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2011 DIGILAW 983 (MAD)

United India Insurance Co. Ltd. , v. Vijayakumari

2011-02-24

P.P.S.JANARTHANA RAJA

body2011
Judgment :- 1. The appeal is preferred by the appellant-Insurance Company, against the judgment and decree dated 21.04.2010 made in MCOP No.188 of 2006 on the file of Motor Accident Claims Tribunal, Sub Court, Gudiyatham. 2. When the matter came up for hearing, the counsel for the Caveator objected the admission and on consent by both parties, the appeal was taken up for final hearing. 3. Background facts in a nutshell are as follows: The deceased one Chidambaram met with a motor traffic accident on 02.06.2006 at about 4.45 pm. The said deceased was proceeding as a rider in motor cycle bearing Regn. No.TN23 AB 1235 with the pillion rider from South to North Direction and at that time, a Toyota Qualis car bearing Regn.No.TN02 P 7822, came in a rash and negligent manner and also in a high speed, and hit the two-wheeler. Due to the impact of the same, the deceased sustained multiple grievous injuries all over the body. He was immediately taken to CMC Hospital, Vellore and he died on 25.06.2006. The claimants are wife, two sons and mother of the deceased. They claimed a compensation of Rs.75,00,000/-. The said Qualis car was insured with the appellant-Insurance Company, who resisted the claim. On pleadings the Tribunal framed the following issues:- "1. Whether the accident happened due to the rash and negligent driving of the driver of the vehicle bearing Regn. No.TN02 P 7822? 2. Whether the petitioner is entitled for compensation. If so, what is the amount entitled to? After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to rash and negligent driving of the driver of the Qualis car and awarded a compensation of Rs.18,91,600/- (Actual award amount is Rs.18,76,600/- and there is a totaling error) with interest at 6% per annum from the date of petition and the details of the same are as under:- Loss of Income Rs.17,31,600/- Loss of consortium Rs. 15,000/- Funeral Expenses Rs. 10,000/- Medical Expenses Rs. 1,20,000/- ----------------- Rs.18,91,600/- ----------------- Aggrieved by that award, the appellant-Insurance Company has filed the present appeal. 4. The learned counsel appearing for the appellant-Insurance Company, questioned only the quantum of compensation and vehemently contended that the compensation awarded by the Tribunal is excessive, exorbitant, without basis and justification. 15,000/- Funeral Expenses Rs. 10,000/- Medical Expenses Rs. 1,20,000/- ----------------- Rs.18,91,600/- ----------------- Aggrieved by that award, the appellant-Insurance Company has filed the present appeal. 4. The learned counsel appearing for the appellant-Insurance Company, questioned only the quantum of compensation and vehemently contended that the compensation awarded by the Tribunal is excessive, exorbitant, without basis and justification. The counsel for the appellant-Insurance Company further submitted that the Tribunal is wrong in applying multiplier 13' and the correct multiplier to be adopted in the present case is 8'. Therefore, the sum of Rs.17,31,600/- awarded by the Tribunal towards loss of income is without any basis. Therefore, the award passed by the Tribunal is not in accordance with law and the same has to be set aside. 5. The 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. It is a question of fact. It is not a perverse order. Hence the order of the Tribunal is in accordance with law and the same has to be confirmed. 6. Heard the counsel and perused the document on record. On the side of the claimants/respondents, P.Ws.1 to 3 were examined and documents Exs.P1 to P20 were marked. Wife of the deceased was examined as P.W.1. One Mr.Dayalan, the eye witness to the accident was examined as P.W.2. One Mr.Devaraj, Assistant Headmaster, representative of the school was examined as PW3. Ex.P1, is the death summary. Ex.P2, is the copy of FIR dated 03.06.2006. Ex.P3, is the Postmortem report. Ex.P4, is the Motor Vehicle Inspector's Report. Ex.P5, is the charge sheet. Ex.P6, is the legal heir certificate. Ex.P7, is the copy of the insurance policy. Ex.P8, is the LLR certificate of the deceased. Ex.P9, is the SSLC certificate of the deceased. Ex.P.10, is the salary certificate of the deceased. Ex.P11, is the copy of B.Sc. Certificate of the deceased. Ex.P12, is the the copy of the B.Ed. Degree of the deceased. Ex.P13, is the M.Sc. Certificate of the deceased. Ex.P14, educational certificate of the son of the deceased. Exs.P15 & P16, is the letter and Medical bills issued by CMC Hospital. Ex.P17, is the letter issued by Govt. Girls Hr. Sec. School, Anaicut. Ex.P18, is the Employee certificate of the deceased. Ex.P19, is the salary register of the deceased. Ex.P13, is the M.Sc. Certificate of the deceased. Ex.P14, educational certificate of the son of the deceased. Exs.P15 & P16, is the letter and Medical bills issued by CMC Hospital. Ex.P17, is the letter issued by Govt. Girls Hr. Sec. School, Anaicut. Ex.P18, is the Employee certificate of the deceased. Ex.P19, is the salary register of the deceased. Ex.P20, is the 6th Pay commission order. On the side of the appellant-Insurance Company, one Mr.Sriniavasan, officer of the appellant-Insurance company was examined as RW1 and one Mr.Krishnamoorthy, the investigating officer, was examined as RW2. But, no documents were marked in support of their claim. After considering the oral and documentary evidence, the Tribunal has given a categorical finding that the accident has occurred due to rash and negligent driving of the driver of the Qualis car. It is a question of fact and based on valid materials and evidences and so the same is confirmed. 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 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) 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 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 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 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. 9. At the time of the accident, the deceased was 51 years old. Ex.P9, is the SSLC certificate, in which it is stated that the age of the deceased was 51 years at the time of the accident. Ex.P3, is the postmortem report, in which also it is stated that the age of the deceased was 51 years. Therefore, the Tribunal fixed the aged of the deceased as 51 years, at the time of the accident. Ex.P3, is the postmortem report, in which also it is stated that the age of the deceased was 51 years. Therefore, the Tribunal fixed the aged of the deceased as 51 years, at the time of the accident. In the evidence of PW1, it is stated that the deceased was a teacher, P.G. Assistant and also Headmaster in Government Girls Hr. Secondary School, Anaicut, earning a sum of Rs.25,000/- per month. Ex.P10, is the salary certificate, in which it is stated that the deceased was earning Rs.16,560/-. Therefore, the Tribunal accepted the same and out of the said sum, 1/3 was deducted towards personal expenses and the Tribunal has taken Rs.11,100/- as monthly contribution to the family. The annual contribution works out to Rs.1,33,200/-(Rs.11,000/- x 12). After considering the age of the deceased at 51 years, adopted multiplier 13' and thereafter has determined the loss of income at Rs.17,31,600/-. The counsel for the appellant vehemently contended that the age of retirement of the deceased is 58 years and earning period should be calculated only upto the age of retirement. He further contended that multiplier 13' adopted by the tribunal is not in accordance with law and the correct multiplier is 8'. The counsel appearing for the claimants vehemently contended that if the salary taken by the tribunal is only based on the evidence of Ex.P10, salary certificate, the deceased is entitled to the salary of Rs.20,640/- as per the 6th pay commission's report. Ex.P20, is the salary of the deceased as per the 6th pay commission and further, P.W.3, is the Assistant Headmaster, who represented the school. In his evidence, he has confirmed the same. Though, oral and documentary evidences were available before the tribunal, the Tribunal has not considered the same. Therefore, the counsel for the claimants submitted that the correct salary to be taken in the present case is Rs.20,640/-, as against Rs.16,560/- taken by the tribunal. Therefore, the annual loss of income is computed as follows: Monthly salary : Rs.20,640/- Annual Salary : Rs.20,640/- x 12 = Rs.2,47,680/- after deducting 15% of the annual salary (Rs.37,152/-) towards Income Tax, the annual contribution works out to Rs.2,10,528/-. Out of the said sum, 1/3 is deducted towards personal expenses and the balance 2/3 works out to Rs.1,40,352/-. So, the annual income was modified to Rs.1,40,352/-. There is no dispute regarding the same. Out of the said sum, 1/3 is deducted towards personal expenses and the balance 2/3 works out to Rs.1,40,352/-. So, the annual income was modified to Rs.1,40,352/-. There is no dispute regarding the same. Further, the Tribunal has wrongly adopted the multiplier of 13' and the correct multiplier to be adopted in the present case is 8'. After considering the remaining period of retirement age and as the monthly income of the deceased is modified, the correct multiplier to be adopted is 8'. There is no dispute regarding the same. Accordingly, if multiplier 8' is adopted, the loss of income works out to Rs.11,22,816/- as against Rs.17,31,600/-awarded by the Tribunal. The Tribunal also awarded a sum of Rs.1,20,000/- towards medical expenses. Immediately after the accident, the deceased was taken to CMC Hospital and he was treated as inpatient. Subsequently, he died on 25.06.2006 and Ex.P16, is the series of medical bills. It is an actual expenditure and the amount awarded under this head is very reasonable. There is no dispute regarding the same. After considering the same, the Tribunal has correctly awarded a sum of Rs.1,20,000/-towards medical expenses. It is also reasonable and the same is confirmed. The Tribunal has awarded only a sum of Rs.15,000/- towards loss of consortium. The age of the widow is 43 years, at the time of the accident. The award amount is very low. It is reasonable to award a sum of Rs.25,000/- towards loss of consortium, as against Rs.15,000/- awarded by the Tribunal. The Tribunal has also awarded a sum of Rs.10,000/- towards funeral expenses. After considering the facts and circumstances of the case, the amount awarded towards funeral expenses is very reasonable and the same is confirmed. The Tribunal has not awarded any sum towards loss of love and affection towards two children and mother of the deceased. The children has lost the love of their father and mother has lost the love of her son. After considering the age of the children and the age of the mother, it is reasonable to award a sum of Rs.30,000/-towards loss of love and affection. Further, it is not disputed that the deceased was a Headmaster of school. The children has lost the love of their father and mother has lost the love of her son. After considering the age of the children and the age of the mother, it is reasonable to award a sum of Rs.30,000/-towards loss of love and affection. Further, it is not disputed that the deceased was a Headmaster of school. After his retirement, definitely, he would have taken private tuition and earned some income after the retirement and also taking into consideration the expectation of life in India and also the qualifications of the deceased, it is reasonable to award a sum of Rs.30,000/- towards loss of future prospects. Further, the tribunal has not awarded any amount towards transportation. It is not in dispute that he was admitted in CMC Hospital and he died there. Therefore, a sum of Rs.10,000/- is awarded towards transportation. The Tribunal has awarded interest at the rate of 6% per annum. After taking into consideration the date of accident, date of award, quantum of award and also 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.11,22,816/- Medical Bills Rs. 1,20,000/- Funeral Expenses Rs. 10,000/- Transportation Rs. 10,000/- Loss of love and affection Rs. 30,000/- Loss of future prospects Rs. 30,000/- ------------------ TotalRs.13,47,816/- rounded off toRs.13,48,000/- ------------------ Therefore, the claimant is entitled to the modified compensation of Rs.13,48,000/- with interest at 6% from the date of petition as against Rs.18,91,600/- awarded by the Tribunal. 10. In these circumstances, the appellant-Insurance company is directed to deposit the modified compensation of Rs.13,48,000/- with interest of 6% per annum, less the amount already deposited, within a period of six weeks from the date of receipt of a copy of this order. It is stated that all the claimants are major and therefore, on deposit of the same, the claimants are permitted to withdraw the modified amount of Rs.13,48,000/-, with interest at the rate of 6% per annum, less the amount already withdrawn, on making proper application. 11. With the above directions, the Civil Miscellaneous Appeal is disposed of. No costs. Consequently the connected Miscellaneous Petition is closed.