First Appeal No.207 of 1997

3rd December, 2003

Cases Cited:
Sumesh Vs. National Insurance Co., 2001(2) ALL MR 246 (S.C.)=JT 2002(I) SC 451 [Para 6]
Rukmani Devi Vs. Omprakash, 1991 ACJ 3 [Para 7]
Oriental Fire & General Insurance Company Ltd. Vs. Hemlata, 1993 Mh.L.J. 1549 [Para 8,10]
U. P. State Road Transport Corporation Vs. Trilok Chandra, (1996)4 SCC 362 [Para 9]
Kaushnuma Begum Vs. New India Assurance Co. Ltd., 2001(2) ALL MR 246 (S.C.)=2001 ACJ 428 [Para 16]

JUDGMENT

JUDGMENT :- Heard Mr. J. D. Malvi, the learned counsel for the appellants and Mr. V. P. Sathe, the learned counsel for the respondent No.3. None for respondent Nos.1 and 2, though served.

2. In this appeal the award dated 08/11/1996 passed by the Member, Motor Accident Claims Tribunal Nagpur under Section 168 of the Motor Vehicles Act, 1988 (For short, the Act) in Claim Petition No.443/1993 granting compensation of Rs.1,40,000/- with interest @ 12% per annum from the date of petition till realisation is under challenge on the ground that the Tribunal has awarded inadequate and unreasonable compensation to the appellants-claimants.

3. Brief facts are as under:

The accident occurred on 20/10/1992 at Siraspeth West, Nagpur at about 5.00 p.m. On that day Laxmibai (deceased) went near the corporation public water tap to fetch drinking water. At that time the Fiat car owned by the respondent No.1 was being driven by respondent No.2 in rash and negligent manner and it had come and gave violent dash to Laxmibai causing severe injuries. The car has been duly insured with respondent No.3-National Insurance Co. Laxmibai succumbed to the injuries on the spot of incident itself. The appellant No.1 Ashok is the husband and appellant No.2 Sachin and appellant No.3 Swati are the male and female child of the deceased Laxmibai. Age of the deceased was around 24 years at the time of incident whereas the age of her husband was 30 years. Laxmibai is said to have been earning Rs.1,500/- per month and she used to contribute the amount of Rs.1,000/- for the maintenance and support of her family members by ironing the clothes of the customers. The appellants-claimants had filed the petition under Section 166 of the Act claiming compensation of Rs.3,75,000/-, interest and costs.

4. The respondents combated the claim by filing their written statement and the Insurance Company, respondent No.3 also denied the claim on the ground that the claim was inflated.

5. The appellants had examined as many as four witnesses and relied on oral as well as documentary evidence in support of their contentions. The respondents did not examine any witness. The Tribunal on appreciation of the evidence, had come to the conclusion that Laxmibai died as a result of accident arising out of the use of motor vehicle, i.e. Fiat car bearing No.MH-31/G-3369 and the Fiat car was being driven in a rash and negligent manner by its driver. The Tribunal also recorded finding that the claimants would be entitled to receive compensation of Rs.1,40,000/- with interest @ Rs.12% per annum from the date of petition till realisation and consistent with these findings, he decreed the claim. These findings are under challenge in this appeal.

6. Mr. Malvi, the learned counsel for the claimants contended that the Tribunal has committed an error in the application of multiplier. He pointed out that the age of Laxmibai was 24 years and she died leaving behind her the husband whose age was 30 years and two minor children of the age of 3 years and 2 years. He contended that the Tribunal ought to have applied the multiplier of 18 years' purchase factor as is held by the Honourable Supreme Court in the case of Sumesh Vs. National Insurance Co., Judgment Today 2002(I) S.C. 451 : 2001(2) ALL MR 246 (S.C.).

7. He contended that Laxmibai was doing business of washing and ironing the clothes of the customers and her monthly income was not less than Rs.1,500/-. He further contended that the Tribunal has assessed the loss of dependency at Rs.1,000/- but wrongly applied the multiplier of 10 and therefore, the impugned award deserves to be modified. He contended that the Tribunal did not award any amount of compensation on account of loss to the estate and loss for consortium, mental agony and sufferings and also did not award funeral expenses and in such circumstances the claimants should be granted just and reasonable compensation. In support of his submission, he relied on the decision of Supreme Court in the case of Rukmani Devi Vs. Omprakash - 1991 ACJ 3.

8. The learned counsel for the Insurance Company contended that amendment in the Motor Vehicles Act was introduced in the year 1994 and Section 163A has been introduced by amending the Act 54 of 1994 which came into force from 14/11/1994. He contended that this accident occurred on 20/10/1992 and therefore, the schedule should not have any application to the present case and therefore, multiplier mentioned in the schedule cannot be a suitable multiplier. He contended that the Tribunal has computed the compensation on considering the evidence adduced on record and having regard to the age of the deceased adopted multiplier of 10. He contended that the Tribunal awarded compensation of Rs.1,40,000/- and the same is just, reasonable and fair and no interference into the same is warranted. He therefore contended that there is no merit in the appeal and the same is liable to be dismissed. In support of these submissions, he relied on the decision of this Court in case of Oriental Fire & General Insurance Company Ltd. Vs. Hemlata and others, 1993 Mh.L.J. 1549 wherein the ratio laid down that the law which is applicable to determine the liability to pay compensation is the law on the date when the accident has occurred.

9. I have carefully considered the contentions canvassed by the learned counsel for the parties. It is useful to refer the three Judges Bench decision of Supreme Court in the case of U. P. State Road Transport Corporation and others Vs. Trilok Chandra and others, (1996)4 Supreme Court Cases 362 wherein it has been held that: "We must at once point out that the calculation of compensation and the amount worked out in the Schedule suffer from several defects. For example, in Item 1 for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicand is shown to be Rs.3000. The total should be 3000 x 15 = 45,000/- but the same is worked out at Rs.60,000/-. Similarly, in the second item the multiplier is 16 and the annual income is Rs.9000/-; the total should have been Rs.1,44,000/- but is shown to be Rs.1,71,000/-. To put it briefly, the table abounds in such mistakes. Neither the tribunals nor the courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose to emphasise is that the multiplier cannot exceed 18 years' purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16. We thought it necessary to state the correct legal position as courts and tribunals are using higher multiplier as in the present case where the Tribunal used the multiplier of 24 which the High Court raised to 34, thereby showing lack of awareness of the background of the multiplier system in Davies case."

10. In view of the observation of the Supreme Court, it is clear that there could be no dispute regarding the application of law for determination of the liability to pay compensation and the law which is applicable to determine the liability on the date when the accident has occurred, as is held by the Division Bench of this Court in Oriental Fire and General Insurance Co. Vs. Hemlata and others (cited supra). That does not mean that the Court cannot take into consideration the various factors for choosing the suitable multiplier and therefore, it follows that neither the Tribunals nor the Courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependant on the age of the deceased and the age of the dependants would also be relevant consideration in the choice of the multiplier.

11. In the present case the age of deceased Laxmibai was 24 years at the time of her death and she died in the accident due to use of motor vehicle leaving behind her husband of the age of 30 years and two minor children of the age of 3 years and 2 years. Since Laxmibai was earning hand in the family, suitable multiplier could have been adopted as 12 years' purchase factor having regard to her age and the age of dependants minor children who were aged about 3 and 2 years respectively on the date of accident. Therefore, so far as choosing multiplier is concerned, I am of the considered view that the Tribunal has committed an error in adopting the multiplier of 10.

12. Now, the evidence adduced on record has been considered by the Tribunal and recorded the finding that the loss of dependency was to the extent of Rs.1,000/- per month. The Tribunal has come to the conclusion that the total monthly income of Laxmibai was around Rs.1,500/- from the business of ironing and as such after deducting 1/3rd on account of personal living expenses, the loss of dependency would come to Rs.1,000/- per month.

13. What is relevant to note is that the evidence of Ashok, P.W.-1 who is husband of Laxmibai would show that his wife was earning Rs.30/- per day from New Super Dry Cleaners and Rs.20/- to Rs.30/- per day from the clothes of Vasti and thus she was earning daily Rs.70/- to Rs.80/- and minimum Rs.50/-. In the cross-examination it would reveal that he was also doing the business of ironing clothes along with his wife, but he could not produce any document to show as to what was the income of his wife. Admittedly, both were doing the business of washing clothes and ironing the same. Therefore, whatever money was being received by both of them was their joint income.

14. The evidence of Vijay, who is Corporator shows that he used to give clothes for ironing and used to pay Rs.150/- to Rs.200/- per month to Laxmibai. The evidence of Smt. Asha who is Laundry and Hotel Keeper would reveal that she was also providing work to Laxmibai and this witness was paying Rs.30/- per day as the minimum charges and Laxmibai was working with her for about 1½ years from 1990 and she had issued certificate (Exh.31) accordingly. The evidence of this witness would only lead to the conclusion that Laxmibai and her husband Ashok were working jointly and their income was also joint as they were washerman by profession. In the circumstance, it cannot be said that finding of the Tribunal, that loss of dependency could be assessed at Rs.1,000/- is erroneous. However, it appears that the Tribunal has awarded the compensation on account of loss of consortium at Rs.5,000/- mentalagony and sufferings at Rs.10,000/- and Rs.500/- on account of love and affection. In my view the award in the conventional sum of Rs.15,000/- on account of loss of consortium, mental agony and sufferings and Rs.15,000/- on account of loss to the estate would be just, fair and reasonable and therefore, the award of the Tribunal deserves to be modified.

15. In this view of the matter we can take about Rs.1,000/- per month or Rs.12,000/- per year as the loss of dependency and if capitalised on a multiplier of 12 years' purchase factor, which is appropriate to the age of the deceased as well as the dependent minor children, the compensation would work out to Rs.1,44,000/- to which is added the usual award for the loss of consortium, mental agony and sufferings in the conventional sum of Rs.15,000/- plus on account of loss to the estate in the sum of Rs.15,000/- and in addition, Rs.5,000/- on account of funeral expenses, the compensation would work out to Rs.1,79,000/-. In my view the award of Rs.1,79,000/- would be just and reasonable and fair in the facts and circumstances of the present case and the appellants are held to be entitled to receive this amount after deducting the amount which has already been paid.

16. That takes me to consider the question of granting interest. In this context, reference may be had to the decision of the Supreme Court in the case of Kaushnuma Begum Vs. New India Assurance Co. Ltd. (2001 ACJ 428) wherein it has been held that, "Now we have to fix up the rate of interest. Section 171 of the M.V. Act empowers the Tribunal to direct that, in addition to the amount of compensation, simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf". Earlier, 12 per cent was found to be the reasonable rate of simple interest. With a change in economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9 per cent on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9 per cent annum from the date of the claim made by the appellants. The amount of Rs.5,0000/- paid by the insurance company under section 140 shall be deducted from the principal amount as on the date of its payment and interest shall be recalculated on the balance amount of the principal sum from such date.

17. The accident, in the present case occurred on 20/10/1992 and it is a common knowledge that the Reserve Bank of India had declared interest rate which was not more than 9 per cent in the year 1992 and therefore, I direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9 per cent per annum from the date of claim petition filed by the appellants. The amount of no fault liability shall be deducted from the principal amount as on the date of its payment and interest shall be recalculated on the balance amount of the principal sum from such date.

18. In the result, the impugned judgment and award by the Tribunal is modified as per the terms and conditions mentioned above and the appeal is allowed with costs.

Appeal allowed.