TMI Blog1993 (1) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1032/-. These facts and the fact that the accident was the result of actionable negligence on the part of the driver of the bus are not disputed. 2. The Motor Accidents Claims Tribunal, Alleppey in O.P.(M.V.) No. 330/1984 on some calculations of its own, which we find it difficult to approve, determined a compensation of Rs. 58,760/- to the respondents-claimants. On appeal by them, the High Court has enhanced the compensation to Rs. 2,64,000/-. The High Court, in addition to the usual award for loss of dependency, made award for special damages for funeral expenses, journey to the hospital, treatment expenses etc. The High Court has also determined the amount of compensation on account of loss of dependency to the tune of Rs. 1,80,000/-. The High Court awarded a sum of Rs. 50,000/- under the head Loss of future earnings in the United States of America. This sum of Rs. 2,64,000/- was directed to be paid together with interest @ 12% per annum from the date of the petition i.e. 15.6.1984 till payment. 3. Sri Krishnamoorthy Iyer, learned senior counsel appearing in support of this appeal, urged that this is a clear case of claimants being over-compensated and that the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, which are maintainable in consequence of a person's death. There were the dependent's claim for the financial loss suffered and a claim for injury, loss or damage, which the deceased would have had, had he lived, and which survives for the benefit of his estate. 6. In a fatal accident action, the accepted measure of damages awarded to the dependents is the pecuniary loss suffered by them as a result of the death. How much has the widow and family lost by the father's death? . The answer to this lies in the oft-quoted passage from the opinion of Lord Wright in Davies and Anr. v. Power Duffryn Associated Collieries Ltd. (1942) A C 601 which says:- The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalised by multiplying it by a figure representing the proper number of year's purchase. Much of the calculation necessarily remains in the realm of hypothesis and in that region arithmetic is a good servant but a bad master since there are so often many imponderables. In every case it is the over-all picture that matters and the court must try to assess as best as it can the loss suffered. 8. There were two methods adopted for determination and for calculation of compensation in fatal accident actions, the first the multiplier mentioned in Davies case (supra) and the second in Nance v. British Columbia Electric Railway Co. Ltd. 1951 A C 601. 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 high ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10. In regard to the choice of the multiplicand the Halsbury's Laws of England in Vol. 34, Para 98 states the principle thus: 98. Assessment of damages under the Fatal Accidents Act 1976. The courts have evolved a method for calculating the amount of pecuniary benefit that dependants could reasonably expect to have received from the deceased in the future. First the annual value to the dependants of those benefits(the multiplicand) is assessed. In the ordinary case of the death of a wage-earner that figure is arrived at by deducting from the wages the estimated amount of his own personal and living expenses. The assessment is split into two parts. The first part comprises damages for the period between death and trial. The multiplicand is multiplied by the number of years which have elapsed between those two dates. Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld multiply the loss of dependency for 45 years - virtually adopting a multiplier of 45 - and even if one third or one fourth is deducted therefrom towards the uncertainties of future life and for immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible. We are aware that some decisions of the High Courts and of this Court as well have arrived at compensation on some such basis. These decisions cannot be said to have laid down a settled principle. They are merely instances of particular awards in individual cases. The proper method of computation is the multiplier-method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. Some judgments of the High Courts have justified a departure from the multiplier method on the ground that Section 110(b) of the Motor Vehicles Act, 1939 in so far as it envisages the compensation to be 'just', the statutory determination of a 'just' compensation would unshackle the exercise from any rigid formula. It must be borne in mind that the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the lost years. Gammell's case was followed by a Division Bench of the Madhya Pradesh High Court in Ramesh Chandra and Ors. v. Madhya Pradesh State Road Transport Corporation and Ors. 1982 MPLJ 426: 1983 ACJ 221. It was pointed out that the decision in Gammel's case wan in line with the Supreme Court's decision in Gobald Motor Service Ltd. v. R.M.K. Veluswami [supra] in which it was held that the capitalised value of his income subject to relevant deductions would be loss caused to the estate of the deceased . The annual loss to the estate was computed in Gammeu's case to be the amount that the deceased would have been able to save, spend or distribute after meeting the cost of his living, and damages for loss to the estate were computed after applying a suitable multiplier to the annual loss. So, ir computation of annual loss the amount that the deceased would have spent on dependents was not taken into account. The result of such a computation was that in cases where the dependants were not the persons to whom the estate devolved, there was likelihood of duplication of damages. To remove this risk, Parliament amended in 1982 the Law Reform (Miscellaneous Provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,25,000/- should be fair, just and reasonable award in the circumstances of this case. The claim made for loss of future earnings of Rs. 50,000/- on the prospects of future employment in USA was rightly negatived by the Tribunal. The award under this head is clearly unjustified in the facts of the case. 15. The rate of interest of 12% from the date of the petition till payment is in the facts and circumstances of the case, left undisturbed. 16. Pursuant to the earlier orders of this Court a sum of Rs. 3,98,000/- had been invested out of which a sum of Rs. 3,60,000/- is invested in a Nationalised Bank. It is appropriate that the appellant shall deposit the balance of the amount together with accrued interest in the Tribunal. The Tribunal will take into account what measures of safety are required to be adopted to protect the interests of the minOrs. It is also necessary to bear in mind that even in respect of the claimants who are sui juris, their interests, if they are illiterate or semi-literate, mast also be protected from possible exploitation. 17. In a case of compensation for death it is appropriate that the Tribunal do keep in mind the principles enunciated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be recorded in writing, permit withdrawal of such amount as is necessary for incurring the expenses for such treatment; (vii) In all cases in which investment in long term fixed deposits is made it should be on condition that the Bank will not permit any loan or advance on the fixed deposit and interest on the amount invested is paid monthly directly to the claimant or his guardian, as the case may be. (viii) In all cases Tribunal should grant to the claimants liberty to apply for withdrawal in case of an emergency. To meet with such a contingency, if the amount awarded is substantial, the Claims Tribunal may invest it in more than Fixed Deposit so that if need be one such F.D.R. can be liquidated. These guidelines should be borne in mind by the tribunals in the cases of compensation in accident cases. 18. In the result this appeal succeeds in part and the compensation is determined at Rs. 2,25,000/-. The judgment of the High Court is modified accordingly. No Costs. 19. The Tribunal will take all this into account and invest as much of the amount as it thinks reasonable in several deposits yielding adequate returns permitting the claimants to withdraw the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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