The Judgment of the Court was delivered by

Sivaraman Nair, J.:— Three female employees of the Christian Welfare Centre. Malappuram who were travelling in an Ambulance Van registered as KLM 1566 belonging to the Centre were involved in an accident on 25-11-1981. One of them, Soumini, was a Health Assistant. She was aged 21 years at the time of the accident. She died as a consequence of the injuries sustained by her. Her mother, two sisters, and a brother filed M.A.C No. 28 of 1982 claiming an amount of Rs. 50,000/- as compensation. The driver, owner and insurer of the Vehicle were the respondents. The applicants alleged that it was due to the rash and negligent manner in which the first respondent in the application drove the vehicle that the accident occurred. In the written statement, the respondents denied negligence on the part of the driver. They stated that the deceased was not a permanent employee and that the income and her prospects were highly exaggerated. The claimants examined three witnesses and produced seven documents, whereas the respondents examined the driver of the ill-fated van and another person as R.Ws 1 and 2. The Tribunal found that the first appellant-mother alone was the dependent and awarded an amount to Rs. 10,800/- as compensation. The Tribunal also limited the liability of the insurer to Rs. 10,000/-. The first applicant has filed M.F.A No. 490 of 1982 claiming enhancement in compensation, whereas the owner of the vehicle has filed M.F.A No. 256 of 1983 assailing the direction contained in the order and award limiting the liability of the insurer to Rs. 10,000/- only.

2. The husband and mother of Mary Sebastian, who also died in the same accident, filed M.A.C No. 139 of 1982, claiming an amount of Rs. 1,00,000/- as compensation. The Tribunal awarded Rs. 21,000/- and limited the liability of the insurer to Rs. 10,000/-. The owner and driver of the vehicle were required to pay the balance amount of Rs. 11,000/- with interest. The owner of the vehicle filed M.F.A No. 230 of 1983 mainly against the directions contained in the order and award limning the liability of the insurer to Rs. 10,000/- only. The claimants in both appeals have sought enhancement of the amount of compensation, the former in an appeal and the latter in a cross-objection. We heard these three appeals together because the questions which arise for consideration are the same and all the appeals related to the same accident. We will first take up M.F.A Nos. 230 and 256 of 1983 filed by the insured of the ill-fated vehicle KLM 1566. The insured was also the employer of the two deceased, in respect of whose death, the claimants had filed M.A.C Nos. 139 of 1982 and 28 of 1982 respectively. The main contention urged by counsel appearing for the appellant-insured was that the Tribunal went wrong in limiting the liability of the insurer for payment of compensation in each of the cases to Rs. 10,000/- only. He submitted, that the limit of the insurer's liability in respect of passengers applies only to “passengers for hire or reward” and not to other passengers. He submitted further, that in the two cases on hand, the deceased were not passengers for hire or reward. They were traveling in the vehicle owned by the insured-employer to discharge their obligations under the Health Service Scheme evolved by the employer. It is his case, that no fare or reward was charged from the deceased, and that they could only be treated, if at all, as passengers travelling in the vehicle pursuant to a contract of employment. Reliance was placed on the decisions in Sheikhpura Transport Co. v. N.I.T Insurance Company, (1971) 1 SCC 785 : AIR 1971 SC 1624, and Madras Motor and General Insurance Company Ltd. v. Balakrishnan, 1982 ACJ 460, for the proposition that only such passengers of insured vehicles as had paid or were to pay hire or reward were within the comprehension of section 95(2)(b)(ii) of the Motor Vehicles Act. The argument of counsel is ingenious and quite attractive, but we find it difficult to accept the same.

3. To understand the submission, we have to refer to the relevant portions of section 95(2)(b)(ii) of the Motor Vehicles Act, as it stood at the relevant time. They read:

“……………a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely;—

……………………………

(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,—

(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;

(ii) in respect of passengers,—

(1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers,—

(2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

(3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and

(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor car and five thousand rupees for each individual passenger in any other case”.

4. Counsel submits, that section 95(2)(b) of the Act sub-divides passengers into those carried for hire or reward, those carried by reason of a contract of employment and those carried in pursuance of a contract of employment. Sub-clause (i) of that Provision, according to counsel, provides for compensation in respect of accidents to persons belonging to the second and third categories, whereas clause (ii) deals with passengers in the first category. The limit of Rs. 10,000/- for each individual passenger, which is provided in section 95(2)(b)(ii)(4), submits counsel, is confined only to passengers who are carried for hire or reward. His farther submission is that passengers, who are carried by reason of or in pursuance of contract of employment are governed by clause (i) and therefore the limit of liability of the insurer is Rs. 50,000/- at the relevant time.

5. Shri Mathews Jacob, appearing for the insurer urged, that the liability of the insurer in respect of passengers-whether they are passengers for hire or reward or are carried by reason of or in pursuance of a contract of employment-is covered by the limit fixed by section 95(2)(b)(ii) of the Motor Vehicles Act. He referred us to the definition of “transport vehicle” in section 2(33) of the Act and the definition of “passenger” in rule 2(i) of the Kerala Motor Vehicles Rules. A transport vehicle is defined as public service vehicle or a goods vehicle. A public service vehicle is defined in section 2(25) to mean, “any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage, and stage carriage”. A contract carriage, which is included in the definition of “public service vehicle” and a transport vehicle as defined in section 2(3) of the Act, mean “a motor vehicle which carries a passenger or passengers for hire or reward under a contract, expressed or implied, for the use of vehicle as a whole at or for fixed or agreed rate or sum-(i) on a time basis whether or not with reference to any route or distance, or (ii) from one point to another, and in either case, without stopping to pick up, or set down along the line of route passengers not included in the contract; and includes a motor cab notwithstanding that the passengers may pay separate fares.” An employer may provide a contract carriage to carry its employees to work. In respect of employees, whose, work involves travel, the employer may provide a vehicle in which the employees may travel. In either of these cases, the individual passenger need not pay any hire or reward. Provision of a carriage may be part of the conditions of service. In other words, such carriage of employees may be in pursuance of or by reason of the contract of employment. Such employees will be passengers as defined in rule 2(i) of the Kerala Motor Vehicles Rules, which states, that “any person travelling in a public service vehicle, other than the driver or the conductor or an employee of the permit-holder while on duty”.

6. We understand the scheme of section 95(2)(b) to mean that the persons, who are involved in accidents, and the risk to whom is covered by the policy, are to be divided broadly into two categories viz., passengers and non-passengers. Passengers, themselves, are sub-divided into three; (i) passengers who are carried for hire or reward, (ii) passengers who are carried by reason of a contract of employment, and (iii) passengers who are carried in pursuance of a contract of employment. Having thus exhausted the categories of passengers, limits of liability in respect of such passengers are set by sub-clause (ii). Limits of liability in respect of non-passengers are set by sub-clause (i) Limit of aggregate compensation in respect of passengers are fixed on the basis of the carrying capacity of the vehicle in clauses (1) to (3) of sub-clause (ii). Then follows clause (4), which provides limits in respect of each individual passenger, subject to the aggregate limit fixed in the three preceding clauses. In other words, Sub-clauses (i) and (ii) of section 95(2)(b) of the Act exhausts all categories of persons involved in accidents to vehicles in which passengers are carried. The former deals with non-passengers of all categories, whereas the latter deals with passengers of all designations.

7. We have perused the decisions which were cited in support of his proposition by counsel for the insured. In Sheikhpura Transport Company case (supra), the Supreme Court did not take a different view from what we understand to be the scope of section 95(2)(b) of the Motor Vehicles Act. The Supreme Court definitely held, that the maximum liability imposed under section 95(2) on the insurer is Rs. 2,000/- per passenger, whose liability may go upto Rs. 20,000/-. It was, of course, observed by the Supreme Court, that the limit of the insurer as prescribed, under section 95(2)(b) of the Act can be enhanced by any contract to the contrary. The Court held, on a reference to the relevant provisions of the Act and the contract of insurance, that—

“reading all these provisions together, it is clear that the statutory liability of the insurer to indemnify the insured is as prescribed in S. 95(2). Hence the High Court was right in its conclusion that the liability of the insurer in the present case only extends up to Rs. 2,000/- each, in the case of Bachan Singh and Narinder Nath”.

8. In Madras Motor and General Insurance Company Ltd., (supra) a Division Bench of this Court took the same view, that the insurer is “liable only to an amount of Rs. 5,000/- in respect of each injured individual passenger and that the decree against the third defendant has to be modified accordingly restricting its liability to Rs. 5,000/- instead of Rs. 20,000/- decreed by the court below”. The limit of liability under section 95(2)(b), at that time, was Rs. 5,000/- for each individual passenger.

9. Neither of these two decisions render any assistance to the proposition advanced by the insured, that the limit fixed under section 95(2)(b)(ii) applies only to passengers for hire or reward and does not apply to persons other than such passengers.

10. This court had occasion to consider the same question in Kunhimohammed v. Ahmedkutty, 1987 (1) KLT 165, and held, that the liability of the insurer in respect of an individual passenger is the amount specified under clause (4) of section 95(2)(b)(ii), which, in respect of the vehicle in question there in, was Rs. 5,000/-. That decision was affirmed by the Supreme Court in Kunhimohammed v. Ahmedkutty, (1987) 4 SCC 284 : AIR 1987 SC 2158. The Supreme Court observed, that—

“the liability extended upto Rs. 10,000/- for each individual passenger where the vehicle was a motor cab, and Rs. 5,000/- for each individual passenger in any other case”.

11. It is true, that in the above cases, neither the Supreme Court nor this Court had occasion to consider the case of a passenger who had not paid any hire or reward for the travel which the deceased undertook. The case of a passenger in a contract carriage vehicle was considered by another Division Bench of this Court in United India Insurance Co. Ltd. v. Premakumaran, 1987 (2) KLT 817. This Court reiterated, that—

“the liability of the insurer in respect of an individual passenger is the amount specified under clause 4 to S. 95(2)(b)(ii) of the Act. The liability of the Insurance Company is only to the extent of Rs. 5,000/- in each claim”.

12. In that decision also, this Court did not have occasion to consider the question of a passenger, other than one who paid his fare.

13. On a reading of section 95(2)(b), with specific reference to clauses (i) and (ii), we have no hesitation to hold, that the limits set by clause (4) on the liability of the insurer in respect of each passenger applies not only to passengers who are carried for hire or reward, but also to the other two categories of passengers. We are, therefore, of the opinion, that the Tribunal was right in holding, that section 95(2)(b)(ii)(4) of the Act did apply to the case on hand, and therefore the insurer was liable to pay only the maximum amount of Rs. 10,000/- per passenger. This is so, because the insured-appellant had not pleaded or proved that there was a contract to the contrary, enhancing the liability of the insurer above the statutory limits. M.F.A Nos. 230 and 256 of 1983 have, therefore, to be dismissed.

14. In M.F.A No. 230 of 1983, the claimants have filed a cross-objection. The Tribunal awarded the aggregate amount of Rs. 21,000/- to be shared by the husband and mother of the deceased Smt. Mary Sebastian. The Tribunal proceeded on the basis, that the annual dependency of the claimants on the deceased would be Rs. 1,200/-. The mother was aged 55 years and the husband 40 years. The deceased was 35 years at the time of her death. Taking all these factors into consideration, the Tribunal fixed the period of dependency as 15 years. Rs. 18,000/- was arrived at as general damages due to the claimants. An additional amount Rs. 3,000/- was awarded to the husband for loss of consortium. Counsel for the claimants submits, that the estimate made by the Tribunal was far to low. Admittedly, the deceased Mary Sebastian was earning an amount of Rs. 395/- per month. Enhancement in salary by periodic revisions being an irreversible phenomenon, the Tribunal ought to have allowed the margin for such enhancements in the amount of dependency and ought to have adopted a reasonably long period of at least upto 60 years as the period during which she would have served and earned but for the accident.

15. The Tribunal has correctly taken into account the fact that the mother of the deceased would have depended on the deceased only for 10 years till she was 65 years old. The husband himself was 40 years old, had other remunerative employment and was likely to re-marry shortly. All these factors justified the inference of the Tribunal, that the period of dependency need be fixed only as 15 years. There were likely to be many imponderables in future, which would perhaps justify a reduction in the amount or period of dependency. All of them could not be visualised by the Tribunal. We are satisfied, that all the possibilities for the good as also the bad were properly balanced by the Tribunal in fixing the multiplier as 15 years.

16. That cannot be said about the multiplicand viz., Rs. 1,200/- per year. It is true, that the husband was earning more than Rs. 700/- per month and would not need any contribution from his wife. But the fact remains, that the deceased could have saved a little every month and that would have gone into the common pool. Admittedly, the mother depended entirely on the daughter. Her monthly salary was Rs. 395/-. It is only reasonable to assume, that she would have saved/contributed at least ⅓ of her income to the dependents. We are, therefore, of the opinion that the annual dependency has to be fixed as Rs. 1,500/-, after following for 1/6 for future uncertainties. Adopting this amount as the multiplicand, the amount of general damages which claimants are entitled to will be Rs. 22,500/-, This amount will be shared equally by the two claimants. We do not think that we need interfere with the finding relating to the amount of Rs. 3,000/- which was award-ed as compensation for loss of consortium and loss of a happy married life. We allow the cross-objection to the extent of enhancing the amount of general damages to Rs. 22,500/- instead of Rs. 18,000/- to be shared equally by the claimants, in addition to Rs. 3,000/- which was allowed in favour of the first claimant for loss of consortium.

17. Shri V.R Venkatakrishan, counsel for the appellant in M.F.A No. 490 of 1983, states that the Tribunal was totally niggardly in awarding only an amount of Rs. 10,800/- as compensation. He assorts that the deceased would have easily got employment which would have fetched a fairly good amount of at least Rs. 500/- per month as dependency to her mother. The deceased had passed S.S.L.C, she had appeared for typewriting and shorthand examinations which she had passed out successfully. These facts are evident from Exts. A2 to A4 certificates. She had undergone a training in embroidery and tailoring as is evident from Ext. A5 certificate and had completed a course in development training which is evident from Ext. A6 certificate. The first applicant, as PW-1, also asserted that the deceased was also getting other income by giving private tuition. However, she had to admit that her daughter had not undergone any course of training in nursing and that she was getting only stipend of Rs. 100/- per month upto September, 1981, and Rs. 125/- per month thereafter. The Tribunal held, that the deceased would have been in a position to earn at least Rs. 400/- to Rs. 500/- per month and she would have paid at least Rs. 150/- per month to her mother for her maintenance. The first applicant being 53 years old and in view of the fact that the deceased would have married within a short period had she not been killed in the accident, the Tribunal determined the period of dependency as six years. It was on that basis that the Tribunal fixed the amount of compensation as Rs. 10,000/- as general damages in addition to an amount of Rs. 800/- as special damages.

18. Counsel for the appellant submits that even an ordinary menial worker will be in a position to contribute more than Rs. 250/- per month to his defendants and that contribution will naturally continue for a reasonably long period of at least 10 to 15 years or as long as the mother lives. The Tribunal has assumed that the deceased would have earned Rs. 450/- to Rs. 500/- per month. Exts, A2 to A6 evidence the attainment of the deceased. In addition to S.S.L.C as general educational qualification, she was proficient in typewriting and shorthand, had acquired certificate in tailoring and embroidery and had also obtained a certificate in development training. Admittedly, she was a stipendiary trainee in health care. All these attainments would ordinarily have stood her in good stead. The reference of the Tribunal that she would have obtained remunerative employment in one capacity or the other cannot, therefore, be faulted. The assessment of the Tribunal that she would, had she lived, have earned at least Rs. 400/- to Rs. 500/- per month do not, therefore, require interference.

19. Counsel seems to us to be right in his submission, that it is only reasonable to assume that the deceased would have contributed at least half of her monthly earnings of her mother. The assumption that such contribution would be only Rs. 150/- per mensem to us to be too unreasonably low an estimate to be justified. The Tribunal has not made out any circumstance justifying such reduction in the monthly dependency. We are of the view, that the monthly dependency has to be reasonably fixed at least at Rs. 200/- after allowing for all reasonable deductions including those on account of future uncertainties.

20. It also appears to us, that the multiplier of six adopted by the Tribunal is far too unrealistic. It is true that a girl of 20 years would have been married away within a reasonable period. But a woman with prospects of employment nearer home would rather continue for a longer period to support and sustain her family. It may be so even after marriage. We are, therefore, of the opinion that the Tribunal erred in estimating the multiplier to be six. Even if she was married within six years, she would still have supported her mother at least for a period of four more years. We will, therefore, substitute 10 as the multiplier in the place of six. The amount of general damages will, therefore, be fixed as Rs. 24,000/- (Rupees Twenty four thousand). The Tribunal has awarded interest on the amount of compensation at the rate of 6% per annum from the date of the petition. The delay due to pendency of proceedings before the Tribunal has to be reasonably compensated by the tortfeasors. We are of the opinion that the reasonable rate of interest to which the appellant is entitled must be 9% instead of 6%.

21. We therefore allow M.F.A No. 490 of 1982 enhancing the amount of compensation from Rs. 10,800/- to Rs. 24,800/- and the rate of interest from 6% to 9%. We dismiss M.F.A Nos. 230 and 256 of 1983. We allow the cross-objections filed by the first respondent in M.F.A No. 230 of 1983 by enhancing the amount of compensation to Rs. 22,500/- as general damages, instead of Rs. 18,000/- to be shared by the two claimants in equal shares and Rs. 3,000/- to the first claimant as compensation for loss of consortium. There will be no order as to costs.