V S GOWDAR Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) THIS appeal is the following circumstances: before us on a reference being made in in Gulam Khader V. United India Insurance Co. Ltd. , 2001 ACJ 163 (karnataka), a division bench of this court held that a higher multiplier would be applicable for determination of loss of dependency in claims arising out of motor accidents that have occurred after the commencement of motor vehicles (Amendment) Act, 1994. For claims arising out of accidents prior to the said amendment, the multiplier could not go beyond 16 as held by the Supreme Court in general manager, Kerala State Road Trans. Corpn. V. Susamma Thomas, 1994 ACJ 1 (sc ). Another division bench of this court comprising h. n. tilhari and k. r. prasad rao, jj. , expressed doubts about the correctness of the said view. Their lordships were of the opinion that there was no real justification for limiting the benefit of the higher multiplier only to claims that arise out of accidents that have occurred after the amending act of 1994. The present reference to a larger bench was accordingly necessitated to examine the correctness of the view taken in gulam khader's case (supra ).

(2.) IN general manager, Kerala State Road Trans. Corpn. V. Susamma Thomas, 1994 ACJ 1 (sc), the apex court recognised the multiplier method of determining loss of dependency as the most appropriate method to be applied in claims arising out of motor accidents. That method was declared to be logically sound and legally well established. The method involves the determination of multiplicand and making a choice of a stable multiplier to determine the amount of compensation payable to the claimant. The multiplicand is determined by ascertaining the net income of the deceased for his support and the support of his dependants. From that income is deducted the amount which the deceased was accustomed to spending upon himself both for maintenance and pleasure. The remainder is taken as the amount representing what the deceased was accustomed to spending for the dependants. The multiplier on the other hand, represents the number of years purchase on which the loss of dependency is capitalised. The court held that the operative multiplier rarely exceeded 16 as the maximum, which would come down as the age of the deceased or the dependants whichever is higher goes up. Speaking for the court, venkatachalaiah, j. As his lordship then was observed;

(3.) TO the same effect is a division bench decision of this court in H. T. Bhan- Dary V. Muniyamma, ILR 1985 kar 2337, in which also the juristic basis underlying the multiplier method has been indicated and the highest multiplier held to go not higher than 16.