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2013 DIGILAW 371 (JK)

New India Assurance Company Limited v. Shamas-ud-din Katoch

2013-06-26

JANAK RAJ KOTWAL

body2013
1. As suggested by the counsel for both sides, this appeal is taken up for final consideration. 2. Heard. Perused the record. 3. Respondents-1 and 2 are the parents of deceased, Arif Shamas, who died in a road traffic accident on 12.10.2010 on the Jammu-Srinagar National High Way within the jurisdiction of Police Station, Ramban. The deceased was riding his motorbike and was knocked down from behind by offending vehicle, bearing registration No. JK 2Q-8714. He died. This accident had occurred due to negligence of the driver of the offending vehicle. On a claim being preferred, learned Motor Accident Claims Tribunal, Ramban vide order dt. 12.9.2012 has awarded compensation of Rs.14, 50,000 to his parents. Compensation awarded under different heads is as under: 1. Loss of dependency Rs. 14,40,000/ 2. Funeral expenses Rs. 5,000/ 3. Loss of estate Rs. 5,000/ Total Rs. 14, 50,000/ 4. Compensation is to be paid by the appellant in its capacity as the insurer of the offending vehicle. Appellant, however, has challenged the award in this appeal mainly on the question of the quantum of the compensation awarded by the Tribunal under the head "Loss of dependency". 5. Deceased was a Diploma-holder Electrical Engineer. He was working as a site engineer with a private concern and drawing monthly salary, of Rs. 9100/. He was 22. While assuming the multiplicand (contribution towards the claimants) as Rs. 90,000/, learned Tribunal applied multiplier of 16 and assessed the compensation on account of the "Loss of dependency" suffered by the claimants (parents) to the tune of Rs. 14,40,000/. Multiplier of 18 was 1 selected on the basis of age of the deceased, which, however, has been scaled down to 16. 6. Learned counsel for the appellant, Mr. D. S. Chauhan, projected only that the learned Tribunal has erred in applying the multiplier on the basis of age of the deceased as it is contrary to law. He argued that Hon'ble Supreme Court in the basic judgment in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, (1994) 2 SCC 176 , while approving the multiplier method for awarding compensation in death cases, has emphasized that the multiplier should be applied on the basis of the age of the deceased or the claimant(s), whichever is higher. Mr. Mr. Chauhan concluded his submissions saying that the multiplier method as approved and explained by the Hon'ble Supreme Court in Susamma Thomas holds ground even today so the multiplier applied by the learned Tribunal may be scaled down appropriately. Per contra, Mr. Bari Abdullah, learned counsel for the claimants, however, supported the award. 7. It would go without saying that the `multiplier method' is well recognized method and holds ground for determining fair compensation in death cases. This method came to be preferred by the Supreme Court in landmark decision in Susamma Thomas (supra) and reiterated and followed in another landmark three-judge bench decision in U.P. State Road Transport Corporation v. Tirlok Chandra, (1996)4 SCC 362 . Of late, the Supreme Court reiterated and further clarified the Multiplier method in Smt. Sarla Verma and Ors. v. Delhi Transport Corporation, AIR 2009 SC 3104 . Supreme Court in this case has extracted the principles laid down in Susamma Thomas as under: "In fatal accident action, the measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant as a result of the death. The assessment of damages to compensate the defendants 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 the 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." "The matter 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 capitalized by multiplying it by a figure representing the proper number of year's purchase". 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 of 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 year of age at the time of death and the life expectancy is 70 years, his 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 the immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible." 8. While applying the multiplier method for determining the fair compensation in a death case, age of the claimants (dependents) is no irrelevant factor. Age of the claimants is relevant and has important bearing in a case where the deceased is of lesser age than the claimants, particularly when the deceased is an unmarried person and the claimants are the parents only. In the case involving death of son, the period of dependency of the parents may not be that longer and in any case son's contribution towards the parents has to proportionately decrease after his marriage and having his own family. Age of the claimants in such cases, therefore, should not be ignored as has been done in this case. In the case involving death of son, the period of dependency of the parents may not be that longer and in any case son's contribution towards the parents has to proportionately decrease after his marriage and having his own family. Age of the claimants in such cases, therefore, should not be ignored as has been done in this case. And if it is ignored, the award would call for correction. 9. Age of the deceased was 22 so multiplier applicable thereby is 18. Age of the claimant is not evident from the record. The learned Tribunal has ignored this aspect of the matter. However, in the memorandum of appeal the appellant has stated the age of claimants/ respondents 1 & 2 as 48 and 40 respectively. Learned counsel for the appellant agree to this extent. Based upon the age of the mother, applicable multiplier would be 15. Multiplier, however, is to be scaled down keeping in view the uncertainties of life and lump sum amount to be paid. Taking all these factors into consideration, multiplier of 13 in my considered view is apt in this case. 10. Viewed thus, award is modified, and while applying the multiplier of 13, compensation under the head `loss of Dependence' is reduced to Rs. 11, 70,000/ (90,000 x 13). Rest everything in the impugned order stands. 11. Amount, if deposited by the appellant in this Court, be released in favour of the claimants strictly in terms of award, subject to modification made herein above, along with interest accrued thereupon. Excess amount, if any, be returned to the appellant. 12. Disposed of along with connected CMA.