Supreme Court of India
LEELA GUPTA & ORS.versusSTATE OF UTTAR PRADESH & ORS.
- Citation
- 2010 INSC 560
- Decided
- 31 August 2010
- Disposal
- Case Partly allowed
- Bench
- AFTAB ALAM
Holding
The Supreme Court held that once the multiplicand and multiplier are correctly ascertained, no further deduction for imponderability is permissible, and a multiplier of 14 (not 16) should be applied, resulting in compensation of Rs. 6,04,800.
Summary
A 39‑year‑old government engineer died in a motor accident, and his wife and three children filed a claim petition under Section 11 OA of the Motor Vehicles Act, 1939. The Motor Accident Claims Tribunal awarded Rs. 2,61,800 as compensation, which the High Court enhanced to Rs. 4,70,000 by applying a multiplier of 16 and then reducing the amount by one‑third for imponderability and uncertainty of life. The Supreme Court examined whether the High Court was correct in both the choice of multiplier and the subsequent one‑third deduction. It held that the multiplicand of Rs. 3,600 per month was correctly calculated following the Susamma Thomas guidelines, but a multiplier of 16 was excessive; a multiplier of 14 was appropriate. The Court further ruled that once the multiplicand and multiplier are fixed, no additional deduction for uncertainties should be made. Consequently, the compensation was enhanced to Rs. 6,04,800 with 9% simple interest, and the appeal was partly allowed.
Issues considered
- Whether the High Court erred in reducing the compensation by one‑third after capitalising the multiplicand with a multiplier of 16.
- What multiplier is appropriate for calculating loss of dependency under Section 11 OA/Section 166 of the Motor Vehicles Act.
- Whether the multiplicand should be recomputed in light of the guidelines laid down in Sarla Verma versus Susamma Thomas.
Legislation cited
- Motor Vehicles Act, 1939s. 11 OA
- Motor Vehicles Act, 1988s. 163A, s. 163B, s. 165A, s. 166, s. 168
Subjects
Motor Vehicles ActCompensationFatal accidentMultiplier methodLoss of dependencyImponderabilitySection 11 OASection 168Section 166Supreme Court
Judgment
[2010] 10 S.C.R. 757
LEELA GUPTA & ORS. A
v.
STATE OF UTTAR PRADESH & ORS.
(Civil Appeal No. 5564 OF 2005}
AUGUST 31, 2010
B
[AFTAB ALAM AND R.M. LODHA, JJ.]
Motor Vehicles Act, 1939 - s. 11 OA - Fatal accident -
Claim petition - Award of compensation by tribunal -
Enhanced by High Court using multiplier of 16 - High Court C
after reaching the compensation amount, deducting 1/3rd
therefrom towards imponderability and uncertainty of life - On
appeal, held: Ascertainment of multiplicand following
guidelines in Susamma· Thomas* case by High Court, is
correct - However, capitalization of multiplicand on a D
multiplier of 16 is on higher side - Therefore, multiplier
reduced to 14 - Reduction of 1/3rd of the compensation
amount towards imponderability and uncertainty of life not
correct - Once the multiplicand and multiplier are ascertained,
no further deduction needs to be made towards uncertainties E
and other contingencies.
A 39 years old man died in a motor accident. His wife
and three children (the appellants) filed a claim petition
uls. 11 OA of Motor Vehicles Act, 1939. The claims tribunal
held that the claimants were entitled to a sum of Rs. F
2,61,8001- towards compensation with pendente lite and
future interest thereon @ 9% p.a .. On appeal, the High
Court after computing the annual income of the
deceased, applied multiplier of 16 and came to a sum of
Rs. 6,91,200 towards compensation. However, G
considering imponderability and uncertainty of life, the
amount reached towards compensation was reduced by
1/3rd and thus the claimants were awarded Rs. 4,70,000.-
757 H
758 SUPREME COURT REPORTS [2010] 10 S.C.R.
A The question for consideration, in the instant appeal
was as regards correctness of the decision of the High
Court in reducing the compensation assessed, by 1/3rd,
after ascertaining the multiplicand capitalized with the
multiplier of 16.
B
Partly allowing the appeal, the Court
HELD: 1.1 The purpose of award of compensation is
to put the dependants of the deceased, who had been
bread-winner of the family, in the same position
C financially as if he had lived his natural span of life; it is
not designed to put the claimants in a better financial
position in which they would otherwise have been, if the
accident had not occurred. At the same time, the
determination of compensation is not an exact science
D and the exercise involves an assessment based on
estimation and conjectures here and there as many
imponderable factors and unpredictable contingencies
have to be taken into consideration. The statutory rule
enacted in Section 11 OB of the Motor Vehicle 1939 Act,
E (now Section 168 of the Motor Vehicles Act, 1988) is
award of 'just compensation'. [Para 3] [762-D-F]
1.2 The High Court ascertained the multiplicand or
the value of dependency at Rs. 3600/- per month keeping
in view the judgment of Supreme Court in Susamma
F Thomas* case. The High Court in ascertaining the
multiplicand has taken into account the guidelines laid
down in Susamma Thomas* case, which warrants no
reconsideration. It is neither proper nor desirable to
recalculate the multiplicand at this distance of time in
G jurisdiction under Article 136 of the Constitution by
applying the guidelines indicated in Sar/a Verma** case.
However, capitalization of multiplicand on a multiplier of
16 is on the higher side and multiplier of 14, in the facts
of the instant case, would meet the ends of justice. [Para
H 8] [771-C-E]
LEELA GUPTA & ORS. v. STATE OF UTTAR 759
PRADESH & ORS.
1.3 The High Court was clearly in error in reducing A
by 1/3rd the compensation assessed, after ascertainment
of multiplicand capitalized on a particular multiplier since
the very method of ascertainment of multiplicand takes
into consideration many )attars of imponderables and the
contingencies of the future. Once the multiplicand and B
multiplier are ascertained, the assessment of damages to
compensate the dependants is arrived at by multiplying
the two and no further deduction needs to be made
towards uncertainties and other contingencies. [Para 9]
[771-F] C
1.4 The compensation awarded by the High Court in
the sum of Rs. 4,70,000/- is enhanced to Rs. 6,04,800/-
which is fair, just and equitable. The appellants shall also
be entitled to 9% simple interest per annum on the
enhanced amount from the date of filing of claim petition D
until the date of its actual payment. [Para 9] [772-A-B]
*General" Manager, Kera/a State Road Transport
Corporation, Trivandrum v. Susamma Thomas (Mrs.) and
Ors. (1994) 2 SCC 176 - relied on. E
**Sar/a Verma (Smt.) and Ors. v. Delhi Transport
Corporation and Anr. (2009) 6 SCC 121- held inapplicable.
UP. State Road Transport Corporation and Ors. v. Trilok
Chandra and Ors. (1996) 4 SCC 362; Abati Bezbaruah v.
F
Geological Survey of India (2003) 2 SCC 148; Fakeerappa
and Anr. v. Karnataka Cement Pipe Factory and Ors. (2004)
2 SCC 473; T.N. State Transport Corpn. Ltd. v. S. Rajapriyaj
and Ors. (2005) 6 SCC 236; New India Assurance Co. Ltd.
v. Charlie and Anr. (2005) 10 SCC 720; UP. State Road
Transport Corporation v. Krishna Bala and Ors. (2006) 6 SCC G
249; Oriental Insurance Co. Ltd. v. Meena Variyal and Ors.
(2007) 5 SCC 428; Reshma Kumari and Ors. v. Madan
Mohan and Anr. (2009) 13 sec 422 - referred to.
Taff Vale Railway Co. v. Jenkins (1913) AC 1; Davies H
760 SUPREME COURT REPORTS [2010] 10 S.C.R.
A and Anr. v. Powell Duffryn Associated Collieries Ltd. (1942)
1 All ER 657; Nance v. British Columbia Electric Railway Co.
Ltd. (1951) 2 All ER 448 - referred to.
Case Law Reference:
B (1994) 2 sec 11s relied on Para 4
(1996) 4 sec 362 referred to Para 5
(2009) s sec 121 held inapplicable Paras
c (2009) 13 sec 422 referred to Para 6
(2003) 2 sec 148 referred to Para 6
(2004) 2 sec 473 referred to Para 6
(2005) s sec 23s referred to Para 6
D
(2005) 1o sec 120 referred to Para 6
(2006) s sec 249 referred to Para 6
(2001) 5 sec 428 referred to Para 6
E (1942) 1 All ER 657 referred to Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5564 of 2005.
F From the Judgment & Order dated 03.09.2003 of the High
Court of Judicature at Allahabad in FAFO No. 385 of 1987.
T. Mahipal for the Appellants.
T.N. Singh, Shekhar Raj Sharma, Chandra Prakash
G Pandey for the Respondents.
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Ganga Prasad Gupta-the deceased,
the husband of the first appellant and father of second, third and
H fourth appellant, was killed in a motor accident on July 8, 1985.
LEELA GUPTA & ORS. v. STATE OF UTIAR 761
PRADESH & ORS. [R.M. LODHA, J.]
He was then aged 39 and was officiating Executive Engineer A
in the Irrigation Department, State of Uttar Pradesh. Had he
lived, it would have been 18 years or so before he reached the
age of superannuation (i.e. 58 years). After superannuation, he
would have qualified for pension. His wife and three child(en
filed a claim petition under Section 11 OA of the Motor Vehicles B
Act, 1939 (for short, 'the 1939 Act') before the Motor Accident
Claims Tribunal, Mirzapur (for short, 'the Tribunal') against the
respondents claiming compensation in the sum of Rs. 7,00,000/
-. His gross salary on the date of accident was Rs. 2,680/- per
month. The Tribunal held that deceased would have contributed c
Rs. 2,200/- per month (Rs. 26,400/- per year) to the family and
by applying a multiplier of 18, reached the finding that the
pecuniary loss to widow and children would be Rs. 4,75,200/-
up to the age of his retirement. The Tribunal then deducted 1/
3rd of the above considering the amount being paid in lump D
sum and uncertainty in life and by further deducting a sum of
Rs. 40,000/- towards group insurance scheme, assessed
compensation to the extent of Rs. 2,76,800/-. An amount of Rs.
· 15,000/- having been already paid to the Claimants towards no
fault liability, the Tribunal in its Award dated February 24, 1987
E
held that claimants are entitled to a sum of Rs. 2,61,800/- and
directed the respondents to pay the said amount with pendente
lite and future interest thereon @ 9% per annum.
2. On appeal by the claimants, the High Court held that the
claimants were entitled to Rs. 4,70,000/- as compensation F
along with 9% simple interest per annum from the date of the
claim petition until the actual payment was made. The High
Court considered the matter thus :
" ...... Taking income of deceased at Rs. 2,700/- per month, G
the same can be assumed safely as Rs. 2700 X 2 =5,400/
- had the deceased lived. Now, 1/3rd is to be deduced
being the amount spent on deceased himself towards his
personal expenses, it gives us a figure of Rs. 3,600/- per
month. Thus, the expected benefit to be derived by the
H
762 SUPREME COURT REPORTS [2010] 10 S.C.R.
A =
claimants comes to Rs. 3,600 X 12 43,200/- per annum
as contribution towards his family. Taking into account the
age of the deceased, we find that multiplier of 16 is
available. The annual income of Rs. 43,200/- being
. multiplied by 16, comes to Rs. 6,91,200/-. However,
B considering imponderability and uncertainty of life, this
amount is reduced by 1-3rd. It gives the figure of Rs.
4,70,000/- (on rounding)."
3. The conventional approach in England for over a century
has been that the damages are to be assessed on the basis
C that the fundamental purpose of an award is to achieve as nearly
as possible full compensation to the plaintiff for the injuries
sustained. This rule has been accepted in fatal accident actions
as well. The House of Lords in Taff Vale Railway Co. v.
Jenkins 1 laid down the test that award of damages in fatal
D accident action is compensation for the reasonable expectation
of pecuniary benefit by the deceased's family. The purpose of
· award of compensation is to put the· dependants of the
deceased, who had been bread-winner of the family, in the
same position financially as if he had lived his natural span of
E life; it is not designed to put the claimants in a better financial
position in which they would otherwise have been if the accident
had not occurred. At the same time, the determination of
compensation is not an exact science and the exercise involves
an assessment based on estimation and conjectures here and
F there as many imponderable factors and unpredictable
contingencies have to be taken into consideration. The statutory
rule enacted in Section 11 OB of the 1939 Act (now Section 168
of the Motor Vehicles Act, 1988) is award of 'just
compensation'.
G
4. In General Manager, Kera/a State Road Transport
Corporation, Trivandrum v. Susamma Thomas (Mrs.) and
Ors. 2 this Court extensively considered the English decisions
1. [1913] AC 1.
H 2. (1994) 2 sec 176.
LEELA GUPTA & ORS. v. STATE OF UTTAR 763
PRADESH & ORS. [R.M. LODHA, J.]
as well as previous decisions of this Court and also the A
decisions of various high courts and laid down that the multiplier
method is logically sound and legally well established and must
be followed; a departure from which can only be justified in rare
and extraordinary circumstances and very exceptional cases.
In para 13 of the Report, this Court stated as follows : B
"13. The multiplier method involves the ascertainment of
the loss of dependency or the multiplicand having regard
to the circumstances of the case and capitalizing the
multiplicand by an appropriate multiplier. The choice of the C
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
multiplicand by way of annual interest. In ascertaining this,
regard should also be had to the fact that ultimately the D
capital sum should also be consumed-up over the period
for which the dependency is expected to last."
In para 17, it was further stated:
E
"17. 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. 10,000. If a sum of Rs 1,00,000 is invested at 10%
annual interest, the interest will take care of the
dependency, perpetually. The multiplier in this case works F
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 perpetually. Then allowance to G
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
H
764 SUPREME COURT REPORTS [2010] 10 S.C.R.
A also to be spent away over the period of dependency is
to last etc. Usually in English Courts the operative multiplier
rarely exceeds 16 as maximum. This will come down
accordingly as the age of the deceased person (or that of
the dependants, whichever is higher) goes up."
B
While dealing with the aspect of multiplicand, the Court stated
that in ascertainment of the multiplicand many factors have to
be put into the scales to evaluate the contingencies of the
future.
C 5. The case of Susamma Thomas 2 arose out of the 1939
Act and the appeal was decided by this Court on January 6,
1993. The 1939 Act stood repealed by the Motor Vehicles Act,
1988 (for short, 'the 1988 Act'). After decision of this Court in
Susamma Thomas 2 , the 1988 Act was amended and, inter
D alia, Section 163A was inserted along with the Second
Schedule w.e.f. November 14, 1994. Vide Section 163A, the
special provisions with regard to payment of compensation on
structured formula basis were introduced in the 1988 Act and
the Second Schedule provided for compensation for third party
E fatal accident/injury cases claims. Under the Second Schedule,
the maximum multiplier could be upto 18 and not 16 as was
laid down in Susamma Thomas 2 . In U.P. State Road
Transporl Corporation and Ors. v. Tri/ok Chandra and Ors. 3 ,
a three-Judge Bench of this Court considered change in
F statutory provisions, particularly, insertion of Section 163A and
Second Schedule in the 1988 Act and observed thus :
"17. 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
G change introduced by the amendment insofar as it relates
to determination of compensation is the insertion of
Sections 163-A and 163-B in Chapter XI entitled
"Insurance of Motor Vehicles against Third Party Risks".
H 3. (1996) 4 sec 362.
LEELA GUPTA & ORS. v. STATE OF UTTAR 765
PRADESH & ORS. [R.M. LODHA, J.]
Section 165-A begins with a non obstante clause and A
provides for payment of compensation, as indicated in the
Second 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 B
injury claims arising out of fatal accidents. The first column
gives the age group of the victims of accident, the second
column indicates the multiplier and the subsequent
horizontal figures indicate the quantum of compensation
in thousand payable to the heirs of the deceased victim. c
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 multiplier can be
up to 18 and not 16 as was held in Susamma Thomas
case." D
6. The short question presented in this appeal is whether
the High Court was in error in reducing by 1/3rd the
compensation assessed after ascertainment of multiplicand
capitalized with the multiplier of 16. But before we pass to the ,
above question, we may notice two recent decisions of this E
Court, namely, (1) Sar/a Verma (Smt.) & Ors., v. Delhi
Transport Corporation & Anr. 4 and (2) Reshma Kumari & Ors.
v. Madan Mohan & Anr. 5 In the case of Sar/a Verma 4 , a two-
Judge bench of this Court considered Susamma Thomas2
and Trilok Chandra 3; few other decisions, namely, Abati F
Bezbaruah v. Geological Survey of lndia 6 ; Fakeerappa & Anr.
v. Karnataka Cement Pipe Factory & Ors. 7 ; T.N. State
Transport Corpn. Ltd. v. S. Rajapriya & Ors. 8; New India
4. (2009) 6 sec 121. G
5. (2009) 13 sec 422.
6. (2003) 2 sec 148.
7. (2004) 2 sec 473.
8. (2005) 6 sec 236.
H
766 SUPREME COURT REPORTS [2010] 10 S.C.R.
A Assurance Co. Ltd. v. Charlie & Anr. 9 ; U. P. State Road
Transport Corpn. v. Krishna Bala & Ors. 10 and Oriental
Insurance Co. Ltd. v. Meena Variyal & Ors. 11 and also two
English decisions - namely; Davies & Anr. v. Powell Duffryn
Associated Collieries Ltd. 12 and Nance v. British Columbia
B Electric Railway Co. Ltd. 13 and laid down certain principles
relating to assessment of compensation in cases of death.
While dealing with the aspect of future prospects, in paragraph
24 of the Report, it was stated as follows:-
" In Susamma Thomas [(1994) 2 SCC 176] this Court
c increased the income by nearly 100%, in Sar/a Dix it
[(1996) 3 sec 179] the income was increased only by
50% and in Abati Bezbaruah [(2003) 2 SCC 148] the
income was increased by a mere 7%. In view of the
imponderables and uncertainties, we are in favour of
D adopting as a rule of thumb, an addition of 50% of actual
salary to the actual salary income of the deceased towards
future prospects, where the deceased had a permanent
job and was below 40 years. (Where the annual income
is in the taxable range, the words "actual salary" should be
E read as "actual salary less tax"). The addition should be
only 30% if the age of the deceased was 40 to 50 years.
There should be no addition, where the age of the
deceased is more than 50 years. Though the evidence
may indicate a different percentage of increase, it is
F necessary to standardise the addition to avoid different
yardsticks being applied or different methods of calculation
being adopted. Where the deceased was self-employed
or was on a fixed salary (without provision for annual
increments, etc.), the courts will usually take only the actual
G
9. (2005) 10 sec no.
10. (2006) 6 sec 249.
11. (2007) 5 sec 428.
12. (1942) 1 All ER 657.
H 13. (1951) 2 All ER 448.
~ LEELA GUPTA & ORS. v. STATE OF UTTAR 767
I PRADESH & ORS. [R.M. LODHA, J.]
I
income at the time of death. A departure therefrom should A
be made only in rare and exceptional cases involving
special circumstances."
As regards deduction for personal expenses, this Court
stated thus:
B
"Though in some cases the deduction to be made
towards personal and living expenses is calculated on the
basis of units indicated in Trilok Chandra [(1996) 4 SCC
362], the general practice is to apply standardised
d.eductions. Having considered several subsequent C
decisions of this Court, we are of the view that where the
deceased was married, the deduction towards personal
and living expenses of the deceased, should be one-third
(1/3rd) where the number of dependent family members
is 2 to 3, one-fourth (1/4th) where the number of dependent D
family members is 4 to 6, and one-fifth (1/5th) where the
number of dependent family members exceeds six."
With regard to multiplier in the cases falling under Section 166
of 1988 Act, this Court held that Davies12 method is applicable
E
and set out the following Table:
Age of the Multiplier Multiplier Multiplier Multiplier Multiplier
Deceased Scale as scale as scale in specified actually
envisaged adopted Trilok in used in
in by Trilok Chandra Second Second
Susamma Chandra as Column Schedule F
Thomas clarified in.the to the MV
in Charlie Table in Act (as
Second seen from
Schedule the
to the quantum
MVAct of
compe-
G
sation)
(1) (2) (3) (4) (5) (6)
Upto 15 yrs - - - 15 20
H
768 SUPREME COURT REPORTS [2010] 10 S.C.R.
A
15 to 20 yrs 16 18 18 16 19
21 to 25 yrs 15 17 18 17 18
26 to 30 yrs 14 16 17 18 17
B 31 to 35 yrs 13 15 16 17 16
36 to 40 yrs 12 14 15 16 15
41 to 45 yrs 11 13 14 15 14
c 46 to 50 yrs 10 12 13 13 12
51 to 55 yrs 9 11 11 11 10
56 to 60 yrs 8 10 09 8 8
D 61 to 65 yrs 6 08 07 5 6
Above 65 Yrs 5 05 05 5 5
After setting out the aforesaid Table, this Court stated as
E follows:-
"Tribunals/courts adopt and apply different operative
multipliers. Some follow the multiplier with reference to
Susamma Thomas [(1994) 2 SCC 176] [set out in
F Column (2) of the table above]; some follow the multiplier
with reference to Trilok Chandra/[(1996) 4 SCC 362}, [set
out in Column (3) of the table above]; some follow the
multiplier with reference to Charlie [(2005) 10 SCC 720]
[set out in Column (4) of the table above]; many follow the
G multiplier given in the second column of the table in the
Second Schedule of the MV Act [extracted in Column (5)
of the table above]; and some follow the multiplier actually
adopted in the Second Schedule while calculating the
quantum of compensation [set out in Column (6) of the
table above]. For example if the deceased is aged 38
H
LEELA GUPTA & ORS. v. STATE OF UTTAR 769
PRADESH & ORS. [R.M. LODHA, J.]
years, the multiplier would be 12 as per Susamma A
Thomas, 14 as per Trilok Chandra, 15 as per Charlie,
or 16 as per the multiplier given in Column (2) of the
Second Schedule to the MV Act or 15 as per the multiplier
actually adopted in the Second Schedule to the MV Act.
Some tribunals, as in this case, apply the multiplier of 22 B
by taking the balance years of service with reference to
the retiring age. It is necessary to avoid this kind of
inconsistency. We are concerned with cases falling under
Section 166 and not under Section 163-A of the MV Act.
In cases falling under Section 166 of the MV Act, Davies c
method is applicable."
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, Trilok Chandra and
Charlie}, which starts with an operative multiplier of 18 (for D
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 E
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 ··ears."
7. In Reshma Kumari 5 , a two-Judge bench of this Court
again noticed a long line of Indian and English cases, most of F
which were noticed in Sar/a Verma 4 (but Sar/a Verma 4 was not
noticed) and in view of divergence of opinion to the question
whether the multiplier specified in the Second Schedule should
be taken to be a guide for calculation of the amount of
compensation payable in a case falling under Section 166 of G
the 1988 Act referred the matter to the larger bench.
8. The issue whether the multiplier specified in Second
Schedule for the purposes of Section 163A of 1988 Act could
be taken to be guide for· computation of amount of
compensation in a motor accident claim case falling under H
770 SUPREME COURT REPORTS [2010] 10 S.C.R.
A Section 166 of the 1988 Act is not yet authoritatively decided
and is pending consideration before the larger bench. Insofar
as present appeal is concerned it arises out of a motor
accident claim filed under Section 110-A of the 1939 Act and,
therefore, the Second Schedule that refers to Section 163A of
B the 1988 Act may not be of much guidance. To revert to the
question stated above, it must be stated immediately that
deceased at the time of accident had settled and stable job in
the Irrigation Department, Government of U.P. He was
officiating as Executive Engineer and had fair chance of regular
c promotion to the post of Executive Engineer and
Superintending Engineer in due course of time; he had about
18 years of service left before superannuation. He would have
got annual increments etc. besides promotion during this period
of 18 years. But vicissitudes of life cannot be ignored, he might
not have lived up to that age; he might have been dismissed
0
from service. In a fatal accident case, everything that might have
happened to the deceased after the date of death remains
uncertain. That his gross salary at the time of accident was Rs.
2680/-, is reflected from his last pay certificate. Having regard
E to the prospects of advancement and future career, the High
Court assumed the income of the deceased at Rs. 5400/- per
month by doubling the last gross salary and making it a round
figure. The High Court then deducted 1/3rd amount towards his
personal expenditure and arrived at a figure of Rs. 3600/- per
month as the expected contribution by the deceased to the
F family and applying a multiplier of 16, assessed the
dependency at Rs. 6,91,200/- but, however, made a further
deduction by 1/3rd considering imponderability and uncertainty
of life and thereby awarded a sum of Rs. 4,70,000/- only as
compensation. We have seen that in Susamma Thomas2
G 100% increase to the income which the deceased was having
at the time of accident was estimated as the gross income of
the deceased. On the other hand, in Sarla Verma4 this Court
prescribed the rule of thumb i.e., an addition of 50% towards
future prospects where the deceased had a permanent job and
H was below 40 years. As regards deduction to be made towards
LEELA GUPTA & ORS. v. STATE OF UTTAR 771
PRADESH & ORS. [R.M. LODHA, J.]
personal expenditure, in Sar/a Verma 4 this Court stated that A
where the deceased was married and where the number of
dependant family members is 4 to 6 then 1/4th of the gross
income should be deducted while in Susamma Thomas2, the
conventional 1/3rd of the gross income was deducted on that
count in the absence of any evidence. Then as per Table set B
out in Sar/a Verma 4• if the age of deceased is 36 to 40 years,
multiplier of 15 is applicable whereas in Susamma Thomas2
the loss of dependency was capitalized on a multiplier of 12
(the deceased was 39 years of age). The question is whether
value of dependency should be recalculated in this appeal. We c
do not think so. The High Court ascertained the multiplicand
or in other words the value of dependency at Rs. 3600/- per
month keeping in view the judgment of this Court in Susamma
Thomas 2 In our opinion, it is neither proper nor desirable to
recalculate the multiplicand at this distance of time in jurisdiction D
under Article 136 of the Constitution by applying the guidelines
indicated in Sar/a Verma 4 The High Court has taken into
account in ascertaining t~e multiplicand the guidelines lafd
down in. Susamma Thomas 2 which, in our view, warrants no
reconsideration. However, we think that capitalization of E
multiplicand on a multiplier of 16 is on the higher side ar.d
multiplier of 14 in the facts of the case such as the present one
would meet the ends of justic< In this way, the appellants
become entitled to Rs. 6,04,800/- as compensation which, in
our opinion, is fair, just and equitable. Before we close, however,
it has to be held and we hold that the High Court was clearly in F
error in reducing by 1/3rd the compensation assessed after
ascertainment of multiplicand capitalized on a particular
multiplier since the very method of ascertainment of
multiplicand takes into consideration many factors of
imponderables and the contingencies of the future. Once the
multiplicand and multiplier are ascertained, the assessment of
damages to compensate the dependants is arrived at by
multiplying the two and no further deduction needs to be made
towards uncertainties and other contingencies.
772 SUPREME COURT REPORTS (2010] 10 S.C.R.
A 9. In the result, the appeal is allowed in part and the
compensation awarded by the High Court in the sum of Rs.
4,70,0001- is enhanced to Rs. 6,04,800/-. The appellants shall
also be entitled to 9% simple interest per annum on the
enhanced amount from the date of filing of claim petition until
B the date of its actual payment. The parties shall bear their own
costs.
K.K.T Appeal partly allowed.
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