IMPORTANT POINT
Where the deceased was aged 37 years and left behind his widow, a minor daughter and his parents, appropriate multiplier would be 12 for determining the compensation claim.

Headnote:Motor Vehicles Act, 1988 – Sections 173 – Accident – Fixation of appropriate multiplier – Claim – Deceased aged 37 years was driver of state Corporation traveling in the Corporation bus – Vehicle fell into a river and deceased sitting in front seat got buried in the sand and died – Claim of compensation of Rs. 15,00,000/- - Monthly salary of deceased was Rs. 6,040/- and he had agricultural income–Tribunal allowed the claim petition and awarded a sum of Rs.7,72,000/- with 9% interest from the date of petition till payment–Tribunal had adopted a multiplier of 16 on annual income of Rs. 6,000/- and after deduction of 1/3 for personal expenses worked out entitlement of claimants–Considering age of deceased what would be the appropriate multiplier–Held, it would be 12 – Total entitlement of claimants is fixed at Rs. 6,00,000/- Fixation of rate of interest at 7.5% instead of 9% as done by the Tribunal and maintained by the High Court.
       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 8)
       Held : Considering the age of the deceased appropriate multiplier would be 12. The income fixed by the Tribunal and the deduction for personal expenses do not warrant any interference. Worked out on that basis, the entitlement of the loss of income is Rs.5,76,000/. The other expenses awarded remain unaltered. In other words, total entitlement of the claimants is fixed at Rs. 6,00,000/-. It would be appropriate to fix the rate of interest at 7.5% instead of g% as done by the Tribunal and maintained by the High Court.
       (Para 14)
       Held : Out of the total amount, a sum of Rs.1,00,000/- shall be kept as fixed deposit in respect of respondent No.1. Further a sum of Rs.4,00,000/- shall be kept in fixed deposit in the name of minor, respondent No.2-Sarojini. Fixed deposit of Rs.50,000/ - each shall be made in the names of respondent No.3, Lakshmi and respondent No.4-Duraisingam. The balance amount shall be paid to respondent No.1-widow of the deceased. (Para 15)

JUDGMENT

Dr. ARIJIT PASAYAT, J.—

1.Leave granted.

2.Challenge in this appeal is to the order passed by a Division bench of the Madras High Court dismissing the appeal under Section 173 of the Motor Vehicles Act, 1988 (in short the ‘Act’) filed by the appellant-Tamil Nadu State Transport Corporation (hereinafter referred to as the ‘Corporation’).

3.One Sathyabalan (hereinafter referred to as the ‘deceased’) was the driver of the appellant-Corporation and was traveling in the Corporation bus. The vehicle met with an accident, the driver of the bus tried to avoid collision with a lorry, dashed against the bridge. The wall of the bridge broke and the bus capsized and fell into the river and the deceased who was -sitting in the front seat got buried in the sand and died. The respondent i.e. the widow of the deceased, his minor daughter and his parents filed a claim petition before the Motor Accidents Claims Tribunal, Maylladutturai, (hereinafter referred to as the ‘Tribunal’) claiming compensation of Rs. 15,00,000/-. In the claim petition, it was indicated that the monthly salary of the deceased was Rs.6,040 / - and he had agricultural income and was aged about 37 years.

4.The appellant-Corporation took the stand that the accident was purely an act of God. There was no negligence which can be attributed to the driver of the bus. The Tribunal allowed the claim petition by the present respondents and awarded a sum of Rs.7,72,000/- with g% interest from the date of petition till payment. Aggrieved by the compensation awarded the appellant Corporation filed an appeal before the Madras High Court. The same was dismissed as noted above by the impugned judgment. It is to be noted that the tribunal had adopted a multiplier of 16 on annual income of Rs.6,000/- and after deduction of 1/3 for personal expenses worked out the entitlement of the claimants.

5.In support of the appeal, learned counsel for the appellant-Corporation submitted that the multiplier as adopted is high and same is the case with the rate of interest applied. It was pointed out that the loss of income on the ground of death was fixed at Rs.7,48,000/- and that for loss of happiness of married life and loss of love and affection Rs.10,000/- each was allowed and for funeral and transportation expenses Rs.2,000/- each was awarded. Therefore, the total entitlement was fixed at Rs.7,72,000/-.

6.Certain principles were highlighted by this Court in the case of Municipal Corporation of Delhi Subhagwanti,1 (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 Duffryn Associated Collieries Ltd.,2 (All ER p.665 A-B) 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 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.”

7.There were two methods adopted to determine and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case (supra) and the second in Nance v. British Columbia Electric Railway Co. Ltd.,3(1951 (2) All ER 448).

8.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 m

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2007 Supreme(SC) 306

IMPORTANT POINTWhere the deceased was aged 37 years and left behind his widow, a minor daughter and his parents, appropriate multiplier would be 12 for determining the compensation claim.

Cases Referred (10)

IMPORTANT POINT
Where the deceased was aged 37 years and left behind his widow, a minor daughter and his parents, appropriate multiplier would be 12 for determining the compensation claim.