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2010 DIGILAW 3873 (MAD)

National Insurance Co. Ltd. , Chennai v. V. Balu Pillai

2010-08-31

P.P.S.JANARTHANA RAJA

body2010
Judgment :- 1. C.M.A.No.2989 of 2004 is preferred by the appellant insurance company against the award dated 01.03.2004 made in M.C.O.P No.5867 of 1999 on the file of the Motor Accident Claims Tribunal, (II Small Causes Court), Chennai. Cross Objection No.112 of 2010 filed by the claimants against the appeal already preferred in C.M.A.No.2989 of 2004 against the award dated 01.03.2004 made in M.C.O.P No.5867 of 1999 on the file of the Motor Accident Claims Tribunal, (II Small Causes Court), Chennai. When the matter came up for hearing, the Cross Objection No.112 of 2010 was not numbered, in the interest of justice, the Registry was directed to number the Cross Objection and both the appeal as well as the Cross Objection were taken up together and disposed of by a common judgment. 2. Background facts in a nutshell are as follows: One deceased Andavar met with motor traffic accident on 27.06.1999, at about 22.00 hours. The deceased was riding his Bajaj M.80 Scooter bearing registration No.TN-09-M-7544 from West Mambalam to Vadapalani. While he was proceeding opposite to A.V.M Hall, a Mini Lorry bearing registration No.TNV 7761 came in a rash and negligent manner and hit the Bajaj M.80 Scooter. Due to the impact, the deceased sustained grievous injuries and died on the spot. The claimants are the parents of the deceased. They claimed compensation of Rs.6,00,000/-. The said mini lorry was insured with the appellant insurance company who resisted the claim. On pleadings, the Tribunal framed the following issues. (i) Whether the accident had occurred due to the rash and negligent driving of the driver of the mini lorry or not ? (ii) What is the compensation, the claimants are 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 mini lorry and awarded compensation of Rs.4,20,100/-with interest @ 9% per annum from the date of claim petition and the details of the same are as under. Loss of income= Rs.4,08,000/- Damage to clothe= Rs. 100/- Funeral expenses= Rs. 2,000/- Loss of marital life= Rs. 10,000/- Total= Rs.4,20,100/- Aggrieved by that award, the appellant insurance company has filed the present appeal and the claimants have filed the cross objection for enhancement. 3. Loss of income= Rs.4,08,000/- Damage to clothe= Rs. 100/- Funeral expenses= Rs. 2,000/- Loss of marital life= Rs. 10,000/- Total= Rs.4,20,100/- Aggrieved by that award, the appellant insurance company has filed the present appeal and the claimants have filed the cross objection for enhancement. 3. The learned counsel appearing for the appellant-Insurance company questioned only the quantum of the award and vehemently contended that the award passed by the Tribunal is excessive, exorbitant, and also without any basis and justification. Further, it was contended that the deceased was a bachelor and therefore, the Tribunal ought to have adopted the multiplier on the basis of the claimants age and further submitted that the Tribunal is wrong in fixing the monthly income at Rs.7,000/-. Therefore, the award passed by the Tribunal is not in accordance with law and the same should be set aside. 4. The Learned counsel appearing for the claimants submitted that the Tribunal awarded a very low and meagre sum of compensation without any basis and the Tribunal ought to have awarded compensation as claimed by the claimants. Further, the Tribunal has not considered the relevant material and also not followed the principles of assessment before passing the award. Therefore, the award passed by the Tribunal is not in accordance with law and it is a fit case for enhancement. 5. Heard the counsel. On the side of the claimants, P.Ws.1 to 3 were examined and documents Exs.P1 to P11 were marked. On the side of the appellant, no one was examined and no document was marked to substantiate their claim. One Balu Pillai, who is the father of the deceased was examined as P.W.1. P.W.2 is Govindasamy, who is also a vegetable vendor in the same place. P.W.3 is one Thanusu, who is the eye witness to the accident. Ex.P1 is the heirship certificate, Ex.P2 is the post-mortem certificate, Ex.P3 is the death certificate, Ex.P4 is the death report, Ex.P5 is the age proof, Ex.P6 is the receipt, Ex.P7 is the income record, Ex.P8 is the FIR, Ex.P9 is the diagram, Ex.P10 is the charge sheet, Ex.P11 is the judgment copy were marked. After considering the above oral and documentary evidence, the Tribunal has given a categorical finding that the accident had occurred only due to the rash and negligent driving of the driver of the mini lorry. It is a question of fact. After considering the above oral and documentary evidence, the Tribunal has given a categorical finding that the accident had occurred only due to the rash and negligent driving of the driver of the mini lorry. It is a question of fact. The finding is based on valid materials. Therefore, the same is 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. 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 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. 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 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. 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 dependant 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 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. 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. 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. 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 accident, the deceased was aged about 21 years. P.W.1 is the father of the deceased. In his evidence, it is stated that the deceased was a Vegetable Merchant in Station Road Bazaar, West Mambalam, Chennai. He claimed that the deceased was earning a sum of Rs.8,000/- per month. EX.P2 is the post-mortem certificate, in which, it is stated that the age of the deceased is 21 years. P.W.1 is the father of the deceased. In his evidence, it is stated that the deceased was a Vegetable Merchant in Station Road Bazaar, West Mambalam, Chennai. He claimed that the deceased was earning a sum of Rs.8,000/- per month. EX.P2 is the post-mortem certificate, in which, it is stated that the age of the deceased is 21 years. Therefore, the Tribunal fixed the age of the deceased at 21 years. P.W.2 is also a Vegetable Merchant in the same place. In his evidence, it is stated that there are 86 shops in the Market and the deceased was also a member of the Small Vendor Association and Ex.P7 is also corroborate the same and further stated that the deceased was earning Rs.250/- to Rs.300/- per day. Therefore, the Tribunal fixed the monthly income of the deceased at Rs.7,000/-but there is no concrete evidence available on record to show that the deceased was earning Rs.7,000/- per month. Out of the said sum, 1/3 of Rs.2,333/- was deducted towards personal expenses and the balance sum was arrived at Rs.4,667/-but the Tribunal was of the view that the deceased being a bachelor, he would have contributed only Rs.2,000/- to his family. Therefore, the Tribunal fixed the monthly contribution of the deceased to the family at Rs.2,000/-and the annual contribution is works out to Rs.24,000/- (Rs.2000x12). After taking into consideration of the age of the deceased, the Tribunal adopted multiplier 17 and computed the loss of income at Rs.4,08,000/-(24,000x17). Learned counsel for the appellant vehemently contended that the Tribunal ought not to have adopted the multiplier on the basis of the age of the deceased and only the claimants age should be taken into consideration. In the present case, the age of the father of the deceased is 59 and the age of the mother of the deceased is 53. Therefore, the age of the mother should be taken into consideration for the purpose of determining the multiplier and if the age of the mother is taken, the correct multiplier as per the Second Schedule to Section 163-A of the Motor Vehicles Act is 11. In support of his contention, the Learned counsel for the appellant relied on a Supreme Court judgment in the case of Syed Basheer Ahamed and others Vs. Mohd. Jameel and another, reported in 2009(1) CTC 743. In support of his contention, the Learned counsel for the appellant relied on a Supreme Court judgment in the case of Syed Basheer Ahamed and others Vs. Mohd. Jameel and another, reported in 2009(1) CTC 743. It is well settled legal principles that when bachelor dies, only the age of the claimants should be taken into consideration for the purpose of determining the multiplier. According to the above discussion, this Court is of the view that it is reasonable to take the age of the mother for the purpose of determining the multiplier and the correct multiplier according to her age as per the Second Schedule to Section 163-A of the Motor Vehicles Act is 11. There is no concrete evidence available on record to show that the deceased was earning Rs.7,000/- per month. Therefore, it is reasonable to fix the monthly salary of the deceased at Rs.6,000/- and on the basis of the principles enunciated in the case of Syed Basheer Ahamed and others Vs. Mohd. Jameel and another, reported in 2009(1) CTC 743 cited supra, 50% of Rs.3,000/-is deducted towards personal expenses and the balance sum of Rs.3,000/- is taken as the monthly contribution of the deceased and the loss of dependency is works out to Rs.3,96,000/-(Rs.3000x12x11). Therefore, the claimants are entitled to Rs.3,96,000/- towards loss of income as against Rs.4,08,000/-awarded by the Tribunal. Further, the Tribunal awarded a sum of Rs.100/-towards damage to clothe which is reasonable and the same is confirmed. The Tribunal has awarded a sum of Rs.2,000/- towards funeral expenses which is very low and meagre and it is reasonable to award a sum of Rs.5,000/- under that head as against Rs.2,000/-awarded by the Tribunal. Further, the Tribunal has not awarded any sum towards transportation and love and affection. After considering the facts and circumstances of the case, it is reasonable to award a sum of Rs.5,000/-towards transportation. Parents lost the love and affection of the son. Therefore, it is reasonable to award a sum of Rs.25,000/- towards love and affection. Moreover, the Tribunal awarded a sum of Rs.5,000/- towards loss of marital life and the award under this head is not in accordance with law and it should be the loss of expectation of life. Therefore, it is reasonable to award Rs.10,000/-towards loss of expectation of life. However, the Tribunal has not awarded any sum towards future prospects. Moreover, the Tribunal awarded a sum of Rs.5,000/- towards loss of marital life and the award under this head is not in accordance with law and it should be the loss of expectation of life. Therefore, it is reasonable to award Rs.10,000/-towards loss of expectation of life. However, the Tribunal has not awarded any sum towards future prospects. In the case of Syed Basheer Ahamed and others Vs. Mohd. Jameel and another, reported in 2009(1) CTC 743, the Apex Court in paragraph No.16 held as follows: 16. As regards the future prospects of the deceased, as noted above, except for copies of account of the deceased in the books of account of his client, after the death, no other reliable evidence has been brought on record to show that the future plans of the deceased regarding expansion or diversification of his business. In our view, a bare argument by learned counsel for the appellants that the deceased had a potential of expanding his business, cannot be accepted as sufficient material to determine the future prospects of the deceased. The decisions of this Court relied upon by learned counsel for the appellants do not lay down any abstract proposition of law in this regard, which are otherwise distinguishable on facts. After taking into consideration of the law laid down in the aforesaid judgment, it is reasonable to award a sum of Rs.9,000/-towards future prospects. The Tribunal awarded interest of 9% per annum. After taking into consideration of the date of accident, date of award and the prevailing rate of interest during that period, the interest of 9% awarded by the Tribunal is reasonable and the same is confirmed. The modified amount of the compensation are as under. Loss of dependency= Rs.3,96,000/- Damage to clothe= Rs. 100/- Funeral expenses= Rs. 5,000/- Transportation= Rs. 5,000/- Love and affection = Rs. 25,000/- Loss of expectation of life= Rs. 10,000/- Loss of future prospects= Rs. 9,000/- Total= Rs.4,50,100/- (Less) Amount awarded by the Tribunal= Rs.4,20,100/- Enhanced compensation= Rs. 30,000/- 9. In the result, the claimants are entitled to enhanced compensation of Rs.30,000/-with interest @ 9% per annum from the date of claim petition. The appellant insurance company is directed to deposit the enhanced compensation of Rs.30,000/- with interest @ 9% per annum within a period of six weeks from the date of receipt of a copy of this order. In the result, the claimants are entitled to enhanced compensation of Rs.30,000/-with interest @ 9% per annum from the date of claim petition. The appellant insurance company is directed to deposit the enhanced compensation of Rs.30,000/- with interest @ 9% per annum within a period of six weeks from the date of receipt of a copy of this order. On such deposit, the claimants are entitled to withdraw the same, on making proper application. In respect of the earlier award amount of Rs.4,20,100/-, it was stated by the counsel for the appellant insurance company that the entire award amount has already been deposited and the claimants were also permitted to withdraw 50% of the award amount. Under these circumstances, the claimant is permitted to withdraw the balance amount, on making proper application. 10. With the above modifications, the appeal as well as the cross objection are disposed of. No costs.