M. Satyanarayana Murthy, J.:— Dissatisfied with the quantum of compensation awarded by the Motor Accidents Claims Tribunal-cum-III Additional Chief Judge, City Civil Court, Hyderabad, in O.P. No. 1459 of 2009, dated 06.04.2011, the present Appeal is preferred by the appellants - claimants, under Section 173 of the Motor Vehicles Act, 1988 (For short, ‘the Act’), seeking enhancement of compensation to Rs. 25,00,00/-, as claimed before the Tribunal.
2. The appellants herein were the petitioners - claimants and the respondents herein were the respondents before the Tribunal in O.P. No. 1459 of 2009. For the sake of convenience, the parties hereinafter will be referred as arrayed before the Tribunal.
3. The appellants filed the claim petition before the Tribunal under Section 166 of the Motor Vehicles Act, claiming compensation of Rs. 25,00,000/- under various heads, for untimely death of Mandala Rajnikanth Goud (Hereinafter referred as ‘Rajnikanth’), who was son of first and second petitioners, and brother of third and fourth petitioners, in a road accident that occurred on 24.04.2009 at about 06:30 p.m. while Rajnikanth was proceeding on his Hero Honda motor cycle bearing No. AP-28P-6872 from Kompally to Gundlapochampally, slowly, on the extreme left side of the road and when reached near C. M. Prakash Garden, a lorry bearing No. TN-43B-8769, being driven by its driver in rash and negligent manner, dashed the motorcycle of Rajnikanth, due to which he fell down and sustained grievous injuries all over his body. Immediately, Rajnikanth was shifted to Balaji Hospital, Pet Basheerabad, wherein the duty doctors declared him as ‘brought dead’. The deceased Rajnikanth was aged about 26 years, hale and healthy, completed Bachelor of Dengal Surgeon (B.D.S.) Course in St. Joseph Dental College of V.D.M.C. Trust, Duggirala, Eluru, West Godavari District, and practicing as House Surgeon, earning an amount of Rs. 10,000/- p.m. and on account of his untimely death, petitioners being the legal heirs, lost their future dependency and suffered mental agony.
4. Thus, the accident occurred only due to rash and negligent act of the driver of lorry bearing No. TN-43B-8769. The first respondent being the owner and the second respondent being the insurer of the lorry are jointly and severally liable to pay compensation, as the insurance policy was subsisting as on the date of accident. Hence, the claim for Rs. 25,00,000/-.
5. The first respondent being the owner of the lorry remained ex-parte.
6. The second respondent filed written statement denying material allegations of the petition inter-alia contending that accident not occurred due to rash and negligent driving of the driver of lorry bearing No. TN-43B-8769 and as such, the driver of lorry was not holding valid and effective driving license at the time of accident to drive the vehicle and the first respondent violated terms and conditions of the policy, committed breach of the policy conditions; as such the second respondent is not liable to pay any compensation and called upon the petitioners - appellants to put strict proof of the age and income of the deceased Rajnikanth and that the claim is on high side. Further, it is contended that the accident occurred only due to rash and negligent riding of the Hero Honda motor cycle by deceased Rajnikanth, without following traffic rules, and to exonerate the second respondent from payment of compensation and finally prayed to dismiss the petition against petitioners 3 and 4, as they are not class-I legal heirs of deceased Rajnikanth.
7. During course of enquiry, on behalf of the petitioners-claimants, PWs.1 to 3 were examined and Exs.A-1 to A-14 were marked. On behalf of the second respondent, none were examined, but got marked Ex.B-1, copy of Insurance policy.
8. Upon hearing argument of both the counsel, considering oral and documentary evidence available on record, the Tribunal awarded a total compensation of Rs. 10,85,000/- together with interest at the rate of 7.5% p.a. from the date of petition till the date of realization, against both the respondents.
9. Dissatisfied with the compensation amount awarded by the Tribunal, petitioners - claimants, preferred this Appeal challenging the inadequacy of compensation on various grounds mainly contending that:
a) The Tribunal did not appreciate the oral and documentary evidence and wrongly taken the earning of the deceased on lower side and awarded meager compensation;
b) The Tribunal erroneously took the age of mother of deceased Rajnikanth and ought to have taken the age of the deceased Rajnikanth;
c) The Tribunal would have added 50% as future prospects but did not consider the same on wrong appreciation of law;
d) The Tribunal deducted 50% towards personal and living expenses of the deceased on wrong appreciation of law.
And finally prayed to allow the Appeal granting total compensation of Rs. 25,00,000/-, which is inclusive of compensation already awarded, together with subsequent interest on the total amount of compensation.
10. During course of argument, learned counsel for the petitioners - appellants mainly contended that in case of death of a bachelor, the age of the deceased shall be taken for application of multiplier, but not the age of his parents placing reliance on the judgments of the Hon'ble Apex Court in P.S. Somanathan v. District Insurance Officer 2011 ACJ 737, Reshma Kumari v. Madan Mohan 2013 ACJ 1253 and Amrit Bhanu Shali v. National Insurance Company Limited 2012 ACJ 2002. He further contended that the Tribunal is not supposed to deduct 50% towards personal expenses, but erroneously deducted 50% towards personal and living expenses of the deceased, though he was a bachelor, and committed an error and finally prayed to allow the Appeal awarding a total compensation of Rs. 25,00,000/-, as claimed before the Tribunal.
11. Per contra, learned standing counsel appearing for the second respondent - Insurance Company contended that in case of death of a bachelor, the age of the surviving dependants, whichever is higher alone shall be taken basing on the capitalization method, placed reliance on the judgment of the Apex Court in New India Assurance Company Limited v. Shanti Pathak 2007 ACJ 2188.
12. Considering rival contentions, perusing material available on record, the points that arise for consideration in this Appeal are:
1. Whether the age of the mother of the deceased Rajnikanth or the age of the deceased Rajnikanth shall be taken into consideration for application of multiplier?
2. Whether deduction of 50% towards personal and living expenses of deceased Rajnikanth, is in accordance with law?
3. Whether the appellants are entitled to compensation of Rs. 25,00,000/-?
13. POINT No. 1: As the respondents herein did not prefer any Appeal questioning the quantum of compensation or occurrence of accident due to the rash and negligent act of driver attributed to the deceased Rajnikanth, the finding recorded by he Tribunal that the accident occurred due to the rash and negligent driving of the driver of the lorry bearing No. TN-43B-8769 attained finality. Hence, we ourselves restrained to decide the core issue of application of relevant multiplier in this Appeal.
14. There are two divergent opinions on this aspect; one line of decisions was that the age of the deceased bachelor alone shall be taken in view of the principles laid down by the Apex Court in Smt. Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121; earlier to that the line of decision was that either the age of the deceased or the dependants of deceased which ever is higher shall be taken for application of multiplier. The principles laid down in the decisions will be discussed in detail in the later paragraphs.
15. The first and foremost contention of learned counsel for the petitioners - appellants is that in case of death of a bachelor, the age of the bachelor alone shall be taken, not the age of his parents. But, the Tribunal placing reliance on the judgment of Apex Court in Sarla Verma (5 supra) erroneously took the age of the mother of the deceased and applied the multiplier. Now, the procedure adopted by the Tribunal is questioned contending that the age of mother shall not be taken for application of multiplier and age of deceased bachelor Rajnikanth alone be taken into account for application of multiplier, and if such multiplier is adopted, the total compensation claimed could have been awarded. In support of his contention, learned counsel for the appellants directly placed reliance on the judgments of the Apex Court in P.S. Somanathan (1 supra) wherein the Apex Court referring to various judgments in U.P. State Road Transport Corporation v. Trilok Chandra 1996 ACJ 831, Sarla Verma (5 supra), held as follows:
“21. For the purpose of calculating the multiplier, the High Court held that mother was the real legal representative and others could not claim to be the legal representatives of the deceased, and accordingly applied the multiplier of 5, whereas the Tribunal had calculated compensation by considering a multiplier of 16.
22. This Court is of the opinion that the law as has been laid correctly in the case of Sarla Verma (7 supra) in a very well considered judgment, is to be followed.”
16. The learned counsel for the appellants also relied on the judgment of Apex Court in Amrit Bhanu Shali (3 supra), wherein it was held as follows:
“17. The selection of multiplier is based on the age of the deceased and not on the basis of the age of dependant. There may be a number of dependants of the deceased whose age may be different and, therefore, the age of dependents has no nexus with the computation of compensation.”
17. In the facts of the decision cited supra, Amrit Bhanu Shali (father) and Sarlaben (mother) were held to be the dependents of deceased Ritesh Bhanu shali. Therefore, the Tribunal held that the appellants 1 and 2 have the right to get compensation. On the date of accident the appellant No. 3, Mamta, was not married but by the time the case was heard by the Tribunal, the appellant No. 3, Mamata, had already been married. In those circumstances, she was found to be not depending upon the deceased Ritesh Bhanu Shali. Therefore, the age of the parents, being dependants of deceased, was taken into consideration and applied multiplier. The Apex Court found that application of multiplier basing on the age of the mother of deceased Ritesh Bhanu Shali is erroneous and applied multiplier 17 basing on the age of the deceased Ritesh Bhanu Shali, who was aged 26 years.
18. In another judgment of the Apex Court in Reshma Kumari (2 supra), the Hon'ble Apex Court held as follows:
“34. If the multiplier as indicated in column (4) of the Table read with para 21 of the Report in Sarla Verma (7 supra), is followed, the wide variations in the selection of multiplier in the claims of compensation in fatal accident cases can be avoided. A standard method for selection of multiplier is surely better than a criss-cross of varying methods. It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The Courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the Table in Sarla Verma (7 supra) for the selection of multiplier in claim applications made under Section 166 in the cases of death. We do accordingly. If for the selection of multiplier, column (4) of the Table in Sarla Verma (7 supra) is followed, there is no likelihood of the claimants who have chosen to apply under Section 166 being awarded lesser amount on proof of negligence on the part of the driver of the motor vehicle than those who prefer to apply under Section 163-A. As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A or section 166 under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in column (6) of the Table in Sarla Verma (7 supra) should be followed. This is to ensure that claimants in such cases are not awarded lesser amount when the application is made under Section 166 of the 1988 Act. In all other cases of death where the application has been made under Section 166, the multiplier as indicated in column (4), of the Table in Sarla Verma (7 supra) should be followed.
40. In what we have discussed above, we sum up our conclusions as follows:
(i) In the applications for compensation made under Section 166 of the 1988 Act in death cases where the age of the deceased is 15 years and above, the Claims Tribunals shall select the multiplier as indicated in column (4) of the Table prepared in Sarla Verma (7 supra), read with para 21 of that judgment.
(ii) In cases where the age of the deceased is up to 15 years, irrespective of Section 166 or Section 163-A under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in column (6) of the Table in Sarla Verma (7 supra) should be followed.
(iii) As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act.
(iv) The Claims Tribunals shall follow the steps and guidelines stated in para 9 of Sarla Verma (7 supra) for determination of compensation in cases of death.
(v) While making addition to income for future prospects, the Tribunals shall follow para 11 of the judgment in Sarla Verma (7 supra).
(vi) Insofar as deduction for personal and living expenses is concerned, it is directed that the Tribunals shall ordinarily follow the standards prescribed in paras 14 and 15 of the judgment in Sarla Verma (7 supra) subject to the observations made by us in para 38 above.
(vii) The above propositions mutatis mutandis shall apply to all pending matters where above aspects are under consideration.”
19. In view of the principles laid down by the Apex Court in P.S. Somanathan (1 supra), Amrit Bhanu Shali (3 supra) for application of multiplier, the age of the deceased bachelor shall alone be taken, not the age of the mother of deceased. But, in view of the principles laid down by the Apex Court in Reshma Kumari (2 supra), the Apex Court succinctly held that when the age of the deceased is 15 years and above, the Tribunal shall select the multiplier as indicated in column No. 4 of Sarla Verma (5 supra), read with para 24 of that judgment.
20. When we advert to the table in Sarla Verma (5 supra), the appropriate multiplier to be applied in the present case, taking into consideration the age of the deceased Rajnikanth shall be ‘17’. In the facts of Reshma Kumari (2 supra) the deceased was only 15 years boy and where the age of the victim happened to be 15 years, the Apex Court is of the opinion that irrespective of Section 166 or Section 163-A of the Act claim for compensation has been made, multiplier of 15 and assessment as indicated in column (4) of Second Schedule subject to correction as pointed out in column (6) of the Table in Sarla Verma (5 supra) should be followed. This is to ensure that claimants in such case are not awarded lesser amount when the application is made under Section 166 of the Act. In all other cases of death, where the application has been made under Section 166, the multiplier as indicated in column (4) of the table in Sarla Verma (5 supra) should be followed.
21. The main contention of second respondent - Insurance Company is that in case of death of a bachelor, the age of the parents alone has to be taken into consideration for application of multiplier for the reason that, during the life time of the parents, they are entitled to enjoy the income of the deceased bachelor, and the question of enjoying any benefits after death of parents though the bachelor was alive does not arise. If for any reason, bachelor's age is taken into consideration, it amounts to conferring undeserved benefit to the claimants (appellants herein) and the claims in motor accident cases cannot be a boon, but it is only a solace for loss of dependency on account of untimely death of a bachelor. Hence, the age of the dependants or the age of deceased, which ever is higher shall be taken to adopt appropriate multiplier. Thus the capitalization method alone shall be applied for adopting the multiplier and drawn the attention of this Court to a decision of the Apex Court in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas 1994 ACJ 1, which is popularly known as Susamma Thomas case, wherein the Apex Court discussed the principles laid down in various judgments of England Picket v. British Rail Engineering Limited 1980 ACJ 261 (HL, Baker v. Bolton (1808) 1 Camp 493, Davies v. Powell Duffryn Associated Collieries Limited (1942) AC 601. Among the judgments of England cited supra by the Apex Court Davies (10 supra) is worthy of reference, where Lord Wright held as follows:
“The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death.”
22. Lord Wright adopted the principle applicable also under the Indian Act in Gobald Motor Service Limited v. R.M.K. Veluswami (1958-65 ACJ 179 (SC)) where the Apex Court stated that the general principle is that the actual pecuniary loss can be ascertained only by balancing, on the one hand, the loss to the claimants of the future pecuniary benefit and, on the other, any pecuniary advantage which from whatever source comes to them by reason of the death, that is, the balance of loss and gain to a dependant by the death must be ascertained. Therefore, the multiplier should be based on the pecuniary loss expected to suffer on account of untimely death, his Lordship also referred the multiplier laid down in Halsbury's Laws of England in Volume 34, para 98, states the principle thus:
“(98) Assessment of damages under the Fatal Accidents Act, 1976 - The courts have evolved a method for calculating the amount of pecuniary benefit that dependants could reasonably expect to have received from the deceased in future. First, the annual value to the dependants of those benefits (the multiplicand) is assessed. In the ordinary case of the death of a wage-earner that figure is arrived at by deducting from the wages the estimated amount of his own personal and living expenses.
The assessment is split into two parts. The first part comprises damages for the period between death and trial. The multiplicand is multiplied by the number of years which have elapsed between those two dates. Interest at one-half the short-term investment rate is also awarded on that multiplicand. The second part is damages for the period from the trial onwards. For that period, the number of years which have elapsed between the death and the trial is deducted from a multiplier based on the number of years that the expectancy would probably have lasted; central to that calculation is the probable length of the deceased's working life at the date of death.”
23. In any view of the matter, the method of capitalization is only based on the dependants who supposed to incur loss for assessment of damages; to compensate the dependants, it has to take into account the total pecuniary loss expected to suffer and the compensation awarded by the Court, if invested in any bank, where the interest accrued thereon would be sufficient to the loss of earnings is the main consideration.
24. In another judgment of the Apex Court in H.S. Ahammed Hussain v. Irfan Ahammed (2002) 6 SCC 52 , AIR 2002 SC 2483 it was held in Para 6 that in case of death of a bachelor or un-married, the age of their mother alone shall be taken to adopt the appropriate multiplier relying the earlier judgment of Supreme Court in National Insurance Company Ltd. v. Swaranlata Das 1993 Supp (2) SCC 743 , AIR 1993 SC 1259 as follows:
“6. Learned counsel then submitted that under Second Schedule to the Act providing compensation based on a formula, the multiplier which was applicable was 15 and not 13 as age of mother of victim Vazeer was 45 years in which case the correct multiplier should have been 15 and not 13 whereas in the case of victim Rafeeq, as age of his mother being 40 years, the correct multiplier should have been 16 and not 14. On the other hand, learned counsel appearing on behalf of the respondents submitted that compensation has been awarded in accordance with the Second Schedule. It is well settled that life expectancy of the deceased or the beneficiaries whichever is shorter is an important factor. Reference in this connection may be made to the decision of this Court in the case of C.K. Subramonia Iyer v. T. Kunhikuttan Nair (1969) 3 SCC 64 : AIR 1970 SC 376. In the case of National Insurance Co. Ltd. v. Swaranlata Das 1993 Supp (2) SCC 743, it was observed that “the appropriate method of assessment of compensation is the method of capitalization of net income choosing a multiplier appropriate to the age of the deceased or the age of the dependants whichever multiplier is lower.” According to the Second Schedule, if the age is above 40 years but not exceeding 45 years, the multiplier applicable is 15 and if the age is above 35 years but not exceeding 40 years, the multiplier would be 16 but the High Court has taken the multiplier as 13 and14 instead of 15 and 16 respectively. In the case of compensation to the parents of Vazeer, the multiplier 15 should have been adopted instead of 13 and the compensation should not have been reduced from Rs. 3,13,000/- to Rs. 1,71,000/- but the same should have been reduced to Rs. 1,95,000/-. In the case of compensation to the parents of Rafeeq, the correct multiplier should have been 16 and not 14 and the High Court was not justified in reducing the compensation from Rs. 3,49,000/- to Rs. 1,83,000/- which should have been reduced to Rs. 2,07,000/-. Thus, we hold that the parents of Vazeer are entitled to total compensation to the tune of Rs. 1,95,000/- and that of Rafeeq to the tune of Rs. 2,07,000/-.”
25. In Swaranlata Das (12 supra), it was held as follows:
“6. In view of these deficiencies in the judgment we should have granted special leave. But then it is a hard case where a young life, the bread winner of a family, is snuffed out ere its prime as a result of the tragic accident. The claimants aver that the deceased was earning Rs. 1,500/- per month. Even if we assume as a rough and ready estimate of Rs. 750/- per month or Rs. 9,000/- per year as the loss of dependency - which may not be an unreasonable estimate - and capitalize it on a multiplier of 15 (which would be the appropriate multiplier having regard to the age of the deceased) the resultant figure will be Rs. 1,35,000/-. To this should be added the usual awards for Loss to the Estate and Loss of Consortium which are generally in conventional figures ranging from Rs. 5,000/- to Rs. 10,000/- on each count. If Rs. 7,500/- on each count is added, the quantification of Rs. 1,50,000/- arrived at by the High Court could be justified; though on a reasoning entirely different from any discernible or manifest from the appellate judgment of the High Court.”
26. In another judgment of the Apex Court in National Insurance Company Limited v. Gurumallamma (2009) 16 SCC 43, it was held as follows:
“6. The second schedule provides for the amount of compensation for third-party fatal accident/injury cases claims. It provides for the age of the victim and also provides for the multiplier for arriving at the amount of compensation which became payable to the heirs and legal representatives of the deceased depending upon his annual income.
10. Parliament in laying down the amount of compensation in the Second Schedule, as indicated hereinbefore, in its wisdom, provided for payment of some amount which should be treated to be the minimum. It took into consideration the fact that a person's potentiality to earn is highest when he is aged between 25 and 30 years and that is why in case of permanent disability multiplier of 18 has been specified. The very fact that even if the deceased had an income of Rs. 3,000/- per month, he being aged about 15 years would receive a sum of Rs. 60,000/- but if his income was Rs. 40,000/- per annum, his legal heirs and representatives would receive a sum of Rs. 8,00,000. In the case of any non-earning person, the notional income has been fixed at Rs. 15,000/- per annum.
12. In view of the aforementioned finding, we are of the opinion that it is not necessary for us to take into consideration, the decisions cited at the Bar suggesting that in a case of death of an unmarried person and wherein the claimants are the parents of the deceased, the age of the deceased shall be an irrelevant factor for applying the multiplier specified in the Second Schedule.”
27. In United India Insurance Company Limited v. Patricia Jean Mahajan JT 2002 (5) SC 74, it was held as follows:
“15. What thus emerges from the above decisions is that the Court must adhere to the system of multiplier in arriving at the proper amount of compensation, and also with a view to maintain uniformity and certainty. Use of higher multiplier has been deprecated and it is emphasized that it can not exceed 18. The multiplier, as would be evident from the observations quoted earlier, may differ in the peculiar facts and circumstances of a particular case as according to the example cited where bachelor dies at the age 45, the age of his dependent parents may be relevant for selecting a proper multiplier. Meaning thereby that a multiplier less than that what is provided in the schedule could be applied in special facts and circumstances of a case.”
28. Similarly, in a decision of this Court in New India Assurance Company Limited, Hyderabad v. Mohd. Ahmedqureishi 2001 (1) ALD 517, this Court held that when the deceased was a bachelor, age of the dependents alone shall be the determining factor to apply the multiplier.
29. In view of the legal position, which the second respondent-Insurance Company relied upon is anterior to the judgment of the Apex Court in Sarla Verma (5 supra), there is a sea change after the advent of Sarla Verma's case. In the judgments relied upon by the learned Standing Counsel for the second respondent, no specific guidelines were issued to any of the Tribunals or subordinate Courts for taking the age of the parents of the deceased bachelor. However, the rationale behind those principles laid down by various Courts in the decisions referred supra is that a human being is expected to live till certain age, in normal course of events, and parents would die earlier than the children in view of the principle that ‘younger survived the elder’. Thus, the normal life expectancy of a human being is to be fixed before applying the multiplier taking the age of parents or the deceased bachelor; that apart, the loss to the parents on account of untimely death of a bachelor would be only during life time of the parents; after their death, they are supposed to suffer no loss. For instance, if the parents' dies earlier to son, the loss would be only during the life time of the parents but not beyond that, therefore, the Tribunal has to fix the reasonable age of life expectancy of a human being and assess the loss during the life time of an individual adopting the multiplier of capitalization method. In view of the guidelines laid down in Sarla Verma (5 supra) for the age group of 15 to 20 and 21 to 25 years, multiplier applicable is 18 and reduced by one unit by every 5 years and held in Para 42 therein as follows:
“42. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the table above (prepared by applying Susamma Thomas (8 supra) U.P.S.R.T.C. v. Trilok Chandra ((1996) 4 SCC 362) and New India Assurance Company Limited v. Charlie ((2005) 10 SCC 720), which starts with an operative multiplier of 18 (for the age groups of 15 to 20, and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”
30. At the same time, in a recent judgment of the Apex Court in Amrit Bhanu shali (3 supra) Reshma Kumari (2 supra) the Apex Court laid down certain guidelines in para Nos. 17, 34 and 40, which we extracted herein above in earlier paras. The learned counsel for the second respondent totally relied on the judgment of the Apex Court in Shanti Pathak (4 supra), wherein it was held as follows:
“4. Before the High Court it was contended by the appellant that the multiplier to be adopted is to be determined on the age of the claimants and not on the age of the deceased, which was to be taken as the basis for working out the compensation. The High Court did not find any substance in this plea. It was held that no permission had been granted to the insurer to contest its claim. It was submitted that it is a clear case of contributory negligence and the quantum of compensation should be suitable divided. The High Court did not find any substance in this plea also.”
31. Thus, the principle laid down by the Apex Court in the decision cited supra is totally contrary to the principle laid down by the Apex Court in Amrit Bhanu Shali (3 supra). These two judgments relate to co-ordinate Benches of the Apex Court, but whereas in Amrit Bhanu Shali (3 supra) it was held as follows:
“16. Admittedly both the parents, appellant No. 1 Amrit Bhanu Shali (father) and appellant No. 2 Sarlaben (mother), have been held to be dependants of deceased Ritesh Bhanu Shali and, therefore, the Tribunal held that the appellant No. 1 and the appellant No. 2 have the right to get the compensation. On the date of the accident the appellant No. 3, Mamta, was not married but by the time the case was heard by the Tribunal the appellant No. 3, Mamta, had already been married. In these circumstances, she is not found to be dependant upon the deceased. Thus, both the parents being dependants, that is, father and the mother, the Tribunal rightly restricted the personal and living expenses of the deceased to 50 per cent and contribution to the family was required to be taken as 50 per cent as per the decision of this Court in the case of Sarla Verma, 2009 ACJ 1298 (SC).”
32. In a recent judgment of the Apex Court in Radhakrishna v. Gokul 2013 STPL (Web) 900 SC, when the same question came up for consideration, the Apex Court totally ignored the multiplier etc., though the facts of the above case are almost similar to the present facts of the case.
33. The judgment in Reshma Kumari (2 supra) is a judgment of Full Bench consisting of 3 Judges, whereas the other judgments are of two judges but the judgment relied upon by the learned counsel for the second respondent i.e., Shanti Pathak (4 supra) is also a judgment of Full Bench of the Apex Court. However, there is little distinction between these two judgments, though they are judgments of coordinate benches, in the judgment relied upon by learned counsel for the second respondent, no specific guidelines were laid down, but the ratio laid down therein was the age of the parents in case of death of a bachelor shall be taken to adopt the multiplier. This is only a ratio decidendi, whereas in the recent judgment in Amrit Bhanu Shali (3 supra), the Apex Court laid down certain guidelines which became a precedent. When a recent judgment of the co-ordinate Bench laid down certain guidelines, the judgment which laid down guidelines is the binding precedent and it has to be followed but not the earlier judgment, where no guidelines were laid down, and placed reliance on the guidelines laid down by the Apex Court in Dalbir Singh v. State of Punjab (1979) 3 SCC 745 , AIR 1979 SC 1384, wherein it was held as follows:
“22. A decision on a question of sentence depending upon the facts and circumstances of a particular case, can never be regarded as a binding precedent, much less ‘law declared’ within the meaning of Article 141 so as to bind all Courts within the territory of India. According to the well-settled theory of precedents every decision contains three basic ingredients:
(i) Findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts;
(ii) Statements of the principles of law applicable to the legal problems disclosed by the facts; and
(iii) Judgment based on the combined effect of (i) and (ii) above.
However, for the purposes of the doctrines of precedents ingredient No. (ii) is the vital element in the decision. This indeed is the ratio decidendi. It is not every thing said by a Judge when giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. Even where the direct facts of an earlier case appear to be identical to those of the case before the Court, the Judge is not bound to draw the same reference as drawn in the earlier case”.
34. In view of the principle laid down by the Apex Court in the decision cited supra, to treat the judgment as law or a precedent, it must satisfy the 2 ingredient, which is a vital element in the decision. This indeed is the ratio decidendi. It is not everything said by a Judge while giving judgment that constitutes a precedent.
35. Thus, finding that the age of the dependents or the deceased whichever is higher is to be taken into consideration is though a ratio which forms part of a precedent, but in view of the later judgment where certain directions were made by three judges is a precedent which laid down law. Therefore, the judgment of the Apex Court in Amrit Bhanu Shali (3 supra) is the law declared by the Apex Court and a binding precedent and if that is applied to the present facts of the case, multiplier applicable to the age group of the deceased alone shall be taken for adopting appropriate multiplier, for arriving at compensation to be paid to the dependants of the deceased bachelor. Hence, we hold that the relevant multiplier to the age group of deceased alone shall be taken for adopting multiplier in view of the law as on today and multiplier applicable is only ‘17’, since earlier judgments are not binding precedents, but they are only consisting of a ratio decidendi. Accordingly, this point is answered in favour of petitioners - appellants.
36. POINT Nos. 2 and 3: The Tribunal basing on the principle laid down by this Court in B. Ramulamma v. Venkatesh, Bus Union, Represented by A.M. Velu Mudaliar 2009 (6) ALD 684 (DB) came to the conclusion in deciding the income of the deceased Rajnikanth, who was practicing as House Surgeon, at Rs. 12,000/- p.m. But, in view of the facts and circumstances of the case and going through the educational qualifications and the rank obtained by the deceased Rajnikanth in EAMCET, 2002, we feel that a minimum of Rs. 14,000/- can be fixed as monthly income of deceased Rajnikanth. In a decision of the Apex Court in Fakeerappa v. Karnataka Cement Pipe Factory (2004) 2 SCC 473, while considering the appropriateness of 50% deduction towards personal and living expenses of the deceased made by the High Court, the Apex Court observed as follows:
“7. What would be the percentage of deduction for personal expenditure cannot be governed by any rigid rule or formula of universal application. It would depend upon circumstances of each case. The deceased undisputedly was a bachelor. Stand of the insurer is that after marriage, the contribution to the parents would have been lesser and, therefore, taking an overall view the Tribunal and the High Court were justified in fixing the deduction.”
37. Further, the Apex Court in Sarla Verma (5 supra) held as follows:
“31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parents and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant on the father.
32. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.”
38. Hence, in view of the principles laid down by the Apex Court in Fakeerappa (19 supra) and Sarla Verma (5 supra), the Tribunal rightly deducted 50% of the income of deceased Rajnikanth towards his personal expenses. However, the Tribunal erroneously applied the multiplier taking into consideration age of mother of deceased Rajnikanth, wrongly relying on Second Column in the table in II Schedule of the Motor Vehicles Act. Hence, in view of the principles laid down by the Apex Court in Sarla Verma (5 supra), the relevant multiplier applicable to the age group of deceased 26 to 30 years is ‘17’. The annual income of deceased is assessed at Rs. 14,000/- × 12 = Rs. 1,68,000/- and if 50% of it is added as his future prospects, the same would come to Rs. 2,52,000/- and out of the same, if 50% is deducted towards his personal and living expenses, contribution to family would come to Rs. 1,26,000/- and if the same is multiplied with the relevant multiplier 17, the amount of compensation to be awarded under the head of loss of dependency comes to Rs. 21,42,000/-. The petitioners - appellants also claimed compensation under the heads of loss of estate and funeral expenses, wherein the Tribunal awarded a meager amount of Rs. 5,000/- towards funeral expenses and Rs. 5,000/-. In view of the principles laid down by the Apex Court in Rajesh v. Rajbir Singh 2013 ACJ 1403, the appellants are entitled to an amount of Rs. 1,00,000/- under the head of loss of estate and an amount of Rs. 25,000/- under funeral expenses. Thus, in all the appellants are entitled to an amount of Rs. 22,67,000/-.
39. In view of the specific contention raised by learned Standing counsel for the second respondent - Insurance Company that petitioners - claimants 3 and 4, being brothers of deceased Rajnikanth, are not entitled to compensation, as they are not class-I legal heirs and the Appeal of petitioners - claimants 3 and 4 is liable to be dismissed. According to Section 166 of the M.V. Act, only legal heirs are entitled to recover compensation, in case of death claims. The wife and mother are the class-I legal heirs of deceased Rajnikanth under the Hindu Succession Act, 1956. Thereby, they alone are competent to file claim petition under Section 166 of the Motor Vehicles Act. In the instant case on hand, deceased Rajnikanth is a bachelor and hence, his parents are entitled to file claim petition under Section 166 of Motor Vehicles Act. However, his brothers, are not the Class-I legal heirs under the provisions of Hindu Succession Act, therefore, the petitioners 3 and 4 cannot be treated as legal heirs of deceased Rajnikanth and as such, not entitled to claim any compensation. Hence, we hold that the petitioners 1 and 2, being parents, are only entitled to receive the compensation awarded by this Court and petitioners 3 and 4, being brothers, are not entitled to receive any compensation.
40. Another aspect to be considered in this Appeal is rate of interest awarded by the Tribunal at the rate of 7.5% p.a. on the compensation amount awarded by the Tribunal. In a recent judgment of the Apex Court in Rebeka Minz v. Divisional Manager, United India Insurance Company Limited 2012 ACJ 2328, Apex Court awarded interest at the rate of 7% p.a. from the date of petition till the date of realization. In another judgment of the Apex Court reported in Dulcina Fernandes v. Joaquim Xavier Cruz (2013) 10 SCC 646, the Apex Court awarded interest at the rate of 6% p.a. but, whereas in a recent judgment of the Apex Court in Sanobanu Nazirbhai Mirza v. Ahmedabad Municipal Transport Service (2013) 16 SCC 719, the Apex Court awarded interest at the rate of 7.5% p.a. In any of the judgments referred to above, there was no specific contention regarding rate of interest but still the Apex Court awarded different rates of interest, as stated above.
41. Thus, there is some inconsistency in awarding rate of interest in the above referred judgments. However, learned counsel for the second respondent - Insurance, during his argument conceded for grant of interest at the rate of 7% p.a. from the date of petition, till the date of realization. In view of the different rates of interest granted by the Apex Court in the judgments referred above, we are of the considered view that the rate of interest awarded by the Motor Accidents Claims Tribunal-cum-III Additional Chief Judge, City Civil Court, Hyderabad, is excessive, as it is not prevailing rate of interest in Nationalized or schedule Bank. The Tribunal did not exercise its discretion judiciously, and in accordance with the principles laid down in various decisions; hence, the rate of interest awarded by the Tribunal is reduced from 7.5% to 7% p.a.
42. In the result, the Appeal is allowed, in part, enhancing the compensation awarded by the Tribunal from Rs. 10,85,000/- to Rs. 22,67,000/-. However, the petitioners - claimants are directed to pay appropriate Court fee, on the difference of enhanced amount, both before this Court and the Tribunal. Out of the compensation awarded by this Court, first appellant, being father of deceased, is entitled to an amount of Rs. 10,00,000/-, second appellant, being mother of deceased, is entitled to an amount of Rs. 12,67,000/- respectively. The compensation amount, if any, withdrawn by appellants 3 and 4, shall be adjusted from out of the compensation awarded against appellants 1 and 2. Appellants 1 and 2 herein are permitted to withdraw their respective share of compensation amount, after deducting the amount, if any, withdrawn by them earlier.
43. In consequence, Miscellaneous Petitions, if any, pending in this Appeal, shall stand closed. No order as to costs.