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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF NOVEMBER, 2019
PRESENT
THE HON’BLE MRS. JUSTICE B. V. NAGARATHNA
AND
THE HON’BLE MS. JUSTICE JYOTI MULIMANI
MISCELLANEOUS FIRST APPEAL No.3659/2018 (MV) C.W. MISCELLANEOUS FIRST APPEAL No.3905/2018 (MV)
MISCELLANEOUS FIRST APPEAL No.3659/2018 (MV)
BETWEEN :
LAKSHMAMMA @ LAKSHMI W/O. LATE H J CHINNASWAMY AGED ABOUT 56 YEARS
MAMATHA D/O. LATE H J CHINNASWAMY AGED ABOUT 28 YEARS
BOTH ARE RESIDING AT: VIDYUTH NAGARA EXTENSION BESIDE VYBHAVI BEKARI OPPOSITE MCE COLLEGE HOUSE NO.532 HASSAN.
... APPELLANTS
(BY SRI.SRIPAD V SHASTRI, ADVOCATE)
2 AND:
K DINAKAR, DRL TRAVELLS NO.143, KOTTANOORDIN NEAR GANESH TEMPLE 8TH PHASE, JP NAGARA BANGALORE.
THE MANAGER NEW INDIA INSURANCE CO., LTD., CHANDAN COMPLEX, HARSHAMAHAL ROAD HASSAN.
... RESPONDENTS
(BY SRI.B C SHIVANNEGOWDA, ADVOCATE FOR SRI.A M VENKATESH FOR R-2, V/O DATED 15.04.2019, NOTICE TO R-1 DISPENSED WITH)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(1) OF THE M.V. ACT, 1988, PRAYING TO ENHANCE THE COMPENSATION FROM RS.25,75,244/- TO RS.35,00,000/- AWARD DT:01.02.2018 IN M.V.C. NO.1701/2015 PASSED BY THE II ADDITIONAL DISTRICT & SESSIONS COURT & ADDITIONAL MACT AT HASSAN, WITH COST AND INTEREST.
MISCELLANEOUS FIRST APPEAL No.3905/2018 (MV)
BETWEEN :
THE MANAGER, NEW INDIA ASSURANCE COMPANY LIMITED, CHANDAN COMPLEX HARSHAMAHAL ROAD, HASSAN. NOW REP. BY ITS APPEALS HUB DIVISIONAL OFFICE-III, 2ND FLOOR MAHALAKSHMI CHAMBERS, M.G. ROAD BENGALURU – 560 001.
3 REP. BY ITS DULY CONSTITUTED ATTORNEY.
... APPELLANT
(BY SRI.B C SHIVANNEGOWDA, ADVOCATE FOR SRI.A M VENKATESH, ADVOCATE)
AND:
LAKSHMAMMA @ LAKSHMI W/O. LATE H J CHINNASWAMY AGED ABOUT 56 YEARS
MAMATHA D/O. LATE H J CHINNASWAMY AGED ABOUT 28 YEARS
BOTH ARE RESIDING AT: VIDYUTH NAGARA EXTENSION BESIDE VYBHAVI BEKARI OPPOSITE MCE COLLEGE HOUSE NO.532 HASSAN.
K DINAKAR, DRL TRAVELS NO.143, KOTTANOORDIN NEAR GANESH TEMPLE 8TH PHASE, J P NAGARA BENGALURU. (OWNER OF BUS BEARING REG. NO.KA-53/C-3015) ... RESPONDENTS
(BY SRI.SRIPAD V SHASTRI, ADVOCATE FOR R-1 & R-2, V/O DATED 25.11.2019, NOTICE TO R-3 DISPENSED WITH)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND
4 AWARD DATED 01.02.2018 BY ALLOWING THE ABOVE APPEAL AND ETC.,
THESE MISCELLANEOUS FIRST APPEALS COMING ON FOR ADMISSION THIS DAY, NAGARATHNA J., DELIVERED THE FOLLOWING:
JUDGMENT
Though these appeals are listed for admission, with consent of the learned counsel on both sides, they are heard finally.
MFA 3659/2018 is filed by the claimants seeking enhancement of compensation, while MFA 3905/2018 is filed by the Insurance Co. assailing the judgment and award passed by the II Additional District and Sessions Court and Additional Motor Accident Claims Tribunal (Tribunal for the sake of brevity), at Hassan, dated 1st February, 2018 passed in MVC No. 1701/2015. Both the appeals have been filed on the issue of quantum of compensation, awarded by the Tribunal.
5 3. For the sake of convenience, parties shall be referred to in terms of their status and ranking before the Tribunal.
The claimants, being the wife and daughter of deceased H.J. Chinnaswamy, filed the claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act, for brevity), seeking compensation of Rs.50,00,000/- on account of the death of Chinnaswamy in a road traffic accident that occurred on 16.08.2015. According to the claimants, on the fateful day, at about 7.30 p.m., Chinnaswamy who was working as an Assistant Sub-Inspector of Police, was on official duty, controlling traffic near Gadenahalli Cross, at that time, bus bearing registration No. KA-51-C-3015 was driven in a rash and negligent manner by its driver and dashed against a car and then to Chinnaswamy. As a result, he sustained severe injuries and died on the spot. Post mortem examination was conducted and his funeral rites were performed. The claimants contended that, Chinnaswamy
6 was hale and healthy and was working in the Police Department, earning an income of Rs.35,000/- per month. That he was the only bread earner of the family and on account of his death, the family was in mental agony and penury. The claimants sought compensation on account of the death of Chinnaswamy by filing the claim petition under Section 166 of the aforesaid Act.
In response to the notices issues by the Tribunal, the first respondent – owner of the bus though served, remained absent and was placed ex parte, while the second respondent – Insurance Company appeared through its counsel and filed its statement of objections, denying the material averments made in the claim petition and contending that the compensation sought by the claimants was excessive, exhorbitant and not in accordance with the status and standard of the deceased. It was contended that any satisfaction of the award would be subject to the terms and conditions of the policy. The Insurance Company sought for dismissal of the claim
7 petition by contending that the claimants had already received Rs.20,00,000/- from the Insurance Company i.e. under the Group Insurance Policy and therefore, they were not entitled for any compensation in the petition filed by them.
On the basis of rival pleadings, the Tribunal framed the following issues for its consideration : 1) Whether the petitioners prove that they are the legal heirs and dependents of deceased, H.J. Chinnaswamy?
2) Whether the petitioners prove that H.J. Chinnaswamy was died in a motor vehicle accident that was taken place on 16.08.2015 at about 8.00 p.m. near Gadenahalli Gate, Hassan, due to rash and negligent driving of bus bearing registration No. KA-51-C- 3015 by its driver in an actionable negligence ?
8 3) Whether the petitioners are entitled for compensation ? If so, at what quantum and from whom ?
4) What order ?
In order to prove their case and reiterate their averments, the widow of the deceased Chinnaswamy examined herself as P.W.1. P.Ws. 2 and 3, namely Raghunath and Suresh were also examined in the matter on behalf of the claimants. The claimants produced twelve documents which were marked as Exs. P.1 to P.12. The respondent examined two witnesses as R.W.1 and R.W.2, namely Sathish and Shivakumar respectively. Respondent – insurer produced eleven documents which were marked as Exs. R.1 to R.11.
On the basis of the said evidence, the Tribunal awarded compensation of Rs.25,75,244/- along with interest at 6% per annum from the date of the claim petition till realization, by directing the Insurance Co. to satisfy the award.
Not being satisfied with the quantum of compensation awarded by the Tribunal, the claimants have preferred MFA 3659/2018, while the Insurance Company has sought for reduction in the compensation awarded by the Tribunal. In the circumstances, both the appeals have been connected together and have been heard together and are disposed of by this common judgment.
Learned counsel for the appellant – insurer contended that the deceased was aged about 59 years at the time of his death. He was serving in the Police Department. At 60 years he would have retired, on attaining the age of superannuation. Therefore, the Tribunal ought to have applied the split multiplier formula in accordance with the judgment of a co-ordinate Bench of this Court in the case of Union of India and others vs. K.S. Lakshmi Kumar and others reported in ILR 2000 Kar. 3809. He submitted that if the split multiplier formula is applied and having regard to the appropriate multiplier of ‘9’ being the multiplier which would apply
10 having regard to the age of the deceased being about 59 years, then 2+7 formula would have to be applied and the compensation awarded on the head of ‘loss of dependency’ would be scaled down. He further contended that the award of compensation on the other conventional heads are also exhorbitant and the same may be reduced, having regard to the dicta of the Hon’ble Supreme Court in the case of National Insurance Co. Ltd. vs. Pranay Sethi and others, reported in (2017) 16 SCC 680 and Magma General Insurance Co. vs. Nanu Ram and others reported in 2018 ACJ 2782. He also contended that a sum of Rs.20,00,000/- was awarded to the claimants towards personal accident claims under a Group Insurance Policy by the Department and hence, to that extent, the compensation has to be reduced, in which event, no compensation is payable to the appellants in this case.
Per contra, learned counsel for the claimants contended that the claimants are entitled to additional compensation having regard to the income that the
11 deceased was deriving and the fact that the Tribunal has not taken into consideration future prospects in view of the recent dictum of the Hon’ble Supreme Court in the case of Pranay Sethi. He further submitted that the amount paid to the claimants under Group Insurance Policy, towards personal accident claim cannot be deducted, as that is a separate entitlement de hors the claim made by the appellants under Section 166 of the Act. He also contended that the split multiplier formula cannot be applied in the instant case as the same has not been approved of by the Hon’ble Supreme Court in any judgment and hence, the appeal filed by the insurer may be dismissed and the appeal filed by the claimants may be allowed by enhancing the compensation.
Having heard learned counsel for the respective parties, the following points would arise for our consideration : i) Whether the award of compensation by the Tribunal would call for any modification ? In other words,
12 whether the appellants are entitled to additional compensation as contended by them, or the award of compensation by the Tribunal calls for a reduction as contended by the Insurance Co. ?
ii) What order ?
On perusal of the material on record , it is noted that the claimants have established that Chinnaswamy died in a road traffic accident that occurred on 16.08.2015 at about 7.30 p.m. while he was discharging his duties as an Assistant Sub-Inspector of Police. In other words, he died in harness. No doubt the Police department has paid a sum of Rs.20,00,000/- to his legal representatives who are the claimants under a Group Insurance Policy and also possibly terminal benefits, but having regard to the dicta of the Hon’ble Supreme Court in the case of Mrs. Helen C.Rebello vs. Maharashtra State Road Transport Corporation reported in AIR 1998 SC 3191 and Sebastian Lakra vs. National
13 Insurance Co. Ltd., reported in AIR 2018 SC 504, it is held that the claimants/dependants are entitled to ‘just compensation’ and any advantage which has accrued to the estate of the deceased or to his dependants as a result of some contract or act which the deceased performed in his life time cannot be said to be the outcome or result of the death of the deceased even though these amounts may go into the hands of the dependents only after his death. Further, in Rajeshwari G. Bhuyar and others vs. Sindhu Travels and another, reported in 2017 ACJ 87, it has been held that, the fruits of an amount received through contributions of the insured cannot be deducted out of the amount receivable under the Motor Vehicle Act, 1988. Hence, it is held that the amount of Rs.20,00,000/- received by the claimants under the Group Insurance Policy on account of the death of Chinnaswamy in a road traffic accident cannot outweigh the claim or have any bearing on the compensation that is payable under Section 166 of the Act.
14 14. However, the contention raised by the learned counsel for the Insurance Company with regard to the applicability of the split multiplier formula in the instant case requires consideration. The deceased Chinnaswamy was working as an Assistant Sub-Inspector of Police in the Police Department and as a Government servant. He died in harness while discharging his duty as Traffic Police. The co-ordinate Bench of this Court headed by Justice Raveendran in the case of Lakshmi Kumar has applied the split multiplier formula when the deceased was working in a Government Department. The split multiplier formula as enunciated by this Court in K.S.Lakshmi Kumar and others, speaking through His Lordship Raveendran J., has to be applied in the instant case. The relevant portion of the said judgment reads as under :
"16. Where the multiplier applicable is higher than the number of years of service which the deceased had before superannuation, the contribution to the family (or loss of dependency) cannot obviously be calculated with the reference to the salary income, for the entire period of multiplier. Let us illustrate. If a person aged 56 years (whose age of superannuation is 60 years) dies in an
15 accident, leaving behind him surviving his wife and two children, how should the total loss of dependency be calculated? Let us assume that his salary was Rs.6,000.00 and after retirement, his pension would be Rs.3,000.00. Under the Davies method accepted and adopted by the Supreme Court, the applicable multiplier will be '9'. But, deceased would have got salary income for only 4 years and then he would get only pension. If the deduction towards personal and living expenses of the deceased is one-third, the contribution to the family during the period of service (4 years period) would have been Rs.4,000/- (that is Rs.6000-2000). But, obviously the contribution to the family would not have been Rs.4,000/- after his retirement, that is from the 5th year onwards. When the pension is Rs.3,000/- per month, after deducting one-third as personal and living expenses, the contribution to the family will only to be Rs.2,000/- per month. Therefore, the loss of dependency cannot be taken as Rs.4,000/- per month for the entire period of 9 years representing the multiplier. It has to be taken as Rs.4,000/- per month for the first four years (when he would have been in service) and Rs.2,000/- per month for the remaining five years (when he would have received pension). The method adopted in the above illustration will have to be applied in this case.
In this case the deceased was aged 53 years at the time of death and she would have attained the age of superannuation in about 7 years. The multiplier period is 9 years. After 7 years, the income would not have been Rs.16,852.00 per month, but only roughly 50% of it as pension, and consequently the
16 loss of dependency would have been 50% of Rs.1,20,000.00 per annum. Thus, loss of dependency will have to be calculated with reference to the salary income for a period of 7 years and pension income for the remaining period of 2 years, as the multiplier period is '9 years'. The loss of dependency would therefore be Rs.1,20,000.00 x 7 plus Rs.60,000.00 x 2 i.e., Rs.9,60,000.00."
If the said formula is applied and keeping in mind 60 years as the age of superannuation in the instant case since the deceased was working as Assistant Sub- Inspector of Police and was aged 59 years, relevant multiplier would be ‘9’ and for the one year of remaining service, i.e. up to 60 years, the entire salary would have to be reckoned and for the balance 8 years, 50% of the salary, i.e. the pension amount has to be reckoned. No one can dispute the fact that on retirement, a Government servant, as in the instant case, would draw only the pension and therefore 50% of the salary has to be assessed as the pension. Therefore, the compensation has to be assessed in the following manner :
17 Since the deceased was aged about 59 years 3 months and left with another 9 months of service, and is thus below the age group of 60 years, 15% is to be added towards future prospects in view of law laid down by Apex Court in Pranay Sethi. The monthly income of deceased will be Rs.40,600/- (15% of Rs.35,304/- i.e. Rs.5,296/- + Rs.35,304/-). Further, Rs.200/- is to be deducted towards professional tax. Then the monthly income will be Rs.40,400/-. If the same is multiplied by 12 multiplier, the annual income of deceased will be Rs.4,84,800/-. On the said amount, for first Rs.2,50,000/- it is not taxable and for remaining amount of Rs.2,34,800/-, 10% is deducted towards income tax which will be Rs.23,480/-. The balance amount will be Rs.2,50,000/- + 2,11,320/- = Rs.4,61,320/-. Since deceased has left behind two dependents, 1/3rd has to be deducted towards self expenses of deceased and balance income for calculation of loss of dependency will be Rs.3,07,547/-.
18 Since deceased was aged about 59 years 3 months on the basis of split multiplier method, he is entitled to full compensation for 1 multiplier and 50% on the remaining 8 multiplier, then the compensation payable will be :
Rs.3,07,547/- x 1 multiplier = Rs. 3,07,547/- 50% of Rs.3,07,547/- = Rs.1,53,773/- x 8 multiplier = Rs.12,30,184/-
Therefore, compensation payable under the head of loss of dependency is Rs.3,07,547 + Rs.12,30,184 = Rs.15,37,731/-.
While arriving at the said formula, we are fortified by a judgment of the co-ordinate Bench of this Court in the case of MFA No.100513/2019 disposed of on 18.02.2019, of which, one of us (Nagarathna J.), was a member. The relevant portions of the said judgment are extracted as under :
“14. The aforesaid approach of the Tribunal is having regard to the judgment of the Division Bench of this Court in the case of Union of
19 India and others V/s K.S.Lakshmi Kumar and others reported in ILR 2000 KAR 3809, wherein his Lordship R.V.Raveendran J., writing the judgment for the Division Bench of this court at Paragraphs 16 and 17 has held as under:-
"16. Where the multiplier applicable is higher than the number of years of service which the deceased had before superannuation, the contribution to the family (or loss of dependency) cannot obviously be calculated with the reference to the salary income, for the entire period of multiplier. Let us illustrate. If a person aged 56 years (whose age of superannuation is 60 years) dies in an accident, leaving behind him surviving his wife and two children, how should the total loss of dependency be calculated? Let us assume that his salary was Rs.6,000.00 and after retirement, his pension would be Rs.3,000.00. Under the Davies method accepted and adopted by the Supreme Court, the applicable multiplier will be '9'. But, deceased would have got salary income for only 4 years and then he would get only pension. If the deduction towards personal and living expenses of the deceased is one- third, the contribution to the family during the period of service (4 years period) would have been Rs.4,000/- (that is Rs.6000- 2000). But, obviously the contribution to the family would not have been Rs.4,000/- after his retirement, that is from the 5th year onwards. When the pension is Rs.3,000/- per month, after deducting one- third as personal and living expenses, the
20 contribution to the family will only to be Rs.2,000/- per month. Therefore, the loss of dependency cannot be taken as Rs.4,000/- per month for the entire period of 9 years representing the multiplier. It has to be taken as Rs.4,000/- per month for the first four years (when he would have been in service) and Rs.2,000/- per month for the remaining five years (when he would have received pension). The method adopted in the above illustration will have to be applied in this case.
In this case the deceased was aged 53 years at the time of death and she would have attained the age of superannuation in about 7 years. The multiplier period is 9 years. After 7 years, the income would not have been Rs.16,852.00 per month, but only roughly 50% of it as pension, and consequently the loss of dependency would have been 50% of Rs.1,20,000.00 per annum. Thus, loss of dependency will have to be calculated with reference to the salary income for a period of 7 years and pension income for the remaining period of 2 years, as the multiplier period is '9 years'. The loss of dependency would therefore be Rs.1,20,000.00 x 7 plus Rs.60,000.00 x 2 i.e., Rs.9,60,000.00."
The Division Bench has also referred to the earlier judgments of the Hon'ble Supreme Court in the case of General Manager, Kerala S.R.T.C. V/s Susamma Thomas reported in AIR 1994 SC 1631 and the case of U.P. State Road Transport Corporation V/s Trilok Chandra and others reported
21 in ILR 1996 KAR 2127, wherein the Davies method (Davies vs Powell Duffryn Associated Collieries Ltd.) (1942 AC 601) has been adopted in calculating general damages i.e. pecuniary loss suffered by the dependant members of the family on account of death of the deceased. This involved determining the total loss of dependency by multiplying the annual contribution to the family of the deceased, which is annual loss of deceased. 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 a capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest.
His Lordship thereafter as a Hon'ble Judge of Supreme Court in the case of Sarla Verma in detail analyzed as to how the multiplier had to be chosen and for a deceased who was between 56 to 60 years, the appropriate multiplier is '9'. Since the deceased Sri Ashok in the instant case would have retired in less than three years and having regard to
22 the fact that on his retirement he would not receive entire salary but only a pensionery amount which would normally be about 50% of the last drawn salary, 50% of the salary is reckoned as multiplicand for the purpose of calculating the compensation.
Though there is no express reference to the case of K.S.Lakshmi Kumar made by the Tribunal in the instant case, the split multiplier formula has indeed been adopted by the Tribunal. The same is having regard to the factual reality as no government servant or any other person who retires from a pensionery job would be receiving pension at the same rate as his/her salary. Therefore, 50% of the salary is reckoned where deceased would have retired within a short period, but for the unfortunate death in the accident. We have not come across any judgment of this Court or of the Hon'ble Apex Court, which has deprecated upon the applicability of the split multiplier formula.
While considering the question as to whether the split multiplier formula was applicable to the facts of the case, reference has been made to a judgment of Hon'ble Supreme Court in Puttamma and others V/s K.L.Narayana Reddy reported in AIR
23 2014 SC 706, wherein it has been held that the Hon'ble Supreme Court in Sarla Verma does not envisage application of split multiplier and that in the absence of any specific reason and evidence on record the Tribunal ought not to apply split multiplier in routine course and should apply multiplier as per decision of the Hon'ble Supreme Court in Sarla Verma as affirmed in Reshma Kumari.
The reason for the application of the split multiplier formula is that once the deceased would have retired from service on attaining the age of superannuation, his pension would not be equivalent to that of the salary income. His income would be in the nature of pension which would be only 50% of the salary that he would have received. Therefore, in the instant case, the Tribunal was right in applying the split multiplier formula. Further in the case of Sarla Verma, the discussion was more on the appropriate multiplier to be applied rather than as to whether a split multiplier formula was applicable. While answering Question No.3, their Lordships have discussed on the choice of the multiplier and analyzed as to how the appropriate multiplier ought to apply starting from '18' for the death of a person between 15 to 20 years up to '5' for death of a
24 person aged about 65 years. In Paragraph 9, the Hon'ble Supreme Court has held as under:-
Basically only three facts need to be established by the claimants for assessing compensation in the case of death : (a) age of the deceased; (b) income of the deceased; and the (c) the number of dependents. The issues to be determined by the Tribunal to arrive at the loss of dependency are (i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference of the age of the deceased. If these determinants are standardised, there will be uniformity and consistency in the decisions. There will be lesser need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay. To have uniformity and consistency, Tribunals should determine compensation in cases of death, by the following well settled steps:
Step 1 (Ascertaining the multiplicand):
The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.
Step 2 (Ascertaining the multiplier)
25 Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a Table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said Table with reference to the age of the deceased.
Step 3 (Actual calculation): The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the `loss of dependency' to the family.
Thereafter, a conventional amount in the range of Rs.5,000 to Rs.10,000 may be added as loss to estate. Where the deceased is survived by his widow, another conventional amount in the range of Rs.5,000 to Rs.10,000 should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased.
The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also be added.
Thereafter there is a discussion on each of the aforesaid aspects namely, additions/deductions to be made for arriving at the income "deductions to be
26 made towards personal living expenses of the deceased and the multiplier to be applied with reference to the age of the deceased." With regard to the additions/deductions to be made after arriving at the income, it has been held that where the age of the deceased is more than 50 years, they should be no addition towards future prospects. Further, a standardization has been made with regard to the percentage of income to be deducted towards personal or living expenses of the deceased and a discussion is made on the appropriate multiplier to be applied having regard to the age of the deceased which has been referred to above.
The Hon'ble Supreme Court in the case of Puttamma and others V/s K.L.Narayana Reddy and another reported in AIR 2014 SC 706 as at Paragraphs 32, 33 and 34 held as under on the issue of split multiplier.
Split Multiplier 32. For determination of compensation in motor accident claims under Section 166 this Court always followed multiplier method. As there were inconsistencies in selection of multiplier, this Court in Sarla Verma prepared a table for selection of multiplier based on age group of the deceased/victim. Act, 1988 does not envisage application of split multiplier.
27 33. In K.R. Madhusudhan and others vs. Administrative Officer and another, (2011) 4 SCC 689 : AIR 2011 SC 979 : 2011 AIR SCW 1390), this Court held as follows:
"14. In the appeal which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of compensation granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of split multiplier and departed from the multiplier used by the Tribunal without disclosing any reason therefor. The High Court has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 and 55 years the multiplier is 11, which is specified in the 2nd column in the Second Schedule to the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said multiplier. This Court also fails to appreciate why the High Court chose to apply the multiplier of 6.
We are, thus, of the opinion that the judgment of the High Court deserves to be set aside, for, it is perverse and clearly contrary to the evidence on record, for having not considered the future prospects of the deceased and also for adopting a split multiplier method."
28 34. We, therefore, hold that in absence of any specific reason and evidence on record the Tribunal or the Court should not apply split multiplier in routine course and should apply multiplier as per decision of this Court in the case of Sarla Verma (AIR 2009 SC 3104 : 2009 AIR SCW 4092) (supra) as affirmed in the case of Reshma Kumari (AIR 2013 SC (Civ) 1731: 2013 AIR SCW 3120) (supra). Compliance of Section 158(6) and 166(4) of the Act, 1988.
In substance, the Hon'ble Supreme Court opined that in the absence of there being any specific reason and evidence on record the Tribunal should not apply split multiplier in routine course and should apply as per decision of the Hon'ble Supreme Court in the case of Sarla Verma as affirmed in the case of Reshma Kumari.
Further in the aforesaid judgment, this Court reduced the compensation awarded by the Tribunal by applying the split multiplier formula when the claimants had infact filed the appeals seeking enhancement of compensation. Though the Tribunal in the instant case has not referred to the decision of K.S.Lakshmi Kumar has infact applied the ratio of the said decision to the case
29 having regard to the fact that the deceased was aged 57 years 11 months and 09 days at the time of his death on account of accident and that he would have retired shortly thereafter at the age of 60 years. That the appropriate multiplier '9' applied. That would imply that the deceased would have retired within three years from the date of the accident and therefore the multiplier of '3' is applied to reckon the compensation to the pre-retirement period by taking the net salary into consideration and the balance multiplier '6' is applied by reckoning the pension on retirement, which is about 50% of the last drawn salary. We do not find any fault with the said approach of the Tribunal as the factual reality has been noted inasmuch as the income (pension) of a retired government servant or an employee having stable income or employment would not be the same prior to his retirement (salary). Also we find the Tribunal has not deducted any amount towards payment of income tax from the pension amount, which is beneficial from the claimants point of view.”
Further, in the instant case the widow of the deceased Chinnaswamy is entitled to a sum of Rs.40,000/-
30 towards loss of consortium. The daughter of the deceased is entitled to a sum of Rs.30,000/- towards loss of parental consortium. A sum of Rs.15,000/- is awarded towards loss of estate and a sum of Rs.15,000/- is awarded towards funeral expenses. Thus, the total compensation arrived at is Rs.16,37,731/- instead of Rs.25,75,244/-.
The reassessed compensation shall carry interest at the rate of 6% per annum from the date of claim petition till realization.
The apportionment made by the Tribunal shall be retained.
In the result, the appeal filed by the claimants is disposed, while the appeal filed by the Insurance Company is allowed in part.
The amount in deposit be transmitted to the Tribunal.
The amount in deposit made by Insurance Company to be released to the claimants in accordance with the
31 directions of the Tribunal, except that the direction for the period of deposit shall be ten years in the case of the widow of the claimant. The remaining amount shall be disbursed to the claimants after due identification.
If any excess compensation amount has been deposited by the Insurance Company, the same shall be refunded to the Insurance Company after due identification.
Parties to bear their respective costs.
Sd/- JUDGE
Sd/- JUDGE
MGN