Citation Codes

Equivalent Citations

citation codes

Case Number

Misc. Appeals Nos. 190 to 192 and 194 of 1977*

Advocates

Y.S.N.Murty
P.K.Mishra
B.Pal
B.Mishrara
B.Mishra

Judges

H.L Agrawal, C.J
S.C Mohapatra, J.

Acts

S. 110-D of the Motor Vehicles Act, 1939 (in short the Act).
MOTOR VEHICLES ACT
Section 110-B

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Smart Summary

Structured Summary of the Opinion (S.C. Mohapatra, J.)

Factual and Procedural Background

These four appeals under Section 110-D of the Motor Vehicles Act, 1939 arise from a collision between a passenger bus (appellant's vehicle, ORG 2351) and the 37-Up Howrah-Madras Janata Express on 29 July 1975 at a manually operated railway level crossing on State Highway No. 8. The bus suffered starting trouble and became immobilised on the railway track; the train struck the immobile bus, causing two fatalities and two serious injuries. Legal representatives of the deceased and the injured filed four claim petitions under Section 110-A of the Act against the appellant and the South Eastern Railways.

The Claims Tribunal heard the claims together and made a common award finding (i) the claim against the railway administration not maintainable; (ii) no negligence by the railway administration; and (iii) the appellant (bus owner) directly liable to pay compensation. The appellant challenged the award. A learned single Judge gave clear findings on all points except determination of just compensation and referred the appeals to the Division Bench because he could not accept the principle adopted by an earlier single Judge decision (AIR 1983 Orissa 193). The Division Bench heard the appeals together and delivered the present judgment.

Legal Issues Presented

Whether the Tribunal constituted under the Motor Vehicles Act has jurisdiction to make the railway administration liable to compensate the claimants?
Whether the gateman of the level crossing was negligent so as to constitute contributory negligence?
Whether the appellant (owner/driver) is liable to pay compensation to the claimants?
Whether determination of the compensation amount by fixing a lump sum whose yield equals the annual loss (the "interest theory" or "bank-rate method") is a just method for awarding future loss of dependency?

Arguments of the Parties

Appellant's Arguments (as advanced by Mr. Y.S.N. Murty)

Challenged the Tribunal's award on all points (the referral to the Division Bench permitted argument on all issues).
Primary contention on compensation: claimants' future pecuniary loss should be compensated by fixing a lump sum capital amount which, if deposited at the prevailing bank rate of interest, would yield the annual loss (i.e., calculating compensation on the basis of annual interest available at bank rate).
In written statement the appellant also contended that, since passengers had got down from the bus before the impact, the railway administration would only be liable for having kept the gate open to permit the bus to enter, implying limited or primary responsibility of the railway for entry onto the crossing.

Claimants' Arguments (as advanced by Mr. P.K. Misra)

Courts normally adopt either (a) awarding pecuniary items actually incurred and assessing non-pecuniary items by reasonable guesswork, and (b) for future pecuniary loss either multiply annual loss by years of continuance or apply a suitable multiplier ("years of purchase"); these are the usual accepted methods.
Objected to adoption of the bank-rate/interest theory as a general rule, noting that many courts have not accepted that method.

Railway Administration's Arguments (in written statement)

The Deputy Chief Commercial Superintendent for South Eastern Railways asserted that the bus driver drove into the crossing despite warnings from the gateman who was about to close the gate after allowing a truck to clear the crossing.
Maintained that the claim against the railway before the Tribunal constituted under the Act was not maintainable.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court in this Opinion
AIR 1983 Orissa 193 — Commissioner, N.C.C. Group, Cuttack v. Smt. Nirmala Moharana	Single Judge passage advocating the bank-rate/interest method (example language: calculating compensation by fixing capital at bank rate—quoted passage about Rs. 25,000 at 10% yielding Rs. 2,500/year).	The learned single Judge who heard these appeals could not accept that principle and referred the matter to the Division Bench; the Division Bench considered that earlier single Judge's passage as the disputed principle under review.
ILR (1972) Cut 275 / AIR 1973 Orissa 33 — Oriental Fire & General Insurance Co. Ltd v. (Mrs.) Kamal Kamini Das	Principle that determination of just compensation under the Act is guided by principles in the Law of Torts.	The Court relied on this Division Bench decision to support the proposition that compensation assessment follows tort principles (restitutio in integrum and related methods).
(1973) 39 Cut LT 539 / AIR 1974 Orissa 24 — Hemalata Devi v. Sk. Lokman	Acceptance that motor-vehicle compensation claims follow tort principles for determining just compensation.	Cited as confirming adoption of tort principles by Orissa High Court decisions.
(1979) 47 Cut LT 368 — Orissa Road Transport Company Ltd v. Sibananda Patnaik	A Division Bench decision that declined to adopt the bank-rate/interest method as a general rule, citing variability of interest rates and loss of claimant control over compensation.	The Court noted this decision and its reasons, but considered them confined to that case's facts in light of later Supreme Court authority.
AIR 1979 Punj & Har 50 — Lachhaman Singh v. Gurmit Kaur (Full Bench)	Full Bench rejected multiplying annual loss by the years of continuance and held that the multiplier (years of purchase) principle is the only method of determination of compensation (as stated in the opinion).	Cited by claimants' counsel; the Court recorded reliance upon it but observed subsequent Supreme Court authority affecting its applicability.
AIR 1986 SC 1199 — Pushpa Thakur v. Union of India (Supreme Court)	Accepted the "interest theory": directed that a lump sum be deposited in bank fixed deposit and that interest be paid periodically to the claimant; allowed withdrawal for sufficient reasons; directed deposit by respondent and specified interest consequences for delay.	The Court treated this Supreme Court decision as decisive authority accepting the interest/bank-rate method; it expressly relied on it to permit adoption of the bank-rate method in the present appeals and to direct redetermination by the Tribunal on that basis.
Winfield on Tort (J.A. Jolowicz & T. Ellis Lewis, 7th ed.)	Textual authority for the basic tort principle of restitutio in integrum as measure of damages.	The Court cited Winfield to explain the foundational principle that damages should place the injured party in the position he would have been if the wrong had not occurred; this underpins the choice among compensatory methods.

Court's Reasoning and Analysis

The Court's reasoning proceeds in a sequential manner addressing each point raised:

Jurisdiction under Section 110-B: The Court analysed Section 110-B's plain language and held that the Claims Tribunal's statutory power extends to directing the insurer, owner and driver of the vehicle involved in the accident to pay compensation. Because the statute contains no provision authorising the Tribunal to direct persons other than owner, driver and insurer to pay compensation, the Tribunal's finding (and the single Judge's affirmation) that the railway administration could not be made liable for payment was upheld.
Railway's role and contributory negligence: Although the Tribunal could not direct the railway to pay compensation, the Court examined the railway's conduct to determine contributory negligence. The evidentiary record (witnesses P.Ws 5 and 6 and O.P.W 1) indicated the gateman was attempting to close the gate and that there was sufficient time for the bus to exit but for the bus's defective engine. Both Tribunal and the single Judge found the gateman not negligent; the Division Bench concurred with that factual conclusion.
Appellant's liability: On the facts — including the bus's frequent starting trouble and the driver's conduct — the Tribunal found the driver and appellant negligent and held the appellant liable both for its own negligence and vicariously. The single Judge affirmed this finding; the Division Bench, after assessing the evidence, found the conclusion fully justified and held the appellant liable to pay compensation.
Determination of just compensation — applicable principles:
- The Court emphasised that Section 110-B requires the Tribunal to determine "just" compensation, a phrase of wide scope.
- The determination is guided by tort principles (restitutio in integrum), as supported by Orissa decisions and legal text (Winfield).
- The Court categorised compensation items: (a) pecuniary losses actually incurred (medical, other expenses, property damage); (b) non-pecuniary losses (pain, suffering, loss of life-pleasure, longevity), where reasonable guesswork is appropriate; and (c) future pecuniary loss (loss of future earnings), which may be assessed by one of three methods described in the opinion.
Methods for future pecuniary loss: The Court described three acceptable methods (as applied in various authorities):
1. Multiplying the annual loss by the period of continuance and deducting a percentage (for lump sum payment advantage and uncertainties).
2. Applying a suitable multiplier ("years of purchase") to the annual loss, selected by reference to facts and precedents (Courts have used 15 or 20 years in different cases).
3. Fixing a lump sum capital sum such that its yield at the prevailing bank fixed-deposit rate would equal the annual loss (the "interest theory" / bank-rate method).
The Court emphasised that the basic principle of restitutio in integrum permits any of these methods depending on the facts of each case, and the annual loss must first be determined before applying any method.
Reconciling precedent and adopting a method: The Court reviewed High Court decisions that rejected the bank-rate method (citing Orissa Division Bench in Orissa Road Transport Co. and the Punjab & Haryana Full Bench). However, it gave decisive weight to the Supreme Court decision in Pushpa Thakur v. Union of India (AIR 1986 SC 1199), which accepted the interest theory and directed deposit of a lump sum in bank with periodic interest payments and liberty for the claimant to seek withdrawals for sufficient reasons. Relying on that Supreme Court authority, the Court held that the bank-rate/interest method is permissible and, on the facts of these appeals (where claimants live near banks), appropriate.
Directions and final analytical conclusions:
- Non-pecuniary losses and pecuniary expenses already incurred or property damage are to be paid as such.
- For future pecuniary losses, any of the three methods may be applied depending on the facts; in these appeals the Court directed the Tribunal to re-determine the compensation for future pecuniary loss on the basis of availability of bank rate of interest (i.e., the interest/bank-rate method), taking into account the claimants' capacity to access banks.

Holding and Implications

Holding (core rulings):

1. The Tribunal does not have jurisdiction under the Motor Vehicles Act to direct the railway administration to pay compensation; the Tribunal's finding that claims against the railway for payment were not maintainable was affirmed.

2. The gateman was not negligent; contributory negligence by the railway was not made out on the evidence.

3. The appellant (bus owner/driver) was held liable for negligence and vicariously liable to pay compensation.

4. The Tribunal is directed to re-determine the awards for future pecuniary loss on the basis of the bank-rate/interest method (i.e., by fixing a lump sum whose interest at the prevailing bank fixed-deposit rate would yield the annual loss), while non-pecuniary losses and expenses already incurred are to be paid as such.

Implications

Direct effect on the parties: the appellant remains liable and must pay compensation; the Tribunal must re-assess the future pecuniary-loss component using the bank-rate/interest method as directed.
The claim against the railway for payment was held not maintainable under the statutory scheme; however, the railway's conduct was considered for assessing negligence, and the gateman was found not negligent.
The Court applied existing precedents — notably the Supreme Court decision in Pushpa Thakur — to permit the interest/bank-rate method; the judgment does not purport to announce a novel rule beyond applying the cited Supreme Court authority and established tort principles.
Disposition: the appeals were allowed in part and the Court ordered no costs in the peculiar facts and circumstances.

Order: Appeals allowed in part; Tribunal directed to re-determine compensation on the bank-rate basis for future pecuniary loss; no order as to costs. (Agrawal, C.J. concurred.)

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Orissa Road Transport Company Limited v. Umakanta Singh And Another

S.C Mohapatra, J.:— Determination of just compensation to the persons injured and the legal representatives of the persons, who became victims of the collision between a passenger bus of the appellant and 37-Up Howrah-Madras Janata Express, is the subject-matter of these four appeals under S. 110-D of the Motor Vehicles Act, 1939 (in short ‘the Act’). The learned single Judge who heard these four appeals has referred them to be decided by a Division Bench, since he could not accept the principle adopted by an earlier single Judge decision of this Court reported in AIR 1983 Orissa 193 (Commissioner, N.C.C Group, Cuttack v. Smt. Nirmala Moharana). The passage in dispute reads as follows:—

“The average bank rate of interest has been 10 per cent on term deposits for a term of three years and above. If Rs. 25,000/- is deposited, it would earn interest of 2,500/- a year and that should adequately compensate the claimants taking into account the possibility of variation of the rate of interest and the losing value of the rupee on account of deflation.”

2. Mr. Y.S.N Murty, the learned counsel for the appellant, taking advantage of the order of reference where the learned single Judge referred the appeals to be decided by the Division Bench challenged the award of the Tribunal on all points. In spite of the fact that the learned single Judge gave clear findings on all points, except determination of the just compensation, we permitted Mr. Murty to argue on all points since on account of the matter being referred to a Division Bench the appellant lost the right of appeal to Division Bench against the order of the learned single Judge.

3. All the claim applications were heard together by the Tribunal and one set of evidence was led. There was one common award against which these four appeals have been filed. The learned single Judge heard all the four appeals together. Since these appeals arise out of the same facts and common questions are involved, we heard them analogously and they are disposed of by this common judgment.

4. These four appeals arose out of the following facts:

On 29-7-1975 at about 10.30 a.m the passenger bus (ORG 2351) left the Puri-Cuttack Road (State High Way No. 8) towards Vani Vihar. After a very short distance it was to cross a manually operated railway level crossing, the driver had to stop the bus on the railway track to give space to a truck coming from the opposite direction to pass. The bus which had starting trouble from before became immobile on account of the starter going off. A few minutes after the train was seen to be reaching the level crossing. The imminent approach of the train caused panic to the passengers who began to get down and run for safety. Shortly after the train dashed against the immobile bus on the track with a few passengers left inside resulting fatal injuries to two passengers and serious bodily injuries to two others. Legal representatives of the two deceased passengers and the two injured passengers filed the four claim petitions under S. 110-A of the Act against the appellant and the South Eastern Railways for compensation.

5. Injured Umakanta Singh, who is respondent 1 in M.A No. 190 of 1971, was aged about 21 years at the time of accident and was a Post Graduate student in Political Science in Utkal University. As a result of the accident, he sustained multiple injuries and his right leg had to be amputated after a prolonged treatment from 29-7-1975 to 28-3-1976 and he had to use artificial limb fitted at Poona. His claim is on the following counts:

(i) Mental shock .. Rs. 6000/- (ii) Physical pain .. Rs. 5,000/- (iii) Expenses incurred for treatment from the date of accident till the date of filing of the claim petition on 14-11-1975. .. Rs. 4,000/- (iv) Future probable expenditure .. Rs. 6,000/- (v) Loss of pleasure in life and longevity .. Rs. 10,000/- (vi) Loss of future career and income at Rs. 400/- per month till the injured completes the age of 70 years. Rs. 1,50,000/- Total Rs. 1,81,000/-

From out of it, the claimant adjusted Rs. 1,000/- already received and claimed the balance of Rs. 1,80,000/-.

6. Injured Nityananda Ray, who is respondent 1 in M.A No. 194 of 1977, was aged about 42 years at the time of accident. He was a lecturer in Vani Vihar drawing a monthly salary of Rs. 670/-. He sustained multiple injuries including fracture of femurs, right pelvis bone and inclination of left pelvis. He made a consolidated claim towards mental shock and physical pain, decrease in physical efficiency, happy healthy life and longevity and medical expenses of Rs. 3,000/- consolidating the same to Rs. 25,000/-. Having already received Rs. 1,000/- as compensation, he claimed Rs. 24,000/- in his claim petition.

7. Deceased Khetrabasi Nanda, who was aged 39 years at the time of accident, was a Copyist in the Utkal University and was drawing a monthly salary of about Rs. 300/-. His widow, five minor daughters and only minor son, who are respondents 1 to 7 in M.S No. 191 of 1977, claimed Rs. 74,000/- (Rs. 8,000 towards compensation for mental shock and Rs. 66,000/- towards loss of dependency). Adjusting Rs. 1500/- already received by them, they filed a petition claiming Rs. 72,500/-.

8. Deceased Shyamsundar Rath, who was aged about 47 years at the time of accident, was a Grade I Assistant in the Utkal University and was drawing salary of about Rs. 600/- per month. His widow, two minor daughters and two minor sons, who are respondents 1 to 5 in M.A No. 192 of 1977, assessed their claim to be Rs. 78,000/- (Rs. 8,000/- towards mental shock and Rs. 70,000/- towards loss of dependency). Adjusting Rs. 1500/- already received, they claimed Rs. 76,500/-.

9. In the written statement, the appellant took the plea that all the passengers having got down from the bus by the time of accident, the railway administration would only be liable for having kept the gate open to permit the bus to enter in.

10. The Deputy Chief Commercial Superintendent of the South Eastern Railways, in the written statement asserted that the driver of the bus drove in despite warning of the gateman who was just going to close the gate after allowing a truck on the midway to get out of the crossing, on getting information that a train was to shortly pass through the level crossing. The maintainability of the claim against railways before the Tribunal constituted under the Act was also challenged.

11. On appreciation of evidence, the Tribunal found:

i) Claim against railway administration is not maintainable;

(ii) Railway administration had no negligence, and

(iii) the appellant is directly liable for the accident to pay compensation.

12. It awarded compensation as under;

(a) Umakanta Singh and another— (M.A No. 190 of 1977)

(i) Expenditure for treat- Rs. 5000/- ment. (ii) Pain and suffering Rs. 10,000/- (iii) Inconvenience in life and loss of longevity Rs. 10,000/- (iv) Loss of earning capacity at Rs. 300/- per month for 25 years. Rs. 75,000/- (deducting 1/6th out of Rs. 90,000/- on account of lump sum payment and future uncertainties.) Rs. 1,00,000/- (one lakh)

(b) Nityananda Ray and another (M.A No. 194 of 1977)

Pain and agony Rs. 15,000/-

Loss of dependency for 23 years @ Rs. 160/- per month Rs. 37,000/-

(deducting 1/6th out of Rs. 44,160/-)

(d) legal representatives of deceased Shyamsundar Rath (M.A No. 192 of 1977):

Loss of dependency for 12 years at Rs. 300/- per month deducting Rs. 5,000/- for subsequent employment of the widow (further deducting one-sixth from Rs. 38,200/-)

Rs. 32,000/-

13. On the submission of Mr. Y.S.N Murty the following points arise for consideration in these appeals.

(a) Whether the Tribunal constituted under the Act has jurisdiction to make the railway administration liable to compensate the claimants?

(b) Whether the gateman of the level crossing was negligent in any manner to be guilty of contributory negligence?

(d) Whether the determination of compensation amount which would be adequate to earn the annual loss of dependency should be held as just?

14. Point (a): From the plain language of S. 110-B of the Act, it is clear that the Tribunal has jurisdiction to direct the insurer, owner and driver of the vehicle responsible for the accident to pay the compensation. Section 110-B reads as follows:—

“110-B. Award of the Claims Tribunal. — On receipt of an application for compensation made under S. 110-A, the Claims Tribunal shall after giving the parties an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and subject to the provisions of S. 109-B, may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid; and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be”.

Tribunal being a creature of the statute is required to exercise the power vested in it. In the absence of any other provision authorising the Tribunal to direct persons other than the owner, driver and insurer to pay compensation determined by it, there is no scope for directing the railway administration to pay compensation. There is, thus, no scope to interfere with the finding of the Tribunal which has been affirmed by the learned single Judge.

15. Point (b):— The part played by the railways has to be considered to find out the extent of negligence of the driver of motor vehicle even though no direction can be given to it for payment of the compensation. In order to determine the same, I perused the materials on record.

P.Ws 5, 6 and O.P.W 1 speak about the accident. P.Ws 5 and 6 were the passengers who got down from the bus to escape unhurt. O.P.W 1 was the conductor. From the evidence of P.W 5 it is clear that the gateman was attempting to close the gate when the bus entered in. There was sufficient time for the bus for its exit out of the level crossing but for the defective engine. Appreciating the materials on record, the Tribunal as well as the learned single Judge held that the gateman was not negligent in keeping the gate open. In view of the evidence of P.Ws 5 and 6 and O.P.W 1, I am of the same view.

16. Point (c):— The Tribunal found that the driver of the bus was negligent as he should not have anticipated the worst (sic) since he knew that the vehicle was having frequent starting trouble. The appellant was also blamed for providing a defective vehicle. Therefore the appellant was held to be liable to pay the compensation both on account of its own negligence as well as on account of its vicarious liability. The learned single Judge while considering the question affirmed the finding. On assessment of the evidence on record, I am satisfied that on the facts and in the circumstances, the finding is fully justified and the appellant is liable for payment of the compensation to be determined to the claimants.

17. Point (d):— This is the main and principal dispute in these appeals. The Act does not provide for any method of determination of the compensation. In Section 110-B it is provided that the Tribunal is to determine the just compensation. The language leaves no room for doubt that the phrase ‘appears to be just’ is wide and comprehensive in its scope. As has been held in the Division Bench decision of this Court reported in ILR (1972) Cut 275 : (AIR 1973 Orissa 33), (Oriental Fire and General Insurance Company Limited v. (Mrs.) Kamal Kamini Das) the determination of just compensation would be guided by the principles in the Law of Torts since the claim for compensation on account of negligence in respect of motor vehicle is a branch of that Law. This has been accepted by another Division Bench of this Court reported in (1973) 39 Cut LT 539 : (AIR 1974 Orissa 24), (Hemalata Devi v. Sk. Lokman).

18. The basic principle for measure of damages in Tort is that there should be restitutio in integrum as has been observed at pages 775-776 in the Seventh Edition of Winfield on Tort by J.A Jolowicz and T. Ellis Lewis. It has been further observed that in cases of compensating injuries by damages, one is to get at the sum of money which will put the party who has been injured or who has suffered in the same position as he would have been if he had not sustained the wrong for which he is to get the compensation for reparation. This principle is applied by adopting various methods of determination of the compensation which appear to be just.

All the decisions of the Supreme Court and for the various High Courts have been rendered in line with the aforesaid principles.

19. Compensation is claimed under the Act for pecuniary loss and non-pecuniary loss. Amount actually loss on account of medical expenses and other expenses are pecuniary loss. The loss of future pecuniary benefit is also pecuniary loss. Loss on account of mental and physical pain, longevity and of similar type are non-pecuniary loss. So far as non-pecuniary loss, a reasonable guesswork is the only method. While making reasonable guesswork in respect of pecuniary loss, it is to be divided into two categories. Amounts actually spent or lost on account of medical and other expenses and amount of loss on account of damage of the property is one category and loss of future pecuniary benefit is another.

20. The compensation to be paid on account of non-pecuniary loss and actual expenses and loss of property is to be paid as such. So far as the loss of future pecuniary benefits, the annual loss is to be first determined. In some cases the annual loss is multiplied to the period of its continuance and from the total amount a percentage is deducted on account of the benefit obtained for lump sum payment and taking into consideration the future uncertainties. In some cases the principle of suitable multiplier is applied. The annual pecuniary loss is multiplied by years of purchase. The years of purchase are fixed depending on the length of continuance of the loss. Supreme Court and other Courts have applied fifteen years or twenty years' purchase depending on the facts and circumstances of the case. The third method of determination of compensation is to fix an amount which would be sufficient to earn the annual loss. The annual loss is made equal to the interest receivable on the available bank rate of interest and the amount which would be sufficient for earning that, interest is determined as the compensation. The basic principle being restitutio in integrum, one of the method is applied to the facts and circumstances of each individual case.

21. Mr. Y.S.N Murty reiterating the stand of the appellant from initial stage, submitted that the claimants are to get compensation calculating it on the basis of annual interest available at bank rate. Mr. P.K Misra, the learned counsel for the claimants, submitted that the normal basis adopted by the Courts are the first two categories and in some cases the category suggested by Mr. Murty has not been accepted.

22. Various decisions have been cited by both the sides in support of their contentions. They are not necessary to be tabulated since this Court in a Division Bench has refused to adopt the last basis and in a single Judge decision has adopted the said principle the correctness of which is the subject-matter of consideration in these appeals.

23. A Division Bench of this Court in the decisions reported in (1979) 47 Cut LT 368 (Orissa Road Transport Company Limited v. Sibananda Patnaik) did not adopt the third basis on the following finding:

“…Rate of interest varies and there is no provision under the Motor Vehicles Act to obtain review of the compensation once awarded on the basis of variance of the rate of interest. That apart, the persons entitled to compensation should have the control over the compensation amount and there can be no justification to keep it out of their reach and make an annuity available to them. We are, therefore, not prepared to accept the proposition as a general rule in the matter of award of compensation under the Motor Vehicles Act…….”

I have already quoted the disputed passage from the decision of the learned single Judge reported in AIR 1983 Orissa 193 (supra). The Full Bench decision of Punjab and Haryana High Court rendered by five learned Judges of that Court reported in AIR 1979 Punj & Har 50 (Lachhaman Singh v. Gurmit Kaur) has been very strongly relied upon by Mr. P.K Misra in which at pages 59-60 in para 27 that Court laid down certain principles after consideration of some of the decisions of the Foreign Courts and the decisions of the Supreme Court. They also rejected the principle of multiplying the amount of the annual loss with the years for which such loss would continue and held that multiplier principle is the only method of determination of compensation.

24. Discussion on these decisions would not be of much value in view of the fact that in a recent decision of the Supreme Court reported in AIR 1986 SC 1199 (Pushpa Thakur v. Union of India) the interest theory has been accepted. It was observed:

“We, therefore, allow the appeals, set aside the order made by the High Court and direct that the Union of India shall pay to the appellant a sum of Rs. 1,00,000/- as and by way of compensation. The amount of Rs. 1,00,000/- shall be deposited with the Tribunal within four weeks from today. This amount shall be deposited by the Tribunal in the name of the appellant in a nationalised bank at New Delhi on long term fixed deposit with a direction that interest on the said amount shall be paid by the nationalised bank to the appellant every quarter. The appellant will also be at liberty to apply to the Tribunal for withdrawal of any part of the principal amount in case it becomes necessary for her to do so for sufficient reasons. If the Union of India does not deposit the amount of Rs. 1,00,000/- within four weeks from today, the said amount shall carry interest @ 12 per cent per annum from today”.

(Emphasis supplied)**

The above quoted passage of the Supreme Court clearly shows that an amount of compensation can be fixed which will be equivalent to the annual loss for compensating the claimants. In view of this decision of the Supreme Court, the Division Bench decision of this Court discarding the principle on the ground that the claimant shall have no control over the amount will not be of much avail. Another ground in the Division Bench decision was that the bank rate of interest fluctuates and there is no provision for review in the Act. This ground would not be available since the bank rate is now almost static for a long period. Thus, the Division Bench decision has to be confined to the facts of that case.

25. In conclusion, the non-pecuniary losses as determined are to be paid as such and the pecuniary losses on account of expenses already incurred or damages to the property are to be paid as such.

So far as loss of pecuniary benefit in future, any of the three principles can be adopted depending upon the facts and the circumstances of the case. Before applying any of the methods the future annual pecuniary loss on account of the accident is to be determined. It may either be multiplied by the years for which the loss would continue or may be multiplied by a suitable multiplier or an amount can be fixed whose annual yield would be equal to the annual loss, preferably calculating the same on the basis of prevailing bank rate of interest on a fixed deposit for three years.

26. In these appeals the claimants are residing in towns where banks are at distance of stone-throw. There would be no difficulty for the claimants to collect the amount. Accordingly, the Tribunal is directed to redetermine the compensation on the basis of availability of bank rate of interest.

27. In the result, the appeals are allowed in part. But in the peculiar facts and circumstances, there shall be no order as to costs.

Agrawal, C.J:— 28. I agree.

Order accordingly.

Orissa Road Transport Company Limited v. Umakanta Singh And Another

Structured Summary of the Opinion (S.C. Mohapatra, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (as advanced by Mr. Y.S.N. Murty)

Claimants' Arguments (as advanced by Mr. P.K. Misra)

Railway Administration's Arguments (in written statement)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Implications

Orissa Road Transport Company Limited v. Umakanta Singh And Another

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