The main legal point established in the judgment is the methodology for determining compensation under the Motor Vehicles Act, 1939, including the calculation of multiplicand and multiplier, and deductions for variations in annual earnings, lumpsum payment, and collateral benefits.

Radhakrishna Menon, J.

1. Not satisfied with the amount of compensation awarded by the Tribunal, the claimant has come up in appeal.

2. On 17-4-1980 the autorikshaw in which the appellant was travelling collided with a K. S. R. T. C. bus bearing Registration No.KRT 9905, going along the M.G. Road at Trivandrum from North to South, from behind when the bus suddenly stopped. In that accident the appellant suffered injuries.

3. The claim petition of the appellant which is a sequel to the accident, contains claims falling under two different heads. They are: (1) pain and suffering, permanent disability and loss of earning capacity; compensation claimed, Rs.50,000/-(2) special damages; compensation claimed, Rs.10,000/-. Thus a total compensation of Rs.60,000/- was claimed. The Tribunal was of the view that the drivers of both the bus as also the autorikshaw were negligent and consequently awarded a sum of Rs.9800/- as special damages and a sum of Rs.20,000/- towards the compensation falling under the first count. The appeal is against the disallowed part of the compensation claimed under the first head.

4. Before we go into the merit of the case set up in the appeal we would like to refer to certain well established principles pertaining to the entitlement of a person physically injured in a road accident for compensation falling under S.110B of The Motor Vehicles Act, 1939. He can claim compensation under two heads, "pecuniary losses" and "non-pecuniary losses". "Pecuniary losses" consist of two separate items: (1)'the loss of earnings of other gains' which he could have made had he not been injured and (2) the medical and other expenses, he had to meet as a result of the injury. It is seen from judicial pronouncements that the 'non-pecuniary losses' have been subdivided into three items; (1) pain and suffering; (2) loss of amenities of life and (3) loss of expectation of life. Compensation under the head "non-pecuniary losses" cannot precisely or with mathematical accuracy, be fixed "because, as far as money goes, the loss is imponderable and any amount awarded must be in the nature of a conventional sum". (See State of Kerala v. Vijayakumaran Nair, 1982 K.L.T. 393).

5. We shall now consider the claim falling under the sub-head "loss of earning capacity and other gains". On a perusal of the award it could be seen that the basis for fixing the quantum under this head is nothing but the feeling of what is fair. Is this the correct way of fixing the quantum? is the question, we have before us. This question, apparently simple, is not that easy to decide. A probe into the common law of England is indispensable See Mcgregor on Damages 14th Edn. Page 797. because the law in this regard has not so far been codified. The oft-quoted general principle settled by judicial pronouncements namely that, the victim is entitled to such a sum, as will make good the financial loss which he has suffered, shall be borne in mind while searching for an answer to this question. It is therefore necessary to find out a methodology to determine the quantum. A satisfactory method that can be adopted in this regard is by arriving at a multiplicand and multiplying this by the multiplier and then making adjustments and variations for elements like inflation and taxation etc.

6. In the calculation of the multiplicand, the basic factor to be taken into account is the diminution in annual earnings. The starting point in the calculation in this regard is the amount that the claimant was earning at the time of the accident or would have earned at the date of the accident, had he not been injured. From this, the amount he is capable of earning in the future is deducted. However, if total incapacity is the result of the injury then nothing falls to be deducted. To determine the earning of the claimant per annum in the case of a salaried employee there shall not be any difficulty because the pay/wage structure provides the basis. In the case of a self-employed,