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1996 Supreme(MP) 20
N.K. Jain, R Shukla J.
Udaychand Jain And Ors.
vs
Smt. Sukhvilas Jain And Ors.
DECIDED ON : 5 January, 1996
The multiplier method is a legally sound and well-established method for calculating compensation in fatal accident cases under the Motor Vehicles Act, 1988.
Headnote:
MOTOR VEHICLES ACT, 1988 - SECTION 173 - FATAL ACCIDENT - COMPENSATION - ASSESSMENT - MULTIPLIER METHOD - APPLICATION - GUIDELINES - SUPREME COURT GUIDELINES - ADOPTION - CALCULATION OF DEPENDENCY - INCOME FROM AGRICULTURE - ESTIMATION - REASONABLE AMOUNT - LOSS OF CONSORTIUM - AWARD - REDUCTION.
Fact of the Case:
A fatal accident occurred involving a tanker owned by the appellant and driven by the appellant, resulting in the death of Saubhagmal, a 38-year-old employee of Bharat Commerce Industries. The deceased's mother, widow, and children filed a claim for compensation under Section 173 of the Motor Vehicles Act, 1988.
Finding of the Court:
The court found that the accident occurred due to actionable negligence on the part of the driver of the vehicle and that the Tribunal had correctly applied the multiplier method to assess compensation.
Issues: 1. Whether the amount of compensation awarded by the Tribunal was too high. 2. Whether the dependency and multiplier were wrongly calculated.
Ratio Decidendi: 1. The court held that the multiplier method of calculating compensation is legally well-established and involves ascertaining the loss of dependency and capitalizing it by an appropriate multiplier. 2. The court determined the deceased's total income from all sources, including his salary, income from agriculture, and private business, and estimated the net dependency after deducting expenses on himself. 3. The court adopted a multiplier of 12, as suggested by the Supreme Court in a similar case, and calculated the damages accordingly. 4. The court also awarded compensation for loss of consortium, love, and affection to each claimant.
Final Decision: The court allowed the appeal in part and reduced the amount of compensation awarded by the Tribunal from Rs. 3,70,905/- to Rs. 2.00 lacs. The court directed that Rs. 30,000/- be paid in lump sum to one of the respondents, while the remaining amount be shared equally by the other respondents, with 50% of their share being deposited in a fixed deposit for 10 years.
N.K. Jain, J.
1. This is an appeal Under Section 173 of the Motor Vehicles Act, 1988 from the award dated 30th March, 1995 passed by the 1st Motor Accident Claims Tribunal, Ujjain in Claim Case No. 5/93 awarding compensation of Rs. 3,70,905/- to the respondent claimants in a fatal accident action.
2. The respondents claimants are the mother, widow and the children of Saubhagmal, aged 38 years who died in a motor accident that occurred on 21.10.1992 at Nagda District Ujjain, involving a tanker owned by the appellant No. 1 driven by the appellant No. 2 and insured with the appellant No. 3. The New India Assurance Co. Ltd. for third party risk.
3. The deceased Saubhagmal at the time of his unfortunate death was employed with Bharat Commerce Industries on a monthly salary of Rs. 1,565.69. These facts alongwith the finding of the Tribunal that the accident occurred due to actionable negligence on the part of the driver of the vehicle are not disputed before us.
4. The Tribunal while assessing the compensation has adopted multiplier method. The dependency was calculated at Rs. 24,000/- per annum, while a multiplier of 15 was applied. Accordingly a sum of Rs. 3,60,000/- was assessed as damages to which Rs. 5,905/- as expenses on medicines and Rs. 5,000/- for loss of consortium were added making the total award for Rs. 3,70,905/-.
5. The learned Counsel for the appellant has assailed the award on the ground that the amount of compensation awarded by the Tribunal is too high. According to him, the dependency as well as the multiplier of 15 were wrongly calculated. As against this, the respondents have defended the award and it was contended on their behalf that the amount awarded to them is rather on the lower side.
6. The multiplier method is now legally well established. For applying this method Hon'ble the Supreme Court in a recent decision in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas and Ors. (1994) MPLJ 520 : 1 (1994) ACC 346 SC : 1994 ACJ 1, has laid down guidelines as follows:
The multiplier method of calculation of compensation under Section HOB of the Motor Vehicles Act, 1939 involves ascertainment of the loss of dependency or the multiplicant having regard to the circumstances of the case and capitalizing, the multiplicant by an appropriate multiplier. The choice of the multiplier is determined by the age 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 multiplicant by way of annual interest. 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 the period for which the dependency is expected to last. The multiplier method is the logically sound and legally well-established method of calculating compensation.
7. Turning to the facts of the case in hand, admittedly the deceased was an employee of Bharat Commerce Industries on a monthly salary of Rs. 1,565.69, although the respondents had claimed that the deceased was doing some private business too and earning about Rs. 7,000 to Rs. 8,000/- per month. But this claim of the respondents was disallowed by the Tribunal and the Tribunal's finding on the point is not under challenge before us. However, the Tribunal has agreed with the claimants that the deceased had some income from agriculture which the Tribunal estimated about Rs. 1,500/- per month. We may, however, observe here that the land owned by the deceased was less than 1/2 acre and there was no definite evidence about his income from this land. The amount of Rs. l,500/- per month estimated by the Tribunal on this count is clearly excessive. Having regards to the area of the land, his income from this source can at best be estimated at Rs. 300/ - per month. His total income from all sources thus comes to Rs. 1,8
