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CASE NO.: Appeal (civil)  3988 of 2007

PETITIONER: A.P.S.R.T.C. Rep. By Its Chief Law Officer

RESPONDENT: M. Pentaiah Chary

DATE OF JUDGMENT: 30/08/2007

BENCH: S.B. Sinha & Harjit Singh Bedi

JUDGMENT: J U D G M E N T  

CIVIL APPEAL NO.  3988                OF 2007 [Arising out of  SLP (Civil) No. 860 of 2007]

S.B. SINHA, J :          1.      Leave granted.   

2.      Whether in the facts and circumstances of this case multiplier of ’15’  ought to have been applied by the High Court in its impugned judgment falls  for consideration in this appeal which arises out of a common judgment and  order dated 29.08.2006 passed by the High Court of Judicature of Andhra  Pradesh in Appeal against Order No. 528 of 2000 and C.M.A. No. 3350 of  1999.   

3.      Before embarking upon the said question, we may notice the basic  fact of the matter which is not in dispute.  Claimant was aged about 38 years  on the date of accident which took place on 26.01.1995.  He was a carpenter  working in a company.  His monthly salary was said to be Rs. 4500/-.  He  had 15 years of experience in woodcrafts.  His parents, wife, two daughters  and one son were dependant on him.  On the night of 25.01.1995, he was  coming back to his house.  When he was riding on a two-wheeler, he met  with the accident having been hit by a bus belonging to the appellant \026 corporation.  He was thrown on the road and dragged to a distance of 10 to  15 yards.  He suffered serious multiple injuries, viz., fracture of left hand  (humour); fracture of left eight ribs; rupture of spleen; loss of skin and  rupture of left hand; injury to haemolhorex; injury to spinal cord, injury to  nerve of contracting to spleen; blunt injury to left forehead; injury to  thoracic lumber; blunt injury to thigh; rupture of left calf muscle, bruises all  over the body; closed brain injury with blackouts.  He underwent an  operation.  A steel rod was inserted in his fractured hand.  He became  permanently disabled and lost his earning capacity.   

       He filed an application under Section 166 of the Motor Vehicles Act  (for short "the Act") claiming a sum of Rs. 4,00,000/- as damages.  The  Tribunal awarded a sum of Rs. 85,000/- with interest at 12% p.a.   

4.      Respondent preferred an appeal thereagainst.  The High Court by  reason of the impugned judgment granted further compensation to him for a  sum of Rs. 1,62,800/- in addition to the awarded compensation of Rs.  85,000/-.        

5.      Application of the multiplier in a structural form was provided in the  Second Schedule appended to the Motor Vehicles Act.  Benefit of applying  such structural formula was considered by this Court in General Manager,  Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas

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(Mrs) and Others [(1994) 2 SCC 176] wherein this Court opined:

"14. The considerations generally relevant in the  selection of multiplicand and multiplier were  adverted to by Lord Diplock in his speech in  Mallett’s case where the deceased was aged 25 and  left behind his widow of about the same age and  three minor children. On the question of selection  of multiplicand Lord Diplock observed:  "The starting point in any estimate of the amount  of the "dependency" is the annual value of the  material benefits provided for the dependants out  of the earnings of the deceased at the date of his  death. But...there are many factors which might  have led to variations up or down in the future. His  earnings might have increased and with them the  amount provided by him for his dependants. They  might have diminished with a recession in trade or  he might have had spells of unemployment. As his  children grew up and became independent the  proportion of his earnings spent on his dependants  would have been likely to fall. But in considering  the effect to be given in the award of damages to  possible variations in the dependency there are two  factors to be borne in mind. The first is that the  more remote in the future is the anticipated change  the less confidence there can be in the chance of its  occurring and the smaller the allowance to be  made for it in the assessment. The second is that as  a matter of the arithmetic of the calculation of  present value, the later the change takes place the  less will be its effect upon the total award of  damages. Thus at interest rates of 4 =  per cent the  present value of an annuity for 20 years of which  the first ten years are at Pounds 100 per annum and  the second ten years at Pounds 200 per annum, is  about 12 years’ purchase of the arithmetical  average annuity of Pounds 150 per annum,  whereas if the first ten years are at Pounds 200 per  annum and the second ten years at Pounds 100 per  annum the present issue is about 14 years’ purchase  of the arithmetical mean of Pounds 150 per annum.  If therefore the chances of variations in the  "dependency" are to be reflected in the  multiplicand of which the years’ purchase is the  multiplier, variations in the dependency which are  not expected to take place until after ten years  should have only a relatively small effect in  increasing or diminishing the "dependency" used  for the purpose of assessing the damages."

6.      Placing strong reliance upon the observations made therein, the  learned counsel appearing on behalf of the appellant \026 corporation would  submit that the correct multiplier which should have been applied in this  case was ’12’.   

       Reliance was also placed on Dr. K.G. Poovaiah v. General Manager/  Managing Director Karnataka State Road Transport Corporation [(2001) 9  SCC 167] wherein this Court opined:

"5...  However, the assessment of compensation  under the head of loss of earning capacity is very  much on the lower side.  The injury to the right  hand, which has left a permanent disability and

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which has affected the functioning of the limb and  in particular the fingers, is a serious handicap to a  medical practitioner.  Patients would be reluctant  to go to him for treatment and, therefore, the loss  of earning capacity would be substantial.  Even if  we were to assume that it would reduce his earning  capacity by 50% and even if we go by his earnings  at the date of the accident, the monthly loss would  come to Rs. 1500 i.e. Rs. 18,000 per annum.  If  this monthly loss of earning is multiplied by 10  years purchase factor the compensation would  work out to Rs. 1,80,000.  To that must be added  the compensation allowed under certain other  heads, namely, pain and suffering, loss of  amenities, medical expenses, etc.  The total  amount comes to Rs. 2,38,000."

7.      Reliance has also been placed on U.P. State Road Transport Corpn. v.  Krishna Bala and Others [(2006) 6 SCC 249] wherein it was held:

"13. In 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 appears to be appropriate. In fact in  Trilok Chandra case, after reference to Second  Schedule to the Act, it was noticed that the same  suffers from many defects. It was pointed out that  the same is to serve as a guide, but cannot be said  to be invariable ready reckoner. However, the  appropriate highest multiplier was held to be 18.  The 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. (See:  New India Assurance Co. Ltd. v. Charlie)"

8.      As against this, the learned counsel appearing on behalf of the  respondent would submit that this is not a fit case where this Court should  exercise its discretionary jurisdiction and in particular having regard to a  recent decision of this Court in Deepal Girishbhai Soni and Ors. v. United  India Insurance Co. Ltd., Baroda [(2004) 5 SCC 385 : AIR 2004 SC 2107]

9.      We have noticed hereinbefore that the accident took place on  26.01.1995.  A few months prior thereto, the Parliament inserted Section  163-A of the Act by Act 54 of 1994 with effect from 14.11.1994.  The said  provision contains a non-obstante clause in terms whereof inter alia the  owner of the motor vehicle is made liable to pay, in the case of death or  permanent disablement, compensation, as indicated in the Second Schedule  appended to the Act.

10.     "Total Disablement" has been defined in Section 2(l) of the  Workmen’s Compensation Act, 1923 to mean "such  disablement,"  whether   of  a temporary or permanent nature, as incapacitates a workman for all  work which he was capable of performing at the time of the accident  resulting in such disablement".

11.     Section 166 of the Act evidently stands on a different footing.  The  extent of compensation payable thereunder may vary from case to case.   Various other factors including contributory negligence, earning capacity,  extent of negligence on the part of one vehicle or the other, are relevant  factors for computation of damages.  Loss of property can also be subject

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matter of the claim petition.

12.     In Deepal Girishbhai Soni (supra), this Court observed:

"Section 163A was, thus, enacted for grant of  immediate relief to a section of the people whose  annual income is not more than Rs. 40,000/-  having regard to the fact that in terms of Section  163A of the Act read with the Second Schedule  appended thereto; compensation is to be paid on a  structured formula not only having regard to the  age of the victim and his income but also the other  factors relevant therefor. An award made  thereunder, therefore, shall be in full and final  settlement of the claim as would appear from the  different columns contained in the Second  Schedule appended to the Act. The same is not  interim in nature. The note appended to column 1  which deals with fatal accidents makes the position  furthermore clear stating that from the total  amount of compensation one-third thereof is to  reduced in consideration of the expenses which the  victim would have incurred towards maintaining  himself had he been alive. This together with the  other heads of compensation as contained in  columns 2 to 6 thereof leaves no manner of doubt  that the Parliament intended to lay a  comprehensive scheme for the purpose of grant of  adequate compensation to a section of victims who  would require the amount of compensation without  fighting any protracted litigation for proving that  the accident occurred owing to negligence on the  part of the driver of the motor vehicle or any other  fault arising out of use of a motor vehicle."

13.     We, therefore, fail to visualise that in a case of this nature a claimant  can be deprived of a reasonable amount of compensation despite the fact that  he has permanently lost his capacity to earn and remain dependant on other  besides physical sufferance of such magnitude as to why the multiplier  suggested by the Parliament should not be accepted.   

14.     We do not, however, intend to lay down a general law.  We wish to  point out that minimum compensation payable in a case of this nature should  be considered from the sufferings of disability undergone by the victim.  We  are not suggesting that in certain situations, the multiplier specified in the  Second Schedule cannot and should not be altered but therefor there must  exist strong circumstances.  In the year 1995, the rate of interest was lower  than the rate of interest taken into consideration in Susamma Thomas  (supra).  Application of multiplicative factor should also be considered from  that angle.

Susamma Thomas (supra) or the other decisions relied upon by the  learned counsel, do not lay down any law in absolute terms.

15.     In Krishna Bala (supra), the Division Bench considered that the  amount of compensation will have to be determined having regard to the fact  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.  Rate of  interest, therefore, was a relevant factor.

16.     Furthermore, in a case of this nature, we are of the opinion that it is  not a fit and proper case where we should exercise our discretionary  jurisdiction under Article 136 of the Constitution of India.  

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17.     For the reasons aforementioned, there is no merit in this appeal which  is dismissed accordingly.  Appellant shall bear the costs of the respondents.   Counsel’s fee assessed at Rs. 25,000/-.