Dismissed

The New India Assurance Company Ltd. v. Ponnamma Somarajan

Kerala HC19 Nov 2018MACA/305/2013

Case brief

AI extract

What is this about?

The Division Bench dismissed the insurer's appeal against the Tribunal's award of compensation. The court held that statutory provisions preclude the use of a split multiplier without specific reasons or evidence, mandating the standard uniform multiplier method instead.

What did the court decide?

The Motor Accidents Claims Appeal filed by the insurer is dismissed with no order as to costs.

The New India Assurance Company Ltd. Vs Ponnamma… — Motor Accident Claims | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.D.RAJAN

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MONDAY ,THE 19TH DAY OF NOVEMBER 2018 / 28TH KARTHIKA, 1940

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M.A.C.A.No. 305 of 2013

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AGAINST THE AWARD IN OPMV 1231/2006 of MOTOR ACCIDENTS CLAIMS TRIBUNAL, PATHANAMTHITTA DATED 22-09-2012

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APPELLANT/3RD RESPONDENT IN OP(MV) NO.1231/06:

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THE BRANCH MANGER, NEW INDIA ASSURANCE COMPANY LTD, PATHANAMTHITTA, REPRESENTED BY ITS MANAGER, REGIONAL OFFICE, KANDAMKULATHY TOWERS, M.G.ROAD, ERNAKULAM.

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BY ADV. SRI.LAL GEORGE

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RESPONDENT/PETIONERS 1 & 2 AND RESPONDENTS 1& 2 IN OP(MV)NO.1231/06:

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1 PONNAMMA SOMARAJAN AGED 47 YEARS W/O.SOMARAJAN, MALAYIL PUTHEN VEEDU, KUTTOOR.P.O., KUTTOOR VILLAGE. 689 106.

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2 SWAPNA SOMARAJAN AGED 24 YEARS D/O.SOMARAJAN, RESIDING AT MALAYIL PUTHEN VEEDU, KUTTOOR.P.O., KUTTOOR VILLAGE. 689 106.

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3 T.GEORGE S/O.THANGALAH (DELETED IN THE AWARD), OPPOSITE SASTHAN COIL, PUTHERI, NAGARCOIL,KANYAKUMARY DISTRICT. 629 001.

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4 MRS.V.RAJAMANI FURNISHING HOUSE, SIVARAJ BUILDING, TOWER JUNCTION, NAGAR COIL, KANYAKUMARY DISTRICT. 629 001.

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BY ADVS. SRI.SURIN GEORGE IPE SRI.P.N.MOHANAN

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THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 19.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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M.A.C.A.No. 305 of 2013

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JUDGMENT

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This appeal is preferred against the award in OP(MV)No. 1231/2006 of the Motor Accidents Claims Tribunal, Pathanamthitta by the insurer. O ne Somarajan sustained injuries in a motor accident and he died, the learned Tribunal awarded Rs.13,14,410/- (Rupees Thirteen Lakhs Fourteen Thousand Four Hundred and Ten only) as compensation to the legal representatives of the deceased. Being aggrieved by that, the insurer preferred this appeal.

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The accident was not disputed by the respondents in the lower court. Claimants case was that on 23-07-2006 at 9.30 am , the deceased was riding a motor cycle KL 01/X/9537 along Thiruvalla - Mavelikkara public road, when he reached at the place of occurrence, another car TN/74/H/1211 driven in a rash and negligent manner hit against the motor cycle. As a result, the rider of the motor cycle sustained serious injuries. While undergoing treatment on 02-09-2006, he succumbed to the injuries at Medical College Hospital, Kottayam. The owner

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M.A.C.A.No. 305 of 2013

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of the vehicle filed a written statement and contended that the deceased was careless and riding the motor cycle in a rash and negligent manner at an exorbitant speed and thereby the accident occurred. The insurer admitted the insurance of the vehicle. Claimants did not adduce any oral evidence, but their documents were marked as Exts.A1 to A11. Respondents did not adduce any oral or documentary evidence.

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The learned counsel appearing for the appellant contended that the deceased was a Civil Police Officer who was aged 53 years at the time of the accident, he has to retire from service at the age of 56 from the state police. Excess amount was awarded towards dependency compensation therefore, the split multiplier has to be taken in view of Puttamma v. Narayana Reddy [2014 (1) KLT 738 (SC)].

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The deceased left behind his wife Ponnamma Somarajan, aged 47 years and daughter Swapna Somarajan aged 24 years who were dependency upon the deceased. They did not challenge the award or file any cross objection in this appeal. Appellant has no dispute with regard to the

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M.A.C.A.No. 305 of 2013

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negligence therefore it is not necessary to consider that aspects in this appeal. In death case, the measure of damage is towards the pecuniary losses, which is to be suffered by the dependents as a result of the fatal accident. But the assessment of damages to the dependents is very difficult because from the nature of things, it has to take into account many imponderables. The life expectancy of the deceased and the dependents are the major factors. Secondly the amount that the deceased would have earned during the remaining period of his life, the amount that he would have contributed to the dependents during that period is also relevant. The chances that the deceased may not have lived or the dependents may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better job and earned more income also have to be considered by the tribunal.

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In this context, the decision of the Apex Court in Puttamma v. Narayana Reddy [2014 (1) KLT 738 (SC)] has to be appreciated. In paragraphs 31, 32, 33 and 34, Apex Court held as follows:

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M.A.C.A.No. 305 of 2013

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31. In sarla Verma (supra) this Court held that the multiplier should be used in the following manner:

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“42. We therefore hold that the multiplier is to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every fie years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M- 14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”

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This Court laid down the above guidelines to ensure uniformity and consistency in the selection of multiplier while awarding compensation in motor accident claims made under S.166. The application of multiplier fell for consideration recently before three-Judge Bench in Reshma Kumari & Ors. v. Madan Mohan & Anr. (2013) (2) KLT 304 (SC)= (2013) 9 SCC (65) . In the said case this court held:

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“33. We have already noticed the table prepared in Sarla Verma for the selection of multiplier. The table has been prepared in Sarla Verma having regard to the three decisions of this Court, namely, Susamma Thomas (1994 (1) KLT 67 (SC)=(1994) 2 SCC 176), Trilok Chandra (1996 (2) KLT 218 (SC) and Charlie (2005 (3) KLT 227 (SC) for the claims made under S.166 of the 1988 Act. The Court said that multiplier shown in Column (4) of the table must be used having regard to the age of the deceased. Perhaps the biggest advantage by employing the table prepared in

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M.A.C.A.No. 305 of 2013

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Sarla Verma is that the uniformity and consistency in selection of the multiplier can be achieved. The assessment of extent of dependency depends on examination of the unique situation of the individual case. Valuing the dependency or the multiplicand is to some extent an arithmetical exercise. The multiplicand is normally based on the net annual value of the dependency on the date of the deceased's death. Once the net annual loss (multiplicand) is assessed, taking into account the age of the deceased, such amount is to be multiplied by a 'multiplier' to arrive at the loss of dependency. In Sarla Verma, this Court had endeavoured to simplify the otherwise complex exercise of assessment of loss of dependency and determination of compensation in a claim made under S.166. It has been rightly stated in Sarla Verma that claimants in case of death claim for the purposes of compensation must establish (a) age of the deceased (b) income of the deceased; and (c) the number of dependants. To arrive at the loss of dependency, the Tribunal must consider (I) additions/deductions to be made for arriving at the income; (ii) the deductions to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased. We do not think it is necessary for us to revisit the law on the point as we are in full agreement with the view in Sarla Verma.

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32. For determination of compensation in motor accident claims under S.166 this Court always followed multiplier method. As there were inconsistencies in selection of multiplier, this Court in Sarla Verma prepared a table for selection of multiplier based on age group of the deceased/victim. Act, 1988 does not envisage

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M.A.C.A.No. 305 of 2013

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application of split multiplier.

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33. In K.R. Madhusudhan & Ors. v. Administrative Officer & Anr. (2011 (1) KLT SN 98 (C.No.136) SC = (2011) 4 SCC 689), this Court held as follows:

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“14. In the appeal which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of compensation granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of split multiplier and departed from the multiplier used by the Tribunal without disclosing any reason therefor. The High Court has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 and 55 years the multiplier is 11, which is specified in the 2nd column in the Second Schedule to the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said multiplier. This Court also fails to appreciate why the High Court chose to apply the multiplier of 6.

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15. We are, thus, of the opinion that the judgment of the High Court deserves to be set aside for it is perverse and clearly contrary to the evidence on record, for having not considered the future prospects of the deceased and also for adopting a split multiplier method.”

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34. We, therefore, hold that in absence of any specific reason and evidence on record the Tribunal or the Court should not apply split multiplier in routine course and should apply multiplier as per decision of this Court in the case of Sarla Verma (supra) as affirmed in the case of Reshma Kumari (supra).

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In the light of the above decision, the question to be

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M.A.C.A.No. 305 of 2013

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considered is whether a split multiplier can be taken in routine course to award just compensation. For considering this aspect, first I have looked into whether any specific reason and any evidence have been furnished before the Motor Accidents Claims Tribunal by the appellant to take split multiplier. Appellant admitted that no specific reasons were stated in the written statement filed before the Motor Accidents Claims Tribunal and no evidence has been adduced in the lower court for adopting a split multiplier. In several decision, Apex Court held that to bring uniformity and certainty in awarding just compensation, 'multiplier method' is acceptable. The expression 'just compensation' has been explained by the Apex Court and held that the compensation awarded by a Tribunal does not become just compensation merely because the Tribunal considered it to be just. “Just Compensation' is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well-settled principles relating to the award of compensation. After surveying almost

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all the previous decision, the Apex Court almost standardised the norms for the assessment of damages in Motor Accidents Claims.

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I have considered the decision rendered by the apex court in General Manager, Kerala State Transport Corporation v. Susamma Thomas [1994 (1) KLT 67 (SC)] , then U.P. State Road Transport Corporation v. Trilok Chandra [1996 (2) KLT 2018 (SC)] and another New India Assurance Co. Ltd. v. Charlie [2005 (3) KLT 227 (SCC)], Sarla Verma v. Delhi Transport Corporation (AIR 2009 SC 3104). The deceased was aged 53 at the time of the accident, he will retire from service at the age of 56 years. In view of Sarala Varma's case (supra), the multiplier is 11. The deceased was getting good salary at the time of his death. After retirement also, he is entitled to get pensionery benefits until his death. He can also earn some money by doing some other work. Due to the sudden unforeseen incident, the entire family lost their dependency.

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Therefore, it is clear that a uniform multiplicand cannot be applied in cases of Government employees, at the

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same time split multiplier in routine course should not be taken without specific reason and evidence. While adverting to the argument of the appellant, it is found that the appellant had not mentioned any specific reason and not adduced any evidence in this case to take split multiplier, therefore the above argument has no basis. The promotion prospects of the deceased before superannuation is a relevant factor for assessing the dependency compensation. The revision of pay scale which may applied retrospectively on the basis of pay commission is also a relevant factor while determining compensation. After retirement also he is entitled to get half of the salary as pensionary benefit till his death. The increase in the Dearness allowance of the pensioner is another relevant factor. What was stated in Puttamma's case (supra) is that, to ensure uniformity multiplier method should be followed while awarding compensation under Section 166 of the Motor vehicles Act, 1988.

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Thus the consistent and well crystallized legal position can be gathered from the above judgment of the Hon'ble Supreme Court is that the Multiplier method is the appropriate

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method for awarding just compensation, a departure from which can be justifiable only on specific reason and evidence. Any departure without “specific reason” and “evidence on record” would introduce inconsistency in the principle of multiplier method which result lack of uniformity in awarding just compensation which is impermissible. Therefore, the submission made by the learned counsel to take notional income after retirement and take split multiplier without specific reason and evidence is without any basis. Therefore, when the legislative intention is to grant compensation and the computation is made for grant of damages alone, it would be a wholly incorrect approach. The facts and circumstances of the case show that the dependants are entitled to get just amount as compensation following multiplier method. I find no merit in the arguments of the appellant and this appeal is dismissed accordingly.

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Sd/- P.D.RAJAN, JUDGE

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nak

The New India Assurance Company Ltd. v. Ponnamma Somarajan

Case brief

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The New India Assurance Company Ltd. v. Ponnamma Somarajan

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