NEW INDIA ASSURANCE COMPANY Vs. ARA BIBI

JUDGEMENT

(1.) The insurer is in appeal challenging the award of Second Motor Accident Claims Tribunal, Cuttack, granting compensa - tion of Rs. 1, 30, 000/ - in favour of respondents 1 and 2 with interest at the rate of 6% per annum from the date of the claim petition till realisation.

(2.) RESPONDENT No. 1 is the widow and respondent No. 2 is the mother of the deceased late Mahibub Saha. Their case is that the deceased was a bus driver and was earning Rs. 800/ - per month. On 15 -12 -1989 in the morning while he was going on the left side of the road at Badarnbadi bus -stand, the offending bus bearing registration number OSU 7614 came from Link road side being driven rashly and negligently in high speed and dashed against the deceased who died at the spot. Respondent No. 3. the owner of the vehicle, contested the case by filing written statement. It was stated in the said written statement that the accident took place on account of careless - ness of the deceased and the driver of the offending vechicle had no contribution to it. It was further stated that the bus in question had valid insurance covering the period of the accident. The appellant also contested the matter by filing a separate written statement denying the allegation made in the claim application.

(3.) LEARNED counsel for the appellant seriously challenges that the quantum of compensation is heavy and the Tribunal, should not have applied the principle of multipler in computing the compensation. In this connection he relies on a Full Bench decision of this Court in Orissa Road Transport Company v. R. K. Das, 1989 (II) OLR 196. The ratio of that case has been absolutely no relevancy to this case inasmuch as what came up for consideration before the Full Bench was whether in assessing compensation under Section 110 -B of the Motor Vehicles Act, 1939. the prevailing interest rate payable by the banks can be taken into consideration so as to limit the lump sum compensation. In a recent judgment, the Supreme Court in Kerala State Road Trans - port Corporation v. Susamma Thomas, 1994 O) KLT 67 observed in paragraph 11 as follows : 'It is necessary to reiterate that the multiplier method is logically sound and legally well -established. There are some cases which have proceeded to determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a percentage therefrom towards uncertainties of future life and award the resulting sum as compensation. This is clearly unscientific. For instance, if the deceased was, say 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the toss of dependency for 45 years -virtually adopting a multiplier of 5 -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 1l0(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 multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We disapprove these decisions of the High Courts which have taken a contrary view. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases. The multiplier represents the number of years purchase on which the loss of dependency is capitalised. Take for instance a case where annual loss of dependency is Rs. 10.000/ -. It a sum of Rs. 1,00,000/ - is invested at 10% annual interest. the interest will take care of the dependency, perpetually. The multiplier in this case works out to 10. It the rate of interest is 5% per annum and not 10%'hen the multiplier needed to capitalise the loss of the annual dependency at Rs. 10,000/ - would be 20. Then the multiplier i, e , the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last etc. Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the aye of the deceased person (or that of the dependants, whichever is higher) goes up.' In view of the authoritative pronouncement of the apex Court in the matter, no exception can be taken to the invocation of multiplier In the present case. In the case of Susamma Thomas {supra), the apex Court took note of the fact that usually in English Courts the operative multiplier rarely exceeds 16 as maximum. In the case at hand, the evidence discloses that the age of the deceased was about 35 years at the time of death. He had a heavy vehicle driving licence vide Ext. 5. PW 3 was a co -worker being the conductor in the bus of which the deceased was the driver. He stated that he worked as conductor with the deceased in buses bearing registration numbers OSU 8752 and OSU 8753. His evidence is that the deceased was earning Rs. 60/ -per day as driver. Nothing has been brought out in the cross -examination of PW 3 to disbelieve the statement. The widow as PW 1 stated that the deceased was earning Rs. 2000/ - per month. In view of such evidence on record, the Tribunal fixed Rs. 1500/ - as monthly average income of the deceased and his contribution to the family was deter - mined at Rs. 800/ - per month. No fault can be found with the aforesaid view taken by the Tribunal. In assessing the compensation, the Tribunal applied the multiplier of 16 and assessed the total loss of dependency at Rs. 1,63,000/ and after making deduction of Rs. 33,000/ - towards uncertainty of life, he determined the compensation payable to respondent Nos. 1 and 2 at Rs 1,20,000/ -. A sum of Rs. 10,000/ - awarded towards less of consortium and mental agony sustained by the widow and the mother of the deceased. In total thus a sum of Rs. 1,30,000/ - has been awarded as compensation. I do not find any legal flaw in computing the aforesaid compensation by the Tribunal. Admittedly, the vehicle in question had valid insurance at the time of accident. The appellant has rightly been held liable to pay the compensation.