MACA.No.2147 of 2005 / OPMV.500/2003 of MOTOR ACCIDENT CLAIMS TRIBUNAL, PUNALUR

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT & THE HONOURABLE MRS. JUSTICE M.C.HARI RANI FRIDAY, THE 2ND SEPTEMBER 2011 / 11TH BHADRA 1933 MACA.No. 2147 of 2005() ----------------------OPMV.500/2003 of MOTOR ACCIDENT CLAIMS TRIBUNAL, PUNALUR .................... APPELLANT(S)/PETITIONERS IN OP(MV): ------------------------ 1. THRESSIAMMA @ RANI MATHEW, W/O.LATE K.M.MATHEW, KANJIRATHUMKUNNIL HOUSE, RAMAPURAM, KOTTAYAM, NOW RESIDING AT MUTTATHIL HOUSE, CHERUKULAM P.O., ANCHAL, KOLLAM DISTRICT. 2. RINU MATHEW (MINOR), S/O.LATE - K.M.MATHEW, REPRESENTED BY HIS MOTHER THRESSIAMMA @ RANI MATHEW, W/O.LATE K.M.MATHEW, KANJIRATHUMKUNNIL HOUSE, RAMAPURAM, KOTTAYAM, NOW RESIDING AT MUTTATHIL HOUSE, CHERUKULAM PO, ANCHAL, KOLLAM DISTRICT. BY ADV. SRI.P.V.BABY SRI.A.N.SANTHOSH RESPONDENT(S)/RESPONDENTS IN OP(MV): - --------------- 1. K.M.KUMBATH, S/O.KOYA, KURINGATTICKAL MEETHAL, VELLEYAMKODU P.O. 2. K.K.ABOO, S/O.MOIDEEN, KOOLIKANDI HOUSE, PERAMBRA P.O., KOZHIKODE. 3. THE BRANCH MANAGER, UNITED INDIA INSURANCE CO. LTD., CALICUT BRANCH. 4. ANNAMMA MYCKLE, W/O.LATE MYCKLE, KANJIRATHUMKUNNEL HOUSE, IDIYARA P.O., RAMAPURAM VILLAGE, MEENACHIL TALUK, KOTTAYAM. ADV. SRI.ANCHAL C.VIJAYAN FOR R4 SRI.M.A.GEORGE FOR R3 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 02/09/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **R. BASANT & M.C. HARI RANI,JJ.** ........................................... M.A.C.A.No.2147 OF 2005 ............................................. Dated this the 2[nd] day of September, 2011. ## **JUDGMENT** ## **R. Basant, J:** Claimants are the appellants. They are the wife and minor child aged 10 years of the deceased, a person aged 42 years who succumbed to the injuries in a road traffic accident which occurred on 8.3.2003. He was the Manager of the State Bank of India. The salary certificate showed that his total monthly emoluments on the date of his death exceeded Rs.25,500/-. He along with his wife and two minor children were travelling in a vehicle when the accident took place. He and a minor son succumbed to the injuries leaving behind his wife and a minor child, the claimants herein as his legal heirs. Against a total claim of Rs.49,25,000/- the Tribunal awarded an amount of Rs.13,08,140/- as compensation as per the details given below: |**_Sl.No._**|**_Head_**|**_Amount claimed_**|**_Amount awarded_**| |---|---|---|---| |1|Pain and sufferings|Rs.25000/-|Rs.10000/-| |2|Loss of amenities|Rs.|Rs.| |3|Medical expenses|Rs.|Rs.| : 2 : ## M.A.C.A.No.2147 OF 2005 |**_Sl.No._**|**_Head_**|**_Amount claimed_**|**_Amount awarded_**| |---|---|---|---| |4|Transportation expenses|Rs.4000/-|Rs.3000/-| |5|Loss of earnings|Rs.|Rs.| |6|Bystander expenses|Rs.|Rs.| |7|Disability/dependency|Rs.48,00,000|Rs.1255140<br>(6973x12x15)| |8|Future Medical expenses|Rs.|Rs.| |9|Extra nurishment|Rs.|Rs.| |10|Damage to clothings|Rs.|Rs.| |11|Love and affection to P2|Rs.25000|Rs.15,000| |12|Loss of consortium to P1|Rs.20000|Rs.20000| |13|Funeral expense|Rs.25000|Rs.5000| ||Total||Rs.13,08,140| 2. We have heard the learned counsel for the appellants/claimants and the learned counsel for the insurance company. The challenge is directed only against the quantum of compensation. Called upon to explain and be specific, the learned counsel for the appellants submits that the appellants are aggrieved by the amount awarded under the head of loss of dependency. Against a total claim of Rs.48,00,000/-, the Tribunal had awarded only an amount of Rs.12,55,140/- (6973x12x15) as compensation for loss of dependency. The learned counsel for the appellants submits that the course of reasoning adopted by the Tribunal to M.A.C.A.No.2147 OF 2005 : 3 : arrive at the multiplicand of Rs.6,973/- is grossly defective and irrational. The Tribunal has totally ignored the relevant principles in binding dicta including the dictum in **Sunil Sharma v. Bachitar Singh** (2011 (2) KLT 451 SC), contends the counsel. 3. It is trite and there is no dispute before us that the multiplier multiplicand method has to be adopted to ascertain the quantum of compensation payable under the head of loss of dependency. The basic logic and rationale is that the dependent claimants must be given the monetary equivalent of the benefits they would have enjoyed if the deceased had continued to be living. It is to ascertain to such loss that the multiplier multiplicand method is adopted. 4. Regarding the multiplier to be adopted, we find that there is no serious dispute. Though the Tribunal had adopted 15 as the multiplier, it is now trite, after the decision in **Sarla Verma v. Delhi Transport Corporation** [(2009) 6 SCC 1211] that in respect of a deceased person belonging to the age group 40 to 45 years, 14 is the multiplier to be adopted. We accept that submission of the M.A.C.A.No.2147 OF 2005 : 4 : learned counsel for the insurance company. There can virtually be no dispute on this in the light of the dictum in **Sarla Verma** . 5. Having thus ascertained the multiplier, the next attempt must be to identify the multiplicand. The deceased was in stable and settled employment as Branch Manager of the State Bank of India at its Cherai Branch. PW4 an officer from the State Bank of India was examined and Ext.A13 salary certificate has been proved by the claimants. There can be no dispute that the oral evidence of the officer concerned that is PW4 and Ext.A13 certificate can safely be accepted. We extract below the relevant details in Ext.A13. Basic Pay Rs. 12540.00 Dearness Allowance Rs. 4637.88 Personal Pay Rs. 350.00 Branch Contribution to P.F Rs. 254.00 Banks Contribution to Pension Fund Rs.1254.00 -----------------Total Rs.20035.88 ======== The Officer was also enjoying the following Perquisites (Value calculated on Monthly basis) ---------------------------------------------------------------------------------- ## M.A.C.A.No.2147 OF 2005 : 5 : |Rent for leased housing|<br>Rs.|3100.00| |---|---|---| |Cleaning materials|Rs.|315.00| |News paper|Rs.|215.00| |Petrol Reimbursement|Rs.|1155.00@Rs.33/- for 35 liters of Petrol)| |Curtain cleaning Charges Rs.||62.50| |Furniture and maintenance Rs.||50.00| |Magazine|Rs.|62.50| |Annual closing<br>|Rs.|41.50| |Entertainment Charges|Rs.|391.50| |Club Membership|Rs.|83.30| ||---------------------------|| |Total|Rs.|5476.30| ||===========|| 6. Salary is described to be Rs.20,035.88 as given above. The deceased was enjoying perquisites, monetary equivalent which is given as Rs.5476.30. The total exceeds Rs.25,500/-. 7. We have looked into specific entries in Ext.A13 to ascertain whether any part of the monthly emoluments received/perquisites derived is to be excluded while ascertaining the multiplicand. There can be virtually no dispute that the amount of Rs.20,035.88 can be reckoned as salary and can be included in the multiplicand. Rs.5476.30 is the monetary equivalent of perquisites received. They are certainly part of the emoluments which the deceased M.A.C.A.No.2147 OF 2005 : 6 : was entitled to receive from the bank in his capacity as the officer/employee of the bank. All the entries except the last three to which we shall refer a little later are amounts which the deceased would invariably have received from his employer every month. Though categorized under the head of perquisites, it is easy to come to the conclusion that they are part of the package of remuneration available to the deceased from his employer. The mere fact that the total inflow from the employer to the employee/officer is described under various heads - sometimes evidently to enable the employee to claim exemption from payment of income tax, does not in any way militate against the fact that such amounts are receivable for services rendered to the bank. We are therefore of the opinion that there is no justification in excluding from the multiplicand the amounts that would be receivable as perquisites (their monetary equivalent given by the bank to the employee). 8. The last three which go to make up the amount of Rs.5476.30 which are shown below do raise doubts in our mind. They are (1) Annual closing (Rs.41.50) (2) M.A.C.A.No.2147 OF 2005 : 7 : Entertainment Charges (Rs.391.50) and (3) Club membership (Rs.83.30). The above three amounts evidently suggest that if only deceased had incurred such expenses in connection with his employment, those payments will be available to the deceased. They also depend on certain other obligations to be performed. We are of the opinion that the above three amounts can safely be excluded from the monthly total amount received by the deceased as remuneration from his employer. Even after reducing those three amounts, we are satisfied that at any rate Rs.24,000 can safely be reckoned as the monthly inflow to the kitty of the deceased from his employer as remuneration for the services rendered. 9. The learned counsel for the insurance company relies on entries in the saral income tax form and contends that the taxable income alone can be taken into consideration. We find no force in this contention. Perquisites are made available by the employer to the employee in consideration of the services rendered. Some of the perquisites may be exempted from payment of income M.A.C.A.No.2147 OF 2005 : 8 : tax. The fact that income tax was not payable on any of the perquisites cannot ipso facto lead the court to the conclusion that those perquisites deserve to be excluded while ascertaining the total monthly income of the deceased. That contention does not hence persuade us to reckon anything below Rs.24,000/- as the indisputable monthly income of the deceased receivable from his employer. 10. The Tribunal had not made any provision for improvement of future prospects in employment. **Sarla verma** in paragraph 24 makes it crystal clear that for a person like the deceased aged 42 years it would be safe to assume that income would have increased by 30%. In fact the evidence of PW4 also suggests that the deceased would have risen in the hierarchy to occupy higher posts. We are satisfied that 30% can straight away be added to the monthly income on the date of the accident. Hence Rs.24,000x130/100 can be reckoned as the monthly income. 11. From the monthly income, income tax will have to be paid. There could be other cesses also. We are in these circumstances of the opinion that 33% can straight ## M.A.C.A.No.2147 OF 2005 : 9 : away be reduced from such multiplicand ascertained by the court. It is true that a flat rate of 33% may not have to be paid as income tax. 33% may have to be paid only at the final slab but we must note that other cesses like profession tax etc will also have to be paid. We in these circumstances are satisfied that a flat reduction of one third can be made for payment of income and other cesses. The multiplicand therefore gets reduced to Rs.20800/(24,000x130/100x2/3). 12. Personal expenses of the deceased will now have to be provided for. The deceased was having a nuclear family of not more than three persons depending on him i.e. his wife and two minor children in addition to himself. **Sarla Verma** standardizes the deduction for personal expenses. We are satisfied that one third can be deducted from the multiplicand ascertained earlier towards the personal expenses of the deceased. That means that amount to be reckoned as multiplicand will only be Rs.13,936/(24,000x130/100x67/100x2/3). What is ascertained above is the monthly income, the annual income has to be M.A.C.A.No.2147 OF 2005 : 10 : ascertained by multiplying the same with 12. We have already ascertained the multiplier to be 14 and not 15 as reckoned by the Tribunal. In these circumstances the total amount payable under the head of loss of dependency would be 24,000x130/100x67/100x2/3x12x14=23,41,248. 13. The above discussions lead us to the conclusion that the appellants will be entitled to a further amount of Rs.10,86,108/- asper the details given below: i.e loss of dependency (24000x130/100x12x67/100x2/3x14 minus 1255140 = Rs.10,86,108/-. 14. The learned counsel for the appellants then submits that the Tribunal was unrealistic in awarding interest at the rate of 6% per annum. Consistent with the rate of interest paid by nationalized banks, interest must have been paid at the rate of 7.5% per annum contends the counsel. The learned counsel for the insurance company contends that the amount of compensation being high, the interest awarded at 6% is reasonable. We agree with the learned counsel for the appellants. We are satisfied that interest has to be awarded realistically and reasonably. M.A.C.A.No.2147 OF 2005 : 11 : We are satisfied that interest deserves to be awarded at the rate of 7.5% per annum. 15. In the result: a. This appeal is allowed in part. b. The appellants are found entitled to further amount of Rs.10,86,108/- in addition to the amount already awarded by the Tribunal. c. We direct that the entire amount of compensation shall carry interest at the rate of 7.5% per annum from the date of the claim to the date of payment. d. All other directions of the Tribunal are upheld. ## **R. BASANT, JUDGE.** **M.C. HARI RANI, JUDGE.** **cl**