V.K Mehrotra, J.:— One B.D Dubey was Regional Manager in the H.P Road Transport Corporation and was posted at Hamirpur. He was going in the jeep No. HPG 387 of the H.R.T.C, driven by its driver Puran Chand to check up a H.R.T.C bus breakdown on March 3, 1981. The jeep rolled down the hillside. Dubey sustained injuries. He was later admitted to the P.G.I Hospital, Chandigarh where, unfortunately, he succumbed to his injuries on April 5, 1981. He was about 52 years in age at that time. Bimla Dubey, widow of B.D Dubey deceased, who was aged 48 years and her two sons Ashwani Dubey, aged about 25 years and Bhuvnesh Dubey, aged about 20 years, made a claim for compensation by filing a petition under section 110-A of the Motor Vehicles Act, 1939. The petition was resisted in certain respects on behalf of the H.R.T.C Parties led evidence in the case.

2. The Motor Accidents Claims Tribunal passed an award on May 24, 1984. Against a claim of Rs. 5,00,000/- made by the three claimants, it awarded a sum of Rs. 87,000/- in all with costs and interest at the rate of 6 per cent per annum from the date of the petition till the date of payment. The claimants felt that the amount awarded to them was inadequate. They have filed the present appeal against it. The first issue which the Tribunal framed was:

“Whether the petition is not maintainable as the petitioners have received the compensation in full and final settlement of the claim outside the court? OPR 1”

3. This issue arose on account of the statement made in the claim petition by the claimants that the H.R.T.C gave an ex gratia amount of Rs. 29,200/- which was accepted by claimant No. 1 without prejudice to her legal claims, and the reply to it, by the H.R.T.C, that besides medical expenses, the Corporation had given about Rs. 30,000/- to the legal heirs of the deceased which amount had been accepted as full and final settlement by them. The Tribunal took the view that no evidence had been produced by the H.R.T.C that the petitioner had received the sum of about Rs. 30,000/- in full and final settlement of the claim and further that the issue was not ‘argued at the time of arguments’. The issue was answered against the H.R.T.C

4. In the cross-objection which the H.R.T.C has filed in this court the plea raised is that the amount of Rs. 29,200/-, which was given by way of ex gratia grant to the legal heirs of the deceased, should have been deducted from the amount of compensation awarded by the Tribunal. The learned counsel for the H.R.T.C has not urged, and rightly so, that on account of the payment of this amount the claim petition was not maintainable at the instance of the three claimants.

5. The second issue, which the Tribunal framed, was:

“Whether the accident of jeep bearing registration No. HPG 387 occurred due to the rash and negligent driving by Puran Chand, respondent No. 2? OPP”

6. The finding of the Tribunal on this issue is that:

“…from the evidence placed on record it can safely be concluded, especially when there is no rebuttal evidence that Puran Chand was driving the vehicle negligently and I believe the petitioner's evidence and return the finding in favour of the petitioners…”

7. The finding has not been assailed in this court.

8. The third and fourth issues framed by the Tribunal were these:

“(3) If issue No. 1 is held in affirmative, what proportionate amount the petitioner is entitled to or from whom? OPP

(4) Relief.”

9. These were the issues which were debated at some length before this court.

10. The Tribunal, on consideration of the evidence led in the case, concluded, firstly, that the life expectancy of the deceased was of 70 years; secondly, that the deceased was contributing Rs. 1,000/- per month to the family out of his monthly income of Rs. 2,000/-; thirdly, that the personal expenditure of the deceased was Rs. 300/- per month; fourthly, that the multiplier of the number of years' purchase should be seven in the present case; and lastly, that application of this multiplier to the contribution of Rs. 1,000/- per month would yield a sum of Rs. 84,000/- by way of compensation which, together with Rs. 3,000/- as conventional amount of damages for the loss of future expectancy of life, would justify a grant of total amount of compensation of Rs. 87,000/-.

11. On the aforesaid findings, the award of Rs. 87,000/- in all with costs and interest at the rate of 6 per cent per annum from the date of the petition till the date of payment was passed.

12. The evidence on the record of the case shows that at the time of death B.D Dubey had about five and a half years of service left with him as his date of retirement, on attaining the age of superannuation, was October 30, 1986. Also, that he was drawing a basic salary of Rs. 1,460/- per month and his total emoluments, inclusive of allowances, were Rs. 1,784/- per month. The statement to this effect was made by AW 2 Parshadi Ram, Accountant H.R.T.C, Hamirpur. According to the chart, which was placed on record by this witness at the direction of the Tribunal, the total amount which Dubey would have received as emoluments if he had survived till the date of his superannuation would have been a sum of Rs. 1,36,541.20.

13. The evidence also shows that Ashwani Dubey, the elder son of B.D Dubey, was about 23 years in age at the time when the accident took place and was doing his M.B.A course at Ahmedabad. He joined service a year later at Chandigarh, in Indo-Swiss Training Centre. The other son Bhuvnesh Dubey was about 18 years in age at the time of the accident and was studying, when Bimla Dubey appeared as a witness before the Tribunal on January 18, 1983.

14. The mother of deceased B.D Dubey was still alive on January 18, 1983 and was aged 78 years. Dubey's father had died earlier at the age of 74 years. The mother of Bimla Dubey was at that time living and was 67 years in age. Her father had died at the age of 70 years.

15. The life expectancy of the deceased, which was fixed at 70 years by the Tribunal, appears to be fully justified in view of the aforesaid evidence. At the time of his death B.D Dubey was about 52 years in age. He could reasonably expect to live for another 18 years but for the accident. Likewise, having regard to the age of her parents, Bimla Dubey can also be assumed reasonably to have a life expectancy up to 70 years in age. A future life of about 18 years can also be assumed in her case from the date of the accident in which her husband lost his life. Bhuvnesh, the second son, could reasonably be expected to settle in life at around 24 years in age, nearly six years after the date of the accident in which his father lost his life.

16. In M.P State Road Transport Corporation v. Sudhakar, 1977 ACJ 290 (SC), the Supreme Court said (in para 6):

“A method of assessing damages, usually followed in England, as appears from Mallett v. McMonagle, 1969 ACJ 312 (HL, England), is to calculate the net pecuniary loss upon an annual basis and to arrive at the total award by multiplying the figure assessed as the amount of the annual ‘dependency’ by a number of ‘years' purchase’, that is, the number of years the benefit was expected to last, taking into consideration the imponderable factors in fixing either the multiplier or the multiplicand…”

17. The suitable multiplier, to borrow the words of Harbans Lal, J., who spoke for a five Judge Full Bench of the Punjab & Haryana High Court in Lachman Singh v. Gurmit Kaur, 1979 ACJ 170 (P&H), is to be found out thus:

“…The suitable multiplier…shall be determined as held in Sudhakar's case, 1977 ACJ 290 (SC), decided by the Supreme Court as well as in Mallett's case, 1969 ACJ 312 (HL, England), by taking into consideration the number of years of the dependency of the various departments, the number of years by which the life of the deceased was cut short and the various imponderable factors such as early natural death of the deceased, his becoming incapable of supporting the dependants due to illness or any other natural handicap or calamity, the prospects of the remarriage of the widow, the coming up of age of the dependants and their developing their independent sources of income as well as the pecuniary benefits which might accrue to the dependants on account of the death of the person concerned. Such benefits, however, should not include the amount of the insurance policy of the deceased to which the dependants may become entided on account of its maturity as a result of the death…”

18. The multiplier method of assessing the ‘just’ compensation for loss of dependency and loss to the estate was found to be useful by this court in H.P Road Transport Corporation v. Jai Ram, 1980 ACJ 1 (HP), where a Division Bench, speaking through T.U Metha, C.J, said (in para 14) that:

“…As we have already pointed out above, no method is final and only that method is best which serves best the purpose of justness contemplated by section 110-B of the Motor Vehicles Act. It may, however, be noted that the possibility of the deceased earning more emoluments in future can be properly taken care of by selecting a suitable multiplier.”

And, (in para 15) that:

“The method of multiplier is recognised by the Supreme Court in its various decisions…A Division Bench of the High Court of Gujarat has discussed this question of preference between the methods adopted by Viscount Simon and Lord Wright in detail in Hirji Virji Transport v. Basiran Bibi, 1971 ACJ 458 (Gujarat), wherein it is clarified that what this multiplier must be in any individual case would of course depend on the particular circumstances of the case because one has to take into account the probable duration of the life of the deceased, duration of the life of the widow and their dependants who might prematurely die, the possibility of widow's remarriage, acceleration of interest in the estate, possibilities of increased earning on the one hand as well as disablement or unemployment on the other. It is further pointed out in that decision that all other possibilities and chances are taken into account and in practice Lord Wright's method is applied by fixing a basic sum of annual dependency and multiplying it by an appropriate multiplier…”

19. The Bench proceeded to say (in para 18) that:

“The difficulty which the courts are generally facing is, however, with regard to the choice of a suitable multiplier on the basis of years' purchase. As already noted above, this multiplier is to be chosen having regard to the peculiar facts of each case…”

20. The following observations of the Full Bench of the Punjab & Haryana High Court in Lachman Singh v. Gurmit Kaur, 1979 ACJ 170 (P&H), (contained in para 24 of the judgment) are trite:

“…According to the Supreme Court, the determination of the amount of compensation is basically a net balance of the loss and gain to the survivors or the dependants. In this calculation, in the very nature of things, it is not possible to visualise and measure in exact terms all the uncertainties, hazards and the windfalls of life. According to their Lordships of the Supreme Court, there is bound to be some sort of general estimate, but mere speculation or wild guesswork has to be avoided. In order to do justice between the parties, the method of multiplying the annual dependency by the number of years by which the life has been cut short without any further reduction is unreasonable and unrealistic. The amount of damages or compensation should not serve as windfall to the dependants. This amount would have been available to them if the accident had not taken place only from month to month and from year to year. That is why, in some cases, the method of making some percentage of deduction from the lump sum so arrived at, was adopted, but the same is too arbitrary and vague to serve the purpose of award of just compensation. The principle of working out the suitable multiplier with which annual dependency be multiplied and capital amount arrived at appears to be the only just and reasonable method because the same takes into consideration not only the age of the victim, but also the ages of the dependants and all uncertainties of life, both in the realm of enhancement in the income as well as factors justifying reduction in the amount of compensation. For the purpose of determining the multiplier, no exact and mathematical calculation can be provided…”

21. The fixation of a correct multiplier is, thus, dependent upon some amount of guesswork on the part of the Judge. Of course, it is not to be a wild guess. It is to be fixed having regard to the totality of circumstances in a case.

22. Where, as in the present case, death of the victim occurred at a fairly advanced age of about 52 years when he had about six years of active service left and could have reasonably expected to have lived for the next 18 years having regard to the expectancy of life till the age of 70 years, the reasonable multiplier in terms of years' purchase could be taken to be ‘seven’ as was done by the Tribunal. In Arvind Singh Mann v. H.R.T.C, 1990 ACJ 647 (HP), this court upheld an award in the case of deceased Makhan Singh who was 59 years in age at the time of his death where the Tribunal had applied the multiplier of five. A similar multiplier of five was upheld by the Punjab & Haryana High Court in Om Parkash Bhatia v. Jagir Singh, 1989 ACJ 68 (P&H), where the victim was about 63 years in age at the time of the accident. True, it is that in the case of Gurdial Kaur v. Atma Singh, 1987 ACJ 245 (P&H), the Punjab and Haryana High Court had applied a multiplier of ten as the appropriate multiplier where the deceased who was a school teacher had died at the age of about 52 years and had yet about 5½ years of service left with him. But, evidently it is a question of guesswork having regard to the totality of the circumstances of a case and no hard and fast rule can be prescribed in this respect.

23. The next aspect of the case relates to the quantum of annual dependency. The Tribunal had fixed it at Rs. 12,000/- on the basis of the statement made by the widow, Bimla Dubey that the deceased was contributing Rs. 1,000/- towards the family expenses. Mr. K.D Sood, appearing for the claimants-appellants, has argued that the Tribunal has committed an error in assuming that the entire contribution of the deceased to the family was of Rs. 1,000/- per month. He pointed out that what was stated by Bimla Dubey as AW 1 before the Tribunal was that:

“…My husband used to give me Rs. 1,000/- for household expenditure and the remaining money he used to spend on the children for their studies. The personal expenditure of my husband was Rs. 200 to Rs. 300/- per month…”

and urged that giving allowance for the amount which the deceased was spending on himself, the remaining amount from out of Rs. 1,784/-, which was his total monthly pay and emoluments, should be treated to be his contribution which the deceased was making to the family. Mr. Sood urged that even if the figure of Rs. 300/- per month, which the Tribunal took to be the personal expenses of the deceased were to be taken into consideration, the remaining amount of Rs. 1,484/- should be the basis for working out the annual dependency.

24. The statement that the widow made before the Tribunal was that apart from Rs. 1,000/- per month which the deceased used to give for household expenditure, the remaining amount used to be spent by him on the children for their studies. Ashwani, the elder son, admittedly completed his education one year after the death of his father. The other son, namely, Bhuvnesh, was still studying. The elder son settled in life at the age of 24. The younger son also could be assumed to have remained dependent on his father till that age. It is in evidence that the mother of the deceased was living with him. It is also in evidence that the family had no other source of income. In the circumstances it is obvious that all the expenses of the family were being met out of the income of the deceased. Giving allowance for the fact that the contribution to the family in the years after the deceased had retired from service may have been reduced to some extent, it is reasonable to hold that the contribution which the deceased would have made to the family, till his death at the age of 70 in view of the life expectancy, would not be appreciably less than what he was making at the time when he died due to the accident. The post of a Regional Manager in the H.R.T.C is a post amongst the higher echelons of the organisation. A certain standard of living can be assumed for the family. So also the probability of the deceased having engaged in fruitful activity after his superannuation, if he had lived to see that day, during the years that he lived after retirement. Taking these factors into consideration it is reasonable to take the view that the contribution of the deceased to the family would not be less than Rs. 1,250/- per month in any case. The annual dependency, on this basis, would work out to Rs. 15,000/- (Rs. 1,250 × 12). The amount of compensation deserves to be worked out by applying the multiplier to this figure.

25. The Tribunal has awarded interest on the amount of compensation at 6 per cent per annum from the date of the application till the date of payment. The rate of interest, according to Mr. K.D Sood, is low, for, according to him, the normal rate of interest applied by the Supreme Court and this court is 12 per cent per annum. He has placed reliance upon the decisions of the Supreme Court in Chameli Wati v. Delhi Municipal Corporation, 1985 ACJ 645 (SC) and Jagbir Singh v. General Manager, Punjab Roadways, 1987 ACJ 15 (SC), as also upon the decision of this court in Oriental Fire & General Ins. Co. Ltd. v. Mast Ram, 1989 ACJ 1120 (HP). In all these decisions the view taken is that the appropriate rate of interest is 12 per cent per annum from the date of the filing of the application till the realisation of the amount. In the present context this appears to be the correct rate of interest.

26. Mr. D.K Khanna stressed on behalf of the H.R.T.C, on the basis of the cross-objection filed in the case, that the sum of Rs. 29,200/- which, admittedly, had been paid to Bimla Dubey and had been accepted by her ‘without prejudice to her legal claims’, deserves to be deducted from the total amount of compensation payable to the claimants in the case. He urged that the amount had not been paid ex gratia under any scheme for such payment applicable to the employees of the H.R.T.C but had been paid in the hope that the amount was being paid in full and final settlement of the claim as far as the H.R.T.C is concerned. The fact that Bimla Dubey had accepted it without prejudice to her legal claim indicated that even she was not treating it to be an ex gratia payment. The case of the claimants in this respect, as presented by Mr. K.D Sood, is that it was an ex gratia payment as stated by Bimla Dubey on oath as AW 1 before the Tribunal which statement was not questioned on behalf of the H.R.T.C Any payment made ex gratia was not liable to be deducted from the amount of compensation payable to the claimants under the provisions of the Motor Vehicles Act. Reliance was placed in this regard upon the observation of Lord Denning in Cunningham v. Harrison, 1974 ACJ 218 (CA, England), who said (pages 221-22) that:

“…It is an established principle of our law that the damages awarded to an injured person are not to be reduced by reason of any insurance moneys received by the injured person…nor by reason of gifts made to relieve his distress…Similarly, I think that the damages are not to be reduced by reason of ex gratia payments made by his employer…”

27. And of V.P Gupta, J. in State Of Himachal Pradesh… v. Dole Ram…., 1981 ACJ 219 (HP) (in para 46) saying that:

“…In the case of Bhag Chand also the compensation paid was not under the Workmen's Compensation Act and it was only an ex gratia payment. Such payments cannot be taken into consideration at the time of awarding of compensation as has been held in A.P. Dorairaj v. State Of Madras, 1974 ACJ 174 (Madras) and Cunningham v. Harrison, 1974 ACJ 218 (CA, England).”

28. As seen above, apart from the statement of Bimla Dubey that the amount of Rs. 29,200/- was paid by way of ex gratia payment, there is no evidence on the record of the case showing the nature of this payment. In the claim petition the payment is described by the claimants as ex gratia grant of Rs. 29,200/- which was accepted by the first claimant without prejudice to her legal claim. In the reply to the claim petition it has been asserted by the H.R.T.C that this amount (stated to be about Rs. 30,000/-) was paid to the claimants in full and final settlement of the compensation claim. The statement which Bimla Dubey made on oath as AW 1 before the Tribunal was that:

“…I was given Rs. 29,200/- on account of gratuity and ex gratia grant…”

29. There is, thus, doubt about the nature of this payment. In case it was an ex gratia payment it may not be deducted. If not, it may be. The benefit, in the event of such a doubt, should go to the claimants as held by this court in Arvind Singh Mann v. H.R.T.C, 1990 ACJ 647 (HP), where it has been observed (in para 26) that:

“Finally, even otherwise, it is well known that in case of doubt whether any payment is to be included or excluded while awarding compensation to the claimants, the benefit must be settled in favour of the claimants…”

30. In view of what has been said above, the appeal succeeds in part. The award of the M.A.C.T is modified and the claimants will be entitled to a total compensation calculated on the basis of dependency at Rs. 1,250 × 12, to be multiplied by seven (being the multiplier) together with a sum of Rs. 3,000/- awarded by the Tribunal as conventional amount of damages. In addition, the claimants would be entitled to interest at the rate of 12 per cent per annum from the date of the presentation of the claim petition till the date of payment. The respondent H.R.T.C will only be liable to deposit additional amount over and above the amount which it may have already deposited/paid in pursuance of the award made by the Tribunal. The appellants would also be entitled to proportionate costs of this court.

Cross-objection No. 219 of 1984

31. The cross-objection shall stand dismissed.

32. Appeal partly allowed.