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2005(4) Supreme 87
Supreme Court of India
(From Madras High Court)
Arijit Pasayat & S.H. Kapadia, JJ.
Tamil Nadu State Transport Corporation Ltd. —Appellant
versus
S. Rajapriya & Ors. —Respondents
Civil Appeal No. 2765 of 2005
(Arising out of SLP (C) No. 6144 of 2004)
Decided on 20-4-2005
Counsel for the Parties :
For the Appellant : Subramonium Prasad, Advocate.
Held : 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. (Para 12)
In Susamma Thomas’s case (supra) it was noted that the normal rate of interest was about 10% and accordingly the multiplier was worked out. As the interest rate is on the decline, the multiplier has to consequentially be raised. Therefore, instead of 16 the multiplier of 18 as was adopted in Trilok Chandra’s case (supra) appears to be appropriate. In fact in Trilok Chand’s case (supra), after reference to Second Schedule to the Act, it was noticed that the same suffers from many defects. It was pointed out that the same is to serve as a guide, but cannot be said to be invariable ready reckoner. However, the appropriate highest multiplier was held to be 18. The highest multiplier has to be for the age group of 21 years to 25 years when an ordinary Indian Citizen starts independently earning and the lowest would be in respect of a person in the age group of 60 to 70, which is the normal retirement age. Considering the age of the deceased and the principles indicated above, the appropriate multiplier would be 12 and not 16 as adopted by the Tribunal and affirmed by the High Court. By applying multiplier 12, amount of compensation is fixed at Rs. 4,50,000/- (in round figures). The Tribunal has fixed interest @ 9% per annum from the date of the claim petition. Taking note of the prevailing rate of interest in bank deposits, the same is fixed at 7.5% per annum. It is stated that a sum of Rs. 4,00,000/- has been deposited pursuant to the order dated 22.3.2004. The balance amount shall be deposited with the Tribunal within four weeks from today. Out of the total deposit 90% of the amount shall be kept in fixed deposit in the name of widow (respondent No. 1), minor child (respondent No. 2) and the mother (respondent No. 3) in the proportion of 35%, 40% and 15% respectively. Rest 10% shall be paid in cash equally to the widow and the mother. Fixed deposits shall be made initially for a period of five years and no withdrawal permitted and only monthly interest will be paid, so far as the fixed deposits in the names of the widow and the mother are concerned. So far as the minor child is concerned, fixed deposit shall be made initially for a period of five years and shall be renewed till the child attains majority. The monthly interest on the deposit shall also be released to the mother as the guardian of the minor. (Paras 17 and 18)
Certainly. Based on the provided legal document, here are the key points:
The case involves a fatal accident resulting in the death of a 38-year-old individual, with the claimants being the widow, minor son, and mother of the deceased (!) (!) .
The deceased was earning a monthly salary of Rs. 4,688, which was considered in calculating dependency loss (!) .
The tribunal initially assessed the dependency loss at Rs. 37,472 per annum and applied a multiplier of 16, resulting in a compensation amount of Rs. 6,09,552, which was upheld by the higher court (!) .
The appropriate multiplier should be determined based on the age of the deceased or the claimants, whichever is higher; in this case, considering the age of the deceased, a multiplier of 12 is deemed appropriate (!) (!) .
The rate of interest on the awarded compensation has been adjusted from 9% to 7.5% per annum, aligning with prevailing bank deposit rates (!) .
A sum of Rs. 4,00,000 has been deposited pursuant to the court’s order, with the remaining amount to be deposited within four weeks (!) .
Of the total deposit, 90% will be kept in fixed deposits in the names of the claimants in specified proportions, with no premature withdrawal permitted; the fixed deposits shall be initially for five years, with renewal until the minor attains majority, and only monthly interest will be paid (!) .
The remaining 10% of the compensation will be paid in cash equally to the widow and mother (!) .
No loans, advances, or pre-mature encashments are allowed on the fixed deposits, except in cases of urgent need, upon a reasoned application and order from the tribunal (!) .
The appeal was allowed, and the modifications regarding the multiplier and deposit arrangements were confirmed, with no costs awarded (!) .
These points summarize the legal principles and decisions relevant to the case, focusing on the calculation of compensation, interest rates, and deposit arrangements without referencing specific case law.
Judgment
Arijit Pasayat, J.—Leave granted.
2. Tamil Nadu State Transport Corporation Ltd. (hereinafter referred to as the ‘Corporation’) calls in question legality of the judgment rendered by a Division Bench of the Madras High Court dismissing the appeal filed by the Corporation. By the impugned order the Division Bench confirmed the compensation awarded to the respondents by the Motor Vehicle Accident Compensation Claim Tribunal, Principal District Judge, Thanjur (in short the ‘Tribunal’).
3. Background facts in a nutshell are as follows:
On 30.8.2001 one Sathyamurthy (hereinafter referred to as the ‘deceased’) lost his life in an automobile accident. His widow (respondent No. 1) and minor son (respondent No. 2) filed petition claiming compensation under the Motor Vehicles Act, 1988 (in short the ‘Act’). Deceased’s mother was impleaded as respondent No. 2 in the claim petition, while the Corporation was impleaded as respondent No. 1. It was stated in the claim petition that the accident occurred due to rash and negligent driving of the Corporation’s driver. Claim of Rs. 20 lakhs was made. Tribunal noted that the deceased was about 38 years of age and was getting monthly salary of Rs. 4688/- (annually Rs. 56,208/-) from the Corporation. After deductions one-third for personal expenses contribution of the deceased was fixed at Rs. 37,472/- per annum. As the deceased was about 38 years of age, multiplier of 16 was applied. Accordingly, the compensation was worked out at Rs. 6,09,552/-. The award was questioned in appeal before the Madras High Court and the Division Bench as noted above, dismissed the same.
4. In support of the appeal, learned counsel for the appellant submitted that quantum as arrived at the applying multiplier of 16 is high. There is no appearance on behalf of the respondents in spite of the notice. While issuing notice on 22.3.2004 the dispute was restricted to the appropriate multiplier to be adopted. The question regarding appropriate multiplier has been considered by this Court in General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors. (1994(2) SCC 176) and U.P. State Road Transport Corporation and Ors. v. Trilok Chandra and Ors. 1996(4) SCC 362).
5. Certain principles were highlighted by this Court in the case of Municipal Corporation of Delhi v. Subhagwanti (1966(3) SCR 649) in the matter of fixing the appropriate multiplier and computation of compensation. In a fatal accident action, the accepted measure of damages awarded to the dependants is the pecuniary loss suffered by them as a result of the death. “How much has the widow and family lost by the father’s death?” The answer to this lies in the oft quoted passage from the opinion of Lord Wright in Davies v. Powell Duffregn Associated Collieries Ltd. (1942 AC 601) which says:
“The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years’ purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow might have again married and thus ceased to be dependent, and other like matters of speculation and doubt.”
6. The rule in common law in Baker v. Bolton (1979(1) All ER 774) enunciated by Lord Ellenborough was that “in a Civil Court, the death of a human being could not be complained of as a injury,”. Indeed, the maxim action personalis moritur cum persona, had the effect that all actions in tort, with very few exceptions, also became extinguished with that person. Great changes were brought about by the Fatal Accidents Act, 1846 (now Fatal Accidents Act, 1976) and the Law Reforms (Miscellaneous Provisions) Act, 1934. Under the statu
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