U.P. STATE ROAD TRANSPORT CORPORATION AND ORS.versusTRILOK CHANDRA AND ORS.

•


       U.P. STATE ROAD TRANSPORT CORPORATION AND ORS.                             A
                                        v.
                       TRILOK CHANDRA AND ORS.

                                  MAY 7, 1996

      [AM. AHMADI, C.J., N.P. SINGH AND M.K. MUKHERJEE, JJ.]                      B

          Motor Vehicles Act, 1939 : Section 110-B.

          Fatal accident-'Just' compensation-Detennination of-Held : multi-
    plier method to be applied-To bring unifonnity and certainty of the awards    C
    made all over the country.

         Motor Vehicles Act, 1988 : Sections 163-A, 163-B, 165-A, 168 and
    second Schedule.

          Fatal accident-Compensation-Calculation of-Held : Second D
    Schedule suffered from several defects in calculation of compensa-
    tion-Neither Tribunals nor Courts could go by ready reckonei-lt could only
    be used as guide-Selection of multiplier not solely dependent on Age of
    deceased.

          The respondent, aged 26 years, was knocked down by an omnibus           E
    belonging to the appellant·Corporation. His legal representatives
    preferred a claim for compensation. Taking bis earning capacity at Rs. 300
    per month, it was esti111ated that be spent Rs. 200 per month on bis family
    members. Fixing the life expectancy at 60 years, the Tribunal deducted 36
    years and held that the family was deprived of his earning for 24 years.
    The compensation was thus worked out at Rs. 57,600 (200x12x24). This          F
    amount was raised to Rs. 81,600 as it was realised that the Tribunal had
    wrongly taken the age of the deceased at 36 Instead of 26 years and had,
    therefore, committed an error in employing the multiplier of 24 years'
    purchase factor instead of 34 years' purchase factor. Thus the compensa-
    tion came to Rs. 200x12x34 = 81,600. The question before this Court was       G
    whether the Tribunal was right in employing the multiplier of 24 or the
    High Court was right in employing the multiplier of 34.

          Disposing of the appeal, this Court

          HELD : 1. In Susamma Thomas' case this Court reiterated that the H
                                   443
    444                  SUPREME COURT REPORTS [1996J SUPP. 2 S.C.R.


A   multiplier method is the sound method of assessing the compensation. It
    was rightly clarified that there should he no departure from the multiplier
    method on the ground that Section 110-B of the Motor Vehicles Act, 1939
    (corresponding to the present provision of Section 168 of the Motor
    Vehicles Act, 1988) envisaged payment of 'just' compensation since the
    multiplier method is the accepted method for determining and ensuring
B                                                                                 '
    payment of just compensation and is expected to bring uniformity and
    certainty of the awards made all over the country. [451-H-452-B]

         General Manager, Kera/a State Road Transport, T1ivand1111n v. Su>am-
    ma Thomas, [1994] 2 SCC 176, relied on.
c
        2. It is necessary to reiterate the method of working out 'just'
  compensation because, of late, the principle on which the multiplier
  method was developed has been lost sight of and once again a hybrid
  method based on the subjectivity of the Tribunal/Court has surfaced,
D introducing uncertainty and lack of reasonable uniformity in the matter
  of determining compensation. It must be realised that the Tribunal/Court
  has to determine a fair amount of compensation awardable to th.e victim
  of an accident which m.ust be proportionate to the injury caused. The two
  English decisions, viz., Davies and Nance provide the guidelines for assess-
  ing the loss occasioned to the victim. Under the formula advocated in
E Davies, the loss has to be ascertained by first determining the monthly
  income of the deceased, then deducting therefrom the amount spent on the
  deceased, and thus assessing the loss to the dependents of the deceased.
  The annual dependency assessed in this manner is then to be multiplied
  by the use of an appropriate multiplier. In the method adopted in the case
F of Nance also, first the annual dependency is worked out and then multi-
  plied by the estimated useful life of the deceased. This is generally deter-
  mined on the basis of longevity. But then, proper discounting on various
  factors having a bearing on the uncertainties of life, such as, premature
  death of the deceased or the dependent, remarriage, accelerated payment
G and increased earning by wise and prudent investments, etc., would be-
  come necessary. It was generally felt that discounting on various im-
  ponderables made assessment of compensation rather complicated and
  cumbersome and very often as a rough and ready measure, one-third to
  one-half of dependency was reduced, depending on the life-span taken.
  That is the reason why courts in India as well as in England preferred the
H   Davies' formula as being simple and more realistic. However, usually
                U.P.STATERD. TPT. v. TRILOKCHANDRA                               445

English courts rarely exceed 16 as the multiplier. Courts in India too . A
followed the same pattern till recently when Tribunals/Courts began to use
a hybrid method of using Nancy's method without making deduction for
imponderables. [452-C-F, 453-D-F]

      Gobald Motor Seivices Limited & Anr. v. R.M.K Ve/uswami and
others, AIR (1962) SC 1; Municipal Co1poration of Ddhi v. Subhagwanti & . B
Ors., AIR (1966) SC 1750; Hirji Virji Transport & Ors. v. Basiranbibi, (1971)
12 Guj LR 783; C.K.S. Iyer v. T.K Nair, AIR (1970) SC 376; Davies v. Powell
Duffiyn Associated Collieries Ltd., (1942) AC 601 aud Nance v. B1itish
Columbia Electric Railways Co. Ltd., (1951) AC 601, referred to.
                                                                                        c
      Taylor v. 0' Conor, [1970] 1 All ER 365 and Mallett v. McMonagle,
[1969] 2 All ER 178, cited.

      3:1. The situation has now undergone a change with the enactment of
the Motor Vehicles Act, 1988, as amended by Amendment Act 54 of 1994.
The most important change introduced by amendment insofar as it relates
                                                            1
                                                                                        D
to determination of compensation is the insertion of Sections 163A, 163B
and 165A. Under the Second Schedule to the Act the maximum multiplier
can be upto 18 and not 16 as was held in Susamma Thomas' case. Therefore,
the multiplier cannot exceed 18 years' purchase factor. This is the improve-
ment over the earlier position that ordinarily it should not exceed 16. However,        E
the calculation of compensation and the amount worked out in the Schedule
suffer from several. defects. Neither the Tribunals nor the Courts can go by the
ready reckoner. It can only be used as a guide. Besides, the selection of
multiplier cannot in all cases be solely dependent on the age of the deceased.
But these mistakes are limited to actual calculations only and not in respect
of other items. [453-G, 454-B, E]                                                       F

       3.2. In the instant case, the Tribunal/Court fell into an error in the cf\oice
of the multiplier. But, in the circumstances of the case, there is no need to
interlere with the quantum of compensation since while the multiplier was
excessive, a very low multiplicand was used as the loss of dependency. If the           G
multiplicand is corrected and the correct multiplier is used, the compensation
would work out the near about the same llgure. [455-A, 454-H]

       This Court directed that copy of this judgment iu this case be sent to
all the High Courts with a direction to circulate it to the Courts/Tribunals
dealing with the Motor Accident compensation cases. [455-B]                             H
    446                  SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A        CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7760-
    7761 of 1996.

         From the Judgment and Order dated 18.3.93 of the Allahabad High
    Court in F.A.0. Nos. 268/81 and 281 of 1982.

B         Raju Ramachandran and Ms. S. Ramachandran, for the Appellants.

          R.A. Mishra for K.K. Gupta for the Respondent Nos. 1-4.

         M.H. Baig, Mrs. P.S. Shroff for S.A. Shroff and Mukul Mudgal for
    the Respondent No. 5.
c
          The Judgment of the Court was delivered by

          AHMADI, CJ. Special leave granted.

          The short question which we are called upon to consider in this
D appeal relates to the use of the correct multiplier for determination of
    compensation to be awarded to the legal representatives of a victim of a
    road accident. T!i.e question arises in the backdrop of the following facts.

          Prem Chandra, aged about 26 years, met with a fatal accident on 1st
E August, 1977. He was knocked down by an omnibus bearing Registration
    No. UTW 1802 belonging to the U.P. State Road Transport Corporation.
    His legal representatives preferred a claim for compensation. Taking his
    earning capacity at Rs. 300 per month, it was estimated that he spent Rs.
    200 per month on his family members. Fixing the life expectancy at 60
    years, the Tribunal deducted 36 years and held that the family was deprived
F   of his earning for 24 years. The compensation was thus worked out at Rs.
    57,600 (200x12x24). This amount was raised to Rs. 81,600 as it was realised
    that the Tribunal had wrongly taken the age of the deceased at 36 instead
    of 26 years and had, therefore, committed an error in employing the
    multiplier of 24 years purchase factor instead of 34 years purchase factor.
G   Thus the compensation came to Rs. 200x12x34 = 81,600. The question
    then is whether the Tribunal was right in employing the multiplier of 24 or
    the High Court was right in employing the multiplier of 34?

          India is one of the countrie• with the highest number of road acci-
    dents. Motor accidents are every day affairs. A large number of claims for
H   compensation for injury caused by road accidents are pending in various
      U.P. STATE RD. TPT. v. TRILOK CHANDRA [AHMADI, C.J.]                  447

Motor Accident Claims Tribunal. In a fatal accident the dependents of the A
deceased are entitled to compensation for the loss suffered by them on
account of the dead. The most commonly practised method of assessing
the loss suffered is to calculate the loss for a year and then to capitalise
the amount by a suitable multiplier. To that is added the loss suffered on
account of loss of expectation of life and the like. the Tribunals and High B
Courts have adopted divergent methods to determine the suitable multi-
plier. Even this Court has not been uniform; maybe because the principle
on which this method came to be evolved has been forgotten. It has,
therefore, become necessary to examine the law and to state the correct
principles to be adopted.
                                                                                   c
     The topic of compensation for causing death by negligent driving
came up for serious discussion before this Court in Gobald Motor Se1vices
Limited & Anr. v. R.M.K. Veluswami and Others, AIR (1962) SC 1. The
Court referred to the House of Lords decision in Davies v. Powell Dufftyn
Associated Collieii£S Ltd., 1942 Ac 601 and quoted the following passage           D
from the judgment :
        11
         The damages are to be based on the reasonable expectation of
        pecuniary benefit or benefit reducible to money value. Jn assessing
        the damages all circumstances which may be legitimately pleaded
        in diminution of the damages must be considered.                           E

        ........... 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."                                                      F

       The Court also referred to the judgment by Viscount Simon in Nance
v. B1itish Columbia Electlic Railways Co. Ltd., (1951) AC 601 in which the
same principles were enunciated for estimating the damages, the method
adopted however differed. Various factors that would enter the calculation         G
as per Viscount Simon \Vere set out in the judgment as under :

        "............ at first the deceased man's expectation of life has to be
        estimated having regard to his age, bodily health and the possibility
        of pre-mature determination of his life by later accidents; secondly,
        the amount required for the future provision of his wife shall be H
    448                  SUPREME COURT REPORTS (1996] SUPP. 2 S.C.R.

A           estimated having regard to the amounts he used to spend on her
            during his lifetime, and other circumstances; thirdly, the estimated
            annual sum is multiplied by the number of years of the man's
            estimated span of life, and the said amount must be discounted so
            as to arrive at the equivalent in the form of a lump sum payable
            on his death; fourthly, further deductions must be made for the
B           benefit accruing to the widow from the acceleration of her interest
            in his estate; and, fifthly, further amounts have to be deducted for
            the possibility of the wife dying earlier if the husband had lived
            the full span of life; and it should also be taken into account that
            there is the possibility of the widow remarrying much to the
c           improvement of her financial position. It would be seen from the
            said mode of estimation that many imponderables enter into the
            calculation. 11

           The same principles were recalled by this Court in the case of
D   Municipal Co1poration of Delhi v. Subhagwanli & 01~., AIR (1966) SC
    1750. In this case the claim for compensation arose on account of loss of
    life caused by the collapse of the Clock Tower abutting a highway. The
    Court referred lo both the aforementioned judgments, and extracted the
    fol!O\ving passage from the judgment in the case of Davies:

E           The starting point is the amount of wages which the deceased was
            earning, the ascertainment of which to some extent may depend
            upon the regularity of his employment. Then there is an estimate
            of how much was required or expended for his own personal and
            living expenses. The balance will give a dictum or basic figure
            which will generally be turned into a lump sum by taking a certain
F           number of years' purchase. That sum, however, has to be taxed
            down by having due regard to uncertainties, for instance that the
            widow might have again married and thus ceased to be dependent,
            and other like matters of speculation and doubt.''

G         In the case before the Court the deceased was Ram Prakash aged 30
    years. The High Court fouad it proper to estimate the amount that the
    deceased would have spent on his wife and children in a year and
    capitalised that for a period of 15 years and observed that the Trial Court's
    calculation was not excessive.

H         The compensation to be awarded has two elements. One is the
      U.P. STATE RD. TPT. v. TRILOK CHANDRA [AHMADI, CJ.]                449

pecuniary loss to the estate of the deceased resulting from the accident,       A
the other is the pecuniary loss sustained by the members of his family for
his death. The Court referred to these two elements in the Gobald Motor
Se1vice's case. These two elements were to be awarded under Section 1 and
Section 2 of the Fatal Accidents Act, 1855 under which the claim in that
case arose. The Court in that case cautioned that while making the calcula-     B
tions no part of the claim under the first or the second element should be
included twice. The Court gave a very lucid illustration, which can be
quoted with profit:


        "An illustration may clarify the position. X is the income of the
        estate of the deceased, Y is the yearly expenditure incurred by him     c
        on his dependents (we will ignore the other expenditure incurred
        by him). X-Y i.e. Z, is the amount he saves every year. The
        capitalised value of the income spent on the dependents, subject
        to relevant deductions, is the pecuniary loss sustained by the
        members of his family through his death. The capitalised value of       D
        his income, subject to relevant deductions, would be the loss
        caused to the estate by his death. If the claimants under both the
        heads are the same, and if they get compensa,tia'n for the entire
        loss caused to the estate, they cannot claim again under the head
        of personal loss the capitalised income that might have been spent
        on them if the deceased were alive. Conversely, if they got com-
                                                                                E
        pensation under S.1, representing the amount that the deceased
        would have spent on them, if alive, to that extent there should be
        deduction in their claim under S.2 of the Act in respect of com-
        pensation for the loss caused to the estate. To put it differently if
        under S.1 they got capitalised value of Y, under S.2 they could get     F
        only the capitalised value of Z, for the capitalised value Y + Z ~ X
        would be the capitalised value of his entire income."


      The High Court of Gujarat in the case of M/s. Hilji Vi1ji Transpmt & G
Ors. v. Basiranbibi, (1971) 12 Gujarat Law Reporter 783 referred to all the
three judgments of this Court mentioned above, considered the principle
laid down in Davies and Nance and explained the law to be applied for
ascertaining the damages in such cases. Reference was also made to the
judgment of Lord Reid in Taylor v. O'Conor, (1970) l All EI.gland Reports
365 and the High Court reiterated Lord Reid's words which we extract:       H
    450                  SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A           "In. ordinary cases which do not involve special factors, as one in
            Taylor's case as regards the questions of income lax and surtax,
            the wealth of experience of Judges and Counsels would be an
            adequate guide to the selection of this multiplier without any
            necessity of any expert evidence, so that on this method by adopt-
            ing a common multiplier the loss of dependency over a period of
B           years can be worked out a lump sum to be given to the dependents."

          The Gujarat High Court also pointed out that the principles laid
    down in the case of Davies and that in the case of Nance led to the same
    end-results because, although, as per Vascount Simon the dependency
C   amount is required to be multiplied by the figure of the expected useful
    life of the deceased, the sum has to be discounted because equivalent
    amount in lump sum has to be worked out keeping in view the fact that
    the sum was to be spread over a period of years and secondly, allowance
    had to be made for uncertainties like the possible pre-mature death of the
D   dependents or of the deceased had he been alive, remarriage of the widow,
    acceleration over other interest of the estate, etc. The Gujarat High Court
    expressed the opinion that if proper discount is done after arriving at the
    lump sum equivalent to this dependency, spread over for a period of years
    the end-result will be the same as that calculated by using a proper
    multiplier to the annual loss. This multiplier is the year's purchase factor.
E   Referring to the decision of Lord Diplock in Mallett v. McMonagle, (1969)
    2 All England Reports 178 at 191, wherein an annuity table was worked
    out, the High Court observed that 12 to 15 years' should be the normal
    multiplier and for the case before the court the outer multiplier of 15 years
    purchase would be proper. The same view in regard to the range for a
F   healthy young man was expressed by this Court in C.KS. Iyer v. T.K Nair,
    AIR (1970) SC 376.

          For concluding the analysis it is necessary now to refer to the
    jndgment of this Court in the case of General Manager, Kera/a State Road
    Transport, T1iva11drom v. Susamma Thomas, [1994] 2 SCC 176. In that case
G   this Court culled out the basic principles governing the assessment of
    c,ompensation emerging from the legal authorities cited above and
    reiterated that the multiplier method is the sound method of assessing
    compensation. The Court observed :

H           "The multiplier method involves the ascertainment of the loss of
      U.P. STATE RD. TPT. v. TRILOKCHANDRA [AHMADI. C.J.]               451

        dependency or the multiplicand having regard to the circumstances A
        of the case and capitalizing the multiplicand by an appropriate
        multiplier. The choice of the multiplier is determined by the age
        of the deceased (or that of the claimants, whichever is higher) and
        by the calculation as to what capital sum, if invested at a rate of
        interest appropriate to a stable economy, would yield the multi- B
        plicand by way of annual inten:st. ln ascertaining this, ·regard
        should also be had to the fact that ultimately the capital sum should
        also be consumed-up over the period for which the dependency is
        expected to last."

The principle was explained and illustrated by a mathematical example :
                                                                               c

        "The multiplier represents the number of Years' purchase on which
        the loss of dependency is capitalised. Take for instance a case
        where annual loss of dependency is Rs. l0,000. If a sum of Rs.         D
        1,00,000 is invested at 10% annual interest, the interest will take
        care of the dependency, perpetually. The multiplier in this case
        works out to 10. If the rate of interest is 5% per annum and not
        10% then the multiplier needed to capitalise the loss of the annual
        dependency at Rs. 10,000 would be 20. Then the multiplier i.e., the
        number of Years' purchase of 20 will yield the annual dependency       E
        perpetually. Then allowance to scale down the multiplier would
        have to be made taking into account the uncertainties of the future,
        the allowances for immediate lump sum payment, the period over
        which the dependency is to last being shorter and the capital feed
        also to be spent away over the period of dependency is to last etc.    F
        Usually in English Courts the operative multiplier rarely exceeds
        16 as maxini.um. This will come down accordingly as the age of the
        deceased person (or that of the dependents, whichever is higher)
        goes up."
                                                                               G
      It was rightly clarified that there should be no departure from the
multiplier method on the ground that Section 110-B Motor Vehicles Act,
1939 (corresponding to the present provision of Section 168 Motor
Vehicles Act, 1988) envisaged payment of 'just' compensation since the
multiplier method is the accepted method for determining and ensuring H
    452                   SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A   payment of just compensation and is expected to bring uniformity and
    certainty of the awards made all over the country.

          In the facts uf that case the Court said that l2 years was the correct
    multiplier to be applied for assessing compensation for the death of the
    victim of the road accident who was 39. Further it was observed that in the
B
    absence of evidence it is not unusual tu deduct one third of the gross
    income towards the personal living expenses of the deceased. The court
    further awarded a conventional sum towards loss of consortium and loss
    of estate.

C         We though it necessary to reiterate the method of working out 'just'
    compensation because, of late, \Ve have noticed fron1 the a\varJ n1acle by
    Tribunals and Courts that the principle on which the multiplier method
    was developed has been lost sight of and once again a hybrid method based
    on the subjectivity uf the Tribunal/Court has surfaced, introducing uncer-
0   tainty and lack of reasonable uniformity in the matter of determination of
    compensation. It must be realised that the Tribunal/Court has tu determine
    a fair amount of compensation awardable to the victin1 of an accident
    which must be proportionate to the injury caused. The two English
    decisions to which we have referred earlier provide the guidelines for
E   assessing the loss occasioned to the victims. Under the formula advocated
    by Lord Wright in Davies, the loss has to be ascertained by first determin-
    ing the monthly income of the deceased, then deducting therefrom the
    amount spent on the deceased, and thus assessing the loss to the depend-
    ents of the deceased. The, annual dependency assessed in this manner is
    then to be multiplied by the use of an appropriate multiplier. Let us
F   illustrate: X, male, aged about 35 year, dies in an accident. He leaves
    behind his widow and 3 minor children. His monthly income was Rs. 3,500.
    First, deduct the amount spent un X every month. The rough and ready
    method hitherto adopted where no definite e\odence was forthcoming, was
    to break up the family into units, taking two units for an adult and one unit
G   fur a minor. Thus X and his wife make 2 + 2 ~ 4 units and each minor
    one unit i.e. 3 units in all, totalling 7 units. Thus the share per unit works
    out to Rs. 3,500 -;- 7 = Rs. 500 per month. It can thus be assumed that Rs.
     1000 \Vas spent on X. Since he wa~ a \Vorking member some provision for
    his transport and out-of-pocket expense has to be estimated. In the present
H   case we estimate the out-of-pocket expense at Rs. 250. Thus the amount
      U.P: STATE RD. TPT. v. TRILOK CHANDRA [AHMADI, CJ.]              453

spent on the deceased X works out to Rs. 1250 per month leaving a balance A
of Rs. 3500-1250 = Rs. 2250 per month. This amount can be taken as the
monthly loss to X's dependents. The annual dependency comes to Rs. 2250
x 12 = Rs. 27,000. This annual dependency has to be multiplied by the use
of an appropriate multiplier lo assess the compensation under the head of
loss to the dependents. Take the appropriate multiplier lo be 15. The B
compensation comes to Rs. 27,000 X 15 = Rs. 4,05,000. To this may be
added a conventional amount by way of loss of expectation of life. Earlier
this conventional amount was pegged down to Rs. 3000 but now having
regard to the fall in the value of the rupee, it can be raised to a figure of
not more than Rs. 10,000. Thus the total comes to Rs. 4,05,000 + 10,000
 = Rs. 4,15,000.
                                                                              c

       In the method adopted by Viscount Simon in the case of Nance also,
first the annual dependency is worked out and then multiplied by the
estimated useful life of the deceased. This is generally determined on the
basis of longevity. But then, proper discounting on various factors having    D
a bearink on the uncertainties of life, such as, premature death of the
deceased. or' the dependent, remarriage, accelerated payment and in-
creased earning by wise and prudent investments, etc., would become
necessary. It was generally felt that discounting on various imponderables
made assessment of compensation rather complicated and cumbersome             E
and very often as a rough and ready measure, one-third to one-half of the
dependency was reduced, depending on the life-span taken. That is the
reason why courts in India as well as England preferred the Davies' formula
as being simple and more realistic. However, as observed earlier and as
pointed out in Susan11na Thonias' case, usually English courts rarely ex-
                                                                              F
ceed 16 as the multiplier. Courts in India too followed the same pattern
till recently when Tribunals/Courts began to use a hybrid method of using
Nance's method without making deduction for imponderables.

      The situation has now undergone a change with the enactment of the
Motor Vehicles Act, 1988, as amended hy Amendment Act, 54 of 1994. G
The most important change introduced by the amendment insofar as it
relates to determination of compensation is the insertion of Sections 163A
and 163B in Chapter XI entitled 'Insurance of Motor Vehicles against
Third Party Risks'. Section 165A begins with a 11011-obsta11te clause and
provides for payment of compensation, as indicated in the Second H
    454                   SUPREME COURT REPORTS [1996] ::iUPP. 2 S.C.R.

A Schedule, to the legal representatives of the deceased or injured, as the
    case may be. Now if we turn to the Second Schedule, we find a table fixing
    the mode of calculation of compensation for third party accident injury
    claims arising out of fatal accident._ The first column gives the age group
    of the victims of accident, the second column indicates the multiplier and
B   the subsequent horizontal figures indicate the quantum of compensation in
    thousand payable to the heirs of the deceased victim. According to this
    table the multiplier varies from 5 to 18 depending on the age group to
    which the victim belonged. Thus, under this schedule the maximum multi-
    plier can be upto 18 and not 16 as was held in Susamma Thomas' case.

c         We must at once point out that the calculation of compensation and
    the amount worked out in the schedule suffer from several defects. For
    example, in item No. 1 for a victim aged 15 years, the multiplier is shown
    to be 15 years' and the multiplicand is shown to be Rs. 3000. The total
    should be 3000 x 15 = 45,000 but the same is worked out at Rs. 60,000.
D   Similarly, in the second item the multiplier is 16 and the annual income is
    Rs. 9000; the total should have been Rs. 1,44,000 but shown to be Rs.
    1,71,000. To put it briefly, the table abounds in such mistakes. Neither the
    Tribunals nor the courts can go by the ready reckoner. It can only be used
    as a guide. Besides, the selection of multiplier cannot in all cases be solely
E   dependent on the age of the deceased. For example, if the deceased, a
    bachelor, dies at the age of 45 and his dependents are his pare.nts, age of
    the parents would also be relevant in the choice of the multiplier. But these
    mistakes are limited to actual calculations only and not in respect of other
    items. What we propose to emphasise is that the multiplier cannot exceed
    18 years' purchase factor. This is the improvement over the earlier position
F   that ordinarily it should not exceed 16. We thought it necessary to state the
    correct legal position as Courts and Tribunals are using higher multiplier
    as in the present case where the Tribunal used the multiplier of 24 which
    the High Court raised to 34, thereby showing lack of awareness of the
    background of the multiplier system in Davies' case.
G
           We had indicated we would not interfere with the amount awarded,
    since in our view, While the multiplier used is excessive, we are satisfied
    that a very low multiplicand was used as the loss of dependency. If we were
    to correct the multiplicand and use the correct multiplier, the compensa-
H   tion would work out to near about the same figure. Therefore, while
         U.P. STATE RD. TPT. v. TRILOK CHANDRA [AHMADI, C.J.]        455

agreeing with the learned Advocate for the appellant, we are disinclined A
to interfere with the figure of compensation. We, therefore, hold that the
Tribunal/Court fell into an error in the choice of the multiplier and allow
the appeal to that extent but we do not, in the circumstances of the case,
interfere with the quantum of compensation. No order as to costs.

      The copy of this Judgment may be sent to all the High Courts with     B
a direction to circulate it to the Court(fribunals dealing with the Motor
Accident compensation cases.

V.S.S.                                                   Appeal allowed.