The Oriental Insurance Company Limited v. Sivagami & Others
2009-10-12
P.P.S.JANARTHANA RAJA
body2009
DigiLaw.ai
Judgment :- The appeal is preferred by the claimants against the award dated 211. 2006 made in MCOP. No.284 of 2006 by the Motor Accident Claims Tribunal ((Sub Court), Sankari. 2. Background facts in a nutshell are as follows: The deceased-Appu @ Ramasamy Gounder met with motor traffic accident on 22.07.2006 at about 7.15 p.m. It is a fatal accident. The deceased was riding TVS-50 bearing Registration No.TN-28 U-1361 proceeding from Sankari to Salem Main Road near Magudanchavadi Sathaipet towards Salem (East) side. At that time, the bus bearing registration No.TN-33-AH-7979 belonging to the 4th respondent herein came in a rash and negligent manner and hit behind the TVS-50 and caused accident. Due to the same, the deceased sustained grievous injuries and he was immediately taken to Government Hospital Salem and he died on the same day. The claimants are wife and sons of the deceased. The claimants claimed a sum of Rs.5,00,000/- as compensation. The said bus was insured with the appellant-Insurance Company. The appellant-Insurance Company resisted the claim. On pleadings the Tribunal framed the following issues:- "1. Whether the accident had occurred due to the rash and negligent driving of the driver of the bus? 2. Whether the claimants are entitled to the compensation? If so, to what extent? 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 fourth respondents bus and awarded compensation of Rs.3,45,000/-with interest at 7.5% per annum from the date of petition and the details of the same are as under:- Loss of income Rs.3,20,000/- Funeral expenses Rs. 5,000/- Loss of love and affection(for wife) Rs. 10,000/- Loss of love and affection(for 2 sons) Rs. 10,000/- (each Rs.5,000) ----------------- Total Rs.3,45,000/- Aggrieved by that award, the appellant-Insurance Company has filed the present appeal. 3. The learned counsel appearing for the appellant-Insurance Company questioned only the quantum of compensation awarded by the Tribunal and contended that the amount awarded by the Tribunal is excessive, exorbitant, without basis and justification and therefore, the award passed by the Tribunal is not in accordance with law and the same has to be set aside. 4. Learned counsel appearing for the respondents/claimants 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.
4. Learned counsel appearing for the respondents/claimants 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 P10 were marked. On the side of the appellant-Insurance Company, no document was marked and no one was examined to support their claim. PW1 is the wife of the deceased. PW2 is the oyer of the deceased. PW.3 is one Nagendran, who is an eye witness to the accident. Ex.P1 is the copy of the First Information Report. Ex.P2 is the copy of the postmortem certificate. Ex.P3 is the copy of the Insurance policy of the 4th respondent TN-33-AH-7979. Ex.P4 is the copy of the rough sketch. Ex.P5 is the copy of the Charge Sheet. Ex.P6 is the death certificate. Ex.P7 is the legal heir certificate. Ex.P8 is the Patta dated 26.06.2007. Ex.P9 is the copy of the driving licence of Palanisamy. Ex.P10 is the salary certificate of the deceased. 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 driver of the bus belonging to the 4th respondent herein and the finding is based on valid materials and evidence. 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. The difference between the two methods was considered and explained by this Court in General Manager, Kerala State Road Transport Corporation Vs.
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 dependents 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 dependents, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependents during that period, the chances that the deceased may not have live or the dependents 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 dependents, 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 dependents. 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.
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 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." 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. 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.
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 therefrom 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) 7. 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. 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.
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. Veluswami, 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 dependents many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the dependents 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 dependent 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 dependents 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 dependents, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependents during that period, the chances that the deceased may not have lived or the dependents 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 dependents 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. 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 judgments cited supra, let me consider the facts of the present case. 8. At the time of the accident, the deceased was aged about 59 years. The driver of the bus was charge sheeted for offences under section 279, 304(A) I.P.C. in Crime No.407 of 2006 by Magudanchavadi Police Station. P.W.1 is the first claimant / wife of the deceased.
8. At the time of the accident, the deceased was aged about 59 years. The driver of the bus was charge sheeted for offences under section 279, 304(A) I.P.C. in Crime No.407 of 2006 by Magudanchavadi Police Station. P.W.1 is the first claimant / wife of the deceased. In her evidence, PW.1 has stated that at the time of accident the deceased was earning Rs.7000/- p.m. and he was a Supervisor in M.Ravi Tex New Road, Elampillai and the deceased also doing agricultural work. PW.1 has stated that the deceased was earning a sum of Rs.2,000/-per month by doing agricultural work and Rs.5,000/- by doing supervisor work in M.Ravi Tex New Road, Elampillai. P.W.2 is Ravi, who is an employer of the deceased and in his evidence, PW.2 has stated that the deceased was earning Rs.5,000/-per month. Though, PW.2, Ex.P10 salary certificate has marked. In her evidence PW1 stated that they owned six acres of land and the deceased was managing the said land. After considering the above evidence, the Tribunal has fixed the monthly income at Rs.5,000/-per month. Ex.P2 is the Post mortem certificate wherein the age of the deceased was mentioned as 59. Considering the same, the Tribunal has taken the age of the deceased as 59 years at the time of the accident. Considering the the evidence of PW1 and PW2, The Tribunal fixed the monthly income of the deceased at Rs.5,000/-p.m. and determined the annual income Rs.60,000/-(Rs.5,000/- x 12). Out of the said sum, the Tribunal has deducted 1/3rd i.e. Rs.20,000/- towards personal expenses of the deceased and balance sum of Rs.40,000/- has been taken as the contribution of the deceased to his family. After taking into consideration of the facts and circumstances of the case, especially noting that there is no concrete evidence to show that the deceased was earning Rs.5,000/-per month, I feel that it would be reasonable to fix the monthly income at Rs.4000/-per month and on such the monthly income of the deceased is fixed and determined annual income is Rs.48,000/-(Rs.4,000/-x 12). Out of the said sum, 1/3rd is deducted i.e. Rs.16,000/- towards personal expenses of the deceased and balance sum of Rs.32,000/- is taken as contribution of the deceased to his family.
Out of the said sum, 1/3rd is deducted i.e. Rs.16,000/- towards personal expenses of the deceased and balance sum of Rs.32,000/- is taken as contribution of the deceased to his family. Considering the age of the deceased at 59 years at the time of the accident, the Tribunal has adopted the multiplier of 8 and there is no dispute regarding the same. The loss of income works out to Rs.2,56,000/- (Rs.32,000/- x 8) as against Rs.3,20,000/-awarded by the Tribunal. The Tribunal has also awarded a sum of Rs.5,000/-towards funeral expenses, which is very reasonable and the same is confirmed. The Tribunal has not awarded any amount towards loss of consortium. After taking into consideration of the age of the wife of deceased as 55 years, I feel that it would be appropriate to award a sum of Rs.10,000/-towards loss of consortium. The Tribunal also awarded a sum of Rs.10,000/-towards loss of love and affection for two sons. The two children have lost their father. Considering the same, the Tribunal awarded a sum of Rs.10,000/-towards loss of love and affection. Considering the facts and circumstances of the case, I feel that it would be appropriate to award a sum of Rs.15,000/- as against Rs.10,000/- awarded by the Tribunal under the head of loss of love and affection. The Tribunal has not awarded any sum towards transport charges and I feel that it would be appropriate to award a sum of Rs.2,000/- towards this head. The Tribunal has not awarded any amount towards loss of estate and I feel that it would be appropriate to award a sum of Rs.5,000/- under this head. The Tribunal has awarded interest at the rate of 7.5% per annum, which I feel is very reasonable and the same is confirmed. The modified amount of compensation is as follows: Loss of income Rs. 2,56,000/-Funeral expenses Rs. 5,000/- Loss of love and affection Rs. 10,000/- Love and affection (2 sons) Rs. 15,000/- Transport Rs. 2,000/- Loss of estate Rs. 5,000/- Total... Rs.2,93,000/- Therefore, the claimants are entitled to the modified compensation of Rs.2,93,000/-with interest at 7.5% p.a. from the date of petition. 9. The learned counsel appearing for the appellant-Insurance company has submitted that already the entire award amount has been deposited as per order of this Court dated 14.08.2008.
15,000/- Transport Rs. 2,000/- Loss of estate Rs. 5,000/- Total... Rs.2,93,000/- Therefore, the claimants are entitled to the modified compensation of Rs.2,93,000/-with interest at 7.5% p.a. from the date of petition. 9. The learned counsel appearing for the appellant-Insurance company has submitted that already the entire award amount has been deposited as per order of this Court dated 14.08.2008. The claimants are permitted to withdraw the modified award amount of Rs.2,93,000/- with interest at the rate of 7.5% p.a. from the date of petition, after adjusting the amount, if any, already withdrawn. The appellant-Insurance company is also permitted to withdraw the balance amount on making proper application. 10. With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs. Consequently, M.P. No.1 of 2009 is closed.