Solapur Municipal Corporation v. Renuka Abhimanyu Medidar
2009-07-30
NISHITA MHATRE
body2009
DigiLaw.ai
Judgment :- 1. The First Appeal has been filed against the Award in Motor Accident Claim Petition No.58 of 1987 decided on 13th September, 1991. The Tribunal has awarded an amount of Rs.1,85,000/- to the applicants i.e. the respondent Nos.1 to 4 herein. The amount which has already been paid towards the no fault liability was directed to be deducted from the aforesaid sum. 2. The accident occurred on 25th December, 1986 at about 7 a.m. at Solapur. The deceased Abhimanyu was riding his motor cycle when a bus owned by the appellant No.1-Municipal Corporation dashed into him. The deceased suffered severe injuries and died within a few hours of being admitted to the Civil Hospital, Solapur. The bus was insured with appellant No.2. 3. The respondent Nos.1 to 4 filed an application under the Motor Vehicles Act for compensation. It was their contention that the driver of the bus, i.e. respondent No.5 herein, was driving the vehicle in a rash and negligent manner on account of which the accident occurred. The deceased was working as a helper to the fitter in a Mill in Solapur and was the only earning member of the family. His monthly income, according to the respondents, i.e. the applicants before the Tribunal, was Rs.1,500/-. They, therefore, claimed that they were deprived of the earnings of the deceased and claimed compensation of Rs.2 lacs. 4. The appellants herein filed a written statement contending that the bus was being driven in a low speed and that the accident occurred within 100 feet. of the bus stop. It was contended that the accident took place only because of the fault of the deceased as he was riding his motor cycle rashly. It was further contended that the deceased did not hold a valid driving license and therefore the liability was not more than Rs.1,50,000/- for the insurance. 5. The Motor Accident Claims Tribunal, Solapur has held that the applicants had proved that the accident occurred due to the rash and negligent driving of respondent No.5 herein. It was also proved that the bus had dashed against the motor cycle being ridden by the deceased. The Tribunal concluded that the deceased had sustained the fatal injuries on account of the collision between the bus and the motor cycle. The Tribunal also accepted the applicants as the legal heirs of the deceased and therefore awarded them compensation of Rs.1,85,000/-.
The Tribunal concluded that the deceased had sustained the fatal injuries on account of the collision between the bus and the motor cycle. The Tribunal also accepted the applicants as the legal heirs of the deceased and therefore awarded them compensation of Rs.1,85,000/-. 6. The main contention raised by the learned Assistant Government Pleader is that the Tribunal has calculated the compensation by adopting an erroneous method. She submits that the Supreme Court has disapproved of the compensation being calculated based on the method adopted by the Tribunal. According to her, it is now well settled that the determination of just compensation must be on the multiplier method which the Supreme Court has found to be scientific. She supports her submission by relying on the judgment of the Supreme Court in the case of General Manager, Kerala State Road Transport Corporation vs. Susamma Thomas and Ors. [reported in 1994 ACJ 1]. 7. In the present case, the Tribunal has observed that the deceased was 34 years old when he met with the accident. The Tribunal has then observed that the monthly income of the deceased was Rs.1,000/-, based on the evidence led by the Accounts Clerk of the Mill in which the deceased was employed. An amount of Rs.200/- was deducted from his salary as the reasonable sum which would be spent by the deceased on himself. The Tribunal has then, on the basis of the amount of Rs.800/- being available to the family for meeting monthly expenses, has calculated that the dependents would suffer a loss of Rs.9,600/- per year. The Tribunal has then considered the fact that the deceased would reasonably have expected to live upto the age of 60 years, i.e. for a further period of 26 years. However, it has deducted 5 years from this span on account of the hazardous occupation that the deceased was involved in. The Tribunal has then observed that the loss for 21 years would be Rs.2,01,600/- and since the applicants have restricted their claim to Rs.2 lacs, it was found that this amount was reasonable compensation to which they are entitled. The Tribunal has then directed that since the no fault liability of Rs.15,000/- had already been paid to the applicants, the amount payable to them would be Rs.1,85,000/-. 8.
The Tribunal has then directed that since the no fault liability of Rs.15,000/- had already been paid to the applicants, the amount payable to them would be Rs.1,85,000/-. 8. The Supreme Court in the case of General Manager, Kerala State Road Transport Corporation (supra) has observed that the multiplier method is the logically sound method which should be followed for determining the compensation payable. The relevant portion of the aforesaid judgment reads as under: “11. 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 awarded 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 lumpsum 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, 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.
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. The multiplier represents the number of years’ purchase on which the loss of dependency is capitalized. 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 per cent annual 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 cent per annum and not 10 per cent, then the multiplier needed to capitalize the loss of the annual dependency at Rs.10,000/- 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.” 9. In the present case, if one applies the provisions of the Motor Vehicles Act as amended, as per Schedule II of the Motor Vehicles Act, the multiplier would be “17” since the deceased was between 30 and 35 years of age when he met with the accident. His annual income was Rs.12,000/- and, therefore, the compensation payable to the applicants would be about Rs.1,92,000/-. 10. Although the Supreme Court has disapproved the calculating of compensation by using the procedure adopted by the Tribunal, in my opinion, it would not be necessary to remand the matter for fresh calculations. The difference between the method used by the Tribunal and the multiplier method which is approved by the Supreme Court is not substantial in the present case.
Although the Supreme Court has disapproved the calculating of compensation by using the procedure adopted by the Tribunal, in my opinion, it would not be necessary to remand the matter for fresh calculations. The difference between the method used by the Tribunal and the multiplier method which is approved by the Supreme Court is not substantial in the present case. Besides, the loss of consortium and other damages sustained must also be taken into account. The Appeal has been pending since 1992. The accident has occurred in 1986 i.e. about 23 years ago. In such a situation, in my opinion, it would be a travesty of justice to remand the matter. The method used for calculating compensation by the Tribunal is not justifiable and must be deprecated in view of the observations of the Supreme Court in the aforesaid judgment. 11. In my opinion, this is not a fit case where the Award should be set aside. The First Appeal is dismissed.