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The appeals before the High Court of Kerala involved multiple cases where children under the age of 10 had died in motor accidents, and the compensation awarded by the Motor Accidents Claims Tribunal was contested by the insurers and the claimants. The primary legal issue was whether the multiplier method should be applied for calculating compensation for loss of dependency in cases involving the death of children, and if so, what multiplier should be used and how the notional income should be determined. The court examined precedents and statutory provisions, particularly focusing on the application of the multiplier method and the calculation of notional income for children who are not earning.
Appeal Details
Counselvise Citation
[2019] 140 COUNSELVISE.COM (IT) 691059 (HC-KERALA)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Others
Pronouncement Date
19-08-2019
Assessment Year
misc
Judgement Text
"C.R. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 19TH DAY OF AUGUST 2019 / 28TH SRAVANA, 1941 MACA.No.1459 OF 2013 OPMV 554/2010 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, VADAKARA APPELLANT/3 rd RESPONDENT: THE NATIONAL INSURANCE COMPANY LTD NEW DELHI,REPRESENTED BY ITS DEPUTY MANAGER,REGIONAL OFFICE,2ND FLOOR,OMANA BUILDING,M.G ROAD,KOCHI 35 BY ADV. SRI.GEORGE CHERIAN (SR.) RESPONDENTS/CLAIMANTS: 1 K.K.ASSAINAR S/O.KUNHABDULLA,RESIDING AT KOTTA KUNNUMMAL LAKSHAM VEEDU,COLONY,IRINGAL (PO), IRINGAL VILLAGE,IRINGAL DESOM,KOYILANDY TALUK,PIN 673 521 2 K.K.JAMEELA W/O.ASSAINAR AND D/O. POCKER,RESIDING AT KOTTAKUNNUMMAL,LAKSHAM VEEDU COLONY,IRINGAL (PO),KOYILANDY TALUK,PIN 673 521 R1 BY ADV. SRI.K.R.AVINASH KUNNATH R1 BY ADV. SRI.U.P.BALAKRISHNAN THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19.08.2019, ALONG WITH MACA.2111/2014, MACA.1018/2016, MACA.115/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MACA.No.1459 OF 2013 & conn.cases 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 19TH DAY OF AUGUST 2019 / 28TH SRAVANA, 1941 MACA.No.2111 OF 2014 OPMV 274/2011 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, VADAKARA APPELLANT/3RD RESPONDENT: THE ORIENTAL INSURANCE CO.LTD. METRO PALACE, GROUND FLOOR, OPP.NORTH RAILWAY STATION, ERNAKULAM, REPRESENTED BY ITS DULY AUTHORIZED OFFICER. BY ADV. SRI.VPK.PANICKER` RESPONDENTS/PETITIONERS: 1 VINODAN S/O.CHATHU, CHEEKILOTTUKUNIYIL HOUSE, THINOOR P.O., NARIPPATTA AMSOM, THINOOR DESOM, VATAKARA TALUK, PIN - 673 507. 2 SAJITHA W/O.VINODAN, CHEEKILOTTUKUNIYIL HOUSE,THINOOR P.O., NARIPPATTA AMSOM, THINOOR DESOM, VATAKARA TALUK, PIN - 673 507 R1 BY ADV. SRI.M.PROMODH KUMAR R1 BY ADV. SRI.P.R.SREEJITH THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19.08.2019, ALONG WITH MACA.1459/2013, MACA.1018/2016, MACA.115/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MACA.No.1459 OF 2013 & conn.cases 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 19TH DAY OF AUGUST 2019 / 28TH SRAVANA, 1941 MACA.No.115 OF 2016 OPMV 947/2014 OF MOTOR ACCIDENT CLAIMS TRIBUNAL,KOTTAYAM APPELLANT/3RD RESPONDENT: RELIANCE GENERAL INSURANCE CO.LTD KOTTAYAM, REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE, ERNAKULAM BY ADVS. SRI.GEORGE CHERIAN (SR.) SMT.K.S.SANTHI RESPONDENTS/CLAIMANTS: 1 PRASAD M.C S/O. CHELLAPPAN, MUZHUVATHARA HOUSE, KIDANGARA P.O, VELIYANAD, ALAPPUZHA DISTRICT PIN 686 102 2 AMAL PRASAD(MINOR), REPRESENTED BY HIS FATHER PRASAD M.C. AS NEXT FRIEND AND GUARDIAN, S/O. CHELLAPPAN, MUZHUVATHARA HOUSE, KIDANGARA P.O, VELIYANAD, ALAPPUZHA DISTRICT, PIN 686 102 R1 BY ADV. SRI. NAZIMUDDIN T.S R1 BY ADV. SRI.P.M.JOSHI R1 BY ADV. SMT.SIJI K.PAUL THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19.08.2019, ALONG WITH MACA.1459/2013, MACA.2111/2014, MACA.1018/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MACA.No.1459 OF 2013 & conn.cases 4 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 19TH DAY OF AUGUST 2019 / 28TH SRAVANA, 1941 MACA.No.1018 OF 2016 OPMV 947/2014 OF MOTOR ACCIDENT CLAIMS TRIBUNAL,KOTTAYAM APPELLANTS/PETITIONERS: 1 PRASAD.M.C. AGED 46 YEARS, S/O.CHELLAPPAN, MAZHUVATHARA HOUSE, KIDANGARA PO, VELIYANAD, ALAPPUZHA DISTRICT 2 AMAL PRASAD S/O.PRASAD MC, AGED 14 YEARS, REPRESENTED BY HIS FATHER PRASAD MC, AGED 48 YEARS, S/O.CHELLAPPAN, MAZHUVATHARA HOUSE, KIDANGARA PO, VELIYANAD, ALAPPUZHA DISTRICT, AS NEXT FRIEND AND GUARDIAN BY ADVS. SRI.P.M.JOSHI SMT.SIJI K.PAUL RESPONDENT/RESPONDENT NO.3: THE REGIONAL MANAGER, RELIANCE GENERAL INSURANCE CO.LTD. KOTTAYAM, KOTTAYAM 1 R1 BY ADV. SRI.GEORGE CHERIAN (SR.) R1 BY ADV. SRI.GEORGE CHERIAN SR. R1 BY ADV. SMT.LATHA SUSAN CHERIAN R1 BY ADV. SMT.K.S.SANTHI THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19.08.2019, ALONG WITH MACA.1459/2013, MACA.2111/2014, MACA.115/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MACA.No.1459 OF 2013 & conn.cases 5 C.R. JUDGMENT [ MACA.1459/2013, MACA.2111/2014, MACA.1018/2016, MACA.115/2016 ] Dated this the 19th day of August 2019 The questions arising for consideration in these matters are common and they are, therefore, disposed of by this common judgment. The questions relate to computation of compensation in cases involving death of children in motor accidents, in terms of the Motor Vehicles Act, 1988 (the Act). 2. Before proceeding to formulate and consider the questions, it is necessary to give an outline of the basic facts and the contentions raised by the parties. 3. Among the appeals, M.A.C.A. No.115 of 2016 is one preferred by the insurer in a proceedings for compensation before the Motor Accidents Claims Tribunal and M.A.C.A.No.1018 of 2016 is by the claimants in the said proceedings. The claimants in the proceedings are the father and elder brother of one Athul Prasad who died in a motor accident on 27.01.2014. Athul Prasad was aged 8 years. Rs.10,00,000/- was the claim made in the proceedings. As against the said claim, the Tribunal has granted to the claimants Rs.6,75,000/- by way of compensation. The said sum of Rs.6,75,000/- includes Rs.4,80,000/- granted towards loss of dependency. According to the MACA.No.1459 OF 2013 & conn.cases 6 insurer, the compensation granted by the Tribunal under the aforesaid and other heads are excessive and according to the claimants, they are grossly inadequate. 4. M.A.C.A.No.1459 of 2013 is also an appeal preferred by the insurer in a proceedings for compensation before the Motor Accidents Claims Tribunal challenging the decision of the Tribunal. The claimants in the said proceedings are the parents of another 8 year old boy, namely, Siraj who died in a motor accident on 27.3.2010. Rs.5,00,000/- was the claim made in the proceedings. As against the said claim, the Tribunal has granted to the claimants Rs.5,65,000/- by way of compensation. The said sum of Rs.5,65,000/- includes Rs.5,40,000/- granted towards loss of dependency. According to the insurer, the compensation granted by the Tribunal under the aforesaid and other heads are excessive. 5. M.A.C.A.No.2111 of 2014 is also an appeal preferred by the insurer in a proceedings for compensation before the Motor Accidents Claims Tribunal challenging the decision of the Tribunal. The claimants in the said proceedings are the parents of a girl aged 3 years, namely, Anamika who died in a motor accident took place on 11.2.2011. Rs.6,00,000/- was the claim made in the proceedings. As against the said claim, the Tribunal has granted to the claimants Rs.4,55,000/- by way of compensation. The said sum of Rs.4,55,000/- includes Rs.2,00,000/- granted towards loss of dependency. According MACA.No.1459 OF 2013 & conn.cases 7 to the insurer, the compensation granted by the Tribunal under the aforesaid and other heads are excessive. 6. The main contention raised by the learned counsel for the insurers is that compensation for loss of dependency cannot be computed in all cases involving death of children, applying multiplier method. According to them, in cases involving death of children below the age of 10 years, it may not be appropriate to compute compensation for loss of dependency applying the multiplier method, as there will not be any materials on record in such cases to make an estimation of the notional income of the deceased, which is required for the purpose of computation. It was the submission of the learned counsel that in such cases, only a consolidated amount can be granted by way of compensation under that head. The learned counsel placed reliance on the decision of this court in United India Insurance Co. Ltd. v. Ajith [2002(3) KLT 330], in support of the said contention. According to the learned counsel, in all the three cases dealt with in these matters, the age of the children being below ten years, a consolidated sum should have been granted by the Tribunal towards compensation for loss of dependency and the compensation computed and granted in their cases applying the multiplier method are liable to be interfered with. As regards the quantum, the submission made by the learned counsel for the insurers was that the same can be fixed having regard to the minimum compensation prescribed for death MACA.No.1459 OF 2013 & conn.cases 8 cases in terms of Section 163A of the Act. It was also contended by the learned counsel that even if it is found that multiplier method is the appropriate method to be applied in these cases, the notional income arrived at by the Tribunal for the said purpose is excessive. 7. Per contra, the learned counsel for the claimants, placing reliance on the decision of the Apex Court in Kishan Gopal and another v. Lala and others [(2014) 1 SCC 244], contended that in so far as compensation for loss of dependency is computed based on the notional income arrived at having regard to the facts and circumstances of each case, there is nothing wrong in adopting the multiplier method for the said purpose, irrespective of the age of the deceased. It was also pointed out by the learned counsel that the said method is required to be followed for maintaining uniformity in the quantum of compensation awarded in respect of children of the same age. It was also pointed out by the learned counsel that as the quantum of compensation payable under Section 166 of the Act cannot go below the quantum of compensation payable under Section 163A of the Act, the multiplier to be applied for the purpose of computation shall be '20', for, if the multiplier '15' is applied, the quantum of compensation may, in some cases, go below the quantum prescribed for death cases in terms of Section 163A of the Act. It was also contended by the learned counsel that in the light of the decision of the Apex Court in National Insurance Company Ltd v. Pranay MACA.No.1459 OF 2013 & conn.cases 9 Sethi [2017(4) KLT 662 (SC)], there has to be an addition also to the notional income arrived at, towards future prospects while determining the multiplicand for the purpose. It was also pointed out by the learned counsel that in Kishan Gopal, the Apex Court has computed the compensation for loss of dependency reckoning the notional yearly income of the deceased at Rs.30,000/-, in the context of an accident took place in the year 1992. According to the learned counsel, if compensation for loss of dependency is computed in the cases on hand on that basis, after making a provision for off-setting the effect of inflation on the real value of money, the same would be far more than what was granted to the claimants. 8. In reply to the submissions made by the learned counsel for the claimants, the learned counsel for the insurers pointed out that the income reckoned for the purpose of computing compensation for loss of dependency in cases involving death of children being notional, it by necessary implication takes into account future prospects, inflation, price rise etc. and therefore, no addition need to be made to the notional income towards future prospects. 9. Sri.A.R.Nimod, the learned Amicus Curiae appointed in this matter, after a scholarly research, has taken me through almost all relevant decisions of the Apex Court and High Courts including this court dealing with the method of computation of compensation for loss of dependency in cases involving death of children. After a scholarly MACA.No.1459 OF 2013 & conn.cases 10 research, it was submitted by the learned Amicus Curiae that the method adopted is not similar or identical in all cases. It was pointed out that a distinction has been drawn by some courts between cases involving children below the age of 10 years and others, having regard to the difficulty experienced in making an estimation of the notional income of the deceased, and the practice followed in such cases is to grant a consolidated amount by way of compensation for loss of dependency, while some other courts are adopting multiplier method even in cases involving death of children below the age of 10. The learned Amicus Curiae has brought to my notice the decision of the Division Bench of this court in M.A.C.A No.1805 of 2008, where compensation has been computed for loss of dependency in a case involving death of a child aged 5 years, applying the multiplier method. It was pointed out that even as regards the multiplier and multiplicand, there is no uniformity among the tribunals and courts. As regards the multiplier, the learned Amicus Curiae submitted that the decision of the Apex Court in Reshma Kumari v. Madan Mohan [2013 (2) KLT 304(SC)] has been understood differently by different courts. While in most of the cases, the multiplier `15' is applied for computing the compensation for loss of dependency following Reshma Kumari, some courts have applied the multiplier `20' following the very same judgment. The decision of the Division Bench in M.A.C.A No.1805 of 2008 has been cited by the learned Amicus MACA.No.1459 OF 2013 & conn.cases 11 Curiae to demonstrate the said anomaly. Coming to the multiplicand to be applied, it was submitted that though the notional income of non-earning persons as prescribed in the Second Schedule to the Act has been taken by courts and tribunals as the basis for determining the multiplicand for computing compensation for loss of dependency in cases involving death of children, in the absence of any guidelines for offsetting the effect of inflation on the real value of money, there has been no uniformity at all in the multiplicand determined on the aforesaid basis, resulting in awarding different quantum of compensation in respect of similarly and identically placed children. 10. Having heard the submissions made by the learned counsel on either side and the learned Amicus Curiae, the following questions are formulated for decision : (i) Can multiplier method be accepted as the appropriate mode of assessment of compensation for loss of dependency in all cases involving death of children and if not, what shall be the mode for assessment of compensation under that head? (ii) What shall be the multiplier to be applied for computing compensation for loss of dependency in cases involving death of children and what shall be the additions and deductions to be made for determining the multiplicand for the said purpose? 11. Question (i): The loss of a child is irremediable and no amount of money could compensate the loss caused to the parents in MACA.No.1459 OF 2013 & conn.cases 12 this connection. Unlike other cases of death, in the case of death of a child, there may have been no pecuniary loss for the parents as they may not have derived any pecuniary benefit from the child during his/her lifetime. But, it is now trite that the same will not preclude the parents from claiming compensation for their future loss, if they had a reasonable expectation of the future pecuniary benefit, had the child been alive. This principle is fairly well established. [See the decision of the House of Lords in Taff Vale Ry. v. Jenkins, (1913 A.C. 1)]. In C.K.Subramania Iyer v. T .Kunhikuttan Nair (1970 ACJ 110), it was held by the Apex Court that in the case of death of children, the parents are entitled to, as a general rule, the present value of the prospective services and pecuniary benefits reasonably expected from them, by way of compensation. The question relates to the mode of computation of the said compensation. In General Manager, Kerala State Road Transport Corporation v. Susamma Thomas [(1994) 2 SCC 176], the Apex Court has held that multiplier method is the logically sound and legally established mode that would ensure just compensation and would make the awards uniform and certain. It was also held in the said case that a departure from this method is justified only in rare and exceptional cases. Of course, the aforesaid statement has been made generally in the context of computation of compensation in motor accident claims, and not specially in the context of computation of compensation in cases involving death of MACA.No.1459 OF 2013 & conn.cases 13 children. In Reshma Kumari, the said propositions have been reiterated and accepted holding that multiplier method is the most appropriate and satisfactory method for granting compensation in fatal accident claims under Section 166 of the Act. However, computation of compensation payable to the claimants in cases involving death of children applying multiplier method has been a difficult task all along for the courts and tribunals. The main reason for the same was that as the issue whether the parents had a reasonable expectation of the prospective services and pecuniary benefits, had the child been alive, and if so, to what extent, are held to be facts to be inferred from the circumstances of each case, and in the absence of sufficient inputs, the courts and tribunals had to make speculations as to the possible placements of the children in life and also as to their possible earnings, in order to arrive at the appropriate notional income and multiplicand for application of multiplier method. The said task has been still onerous in the case children below the age of 10, for, in their case, even the speculations may not be possible for want of data. There has been, therefore, a large number of cases where the multiplier method has not been followed for computation of compensation for loss of dependency in the case of children below the age of 10 and instead, consolidated amounts have been granted by way of compensation in their cases. Some courts have also taken the view that mortality rate is very high among the children in that age group and it is, therefore, MACA.No.1459 OF 2013 & conn.cases 14 only appropriate that a consolidated amount is granted by way of compensation in their cases. In Lata Wadhwa v. State of Bihar [(2001) 8 SCC 197], although the Apex Court has enhanced and re- fixed the consolidated amounts granted by way of compensation to the parents of the children in the age group of 5 to 10 who died in an accident, the question whether the differentiation made in their cases for grant of compensation by way of consolidated amounts was justified has not been considered. Having regard to the large number of motor accident claims involving death of children coming up for adjudication before the tribunals and the summary nature of the proceedings contemplated under the Act for the said purpose, I am of the view that the need of the hour is to have a simplified procedure for computation of compensation for loss of dependency in cases involving death of children for expeditious disposal of such claims. 12. It is a fact that only in a very few cases coming up before the Motor Accidents Claims Tribunals, evidence is let in by the parties. Even among the said cases, cases involving death of children is a minuscule. The practice adopted in such cases is to compute compensation for loss of dependency applying multiplier method based on a notional income arrived at subjectively by the Tribunal. It is on account of this reason that there has been no uniformity in the compensation granted by the Tribunals in the State. Except in exceptional cases where the children are earning during their minority, MACA.No.1459 OF 2013 & conn.cases 15 according to me, the expectation of the parents about their children would only be that they would be a helping hand for them in future, financially and otherwise. The said expectation may or may not materialise. For instance, an intelligent bright child may not financially or otherwise support his parents at their old age, and at the same time, the possibility of a child who is not that much bright and intelligent supporting the parents financially and otherwise at their old age cannot be ruled out. Be that as it may, after the introduction of the Right of Children to Free and Compulsory Education Act, which confers on all children in the age group of 6 to 14, right to free and compulsory education till the completion of his or her elementary education, irrespective of their financial and other backgrounds, the parents of all school going children in that age group who are not earning need to be treated alike in the matter of considering their expectations about their children. It is all the more so since it has come to light, situations where children from very poor backgrounds have achieved greater heights in life and situations vice versa. If such a view is not taken, there would be situations where different compensation would be granted in respect of children studying together, but hailing from different backgrounds. Having regard to the advancement of medical sciences, the reason that mortality rate is high among the children below the age of 10 also cannot be accepted. In the circumstances, according to me, except in exceptional cases MACA.No.1459 OF 2013 & conn.cases 16 where the children are earning during their minority itself and positive evidence is let in, in the proceedings to establish the prospective services and pecuniary benefit expected from them, compensation in respect of school going children died in motor accidents above the age of 6 up to the age of 15, shall be uniformly computed and granted applying multiplier method. 13. As far as the cases involving death of children below the age of 6 are concerned, as the compensation payable to their parents is the present value of the prospective services and pecuniary benefits expected from the deceased children, the parents of such children cannot be equated with the parents of school going children up to the age of 15, for, they cannot expect services and pecuniary benefits from the children in the near future as in the case of the parents of the children in the age group of 6 to 15. Further, unlike the parents of school going children, the parents of children below the age of 6 may not have spent amounts for the education and related matters of their children, so as to maintain a legitimate and reasonable expectation of services and pecuniary benefits in future from their children. A different yardstick is, therefore, to be fixed for computing compensation for loss of dependency in their cases. If multiplier method cannot be applied in such cases, only a consolidated amount can be granted by way of compensation. 14. Prescription of a mode for arriving at the consolidated MACA.No.1459 OF 2013 & conn.cases 17 amount of compensation payable in such cases is a difficult task. It is difficult also for the reason that the mode prescribed shall satisfy the concept of just compensation and maintain uniformity in the compensation granted in identical and similar cases. As mentioned earlier, in the context of death of children in the age group of 6 to 15 also, evidence is not let in, in most of the proceedings and compensation is arrived at subjectively by the Tribunals having regard to the statements made in the claim petitions. As in the cases involving death of children in the age group of 6 to 15, except in exceptional cases where the children under this group are earning during their minority and positive evidence is let in, in the proceedings to establish the prospective services and pecuniary benefit expected from them, all cases involving death of children below the age of six years shall be considered, according to me, alike. As the parents cannot expect services and pecuniary benefits from such children in the near future, the compensation provided for in terms of Section 163A of the Act for the claimants in cases involving death of children, subject to a progressive addition from year to year, according to me, would satisfy the requirement of just compensation in their cases. The compensation prescribed in terms of Section 163A of the Act for the claimants in a case involving death of a child is Rs.2,40,000/- [See Kumari Sree Devi v. The Managing Director, K.S.R.T .C. (2011 (3) KLT 716)]. Section 163A was introduced on 14.11.1994. The amount MACA.No.1459 OF 2013 & conn.cases 18 specified therein can, therefore, be granted certainly, except in exceptional cases as compensation in the case of children in this category in respect of claims arose during the years 1994 and 1995. Section 163A of the Act has now been amended with effect from 22.5.2018 and the compensation prescribed in terms of the amended provision is Rs.5,00,000/-. If a sum of Rs.12,000/- is added progressively every year after 1995 to the compensation prescribed under the said provision initially namely Rs.2,40,000/-, the same would sync with the compensation prescribed under the provision after the amendment as well. In cases involving death of children in that age group after the 2018 amendment to Section 163A, compensation can be fixed appropriately on the basis of the compensation prescribed under Section 163A namely Rs.5,00,000/-, after offsetting the effect of inflation on the real value of money. If compensation is computed in cases involving death of children below the age of 6 in the aforesaid manner, I am of the view that the same would not only satisfy the requirement of just compensation but also ensure uniformity in the awards passed in similar and identical cases. The question is answered accordingly. 15. Question (ii): The questions relating to the multiplier to be applied and the mode of assessment of compensation for loss of dependency in cases involving death of children below the age of 15 years, have been considered by the Apex Court in Resma Kumari, MACA.No.1459 OF 2013 & conn.cases 19 and It was held in the said case that irrespective of Section 163A or Section 166 under which the claim for compensation has been made, multiplier of '15' and the assessment as indicated in the Second Schedule subject to the correction as pointed out in column (6) of the table in Sarla Verma, shall be followed. Paragraph 34 of the judgment of the Apex Court in Resma Kumari reads thus: “34. If the multiplier as indicated in Column (4) of the table read with paragraph 42 of the Report in Sarla Verma (2010 (2) KLT 802 (SC) = (2009) 6 SCC 121) is followed, the wide variations in the selection of multiplier in the claims of compensation in fatal accident cases can be avoided. A standard method for selection of multiplier is surely better than a criss-cross of varying methods. It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the table in Sarla Verma (2010 (2) KLT 802 (SC) = (2009) 6 SCC 121) for the selection of multiplier in claim applications made under S.166 in the cases of death. We do accordingly. If for the selection of multiplier, Column (4) of the table in Sarla Verma (2010 (2) KLT 802 (SC) = (2009) 6 SCC 121) is followed, there is no likelihood of the claimants who have chosen to apply under S.166 being awarded lesser amount on proof of negligence on the part of the driver of the motor vehicle than those who prefer to apply under S.163A. As regards the cases where the age of the victim happens to be upto 15 years, we are of the considered opinion that in such cases irrespective of S.163A or S.166 under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the table in Sarla Verma (2010 (2) KLT 802 (SC) = (2009) 6 SCC 121) should be followed. This is to ensure that claimants in such cases are not awarded lesser amount when the application is made under S.166 of the 1988 Act. In all other cases of death where the application has been made under S.166, the multiplier as indicated in Column (4) of the table in Sarla Verma (2010 (2) KLT 802 (SC) = (2009) 6 SCC 121) should be followed” MACA.No.1459 OF 2013 & conn.cases 20 The direction contained in the said judgment that the multiplier to be applied shall be '15', which was made subject to the correction as pointed out in column (6) of the table in Sarla Verma, was necessitated as, without which, the compensation to be arrived at applying the mode specified in the Second Schedule would not always be at par or above the compensation prescribed under Section 163A of the Act which has been a requirement under law. In the light of the said judgment, it can be concluded that the multiplier to be applied for arriving at the compensation for dependency payable in cases involving death of children shall be '15', and the mode of assessment is as provided for in the Second Schedule to the Act, viz, that one third of the notional income shall be deducted while determining the multiplicand, subject, of course, to the condition that the compensation shall not go below the compensation prescribed under Section 163A of the Act. 16. The next issue is as to whether any amount is required to be added to the notional income towards future prospects while computing compensation for dependency in cases involving death of children. It is placing reliance on the decision of the apex Court in Pranay sethi, the learned counsel for the claimants contended that 50% of the notional income shall be added towards future prospects while determining the multiplicand. According to me, as compensation for loss of dependency is calculated in the case of MACA.No.1459 OF 2013 & conn.cases 21 children based on the notional income reckoned, it by necessary implication takes into account future prospects, inflation etc. I draw support in this view from the decision of the Apex Court in R.K. Malik v. Kiran Pal (CDJ 2009 SC 1040). Paragraph 17 of the said judgment reads thus: “17. Reverting back to the factual position of the present case, the date of accident is 18.11.1997. Prior to this, the Second Schedule of the Act was already introduced w. e. f. 14.11.1994. Thus, the notional income mentioned in the Second Schedule and the multiplier specified therein can form the basis for the pecuniary compensation for the loss of dependency in the present cases. No fact and reason was highlighted during the arguments why the Second Schedule should not apply in the present cases. The Second Schedule also provides for deduction of 1/3rd consideration towards expenses; which the victim would have incurred on himself if he had lived. As compensation for loss of dependency is to be calculated on the basis of notional income because the deceased was a child. It by necessary implication takes into account future prospects, inflation, price rise etc.” In other words, it can be concluded that no amount need be added to the notional income towards future prospects while determining the multiplicand for computing compensation for loss of dependency in cases involving death of children. On the aforesaid logic, according to me, the contention advanced by the learned counsel for the insurers on the strength of the decision of the Apex Court in Pranay sethi that 50% of the notional income reckoned shall be deducted towards personal expenses, is also liable to be rejected, especially since the case of children was not dealt with by the Apex Court in Pranay sethi. 17. What remains to be considered is the issue as regards MACA.No.1459 OF 2013 & conn.cases 22 the manner in which notional income has to be arrived at in cases involving death of children in a proceedings under Section 166 the Act. The plethora of precedents in matters relating to computation of compensation in cases involving children do not provide consistency or uniform guidelines for the tribunals and courts to approach the matter with certainty or with absolute confidence. As noted, in the context of cases involving death of children below the age of 10, except in cases where the children are actually earning during their minority itself, determination of notional income has been a mere process of guess work. Having regard to the large number of motor accident claims coming up for adjudication before the tribunals and the summary nature of the proceedings contemplated under the Act for adjudication of such claims, according to me, there is need for a simplified procedure for the said purpose so as to maintain uniformity in the awards. Except in exceptional cases where the circumstances warranted a different yardstick to be followed for arriving at the notional income, according to me, the statutory prescription contained in the Second Schedule can be the basis for fixing the notional income. 18. Once it is accepted that the multiplier to be applied while computing compensation for dependency is '15' and the mode of assessment is as provided for in the Second Schedule to the Act, viz, that one third shall only be deducted from the notional income to determine the multiplicand, as it is found that the compensation MACA.No.1459 OF 2013 & conn.cases 23 payable under the un-amended Section 163A is Rs.2,40,000/-, it can be seen, though it is provided in the Second Schedule that the notional income of a non-earning person shall be reckoned at Rs.15,000/-, the notional income in respect of children below the age of 15 is actually contemplated to be reckoned at Rs.24,000/-. In other words, having regard to the fact that Section 163A is a provision introduced only with effect from 14.11.1994, and having regard to the compensation granted by various courts in cases involving death of children during the said period, I am of the view that Rs.24,000/- can be fixed, except in exceptional cases where a different yardstick has to be followed, as the notional income of the children died in accidents till the end of the financial year 1995-96. But the said amount cannot be reckoned as the notional income in cases arising in the subsequent years, as it is common knowledge that rupee value has come down drastically thereafter and the effect of inflation in the subsequent years has therefore, to be off-setted. In Chetan Malhotra & Others v. Lala Ram & Others [CDJ 2016 DHC 865], the Delhi High Court has made an endeavour to bring in uniformity in the compensation granted in cases involving death of children. In the said case, it was found that having regard to the fluctuating trends in consumer price index, the cost inflation index determined and notified by the Ministry of Finance in Government of India under Section 48 of the Income T ax Act, 1961, for each financial year would be a better method to offset the effect of MACA.No.1459 OF 2013 & conn.cases 24 inflation on the real value of money. The view expressed in the said case appears to be sound and can be accepted. A table showing the cost inflation index notified by the Government of India from time to time, the corresponding money value for Rs.24,000/- applying the cost inflation index up to the year 2018-19 and the nearest thousand of the money value arrived at, is furnished hereunder for ready reference : In other words, the notional income of children died after the financial year 1995-96 can be determined applying the above table and I have no doubt, the same would certainly provide uniformity in the awards. SCHEDULE 2 VALUE 1 1995-96 281 24000 24000 2 1996-97 305 26,050 26,000 3 1997-98 331 28,270 28,000 4 1998-99 351 29,979 30,000 5 1999-00 389 33,224 33,000 6 2000-01 406 34,676 35,000 7 2001-02 426 100 36,384 36,000 8 2002-03 105 38,204 38,000 9 2003-04 109 39,659 40,000 10 2004-05 113 41,114 41,000 11 2005-06 117 42,570 43,000 12 2006-07 122 44,389 44,000 13 2007-08 129 46,936 47,000 14 2008-09 137 49,847 50,000 15 2009-10 148 53,849 54,000 16 2010-11 167 60,762 61,000 17 2011-12 184 66,947 67,000 18 2012-13 200 72,769 73,000 19 2013-14 220 80,046 80,000 20 2014-15 240 87,322 87,000 21 2015-16 254 92,416 92,000 22 2016-17 264 96,055 96,000 23 2017-18 272 98,965 99,000 24 2018-19 280 101,876 102,000 SL. NO FINANCIAL YEAR COST INFLATION INDEX COST INFLATION NEW INDEX VALUE TO NEAREST THOUSAND MACA.No.1459 OF 2013 & conn.cases 25 19. The outcome of the aforesaid discussion as regards compensation payable for loss of dependency in cases involving death of children can be summarised as follows: (1) Compensation in respect of school going children died in motor accidents above the age of 6 and upto the age of 15 shall be computed applying the multiplier method, and the multiplier to be applied shall be '15', subject to the condition that the compensation shall not go below the prescribed amount in terms of the Second Schedule. (2) Except in exceptional cases, where different yardsticks have to be followed for arriving at the notional income having regard to the cogent and irrefutable evidence let in by the parties, the notional income of the deceased children in the age group of 6 to 15 shall be determined as in the Second Schedule, viz, Rs.24,000/-, after making appropriate correction for offsetting the inflation, as indicated in the table furnished in paragraph 18 above. (3) No amount need be added to the notional income towards future prospects and one third of the notional income has to be deducted towards personal expenses while computing compensation. (4) Except in exceptional cases, where the Tribunal finds on cogent and irrefutable evidence let in by the parties that the quantum of compensation arrived at in cases involving death of MACA.No.1459 OF 2013 & conn.cases 26 children below the age of 6 in the manner indicated in this judgment will not satisfy the requirement of just compensation, consolidated amounts can be granted by way of compensation. The consolidated amounts for the said purpose shall be as provided for in Section 163A of the Act as applicable to death cases namely, Rs.2,40,000/-, subject to a progressive addition to be made from year to year, at the rate of Rs.12,000/- for every year after 1995, for cases involving death upto the year 2018. Thereafter, the compensation shall be computed as provided for in the amended Section 163A, viz, Rs.5,00,000/-, after offsetting the effect of inflation on the real value of money, as indicated in Clause (2) above. 20. Now, I shall render the case-wise decisions. In the case involved in M.A.C.A.Nos.115 of 2016 and 1018 of 2016, the Tribunal has granted only a sum of Rs.4,80,000/- towards compensation for loss of dependency, reckoning the notional yearly income of the deceased at Rs.24,000/- applying the multiplier '20'. As noted, in so far as the death in the instant case is on 27.1.2014, the notional yearly income of the deceased is to be reckoned at Rs.80,000/- and the multiplier to be applied is '15' and the deduction to be made for personal expenses is one third. If compensation for loss of dependency is worked out on that basis, the same would come to Rs.8,00,000/- (80,000 x 15 x 2/3). The claimants are, therefore, entitled to a sum of Rs.3,20,000/- by way of additional compensation. T owards compensation for loss of love and MACA.No.1459 OF 2013 & conn.cases 27 affection, the Tribunal has granted only a sum of Rs.50,000/- to the claimants, who are the father and elder brother of the minor boy who died in the accident. According to me, in the light of the decision of the Apex Court in Magma General Insurance Company Ltd. v. Nanu Ram and others [(2018) ACJ 2782], the Tribunal should have granted at least a sum of Rs.40,000/- each to the claimants under that head. The claimants are, therefore, entitled to an additional compensation of Rs.30,000/- under that head. Likewise, in the light of the decision of the Apex Court in National Insurance Company Ltd v. Pranay Sethi [2017 (4) KLT 662], the Tribunal should have granted only Rs.15,000/- each towards funeral expenses and for loss of estate, totalling to Rs.30,000/-. The Tribunal has granted under the said heads a total sum of Rs.1,25,000/-. Rs.95,000/- granted by the Tribunal under the said heads is, therefore, excessive and the same is liable to be adjusted against the additional compensation to which the claimants are found entitled. The net additional compensation payable to the claimants would, therefore, come to Rs.2,55,000/-. 21. Coming to M.A.C.A.No.2111 of 2014, as noted, the accident was on 11.2.2011 and the deceased was a girl aged three years. The compensation payable for loss of dependency in her case would, therefore, come to Rs.4,30,000/- (Rs.2,40,000 + 1,90,000). The Tribunal has granted only a sum of Rs.2,00,000/- under that head. The compensation under that head is, therefore, short by Rs.2,30,000/-. MACA.No.1459 OF 2013 & conn.cases 28 Likewise, the Tribunal has not granted any compensation to the claimants towards pain and sufferings and loss of estate. The Tribunal should have granted Rs.15,000/- each under those two heads as well. It is seen that the Tribunal has granted a sum of Rs.10,000/- in excess towards funeral expenses. Likewise, the Tribunal has granted a sum of Rs.50,000/- in excess towards compensation for loss of love and affection. The Tribunal has also granted, without any basis, a sum of Rs.75,000/- towards mental shock. In so far as it is found that the compensation granted by the Tribunal for loss of dependency, pain and sufferings and loss of estate is short by a total sum of Rs.2,60,000/-, it is unnecessary to interfere with the decision of the Tribunal. 22. Coming to M.A.C.A.No.1459 of 2013, the Tribunal has granted only a sum of Rs.5,40,000/- towards compensation for loss of dependency, reckoning the notional yearly income of the deceased at Rs.48,000/-, applying the multiplier '15', adding 50% towards future prospects and deducting one half towards personal expenses. As noted, in so far as the death in the instant case took place on 27.3.2010, the notional yearly income of the deceased is to be reckoned at Rs.54,000/- and the multiplier to be applied is '15' and the deduction to be made for personal expenses is one third. If compensation for loss of dependency is worked out on that basis, the same would come to Rs.5,40,000/- (54,000 x 15 x 2/3). As the claimant has been granted only the said amount, it cannot be said to be MACA.No.1459 OF 2013 & conn.cases 29 excessive. Further, it is seen that the compensation granted by the Tribunal to the claimants towards funeral expenses is short by Rs.12,000/- and the compensation granted towards loss of estate is short by Rs.10,000/-. Similarly, the compensation granted towards loss of love and affection is also short by Rs.65,000/-. Further, it is seen that no compensation has been granted towards pain and sufferings. In the circumstances, the appeal is without merits. 23. In the result, M.A.C.A.Nos.2111 of 2014 and 1459 of 2013 are dismissed and M.A.C.A.Nos.115 and 1018 of 2016 are disposed of granting to the claimants a sum of 2,55,000/- by way of additional compensation. Needles to say that the claimants in the said appeals would be entitled to interest also on the additional compensation granted @7.5% per annum. The registry is directed to forward a copy of this judgment to all the Motor Accidents Claims Tribunals in the State. Before parting with this judgment, I record my deep felt gratitude for the dispassionate assistance rendered by Sri.A.R.Nimod, the learned Amicus Curiae. Sd/- P .B.SURESH KUMAR, JUDGE. sd "
Other Referred Cases
United India Insurance Co. Ltd. v. Ajith, Kishan Gopal and another v. Lala and others, National Insurance Company Ltd v. Pranay Sethi, Reshma Kumari v. Madan Mohan, C.K. Subramania Iyer v. T. Kunhikuttan Nair, General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, Lata Wadhwa v. State of Bihar, Magma General Insurance Company Ltd. v. Nanu Ram and others, R.K. Malik v. Kiran Pal, Chetan Malhotra & Others v. Lala Ram & Others
Laws Referred To
Motor Vehicles Act, 1988
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