High Court of KeralaDivision Bench2007-07-09Partly Allowed

Rosa Johnson v. P.T. Abraham and United India Insurance Co. Ltd.

Case / Petition Number:MFA.No.341 of 2001; OPMV.174/1992 (MACT, Pathanamthitta)

Neutral Citation:/

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: J.B. Koshy
K.P. Balachandran
Judgment Date: 2007-07-09
Court Decision / Holding: The appeal is allowed in part. The monthly income is increased to Rs. 2,400 with 1/3 deduction for personal expenses, yielding Rs. 1,600 monthly; applying a multiplier of 16 results in Rs. 3,07,200 as compensation for loss of dependency. The Tribunal’s Rs. 1,44,000 award for dependency is supplemented by Rs. 1,63,000, with 7% interest from the date of application. Distribution: Rs. 10,000 to each of appellants 5 and 6 (parents), Rs. 50,000 to appellant 1, and the balance, including interest, to be deposited in the names of the three minor children in equal shares and withdrawal permitted at their marriages. The other heads (loss of consortium, love and affection) are not enhanced.
Final Disposition: Partly Allowed

Parties to the Case

Appellants / Petitioners

Rosa Johnson
Jima Rose Johnson
Jinu Rose Johnson
Judhu Rose Johnson
Chacko David
Annamma David

Respondents

P. Abraham
The Divisional Manager, United India Insurance Co. Ltd.

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri. Wilson Urmese

Counsels for Respondents

• Adv. Sri. Mathews Jacob (Sr.)
• SMT. M. Lalitha Nair

Case Synopsis & Summary

This is a Kerala High Court misc. first appeal arising from an MACT Pathanamthitta compensation claim under the Motor Vehicles Act for the death of the husband of the first appellant, a 32-year-old widow who supported a large family including three minor children. The deceased, aged 35, was a businessman who had formed a private limited company and served as Managing Director of JPJ Lampack (P) Ltd. The Tribunal awarded Rs. 1,73,000 as total compensation, with a monthly income of only Rs. 1,500 and a monthly dependency of Rs. 1,000. The appellants challenged the quantum, arguing the deceased’s earnings and future prospects merited higher compensation. The High Court, relying on evidence from the employer-provided documents (Exhibits A7–A8) and established case law, deemed the monthly income to be Rs. 2,400 and applied a multiplier of 16 (guided by the second schedule of the MV Act and supported by precedents). This produced a revised compensation of Rs. 3,07,200 for loss of dependency. The court decreed an additional Rs. 1,63,000 beyond the Tribunal’s award, with 7% interest from the date of application, and ordered specific distribution to the parents and the three minors, in equal shares, with withdrawal at their marriages. The appeal was allowed in part, with no enhancement in other heads such as loss of consortium or love and affection.

Provisions of Law Cited

Motor Vehicles Act, Second Schedule (guideline for compensation under Section 166)Section 166 of the Motor Vehicles ActSection 163A of the Motor Vehicles Act

Legal Doctrines & Maxims

Second Schedule provides guidelines for determining compensation under Section 166; normally the multiplier system should be applied as per the second schedule; deviation from the structured formula is permissible only in exceptional circumstances; higher multiplicands may warrant a lesser multiplier in special cases; the earlier methods are generally superseded by the multiplier system (per Supe Dei, Mahajan, Abati Bezbaruah).

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants contended that the deceased’s actual monthly income exceeded Rs. 5,000 due to his status as a businessman and MD of a private limited company; evidence from employers (Exhibits A7, A8) supported higher earnings and future prospects. They urged application of Rs. 2,400 as monthly income and 16 as multiplier, resulting in a higher compensation, plus appropriate enhancement for loss of dependency and for other heads; they demanded deposit of the enhanced amount with interest and distribution to the dependents.

Contentions of Respondents

The respondents urged adherence to the Tribunal’s figures, arguing that standard guidelines (second schedule) should be treated as a safe framework; deviation should be rare, and normally the multiplier specified in the second schedule should be applied, with careful consideration of actual multiplicands and market conditions.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Smt. Supe Dei v. M/s. National Insurance Co. Ltd.	JT 2002 (Suppl.1) SC 451	Positive	Held that the second schedule is a guideline for determining compensation under Section 166; supports applying multiplier guidelines.
United India Insurance Co. Ltd. v. Patricia Jean Mahajan	JT 2002 (Suppl.1) SC 74	Positive	Held that, except in very rare cases, the multiplier system should not be deviated from; normally follow the second schedule.
Abati Bezbaruah v. Dy. Director General, Geological Survey of India	(2003) 3 SCC 148	Positive	Held that the structured formula provides guidelines and deviation from it should be in exceptional circumstances; multiplier system to be followed ordinarily.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN ## MONDAY, THE 9TH JULY 2007 / 18TH ASHADHA 1929 MFA.No. 341 of 2001 --------------------------------- OPMV.174/1992 of MACT, PATHANAMTHITTA .................... ## APPELLANTS/PETITIONERS: 1. ROSA JOHNSON, ARANMULATHU HOUSE, KONNI THAZHAM MURI IRAVAN VILLAGE, KOZHENCHERRY TALUK, PATHANAMTHITTA DIST. 2. JIMA ROSE JOHNSON, AGED 6 YEARS (MINOR) DO. 3. JINU ROSE JOHN, AGED 3 YEARS, (MINOR)DO. DO. 4. JUDHU ROSE JOHN, AGED 2 YEARS, (MINOR) DO. DO. 5. CHACKO DAVID, DO. DO. DO. ## 6. ANNAMMA DAVID, W/O CHACKO DAVID, DO. DO. Appellants 2 to 4 rep. by their mother Rosa Johnson BY ADV. SRI.WILSON URMESE ## RESPONDENTS/RESPONDENTS: 1. P.T.ABRAHAM, S/O K.A.THOMAS, POOVANNUNIL KKUNNATHIL, THEKLKUTHODU P.O., THANNITHODU VILLAGE, KONNI, KOZHENCHERRY TALUK. 2. THE DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO. LTD., KOLLAM. BY ADV. SRI.MATHEWS JACOB(SR.) R2 BY SMT.M.LALITHA NAIR THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 09/07/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B.Koshy & K.P.Balachandran, JJ. --------------------------------- M.F.A.No. 341 of 2001 --------------------------------- ## **JUDGMENT** Koshy, J. The first appellant, who became a widow at the age of 32, along with her three minor children and aged parents, filed an application for compensation for the untimely death of her husband, who was aged 35, due to the negligent driving of the vehicle, insured with the second respondent Insurance Company, by the first respondent. It has come out in evidence that the deceased was a business man. He converted his firm as a private limited company. He was the Managing Director of JPJ Lampack (P) Ltd., Koratty. Exhibit A5 is the Memorandum and Articles of Association of the said company. The company was registered in 1991. Exhibits A6 and A7 show that before he started the business he was employed in Graphic Packaging and Plastic Pvt. Ltd. and Sapana Ployweave Pvt. Ltd., Bombay. It is the MFA 341/01 2 contention of the appellants that from the experience of employment, he started the business and his monthly income was more than Rs.5,000/-. He was maintaining a large family. As he was a business man, the future prospects also has to be considered. However, the Tribunal took only Rs.1,500/- as the monthly income and Rs.1,000/- as the loss of monthly dependency and calculated a total compensation of Rs.1,73,000/- against a claim of Rupees six lakhs. The only dispute in this appeal is regarding the quantum of compensation. 2. After considering Exhibits A7 and A8 issued by the previous employers, considering the fact that he had formed a company and he was the Managing Director of that company and considering the evidence adduced, we are of the opinion that at least Rs.2,400/- ought to have been taken as the monthly income of the deceased. If that be so, after deducting one third for personal expenses, the compensation has to be calculated taking MFA 341/01 3 Rs.1,600/- as the monthly income. Then the question is regarding the multiplier. 3. The deceased was aged 35 at the time of the accident. His wife was aged 32. There were three minor children. As per the second schedule of the Motor Vehicles Act, for persons between 30 and 35 multiplier is 17 and for persons between 35 and 40, multiplier is 16. A three member Bench of the Supreme Court in **Smt.Supe Dei v. M/s.National Insurance Company Ltd.** (JT 2002 (Suppl.1) SC 451) held that the second schedule of the Motor Vehicles Act is framed for the purpose of awarding compensation under Section 163A, but, it serves as a guideline for determination of compensation under Section 166 of the Motor Vehicles Act. Since the victim of the accident in that case was aged 32, considering the second schedule, Hon'ble Supreme Court accepted 17 as the multiplier. In **United** **India Insurance Co. Ltd. v. Patricia Jean Mahajan** (JT 2002 (%) SC 74) the Apex Court held that except MFA 341/01 4 in very rare cases, multiplier system should not be deviated from. The other methods, which were in vogue prior to the introduction of the multiplier system, were held to be no more good system. It was further held that, normally, the multiplier, as indicated in the second schedule, should be applied. Though the second schedule is found to be a safe guide for the purpose of calculation of the amount of compensation, in special circumstances, it can be varied. In that case, it was also held that if the multiplicand is very high, a lesser multiplier can be taken. In **Abati Bezbaruah v. Dy.** ## **Director General, Geological Survey of India** ((2003) 3 SCC 148) it was held that structured formula mentioned in the second schedule gives guidelines for determination of the amount of compensation in terms of Section 166 of the Motor Vehicles Act. Deviation from the structured formula can be resorted to only in exceptional cases and ordinarily, the above multiplier system MFA 341/01 5 should be followed. Taking the guideline from the second schedule, we take 16 as the multiplier. If that be so, compensation payable will be 1600 x 12 x 16 = 3,07,200. 4. The Tribunal has awarded Rs.1,44,000/- as compensation for loss of dependency. Therefore, the claimants are entitled to an additional amount of Rs.1,63,000/-. It is contended that the amounts awarded for loss of consortium and for loss of love and fatherly affection are too meagre. Considering the total compensation awarded, we are not enhancing compensation on other counts. The above additional amount of Rs.1,63,000/- over and above the decreed amount by the Tribunal, should be deposited by the second respondent Insurance Company with 7% interest from the date of application till its deposit. On deposit of the above amount, Rs.10,000/- each shall be given to appellants 5 and 6, the parents of the deceased. Rs.50,000/- shall be disbursed to the first MFA 341/01 6 appellant. The balance amount, including entire interest, should be deposited in the name of three minor children in equal shares and it should be allowed to be withdrawn by them at the time of their marriage. The appeal is allowed in part. **==> picture [186 x 13] intentionally omitted <==** **==> picture [111 x 14] intentionally omitted <==** **==> picture [220 x 12] intentionally omitted <==** tkv MFA 341/01 7 J.B.Koshy & K.P.Balachandran, JJ. --------------------------------M.F.A.No.341 of 2001 --------------------------------- **JUDGMENT** 9[th] July, 2007