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2010 DIGILAW 2589 (MAD)

Oriental Insurance Co. Ltd v. Mannagkatti

2010-06-29

P.P.S.JANARTHANA RAJA

body2010
Judgment :- 1. The appeal is preferred by the appellant-Insurance Company against the award and decree dated 20.12.2002 made in O.P. No.486 of 2002 on the file of the Motor Accidents Claims Tribunal, Principal Sub Judge, Tindivanam. 2. The deceased-Tamil Selvan met with an accident on 28.02.2002 at about 09.30 a.m. While he was proceeding in his bicycle near Lakshmi Cafe, Gandhi Statue on Rajaji Street, Tindivanam, a bus bearing Registration No.TN32H8899 belonging to the sixth respondent insured with the appellant-Insurance Company, came in a rash and negligent manner and hit the cyclist. Due to the same, the deceased sustained injuries. Immediately, he was taken to the Government Hospital, Pondicherry, where he died. The claimants are father, mother, sister and two brothers. They claimed a sum of Rs.20,00,000/- as compensation. 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 first respondents bus driver? 2. What is the compensation the claimant is entitled to?" 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 driver of the sixth respondents bus insured with the appellant/Insurance Company and awarded a compensation of Rs.10,51,000/- with interest at 9% per annum from the date of petition and the details of the same are as under:- Loss of income Rs.10,24,000/- (8000x12=96000-1/3=76000x16) Loss of love and affection Rs. 25,000/- Funeral expenses Rs. 2,000/- Total Rs.10,51,000/- Aggrieved by that award, the 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. The Tribunal is erred in fixing the monthly income at Rs.8,000/-and also wrongly adopted the multiplier of 16 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. Hence the order of the Tribunal is in accordance with law and the same should be confirmed. 5. Heard the counsel. 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 should be confirmed. 5. Heard the counsel. On the side of the claimants, P.Ws.1 to 5 were examined and documents Exs.P1 to P23 were marked. On the side of the appellant-Insurance Company, no witnesses were examined and Ex.R1-copy of the Insurance Police Certificate was marked. P.W.1-Tmt. Mariammal, PW2-Chinnaraj is the STD booth owner. PW3 is one Ganesan residing in the opposite house. PW4-Muniyandi is working in the Panchayat of Kollar Village and PW5-Balaj. Ex.P1 is the FIR copy of the deceased prepared by the Sub Inspector, Dindivanam Police Station. Ex.P2 is the copy of the Motor Vehicle Inspectors report. Ex.P3 is the copy of the final report filed by the Inspector of Dindivanam against the first respondents driver. Ex.P4 is the Rough Sketch. Ex.P5 is the copy of the post mortem report. Ex.P6 is the 10th transfer certificate. Ex.P7 is the certificate of Tamil Mandram. Ex.P8, Ex.P9 and Ex.P10 are the Sports certificate. Ex.P11 is the certificate of Scout. Ex.P12 is the certificate issued by the Lions Club for donating the blood. Ex.P13 and Ex.P14 are the blood donors card. Ex.P15 is the salary certificate. Ex.P16 is the documents relating to number plates, sticker cutting and the Artist work done by the deceased. Ex.P17 is the identity card with address proof. Ex.P18 is the receipt book. Ex.P19 is the certificate of the treatment taken for nerves of the first respondent who is the father of the deceased. Ex.P20 is the Certificate issued by the Doctor R. Shanmuga Sundaram to the sister of the deceased. Ex.P21 is the page 82 of the receipt book. Ex.P22 is the page 50 of the receipt book. Ex.P23 is the certificate of the employment of National Scout Youth Wing. 6. After considering the 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 sixth respondent and the finding is based on valid materials and evidence. 7. In the case of SARLA VERMA AND OTHERS VS. 6. After considering the 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 sixth respondent and the finding is based on valid materials and evidence. 7. 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. 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. 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 capitalized 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. 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. 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..... 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 dependents 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. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependents 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 Thomas2, 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 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 dependent came up for consideration before a three-Judge Bench of this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami4, 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. 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 capitalizing 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. 9. At the time of accident, the deceased was aged about 19 years. Ex.P6 is the 10th Std. Transfer Certificate of the deceased. Based on the age mentioned in the said document, the age of the deceased at the time of accident was 19 years. Considering the same, the Tribunal taken the age of the deceased at 19 years at the time of the accident. The claimants claimed that the deceased was earning Rs.8,000/- per month. Transfer Certificate of the deceased. Based on the age mentioned in the said document, the age of the deceased at the time of accident was 19 years. Considering the same, the Tribunal taken the age of the deceased at 19 years at the time of the accident. The claimants claimed that the deceased was earning Rs.8,000/- per month. According to PW1, the deceased was working in Telephone Booth and also doing stickering work. But no document was produced to prove the same. However, on the side of claimants, PW2, the owner of STD Booth and PW3-Ganesan, who is the neighbour were examined to prove the income. On that basis, the Tribunal fixed the income of the deceased at Rs.8,000/- per month and the annual income at Rs.96,000/-. Out of the said sum, the Tribunal deducted 1/3 of Rs.32,000/- and the balance amount of Rs.64,000/- was taken as the annual contribution to the family of the deceased. Since the age of the deceased was 19 years, the Tribunal adopted the multiplier of 16 and determined the loss of income as at Rs.10,24,000/-(64000x16). The learned counsel appearing for the appellant-Insurance Company vehemently contended that the Tribunal is wrong in fixing the monthly income and it is reasonable to fix the income of the deceased at Rs.4,500/-. Out of Rs.4,500/-, if 1/3 of 1,500/-is deducted towards personal expenses, the balance sum of Rs.3,000/-is taken as the monthly contribution to the family of the deceased and the annual income works out to Rs.36,000/-. The Tribunal adopted the multiplier of 16. The learned counsel for the appellant-Insurance Company vehemently contended that the Tribunal is wrong in adopting the multiplier of 16 and therefore the correct multiplier would be adopted in this case is 14 and the loss of income works out to Rs.5,04,000/-(Rs.36000x14). Further, the Tribunal awarded a sum of Rs.25,000/- towards loss of love and affection which is very reasonable and the same is hereby confirmed. The Tribunal has awarded a sum of Rs.2,000/-towards funeral expenses, which is very reasonable and the same is confirmed. The Tribunal has awarded the interest at 9% per annum. The date of accident was on 28.02.2002. Considering the prevailing rate of interest during that period, the interest awarded by the Tribunal is very reasonable and the same is confirmed. The Tribunal has awarded a sum of Rs.2,000/-towards funeral expenses, which is very reasonable and the same is confirmed. The Tribunal has awarded the interest at 9% per annum. The date of accident was on 28.02.2002. Considering the prevailing rate of interest during that period, the interest awarded by the Tribunal is very reasonable and the same is confirmed. The details of the modified compensation as per the above discussion are as under:- Loss of income Rs.5,04,000/- (3000x12x14) Loss of love and affection Rs. 25,000/- Funeral expenses Rs. 2,000/- Total Rs.5,31,000/- Therefore, the respondents 1 to 5-claimants are entitled to the modified compensation of Rs.5,31,000/- with interest at 9% per annum as against Rs.10,51,000/- awarded by the Tribunal. 10. The learned counsel for the appellant-Transport Corporation submitted that the 50% of the award amount has already been deposited as per the order of this Court dated 10.11.2003 and the claimants also permitted to withdraw 50% of the deposited amount as per order dated 16.03.2004. It is represented that the respondents 4 and 5-claimants also attained majority. Under these circumstances, the respondents 1 to 5-claimants are permitted to withdraw their share in the modified amount of Rs.5,31,000/- with interest at 9% less the amount already withdrawn on making proper application. The insurance company is also permitted to withdraw the balance amount on making proper application. 11. With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.