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CASE NO.: Appeal (civil)  2897 of 2008

PETITIONER: MG. Dir., Bangalore Metropolitan Tpt. Corp.

RESPONDENT: Sarojamma & Anr

DATE OF JUDGMENT: 22/04/2008

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

JUDGMENT: J U D G M E N T  REPORTABLE

CIVIL APPEAL NO.     2897           OF 2008 [Arising out of  SLP (Civil) No. 17647 of 2006]

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

2.      One Ravi Kumar (deceased) son of Respondent no. 1 was travelling in  a bus belonging to the appellant on 25.11.1998.  It met with an accident.   The deceased sustained injuries.  He subsequently succumbed thereto.  He  was unmarried.  He was aged about 18 years.  He left behind the respondent  No. 1 as his only heir and legal representative.   A claim petition was filed in terms of Section 163-A of the Motor  Vehicles Act, 1988 (for short "the Act").  The Tribunal calculated the loss of  dependency at Rs.3,84,000/-, wherefor the multiplier of 16 was applied.  The  Tribunal estimated the income of the deceased at Rs.3,000/- p.m.  One-third  was deducted from the said amount towards his personal expenses.   An appeal was preferred thereagainst by the appellant.  By reason of  the impugned judgment, the High Court while allowing the multiplier of 15  instead of 16 increased the rate of interest from 7% to 10%.  Respondent No.  1 was held to be entitled to a total sum of Rs. 3,64,500/- (Rs. 3,60,000 +  2,000 + 2,500). 3.      Mr. R.S. Hegde, learned counsel appearing on behalf of the appellant  would submit: (i)     There was no evidence to show that the deceased was earning a  sum of Rs. 3,000/- p.m. (ii)    The age of the respondent No. 1 being 45 as on the date of  accident, the High Court committed a serious error in applying the  multiplier of 15; as the deceased was a bachelor  (iii)   The claimant being his mother, the Tribunal as also the High Court  should have deducted 50% of the amount from his income. (iv)    The High Court committed a serious error in enhancing the rate of  interest from 7% to 10% wherefor no justification has been shown. 4.      Ms. Kiran Suri, learned counsel appearing on behalf of the  respondents, on the other hand, would urge: (i)     It is not a fit case where this Court should exercise its discretionary  jurisdiction under Article 136 of the Constitution of India.   (ii)    Keeping in view the fact that the mother has lost her only son, the  Tribunal should have awarded compensation towards loss of estate  and loss of love and affection.   (iii)   As deduction of one-third towards personal expenses is applied in  all cases, the impugned judgment should not be interfered with. (iv)    Keeping in view the fact that the accident had taken place in the  year 1998, grant of 10% interest was wholly justified. 5.      Section 163-A of the Act was inserted by Act No. 54 of 1994 with

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effect from 14.11.1994.  For invoking the said provision, it is not necessary  for a claimant to establish any act of negligence on the part of the driver.  It  is not necessary even to plead that the death had occurred owing to any  wrongful act or neglect or default of owner of the vehicle. 6.      Quantum of compensation is to be determined in terms of the  Schedule II appended thereto.  In terms thereof, apart from the amount of  compensation as provided for therein only funeral expenses, loss of  consortium (if beneficiary is the spouse), loss of estate, medical expenses,  would be payable.   7.      As the Schedule II provides for a structured formula, ordinarily, the  same has to be adhered to.  The structured formula itself stipulates reduction  of income of the deceased by one-third in consideration of the expenses  which he would have incurred towards maintaining himself, had he been  alive.   8.      Whereas in determining an application for grant of compensation  under Section 166 of the Act, the Tribunal may be entitled to find out actual  loss of damages suffered by the claimants, the formula having not envisaged  such a contingency, we are of the opinion that ordinarily one-third should be  deducted from the income of the deceased and not the half thereof.   

       For determining the amount of compensation, the most relevant  factor, therefore, is the income of the deceased.  He was a tutor.  He was  admitted in the Army Teachers Training institute.  He had the requisite  potential of becoming a teacher.  His income, thus, having been estimated at  Rs. 3,000/- p.m. cannot be said to be on a very high side.   9.      This Court in General Manager, Kerala State Road Transport  Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Others [(1994) 2  SCC 176] held as under: "9. The assessment of damages to compensate the  dependants is beset with difficulties because from  the nature of things, it has to take into account  many imponderables, e.g., the life expectancy of  the deceased and the dependants, the amount that  the deceased would have earned during the  remainder of his life, the amount that he would  have contributed to the dependants during that  period, the chances that the deceased may not have  lived or the dependants may not live up to the  estimated remaining period of their life  expectancy, the chances that the deceased might  have got better employment or income or might  have lost his employment or income altogether."

10.     This aspect of the matter has also been considered in U.P. State Road  Transport Corporation and Others v. Trilok Chandra and Others [(1996) 4  SCC 362] by a Three-Judge Bench of this Court in the following terms: "9. The compensation to be awarded has two  elements. One is the pecuniary loss to the estate of  the deceased resulting from the accident, the other  is the pecuniary loss sustained by the members of  his family for his death. The Court referred to  these two elements in the Gobald Motor Seivice’s  case. These two elements were to be awarded  under Section 1 and Section 2 of the Fatal  Accidents Act, 1855 under which the claim in that  case arose. The Court in that case cautioned that  while making the calculations no part of the claim  under the first or the second element should be  included twice. The Court gave a very lucid  illustration, which can be quoted with profit: An illustration may clarify the position. X is the  income of the estate of the deceased, Y is the  yearly expenditure incurred by him on his  dependents (we will ignore the other expenditure  incurred by him). X-Y i.e. Z, is the amount he

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saves every year. The capitalised value of the  income spent on the dependents, subject to  relevant deductions, is the pecuniary loss sustained  by the members of his family through his death.  The capitalised value of his income, subject to  relevant deductions, would be the loss caused to  the estate by his death. If the claimants under both  the heads are the same, and if they get  compensation for the entire loss caused to the  estate, they cannot claim again under the head of  personal loss the capitalised income that might  have been spent on them if the deceased were  alive. Conversely, if they got compensation under  Section 1, representing the amount that the  deceased would have spent on them, if alive, to  that extent there should be deduction in their claim  under Section 2 of the Act in respect of  compensation for the loss caused to the estate. To  put it differently if under Section 1 they got  capitalised value of Y, under Section 2 they could  get only the capitalised value of Z, for the  capitalised value Y + Z = X would be the  capitalised value of his entire income."

11.     What should be the legal principle on which the principle of just  compensation should be worked out had been the subject matter of various  decisions of this Court.  This court in cases after cases noticed that the  principles on which the multiplier method was developed has been given a  go-by.  In many cases, a hybrid method based on the subjectivity of the  Tribunal has been noticed.  Guidelines provided for by the statutes as also  the Superior Court have not been applied.  The courts have also noticed  several defects in the schedule.  It was opined that ordinarily the multiplier  should not exceed 16.   12.     Our attention has also been drawn to a decision of this Court in  Fakeerappa and Another v. Karnataka Cement Pipe Factory and Others  [(2004) 2 SCC 473] wherein it was held: "7. What would be the percentage of deduction for  personal expenditure cannot be governed by any  rigid rule or formula of universal application. It  would depend upon circumstances of each case.  The deceased undisputedly was a bachelor. Stand  of the insurer is that after marriage, the  contribution to the parents would have been lesser  and, therefore, taking an overall view the Tribunal  and the High Court were justified in fixing the  deduction. 8. It has to be noted that the ages of the parents as  disclosed in the Claim Petition were totally  unbelievable. If the deceased was aged about 27  years as found at the time of post mortem and  about which there is no dispute, the father and  mother could not have been aged 38 years and 35  years respectively as claimed by them in the Claim  Petition. Be that as it may, taking into account  special features of the case of feel it would be  appropriate to restrict the deduction for personal  expenses to one-third of the monthly income.  Though the multiplier adopted appears to be  slightly on the higher side, the plea taken by the  insurer cannot be accepted as there was no  challenge by the insurer to the fixation of the  multiplier before the High Court and even in the  appeal filed by the appellants before the High  Court the plea was not taken."

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13.     No finding has been arrived at by the Tribunal that the age of the  claimant was 45 or below.  Why the multiplier of 16 had been applied by the  Tribunal was not stated.  The High Court has also not laid down the legal  premise upon which it had applied the multiplier of 15.  It, however, appears  that the learned counsel for the appellant himself stated that the correct  multiplier would be 15 and not 16 which has been accepted by the High  Court.  We do not, therefore, intend to interfere with the said finding in the  instant case. 14.     The High Court, however, took into consideration an irrelevant factor,  viz., that the claimant must have been suffering from a mental agony in  determining the rate of interest as also the age of the deceased.  We do not  see any justification for increase in the rate of interest.  We, therefore, are of  the opinion that the interest of justice would be subserved if the rate of  interest payable on the awarded amount is brought down to 7%, as was  directed by the Tribunal.

15.     The appeal is allowed only to the aforementioned extent.  No costs.