Important point
Choice of multiplier is determined by age of deceased (or that of the claimants whichever is higher) and by 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.

Headnote:Motor Vehicles Act, 1988—Section 166—Assessment of compensation in death case in motor accident—Deceased was 34 years of age and had gross monthly salary of Rs. 5843/- —Tribunal making deduction of 1/3rd of said amount towards personal expenses worked out annual dependency for claimant, widow, children and mother, at Rs. 46,752 per annum and applying multiplier of 17 calculated amount at Rs. 7,94,784 and Rs. 40000/- for pain and sufferings, loss of love and affection etc. etc.—High Court upheld the award—Appeal—Contention that respondent No. 1 got clerical job on compassionate ground in place of deceased who worked as Upper Division Clerk and that multiplier was on higher side—Measure of damage is pecuniary loss suffered and is likely to be suffered by each dependent—Multiplier method involved the ascertainment of loss of dependency or multiplicand and capitalizing the multiplicand by appropriate multiplier—Choice of multiplier is determined by age of deceased and by calculation as to what capital sum, if invested at a rate of interest in a stable economy, would yield the multiplicand by way of annual interest—Appropriate multiplier in this case would be 13 and accordingly compensation would come to Rs. 6 lakhs and thus instead of Rs. 8,34,794, claimants were entitled to Rs. 6 lakhs—Interest at 7.5 allowed on the amount since claim application was filed—Rs. 1.5 lakh share of each minor to be invested in Bank till they became major.
       Held : The measure of damage is the pecuniary loss suffered and is likely to be suffered by each dependant. Thus “except where there is express statutory direction to the contrary, the damages to be awarded to a dependant of a deceased person under the Fatal Accidents Acts must take into account any pecuniary benefit accruing to that dependant in consequence of the death of the deceased. It is the net loss on balance which constitutes the measure of damages.” Lord Wright in the Davies’s case (supra) said, “The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing on the one hand the loss to him of the future pecuniary benefit, and on the other any pecuniary advantage which from whatever sources comes to him by reason of the death.” These words of Lord Wright were adopted as the principle applicable also under the Indian Act in Gobald Motor Service Ltd. v. R.M.K. Veluswami (1962(1) SCR 929) where this Court stated that the general principle is that the actual pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimant of the future pecuniary benefit and on the other any pecuniary advantage which from whatever sources 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. (Para 10)
       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 15)
       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. Taking into account the relevant factors and the age of the deceased it would be appropriate to apply the multiplier of 13. On that basis the compensation comes to about Rs. 6 lakhs and is rounded to Rs. 6 lakhs. In other words, instead of Rs. 8,34,794 the claimants will be entitled to Rs. 6 lakhs. Going by the applicable bank rate of interest, the interest payable in the case is fixed at 7.5 per annum from the date of application till payment after adjustment of amount, if any, paid. (Paras 20 and 21)

Judgment

Arijit Pasayat, J.—Leave granted.

2. Challenge in this Appeal is to the judgment rendered by a Division Bench of the Kerala High Court affirming the Award made by the Motor Accident Claims Tribunal, Neyyattinkara (in short the ‘Tribunal’), disposing of an application filed under Section 166 of the Motor Vehicles Act, 1988 (in short the ‘Act’).

3. Background facts according to the respondents (hereinafter referred to as ‘Claimants’) are a follows:

4. On 5th July, 2002 at about 7.30 P.M. one Satheesh Kumar (hereinafter referred to as ‘the deceased’) lost his life in an automobile accident. The deceased was riding a Hero Honda Motor Cycle. The bus belonging to the appellant- Corporation (hereinafter referred to as the ‘Corporation’) dashed against the deceased as a result of which he sustained serious injuries on the left side of his body, thereafter, he was taken to the Medical College Hospital, Thirueanantpuram where he expired. A claim petition was filed by the respondents who are the widow, children and the mother of the deceased before the Tribunal. A claim of Rs. 25 lakhs as compensation was made. Considering the evidence on record the Tribunal came to hold that the claimants are entitled to Rs. 8,34,784 as compensation. Age of the deceased was taken to be 34 years. With reference to the salary certificate the gross monthly income was taken to be Rs. 5,843 and making deduction of 1/3rd of the said amount towards personal expenses, the contribution to the family was worked out at Rs. 3,896 and annual dependency was arrived at Rs. 46,752. Multiplier of 17 was applied and accordingly the amount was calculated at Rs. 7,94,784. In addition to that a sum of Rs. 40,000 for pain and sufferings, loss of love and affection, transportation, post mortem and funeral expenditure was awarded. The award was challenged by the Corporation before the High Court on several grounds. Primary stand was regarding alleged contributory negligence on the part of the deceased. It was, therefore, urged that the amount awarded cannot be maintained. It was also submitted that there was no loss of dependency as the respondent No. 1 had got clerical job on compassionate ground in place of the deceased who was working as an Upper Division Clerk in the Civil Supplies Corporation. The multiplier was also stated to be on the higher side. The High Court did not accept the plea regarding contributory negligence though reliance was placed on the evidence of a passenger in the bus (PW 2), who was also examined. On consideration of the claimant’s case relating to the accident, High Court felt that there was no scope for any interference.

5. The points urged before the High Court was reiterated by learned counsel for the appellant-Corporation. Learned counsel for the respondent-Claimants supported judgments of the Tribunal and the High Court.

6. We find that no definite material as regards contributory negligence was placed on record. The evidence of PW-2, on which strong reliance was placed by learned counsel for the appellant, does not really further the case of the appellant-Corporation. There was no definite material to infer that deceased by his negligent acts contributed to the accident.

7. The residual question is whether the quantum as awarded is on the higher side as claimed by the appellant-Corporation. It appears that the High Court referred to the Second Schedule to the Act in terms of Section 163(A) to hold that the multiplier of 17 is proper.

8. 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 Da

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2005 Supreme(SC) 1313

Important pointChoice of multiplier is determined by age of deceased (or that of the claimants whichever is higher) and by 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.

Cases Referred (4)

Important point
Choice of multiplier is determined by age of deceased (or that of the claimants whichever is higher) and by 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.