Mr. Ravichandran, co-employee of the deceased in the Primary Health Centre and in his evidence, he stated that the deceased was earning a sum of Rs.5,436/- per month. Ex.P.6 is the salary certificate of the deceased. It is relevant to extract the same as follows; PAY CERTIFICATE I certify that Thiru V. Kaliyamoorthy is an employee of the State Government getting a salary of Rs.5,436/- (Five thousand four hundred & thirty six only) p.m. And employed as Hospital worker (Sidha) in the office of the Government Primary Health Centre, Kabistalam as detailed below; Details of pay & allowance drawn by the individual are furnished below; Deduction 1. Pay Rs.3,310/- 1.G.P.F. Rs.2,185/- 2. Spl Pay Rs. 115/- 2.S.G.P.F. 3. Dearness allowance Rs.1,781/- 3.F.B.F. Rs. 20/- 4. House Rent allowance Rs. 150/- 4.OTHERS (HF) Rs. 10/- 5. Medical allowance Rs. 50/-TD = Rs.2,215/- I.R. I OA Rs. 30/- Net Amount = Rs.3,221/- Total Rs.5,436/- (Rupees three thousand two hundred & twenty one only. Pay Rs.3,310/- 1.G.P.F. Rs.2,185/- 2. Spl Pay Rs. 115/- 2.S.G.P.F. 3. Dearness allowance Rs.1,781/- 3.F.B.F. Rs. 20/- 4. House Rent allowance Rs. 150/- 4.OTHERS (HF) Rs. 10/- 5. Medical allowance Rs. 50/-TD = Rs.2,215/- I.R. I OA Rs. 30/- Net Amount = Rs.3,221/- Total Rs.5,436/- (Rupees three thousand two hundred & twenty one only. Date of Birth : 20.05.1956 Date of Retirement : 31.05.2016 Date of Death : 0110. 2003 On perusal of the above, the gross salary of the deceased was at Rs.5,436/- and after deduction, the net salary was at Rs.3,221/-per month. There is no dispute regarding the same. The Tribunal has taken the net salary only Rs.3,221/-and after taking into consideration of the savings, the Tribunal fixed the monthly income at Rs.4,000/-per month of the deceased. Out of the said amount, 1/3rd is deducted towards his personal expenses and 2/3rd is the contribution towards his family. After considering the age of the deceased at 47 years, the Tribunal adopted the multiplier of 13 and determined the loss of dependency at Rs.4,16,000/-(Rs.4,000x2/3x12x13). The learned counsel appearing for the claimants submitted that the Tribunal ought to have taken only gross salary of the deceased and further he contended that the Tribunal ought not to have deducted GPF amount from the salary because the same is part of the salary. In support of his contention, he also relied upon a Judgement of the Supreme Court in the case of National Insurance Co. Ltd. Vs Indira Srivastava and others reported in (2008) 1 Supreme Court Cases (Cri) 550, wherein it is held as follows; "9. The term "income" has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay-packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms. 10. Section 168 of the Act uses the word "just compensation" which, in our opinion, should be assigned a broad meaning. Loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms. 10. Section 168 of the Act uses the word "just compensation" which, in our opinion, should be assigned a broad meaning. We cannot, in determining the issue involved in the matter, lose sidght of the fact that the private sector companies in place of introducing a pension scheme take recourse to payment of contributory provident fund, gratuity and other perks to attract the people who are efficient and hard-working. Different offers made to an officer by the employer, same may be either for the benefit of the employee himself or for the benefit of the entire family. If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicants is required to be determined. For the aforementioned purpose, we may notice the elements of pay, paid to the deceased: a) "Basic 63,400.00 Conveyance allowance 12,000.00 Rent CO lease 49,200.00 Bonus (35% of basic) 21,840.00 Total 1,45,440.00 b) In addition to above, his other entitlements were: Contribution of PF ---- 10% basic Rs. 6,240(p.a.) LTA reimbursement Rs. 7,000(p.a.) Medical reimbursement Rs. 6,000(p.a.) Superannuation 15% of basic Rs. 9,360(p.a.) Gratuity contribution—5.34% of basic Rs. 3,332(p.a.) Medical policy – self and family @Rs. 55,000(p.a.) Education scholarship @ Rs.500 payable to his two children directly The question came for consideration before a learned single Judge of the Madras High Court in National Insurance Co. Ltd. V. Padmavathy wherein it was held: (AIHC pp. 1927-28 para 7) 7. Income tax, professional tax which are deducted from the salaried person goes to the coffers of the Government under specific head and there is no return. Whereas, the general provident fund, special provident fund, LIC contribution are amounts paid under specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. Whereas, the general provident fund, special provident fund, LIC contribution are amounts paid under specific heads and the contribution is always repayable to an employee at the time of voluntary retirement, death or for any other reason. Such contribution made by the salaried person are deferred payments and they are savings. The Supreme Court as well as various High Courts have held that the compensation payable under the Motor Vehicles Act is statutory and that the deferred payments made to the employee are contractual. Courts have held that there cannot be any deductions in the statutory compensation, if the legal representatives are entitled to lump sum payment under the contractual liability. If the contributions made by the employee which are otherwise savings from the salary are deducted from the gross income and only the net income is taken for computing the dependency compensation, then the legal representatives of the victim would lose considerable portion of the income. In view of the settled proposition of law, I am of the view, the Tribunal can made only statutory deductions such as income tax and professional tax and any other contribution, which is not repayable by the employer, from the salary of the deceased person while determining the monthly income for computing the dependency compensation. Any contributions made by the employee during his lifetime, form part of the salary and they should be included in the monthly income, while computing the dependency compensation." 19. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way contribution to the family as contra distinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. He also relied that, recently the Supreme Court in the case of RAGHUVIR SINGH MATOLYA AND OTHERS Vs. HARI SINGH MALVIYA AND OTHERS reported in 2009 (2) TNMAC 185 held that the dearness allowance as well as house rent allowance payable to the deceased should have been included for determining the income of the deceased and consequently the amount of compensation. HARI SINGH MALVIYA AND OTHERS reported in 2009 (2) TNMAC 185 held that the dearness allowance as well as house rent allowance payable to the deceased should have been included for determining the income of the deceased and consequently the amount of compensation. In view of the above Judgement of the Supreme Court, the Tribunal is wrong in deducting the Provident Fund amount from the salary of the deceased. Therefore, the Tribunal ought to have fixed the income of the deceased at Rs.5,436/- instead of fixing the income at Rs.4,000/- per month. Out of the said sum of Rs.5,436/-, if 1/3rd of Rs.1,812/- is deducted towards personal expenses, the balance sum of Rs.3,624/-(Rs.5,436/- - Rs.1,812/-) is the monthly contribution of the deceased to his family. Accordingly, the loss of income is determined as follows; Rs.3,624/- x 12 x 13 = Rs.5,65,344/- The Tribunal has adopted the correct multiplier of 13 as per the schedule and the loss of income is modified to Rs.5,65,344/- as against Rs.4,16,000/- awarded by the Tribunal. The Tribunal also awarded a sum of Rs.10,000/-towards funeral expenses, which is very reasonable and the same is hereby confirmed. Further, the Tribunal awarded a sum of Rs.34,000/-towards loss of love and affection and loss of consortium. After considering the age of the widow as well as the children, it is just, fair and reasonable and the same is hereby confirmed. The Tribunal also awarded the interest rate at 7.5%, which is very reasonable and the same is hereby confirmed. The details of the modified compensation as per the above discussion are as under:- Funeral expenses Rs. 10,000/- Loss of love and affection and loss of consortium Rs. 34,000/- Loss of income Rs.5,65,344/- Total Rs.6,09,344/- Less: Already awarded amount Rs.4,60,000/- ----------------- Enhanced amount Rs.1,49,344/- (The enhanced amount rounded of Rs.1,50,000/-) Therefore, the claimants are entitled to the enhanced compensation of Rs.1,50,000/-(6,09,344-4,60,000) with interest at 7.5% from the date of petition. 8. The learned counsel appearing for the second respondent -Insurance Company is directed to deposit the enhanced compensation of Rs.1,50,000/-with interest at 7.5% from the date of petition within a period of six weeks from the date of receipt of a copy of this order. On deposit, the first claimant is entitled to withdraw her respective share with accrued interest as fixed by the Tribunal by making proper application. On deposit, the first claimant is entitled to withdraw her respective share with accrued interest as fixed by the Tribunal by making proper application. In respect of the minors shares shall continue to be in the deposit till they attain majority. The first claimant/mother of the minors is also permitted to withdraw the interest accrued in the deposit of the minors shares once in three months on making proper application. 9. With the above modification, the Civil Miscellaneous Appeal is disposed of. Consequently, connected miscellaneous petition is closed. No costs.