Aniamma and others v. Reju Joy and others and United India Insurance Co. Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE BASANT BALAJI** **WEDNESDAY, THE 17[TH] DAY OF AUGUST 2022 / 26TH SRAVANA, 1944 MACA NO. 136 OF 2017** ## **OPMV 125/2015 OF ADDITIONAL DISTRICT COURT & MOTOR ACCIDENT** ## **CLAIMS TRIBUNAL,THODUPUZHA** ## **APPELLANT/S:** 1 ANIAMMA,AGED 52, W/O. SIBY JOSEPH, KOCHUKIZHAKKEL HOUSE, MOOLAMATTOM P.O., ARAKULAM VILLAGE, PIN685589 2 JOSEPH SEBASTIAN. AGED 24, S/O.SIBY JOSEPH, KOCHUKIZHAKKEL HOUSE, MOOLAMATTOM P.O., ARAKULAM VILLAGE, PIN-685589 3 ANN MARY SEBASTIAN, AGED 23, D/O.SIBY JOSEPH, KOCHUKIZHAKKEL HOUSE, MOOLAMATTOM P.O., ARAKULAM VILLAGE, PIN-685589 BY ADVS. SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) SRI.A.R.DILEEP SRI.P.J.JOE PAUL SRI.MANU SEBASTIAN ## **RESPONDENT/S:** 1 REJU JOY, AGED 51, S/O.JOY, RAMANATTU HOUSE, KUNNUKARA KARA, AMMANATHU PALLAM BHAGAM, KUNNUKARA VILLAGE, PARAVOOR TALUK, ERNAKULAM DISTRICT-683578 2 MINI REJU, AGED 48 , W/O.REJU JOY, KP III/512-B, MUKKOLA, MANNAMTHALA P.O., TRIVANDRUM-15, RESIDING AT RAMANATTU HOUSE, KUNNUKARA KARA, AMMANATHU PALLAM BHAGAM, KUNNUKARA VILLAGE, PARAVOOR TALUK, ERNAKULAM DISTRICT-683578 **MACA NO. 136 OF 2017** -2- 3 MS.UNITED INDIA CO. LTD. M.MC 19/642, KULANGARA TOWERS, M.C.ROAD, KACHERITHAZHAM, MUVATTUPUZHA-686661 BY ADVS. SRI.P.JACOB MATHEW SRI.MATHEWS JACOB SR. THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 17.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **MACA NO. 136 OF 2017** -3- ## **JUDGMENT** (Dated this the 17[th] day of August 2022) Petitioner are the wife and children of the deceased Siby Joseph. O.P. No.125 of 2015 was filed claiming compensation for the death of Siby Joseph. The deceased died in a road accident, caused due to a collision involving his car bearing Reg.No.KL 5W/188 with another car bearing Reg.No.KL1BQ/7337 on his way to St.Joseph College, Moolamattom. He was working as Associate Professor in Chemistry department. The accident occurred on 21.2.2015 at 9.15 a.m. due to the rash and negligent riding of the rider of the vehicle bearing Reg.No.KL1BQ/7337. The 2[nd] respondent is the owner and 3[rd] respondent being the insurer, are liable to pay the compensation. Immediately after the accident, he was taken to Bishop Vayalil Hospital, Moolamattam and thereafter to **MACA NO. 136 OF 2017** -4- Holy Family Hospital, Muthalakodam, where he succumbed to the injuries. He was the head of the department and was acting as the Chairman of different departments of Mahatma Gandhi University. 2. The respondent Nos.1 and 2 filed written statement disputing that the accident happened not due to the driver of the vehicle bearing Reg.No.KL1BQ/7337, but it was due to rash and negligent driving of the deceased himself. 3. The 3[rd] respondent filed written statement admitting the insurance policy of the offending vehicle. But it was contended that the deceased was responsible for the accident. The age, occupation and monthly income are not correct. The compensation claimed is highly exorbitant and the amount of compensation claimed for loss of estate and dependency are without any basis. **MACA NO. 136 OF 2017** -5- 4. The Tribunal, after consideration of Exts.A1 to A10 and Ext.B1, awarded a total compensation of Rs.51,92,265/- with interest at the rate of 9% per annum from the date of petition. Aggrieved by the award of the compensation, this appeal is filed by the legal heirs of the deceased. 5. The counsel for the appellants submits that the Tribunal had committed an error in using the split multiplier method for arriving the compensation for loss of dependency. Moreover, 30% was deducted towards income tax from the total compensation. The Tribunal also erred in reducing the AGP and HRA from the total monthly income of the deceased in calculating the loss of dependency. **MACA NO. 136 OF 2017** -6- 6. The counsel for the 3[rd] respondent Insurance Company submits that since the deceased was aged 54 years at the time of accident and working as Associate Professor in Chemistry department, the Tribunal rightly applied split multiplier, because he was due to retire at the age of 56 and thereafter, his income would be reduced by half i.e., pension alone. So taking into consideration of all the aspects, the Tribunal has calculated the loss of dependency on the principles of split multiplier. Moreover, deduction of income tax was as per the rules and so, no interference is warranted. 7. Heard. 8. The deceased Siby Joseph, was aged 54 years at the time of accident earning a monthly salary of Rs.1,27,390/being the head of the department of Chemistry at St **MACA NO. 136 OF 2017** Josephs college, Moolamattom. Ext.A7 is the salary certificate issued by the Principal. The Tribunal did not take into consideration AGP (Academic Gross Pay) and HRA (House Rent Allowance) as those were not explained. Thereafter, fixing the monthly income as Rs.1,18,401/- and the multiplier applicable as 11, deducted 30% towards income tax. 1/3[rd] was deducted towards personal expenses. Thus the compensation arrived was Rs.49,56,265/- towards loss of dependency. This figure was arrived taking the split multiplier method where the salary at the rate of Rs.1,18,401/- per month was taken for two years and for the balance 9 years pension at the rate of Rs.59,200/- per month was taken. 9. The main contention raised by the counsel for the appellants is that the Tribunal was not justified in taking the **MACA NO. 136 OF 2017** split multiplier in view of the decision of the Apex Court in **Puttamma and others v. K. L Narayana Reddy and another [(2014) 4 SCC (Civ.) 384],** wherein the Apex court has categorically in paragraph 34 held as follows: “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 the case of Sarla Verma (supra) as affirmed in the case of Reshma Kumari (supra).” 10. The Apex court had, in another occasion to consider the similar issue in **Jayasree N. & others v.** **Cholamandalam MS General Insurance Company Ltd (2021 (6) KHC 163)** wherein one of the questions raised by the Apex Court was whether the High court was justified in applying split multiplier? The Apex court, after **MACA NO. 136 OF 2017** referring to a number of decisions right, from **Sarla Verma(Smt.) & another v. Delhi Transport Corporation & another [(2009) 2 SCC 735]** held as follows: “22. The deceased was aged 52 years at the time of the accident. He was working as an Assistant Professor and getting a monthly salary of Rs.83,831/- (Rupees eighty-three thousand eight hundred thirty-one only). The evidence on record shows that he was a meritorious man having the qualifications of M.Sc, M.Phil. He was a first-class holder in M.Sc. He was a Selection Grade Lecturer in Mathematics and was a subject expert. He was also included in the panel of Mahatma Gandhi University and was appointed as Examiner in the Board of Examiners for CBCCSS Programme in Mathematics. Subsequently, he was appointed as Deputy Chairman of the Examiners Board. Evidence on record also shows that there is acute shortage of lecturers in Mathematics for appointment in colleges and retired Mathematics Professors are appointed in so many colleges. It is common knowledge that the teachers, especially Mathematics teachers, **MACA NO. 136 OF 2017** -10- are employed even after their retirement in coaching centers. They may also hold private tuition classes. This would increase their income manifold after retirement. 23. In Sarla Verma, this Court has held that while calculating the compensation, the courts should take into consideration not only the actual income at the time of the death but should also make additions by taking note of future prospects. It was further held that though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid or disparate yardsticks being applied disparate methods of calculation being adopted. 24. In Reshma Kumari & Ors. vs. Madan Mohan & Anr.", a three-Judge Bench of this Court has approved the judgment in Sarla Verma. 25. In Pranay Sethi, this Court has not only approved the aforesaid observations made in Sarla Verma but also held as under: 59.3. While determining the income, an addition of 50% of actual salary **MACA NO. 136 OF 2017** -11- 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. 59.4. In case the deceased was selfemployed 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." 26. In K.R. Madhusudhan and Ors. vs. Administrative Officer and Anr., this Court was considering a case where the **MACA NO. 136 OF 2017** -12- High Court had applied split multiplier for the of calculation of purpose compensation towards loss of dependency and held as under: 8. In Sarla Verma judgment the Court has held that there should be no addition to income for future prospects where the age of the deceased is more than 50 years. The learned Bench called it a rule of thumb and it was developed so as to avoid uncertainties in the outcomes of litigation. However, the Bench held that a departure can be made in rare and exceptional circumstances. cases involving special circumstances. 9. We are of the opinion that the rule of thumb evolved in Sarla Verma is to be applied to those cases where there was no concrete evidence on record of definite rise in income due to future prospects. Obviously, the said rule was based on assumption and to avoid uncertainties and inconsistencies in the interpretation of different courts, and to overcome the same." **MACA NO. 136 OF 2017** -13- 27. In Puttamma and Ors. vs. K.L. Narayana Reddy and Anr. this Court was again considering a case where split multiplier for the purpose of calculation of dependency compensation was applied. It was held thus: "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 of the age group deceased/victim. The 1988 Act, does not envisage application of a split multiplier. 33. In K.R. Madhusudhan v. Administrative Officer this Court held as follows: (SCC p. 692, paras 14-15) "14. In the appeal which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of **MACA NO. 136 OF 2017** -14- 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 reason disclosing any 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. 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 **MACA NO. 136 OF 2017** -15- not considered the future prospects of the deceased and also for adopting a split multiplier method. 28. From the above discussion it is clear that at the time of calculation of the income, the Court has to consider the actual income of the deceased and addition should be made to take into account future prospects. Further, while the evidence in a given case may indicate a different percentage of increase, standardization of the addition for future prospects should be made to avoid different yardsticks being applied or different methods of calculation being adopted. In Pranay Sethi, the Constitution Bench has directed addition of 15% of the salary in case the deceased was between the age of 50 to 60 years as a thumb rule, where a deceased had a permanent job. In view of the above, the High Court was not justified in applying split multiplier in the instant case.” 11. Thus going by the decisions of the Apex Court, the Tribunal ought not have taken the split multiplier method in the absence of any specific reason and evidence **MACA NO. 136 OF 2017** -16- on record for arriving at the compensation of loss of dependency. Hence, the same has to be modified taking into consideration the dictum laid down in **Sarla Verma (supra)** . As per the salary certificate issued by the Principal of College, the total income of the deceased is Rs.1,27,390/-. The Tribunal was wrong in deducing HRA and AGP in taking the monthly salary. Hence, the monthly salary to be taken is Rs.1,27,390/-. With this figure as the monthly salary, the loss of dependency can be calculated as ## below:- |Annual income|12 x Rs.1,27,390|Rs.15,28,680.00| |---|---|---| |Income Tax<br>Applying Income<br>tax Slab (for the<br>assessment year<br>2015-16)|For Rs.10,00,000 &<br>above - Rs.1,25,000<br>+ 30% of the amount<br>exceeding<br>Rs.10,00,000|Rs.1,25,000+30% of<br>5,28,680 ( amount<br>exceeding<br>Rs.10,00,000) =<br>Rs.2,83,604/-| **MACA NO. 136 OF 2017** -17- |Actual salary (after<br>deduction of Income<br>Tax applying<br>Income tax slab<br>2015-16)|15,28,680- 2,83,604|Rs.12,45,076.00| |---|---|---| |Calculation of loss<br>of dependency|Future prospects for age<br>group 50-60|Rs.1,86,761<br>(Rs.12,45,076x15%)| ||Revised Annual income<br>for calculation of loss of<br>dependency|Rs.14,31,837<br>(Rs.12,45,076+Rs.1,86,761)| ||Multiplier applicable|11| ||Deduction towards<br>personal expenses|1/3| ||**14,31,837x11x2/3**|**Rs.1,05,00,138/-**| 12. As far as funeral expenses is concerned, the Tribunal awarded Rs.25,000/-. In _**National Insurance Company Ltd**_ . v. _**Pranay Sethi**_ **[2017 (16) SCC 680]** , the maximum amount that can be awarded as funeral expense is Rs.15,000 + 10% escalation every three year. So the **MACA NO. 136 OF 2017** -18- amount awarded by the Tribunal is more and it is brought down to Rs.16,500/-. 13. Towards love and affection, a sum of Rs.50,000 is awarded against the claim of Rs.3,00,000/-. Moreover, an amount of Rs.1 lakh is given as loss of consortium. As per the decision reported in _**Magma General Insurance Co.Ltd.**_ **v** . _**Nanu Ram Alias Chuhru Ram & Others**_ [(2018) 18 SCC 130] the loss of consortium to be paid is Rs.40,000/- per person. They are also entitled to 10% increase every three years as per the decision reported in _**Pranay Sethi**_ (supra) and thus, the 10% increase would come to Rs.44,000 x 3, i.e., Rs.1,32,000/-. 14. The Tribunal has awarded Rs.50,000/- under the head loss of love and affection. When loss of consortium is awarded loss of love and affection cannot be awarded over **MACA NO. 136 OF 2017** -19- and above the loss of consortium. Hence, the amount of Rs.50,000/- awarded by the Tribunal on the head of loss of love and affection is set aside. 15. For pain and sufferings, Rs.50,000/- is awarded by the Tribunal. As per the decision reported in **Sarla Verma(supra),** no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased. Thus, the award of Rs.50,000/- under the head pain and sufferings is set aside. Accordingly, the following enhancements are made to the award passed by the Tribunal: |Sl.<br>No.|Head of Claim|Amt.<br>Awarded by<br>Tribunal (Rs.)|Amt.<br>Enhanced in<br>appeal (Rs.)| |---|---|---|---| |1|Loss of dependency|49,56,265|1,05,00,138| |2.|Loss of consortium|1,00,000|1,32,000| **MACA NO. 136 OF 2017** -20- ||Total|50,56,265|1,06,32,138| |---|---|---|---| ||Amount enhanced Rs.1,06,32,138–Rs.50,56,265**=**<br>Rs.55,75,873/-||| ||**Less**||| ||Love and affection|-|50,000| ||Funeral Expense|-|8,500<br>[25,000-16,500]| ||Pain and sufferings|-|50,000| ||Total (deductions)||1,08,500/-| ||Total amount enhanced Rs.55,75,873 – 1,08,500<br>**= Rs.54,67,373/**-||| In the result, the appeal is allowed and the appellants are entitled to an amount of Rs.54,67,373/(Rupees fifty four lakh sixty seven thousand three hundred seventy three only). The Insurance Company shall pay interest for the amounts awarded by the Tribunal at the rate directed in the impugned award and for the enhanced **MACA NO. 136 OF 2017** -21- amounts at the rate of 8% from the date of petition. If any amounts have already been paid, the same shall be granted set off. The claimants shall produce the details of the Bank account before the Insurance Company/Tribunal within one month from the date of receipt of a certified copy of this judgment and amount shall be transferred to the Bank account directly through NEFT/RTGS mode, within a period of one month thereafter. If the Bank account is not furnished within the time stipulated, it is made clear that no interest shall run on the enhanced amount after the period stipulated by this Court. However, if the Insurance Company fails to deposit the amount as directed, interest shall run at the rate ordered by the Tribunal from the date of petition. ## Sd/ **BASANT BALAJI, JUDGE** _dl/_