BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ANITA SUMANTH, R. VIJAYAKUMAR, JJ.
Reliance General Insurance Company Limited, Rep.by its Divisional Manager, Salem – Appellant
Versus
K. Sumathi & Others – Respondents
C.M.A.(MD) No. 648 of 2020 & C.M.P.(MD) Nos. 6569 of 2020 & 2805 & of 2023
Decided On : 14-07-2023
Motor Vehicles Act - Compensation Calculation - Section 173 - [2022 5 SCC 107, (2009) 6 SCC 121, 2013 (9) SCC 65, 2017 (16) SCC 680, 2020 SCC online SC 410] - The court discussed the application of the multiplier method in determining compensation and referred to various judgments to establish that a uniform multiplier should be applied in all cases. The court highlighted the importance of considering the age of the deceased for the application of the multiplier and emphasized that the purpose of the litigation is to arrive at a fair and proper determination of compensation to the legal heirs of the deceased.
Fact of the Case:
The appeal challenges the order passed by the Motor Accident Claims Tribunal regarding the quantification of liability in a compensation claim filed by the widow and daughters of the deceased who suffered fatal injuries in a road accident.
Finding of the Court:
The court found that the Tribunal's application of a uniform multiplier in determining the compensation was appropriate, based on the settled position in various Supreme Court judgments. The court also directed the appellant to deposit the computed compensation amount within a specified period.
Issues: The core issue was the application of the multiplier method in determining the compensation payable to the claimants.
Ratio Decidendi: The court held that a uniform multiplier should be applied in all cases for determining compensation, considering the age of the deceased as the relevant factor. The purpose of the litigation is to arrive at a fair and proper determination of compensation to the legal heirs of the deceased.
Final Decision: The appeal of the Insurance Company was found to be bereft of merit and liable to be dismissed. The court directed the appellant to deposit the computed compensation amount within a specified period, and the respondents were entitled to a higher quantification of compensation.
JUDGMENT
(Prayer:Civil Miscellaneous Appeal - filed under Section 173 of the Motor Vehicles Act, to set aside the fair and decretal order dated 14.10.2019 made in M.C.O.P.No.78 of 2019 on the file of the Motor Accident Claims Tribunal (Additional District Judge), Karur and allow this Civil Miscellaneous Appeal.)
DR. ANITA SUMANTH , J
1. This appeal has been filed by the Reliance General Insurance Company Limited, challenging order dated 14.10.2019 passed by the Motor Accident Claims Tribunal (Additional District Judge), Karur in M.C.O.P.No.78 of 2019.
2.The core ground upon which the appeal has been preferred is that the Tribunal ought not to have applied multiplier 11 uniformly in deciding the compensation and instead ought to have adopted split multiplier/service multiplier method. Though some other grounds also figure in the grounds of appeal, this is the only effective ground.
3.The claimants before the Tribunal were the widow and two daughters, one of whom is a minor, of late M.Kanagaraj (deceased). The deceased had been driving a TVS-XL motorcycle on 11.09.2014 on TNPL Road, Velayuthampalayam. While so, he had encountered a lorry driving on the same road, that had shifted suddenly in the middle of the road without any provocation. The motorcycle thus crashed into the lorry and on account of this accident, the deceased had sustained grievous injuries and was hospitalized for several months. He passed away on 07.05.2015 aged 53 years.
4.The claimants/respondents in appeal, approached the Tribunal seeking compensation and in the award passed on 04.10.2019, their claim had been accepted, the Tribunal applying multiplier 11 in determining the compensation payable. The computation is as follows:
| S.No. | Heads | Amount |
| 1. | Loss of income (Rs.54,201-1/3=Rs.16,067/- Rs.36,134+15% future prospects- Rs.5,420/- =Rs.42,554/- 10% for Income Tax -Rs.4,155/ Rs.37,999*12*11) | Rs.49,36,668/- |
| 2. | Loss of consortium to the first claimant | Rs. 40,000/- |
| 3. | Loss of love and affection to claimants 1 & 2 – each Rs.25,000/- third claiman Rs.50,000/- | Rs. 1,00,000/- |
| 4. | Loss of belongings | Rs. 15,000/- |
| 5. | Funeral Expenses | Rs. 15,000/- |
| 6. | Medical Bills under Ex.B17 | Rs. 1,54,053/- |
| 7. | Medical Bills under Ex.B18 | Rs. 16,457/- |
|
| Total | Rs.52,77,178/- |
5.The appeal has been filed only on the aspect of quantification of liability and not at all on liability itself. On the application of the multiplier, Mr.Srinivasa Raghavan, who appears for the appellant would fairly draw attention to the judgment of the Hon''ble Supreme Court in the case of R.Valli and others vs. Tamil Nadu State Transport Corporation Ltd., [2022 5 SCC 107] that has settled the position that application of split multiplier is not an appropriate method for determining compensation.
6.In the case of Sarala Varma (Smt) and others vs. Delhi Transport Corporation and another [(2009) 6 SCC 121], it had been held that the proper basis for selection of a multiplier would be the age of the deceased at the time of death and not the number of years left in employment.
7.The above judgment was affirmed in Reshma Kumari and others vs. Madan Mohan and another [2013 (9) SCC 65] and the ratio of both the aforesaid judgments have been are confirmed by the Constitution Bench of the Hon''ble Supreme Court in National Insurance company limited vs. Pranay Sethi and others [2017 (16) SCC 680], the relevant portion of which reads as follows:
“11.Thus, we find that the method of determination of Compensation applying two multipliers is clearly erroneous and run counter to the judgment of this Court in Pranay Sethi, affirming the judgment in Sarala Varma. Since the deceased was 54 years of age on the date of incident, therefore, the suitable multiplier would be 11 as per the judgment of this Court in Sarala Varma approved by this Cou
The main legal point established in the judgment is that a uniform multiplier should be applied in all cases for determining compensation, considering the age of the deceased as the relevant factor.
The Supreme Court's decision on the application of the multiplier in determining compensation is binding and cannot be changed under any circumstances.
Accident claim - loss of dependency – Entitlement of enhanced compensation amount
Without assigning any reasons, compensation towards "loss of dependency" cannot be determined by splitting multiplier.
The appropriate multiplier for compensation in accidental death cases should be based solely on the deceased's completed age, as established in the Sarla Verma case.
The court reaffirmed that split multipliers for compensation calculations are impermissible unless exceptional reasons are recorded, thus enhancing the total compensation based on the standard multip....
The court established that the application of a uniform multiplier based on the deceased's age is essential in compensation claims, and the split multiplier approach is only valid when justified by s....
The applicable multiplier for compensation under the Motor Vehicles Act, 1988 must be determined based on the age of the deceased, as established in the decisions of Pranay Sethi(supra) and Sarla Ver....
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