Judgment:-

Dr. Arijit Pasayat, J.

Leave granted.

2. Challenge in this appeal is to the judgment of a learned Single Judge of the Uttaranchal High Court, partially allowing the appeal filed by the respondents. The appeal was filed before the High Court in terms of Section 173 of the Motor Vehicles Act, 1988 (in short the Act) seeking enhancement of the compensation as fixed by learned Ist Additional District Judge-cum-Motor Accident Claims Tribunal, Haridwar. (In short the MACT). The MACT had awarded compensation of Rs.1,64,500/- alongwith interest @ 9% p.a. from the date of claim.

3. The claim petition was filed inter-alia stating that on 2.9.2003 one Soorveer Singh (hereinafter referred to as the deceased) was driving a scooter. Suddenly, the bus owned by the present appellant-Corporation dashed against it. The vehicle was being driven in a rash and negligent manner. It is stated that the deceased was aged 43 years at the time of the accident and was a hawker and earning Rs.5,000/- p.m. The Corporation took the stand that there was actually no rash and negligent act of the driver. When the scooter was trying to overtake the truck it lost control and the accident occurred due to negligence of the claimant. The MACT held that there was no material to establish the income as claimed and accordingly a sum was fixed at Rs.15,000/- p.a. which is the notional income.

4. The High Court held that the notional income has to be taken at Rs.30,000/- p.a. and since the deceased was a Hawker he could have easily earned Rs.3,000/-p.m. and accordingly after making 1/3rd deduction for personal expenses the loss of dependency was assessed at Rs.24,000/-p.a. and multiplier of 15 was adopted. Accordingly, the compensation was fixed at Rs.3,60,000/-with 9% interest from the date of claim.

5. In support of the appeal, learned counsel for the appellant submitted that there was no basis indicated for taking the income at Rs.36,000/-p.a.. On surmises the High Court came to the conclusion that the claim could have earned at Rs.36,000/-p.a. There was no basis for coming to such a conclusion. It was also submitted that the multiplier adopted is high.

6. There is no appearance on behalf of the respondents in spite of service of notice.

7. There were two methods adopted to determine and for calculation of compensation in fatal accident actions. The first multiplier method mentioned in Davies v. Powell Duffregn Associated Collieries Ltd. (1942 AC 601) and the second in Nance v. British Columbia Electric Railway Co. Ltd. (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 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.

9. The considerations generally relevant in the selection of multiplicand and multiplier were adverted to by Lord Diplock in his speech in Mallett v. Mc Mongle (1969 (2) All ER 178) where the deceased was aged 25 and left behind his widow of about the same age and three minor children. On the question of selection of multiplicand Lord Diplock observed:

"The starting point in any estimate of the amount of the dependency is the annual value of the material benefits provided for the dependants out of the earnings of the deceased at the date of his death. But.... there are many factors which might have led to variations up or down in the future. His earnings might have increased and with them the amount provided by him for his dependants. They might have dimi