JULY 5, 2002: Satheesh Kumar was riding a Hero Honda motorcycle. A bus of TNSTC Ltd hit the bike, causing serious injuries to Satheesh. He was taken to the Medical College Hospital, Thiruvananthapuram, where he died. His widow, children and mother filed a claim before the Motor Accident Claims Tribunal, Neyyattinkara, seeking a compensation of Rs 25 lakh.

The Tribunal noted that Satheesh's monthly income, as `Upper Division Clerk in Civil Supplies Corporation', was Rs 5,843 and deducted one-third towards personal expenses to work out the contribution to the family as Rs 3,896 p.m. and annual dependency at Rs 46,752. Since Satheesh was 34 when the accident snatched his life, the Tribunal applied a multiplier of 17 and arrived at Rs 7,94,784. To this was added Rs 40,000, "for pain and sufferings, loss of love and affection, transportation, post-mortem and funeral expenditure". Thus, the Tribunal awarded Rs 8,34,784 as compensation.

Producing `evidence of a passenger in the bus', TNSTC challenged the award before the High Court on several grounds: such as, allegation of `contributory negligence' of the bike-rider, no loss of dependency as Satheesh's wife "got a clerical job on compassionate ground", and a high multiplier. However, the High Court felt that there was no scope for any interference with the Tribunal's order. So, TNSTC proceeded to the Supreme Court.

There, Justices Arijit Pasayat and Arun Kumar heard the case. They could not find any evidence of contributory negligence; nor did they find appealing the evidence of the bus passenger, on which TNSTC strong relied. "There was no definite material to infer that the deceased by his negligent acts contributed to the accident," reads the text of the apex court's judgment dated October 5.

The next question before the Supreme Court was whether the compensation was on the higher side. "Actual pecuniary loss can be ascertained only by balancing, on the one hand, the loss to the claimant of the future pecuniary benefit and, on the other, any pecuniary advantage which from whatever sources comes to them by reason of the death," noted the court, citing Gobald Motor Service Ltd vs R.M.K. Veluswami.

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, informs the judgment.

The multiplier has to serve as a guide, not an invariable ready-reckoner, pointed out the court citing the Trilok Chandra case, and fixed the multiplier in Satheesh's case as 13.

"Instead of Rs 8,34,794 the claimants will be entitled to Rs 6 lakh," ruled the court, and awarded 7.5 per cent interest "from the date of application till payment after adjustment of amount, if any, paid".

The court directed how the compensation should be deployed: Rs 50,000 as fixed deposit in the name of the mother; and Rs 1.5 lakh each in the names of the other three, for five years, with the facility to withdraw monthly interest. The deposits in the names of the two children should be renewed till they attain majority, said the court.

"No loan or advance of any type shall be permitted against the fixed deposits without leave of the Tribunal. Respondents if, however, to meet any urgent need for money, they may make application to the Tribunal for permitting withdrawal," directed the court.


D. Murali

(This article was published in the Business Line print edition dated October 16, 2005)
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