TMI Blog2002 (7) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... has been challenged and the matters relate to the same accident, all these appeals have been heard together and they are being disposed of by this order. The brief facts are that Dr. Suresh K. Mahajan aged 47-48 years a medical graduate went to America and established himself in the medical profession and became an American National. He established his own hospital in Michigan, U.S.A. He was on visit to India and on February 3, 1995 while proceeding to Jaipur from Delhi in a Maruti Car No. DL-4CB-1926 belonging to one of the two brothers travelling with him, a truck No. HR-29D-1125 hit the rear part of the Maruti Car. Dr. Mahajan was sitting on the back seat was injured and succumbed to his injuries. The Dependants of Dr. Suresh K. Mahajan filed a petition under Section 166 of the Motor Vehicles Act for compensation on account of death of Dr. Mahajan. According to the claimants Dr. Mahajan had specialized in the field of Nephrology and had set up his good practice and a hospital in Michigan U.S.A. According to the claimants, income of the deceased was progressively increasing every year out of his practice and the hospital and in the year 1994 his income was to the tune of 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, came to Rs. 10.38 crores. The FAO No. 273 of 1998 preferred by the claimants was thus allowed in the manner indicated above. And the appeal preferred by the United India Insurance company Ltd. FAO No. 366 of 1998 was dismissed with an observation that there was no scope to disturb the finding of the Tribunal on the question of negligence of offending troller/driver. The parties preferred three Letters Patent Appeals before the Division Bench, which have been decided by the judgment and order dated 17.10.2001. The LPA No. 179 of 2001, preferred by Patrica Mahajan, and LPA No. 225 of 2001 and 236 of 2001 had been filed by the United Insurance Company Ltd. challenging the amount of compensation as awarded by the learned Single Judge and also the order upholding the finding of rash and negligent driving on the part of driver of the troller. By means of impugned judgment, the Division Bench maintained the order passed by the learned Single Judge but for application of multiplier and the exchange rate. In so far it related to exchange rate of Dollar, the Division Bench observed that it was a closed chapter since the amount awarded by the Tribunal at the exchange rate of Rs. 30 was wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isability shall have the same meaning and extent as in the Workmen s Compensation Act, 1923 (8 of the 1923). (2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle/ or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule. The noticeable features of this provision are that it provides for compensation in the case of death or permanent disablement due to accident arising out of use of Motor Vehicle. The amount of compensation would be as indicated in the Second Schedule. The claimant is not required to plead or establish that the death or permanent disablement was due to any wrongful act or negligence or default of the owner of the vehicle or any other person. Award of compensation according to Schedule under this provision is also known as structured formula. Section 166 reads as under:- Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression claims for compensation in respect of accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles includes claims for compensation under Section 140 and section 163A. From the provisions quoted above, it is clear that a claim under Section 166 covers cases of all kinds of bodily injuries or damage to the property of third party or both. Under the explanation to sub-Section 1 of Section 165 it has been indicated that the provision includes the claims for compensation under Section 140 and Section 163A but it is nowhere provided that the amount of compensation is to be assessed or calculated according to the second Schedule. On the other hand, Section 168 provides the key leading to determination of amount of compensation under Section 166 of the Act. The relevant part of Section 168 reads as under:- 168. Award of the Claims Tribunal. On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity if being heard, hold an inquiry into the claims or as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute, i.e. to say that the amount of multiplicand shall be the 2/3rd of annual income of the deceased. The annual income of the deceased, as found by the learned Single Judge and the Division Bench namely $3,39445 is also not in dispute, nor the amount of dependency 2,26297 US Dollars. The only dispute is about application of 13 as multiplier as applied by a Division Bench of the High Court following the Second Schedule to the Act. We may refer to the decision reported in [1994] 2 SCC 176 General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) and Ors. In this case while considering the law on the subject, it was observed in para 13 of the report as follows:- 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph 18 it has however, been observed about Second Schedule that neither the Tribunals nor the Court can go by the ready recknor, it can only be used as guide. The Court has emphasized that in no case a multiplier should exceed 18 years purchase factor. It is however, observed as follows:- 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 dependents are his parents, age of the parents would also be relevant in the choice of mutiplier. (emphasis supplied) What thus emerge from the above decisions is that the Court must adhere to the system of multiplier in arriving at the proper amount of compensation, and also with a view to maintain uniformity and certainty. Use of higher multiplier has been depricated and it is emphasized that it can not exceed 18. The multiplier, as would be evident from the observations quoted earlier, may differ in the peculiar facts and circumstances of a particular case as according to the example cited where bachelor dies at the age of 45, the age of his dependent parents may be rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 and 17 years and the age of son was 13 years, parents of the deceased were 69/ 73 years. The Tribunal was of the view that period of dependency may not be long for the children. Then in consideration of the fact that amount awarded by applying multiplier of 7 would yield an interest of about 87,000 US Dollars if invested at the rate of 12% per annum. The learned Single Judge of the High Court considering the age of the deceased and his dependants and the provisions of the Second Schedule and the decision of this Court in the case of Trilok Chand (supra) took the view that the application of mutiplier of 10 would be appropriate in the present case. The Division Bench in appeal has laid much stress on the fact that according to the decision in Susamma Thomas and Trilok Chand (supra) there should not be any deviation in the method of working out the amount of compensation applying multiplier method. There is nothing wrong in the statement of above propositions as indicated by the Division Bench. Different method can be resorted to only in rare and exceptional cases but the learned Single Judge had applied only mutiplier method and none-else, however looking to the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side. Two of the dependants namely, parents aged 69/73 years live in India, but four of them are in the United States. Shri Soli J. Sorabjee submitted that the amount of multiplicand shall surely be relevant and in case it is a high amount, a lower mulitplier can appropriately be applied. We find force in this submission. Considering all the facts and factors as indicated above, to us it appears that application of multiplier of 7 is definitely on the lower side. Some deviation in the figure of multiplier would not mean that there may be a wide difference between the multiplier applied and the scheduled multiplier which in this case is 13. The difference between 7 and 13 is too wide. As observed earlier, looking to the high amount of multiplicand and the ages of the dependants and the fact that parents are residing in India in our view application of multiplier of 10 would be reasonable and would provide a fair compensation i.e. purchase factor of 10 years, We accordingly hold that multiplier of 10 as applied by the learned Single Judge should be restored instead of multiplier of 13 as applied by the Division Bench, We find no force in the submission made on behalf of the claimants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r facts calling for deviation from the multiplier usually applicable. Now we come to the next point raised by Mr. Soli J. Sorabjee, learned senior counsel appearing on behalf of the Insurance Company, about deductions, from the amount of compensation as received by the claimants on account of social security system. In this connection. It has been submitted that admittedly, the claimants had received 2,50,000 Dollars on account of life insurance policy of the deceased. Apart from that, Patricia Mahajan had also received unemployment allowance for a period of 8 and 9 months as well as two children out of the three. It may be noted here that the Tribunal had deducted the said amount, but it was disallowed by the learned Single Judge and upheld by the Division Bench. Mr. Soli J. Sorabji submitted that while assessing the amount of compensation, the benefits which have accrued to the claimants by reason of death must also be taken into account. A kind of balancing of losses and the gains or benefit by reason of death would be necessary. In support of the above contention he has referred to a decision reported in [1962] 1 SCR 929 Gobald Motors Service Limited v. R.M.K. Velus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een accepted by this court as well, On behalf of the Insurance company 1988 (3) All ER. 870 Hodgson v. Trapp and Anr. has been relied in which our attention has particularly been drawn to the following observations made at page 873. ...........the basic rule is that it is the net consequential loss and expense which the Court must measure, it, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set against the aggregate of the plaintiff s losses and expenses in arriving at the measure of his damages. All this is elementary and has been said over and over again. To this basic rule there are of course, certain well established, though not always precisely defined and delineated, exceptions. But the Courts are, I think, sometimes in danger, in seeking to explore the rationale of the exceptions, of forgetting that they are exceptions. It is the rule which is fundamental and axiomatic and exceptions to it which are only to be admitted on grounds which clearly justify their treatment as such From the above passage it is clear that the deductions are admissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity benefits should be disregarded. 482-We recommend that the full value of social security benefits payable to an injured person or his dependents as a result of an injury for which damages are awarded should be deducted in assessment of damages. And at page 118 under para 537 our attention has also been drawn to a passage which reads as under:- 537. Under the present law in England, Wales and Northern Ireland, pecuniary benefits derived by a dependent of a deceased person from his estate are taken into account in assessing damages under the Fatal Accidents Acts. Usually, any deduction is unimportant because, if the sum would have been paid to the plaintiff in any event in the future (for example, under a will), it is not deducted in full. Instead, an allowance may be made for accelerated payment and certainty of receipt. Nor does the rule apply to payments under a life insurance policy or to the use of a home or property. A full deduction is, however, made where the dependant receives a sum awarded to the estate of the deceased for non pecuniary loss. A perusal of the recommendations of the Royal Commission headed by Lord Pearson as referred to and relied upon on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he victim may not have died and may be still alive. Therefore, such payments which are unconnected and unrelated with the event of an accident resulting in injury or death, have to be disregarded for the purposes of deduction from the amount of damages. He has also referred to some American decisions one of them is 230 S.O. 2(d)(1) 1968 Flaapp Lexis 5073 Marc A. O NEAL........Appeal No. H-303. The Court of Appeals Florida first Districts the opinion of judge Carrol was countered by the other judges and the Chief Justice. He has drawn our attention to the following observation: Stated broadly the general Rule founded upon decisional law as well as logic and justice seems to be that a dependent can not reduce the damages for which there was otherwise be liable by showing that the plaintiff received compensation from a Collateral source such as benefits received from welfare and pension funds. Learned senior counsel appearing on behalf of the claimants also submits that the High Court has rightly placed reliance upon a decision of this Court reported in [ 1999] 1 SCC page 90 Helen Rebellos case. It is further submitted that this Court has rightly made a distinctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction. However, our legislature has taken note of such contingency through the proviso of Section 95. Under it the liability of the insurer is excluded in respect of injury or death, arising out of and in the course of employment of an employee. The Court has observed in the last part of the para 34:- How can an amount of loss and gains of all one contract be made applicable to the loss and gain of an other contract. Similarly, how an amount receivable under a statute has any co-relation with an amount earned by an individual. Principle of loss and gain has to be on the same line within the same sphere, of course, subject to the contract to the contrary or any provisions of law. The court has further referred to receipts of Provident Fund which is a deferred payment out of contribution made by an employee during tenure of his service Such an amount is payable irrespective of accidental death of the employee. The same is the position relating to family pension. There is no co-relation between the compensation payable on account of accidental death and the amounts receivable irrespective of such accidental death which otherwise in the normal course one would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hands of the claimants, in view of the mere death of the victim, it would only defeat the purpose of the Act providing for just compensation on account of accidental death. Such gains may be on account of savings or other investment etc. made by the deceased would not go to the benefit of wrong doer and the claimant should not be left worse of, if he had never taken an Insurance Policy or had not made investments for future returns. We therefore, do not allow any deduction as pressed by the Insurance Company an account of receipts of Insurance Policy and social security benefits received by the claimants. We may now pass on to the next question of rate of interest payable on the amount of compensation. It has been awarded at the rate of 12%. Learned senior counsel for the respondent Shri P.P. Rao took an objection that the question relating to rate interest was not under challenge before the High Court. He has referred to the observations made by the Division Bench in its judgment to the effect in any case, the rate of interest is not in dispute before us . Thereafter it is observed that the Tribunal had awarded interest @ 12% per annum which was maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made in the judgment of the Division Bench itself, has been relied upon by the counsel for the Insurance Company for reducing the rate of interest. The Division Bench in its judgment observed as follows: It has, however, also been brought to our notice that in A. Roverl v. United Insurance Co. Ltd., [1999] 8 SCC 228 the Supreme Court awarded interest at 6% from the date of the application till actual payment to the claimant. In Kanshnuma Begum (Smt.) and Ors v. United Insurance Co. Ltd., [2001] 2 SCC 9 this Court awarded interest at the rate of 9% per annum. Thereafter the observations made in the case of Kanshnuma Begum (Supra) have been quoted. After so much of discussion on the point of rate of interest and after mentioning the decisions relied upon by both the sides on their part, it could not be said that rate of interest was not in dispute before the Court. As indicated earlier the observation is not indicated to have been made in reference to any statement of the counsel for the party nor it comes out that the respective parties may not have advanced arguments for maintaining the rate of interest as awarded and the other party for reducing the rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalized banks are now granting interest at the rate of 9% on fixed deposit for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants. In our view the reason indicated in the case of Kaushnuma Begum (supra) is a valid reason and it may be noticed that the rate of interest is already on the decline. We therefore, reduce the rate of interest to 9% in place of 12% as awarded by the High Court. The next point which remains to be considered is in relation to the exchange rate of the Dollar in Rupee. The Motor Accident Claims Tribunal allowed the exchange rate of the Dollar at Rs. 30. The learned Single Judge allowed it at the then current rate of Rs. 47. The Division Bench restored the exchange rate at Rs. 30 observing that the matter was closed since the claimants had withdrawn the amount as awarded by the Tribunal and the matter was now on the second stage relating to enhanced amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was for a definite sum it terms of Rupees, a part of which was found admissible which amount was decreed. There is no occasion to convert the amount of decree in Rupees into Dollars applying Rs. 30 as rate of conversion and then reconvert it in Rupees at the rate of Rs. 47 The claimants cannot ask for more than what was prayed for in the claim petition. We are therefore not inclined to accede to the request made for calculation of the amount of award at the conversion rate of Rs. 47. Shri T.R. Rajagopalan, learned senior counsel appearing for the Insurance Company in SLP (c) 20874/2001 preferred on the question of rash and negligent driving against the driver of the Trailer advanced some arguments but we do not think that the finding of fact recorded by the Courts of fact namely the Motor Accident Claims Tribunal and upheld by the learned Single Judge as well as the Division Bench can be re-opened to re-assess the evidence on the point. In view of the discussion held above, we partly allow the appeals of the Insurance Company (SLP c Nos. 20875 and 21858/2001) and set aside the part of the judgment of the Division Bench of the High Court by which it applied the multiplie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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