• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

D. Murali

AN AUTOMOBILE dealer named Reliable Imports sent a mailer to its customers saying that a rental car company had gone bankrupt and that the court had ordered the sale of a certain number of vehicles. The communiqué said that the sale was `by invitation only'. "If it is too good to be true... it is probably a fraud," says Ron Weber. Well, that's how it turned out to be; all the statements made by the dealer were found to be false by the Greene County Circuit Court in the US, which decided the case on May 19. As penalty, Reliable has been ordered to pay $70,000 for its deceptive advertising practices. Of this, $35,000 will go to the Greene County Public School Fund, and the balance to the state Merchandising Practices Revolving Fund. "It's time Reliable Imports lived up to its name," observed Missouri Attorney General Jay Nixon. Quite instructive.

Melancholy multiplier

THIS case is about an accident in 2001 that killed Sathyamurthy, 38. The cause of the accident was rash and negligent driving by a driver of the Tamil Nadu State Transport Corporation. While the family of the deceased claimed a compensation of Rs 20 lakh, the Motor Vehicle Accident Compensation Claim Tribunal awarded them about Rs 6 lakh. The amount was arrived by considering monthly salary of Rs 4,688 of the deceased, and a one-third deduction for personal expenses; a multiplier of 16 was used.

But the Transport Corporation wasn't happy, and so appealed before the Madras High Court, which then confirmed the compensation awarded. So, the dispute went to the Supreme Court. There, the Corporation argued that the quantum arrived at by applying a multiplier of 16 was high.

To decide on "How much the widow and family lost by the father's death?" the court cited an earlier case — Municipal Corporation of Delhi vs Subhagwanti — and quoting a "passage from the opinion of Lord Wright in Davies vs Powell Duffregn Associated Collieries Ltd" a case dating back to 1942, where he says how the compensation "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."

The Supreme Court observed that the assessment of damages to compensate the dependants is "beset with difficulties because from the nature of things, it has to take into account many imponderables". And that, "much of the calculation necessarily remains in the realm of hypothesis". Arithmetic is a good servant but a bad master, reminded the court, and said that in every case "it is the overall picture that matters".

On the selection of multiplicand and multiplier, read what Lord Diplock said in Mallett vs McMongle, "where the deceased was aged 25 and left behind his widow of about the same age and three minor children." Also read Halsbury's Laws of England.

The court ultimately decided that the appropriate multiplier would be 12 and not 16 as adopted by the Tribunal and subsequently affirmed by the High Court. Compensation was therefore fixed at Rs 4,50,000. What accounted for the difference between the original and the revised claim was mainly interest rate. The tribunal had adopted 9 per cent interest, but the apex court looked at `the prevailing rate of interest in bank deposits' and fixed the rate at 7.5 per cent for computing the compensation.

There's no compensation for death, we're aware. "Sinks down to death, oppress'd with melancholy," the Bard would lament; but Somerset Maugham may wryly comment, "Death is a very dull, dreary affair, and my advice to you is to have nothing whatsoever to do with it." My advice would be: drive safely.

LawLane@TheHindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investment quiz

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line