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CASE NO.: Appeal (civil)  2090 of 2008

PETITIONER: Laxmi Devi & Others

RESPONDENT: Mohammad Tabbar & Another

DATE OF JUDGMENT: 25/03/2008

BENCH: S.B. Sinha & V.S. Sirpurkar

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No.16034 of 2007)

V.S. SIRPURKAR,J.

1.      Leave granted.

2.      This appeal is filed by the widow and five children of one Rajendra  Singh who died in an accident on 12.4.2004 when he was riding on his  bicycle and was given a dash by the offending vehicle, a Canter Truck  bearing Registration No.UA-04-1486.  Rajendra Singh died on the spot.   The driver of the offending vehicle was caught on the spot.  The claimants,  therefore, filed the claim before the Motor Accidents Claims Tribunal on the  basis that Rajendra Singh used to earn Rs.140/- per day and Rs.4200/-  per month and that his age at the time of accident was barely 35 years.  In  support of the claim, three witnesses including Laxmi Devi, the wife of the  deceased were examined and the Tribunal, on the basis of the evidence,  held that the deceased Rajendra Singh died on account of the injuries  sustained by him in the accident on 12.4.2004 which accident had  occurred due to rash and negligent driving of the offending vehicle.  As  regards the income, the Tribunal assessed the same at Rs.15,000/- per  annum on the basis of the notional income prescribed in Second Schedule  under Section 163-A of the Motor Vehicles Act.  After deducting 1/3rd of the  said amount as the personal expenses of the deceased, the claimants\022  dependency was assessed at Rs.10,000/- per month and by multiplying  the annual dependency of Rs.10,000/- with the multiplier of 16, the  compensation was worked out to Rs.1,60,000/-.  The other claims were  also awarded being Rs.2,000/- for funeral expenses, Rs.5,000/- for loss of  consortium to the widow and Rs.2,000/- for loss of estate.  Thus a total  sum of Rs.1,69,000/- was awarded as compensation to the claimants.  The  Tribunal directed the payment of interest on the amount of compensation  at the rate of 6% per annum from the date of claim petition. 3.      An appeal came to be filed before the High Court by the claimants.   No appeal, however, was filed by the Insurance Company or the owner of  the vehicle.  It was contended before the High Court that there was no  basis for arriving at the notional income at Rs.15,000/- per annum and in  fact the income was much more than that for which the evidence of Laxmi  Devi was led.  Therefore, the enhanced compensation was claimed in the  appeal.  As against this it was argued that the Tribunal had erred in  applying the higher multiplier of 16.  Reliance was placed on a reported  decision of this Court in T.N. State Transort Corporation Ltd. v.  Rajapriya and [(2005) 6 SCC 236].   4.      The High Court confirmed the earlier findings regarding the  negligence of death.  However, the High Court came to the conclusion that  though the claim of the income of Rs.4200/- per month was not reliable,  the notional income should have been held to be Rs.36,000/- per annum,

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i.e., Rs.3,000/- per month.  For this proposition the High Court held that the  notional income of Rs.15,000/- in the Second Schedule was prescribed in  the year 1994 while the accident had taken place in the year 2004.  The  second reason given by the High Court was that even an unskilled  labourer, these days, can easily earn Rs.100/- per day and Rs.3,000/- per  month and, therefore, the High Court held the income to be Rs.36,000/-  per annum and by deducting 1/3rd of the income of the deceased for his  personal expenses, the claimants\022 dependency was assessed at  Rs.24,000/- per annum.  However, the High Court reduced the multiplier of  16 applied by the Tribunal to 12.  For this action, the High Court relied on  the aforementioned judgment in T.N. Transports Corporation\022s case.   The High Court thus applied the multiplier of 12 instead of 16 and  ultimately the High Court arrived at the figure of Rs.2,88,000/- and to this  the other compensation on account of funeral expenses, loss of  consortium to the widow and loss of estate, which were granted by the  Tribunal, were added and the total compensation of Rs.2,97,000/- was  awarded by the High Court.  The claimants, dissatisfied with this finding,  have filed this appeal before us. 5.      Learned counsel for the claimants urged that the High Court erred in  applying the multiplier of 12 particularly when the deceased was only 35  years old and none of the claimants was more than that age.  Learned  counsel further urged that the deceased had left behind four minor  daughters along with a young wife.  It was urged that considering the fact  that only 6% interest was granted, the multiplier of 12 was not a proper  multiplier and the multiplier as found by the Tribunal should have been  retained.  As against this, the learned counsel for the Insurance Company  supported the order of the High Court and claimed that in fact the  compensation granted by the High Court was on higher side. 6.      We have considered the contentions as well as the law laid down in  T.N. Transport Corporation\022s case (supra).  In the said decision this  Court, after considering the rulings in G.M. Kerala SRTC v. Susamma  Thomas [(1994) 2 SCC 1760, U.P. SRTC v. Trilok Chandra [(1996) 4  SCC 362] as also the other English cases such as Davies v. Powell  Duffryn Associated Collieries Ltd. [(1942) 1 All ER 657 (HL)] and  Nance v. British Columbia Electric Rly. Co. Ltd., [(1951) 2 All ER 448]  observed in para 12 that: \023The 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 capital sum, if invested at a rate of interest appropriate to  a stable economy, would yield the multiplicand by way of  annual interest.  In ascertaining this, 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 to last.\024

This Court then observed in para 16 as under: \023In Susamma Thomas case it was noted that the normal rate of  interest was about 10% and accordingly the multiplier was  worked out.  As the interest rate is on the decline, the multiplier  has to consequentially be raised.  Therefore, instead of 16 the  multiplier of 18 as was adopted in Trilok Chandra case  appears to be appropriate.\024

It was also further observed by this Court that:

\023The highest multiplier has to be for the age group of 21 years  to 25 years when an ordinary Indian citizen starts  independently earning and the lowest would be in respect of a  person in the age group of 60 to 70, which is the normal  retirement age.\024

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In para 17 of the judgment this Court came to the conclusion that the  appropriate multiplier would be 12 and not 16 in case of a person where  the deceased was 38 years old and the interest was granted at 9% per  annum from the date of claim petition.  The Court, therefore, reduced the  multiplier from 16 to 12 and also reduced the rate of interest to 7.5% per  annum.  It seems that based on that findings the High Court has reduced  the multiplier in the present case. 7.      Considering the above principles in this case, we must say that the  High Court has definitely erred in bringing down the multiplier to 12.  It is to  be seen that in this case the deceased was 35 years old.  The claimants  are his wife and four minor daughters.  Even as per the Second Schedule  the multiplier in case of the persons between 35 to 40 years is 16.  In the  present case the rate of interest granted is only 6% considering the general  rate of interest prevalent in 2004.  In our opinion, therefore, the proper  multiplier would be 14 as the value of the notional income has been  increased.  It was nobody\022s case that the deceased was not working at all.   His wife has entered in the witness box and had asserted that he earned  Rs.140/- per day.  Even if we ignore the exaggeration, the figure arrived at  by the High Court at Rs.100/- per day and Rs.3,000/- per month appears to  be correct.  However, considering that the claimant would get only 6%  interest, we would chose to grant the multiplier of 14 instead of 12.   Accordingly the notional income as applied would be Rs.24,000 x 14 =  Rs.3,36,000/- and to this will be added the other compensation like  Rs.2,000/- as funeral expenses, Rs.5,000/- for the loss of consortium to the  widow and Rs.2,000/- for the loss of estate.  The claimants would,  therefore, be entitled to a sum of Rs.3,45,000/-.  The said sum shall carry  the interest at the rate of 6% per annum from the date of claim petition.     8.      In view of the above, the appeal is allowed.  There would be no order  as to costs.