M. Srinivasan, C.J.
1. This appeal is directed against the award passed by the Motor Accidents Claims Tribunal, Solan. The accident took place on 16.6.1986 at about 4 p.m. near village Dharja on Solan Rahgarh road. The husband of the first claimant by name, Joginder Singh, was travelling in a bus bearing registration No. HPA 1289 belonging to Himachal Road Transport Corporation (hereinafter referred to as 'the appellant'). According to the claimants, the bus was driven in a rash and negligent manner and the driver failed to negotiate a curve properly with the result the vehicle rolled down a ditch some 100 metres below the road. Consequently, injuries were sustained by several persons travelling in the vehicle and Joginder Singh succumbed to the said injuries on the spot. He was employed as leprosy worker in ayurvedic dispensary, Dhamla, Tehsil Rajgarh, District Sirmaur and was drawing a salary of Rs. 1,743/- p.m. He was aged about 36 years and he had good chances of rising up in his life. Thus the claimants have put forward a claim for compensation for a sum of Rs. 4,00,000/-in the original petition. The contention of the appellant was that there was no rashness and negligence on the part of the driver and the appellant will not be liable for the death of Joginder Singh.
2. The Tribunal has on the facts found that the accident was caused by the rash and negligent driving of the bus by the respondent No. 3 before it who was the driver. Though this finding is attacked by the appellant, we do not find any justification whatever to interfere with the said finding. It is based on the evidence on record and there is ample material on record to come to a conclusion that the bus was driven in a rash and negligent manner. Hence, that finding is affirmed.
3. The Tribunal held that the appellant was liable to pay a sum of Rs. 2,44,800/-by way of compensation to the claimants with interest at the rate of 12 per cent per annum from the date of institution of the petition till the realisation thereof. In the said amount, a sum of Rs. 57,800/- was awarded to the widow of the deceased, who was the petitioner No. 1 before the Tribunal. A sum of Rs. 50,000/- was to be invested in National Saving Certificates (7th issue) and remaining amount to be released to her unconditionally. Claimant Nos. 6 and 7 before the Tribunal were the parents of the deceased Joginder Singh and they were awarded Rs. 15,000/- each by the Tribunal. The said amount was also directed to be invested in National Saving Certificates (7th issue). Claimant Nos. 2 to 5 were the children of the deceased being sons and daughters. In so far as the sons are concerned, the Tribunal directed payment of Rs. 35,000/- to each of the sons and Rs. 45,000/- to each of the daughters. However, as all of them were minors, the Tribunal had directed investment of the amount in National Saving Certificates (6th issue) and also directed reinvestment periodically.
4. The appellant vehemently attacks the method adopted by the learned Tribunal in arriving at the amount of compensation of Rs. 2,44,800/-. According to the appellant, the multiplier chosen by the Tribunal is not based on any principle. At any rate, it is against the certain principles settled by the Supreme Court of India in several judgments. It is also the contention of the appellant that the multiplicand taken by the Tribunal into account is also wrong and it should not have taken into account Rs. 1,200/- as multiplicand. It is seen from the evidence that the deceased was earning Rs. 1,743/- p.m. as salary. The claimant No. 1 has deposed as PW 1. She has stated that the deceased used to spend only Rs. 500/- to Rs. 600/- p.m. for his personal requirements and the remaining amount was being paid for household expenses. It was also in her evidence that the deceased had rented out a house in a place of working and the family was occupying the said house. Thus the evidence of PW 1 makes it clear that the deceased was giving at least a sum of Rs. 1,200/- p.m. for household expenses. In the strata of life to which the claimants and the deceased belong there can be no difficulty in accepting the evidence of PW 1 as true. It can be easily appreciated that the people belonging to that strata of life will normally spend less on themselves individually and more on their families. There is nothing on record to show that the deceased was frittering away or wasting the income or leading a reckless life without caring for his family. In such a situation, there is no warrant to differ from the Tribunal and hold that the Tribunal was in error in accepting the version of PW 1 and taking Rs. 1,200/- as multiplicand. We affirm the finding of the Tribunal in that regard and hold that the deceased was giving at least Rs. 1,200/-p.m. for the household expenses and that amount happened to be loss of dependency of the claimants.
5. As regards the multiplier, we are of the opinion that the Tribunal's view is correct on the facts and circumstances of the case. Learned counsel for the appellant draws our attention to the judgment of the Supreme Court in U.P. State Road Trans. Corporation v. Trilok Chandra 1996 ACJ 831 (SC). The court referred to an earlier judgment in General Manager, Kerala State Road Trans. Corporation v. Susamma Thomas 1994 ACJ 1 (SC) and extracted some passages from the earlier judgment. The judgment in Susamma Thomas' case is relied upon by the counsel for the respondents. Hence, it is of advantage to extract the passages, which have been quoted by the Apex Court in the later judgment to understand the principle regarding multiplier:
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 higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed up over the period for which the dependency is expected to last.
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/-. If a sum of Rs. 1,00,000/- is invested at 10 per cent annual interest, the interest will take care of the dependency perpetually. The multiplier in this case works out to 10. If the rate of interest is 5 per cent per annum and not 10 per cent, then 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 age of the deceased person (or that of the dependants, whichever is higher) goes up.
6. After quoting the above passages the Supreme Court said that it was rightly clarified that there should be no departure from the multiplier method on the ground that Section 110-B of the Motor Vehicles Act, 1939 envisaged payment of just compensation since the multiplier method is the accepted method for determining and ensuring payment of just compensation and it expected to bring uniformity and certainty of the awards made all over the country. Thereafter, the court held that on the facts of the earlier case the court was justified in adopting the multiplier of 12 when the victim was of the age of 39. The court observed that the Tribunals and High Courts are very often losing sight of the principle on the basis of which multiplier has to be determined and proceeded to set out the law in the following manner:
(15) We thought it necessary to reiterate the method of working out 'just' compensation because, of late, we have noticed from the awards made by the Tribunals and courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realised that Tribunal/court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused. The two English decisions to which we have referred earlier provide the guidelines for assessing the loss occasioned to the victims. Under the formula advocated by Lord Wright in Davies (1942) AC 601, the loss has to be ascertained by first determining the monthly income of the deceased, then deducting therefrom the amount spent on the deceased, and thus assessing the loss to the dependants of the deceased. The annual dependency assessed in this manner is then to be multiplied by the use of an appropriate multiplier. Let us illustrate: X, male, aged about 35 years, dies in an accident. He leaves behind his widow and 3 minor children. His monthly income was Rs. 3,500/-. First, deduct the amount spent on X every month. The rough and ready method hitherto adopted where no definite evidence was forthcoming, was to break up the family into units, taking two units for an adult and one unit for a minor. Thus X and his wife make 2+2=4 units and each minor one unit, i.e., 3 units in all, totalling 7 units. Thus the share per unit works out to Rs. 3500/7= Rs. 500/- per month. It can thus be assumed that Rs. 1,000/- was spent on X. Since he was a working member some provision for his transport and out-of-pocket expense has to be estimated. In the present case we estimate the out-of-pocket expense at Rs. 250/-. Thus the amount spent on the deceased X works out to Rs. 1,250/- per month leaving a balance of Rs. 3,500/- - Rs. 1,250/- = Rs. 2,250 per month. This amount can be taken as the monthly loss to X's dependants. The annual dependency comes to Rs. 2,250/- X 12 = Rs. 27,000/-. This annual dependency has to be multiplied by the use of an appropriate multiplier to assess the compensation under the head of loss to the dependants. Take the appropriate multiplier to be 15. The compensation comes to Rs. 27,000/- X 15 = Rs. 4,05,000/-. To this may be added a conventional amount by way of loss of expectation of life. Earlier this conventional amount was pegged down to Rs. 3,000/- but now having regard to the fall in the value of the rupee, it can be raised to a figure of not more than Rs. 10,000/-. Thus the total comes to Rs. 4,05,000/- + Rs. 10,000/- = Rs. 4,15,000/-.
(16) In the method adopted by Viscount Simon in the case of Nance (1951) AC 601, also first the annual dependency is worked out and then multiplied by the estimated useful life of the deceased. This is generally determined on the basis of longevity. But then, proper discounting on various factors having a bearing on the uncertainties of life, such as premature death of the deceased or the dependant, remarriage, accelerated payment and increased earning by wise and prudent investments, etc., would become necessary. It was generally felt that discounting on various imponderables made assessment of compensation rather complicated and cumbersome and very often as a rough and ready measure, one-third to one-half of the dependency was reduced, depending on the life-span taken. That is the reason why courts in India as well as England preferred the Davies' formula as being simple and more realistic. However, as observed earlier and as pointed out in Susamma Thomas' case 1994 ACJ 1 (SC), usually the English courts rarely exceed 16 as the multiplier. Courts in India too followed the same pattern till recently when Tribunals/courts began to use a hybrid method of using Nance's method without making deduction for imponderables.
(17) The situation has now undergone a change with the enactment of the Motor Vehicles Act, 1988, as amended by the Amendment Act, 54 of 1994. The most important change introduced by the amendment insofar as it relates to determination of compensation is the insertion of Sections 163-A and 163-B in Chapter XI entitled 'Insurance of Motor Vehicles Against Third Party Risks'. Section 163-A begins with a non-obstante clause and provides for payment of compensation, as indicated in the Second Schedule, to the legal representatives of the deceased or the injured, as the case may be. Now if we turn to the Second Schedule, we find a Table fixing the mode of calculation of compensation for third party fatal accident and injury claims arising out of accidents. The first column gives the age group of the victims of accident, the second column indicates the multiplier and the subsequent horizontal figures indicate the quantum of compensation in thousand payable to the heirs of the deceased victim. According to this Table the multiplier varies from 5 to 18 depending on the age group to which the victim belonged. Thus, under this Schedule the maximum multiplier can be up to 18 and not 16 as was held in Susamma Thomas' case 1994 ACJ 1 (SC).
7. After setting out the principle in that manner, the court upheld the multiplier of 34, fixed by the High Court as against the multiplier of 24 fixed by the Tribunal. The court said that on the facts of that case that was a proper multiplier.
8. In S. Chandra v. Pallavan Trans. Corporation 1995 ACJ 1170 (SC), the Supreme Court held that the multiplier was appropriate on the facts of the case and having regard to the annual expenditure on the family a claim of Rs. 1,00,000/- made in that case was justified.
9. Thus, it is clear from the above three passages that the multiplier has to be fixed on the basis of the facts and circumstances of each case and it cannot be a fixed figure for all the cases on a hypothetical basis. If we look into the facts and circumstances of this case, it is seen that Joginder Singh died at the age of 36. He was holding a decent employment and there was a good chance of his getting further promotion and getting more salary before the date of superannuation. In the normal course, he would have retired at the age of 58. Thus, he would have worked for another 22 years before his retirement. The amount which was being given to the family by him was found to be Rs. 1,200/- p.m. If the said amount is capitalised by taking into account the normal rate of interest paid by nationalised banks, it can be easily said that the total amount which is payable by way of compensation is something very near to the amount fixed by the Tribunal. It may happen to be more than what is fixed by the Tribunal. Our reasoning is this: if the amount fixed by the Tribunal is invested in a nationalised bank at the rate of interest which is now prevailing, the said amount will yield an interest of Rs. 24,780/- p.a. in all. That will work out at Rs. 2,065/- p.m. If the fact that the deceased would have reached a higher position by the time of superannuation and that he would be drawing a salary at the time of death, which would be more than the amount taken into account, certainly a sum of Rs. 2,065/- p.m. would be less than the average which the family would have had during that period from the deceased. Thus the amount fixed by the Tribunal can be justified as proper compensation. Hence, we hold that the multiplier of 17 adopted by the Tribunal is correct on the facts and circumstances of the case and we do not find any justification to interfere with the same.
10. By the Amendment Act of 1994 a Schedule was introduced in the Motor Vehicles Act fixing the multiplier to be adopted normally. But the Supreme Court referred to the Schedule in its judgment and pointed out that it contains several mistakes. In fact the Supreme Court observed that the Table 'abounds in such mistakes'. The Supreme Court has after referring to the said Table emphasised that the multiplier cannot exceed 18 years' purchase factor. In this case the multiplier is only 17 and, therefore, the principle laid down by the Supreme Court is in no way violated in the present case. Further, the Schedule introduced by Amendment Act is not applicable to the present case as the accident took place long before the Amendment Act came into force. Hence, the court cannot be guided by the Table introduced in the Schedule by the Amendment Act, 1994.
11. Thus, we have no difficulty in holding that the appellant has to fail and the compensation awarded by the Tribunal is just on the facts and circumstances of the case.
12. The claimant Nos. 6 and 7 have filed a memorandum of cross-objections. They have questioned the apportionment. According to them, they will be entitled to much more than Rs. 15,000/- each as awarded by the Tribunal. Learned counsel for the cross-objectors submits that even in the evidence of PW 1, she has stated that parents were being paid by deceased Joginder Singh a sum of Rs. 200/- p.m. If that version is accepted then it is seen that the parents were receiving roughly about 1/9th of what was earned by deceased Joginder Singh. Therefore, the amount of Rs. 15,000/- awarded to each of the claimant Nos. 6 and 7 is more than what they were receiving during the life-time of Joginder Singh. Consequently, there is no merit in the cross-objections.
13. Claimant Nos. 1 to 5 have filed a separate cross-objection. According to them, the total compensation should have been fixed at Rs. 4,00,000/- and not at Rs. 2,44,800/-. But we do not find any material on record to justify the grant of Rs. 4,00,000/- by way of compensation. Reliance is placed by learned Counsel, as pointed out already, on the judgment of the Supreme Court in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas (1994) ACJ 1 (SC). Learned counsel submits that in that case the Supreme Court found that the deceased had admittedly an income of Rs. 1,032/-p.m. and the dependency was only about Rs. 600-700/- p.m. However, the court took the future prospects of the deceased and proceeded on the footing that the income should be around Rs. 2,000/- p.m. and the loss of dependency was about Rs. 1,400/- p.m. That amount was capitalized by the Supreme Court but the multiplier was only 12. Even if that procedure is adopted in the present case, the result would not be different as we have already pointed out that if Rs. 2,47,800/-is invest ed the monthly interest will be Rs. 2,065. Thus, it is more than the amount, which was given to the family for household expenses by the deceased. Hence, the compensation which is worked out in the present case does not violate the principles laid down by the Supreme Court in the aforesaid case.
14. In the circumstances, the appeal and memoranda of cross-objections are dismissed. No costs.