Smt Kamalavva Vs Nagesh S O Yeshwant Davalatkar - Citation 1231937 - Court Judgment

Judgment:

® - 1 - IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE8H DAY OF JANUARY2021PRESENT THE HON’BLE MR. JUSTICE G.NARENDAR AND THE HON’BLE MR. JUSTICE M.I.ARUN MFA NO.101613/2017 (MV) BETWEEN:

1. SMT. KAMALAVVA W/O BUDDAPPA VAJJAL AGE:

57. YEARS, OCC: HOUSEHOLD WORK R/O HUNAGUND, TAL: HUNGUND, DIST: BAGALKOT2 KUMARI CHANNAMMA D/O BUDDAPPA VAJJAL AGE:

38. YEARS, OCC: NIL R/O HUNAGUND, TAL: HUNGUND, DIST: BAGALKOT3 KUMAR FAKIRAPPA S/O BUDDAPPA VAJJAL AGE:

37. YEARS, OCC: COOLIE R/O HUNAGUND, TAL: HUNGUND, DIST: BAGALKOT4 KUMAR MALLESH S/O BUDDAPPA VAJJAL AGE:

35. YEARS, OCC: COOLIE R/O HUNAGUND, TAL: HUNGUND, DIST: BAGALKOT … APPELLANTS (BY SRI S.C.HIREMATH, ADVOCATE) - 2 - AND:

1. NAGESH S/O YESHWANT DAVALATKAR AGE:

45. YEARS, OCC: OWNER OF TATA TRUCK BEARING NO.KA-22/A-735 R/O ZAAD ANKLE, TAL: KHANAPUR, DIST: BELAGAVI2 THE BRANCH MANAGER RELIANCE GENERAL INSURANCE CO. LTD. KALABURGI SQUARE DESAI CROSS, DESHPANDE NAGAR HUBBALLI … RESPONDENTS (BY SRI G.N.RAICHUR, ADVOCATE FOR R-2; R-1 SERVED) THIS MFA IS FILED UNDER SECTION1731) OF MV ACT AGAINST THE

JUDGMENT

AND AWARD DATED1807.2013 PASSED IN MVC NO.346/2012 ON THE FILE OF THE MOTOR VEHICLE ACCIDENT CLAIMS TRIBUNAL-X, HUNAGUND, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THIS MFA HAVING BEEN HEARD AND RESERVED ON1111.2020 FOR

JUDGMENT

AND COMING ON FOR PRONOUNCEMENT OF

JUDGMENT

, THIS DAY, M.I.ARUN J., DELIVERED THE FOLLOWING:

JUDGMENT

Though the matter is listed for orders, with the consent of learned counsel for the parties, the matter is taken up for final disposal.

2. This appeal is filed under Section 173(1) of the Motor Vehicles Act by the appellants/claimants being aggrieved by the judgment and award dated 18.07.2013 passed by the Motor - 3 - Accident Claims Tribunal-X, Hunagund (for short “the Tribunal”) in MVC No.346/2012, seeking enhancement of compensation.

3. For the sake of convenience, the parties are referred to as per their ranking before the Tribunal.

4. The brief facts of the case are that on 02.02.2012 at about 6.15 a.m., the deceased Buddappa being the husband of petitioner no.1 and father of petitioner nos.2 to 4 was riding his motorcycle bearing registration No.KA-22/ED-9197 on Belgaum- Khanapur NH.14 road and when he came near the Government Hospital, Ganebail, a Tata Truck bearing registration No.KA- 22/A-735, which was moving in front of the said motorcycle without any reason and in a rash and negligent manner applied the brake suddenly and stopped in the middle of the road. The deceased consequently dashed against the truck and sustained grievous head injuries and died on the spot. Hence, the petitioners preferred MVC No.346/2012 before the Tribunal seeking a compensation of Rs.36,45,000/- with interest.

5. Respondent no.1 is the owner of the truck and respondent no.2 is the insurer with whom the offending truck was insured. Respondent no.1, though served with the notice, remained absent and was placed ex parte. Respondent no.2 - 4 - appeared through its counsel and filed written statement. It denied the liability and sought for dismissal of the claim petition.

6. Based on the pleadings, the Tribunal framed the issues and recorded the evidence. Petitioner No.1 got herself examined as P.W.1 and got marked eight documents as Exs.P-1 to P-8. Respondent no.2 got examined its Deputy Manager as R.W.1 and got marked the insurance policy as Ex.R.1. Based on the pleadings and the evidence let in, the Tribunal came to the conclusion that the accident happened due to rash and negligent driving of the offending truck. It was held that the claimants are entitled to a compensation to the tune of Rs.4,65,900/- with interest at the rate of 6% p.a. from the date of petition till realization. Further, respondent no.2 with whom the offending truck was duly insured is held liable to compensate the petitioners.

7. Not satisfied by the said judgment and award, the petitioners have filed the appeal seeking for enhancement of compensation.

8. The contention of the learned counsel for the petitioners is that the deceased was working as a forest guard in the Forest Department and was earning a salary of Rs.8,806/- per month; that he was aged 58 years at the time of the - 5 - accident and was hale and healthy. The learned counsel contends that considering the nature of job of the deceased, though he would have retired by 60 years, in view of his robust health and average life expectancy being 70 years of age, he would have definitely found alternate employment after his retirement also. The learned counsel contends that the Tribunal erred in not taking this fact into consideration and while assessing the compensation, it has applied the principle of split multiplier which is illegal, contrary to the law laid by the Five- Judge Bench of the Hon’ble Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi and others reported in 2017 ACJ2700and in fact is alien to the scheme of the Motor Vehicles Act. The Tribunal ought to have applied the multiplier of 9 to the actual income of the deceased and granted compensation with an addition calculated at the rate of 10%. Thus, the Tribunal has erroneously granted the compensation much on the lower side and it requires to be enhanced.

9. Per contra, learned counsel for respondent No.2 has justified the judgment of the Tribunal and has sought for dismissal of the appeal.-. 6 - 10. Heard the learned counsel for the appellants and the learned counsel for respondent No.2. Perused the records, evidence and depositions.

11. It is not in dispute that the said accident happened due to the rash and negligent driving of the truck which is duly insured with respondent no.2-insurer and the liability of respondent no.2 to pay the compensation is established. The questions that arise for consideration is whether the Tribunal erred in applying the principle of split multiplier in the given facts and circumstances of the case and whether the quantum of compensation awarded in favour of the petitioners is just.

12. In a fatal accident action, the measure of damage is pecuniary loss suffered and that is likely to be suffered by each dependent as a result of the death of the bread winner. While assessing the damages on the count of loss of dependency, to have an element of uniformity and to avoid uncertainty, as held by the Hon’ble Apex Court, the Courts take into consideration (i) the income of the deceased at the time of his death; (ii) the amount that he would approximately spend on himself; (iii) the age of the deceased at the time of his death; (iv) his future prospects; and (v) the multiplier to be applied to his present income based on the probable years of his future earning. The - 7 - above aspects have been evolved over a period of time by various judgments with reference to the multiplier. A reading of the various rulings clearly amplifies the fact, that the Hon’ble Apex Court has been striving to achieve certainty in the matter of calculation of loss suffered by the claimant on account of his/her dependency.

13. The Hon’ble Supreme Court in one of its earliest rulings, rendered in the case of General Manager, Kerala State Road Transport Corporation, Trivandrum vs. Susamma Thomas (Mrs) and others reported in (1994) 2 SCC176 in paragraph Nos.10, 13 and 16 has held as under: “10. The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependents, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self- maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependents. Then that should be capitalised by multiplying it by a figure representing the proper number of year's purchase.

13. 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.-. 8 - 16. 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 loss of dependency for 45 years virtually adopting a multiplier of 45 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 110-B of the Motor Vehicles Act, 1939 insofar 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 ill rare and extraordinary circumstances and very exceptional cases.

14. The Hon’ble Supreme Court in the case of Sarla Verma (Smt.) and Others vs. Delhi Transport Corporation and Another reported in (2009) 6 SCC121 in paragraph Nos.26, 27, 28, 29, 30, 40 and 42 has held as under: - 9 - “26. It is also very difficult for the respondents in a claim petition to produce evidence to show that the deceased was spending a considerable part of the income on himself or that he was contributing only a small part of the income on his family. Therefore, it became necessary to standardize the deductions to be made under the head of personal and living expenses of the deceased. This lead to the practice of deducting towards personal and living expenses of the deceased, one-third of the income if the deceased was a married, and one-half (50%) of the income if the deceased was a bachelor. This practice was evolved out of experience, logic and convenience. In fact one-third deduction, got statutory recognition under Second Schedule to the Act, in respect of claims under Section 163A of the Motor Vehicles Act, 1988 (`MV Act' for short). But, such percentage of deduction is not an inflexible rule and offers merely a guideline.

27. In Susamma Thomas, it was observed that in the absence of evidence, it is not unusual to deduct one-third of the gross income towards the personal living expenses of the deceased and treat the balance as the amount likely to have been spent on the members of the family/dependants.

28. In U.P. SRTC v. Trilok Chandra [1996 (4) SCC362, this Court held that if the number of dependents in the family of the deceased was large, in the absence of specific evidence in regard to contribution to the family, the Court may adopt the unit method for arriving at the contribution of the deceased to his family. By this method, two units is allotted to each adult and one unit is allotted to each minor, and total number of units are determined. Then the income is divided by the total number of units. The quotient is multiplied by two to arrive at the personal living expenses of the deceased. This Court gave the following illustration: (Trilok Chandra case, SCC p.370, para 15)

"15. ……X, male, aged about 35 years, dies in an accident. He leaves behind his widow and 3 minor children. His monthly income was Rs.3500. 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 and 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, totaling 7 units. Thus the share per unit works out to Rs.3500/7=Rs.500 per - 10 - month. It can thus be assumed that Rs.1000 was spent on X. Since he was a working member some provision for his transport and out-of-pocket expenses 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.1250 per month leaving a balance of Rs.3500-1250=Rs.2250 per month. This amount can be taken as the monthly loss of X's dependents.

29. In Fakeerappa vs Karnataka Cement Pipe Factory - 2004 (2) SCC473 while considering the appropriateness of 50% deduction towards personal and living expenses of the deceased made by the High Court, this Court observed: (SCC p.475, para 7)

"7. What would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula of universal application. It would depend upon circumstances of each case. The deceased undisputedly was a bachelor. Stand of the insurer is that after marriage, the contribution to the parents would have been lesser and, therefore, taking an overall view the Tribunal and the High Court were justified in fixing the deduction."

In view of the special features of the case, this Court however restricted the deduction towards personal and living expenses to one-third of the income.

30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardized deductions. Having considered several subsequent decisions of this court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependant family members exceed six.

40. The multipliers indicated in Susamma Thomas, Trilok Chandra and Charlie (for claims under Section 166 of the MV Act) is given below in juxtaposition with the multiplier mentioned in the Second Schedule for claims - 11 - under Section 163-A of the MV Act (with appropriate deceleration after 50 years): Age of Multiplier Multiplier Multiplier Multiplier Multiplier the scale as scale as scale in specified actually used deceased envisaged adopted Trilok in in Second in by Chandra Second Schedule to Susamma Trilok as Column the MV Act Thomas Chandra clarified in the (as seen from in Charlie Table in the quantum Second of Schedule compensation) to the MV ACT (1) (2) (3) (4) (5) (6) Upto 15 - - - 15 20 yrs 15 to 20 16 18 18 16 19 yrs 21 to 25 15 17 18 17 18 yrs 26 to 30 14 16 17 18 17 yrs 31 to 35 13 15 16 17 16 yrs 36 to 40 12 14 15 16 15 yrs 41 to 45 11 13 14 15 14 yrs 46 to 50 10 12 13 13 12 yrs 51 to 55 9 11 11 11 10 yrs 56 to 60 8 10 09 8 8 yrs 61 to 65 6 08 07 5 6 yrs Above 5 05 05 5 5 65 yrs 42. We therefore hold that the multiplier 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 five 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 - 12 - 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.

15. In Sarla Verma’s case mentioned supra, the Hon’ble Supreme Court did not envisage the concept of split multiplier. However, in the case of deceased being employed, who retired after reaching the age of superannuation, few Courts started adopting the concept of split multiplier on the ground that the income of the deceased would be higher till the age of his retirement, but would become less after his retirement.

16. In the case of K.R. Madhusudhan & Ors. v. Administrative Officer & Anr. reported in AIR2011SC979 the Hon’ble Supreme Court was examining the case of the deceased, who was 53 years of age at the time of accident. The deceased in that case was working as a Senior Assistant in Karnataka Electricity Board, in which case, if he was alive, he would have retired on attaining the age of superannuation and on the ground that he would retire at the age of 58 years, the High Court had applied the split multiplier and had reduced the compensation awarded by the Tribunal. The same was not agreed to by the Hon’ble Supreme Court. In paragraph Nos.10, 12, 13, 14, 15 and 16 of the judgment, it has held as under: “10. The present case stands on different factual basis where there is clear and incontrovertible evidence on record that the deceased was entitled and in fact bound to get a rise in - 13 - income in the future, a fact which was corroborated by evidence on record. Thus, we are of the view that the present case comes within the ‘exceptional circumstances' and not within the purview of rule of thumb laid down by the Sarla Verma (AIR2009SC3104 (Supra) judgment. Hence, even though the deceased was above 50 years of age, he shall be entitled to increase in income due to future prospects.

12. PW.3, who was the Senior Assistant in KEB, in his evidence also stated that the deceased was 52 years of age at the time of his death and he was having six years of service left. The annual increment is Rs.350/-. In the year 2003 (which would have been year of retirement), the basic pay of the deceased would have been around Rs.16,000/- and in all he would have obtained gross salary of Rs.20,000/- per month. PW.3 deposed that as per the Board Agreement for every five years their pay revision is compulsory. Both the witnesses were cross-examined before the Tribunal but the evidence leading to pay revision was not assailed.

13. Therefore, the consistent evidence before the Tribunal was that if the deceased would have been alive he would have reached the gross salary of Rs.20,000/- per month.

14. In view of this evidence the Tribunal should have considered the prospect of future income while computing compensation but the Tribunal has not done that. 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 II Column in the II Schedule in 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.

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.

16. The income of the deceased will be taken to be Rs.20,000/- p.m. which amounts to Rs.2,40,000/- p.a. After deduction of 1/3rd amount for personal expenses, the loss of notional income will be Rs.1,60,000/-. The multiplier of 11 will be applied, from which the loss of dependency will amount to Rs.17,60,000/-. We also award Rs.10,000/- for funeral and transport expenses, Rs.6,000/- for medical expenses prior to - 14 - death and Rs.25,000/- for loss of love and affection. Thus, the total compensation awarded amounts to Rs.18,01,000/- which we round off to Rs.18,00,000/-.” Similarly, in the case of Puttamma and others v. K.L. Narayana Reddy and another reported in AIR2014SC706 the Hon’ble Supreme Court was examining the case of a 48 year old person, who was working as Type Setting Assistant in a Computer Section at Mysore Printers Limited, a post from which he would retire on attaining the age of superannuation. The High Court had adopted the split multiplier while deciding the issue. The Hon’ble Supreme Court in paragraph Nos.18, 19, 31, 32, 33 and 34 has held as under: “18. Most of the people work even after their retirement to support their children. The longevity of life in India has increased at least up to 69 years; in many cases, people live longer than that. The salaries and cost of things increase rapidly. At a glance, between every 9-10 years they double.

19. Though the method of multiplier is one of the best methods in providing compensation, while choosing the multiplier the court/tribunal has to take into consideration the rising inflation, increasing salaries and increasing cost of living. Therefore, we have to determine just compensation keeping in view the Indian background, the Indian culture, the Indian legal background, and the socio-cultural circumstances existing in India.

31. In Sarla Verma this Court held that the multiplier should be used in the following manner: “42. We therefore hold that the multiplier 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 five 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 - 15 - 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.” 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 Section 166. The application of multiplier fell for consideration recently before a three-Judge Bench in Reshma Kumari v. Madan Mohan Reshma Kumari v. Madan Mohan, (2013)9 SCC65 (air 2013 SC (Civ) 1731: AIR SCW3120. In the said case this Court held: “33. We have already noticed the Table prepared in Sarla Verma (AIR2009SC3104 2009 AIR SCW4992 for the selection of a multiplier. The Table has been prepared in Sarla Verma having regard to the three decisions of this Court, namely, Susamma Thomas (AIR1994SC1631:

1994. AIR SCW1356 Trilok Chandra and Charlie (AIR2005SC2157 2005 AIR SCW1801 for the claims made under section 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 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 has endeavoured to simplify the otherwise complex exercise of assessment of loss of dependency and determination of compensation in a claim made under Section 166. It has been rightly stated in Sarla Verma that the 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.

34. If the multiplier as indicated in Column (4) of the Table read with para 42 of the Report in Sarla Verma 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 - 16 - 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 for the selection of a multiplier in claim applications made under Section 166 in the cases of death. We do accordingly. If for the selection of a multiplier, Column (4) of the Table in Sarla Verma is followed, there is no likelihood of the claimants who have chosen to apply under Section 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 Section 163-A. As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A 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 correction as pointed out in Column (6) of the Table in Sarla Verma should be followed. This is to ensure that the claimants in such cases are not awarded lesser amount when the application is made under section 166 of the 1988 act. In all other cases of death where the application has been made under Section 166, the multiplier as indicated in Column (4) of the Table in Sarla Verma should be followed. “40. In what we have discussed above, we sum up our conclusions as follows: (i) In the applications for compensation made under section 166 of the 1988 act in death cases where the age of the deceased is 15 years and above*, the Claims Tribunals shall select the multiplier as indicated in Column (4) of the Table prepared in Sarla Verma read with para 42 of that judgment. (ii) In cases where the age of the deceased is up to 15 years, irrespective of Section 166 or Section 163-A 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 should be followed. (iii) As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act. (iv) to (vi) XXX XXX XXX XXX (vii) The above propositions mutatis mutandis shall apply to all pending matters where above aspects are under consideration.” - 17 - Thus the view taken by this Court in Sarla Verma is affirmed by the three-Judge Bench of this Court in Reshma Kumari. Split multiplier 32. For determination of compensation in motor accident claims under Section 166 this Court always followed multiplier method. As there were inconsistencies in the selection of a multiplier, this Court in Sarla Verma prepared a table for the selection of a multiplier based on the age group of the deceased/victim. The 1988 Act, does not envisage application of a split multiplier.

33. In K.R.Madhusudhan and others v. Administrative Officer and another (2011) 4 SCC689: (AIR2011SC979:

2011. AIR SCW1390, this Court held as follows: “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.

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 Sarla Verma as affirmed in Reshma Kumari.” The Hon’ble Supreme Court in the case of National Insurance Co. Ltd. v. Pranay Sethi and others, reported in 2017 ACJ2700has determined the factors to be considered while determining the damages on the count of loss of dependency and - 18 - it does not consider the concept of split multiplier at all. It has been held that the selection of multiplier shall be as indicated in a table in Sarla Verma’s case and that the age of the deceased should be the basis for applying the multiplier. As discussed above, Sarla Verma’s case does not recognize the concept of split multiplier. The Apex Court in paragraph Nos.44, 45, 46 and 61 of Pranay Sethi’s case supra has held as under: “44. As far as the multiplier is concerned, the claims tribunal and the Courts shall be guided by Step 2 that finds place in paragraph 9 of Sarla Verma read with paragraph 21 of the said judgment. For the sake of completeness, paragraph 21 is extracted below: “(21) We therefore hold that the multiplier 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 five 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.

45. In Reshma Kumari, the aforesaid has been approved by stating, thus:- “(34) …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 for the selection of multiplier in claim applications made under Section 166 in the cases of death. We do accordingly. If for the selection of multiplier, Column (4) of the Table in Sarla Verma is followed, there is no likelihood of the claimants who have chosen to apply under Section 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 Section 163-A. As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A or Section 166 - 19 - 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 should be followed. This is to ensure that the claimants in such cases are not awarded lesser amount when the application is made under Section 166 of the 1988 Act. In all other cases of death where the application has been made under Section 166, the multiplier as indicated in Column (4) of the Table in Sarla Verma should be followed.

46. At this stage, we must immediately say that insofar as the aforesaid multiplicand/multiplier is concerned, it has to be accepted on the basis of income established by the legal representatives of the deceased. Future prospects are to be added to the sum on the percentage basis and “income” means actual income less than the tax paid. The multiplier has already been fixed in Sarla Verma 2009 ACJ1298(SC) which has been approved in Reshma Kumari with which we concur.

61. In view of the aforesaid analysis, we proceed to record our conclusions:- (i) The two-Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench. (ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent. (iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax. (iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component. (v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore.-. 20 - (vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment. (vii) The age of the deceased should be the basis for applying the multiplier. (viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.” (emphasis supplied by this Court) A Co-ordinate Bench of this Court in MFA No.24613/2013, disposed of on 24th April 2018 in paragraph No.11 has held as under: “11. Considering the aforesaid judgments of the Hon’ble Apex Court and this Court, it is clear that basically there must be some pleadings and evidence on record and also reasons to adopt the split multiplier method. It depends upon the facts and circumstances of the case. For the first time, the insurer has taken the contention with regard to applicability of split multiplier; neither the respondents have adduced any evidence nor suggested in the cross-examination of the claimants on that point. Therefore, the contention taken up by the insurer with regard to applicability of the split multiplier at the appellate stage is not maintainable and cannot be accepted. Hence, we are of the considered view that the multiplier of 11 has to be adopted considering the age of the deceased i.e. 55 years, adding 15% of the income towards future prospects. The Tribunal has determined and taken a sum of Rs.2,06,436/- as annual income after deducting 1/3rd towards personal expenses of the deceased, the same is not disturbed. Hence, the claimants shall be entitled for compensation of Rs.26,11,415/- (Rs.2,06,436 + 15% x

11) under the head of loss of dependency.” A Co-ordinate Bench of this Court in MFA No.7025/2015, disposed of on 4th February 2020 in paragraph No.11 has held as under: “11. The question, whether split multiplier method can be applied in the absence of any pleadings, need not detain us in this case. In the absence of any reasons and evidence on record, the MACT should not apply split multiplier in view of the - 21 - law laid down in Puttamma’s case. In this case, there is no specific evidence available as to the quantum and nature of pension of the deceased. Hence, there is no sufficient justification for applying the split multiplier method to this case.” A Co-ordinate Bench of this Court in MFA No.102626/2019, disposed of on 26th August 2020 in paragraph No.11 has held as under: “11. It is relevant to note that in MFA No.7025/2015 (Smt.K.Yashodha w/o. late L.Nagaraj and others vs. Smt.S.Maheswari and another) decided on 4.2.2020 and in MFA No.24613/2013 (Smt.Manini and another vs. Mr.Premanand Bhupal Kamble and another) decided on 24.4.2018 two Division Benches of this Court have dealt with the aspect of split multiplier and adverted to the decision of the Hon’ble Supreme Court of India in Puttamma vs. K.L.Narayana Reddy and another, reported in AIR2014SC706 The Supreme Court of India, in Puttamma’s case held that in the absence of any specific reason and evidence on record the tribunal or Court should not apply split multiplier in routine course and should apply multiplier as per decision of the Hon’ble Supreme Court in the case of Sarla Verma (smt) and others vs. Delhi Transport Corporation and another, reported in (2009) 6 Supreme Court Cases 121.

17. Learned counsel appearing for the Insurance Company has relied upon a decision of a Co-ordinate Bench of this Court rendered in MFA Cr.Ob.No.100087/2019 C/w. MFA No.101225/2019, disposed of on 18th March 2020, wherein the split multiplier was applied and contended that in the instant case also the deceased was going to retire after a couple of years and the tribunal was correct in applying the split multiplier. In fact the above decision was decided by a Bench consisting one of us. Paragraph 11 of the said judgment reads as under: - 22 - “11. Admittedly, the deceased was earning a sum of Rs.67,550/- per month at the time of death. The annual income for the first split multiplier will be Rs.8,10,600/-; to which, added 15% towards future prospectus, deducting 1/3rd towards his personal expenses and also after deducting the income tax to the tune of Rs.31,000/-, the annual income for the first year will be Rs.5,90,460/-. Since the deceased used to retire at the age of 60 years and his salary was Rs.67,550/- and annually he used to get Rs.8,10,600/-, to which 15% is to be added as future prospectus and 1/3rd is deducted towards his personal expenses and out of which 50% has to be taken for the purpose of his pensionary benefits, he is going to get an amount of Rs.3,10,730/- and the same is multiplied with “8” multiplier, he will get an amount of Rs.24,85,840/-. The same is added to the amount of first split multiplier, the total amount of Rs.30,76,300/- is awarded, to which an amount of Rs.70,000/- is awarded towards conventional heads. Accordingly, the claimants are entitled to the total compensation of Rs.31,46,300/- as against Rs.52,42,062/- with interest at the rate of 6% p.a.” But it is noticed in the said judgment, that the decision of Pranay Sethi’s case has not been considered at all. Even otherwise solely on the ground that a person would retire on reaching the age of superannuation, cannot be a ground to adopt the split multiplier and reduce the compensation being awarded, in the light of the authoritative pronouncement of the Apex Court in Pranay Sethi’s case and in the light of the language “shall be guided by Step 2 that finds place in paragraph 9 of Sarla Verma read with paragraph 21 of the said judgment” employed by the Apex Court, it leaves no scope for any doubt with regard to law in this regard. Our view is further buttressed by the observations of the Hon’ble Apex Court in paragraph 61 of Pranay Sethi judgment - 23 - with regard to addition to income. The use of the words “shall be guided by” leaves no scope for any departure in the matter of adoption of the multiplicand and it ought to be in consonance with the law declared by the Hon’ble Apex Court in the case of Sarla Verma and Pranay Sethi’s case alone and any departure would be in the teeth of the law declared by the Hon’ble Apex Court. In that view of the matter, the next question is whether split multiplier can any longer be viewed as a proper method for determining the compensation?. The age block of 56-60 is recognized by the Apex Court in Sarla Verma’s case. In fact, multiplier’s have been stipulated and fixed till the age of 70. This has been reiterated by the Apex Court in Pranay Sethi’s case. The age block of 56 to 60 has been recognized as an unit with an applicable multiplier of 9 which has received the stamp of approval at the hands of the Five Judge Bench in Pranay Sethi’s case. The age block being an identifiable unit, question of application of split multiplier in our considered opinion would be contrary to the law declared by the Five Judge Bench of the Hon’ble Apex Court in the case of National Insurance Company Limited v. Pranay Sethi and others reported in 2017 ACJ2700 18. In the instant case, the deceased was working as a Forest Guard, was aged about 58 years at the time of accident - 24 - and he would have retired after two years. At the time of accident, he was getting a monthly income of Rs.8,806/-. Given the nature of his work, there was every chance of him being gainfully employed even after retirement without much reduction in his income, if he were to be alive. Over a period of time, the life span in India has increased. In Sarla Verma (smt) and others vs. Delhi Transport Corporation and another, reported in (2009) 6 SCC121 the Hon’ble Supreme Court has contemplated the multiplier to be applied till the age of 70 years, meaning that a person can always be gainfully employed till the age of 70 years.

19. In the instant case, we are of the opinion that the deceased could have been gainfully employed even after retirement, if he were to be alive and given the nature of work, he would have drawn similar salary.

20. The deceased was earning Rs.8,806/- per month as salary at the time of accident. Thus, his annual income would be Rs.1,05,672/-. He had four dependants namely wife, two grown up sons and a daughter. Only his wife and daughter can be considered as dependents and his two grown up sons cannot be considered as dependents. Thus, petitioner Nos.1 and 2 are to be considered as dependents. Hence, there shall be a deduction 1/3rd towards his personal expenses. He was aged about 58 - 25 - years at the time of accident. Thus, the multiplier “9” needs to be adopted. As per the law laid down by the Hon’ble Supreme Court in the case of National Insurance Company Limited v. Pranay Sethi and others reported in 2017 ACJ2700 10% has to be added towards future prospects. Thus, the compensation towards loss of dependency, the petitioners would be entitled to a sum of Rs.6,97,436/- (Rs.8,806/- x 12 – 1/3 x 9 + 10%).

21. In view of the decision of the Hon’ble Supreme Court in the case of Magma General Insurance Company Limited vs. Nanu Ram reported in 2018 SCC1546 the petitioners are entitled to Rs.40,000/- each towards loss of consortium. Thus, the petitioners are entitled to Rs.1,60,000/- on account of loss of consortium. Towards funeral expenses and loss of estate, they shall be entitled to a sum of Rs.30,000/-. Thus, in all, the petitioners are entitled to a compensation of Rs.8,87,436/-.

22. Thus, the petitioners are entitled to enhanced compensation of Rs.4,21,536/-, which shall carry interest @ 6% p.a. from the date of claim petition till realization excluding the period of delay in preferring the appeal. Out of the enhanced compensation, 50% each will be paid to petitioner Nos.1 and 2.-. 26 - 23. For the aforementioned reasons, the judgment and award of the Tribunal stand modified and accordingly the appeal is allowed in part. Registry to draw the award accordingly. SD/- JUDGE Sd/- JUDGE hkh./Vnp*

Court	Karnataka Dharwad High Court
Decided On	Jan-08-2021
Case Number	MFA 101613/2017
Judge	G.NARENDAR AND M.I.ARUN
Appellant	Smt. Kamalavva
Respondent	Nagesh S/o Yeshwant Davalatkar

Smt. Kamalavva Vs. Nagesh S/o Yeshwant Davalatkar - Court Judgment