Supreme Court of India
P. S. SOMANATHAN AND ORS.versusDISTRICT INSURANCE OFFICER AND ANR.
- Citation
- 2011 INSC 131
- Decided
- 17 February 2011
- Disposal
- Appeal(s) allowed
- Bench
- G S SINGHVI
Holding
The appropriate multiplier is to be fixed based on the age of the deceased (or claimant whichever is higher) as per Sarla Verma, rendering the High Court's reduction to 5 incorrect and restoring the MACT award.
Summary
A 33‑year‑old unmarried man was killed by a lorry on a highway. His mother, brother and later the mother’s daughter filed a claim under Section 166 of the Motor Vehicles Act, 1988 seeking compensation. The Motor Accident Claims Tribunal (MACT) awarded Rs.1,71,600 using a multiplier of 16 based on the deceased’s age and dependency. The High Court reduced the award to Rs.85,000, applying a multiplier of 5 and holding that only the mother was the legal representative. The Supreme Court held that the multiplier must be determined by the age of the deceased (or claimant whichever is higher) as laid down in Sarla Verma, and that the High Court’s technical approach was erroneous. Consequently, the High Court judgment was set aside and the MACT award restored. The appeal was allowed.
Issues considered
- What multiplier should be applied for calculating compensation under Section 166 of the Motor Vehicles Act, 1988?
- Who is the proper legal representative of the deceased for the purpose of the claim?
- Whether the High Court erred in reducing the multiplier to 5 based on the mother’s age?
Legislation cited
- Motor Vehicles Act, 1988s. 163A, s. 166
Subjects
Motor Vehicles ActCompensationMultiplierLegal representativeMotor Accident Claims TribunalSarla VermaDependentsAccident liabilitySection 166Section 163A
Judgment
• [2011] 4 S.C.R. 367
P. S. SOMANATHAN AND ORS. A
v.
DISTRICT INSURANCE OFFICER AND ANR.
(Civil Appeal No. 1891 of 2011)
FEBRUARY 17, 2011
B
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Motor Vehicles Act, 1988 - ss. 166 and 163A - Motor
accident - Compensation claim - Quantum of compensation
- Fixation of - Appropriate multiplier - In the present case, C
the original claim petition had been filed by the mother and
brother of the deceased and the deceased was 33 years of
age when he died in the accident - The deceased was looking
after the entire family - Tribunal calculated compensation by
considering a multiplier of 16 - High Court, however, held that D
the deceased's mother was the real legal representative and
others could not claim to be the legal representatives of the
deceased, and accordingly reduced compensation by
applying a multiplier of 5 - Held: The High Court took a very
technical view in the matter of applying the multiplier - The . E
High Court could not have kept out of its consideration the
claim of the daughter of the first claimant, since later the
daughter was a/so impleaded in the claim petition .....
Reasoning of the High Court not correct in view of the ratio in,, ·
Sar/a Verma's case - Following the same, the High Court F
should have proceeded to compute the compensation on the
age of the deceased - Judgment of the High Court set aside
and the award of the Tribunal restored.
A 33 year old unmarried man died due to injuries
sustained in an accident when a lorry suddenly hit him G
while he was walking on the Highway. The lorry was
insured with the first respondent and was owned by the
second respondent.
367 H
368 SL'PREME COURT REPORTS •
[2011] 4 S.C.R.
A The appellants, who are family members of the
deceased, filed claim petition before the Motor Accident
Claims Tribunal (MACT) under Section 166 of the Motor
Vehicles Act, 1988, claiming Rs.1, 75,000/- as
compensation. The original claim petition was filed by the
B mother and brother of the deceased. Later on, the
daughter of the first claimant was also impleaded in the
claim petition. The MACT concluded that the accident had
occurred in view of the rash and negligent driving of the
second respondent; that the monthly income of the
c deceased was Rs.1,200/- and that he had been looking
after the entire family. By applying a multiplier of 16, the
MACT awarded a total compensation of Rs.1,71,600/-
together with interest at the rate of 12% p.a. and cost of
Rs.1,500/-. The first respondent appealed against the
judgment of the MACT before the High Court. The High
0
Court held that the mother of the deceased was the real
legal representative and others could not claim to be the
legal representatives of the deceased, and accordingly
applied a multiplier of 5 and thus reduced the
E compensation to Rs.85,000/- along with interest at the
rate of 12% p.a. Hence the present appeal against the
judgment of the High Court.
Allowing the appeal, the Court
F HELD: In the present case, the claimants had filed for
compensation under Section 166 of the Motor Vehicles
Act, 1988. The original claim petition had been filed by the
mother and brother of the deceased and the deceased
was 33 years of age when he died in the accident. For
G 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 a multiplier of 5,
whereas the Tribunal had calculated compensation by
H considering a multiplier of 16. The High Court
• P. S. SOMANATHAN AND ORS. v. DISTRICT
INSURANCE OFFICER
369
unfortunately took a very technical view in the matter of A
applying the multiplier. The High Court cannot keep out
of its consideration ttie claim of the daughter of the first
claimant, since the daughter was impleaded, and was 49
years of age. Admittedly, the deceased was looking after
the entire family. In determining the age of the mother, the B
High Court should have accepted the age of the mother
at 65, as given in the claim petition, since there is no
controversy on that. By accepting the age of mother at
67, the High Court further reduced the multiplier from 6
to 5, even if the reasoning of the High Court is accepted c
to be correct. The reasoning of the High Court is not
correct in view of the ratio in Sar/a Verma's case.
Following the same, the High Court should have
proceeded to compute the compensation on the age of
the deceased. The judgment of the High Court is therefore
0
set aside and the award of MACT is restored. [Paras 20,
21, 23 and 25] [378-0-E; G-H; 379-A-B, D]
Sar/a Verma (Smt.) & Ors. v. Delhi Transport Corporation
& Anr. (2009) 6 SCC 121 - relied on.
E
Concord of India Insurance Co. Ltd. v. Nirmala Devi
(1979) 118 ITR 507(SC); General Manager, Kera/a State
Road Transport Corporation, Trivandrum v. Mrs. Susamma
Thomas and Ors. AIR 1994 SC 1631; U. P. State Road
Transport Corporation and Ors. v. Trilok Chandra and Ors. F
(1996) 4 SCC 362; Tamil Nadu State Transport Corporation
Ltd. v. S. Rajapriya & Ors. AIR 2005 SC 2985; United India
Insurance Co. Ltd. v. Bindu & Ors. (2009) 3 SCC 705; Supe
Dei (Smt) & Ors. v. National Insurance Co. Ltd. & Anr. (2009)
4 SCC 513 and New India Assurance Co. Ltd. v. Charlie & G
Anr.(2005) 10 SCC 720 - referred to.
Case Law Reference:
(1979) 118 ITR507(SC) referred to Para 11
AIR 1994 SC 1631 referred to Para 12, 14, 19 H
370 SUPREME COURT REPORTS [2011] 4 S.C.R. •
A (1996) 4 sec 362 referred to Para 14, 19
AIR 2005 SC 2985 referred to Para 15
(2009) 3 sec 105 referred to Para 16
(2009) 4 sec 513 referred to Para 17
B
(2009) 6 sec 121 relied on Para 18, 22, 23,
24
(2005) 10 sec 120 referred to Para 19
c CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1891 of 2011.
From the Judgment & Order dated 5.1.2007 of the High
Court of Kerala at Ernakulam in MFA No. 444 of 2001.
D Alex Jeseph for the Appellant.
R. Sathish for the Respondent.
The Judgment of the Court was delivered by
E
GANGULY, J 1. Delay condoned.
2. Leave granted.
3. One Suresh Chandra Babu, was walking along the side
F of Alappuzha-Kollam National Highway near Punnapra junction
on 25.07.1994, when a lorry (bearing registration No. KL 4/
6802) which was being driven rashly suddenly hit him. As a
result of which he sustained serious injuries and died on the
spot. The lorry which was insured with the first respondent was
G owned by the s".lcond respondent.
4. The appellants (claimants) who are the family members
of the deceased filed a claim petition before the Motor Accident
Claims Tribunal (MACT), claiming Rs.1,75,000/- as
compensation. The same was contested by the first and second
H respondents.
• P. S. SOMANATHAN AND ORS. v. DISTRICT
INSURANCE OFFICER [ASOK KUMAR GANGULY, J.]
371
5: Before the MACT, the following issues were framed: A
"i. Whether the accident was due to the rash and
negligent driving of the second respondent herein?
ii. Whether the petitioners were entitled to get ~ny
compensation and if so, what was the quantum and B
who all were liable?"
6. Based on the evidence on record, MACT concluded that
the accident had occurred in view of the rash and negligent
driving of the second respondent and it awarded a total c
compensation of Rs.1, 71,600/- together with interest at the rate
of 12% p.a. and cost of Rs.1,500/-. It calculated the same as
follows:
" ... Suresh Chandra Babu aged 33 years died due to
injuries sustained in the accident. PW1 swears that at the D
time of accident Suresh Chandra Babu was working as
an·operator in Motherland Industries, Punnapra and was
getting RsA,500/- p.m. In Ext. A1 FIR, it is stated that
Suresh Chandra Babu was working as a mechanic
operator in Motherland Industries Company. PW1 swears E
that Suresh Chandra Babu was unmarried and he was
looking after the affairs of the family. Considering the
nature of the work done by deceased Suresh Chandra
Babu, his monthly income can be assessed as Rs.1,200/
- for the purpose of calculating just compensation. After F
deducting his personal expenses he would be contributing
Rs.800/- p.m. to his mother- the first petitioner. In this
manner, the annual dependency of the first petitioner of the
deceased comes to Rs.9,600/-. In this case 16 can be
determined as suitable multiplier. Therefore, the amount G
of compensation on account of loss of dependency comes
to Rs.1,53,000/-. Rs.15,000/- can be awarded towards
compensation for pain and suffering. Rs.1,900/- can be
awarded towards transportation charges and Rs.2,000/-
H
372 SUPREME COURT REPORTS [2011] 4 S.C.R.
A can be awarded towards funeral expenses. Thus, in total,
the petitioner is entitled to get Rs.1,71,600/- as
compensation."
7. The first respondent appealed against the judgment of
the MACT before the High Court of Kerala at Ernakulam.
8
8. The High Court, vide its impugned judgment, reduced
the compensation to Rs.85,000/- along with interest at the rate
of 12% p.a., the relevant portion of High Court judgment reads
as follows:
c
"Heard both sides. The learned Government Pleader
submits that father was aged about 70 years even at the
time of the accident and therefore the Tribunal had
committed an error in fixing the multiplier at 16 whereas it
D has to only apply a multiplier of 5. In the award, the age of
first claimant is not shown but the daughter of the first
claimant namely Leela has filed an affidavit before this
Court for getting impleaded as I.A. 1407/06 where her age
is shown as 61 years. So it is clear that she would be 49
years at the time of the accident and therefore even if the
E minimum age that can be fixed for the mother will be 67
years and not less. The mother is the real legal
representative and others cannot claim the status of legal
representative and therefore the appropriate multiplier to
be used in this case is only 5. It is true that the Tribunal
F has taken his income at Rs.1,200/- per month whereas
claimants claimed that the deceased was getting an
amount of Rs.1,500/- as his income. We fix it at Rs.1,500/
- deduct 1/3rd for personal expenses and applying a
multiplier of 5 the loss of dependency compensation would
G come to Rs.60,000/-. The Tribunal has awarded
Rs.15,000/- towards pain and suffering, Rs.1,000/- towards
transportation charges and Rs.2,000/- for funeral
expenses. They are only just and reasonable and we do
not find any ground to interfere with the same. But the
H Tribunal has not awarded any amount towards love and
• P. S. SOMANATHAN AND ORS. v. DISTRICT
INSURANCE OFFICER [ASOK KUMAR GANGULY, J.]
373
affection. l::lence, we grant an amount of Rs.5,000/- under A
that head and also award a sum of Rs.2,500/- towards loss
of estate. Therefore, the total compensation that the
claimants are entitled to will be Rs.85,000/-."
9. Aggrieved with the judgment of the High Court, the 8
appellants (claimants) filed a Special Leave Petition before this
Court.
10. On the question of fixing the quantum of compensation
in motor accident claim cases, this Court has laid down several
guidelines. C
11. In the case of Concord of India Insurance Co. Ltd. v.
Nirrria/a Devi [(1979) 118 ITR 507(SC)], Justice Krishna Iyer,
speaking for a Bench of this Court, observed that the
determination of compensation must be liberal, not niggardly o
since the law values life and limb in a free country in generous
scales.
12. In the case of General Manager, Kera/a State Road
Transport Corporation, Trivandrum v. Mrs. Susamma
Thomas and Ors. [AIR 1994 SC 1631], this Court held that: E
"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, e.g., the life expectancy of the deceased F
and the dependants, the amount that the deceased would
have earned during the remainder of his life, the amount
that he would have contributed to the dependants during
that period, the chances that the deceased may not have
lived or the dependants may not live up to the estimated G
remaining period of their life expectancy, the chances that
the deceased might have got better employment or income
or might have lost his employment or income together.
The manner of arriving at the damages is to ascertain the
H
A
374 SUPREME COURT REPORTS [2011] 4 S.C.R.
net income of the deceased available for the support of
•
himself and his dependants, and to deduct therefrom such
part of his income as the deceased was accustomed to
spend upon himself, as regards both self- maintenance
and pleasure, and to ascertain what part of his net income
B the deceased was accustomed to spend for the benefit of
the dependants. Then that should be capitalized by
multiplying it by a figure representing the proper number
of year's purchase.
Much of the calculation necessarily remains in the realm
c of hypothesis "and in that region arith:-netic is a good
servant but a bad master" since there are so often many
imponderables. In every case "it is the overall picture that
matters" and the court must try to assess as best as it can
the loss suffered."
D
13. The Bench also observed that the proper method of
computation is the multiplier-method, which was an accepted
method of arriving at 'just' compensation. Any departure, save
in exceptional and extraordinary cases, would introduce
E inconsistency of principle, lack of uniformity and an element of
unpredictability for the assessment of compensation. Further,
the Bench held that the multiplier was determined by two factors,
namely, the rate of interest appropriate to a stable economy
and the age of the deceased or of the claimant whichever was
F higher.
14. The principles laid down in Susamma (supra) were
upheld in the case of U. P. State Road Transport Corporation
and Ors. v. Trilok Chandra and Ors. [(1996) 4 SCC 362].
G 15. In the case of Tamil Nadu State Transport Corporation
Ltd. v. S. Rajapriya & Ors. [AIR 2005 SC 2985], this Court
observed that the choice of the multiplier was to be determined
by the age of the deceased (or that of the claimants whichever
is higher) and by the calculation as to what the capital sum, if
H invested at a rate of interest appropriate to a stable economy,
• P. S. SOMANATHAN AND ORS. v. DISTRICT
INSURANCE OFFICER [ASOK KUMAR GANGULY, J.]
375
would yield by way of annual interest. In ascertaining this, regard A
was also to be had to the fact that ultimately the capital sum
would also be· consumed-up over the period for which the
dependency was expected to last.
16. In United India Insurance Co. Ltd. v. Bindu & Ors.
8
[(2009) 3 SCC 705], this Court again reiterated that the choice
of the multiplier was to be determined by the age of the
deceased (or that of the claimants whichever is higher) and by
the calculation of a capital sum which, if invested at a rate cf
interest appropriate to a stable economy, would yield by way C
of annual interest.
17. In Supe Dei (Smt) & Ors. v. National Insurance Co.
Ltd. & Anr. [(2009) 4 SCC 513], the Court observed that while
considering the question of just compensation payable in a
case all relevant factors including appropriate multiplier had to D
be considered, and that the Second Schedule under Section
163-A to the Motor Vehicles Act, 1988, which gave amount of
compensation to be determined for purpose of claim under the
section, could be taken as a guideline while determining the
compensation under Section 166 of the Act. E
18. In Sar/a Verma (Smt.) & Ors. v. Delhi Transport
Corporation & Anr. [(2009) 6 SCC 121], this Court formulated
the principles very lucidly and which are quoted below:
"Basically only three facts need to be established by the F
claimants for assessing compensation in the case of death:
(a) age of the deceased;
(b) income of the deceased; and the
G
(c) the number of dependents.
The issues to be determined by the Tribunal to arrive at
the loss of dependency are:
H
A
376 SUPREME COURT REPORTS [2011 I 4 S.C.R.
(i) additions/deductions to be made for arriving at the
•
income;
(ii) the deduction to be made towards the personal living
expenses of the deceased; and
B (iii) the multiplier to be applied with reference of the age
of the deceased.
If these determinants are standardized, there will be
uniformity and consistency in the decishns. There will
c lesser need for detailed evidence. It will also be easier for
the insurance companies to settle accident claims without
delay.
To have uniformity and consistency, the Tribunals should
determine compensation in cases of death, by the
D following well-settled steps:
Step 1 (Ascertaining the multiplicand)
The income of the deceased per annum should be
E determined. Out of the said income a deduction should be
made in regard to the amount which the deceased would
have spent on himself by way of personal and living
expenses. The balance, which is considered to be the
contribution to the dependant family, constitutes the
multiplicand.
F
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and period of
active career, the appropriate multiplier should be selected.
G This does not mean ascertaining the number of years he
would have lived or worked but for the accident. Having
regard to several imponderables in life and economic
factors, a table of multipliers with reference to the age has
been identified by this Court. The multiplier should be
H chosen from the said table with reference to the age of the
• P. S. SOMANATHAN AND ORS. v. DISTRICT
INSURANCE OFFICER [ASOK KUMAR GANGULY, J.]
deceased.
377
A
Step 3 (Actual calculation}
The annual contribution to the family (multiplicand) when
multiplied by such multiplier gives the 'loss of dependency'
to the family." B
19. Further, this Court considered the principles laid down
in Susamma (supra), Trilok Chandra (supra) and New India
Assurance Co. Ltd. v. Charlie & Anr. [(2005) 10 SCC 720] and
gave the following table for multiplier: c
Age of Multiplies Multiplier Multiplier Multiplier Multiplier
the Scale Scale Scale specified actually
Deceased as as in in used in
envisaged adopted Trilok Second Second
in by Trilok Chandra Column Schedule to
D
Susamma Chandra as in the the MVAct
Thomas clarified Table in (as seen
in Charlie Second from the
Schedule quantum of
to the MV Com pen-
M. sation)
E
(1) (2) (3) (4) (5) (6)
Up to - - - 15 20
15 yrs
15 to 16 18 18 16 19
20 yrs F
21 to 15 17 18 17 18
25 yrs
26 to 14 16 17 18 17
30 yrs
G
31 to 13 15 16 17 16
35 yrs
36 to 12 14 15 16 15
40 yrs
H
378 SUPREME COURT REPORTS
e
[2011] 4 S.C.R.
A 41 to 11 13 14 15 14
45 yrs
46 to 10 12 13 13 12
50 yrs
51 to 9 11 11 11 10
8
55 yrs
56 to 8 10 09 8 8
60 yrs
61 to 6 08 07 5 6
c 65 yrs
Above 5 05 05 5 5
65 Yrs .
20. In the present case, the claimants had filed for
compensation under Section 166 of the Motor Vehicles Act,
0
1988. The original claim petition had been filed by the mother
and brother of the deceased and the deceased was 33 years
of age when he died in the accident.
21. For the purpose of calculating the multiplier, the High
E 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 a 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 Sar/a Varma (supra), in a very well
considered judgment, is to be followed.
23. The High Court unfortunately took a very technical view
G m the matter of applying the multiplier. The High Court cannot
keep out of its consideration the claim of the daughter of the
first claimant, since the daughter was impleaded, and was 49
years of age. Admittedly, the deceased was looking after the
entire family. In determining the age of the mother, the High
H
• P. S. SOMANATHAN AND ORS. v. DiSTRICT
INSURANCE OFFICER [ASOK KUMAR GANGULY, J.]
379
Court should have accepted the age of the mother at 65, as A
given in the claim petition, since there is no controversy on that.
By accepting the age of mother at 67, the High Court further
. reduced the multiplier from 6 to 5, even if we accept the
reasoning of the High Court to be correct. The reasoning of the
High Court is not correct in view of ttie ratio in Sar/a Verma B
(supra). Following the same the High Court should have
proceeded to compute the compensation on the age of the
deceased.
24. Thus, the finding of the High Court is contrary to the C
ratio in Sar/a Verma (supra), which is the leading decision on
this question and which we follow.
25. This Court, therefore, cannot sustain the High Court
judgment and is constrained to set aside the same. The award
of MACT is restored. D
26. The appeal is allowed. No costs.
8.8.B.- Appeal allowed.
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