Holding

For claims under Section 166, compensation must be calculated using the multiplier table laid down in Sarla Verma, split‑multiplier is not permissible, and interest should be fixed at 12% per annum, with a directive to amend the Second Schedule to reflect current economic conditions.

Summary

The petitioners claimed compensation under Section 166 of the Motor Vehicles Act, 1988 after the death of a 48‑year‑old employee who earned Rs.13,331 per month; the Claims Tribunal awarded Rs.9.03 lakh, which the Karnataka High Court enhanced to Rs.11.25 lakh by applying a split‑multiplier and a lower multiplier of 10. The Supreme Court examined whether the multiplier system in the Second Schedule of Section 163A applies to Section 166 claims, whether a split‑multiplier is permissible, the correct multiplier for a 48‑year‑old with four dependents, the appropriate deduction for personal expenses, and the rate of interest under Section 171. It held that the Second Schedule is not binding for Section 166 claims, that split‑multiplier cannot be used, and that the multiplier must follow the Sarla Verma table (13 for the age group), with a 1/4 deduction for four dependents, and that interest should be fixed at 12% per annum. Consequently, the appeal was allowed, the compensation was set at Rs.23.43 lakh with 12% interest, and the Court directed the Central Government to amend the Second Schedule to reflect current cost of living.

Issues considered

The multiplier prescribed in the Second Schedule of Section 163A is binding for compensation claims under Section 166.
Whether a split‑multiplier method may be applied in Section 166 claims.
The appropriate multiplier for a deceased aged 48 years with four dependents.
The correct percentage deduction for personal and living expenses of the deceased.
The rate of interest to be awarded under Section 171 of the Motor Vehicles Act.
The necessity and procedure for amendment of the Second Schedule in view of inflation and increased life expectancy.
Compliance with reporting requirements of Sections 158(6) and 166(4).

Legislation cited

Fatal Accident Act, 1855
Motor Vehicles Act, 1988s. 140, s. 158(6), s. 163, s. 163A, s. 163A(3), s. 166, s. 168, s. 171
Workmen's Compensation Act, 1923

Subjects

Motor Vehicles ActSection 166Multiplier methodSplit multiplierSecond ScheduleCompensationInterest rateAmendmentFatal accident

Judgment

[2013) 16 S.C.R. 831

PUTTAMMA & ORS. A
v. .
K. L. NARAYANA REDDY & ANR.
· (Civil Appeal No. 10918 ·of 2013)

DECEMBER 9, 2013
B
[G.S. SINGHVI AND SUDHANSU
JYOTI MUKHOPADHAYA, JJ.]

Motor Vehicles Act, 1988 - s.166 - Accidenr claim -
Award of compensation - Use of multiplier method - Selection C
of mu/tip-lier based on age group of the deceased/victim -
Split multiplier method - Applicability of - Held: The 1988 Act
does no(envisage application of split multiplier - In absence .
of any specific reason and evidence on record, Tribunal or
Court should not apply split multiplier in routine course and D
should apply multiplier as per decision of Supreme Court in
the case of Sar/a Verma as affirmed in the case of Reshma
Kumari.

Motor Vehicles Act, 1988- ss.163A and 166- Principles E
relating to determination of liability and quantum of
cf;;bmpe(lsation different for claims made uls. 163A and claims ·
'ftlEJde u/s. 166 """ Structured formula as prf:tscribed under the
'Second Schedule in s. 163A and the multiplier mentioned
~-. :'"' '

:therein not binding for claims uls. 166.
F
Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Applicability and purpose of - Discussed.

Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Amendment in -Requirement of - Held: The Second G
Schedule was enacted in 1994 - It ha$ now become
redundant, irrational aqd unwo.rkable, due to changed
scenario including the present cost of Jiving and cu"ent rate
of inflation and increased life expectancy - Specific direction
831 H
832 SUPREME COURT REPORTS [2013] 16 S.C.R.

A to Central Government to make proper amendments to the •
Second Schedule table keeping .in view the present cost of
living, subject to amendment of Second Schedule as
proposed or may be made by the Parliament.
Motor Vehicles Act, 1988 - s. 171 - Accident claim -
8
Compensation - Award of interest - Duty bestowed upon.
Tribunal and Courts - Held: Under s.171, no rate of interest
has been fixed and duty is bestowed upon the Tribunal to fix
the rate of interest - Tribunals and Courts to decide the rate
of interest after taking into consideration the rate of interest
C allowed by the Supreme Court in similar case and other
factors such as inflation, change in economy, policy adopted
by the Reserve Bank of India from time to time and the period
since when the case is pending.

o Motor Vehicle Act, 1988- s.168- Compensation - Grant
of - Difference between English law and Indian law - Held:
According to the English Law compensation/ damages are
payable according to the proportionate loss whereas in India
compensation is payable which appears to the Tribunal to be
E just is payable - English Fatal Accidents Act, 1846.
Motor Vehicles Act, 1988 - s.166 - Accident claim -
Compensation - Determination of - Deceased was 48 years
old and drawing gross salary of Rs. 13,3311- per month and
paying a sum of Rs.8891- per month towards tax- Decea$ed
F left behind four dependent family members - Tribunal
awarded compensation of Rs. 9. 3 lakhs - High Court
enhanced the compensation to Rs.11.25 lakhs - On appeal,
held: Since deceased left behind four dependent family
members, deduction towards his personal and living expenses
G should be 114th - In appeal filed by the claimants, High Court
instead of deciding just compensation allowed meager
enhancement of compensation - High Court introduced the
concept of split multiplier and departed from the multiplier
system generally used in light of the de'cision in Sar/a Verma
H case without disclosing any reason - High Court also did not
. PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 833
ANR.
consider the question of prospect of future increase in salary A
'of the deceased though it noticed that the deceased would
have continued in pensionable services for more than 10
years - When age of the deceased was 48 years at the time
of death it wrongly applied multiplier of 10 and not 13 as per
decision in 'Sar/a Verma' - Thus, judgment of High Court 8
perverse and contrary to the evidence on record and fit to be
set aside for having not considered the future prospects of the
deceased and also for adopting split multiplier method
against the law laid down by Supreme Court - Claimants
entitled for total compensation of Rs.23,43 lakhs and also c
interest on the enhanced compensation at the rate of 12% p.a.
from the date of filing of the complaint petition. ·
'R' aged about 48 years, while returning -home on his
scooter, met with accident with a Tanker driven by its
driver in a rash and negligent manner. On account of the D
said accident, 'R' fell down and sustained grievous
injuries all over the body, and later succumbed to the
injuries. His wife and children preferred the claim petition
under Section 166 of the Motor Vehicles Act, 1988,
claiming compensation of Rs.30,00,0001-. The Tribunal E
held that the accident occurred on account of rash and
negligent driving by the driver of the Tanker. It took into
consideration the fact that the deceased was drawing a
salary of Rs.13,3311- p.m. After deduction of the Income
Tax, Professional Tax and personal expenses from the F
basic salary it awarded a compensation of Rs.9,03,6001-.
On appeal by the claimants, the High Court enhanc~d the .
compensation to Rs.11,25,0001-. The High Court rounded
the age of the deceased as 50 years; applied Rs.8.,295/-
as multiplicand and deducted 1/3rd amount towards G
personal expenses. The High Court split the multiplier and
applied multiplier of 10 for the multiplicand of Rs.8,2951-
and multiplier of 2 for the multiplicand of Rs.4,147/-.
The grievances of the claimants are summarised as
follows:- H
834 SUPREME COURT REPORTS [2013] 16 S.C.R.

A (i) Deduction of 1/3rd amount towards personal
expenses in all cases is arbitrary and unreasonable.

(ii) Multiplier under Second Schedule cannot be
applied. in for determination of compensation under
8 Section 166 of the Motor Vehicles Act, 1988.
(iii) Split multiplier cannot be made applicable in the
facts of the case.

(iv) Interest granted by the Tribunal and the High
C .Court was on the lower side which should be 9% in place
of 6% per annum.

At the time of argument, the appellants insisted to
issue a direction on the authority to comply with Section
0 158 (6) and 166 (4) of the Act, 1988. Further prayer was
made to direct the Central Government to amend the
Second Schedule of the Act, 1988 in light of the present
cost of living which increased manifold.

Allowing the appeal, the Court
E
HELD:1.1. Fatal Accident Act, 1855 was the first
Indian legislation that provided a right to claim
compensation for the death ·of a person caused by
wrongful act of another. It was enacted in accordance
F with English Fatal Accidents Act, 1846.

Indian Fatal Accidents Act, 1855 followed the
principles in English Fatal Accident Act, 1896 with regard
to payment of compensation. Thus, compensation/
G damages proportionate to the loss resulting from such
dea.th was payable. [Paras 11, 12] [847-G; 848-F-G]

1.2. Motor Vehicle Act was enacted in 1939. Later, by
Act No. 100 of 1956 with effect from 16th February, 1957
Motor Vehicle Act, 1939 was amended and claims
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 835
• ANR.
tribunals were constituted under Section 110. In 1988, A
Motor Vehicle Act, 1939 was repealed and Motor Vehicle
Act, 1988 came into force. By bringing Section 168 of the
Motor Vehicle Act, 1988 it was reiterated that the amount
of compensation payable would be which appeared to be
just. [Paras 14, 15] (849-D, H; 850-A] B

1.3. Thus according to the· English Law
compensation/dam.ages were payable according to the
proportionate loss whereas in India compensation is
payable which appears to the Tribunal to be just is C
payable. The approacl'I of the Courts according to the
English law and according to the Indian Law have to be
distinct and separate. Indian Law recognizes just
compensation whereas English law required
compensation proportionate to the loss suffered. English
courts
. ·, ..
have been calculating loss of money as a bargain
as to how much m'onetary loss has been caused to the
0

claimant, as a result the death of bread earner/deceased.
The English Law being different, English judges were
having different approach towards the grant of
compensation to the deceased's family. [Para 16) [850~F- . E
H; 851-A]

2.. Though the method of multiplier is one of the best
methods in providing compensation while choosing the
multiplier the court/~~i.bunal has to take into consideration F
the rising inflation, increasing salaries and increasing
cost of living. Therefore, just compensation has to be.
determined keeping in view the Indian background, the
Indian culture, the Indian legal background, and the
socio-cultural circumstances existing in India. [Para 19] G
[851-E-F]

3.1. Section 163A of the Motor Vehicles Act, 1988
contains special provisions as to payment of
compensation on:;$tructured formula basis. :rhe Second H
836 SUP.REME COURT REPORTS [2013] 16 S.C.R.

A Schedule referred to in Section 163A of the Act, 1988
prescribes structured formula for the purpose of grant of
compensation. By reasons thereof, a multiplier system
has been introduced in terms of which amount of
compensation is required to be calculated having regard
B to the age of victim and his annual income. In terms of
the note appended to the said Schedule, the amount of
compensation so arrived at in cases of fatal accident, is
to be reduced by 1/3rd in consideration of the expenses
which the victim would have incurred towards
c maintaining himself. The Second Schedule mandates that
the amount of compensation shall not b·e less than
Rs.50,000/-. It also prescribes for grant of compensation
under different heads such as general damage in case
of death, general case of injury and disability; disability
o in non-fatal accident and notional income for
compensation. for those who had no income at the time
of accident. The maximum amount which can be paid
under different heads has been specified therein. Section
166 of the Act, 1988 relates to application for
E compensation preferred before the Claims Tribunal.
[Paras 23, 24, 26) [854-H; 855-F-H; 856-A-B, DJ

3.2. In Sar/a Verma case, this Court compared
Section 163A with Section 166 of the Act, 1988 and
reiterated that the principles relating to determination of
F liability and quantum of compensation were different for
the claims under Section 163A and claims made under
Section 166. Thus it will be evident from the provisions
of the Act that the structured formula as prescribed under
Second Schedule and the multiplier mentioned therein is
G not binding for claims under Section 166 of the Act, 1988.
[Paras 28, 29) [860-C-E]
Deepa/ Girishbhai Son and others vs. United India
Insurance Co. Ltd., Baroda (2004) 5 SCC 385 and Sar/a
H
.,

PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 837
ANR.
Verma (Smt.) and others vs. Delhi Transport Corporation and A
another 2009(6) SCC 121: 2009 (5) SCR 1098 - referred to. .

4. Multiplier: This Court in order to bring uniformity
and certainty in granting compensation always ~nvisaged
payr:nent of just compensation based on multiplier B
method which is accepted method for determining and .
ensuring payment of just compensation. [Para 30) [860·
E-F]'

Jyotsana Dey and Ors. vs. State of Assam & Ors., 1987
ACJ 172; Hardeo Kaur & Ors. vs. Rajasthan State Transport C·
Corporation & Anr. (1992) 2 SCC 567: 1992 (2) SCR 272;
Sar/a Verma (Smt.) and others vs. Delhi Transport
Corporation and another 2009(6) sec 121: 2009 (5) SCR
1098 and Resh ma Kumari & Ors. vs. Madan Mohan & Anr.
(2013) 9 SCC 65: 2013 (2) SCR 706 - referred to. D

5. Split Multiplier: For determination of compensation
in motor accident claims under Section 166, this Court
always followed multiplier method. As there were
inconsistencies in selection of multiplier, this Court io E
Sar/a Verma prepared a table for selection of multiplier
based on age group of the deceased/victim. Act, 1988
does not envisage application of split multiplier. In
absence of any specific reason and evidence on record
the Tribunal or th' Court should not apply split multiplier F
in routine course and should apply multiplier as per
decision of this Court in the case of Sar/a Verma as
affirmed in the case of Reshma Kumari. [Paras 32, 34)
[865-E-F; 866-E)
K.R. Madhusudhan and others vs. Administrative Officer G
and another (2011) 4 sec 689: 2011 (2) SCR 1061; Sar/a
Verma (Smt.) and others vs. Delhi Transport Corporation and
another 2009(6) sec 121: 2009 (5) SCR 1098 and Resh ma.
Kumari & Ors. vs. Madan Mohan & Anr. (2013) 9 SCC 65: H
2013 (2) SCR 706 - referred to.
838 SUPREME COURT REPORTS [2013] 16 S.C.R.

A 6. Compliance of Section 158(6) and 166(4) of the Act,
1988: Information regarding any accident involving death
or bodily injury to any person is to be recorded or
reported under Section 158(6) of the Act, 1988. Sub
Section (4) of Section 166 of the Act,1988 substanUates
B the object of enacting the provisions of sub-section (6)
of Section 158. [Para 35] [866-F-G; 867-B]

General Insurance Council & Others v. State of Andhra
Pradesh & Others. (2007) 12 SCC 354: 2007 (8) SCR 192;
C Jai Prakash v. National Insurance Co. Ltd. & Ors (2010) 2
SCC 607: 2009 (16) SCR 710 - referred to.

7.1. Applicability of Second Schedule in the present
scEmario: By Act 54 of 1994, Section 163-A - Special
Provisions as to payment of compensation on structured
D formula basis has been inserted with effect from
14.11.1994. Section 163-A envisages that notwithstanding
any contained in the Act or in any other law or instrument
having the force of law, the owner of the motor vehicle
shall be liable to pay in the case of death or permanent
E disablement due to accident arising out the use of motor
vehicle, compensation as indicated in the second
schedule, to the legal heirs or the victim, as the case may
be. The purpose of Section 163-A and the Second
Schedule is to avoid long-drawn litigat!on and delay in
F payment of compensation to the victims or his heirs who
are in dire need of relief. Sub-section(2) of Section 163-A
envisages that the claimant shall not be required to plead
or establish that the death or permanent disablement in
respect of which the claim has been made was due to any
G wrongful act or neglect or default of the owner of the
vehicle or vehicles concerned or of any other person.
Sub-section (3) of Section 163-A envisages that the
Central Government may, keeping in view the cost of
living by notification in the Official Gazette, from time to
H tttne amend the second schedule. [Para 39] [872 B-G]
PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 839
ANR.
7 .2. Perusal of Second Schedule shows that the A
legal' heirs of the· deceased person having an annual
income, minimum Rs.3,000/- and maximum Rs.40,000/-
could only derive benefit under. Section 163A of the Act,
1'9~8. Legal heirs of the deceased person whose income
is more than Rs.40,000/- per annum i.e. approximately B
Rs.3,600/- per month cannot derive advantage of the
Second Schedule. The largest multiplier envisaged is 18
in the case of victim "above 25 years of age" but not
exceeding 30 years". The multiplier for the higher age is
required to be re-looked in view of increase in life c
expectancy. [Para 40) [876-A-C]

7 .3 .. A minimum amount of compensation of
Rs.50,000/- was fixed under Second Schedule in the year
1994. In addition, general damages in lieu of funeral D
expenses, loss of consortium (if beneficiary is the
spouse), medical expenses, pain and suffering, grievous
injuries, non-grievous injuries, etc. are also provided for.
But no revision was made to these amounts in these 19
years. [Para 41] [876-C-D]
E
7.4. Keeping in view the cost of living, the Central
Government is required to amend the Second Schedule
[See Section 163A (3)]. The Second Schedule was
enacted by Act 54 of 1994 w.e.f. 14th November, 1994.
Now more than 19 years have passed but no amendment F
has been m'ade. Cost of living has gone up many fold. The
Second Schedule as was enacted in 1994 has now
become redundant, irrational and unworkable, due to
changed scenario including the present cost of living and
current rate of inflation and increased life expectancy. G
[Paras 52, 53) [887-C-E]
7 .5.The Central Government was bestowed with
duties to amend the Second Schedule in view of Section
163-A(3), but it failed to do so for 19 years in spite of H
840 SUPREME COURT REPORTS [2013] 16 S.C.R.

A repeated observations of this Court. It is proper to issue
specific direction to the Central Government through the
Secretary, Ministry of Road Transport & Highways to
make the proper amendments to the Second Schedule
table keeping in view the present cost of living, subject
B to amendment of Second Schedule as proposed or may
be made by the Parliament. Accordingly, the Central
Government is directed to do so immediately. Till such
amendment is made by the Central Government in
exercise of power vested under sub-section (3) of
c Section 163A of Act, 1988 or amendment is made by the
Parliament, it is held and directed that for children upto
the age of 5 years shall be entitled for fixed compensation
of Rs.1,00,000/-(rupees one lakh) and persons more than
5 years of age sha.11 be entitled for fixed compensation of
0 Rs.1,50,000/-(rupees one lakh and fifty thousand) or the
amount may be determined in terms of Second Schedule
whichever is higher. Such amount is to be paid if any
application is filed under Section 163A of the Act, 1988.
[Para 56) [890-B-E]
E UP. State Road Transport Corporation & Ors. v. Trilok
Chandra & Ors. (1996) 4 SCC 362: 1996 (2) Suppl. SCR
443; Oriental Insurance· Co. Ltd. v. Hansrajbhai V. Koda/a
(2001) 5 SCC 175: 2001 (2) SCR 999; Deepal Girishbhai
Son and others vs. United India Insurance Co. Ltd., Baroda
F (2004) 5 SCC 385 and Sar/a Verma (Smt.) and others vs.
Delhi Transport Corporation and another 2009(6) SCC 121:
2009 (5) SCR 1098 - referred to.

8. Grant of Interest: Section 171 of the Act, 1988 deals
G with the award of interest where any claim is allowed.
Under the said provision no rate of interest has been
fixed.and its duty is bestowed· upon the Tribunal to fix the
rate of interest. This question is kept open· for Tribunals
and Courts to decide the rate of interest after taking into
H consideration the rate of interest allowed by the Supreme
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 841
ANR.
Court in similar case and other factors such as inflation, A
change.in economy, policy adopted by the Reserve Bank
.of India from time to time and the period since when the
case is pending. [Paras 57, 62] (890-F, H; 892-E-F]

. · Kaushnuma Begum v. New India( Assurance Co. Ltd. & B
Ors. (2001) 2 SCC 9: 2001 f{) SCR 8; Abati Bezbaruah v.
Deputy Director General, Geological, Survey of India & Anr.
. (2003) 3 SCC 148: 2003 (1) SCR 1229; and Supe Dei v.
National Insurance Co. Ltd.& Anr. (2009) 4 SCC 513 -
referred to.
c.
9.1. In the present case, the deceased was .drawing
gross'salary of Rs. 13,3311- per month and he was paying
a sum of Rs.789/- per month towards income tax and an
amount of Rs.1001- per month towards professional tax.
Thus he was paying total amount of Rs.8891- per month D
towards tax and if that amount is deducted from. the
gross income of the deceased it comes to Rs.12,442/- per
month. The deceased was 48 years old at the time of
death. He would have continued in service for another 12
years and he would have been entitled for pension. · E
Therefore, if increase in the future income is taken at 50%
it will come to Rs.18,663/- (Rs.12,442/- +Rs. 6221). As per
decision in 'Sar/a Verma' the deduction towards personal
and living expenses of the deceased should be one-third
(1/3rd) where the number of dependent family members F
is 2 to 3; one-fourth· (1 /4th) where the number of
dependent family members is 4 to 6 and one-fifth (1/5th)
where the number of dependent family members exceeds
6. In the present case, there are four dependent family .
members. Therefore, the deduction towards personal and G
living expenses of the deceased should be 1/4th. If 1/4th
amount is deducted from the income of the deceased it
will come to Rs.13,998/- (Rs. 12,442/- + Rs. 6,221 - Rs.
4665). At the time of accident, the, deceased was 48 years
old, hence on the basis of decision in 'Sar/a Verma' H
842 .SUPREME COURT REPORTS [2013] 16 S.C.R.

A multiplier of 13 will be applicable. In that case the
claimants should be entitled to get the following benefits:

(i) Amount of compensation with 12 months salary
and 13 as multiplier (13,998/- x 12 x13) Rs.
B 21,83,688/-

(ii) Compensation to the famJly members (children
and family members other than wife) for loss of
love and affection, deprivation of protection,
social security etc. Rs. 1,00,000/-
c
(iii) Compensation to the widow of the deceased for
loss of love and affection, pains and sufferings,
loss of -consortium, deprivation of protection,
social security etc. Rs. 50,000/-
D
(iv) Cost incurred on account of funeral and ritual
expenses Rs. 10,000/-

Total Compensation Rs.23,43,688/- [Para 63)
[892-G-H; 893-A-H]
E
9.2. In the appeal filed by the claimants before the
High Court, the High Court instead of deciding the just
compensation allowed meager enhancement of
compensation. In doing so, the High Court introduced the
F concept of split multiplier and departed from the
multiplier system generally used in light of the decision
in Sar/a Verma case without disclosing any reason. The
High Court also did not consider the question of prospect
of future increase in salary of the deceased though it
G noticed that the deceased would have continued in
pensionable services for more than 10 years. When the
age of the deceased was 48 years at the time of death it
wrongly applied multiplier of 10 and not 13 as per
decision in 'Sar/a Verma'. Thus, the judgment of the High
H Court is perverse and contrary to the evidence on record
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 843
ANR.
and is fit to be set aside for having not considered the A
future prospects of the deceased and also for adopting
split multiplier method against the law laid down by this
Court. The impugned judgment, is accordingly, set aside
and it is held that the claimants are entitled for total
compensation of Rs.23,43,688/-. They shall also get B
interest on the enhanced c::ompensation at the rate of
12% per annum from the date of filing of the complaint
petition. Respondent No.2-lnsurance Company is
directed to pay enhanced/additional compensation and
interest to the claimants within a period of three months. c
[Para 64] [894-A-F]
Case Law Reference :
(2004) 5 sec 385 referred to Para 27
2009 (5) SCR 1098 referred to Para 28 D

1987 ACJ 172 referred to Para 30
1992 (2) SCR 272 referred to Para 30
2013 (2) SCR 706 referred to Para 31 E
2011 (2) SCR 106 referred to Para 33
2007 (8) SCR 192 referred to Para 36
2009 (16) SCR 710 referred to Para 37 F
1996 (2) Suppl. SCR 443 referred to Para 43
2001 (2) SCR 999 referred to Para 44
2001 (1) SCR 8 referred to Para 59
G
2003 (1) SCR 1229 referred to Para 60
(2009) 4 sec 513 referred to Para 61
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
10918 of 2013 H
844 SUPREME COURT REPORTS [2013] 16 S.C.R.

A From the Judgment and Order dated 19.03.2009 of the
High Court of Karnataka at Bangalore in MFA No. 2344 of 2004
P. P. Malhotra, ASG, Yasir Rauf, Rajan Mukherjee, Kiran
Suri, Nakibur Rahman Barbhuiya, Vishnu Mehra, Sakshi Gupta
Manjeet Chawla for the appearing parties.
B
The Judgment of the Court was delivered by
SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Delay
condoned. Leave granted.
c 2. This appeal has been preferred by the appellants-
claimants in motor accident case against the judgment and
order dated 19th March, 2009 passed by the Division Bench
of the High Court of Karnataka, Bangalore in a motor accident
cas'e being Miscellaneous First Appeal No. 2344 of 2004(MV).
D They are not happy with the meager enhancement of
compensation granted by the High Court.
3. The brief facts of the case are as follows:-
That Ramadas, aged about 48 years, was working as a
E Typesetting Assistant in Computer Section of the Mysore
Printers Limited (Deccan Herald}. On 27th July, 1999 at about
1.30 a.m. while he was returning home on his scooter bearing
Registration No.KA 03/K 7514 on Hosur-Luskar road, near
Mica Software, he met with accident with a Tanker bearing
F Registration No.KA 05/A 5995 driven by its driver in a rash and
negligent manner. On account of the said accident, Ramadas
fell down and sustained grievous injuries all over the body. He
was shifted to Victoria Hospital, where he succumbed to the
injuries.
G 4. His wife and children preferred the claim petition under
Section 166 of the Motor Vehicles Act, 1988 (hereinafter
referred to as the 'Act, 1988), claiming compensation of
Rs.30,00,000/-. The 2nd respondent (Insurance Company)
contested the claim. They had not disputed the accident or the
H insurance coverage. On behalf of the claimant, witnesses were
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 845
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

examined including P .W-1, who was the claimant No.1 and A
another one Chandrashekar, an eye-witness to the accident.
Nine documents were led as evidence marked as Exhs.P1 to
P9. No oral evidence was adduced by the respondents. The
Insurance Policy was marked as Exh.R1.
B
5. The Tribunal on appreciation of the oral and
documentary evidence on record held that the accident was
occurred on account of rash and negligent driving by the driver
of the Tanker. It took into consideration the fact that the
deceased was drawing a salary of Rs.13,331/- p.m. After
deduction of the Income Tax, Professional Tax and personal C
'expenses from the basic salary it awarded a compensation of
Rs.9,03,600/-.

6. On appeal preferred by the claimants, the High Court
enhanced the compensation to Rs.11,25,000/-. The High Court D
rounded the age of the deceased as 50 years; applied
Rs.8,295/- as multiplicand and deducted 1/3rd amount toward~
personal expenses. The High Court split the multiplier and
applied multiplier of 10 for the multiplicand of Rs.8,295/- and
multiplier of 2 for the multiplicand of Rs.4, 147/-. E

7. The grievances of the claimants are summarised as
follows:-

(i) Deduction of 1/3rd amount towards personal
expenses in all cases is arbitrary and unreasonable. F

(ii) Multiplier under Second Schedule cannot be
applied in for determination of compensation under
Section 166 of the Motor Vehicles Act, 1988.
G
(iii) Split multiplier cannot be made applicable in
the facts of the case.

(iv) Interest granted by the Tribunal and the High
Court is lower side which should be 9% in place of
6% per annum. H
846 SUPREME COURT REPORTS [2013] 16 S.C.R.

A At the time of argument learned counsel for the appellants
insisted to issue a direction on the authority to comply with
Section 158 (6) and 166 (4) of the Act, 1988. Further prayer
was made to direct the Central Government to amend the
Second Schedule of the Act, 1988 in light of the present cost
B of living which increased manifold.

8. Per contra, according to the counsel for respondent
No.2-0riental Insurance Co. Ltd. (hereinafter referred to as, "the
Insurance Company") the compensation paid in favour of the
C claimants is just and proper, multiplier method is sound method
of assessing compensation; Section 163(A) directs to follow
a structured formula indicated in Second Schedule to avoid long
drawn litigation and delay in payment of compensation; there
is consistency and uniformity in the said approach.

D 9. Before we refer to the broad features of the Act, 1988,
it is desirable to notice the background in which the Parliament
considered it necessary to bring in the provisions of the Motor
Vehicles Act.

E (i) Before Indian Fatal Accident Act, 1855 came into
force in India, there was no provision in Indian Laws to maintain
a claim for damages/compensation by the legal representative
of the deceased for his death caused by tort/civil wrong or even
by crime. The right to claim compensation died with the death
F of a person.

(ii) Prior to the enforcement of Indian Fatal Accident Act,
1855 in England there was a statute, namely, Fatal Accident
Act, 1846 certain provisions of which read as under:
G (a) 'Whereas no action at law is now maintainable a
person who by his wrongful act, neglect or default may
have caused the death of another person, and it is often-
times right and expedient that the wrongdoer in such cases

H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 847
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
should be answerable in damages for the injury so caused A
by him.' Be it therefore enacted by the Queen's most
Excellent Majesty, by and with the Advice and Consent of
the Lords Spiritual and Temporal, and Commons;in this
present Parliament assembled, and by the Authority of the
same, that whensoever the death of a person shall be B
caused by a wrongful act, neglect and default is such as
would (if death had not ensued) have entitled the party
injured to maintain an action and recover damages in
respect thereof, then and in every such case the person
who would have been liable if death had not ensued shall c
be liable to an action for damages, notwithstanding the
death shall have been caused under such circumstances
as amount in law to a Felony.

(b) And be it enacted, that every such action shall be for
the benefit of the wife, husband, parent and child of the D
person whose death shall have been so caused, and shall
be brought by and in the name of the executor or
administrator of the person deceased; and in every such
action the Jury may give such Damages as they may
think proportioned to the Injury for such death to the E
parties respectively for whom and for whose benefit
such action shall be brought: and the amount so
recovered, after deducting the costs not recovered from
the defendant.. ....
F
10. lnEngland, there have been several amendments and
enactments after the Fatal Accidents Act, 1846.

11. Fatal Accident Act, 1855 was the first Indian legislation
that provided a right to claim compensation for the death ofa G
,person caused by wrongful act of another. It was enacted in
accordance with English Fatal Accidents Act, 1846. Section 1A
of the Indian Fatal Accident.Act, 1855 reads as under:

"[1A] Suit for compensation to the family of a person
H
848 SUPREME COURT REPORTS [2013] 16 S.C.R.

A for loss occasioned to it by his death by actionable
wrong? Whenever the death of a person shall be caused
by wrongful act, neglect, or default, and the act, neglect or
default is such as would (if death had not ensued have
entitled the party injured to maintain an action and recover
B damages in respect thereof, the party who would have
been liable if death had not ensued, shall be liable to an
action or suit for damages, notwithstanding the death of
person injured, and although the death shall have been
caused under such circumstances as amount in ·law to
c felony or other crime.

[3][***] Every such action or suit shall be for the benefit of
the wife, husband, parent and cl'lild, if any, of the person
whose death shall have been so caused, and shall be
brought by and in the name of the executor, administrator
D or representative of the person deceased;

and in every such action, t.he court may give such
damages as it may think proportioned to the loss
resulting from such death to the parties respectively,
E for whom and for whose benefit such action shall be
brought, and the amount so recovered, after deducting all
costs and expenses, including the costs not recovered from
the defendant, shall be divided amongst the before
mentioned parties, or any of them, in such shares as the
F court by its judgment or decree shall direct."

12. Indian Fatal Accidents Act, 1855 followed the principles
in English Fatal Accident Act, 1896 with regard to payment of
compensation. Thus, compensation/damages proportionate to
G the loss resulting from such death was payable.

13. Under Section 306 of the Indian Succession Act 1925
all rights for claiming damages after the death of a person
survive and legal representative could claim damages. Section
306 of the Indian Succession Act, 1925 reads as under:
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 849
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
"306. Demands and rights of action of or against A
deceased survive to and against executor or
administrator - All demands whatsoever all rights to
prosecute or defend any action or special proceedings
existing in favour of or against a person at the time of his
· decease, survive to and against his executors or B
administrators; except causes of action for defamation,
assault, as defined in the Indian Penal Code, 1960 (45 of
1860) or other personal injuries not causing the death of
the party; ani except also cases where, after the death of
the party, the relief sought could not be enjoyed or granting c
it would be nugatory." .

14. Motor Vehicle Act was enacted in 1939. Later, by Act
No. 100 of 19§6 with effect from 16th February, 1957 Motor
Vehicle Act, 1939 was amended and claims· tribunals were D
constituted under Section 110. Section 110 to Section 11 OF
of the Motor Vehicles Act, 1939 were brought. Section 1108
of the Motor Vehicle Act, 1939 as amended reads as under:-

"1108. Award of the Claims Tribunal - On receipt of an
application for compensation made under Section 110-A, E
the Claims Tribunal shall, after giving the parties an
· opportunity of being heard, [hold an inquiry into the claim
or, as the case may be, each of the claims and, subject to
the provisions of Section 109-B, may make an award]
determining the amount of compensation which F
appears to it to be just and specifying the person or
persons to whom compensation shall be paid; and
in making the award the Claims Tribunal shall specify the
amount which shall be paid by the insurer [or owner or
driver of the vehicle involved in the accident or by all or any G
of them, as the case may be}."

/ 15. In 1988, Motor Vehicle Act, 1939 was repealed' and
Motor Vehicle Ad, 1988 came into force. By bringing Section
168 of the Motor Vehicle Act, 1988 it was reiterated that the H
850 SUPREME COURT REPORTS [2013] 16 S.C.R.

A amount of compensation payable would be which appeared
to be just; Section 168 of the amended Motor Vehicle Act
reads as under:

"168. Award of the Claims Tribunal - (1) On receipt of
·s an application for compensation made under Section 166,
the Claims Tribunal shall, after giving notice of the
application to the insurer and after giving the parties
(including the insurer) an opportunity of being heard, hold
an inquiry into the claims or, as the case may be, each of
the claims and, subject to the provisions of Section 162
c
may ·make an award determining the amount of
compensation which appears to it to be just and
specifying the person or persons to whom compensation
shall be paid and in making the award the Claims Tribunal
shall specify the amount which shall be paid by the insurer
D
or owner or driver of the vehicle involved in the accident
or by all or any of them, as the case may be:

Provided that where such application makes a claim for
compensation under Section 140 in respect of the death
E or permanent disablement of any person, such claim and
any other claim (whether made in such application or
otherwise) for compensation in respect of such death or
permanent disablement shall be disposed of in
accordance with .the provisions of Chap'ter X ..... "
F
16. Thus according to the English Law compensation/
damages were payable according to the proportionate toss
whereas in India compensation is payable which appears to
the Tribunal to be just is payable. The approach of the Courts
G according to the English law and according to the Indian Law
have to be distinct and separate. Indian Law recognizes just
compensation whereas English law required compensation
proportionate to the loss suffered. English courts have been
calculating loss of money as a bargain as to how much monetary
H loss has been caused to the claimant, as a result the death of
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 851
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
bread earner/deceased. The English Law being different, A
English judges were having different approach towards the
grant of compensation to the deceased's family.

17. Here in India, we have a different culture. Here, every
parent thinks that it is his moral and legal duty to give fullest
8
education to his children. Parents think that marriage of their
children is their responsibility and even providing a house to
their children and grand children is their responsibility. Here,
in India, the concept of culture and family life is totally distinct
from the culture and family life in England and in other foreign C
countries. Here, parents not only educate the children but spend
huge amounts or at least sufficient amounts on the marriages
of their children, on their education, for their housing needs and
in majority of cases in return they are looked after in old ages.

18. Most of the people work even after their i:etirement to D
support their children. The longevity of life in India has increase
at least upto 69 years; in many cases, peoples live longer than
that. The salaries and cost of things increase rapidly. At a
glance, between every 9-10 years they double.
E
19. Though the method of multiplier is one of the best
methods in providing compensation while· choosing the
multiplier the court/tribunal has to take into consideration the
rising inflation, increasing salaries and increasing cost of living.
Therefore, we have to determine just compensation keeping F
in view the Indian background, the Indian culture, the Indian legal
background, and the socio-cultural circumstances existing in
India.

Relevant statutory provisions of Act, 1988
G
. 20. "Liability without fault" in certain cases is provided
under Chapter X. Section 140 prescribes liability upon the
owner of the vehicle on the principle of no.fault and reads as
follows:
H
852 SUPREME COURT REPORTS [2013] 16 S.C.R.

A "140. Liability to pay compensation in certain cases
on the principle of no fault.- (1) Where death or
permanent disablement of any person has resulted from
an accident arising out of the use of a motor vehicle or
motor vehicles, the owner of the vehicle shall, or, as the
8 case may be, the owners of the vehicles shall, jointly and
severally, be liable to pay compensation in respect of such
death or disabiement in accordance with the provisions of
this section.

(2) The amount of compensation which shall be payable
c under sub-section (1) in respect of the death of any person
shall be a fixed sum of 1[fifty thousand rupees] and the
amount of compensation payable under that sub-section
in respect of the permanent disablement of any person .
shall be a fixed sum of _f[twenty-five thousand rupees].
D
(3) In any claim for compensation under sub-section (1),
the claimant shall not be required to plead and establish
that the death or permanent disablement in respect of
which the claim has been made was due to any wrongful
E act, neglect or default of the owner or owners of the vehicle
or vehicles concerned or of any other person.

(4) A claim for compensation under sub-section (1) shall
not be defeated by reason of any wrongful act, neglect or
default qf the person in respect of whose death or
F
permanent disablement the claim has been made nor shall
the quantum ·of compensation recoverable in respect of
such death or permanent disablement be reduced on the
basis of tile share of such person in the responsibility for
such death or permanent disablement.
G
[(5) No~ithstanding anything contained in sub-section (2)
regarding death or bodily injury to any person, for which
the owner of the vehicle is liable to give compensation for
r.elief, he is also liable to pay compensation under any other
H ·1aw for the time being in force:
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 853
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

Provided that ,the amount of such compensation to be A
given under any other law shall be reduced from the
amount of compensation payable under this section or
under section 163 A.]"

21. Section 141 relates to provisions as to whether right 8
to claim compensation for death or permanent disablement and
reads as follows:

"141. Provisions as to other right to claim compensation
for death or permanent disablement.-
c
(1 )"fhe right to claim compensation under section 140 in
respect of death or permanent disablement of any person
shall be in addition ·to any other right (hereafter in this
section referred to as the right on the principle of fault)
to claim compensation in respect thereof under any other D
provision of this Act or of any other law for the time befng
in force.

(2)A claim for compensation under section 140 in
\ respect of death or permanent disablement of any E
person shall be disposed of as expeditiously as possible
and where compensation is claimed in respect of such
death or permanent disablement under section 140 and
also in pursuance of any right on the principle of fault,
the claim for compensation under section 140 shall be
F
disposed of as aforesaid in the first place.

(3)Notwithstanding anything contained in sub-section (1),
where in respect of the death or permanent disablement
of any person, the person liable to pay compensation
under sec;tion 140 is also liable to pay compensation in G
accordance with the right on the principle of fault, the
person so liable shall pay the first-mentioned
compensation and-

(a)if the amount of the first-mentioned H
854 SUPREME COURT REPORTS [2013] 16 S.C.R.

A compensation is less than the amount· of the
second-mentioned compensation, he shall be
liable to pay (in addition to the first-mentioned
compensation) only so much of the second-
mentioned compensation as is equal to the amount
B by which it exceeds the first-mentior1ed
compensation;

{b)if the amount of the first-mentioned
compensation is equal to or more than the
c amount of the second-mentioned compensation,
•
he shall not be liable to pay the second-mentioned
compensation."

22. Section 142 prescribes permanent disablement as
follows:
D
· "142.Permanent disablement.- For the purposes of this
Chapter, permanent disablement of a person shall be
deemed to have resulted from an accident of the nature
referred to in sub-section (1) of section 140 if such person
E has suffered by reason of the accident, any injury or injuries
involving-

(a) permanent privation of the sight of either eye or the
hearing of either ear, or privation of any member or joint;
F or

(b) destruction or permanent impairing of the powers of any
member or joint; or

(c) permanent disfiguration of the head or fact."
G
Section 144 provides for non-obstante clause.

23. Section 163A contains special provisions as to
payment of compensation on structured formula basis. It came
into force from 14th November", 1994 and read~ as follows:
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 855
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
'
"163A. Special provisions ·as to payment of A
·compensation on structured formula basis.- (1)
Notwithstanding anything contained in· this Act or in any
other law for the time being in force or instrument having
the force of law, the owner of the motor vehicle of the
authonsed insurer shall be li~ble to pay in the case of death B
. or permanent disablement due to accident arising out of
1he use of motor vehicle, compensation, as indicated in the
Second Schedule, to the legal heirs or the victim, as the
case may be.

Explanation.-For the purposes of this sub-section,
c
"permanent disability" shall have the same meaning and
extent as in the Workmen's Compensation Act, 1923 (8
of 1923).

(2) In any claim for compensation under sub-section (1), D
the claimant shall not be required to plead or establish that
the death or permanent disablement in respect of which
the claim has been made was due to any wrongful act or
neglect or default of the owner of the vehicle or vehicles
concerned or of any other person. ' E

(3) The Central Government may, keeping in view the cost
of living by notification in the Official Gazette, from time to
time amend the Second Schedule."

24. The Second Schedule referred to in Section 163A of F
the Act, 1988 prescribes structured formula for the purpose of
grant of compensation. By reasons thereof, a multiplier system
has been introduced in terms of which amount of compensation
is required to be calculated having regard to the age of victim G
and his annual income. In terms of the note appended to the
said Schedule, the amount of compensation so arrived at in
cases of fatal accident, is to be reduced by 1/3rd in
consideration of the expenses which the victim would have
incurred towards maintaining himself.
H
856 SUPREME COURT REPORTS [2013] 16 S.C.R.

A The Second Schedule mandates that the amount of
compensation shall not be less than Rs.50,000/-. It also
prescribes for grant of compensation under different heads
such as general damage in case of death, general case of injury
and disability; disability in non-fatal accident and notional
B income for compensation for those who had no income at the
time of accident. The maximum amount which can be paid
under different heads has been specified therein.

25. Section 163B provides two options for claim in certain
c cases as quoted below:

"1638. Option to file claim in certain cases.- Where a
person is entitled to claim compensation under section 140
and section 163A, he shall file the claim under either of
the said sections and not under both."
D
26. Section 166 relates to application for compensation
preferred before the Claim Tribunal and Section 167 provides
option regarding .claim for compensation in certain cases, they
reads as follows:
E
"166. Application for compensation.- (1)
An Application for compensation arising out of an accident
of the nature specified in sub-section (1) of section 165
may be made-
F
(a) .by the person who has sustained the injury; or

(b) by the owner of the property; or

{c) where death has resulted from the accident, by all.or
G any of the legal representatives of the deceased: or
(d) by any agent duly authorised by the person injured or
all or any of the legal representatives of the deceased, as
the case may be:
H
PUTIAMMA & ORS. v. K. ,!'... NARAYANAREDqYi& 857
ANR. [SUDHANSU· JYOTI MUKHOPADHAYA .. JJ
Provided that where all the legal representatives. o(the A
deceased have not joined in any such Applic!iltion for ·
compensation, the Application shall be made on behalf of
or for the benefit of all the legal representatives of the
deceas.ed and the legal representatives who have riot so
joined, shall be impleaded as respondents to :.':,_\ a
the Application.

'[(2) Every Application under sub-section (1) shall be made,
at the option of the claimant, either to the Claims Tribunal.
having jurisdiction over the area in which the accident ,:(j
occurred or to the Claims Tribunal within the
•' local limits·o.f
.,
or\ ···:
·'

whose jurisdiction the claimant resides or carries
business or within the local limits of whose jurisdiction tlj~
defendant resides, and shall be in such form and contain
such particulars as may be prescribed: 0
Provided that where no claim for compensation under
section 140 is made in such Application,
the Application shall contain ,a separate statement to that
· effect immediately before the signature of the applicant.] .
E
3[**~l

[(4) The Claims Tribunal shall treat any report of accidents
forwarded to it under sub-section (6) of section 158 as
an Application for· compensation under this Act.]
F
167.0ption regarding claims for compensation in
certain cases.- ,Notwithstanding anything contained in the
Workmen's Compensation Act, 1923 (8 of 1923) where
the death of, or bodily injury to, any person gives rise to a
claim for compensation under this Act and also under the G
Workmen's Compensation Act, 1923, the person entitled
to compensation may without prejudice to the provisions
of Chapter X claim such compensation under either of
those Acts but not under both."
H
858 SUPREME COURT REPORTS [2013) 16 S.C.R.

A 27. In Deepal Girishbhai Son and others vs. United India
Insurance Co. Ltd., Baroda,. (2004) 5 SCC 385, a larger
Bench of three-Judge held:

"41. Section 140 of the Act dealt with interim
B compensation but by inserting Section 163-A,
Parliament intended to provide for the making of an
award consisting of a predetermined sum without insisting
on· a long-drawn trial or without proof of negligence in
causing the accident. The amendment was, thus, a
deviation from 'the common law liability under the law of
c torts and was also in derogation of the provisions of the
Fatal Accidents Act. The Act and the Rules framed by
the State in no uncertain terms suggest that a new device
was sought to be evolved so as to grant a quick and
efficacious relief to the· victims falling within the specified
category. The heirs of the deceased or the victim in terms
of the said provisions were assured of a speedy and
effective remedy which was not available to the claimants
under Section 166 of the Act.

E 42. Section 1.63-A was, thus, enacted for ·grant of
immediate relief to a section of the people whosfl annual
income is not more than Rs 40,000 having regard to the
fact that in terms of Section 163-A of the Act read with
the Second Schedule appended thereto, compensation
F is to be paid on· a structured formula not only having
regard to the age of the victim and his income but also
the other factors relevant therefor. An award made
thereunder, therefore, shat/ be in full and final settlement
of the claim as wo_uld appear from the different_columns
G contained in the Second Schedule appended to the Act.
The same is.not interim. in nature. The note appended
to column 1 ·which deals with fatal accidents makes the
position furthern:iore clear stating that from the total
amount of. compensation one-third thereof is to be
H reduced in consideration of the expenses which the
PUTTAMMA & ORS. v. K. L. f)JARAYANA REDDY & 859
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

victim would have incurred towards maintaining himself A
had he been alive. This together with the other heads of
compensation as contained in columns 2 to 6 thereof
leaves no manner of doubt that Parliament intended to
lay a 'comprehensive scheme for the purpose of grant of
adequate compensation to a section of victims who would B
require the amount of compensation without fighting any
protracted litigation for proving that the accident occurred
owing to negligence on the part of the driver of the motor
vehicle or any other fault arising out of use of a motor
vehicle. C
In the said case the Court further held:

52. It may be true that Section 163-B provides for an option
to a claimant to either go for a claim under Section 140 D
or S~ction 163-A of the Act, as the case may be, but the
same was inserted ex abundanti cautela so as to remove
any misconception in the minds of the parties to the lis
having regard to the fact that both relate to the claim on
the basis of no~fault liability. Having regard to the fact that
Section 166 of the Act provides for a complete machinery E
for laying a claim on fault liability, the question of giving an
option to the claimant to pursue their claims both under
Section 1.63-A and Section 166 does not arise. If. the
submission of the learned counsel is accepted.the same
would lead to an. incongruity. F
.
53. Although the Act is a beneficial on~ and, thus,
deserves liberal construction with a view to implementing
the legislative intel)t but it is trite that where such beneficial
legislation has a scheme of its own and there is no G
vagueness or doubt therein, the court would not travel
beyond the same and extend the scope of the statute on
the pretext of extending the statutory benefit to those who
are not covered thereby. (See Regional Director, ESI
Corpn. v. Ramanuja Match Industries (1985) 1 SCC 218. H
860 SUPREME COURT REPORTS [2013) 16 S.C.R.

57. We, therefore, are of the opinion that the remedy for
payment of ~ompensation both under Sections 163-A and
166 being final and independent of each other as ~tatutorily
provided, a claimant cannot pursue his remedies
thereunder simultaneously. One, thus, must opt/elect to go
B either for a proceeding under Section 163-A or under
Section 166 of the Act, but not under both."

28: In Sar/a Verma(Smt.) and others vs. Delhi Transport
Corporation and another, 2009(6),SCC 121,this Court
C compared Section 163A with Section 166 of the Act, 1988 and
reiterated that the principles re}ating to determination of
liability and quantum of compensation were different for the
claims under Section 163A and claims made under Section
166.
D 29. Thus it will be evident from the provisions of the Act
that the structured formula as prescribed under Second
Schedule and the multiplier mentioned therein is not binding for
claims under Section 166 of the Act; 1988.

E Multiplier

30. This Court in order to bring uniform.ity and certainty in
granting compensation always envisaged payment of just
compensation based on multiplier method which is accepted
F method for determining and ensuring payment of just
compensation.

This Court has applied different multipliers in following
different cases:

G (1) General Manager, Kei'ala State Road Transport
Corporation, Trivandrum vs. Susamma Thomas
(Mrs) and others, (1994) 2 SCC 176 - The
multiplier applied is 12.

H (2) S. Chandra and others vs. Palla van Transport
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY.& 861
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Corporation, 1994(2) SCC 189 - The multiplier A
applied is 20.

(3) Sar/a Dixit (Smt.) and another vs. Ba/want
yadav and others, (1996) 3 SCC 179- The
multiplier applied is 15. · B
(4) U.P. State Road Transport Corporation and
others vs. Trilok Chandra and othrs, (1996) 4 SCC
362- The multiplier applied is 15. This Court
further held that multiplier cannot exceed 18 years
purchase factor. C
(5) Jyoti Kaul and others vs. State of M.P. and .
another, (2002) 6 sec 306- The multiplier applied
is 15.
D
(6) T. N. State Transport Corpn. Ltd. vs. S.
Rajapriya and others, (2005) 6 SCC 236- The
multiplier applied is 12.

(7) New India Assurance co:Ltd. vs. Charlie and
. another, (2005) 10 SCC 720- The multiplier E
applied is 18.

(8) U.P. State Road Transport Corpn. vs. Krishna
Bala and others, (2006) 6 sec 249- The multiplier
applied is 13. F

(9) New India Assurance Co.Ltd. vs. Kalpana
(Smt.)and others, (2007) 3 SCC 538-The
multiplier applied is 13. .

(10) Oriental Insurance Company Limited vs. G
Jashuben and others, (2008) 4 sec 162 - the
multiplier applied is 13.

However, in Jyotsana Dey and Ors. vs. State of Assam
& Ors., 1987 ACJ 172, this court applied a multiplier of 25 H
862 SUPREME COURT REPORTS (2013] 16 S.C.R.

A years and in Hardeo Kaur & Ors. vs. Rajasthan State
Transport Corporation & Anr., (1992) 2 SCC 567, this Court
applied a multiplier of 24 years.

31. In Sar/a Verma (Supra) this Court held. that the
8 multiplier should be used in the following manner:

"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, Trilok Chandra
and Charlie), which starts with an operative multiplier of 18
c (for the age groups of 15 to 20 and 21 to 25 years),
reduced by O!le 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
D 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."

This Court laid down the above guidelines to ensure
uniformity and consistency in the selection of multiplier while
E awarding compensation in motor accident clciims made under
Section 166.

The application of multiplier fell for consideration recently
before three-Judge Bench in Reshma Kumari & Ors. 'vs.
F Madan Mohan & Anr., (2013)9 sec 65. In the said case this
Court held:

"33. We have already noticed the table prepared in Sarla
Verma for the selection of multiplier. The table has been
prepared in Sarla Verma having regard to the three
G decisions of this Court, namely, Susamma Thomas1,
Trilok Chandra and Charlie for the claims made under
Section 166 of the 1988 Act. The Court said that multiplier
shown in Column (4) of the table must be used having
regard to the age of the deceased. Perhaps the biggest
H advantage by employing the table prepared in Sarla
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 863
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Verma is that the uniformity and consistency in selection A
of the multiplier can be achieved. The assessment of
extent of dependency depends on examination of the
unique situation of the individual case. Valuing the
dependency or the multiplicand is to some extent an
arithmetical exercise. The multiplicand is normally based B
on the net annual value of the dependency on the date of
the deceased's death. Once the net annual loss
(multiplicand) is assessed, taking into account the age of
the deceased, such amount is to be multiplied by a
'multiplier' to arrive at the loss of dependency. In Sarla c
Verma, this Court has endeavoured to simplify the
otherwise complex exercise of assessment of loss of
dependency and determination of compensation i!l a claim·
made under Section 166. It has been rightly stated in Sarla
Verma that claimants in case of death claim for the D
purposes of compensation must establish (a) age of the
deceased; (b) income of the deceased; and (c) the number
of dependants. To arrive at the loss of dependency, the
Tribunal must consider (i) additions/ deductions to be
made for arriving at the income; (ii) the deductions to be E
made towards the personal living expenses of the
deceased; and (iii) the multiplier to be applied with
reference to the age of the deceased. We do not think it
is necessary for us to revisit the law on the point as we
are in full agreement with the view in Sarla Verma. F
34. If the multiplier as indicated in Column (4) of the table
read with paragraph 42 of the Report in Sarla Verma 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 G
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 ·
H
864 SUPREME COURT REPORTS [2013] 16 S.C.R.

A overseas jurisdictions have made this advance. It is for
these reasons, we think we must approve the table in Sarla
Verma 17 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
B the table in Sarla Verma 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 163A. As regards the cases
c where the age of the victim happens to be upto 15 years,
we are of the considered opinion that in such cases
irrespective of Section 163A or Section 166 under which
the claim for compensation has been made, multiplier of
15 and the assessment as indicated in the Second
D Schedule subject to correction as pointed out in Column
(6) of the table in Sarla Verma should be followed. This is
to ensure that claimants in such cases are not awarded
lesser amount wnen the application is made under Section
166 of the 1988 Act. In all other cases of death where the
E application has been made under Section 166, the
multiplier as indicated in Column (4) of the table in Sarla
Verma should be followed.

"40. In what we have discussed above, we sum up our
conclusions as follows:
F
(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
G (4) of the table prepared in Sarla Verma read with para
42 of that judgment.

(ii) In cases where the age of the deceased is upto 15
years, irrespective of the Section 166 or Section 163A
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 865
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
under which the claim for compensation has been made, A
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 should be followed.
(iii) As a result of the above, while considering the claim
8
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.
c
(iv) to (vi) xxx xxxxxx xxx
(vii) The above propositions rriutatis muta.ndis shall apply
to all pending matters where above aspects are under
consideration."
D
Thus the view taken by this Court in Sar/a Verma is
affirmed by three-Judge Bench of this Court in Reshma
Kumari.

Split Multiplier
E
32. For determination of compensation in motor accident
claims under Section 166 this Court always followed multiplier
method. As there were inconsistencies in selection of multiplier,
1his Court in Sar/a Verma prepared a table for selection of
multiplier based on age group of the deceased/victim. Act, 1988 F
does not envisage application of split multiplier.
33. In K.R. Madhusudhan and others vs. Administrative
Officer and another, (2011) 4 sec
689, this Court held as
follows:
G
"14. In the appeal which was filed by the appellants before
the High Court, the High Court instead of maintaining the
amount of compensation granted by the Tribunal, reduced
the same. In doing so, the High Court had not given any
reason. The High Court introduced the concept of split H
866 SUPREME COURT REPORTS [2013] 16 S.C.R.

A multiplier and departed from the multiplier used by the
Tribunal without disclosing any reason therefor. The High
Court has also not considered the clear and corroborative
evidence about the prospect of future increment of the
deceased. When the age of the deceased is between 51
B and 55 years the multiplier is 11, which is specified in the
2nd Golumn in the Second Schedule to the Motor Vehicles
Act, and the Tribunal has not committed any error. by
·accepting the said multiplier. This Court also fails to
appreciate why the High Court chose to apply the multiplier
C. of 6.

15. We are, thus, of the opinion that the judgment of the
High Court deserves to be set aside for it is perverse and
clearly contrary to the evidence on record, for having not
considered the future prospects of the deceased and also
D for adopting a split multiplier method."

34. We, therefore, hold that in absence of any specific
reason and evidence on record the Tribunal or the Court
should not apply split multiplier in routine course and should
E apply multiplier as per decision of this Court in the case of
Sar/a Verma(supra) as affirmed in the case of Reshma
Kumari (supra).

Compliance of Section 158(6) and 16.6(4) of the Act,
1988
F
35. Information regarding any accident involving death or
bodily injury to any person is to be recorded or reported under
Section 158(6) of the Act, 1988 which mandates as follows:
"158 (6) As soon as any information regarding any
G accident involving death or: bodily injury to any person is
recorded or report under this section is completed by a
police officer, the officer incharge of the police station shall
forward a copy of the same within thirty days from the date
of ·recording of information or, as the case may be, on
H completion of such report to the Claims Tribunal having
PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 867
ANR. [SUDHANSU J-i'.OTI MUKHOPADHAYA, J.]
jurisdiction and a copy thereof to the concerned insurer, A
and where a copy is made available to the owner, he shall
also within thirty days of receipt of such report, forward the
same to such Claims Tribunal and Insurer."
Sub Section (4) of Section 166 of the Act, 1988
substantiates the. object of enacting the provisions of sub- B
section (6) of Section 158, which reads as under:
"166 (4) The Claims Tribunal shall treat any report of
accidents forwarded to it under sub-section (6) of Section
158 as an application for compensation under this Act." c
36. Surprisingly, such a useful provision such as Section
158(6) of the Act, 1988 was lying dormant for a long period. A
writ petition for enforcement ·of the said provision came to be
filed in this Court in the case of General Insurance· Council &
D·
Others v. State of Andhra Pradesh & Others (2007) 12 SCC
354 In which it has been held and directed as under:
"9. Since there is a mandatory requirement to act in the
manner provided in Section 158(6) there is no justifiable
reason as to why the requirement is not being followed. E
10. It is, therefore, directed that all the State Governments
and the Union Territories shall instruct, if not already done,
all police officers concerned about the need to comply with
the requirement of section 158(6) keeping in view the F
requirement indicated in Rule 150 and in ·Form 54.
Periodical checking shall be done by the Inspector General
of Police concerned to ensure that the requirements are
being complied with. In case there is non-compliance,
appropriate· action shall be taken against the erring G
officials. The Department of Road Transport and Highways
shall make periodical verification to ensure that action is
being taken and in case of any deviation immediately bring
the same to the notice of the State Governments/Union·

H
868 SUPREME COURT REPORTS [2013] 16 S.C.R.

A Territories concerned so that necessary action can be
taken against the officials concerned."

37. This Court in Jai Prakash v. National Insurance Co.
Ltd. & Ors (2010) 2 SCC 607 again noticed the aforesaid
provisions and issued following directions to the police
8
authorities:

"16. The Director Gel'.leral of Police of each State is
directed to instruct all police stations in his State to comply
with the provisions of Section 158(6) of the Act. For this
c purpose, the following steps will have to be taken by the
Station House Officers of the jurisdictional police stations:

(i) Accident information report ("AIR", for short) in Form No.
54 of the Central Motor Vehicles Rules, 1989 shall be
submitted by the police (Station House Officer) to the
D
jurisdictional Motor Accidents Claims Tribunal, within 30
days of the registration of the FIR. In addition to the
particulars required to be furnished in Form No. 54, the
police should also collect and furnish the following
additional particulars in the AIR to the Tribunal:
E
(i) The age of the victims at the time of accident;

(ii) The income of the victim;

(iii) The names and ages of thedependent family
F members.

(ii) The AIR shall be accompanied by the attested copies
of the FIR, site sketch/mahazar/photographs of the place
of occurrence, driving licence of the driver, insurance
policy (and if necessary, fitness certificate) of the vehicle
G
and post-mortem report (in case of death) or the injury/
wound certificate (in case of injuries). The names/
addresses of injured or dependent family members of the
deceased should also be furnished to the Tribunal.

H (iii) Simultaneously, a copy of the AIR with annexures
PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 869
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

thereto shall be furnished to the insurance company A
concerned to enable the insurer to process the claim.

(iv) The police shall notify the first date of hearing fixed by
the Tribunal to the victim (injured) or the family of the victim
(in case of death) and the driver, owner and insurer. If so
8
directed by the Tribunal, the police may secure their
presence on the first date of hearing.

17. To avoid any administrative dif.:culties in immediate
implementation of Section 158(6) of the Act, we permit
such implementation to be carried out in three stages. In C
the first stage, all police stations/Claims Tribunals in the
NCT region and the State capital regions shall implement
the provisions by the end of April, 2010. In the second
stage, all" the police stations/Claims Tribunals in district
headquarters regions shall implement the provisions by the D
end of August, 2010. In the third stage, aH the police
stations/Claims Tribunals shall ~mplement the provisions by
the end of December, 2010. The Directors General shall
ensure that necess 3ry forms and infrastructural support is
made available to give effect to Section 158(6) of the Act. E

18. Section 196 of the Act provides that whoever drives a
motor vehicle or causes or allows a motor vehicle to be
driven in contravention of the provisions of Section 146
shall be punishable with imprisonment which may be
extended to three months, or with a fine which may extend F
to Rs 1000, or with both. Though the statute requires
prosecution of the driver and owner of uninsured vehicles,
this is seldom done. Thereby a valuable deterrent is
ignored. We therefore direct the Directors General to issue
instructions to prosecute drivers and owners of uninsured G
vehicles under Section 196 of the Act.
19. The Transport Department, Health Department and
other departments concerned shall extend necessary
H
870 SUPREME COURT REPORTS [2013] 16 S.C.R.

A cooperation to the Directors General to give effect to
Section 158(6)."
38. Further, directions were issued to the Claim Tribunals
for compliance of mandatory provisions of Section 158(6) of
the Act, 1988 which reads as under:-
B
"20. The Registrar General of each High Court is directed
to instruct all Claims Tribunals in his State to register the
reports of accidents received under Section 158(6) of the
Act as applications for compensation under Section 166(4)
c of the Act and deal with them without waiting for the filing
of claim applications by the injured or by the family of the
deceased. The Registrar General shall ensure that
necessary registers, forms and other support is extended
to the Tribunal to give effect to Section 166(4) of the Act.
D 21. For complying with Section 166(4) of the Act, the
jurisdictional Motor Accidents Claims Tribunals shall
initiate the following steps:
(a) The Tribunal shall maintain an institution register for
recording the AIRs which are received from the Station
E
House Officers of the police stations and register them as
miscellaneous petitions. If any private claim petitions are
directly filed with reference to an AIR, they should also be
recorded in the register.
F (b) The Tribunal shall list the AIRs as miscellaneous
petitions. It shall fix a date for preliminary hearing so as to
enable the police to notify such date to the victim (family
of the victim in the event of death) and the owner, driver
and insurer of the vehicle involved in the accident. Once
G the claimant(s) appear, the miscellaneous application shall
be converted to claim petition. Where a claimant(s) file the
claim petition even before the receipt of the AIR by the
Tribunal, the AIR may be tagged to the claim petition.
(c) The Tribunal shall enquire and satisfy itself that the AIR
H relates to a real accident and is not the result of any
I

PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 871
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.)
collusion and fabrication of an accident (by any "police A·
officer-advocate-doctor" nexus, which has come to light in
several cases).
(d) The Tribunal shall by a summary enquiry ascertain the
dependent family members/legal heirs. The jurisdictional
police shall also enquire and submit the names of the B
dependent legal heirs.

(e) The Tribunal shall categorise the claim cases
registered, into those where the insurer- disputes liability
and those where the insurer does not dispute the liability. c
(f) Whe(ever the insurer does not dispute the liability under
the policy, the Tribunal shall make an endeavour to
determine the compensation amount by a summary enquiry
or refer the matter to the Lok Adalat for settlement, so as
to dispose of the claim petition itself, within a time-frame D
not exceeding six months from the date of registration of
the claim petition.
(g) The insurance companies shall be directed to deposit
the admitted amount or the amount determined, with the E
Claims Tribunals within 30 days of determination. The
Tribunals should ensure that the compensation amount is
kept in a fixed deposit and disbursed as per the directions
contained in Kerala SRTC v. Susamma Thomas.
(h) As the proceedings initiated in pursuance of Sections F
158(6) and 166(4) of the Act are different in nature from
an application by the victim(s) under Section 166(1) of the
Act, Section 170 will not apply. The insurers will therefore
be entitled to assist the Tribunal (either independently or
with the owners of th,e vehicles) to verify the correctness G
in regard to the accident; injuries, age, income and
dependants of the deceased victim and in determining the
quantum of compensation."

H
872 SUPREME COURT REPORTS [2013) 16 S.C.R.

A 39. In view of the directions already issued by this Court,
we find no reason to issue any further direction.

Applicability of Second Schedule in the present
scenario:
B By Act 54 of 1994, Section 163-A - Special Provisions
as to payment of compensation on structured formula basis has
been inserted with effect from 14.11.1994. Section 163-A
envisages that notwithstanding any contained in the Act or in
any other law or instrument having the force of law, the owner
c of the motor vehicle shall be liable to pay in the case of death
or permanent disablement due to accident arising out the use
of motor vehicle, compensation as indicated in the second
schedule, to the legal heirs or the victim, as the case may be

The purpose of Section 163-A and the Second. Schedule
D is to avoid long-drawn litigation and delay in payment of
compensation to the victims or his heirs who are in dire need
of relief.

Sub-section(2) of Section 163-A envisages that the
E claimant shall not be required to plead or establish that the
death or permanent disablement in respect of which the claim
has been made was due to any wrongful act or neglect or
default of the owner of the vehicle or vehicles concerned or of
any other person.

F Sub-section (3) of Section 163-A envisages that the
Central Government may, keeping in view the cost of living by
notification in the Official Gazette, from time to time amend the
second schedule, which is as follows:

G

H
1[THE SECOND SCHEDULE ""O
(See section 163A) c
;:I
)>
SCHEDULE FOR COMPENSATION FOR THIRD PARTY FATAL ACCIDENTS/ INJURY CASES CLAIMS.
s::
1. Fatal Accidents: ..... s::
(/) )>
Annual lnco'ine Rs. Rs. Rs. Rs. Rs. Rs.Rs.Rs. Rs. Rs. Rs. Rs. Rs. !20 §
3000 4200 5400 6600 7800 10200 11400 12000 18000 24000 36000 40000 ::I: 0
9000
)> :::0
AGE OF
VICTIM
MULTIPLIER· (RUPEES IN THOUSANDS)
(compensation in case of death)
z .(/)
(/)
c:c:::
. Rs. Rs. Rs . Rs. Rs. Rs.· Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Up to 15 yrs. .. 15 60 84 108 132 156 180. 204 228 240 360 48Q 720 800
c...."
-< .
o,
Above. 15 yrs. but not -I •
exdg. 20 yrs. ..16 57 79.8 102 125.4 148.2 171 193.8 216.6 228 342 456 684 760 s:: z
c )>
Above 20 tyrs. but not
exdg. 25 yrs. ..17 54 75.6 97.2 11.8.8 140.4 162 183.6 205.2 216 324 432 648 720 "~
::I:~
oz
Above 25 yrs. but not ~)>
exdg. 30 yrs. .. 18 51 71.4 91.8 112.2 132.6 153 173.4 193,!L 204 306 408 612 680 CJ :::0
:::i::m
Above 30 yrs. but not ?<o
exdg. 35 yrs. ... 17 50 67.2 86.4 105,6 124.8 144 163.2 192.4 192 288 384 576 640 _)>~
. ~!20
......
Above 35 yrs. but not )>
exdg. 40 yrs. ..16 50 63 81 99 117 135 153 171 180 270 380 540 600 z
:::0
Above 40 yrs. but not 00
exdg. 45 yrs. ..15 50 58.8 75.6 92.4 109.2 126 142.8 159.6 168 252 336 504 560 -...I
w
co
ABove 45 yrs. but not ~
exdg. 50 yrs. .. 13 50 50.4 64.8 79.2 93.6 108 ·~·22.4 136.8 144 216 286 432 480

Above 50 yrs. but not en
exdg. 55 yrs. .. 11 50 50 54 66 78 90 102 "t14 120 180 240 360 400 c
"'CJ
::::0
Above 55 yrs. but not m
exdg. 6 0 yrs. ..8 50 50 50 52.8 62.4 72 81.6 91.2 96 114 192 286 320 s::::
m
Above 60 yrs. but not ()
exdg. 65 yrs. ..5 50 50 50 50 50 54 61.2 68.4 72 108 144 216 240 0
c
::::0
Above 65 yrs. .. 5 50 50 50 50 50 50 51 57 60 90 120 . 180 200 -;
:::0
m
"'CJ
Note- The amount of compensation so arrived at in the case of fatal accident claims shall be reduced by 1/3rd in 0
consideration of the expenses which the victim would have incurred towards maintaining himself had he been :::0
-i
alive. en
1. Ins. by Act 54of1994, Sec. 64 (w.e.f. 14-11-1994).
2. Amount of compensation shall not be less than Rs.50,000. -"'__..
0
3. General Damages (in case of death):
The following General Damages shall be payable in addition to compensation outlined above:- -w__..
m
(i) Funeral expenses -Rs. 2,000/-
en
(ii) Loss of Consortium, if beneficiary is the spouse • -Rs. 5,000/- 0
(iii) Loss of Estate -Rs." 2,500/- :::0
(iv) Medical Expenses -actual expenses incurred -
(/)
before death supported by bills/vouchers but not exceeding -Rs.15,000/- . c:
4. General Damages in case' of injuries and Disabilities: -0
:;o
(i) Pain and Sufferings m
(a) Grievous injuries - Rs. ?,000/-
s::
m
(b) Non-grievous injuries - Rs. 1,000/- (")
0
(ii) Medical expenses - actual expenses incurred supported by billsNouchers c:
but not exceeding as one time payment - Rs. 15,000/-
~
5. Disability in non-fatal accidents: :;o
The following compensation shall be payable in case of disability to the victim .arising ciut of non- fatal accidents:-. m
-0
Loss of income, if.any, for actual period of disablement not exceeding fifty two weeks.\ 0
(a)
PLUS either of the following :-
In case of permanent total disablement the amount payable shall be arrived at by multiplying the annual loss of
~
(/)
income by the Multiplier applicable to the age on the date of determining the compensation, or
(b) In case of permanent partial disablement such percentage of compensation which would have been payable in
the case of permanent total disablement as specified under item (a) above.
Injuries deemed to result in Permanent Total Disablement/Permanent Partial Disablement and percentage of
loss of earning capacity shall be as per Schedule 1 under Workmen's Compensation Act, 1923.
--
'N
0
.5!:?
C J)
(/)
6. Notional income for compensation to those who had no income prior to accident:
Fatal and disability in non-fatal accidents:
h
:;o
(a) Non-earning persons -Rs.15,000 p.a ..
CX>
(b) Spouse -Rs.1 /3rd of income of the earning/surviving spouse. .......
c.n
In case. of other injuries only "general damage" as applicable.]"
876 SUPREME COURT REPORTS [2013) 16 S.C.R.

A 40. Perusal of Second Schedule shows that the legal heirs
of the deceased person having an annual income, minimum
Rs.3,000/- and maximum Rs.40,000/- could only derive benefit
under Section 163A of the Act, 1988. Legal heirs of the
deceased person whose income is more than Rs.40,000/- per
B annum i.e. approximately Rs.3,6001- per month cannot derive
advantage of the Second Schedule. The largest multiplier
envisaged is 18 in the case of victim "above 25 years of age"
but not exceeding 30 years". The multiplier for the higher age
is required to be re-looked in view of increase in life
c expectancy.
41. A minimum amount of compensation of Rs.50,000/-
was fixed under Second Schedule in the year 1994. In addition,
general damages in lieu of funeral expenses, loss of consortium
- (if beneficiary is the spouse), medical expenses, pain and
o suffering, grievous injuries, non-grievous injuries, etc. are also
provided for. But no revision was made to these amounts in
these 19 years.
42. In view of non-amendment of Second Schedule for 19
years, the appellant has also questioned the validity of the
E existing Second Schedule.
43. Several anomalies exit in the Second Schedule and
the said anomalies were first noticed as early as in the year
1996 in U.P. State Road Transport Corporation & Ors. v.
Trilok Chandra & Ors. (1996) 4 SCC 362 wherein this Court
F held that the table in Second, Schedule suffers from several
defects and cannot be used as a ready recknor and observed
as follows:
"18. We must at once point out that the calculation of
compensation and the amount worked out in the
G
Schedule suffer from several defects. For example, in
Item 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. Similarly, in the second
H item the multiplier is 16 and the annual income is Rs
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 877
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
9000; the total should have been Rs 1,44,000 but is A
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 dependant on the age of the B
deceased. For example, if the deceased, a bachelor" dies
at the age of 45 and his dependants are his parents, 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 C
we propose to emphasise is that the multiplier cannot
exceed 18 years' purchase factor. This is the
improvement over the earlier position 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 D
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."

44. Again this Court in Oriental Insurance Co. Ltd. v. E
Hansrajbhai V. Koda/a (2001) 5 SCC 175 held that there is
a specific provision under Section 163-A(3) of the Act, 1988
which require that the Central Government keeping in view the
cost of living by notification in Official Gazette from time to
time amend the Second Schedule and held: F
"26. In addition, the learned counsel also pointed out that
in case ofa fatal accident and disability in a non-fatal
accident, it has been provided that notional income for
the claimant who had no income prior to the· accident
shall be Rs 15, 000 per annum and still, however the G
Second Schedule provides table of income ranging from
Rs 3000 to Rs 40, 000 and the break-up also does not
provide any calculation for Rs 15, 000, as the columns

H
878 SUPREME COURT R{:PORTS [2013] 16 S.C.R.

A in (he Schedule inter alia provide for compensation for
a person having income of Rs 12, 000, and thereafter
straight away at Rs 18, 000. The learned counsel also
submitted that despite the specific provision in Section
163-A(3) that the Central Government may, keeping in
B view the cost of living, by notification in the Official
Gazette from time to time amend the Schedule, nothing
has been done so far. Further, by order dated 30-8-2000,
this Court again noticed a number of anomalies in the
Second Schedule and, therefore, thought it fit to have
c assistance of either the Attorney General of India or the
Solicitor General of India. When the matter was called out
on 15-12-2000, Mr A/tat Ahmed, ASG, stated before the
Court that the order passed by this Court on 30-8-2000
has already engaged serious attention of the Ministry of
Surface Transport Department and the Government was
D
considering the matter for bringing necessary correction
in the Second Schedule of the Motor Vehicles Act.
Thereafter, we again sought assistance of the Additional
Solicitor General on the interpretation of Section 163-A
and also to verify whether there are corrections in the
E Second Schedule. Learned Additional Solicitor General
stated that amendment might take some time. In this
view of the matter, we think it would be appropriate if the
Central Government takes necessary action as early as
possible under Section 163-A(3}."
F
45. In Deepal Girishbhai Soni (supra) this Court having
regard to inflation and fall in rate of bank interest observed
that it is desirable that the Central Government bestows
serious consideration to amend the Second Schedule and
G made following observation:

"72. Section 163-A was introduced in the year 1994. The
executive authority of the Central Government has the
requisite jurisdiction to amend the Second Schedule
from time to time. Having regard to the inflation and fall
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 879
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
in the rate of bank interest, it is desirable that the Central A
.Government bestows serious consideration to this aspect
of the matter." \

. 46. Discrepancies/errors in the multiplier scale given in the
Second Schedule were also noticed in the case of Sarla
9
Verma. Para 35 and 36 of the judgment in Sarla Verma is
quoted hereunder:

"35. There are however discrepancies/errors in the
multiplier scale given in the Second Schedule table. It
prescribes a lesser compensation for cases where a C
higher multiplier of 18 is applicable and a larger
compensation with reference to cases where a l~sser
multiplier of 15, 16, or 17 is applicable. From the quantum
of compensation specified in the table, it is possible to
infer that a clerical error has crept in the Schedule and D
the "multiplier'' figures got wrongly typed as 15, 16, 17,
18, 17, 16, 15, 13, 11, 8, 5 and 5 instead of 20, 19, 18,
17, 16, 15, 14, 12, 10, 8, 6 and 5.

36. Another noticeable incongruity is, having prescribed
the notional minimum income of non-earning persons as. E
Rs 15, 000 per annum, the table prescribes the
compensation payable even in cases where the annual
income ranges between Rs 3000 and Rs 12, 000. This
leads to an anomalous position in regard to applications
under Section 163-A of the MV Act, as the compensation F
will be higher in cases where the deceased was idle and
not having any income, than in cases where the
deceased was honestly earning an income ranging
between Rs 3000 and Rs 12, 000 per annum. Be that as
nm~" G
In spite of assurance by the Central Government to the
Court, no change is brought in the Second Schedule keeping

H
. 880 SUPREME COURT REPORTS [2013] 16 S.C.R.

A in view the cost of living.
47. The appellants have produced the copy of the report
of the 6th Pay Commission to consider the trends in prices
including natural inflation. The same is quoted below:
B Trends in Prices "1.3.6 The General Wholesale price
index (WP/) (52 weeks average) increased 1.6 times
between 1995-96 to 2005-06 while the price index for
manufactures increased by 1. 4 times and that of
agriculture 1.6 times. Between 1996-97 and 2000-01, the
c general inflation averaged 5. 1 percent. Acceleration in
inflation post 2006 was caused by acceleration in inflation
in primary commodities and continued high escalation
in price of the commodities in fuel group due to
hardening of global prices.
D 1. 3. 7 The Consumer Pric,e Index (CPI) with Base 1982,
increased from a level of 342 in 1996-97 to 579 in 2006-07.

Consumer Price Index -CPL (IW)
General Base 1982=100
E
700

600

500

F 400

300

200

G 100

0
1996-97 97-98 98-99 99-2000 2000-01 2001-()2 2002-03 2003-04 2004-05 2005-06 2006-07

H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 881
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

A
48. Mr. P.P. Malhotra, learned Amicus Curiae produced
a table relating to "Minimum Support Price for food grains
according to crop year (Fair Average .Quality)". Second
Schedule of Act, 1988 came into effect from 14th November, B
1994. If the Minimum Support Price for food grains of the year
1994-1995 is compared with the Minimum Support Price for
the year 2011-2012 the resulting figures come as follows:-

Table 25: Minimum Support Price for Foodgrains According to
c
Crop Vear (Fair Average Quality)
(Rs. per quintal}

Year Paddy Coarse Wheat Gram Arhar Moong Urad
common cereals (Tur) D
2 3 4 5 6 7 8
1994-95 340 280 360 670 760 760 760
1995-96 360 300 380 700 800 800 800
2010-11 1000 880 1120 2100 3000 3170 2900 E

2011-12 1080 980 3200 3500 3300

Percentage increase in price of food grains since 1991-
92 has been shown as under:- F

G

H
CX>
PERCENTAGE INCREASE !N PRICE OF FOODGRAINS SINCE 1991-92 ~
Year Paddy Percent- Coarse Percent- Wheat Percent- Gram Percent- Arhar Percent- "Moong Percent- Urad Percent-
Com- tage cereals tage !age tage (Tur) tage !age !age en
men Increase Increase Increase Increase Increase Increase Increase c
since since since since since since since ""CJ
1991-92 1991-92 1991-92 1991-92 1991-92 1991-92 1991-92 ;;o
m
1991-92 230 - 205 - 280 - 500 . 545 - 545 0 545 0 s::
m
1992-93 270 17 240 17 330 18 600 20 640 17' 640 17 640 17
()
1993-94 310 35 260 27 350 25 640 28 700 28 700 28 700 28 0
1994-95 340 48 280 37 360 29 670 34 760 39 • 760 39 760 39
c
2010-11 1000 335 880 329 1120 300 2100 320 3000 450 3170 482 2900 432
~
;;o
2011-12 1080 370 980 378 - - - - 3200 487 3500 542 3300 506 m
""CJ
(Figures in Rupees per quintal) 0
~
en
~

"'
0_,..

-_,..
w

a>
(/)
(")
;;o
PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 883
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Minimum Support Price for non-foodgrains according to A
crop year (Fair Average Quality) has been brought to our notice
which is a~ follow~:

Table 26 : Minimum Support Price for Non-Foodgrains According to B
Crop Year (Fair Average.Quality)
(per quintal
Year Sugar. Cotton Jute Ground· Soya- Soya- Sun- Rape· Sal·
cane nut been been flower seed ftbwer
(in shell) black yellow .
seed Mustard

1 2 3 4 5 6 7 8 9 10 c
.
1991-92 26.00 840.00 375.00 645.00 395.00 445.00 670.00 670.00 640.00

1992-93 31.00 950.00 400.00 750.00 475.00 525.00 800.00 760.00 720.00

1993-94 34.50 1050.00 450.00 800.00 525.00 580.00 850.00 810.00 760.00

1994-95 39.10 1200.00 470.00 860.00 570.00 650.00 900.00 830.00 780.00

1995-96 42.50 1350.00 490.00 900.00 600.00 680.00 950.00 860.00 800.00
D
2010-11 139.12 3000.00 1575.00 2300.00 1400.00 1440.00 2350.00 1850.00 1800.00

2011-12 139.12 3300.00 1600.00 2700.00 1650.00 1690.00 2800.00

Percentage increase in price of non-foodgrains in the year
1991-92, 1992-93, 1994-95 and 2011-12 has been shown as E

F

G

H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY~
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
under:- CX>
PERCENTAGE INCREASE IN PRICE OF NON-FOODGRAINS SINCE 1991-92 CX>

""""
Year Sugar- Percent- Cotton Percent- Jute Percent- Gro- Percent- Soya. Percent- Soya- Percent- Sun- Percent-
cane tage cereals tage tage und tage been tage been tage flower tage en
Increase Increase lncreasE nut Increase black Increase yellow Increase Seed Increase c
since since since in since since since since "U
1991-92 1991-92 1991-92 shell 1991-92 Hl91-92 1991-92 1991-92 :;o
m
s::
1991-92 26 0 840 0 375 0 645 0 395 0 445 0 670 0
m
()
1992-93 31 19 950 13 400 7 750 16 - 475 20 525 18 800 19.40 0
1993-94 34.50 33 1050 25 450 20 800 24 525 33 580 30 850 26.87
c
1994-95 39.10 50 1200 - 43 470 25 860 33 570 44 650 46 900 34.33
~
:;o
2011-12 139.12 435 3300 293 1600 327
. 2700 319 1650 318 1690 280 2800 317.91 m
"U
0
~
'N
0
......
~
......
O>
en
0
;:o
P;l,ftrAMMA & ORS. v. K. L NARAYANA REDDY & 885
ANR, [~UDHANSU JYOTI· MUKHOPADHAYA, J.]
We are not comparing the average price of gold and silver A
in domestic and foreign markets as increased since 1994-95
till 2011-12.
49. The rates ofminimum wages, annual income as per
rates of minimum wages, dependency actual income - 1/4th
of annual income etc. has been shown in a chart, relevant B
:>O rt'ion of w h.1ch .1s as foII ows:
ILLUSTRATION
Compensation granted to the dependants (assuming to be his wife .
mother and two children) of an unskilled aged under 25 years in the yea
1990:
Annual income as per rate of minimum wages= Rs.9360
c
Annual dependency as in the year= 1/4th of Rs.9360 = Rs.7020
Compensation granted to the dependants based on the judgmen
Sarla Verma vs. DTC' = Annual dependency X Multiplier applicl3ble in the
age group '20-25 years' i.e. 18 =Rs 7020 X 18 = Rs.126360
D
STATE- DELHI
Year Rate of Annual Balance Depen- rate of Interest
minimum income Com pen- dency interest received
wages as per sation , (annual
rate of (Remai- income-
minimum ning 1/4th of E
wages com pen- annual
sation income)
Depende-
ncy i
nterest
received) F
1990 780 9360 126360 7020 10% 11934
(compen-
sation
granted) '
1994 1401 16812 148371 12609 10% 13576 G

1995 1520 18240 149338 13680 11.60% 15736
2010 5278 63336 - 47502 7.50% -
2011 6443.667 77324 - 57993 9% -
H
886 SUPREME COURT REPORTS {2013J 16 S.C.R.

A The aforesaid charts have been prepared by learned
Amicus Curiae.
50. Learned Amicus Curiae also produced a copy of the
"Family Welfare Statistics in India 2011" published by Statistics
Division, Ministry of Health and Family Welfare, Government of
B India. Therein the expectation of life at birth has been shown
at Table - A.12 and the same is quoted below:

"Table - A.12
EXPECTATION OF LIFE AT BIRTH
c
Census Year Male Female
1 2 3
1901-10 22.6 23.3
D 1911-20 19.4 20.9
1921-30 26.9 26.6
1931-40 (a) 32.1 31.4
1941-50 32.4 31.7
1951-60 41.9 40.6
E
1961-70 46.4 44.7
1970-75 50.5 49.0
1976-ao (b) 52.5 52.1
19a1-a5 55.4 55.7
F
19a6-90 57.7 5a.1
1991-96 60.6 61.7
1996-01 (c) 62._3 65.3
2001-05 63.a 66.1
G . 2006-10 65.a 68.1
2011-15 (d) 67.3 69.6
-2016-20 ea.a 71.1
20~1-25 69.a 72.3
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 887
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
51. Considering the current trend of inflation cost of food A
grains and all other items, Mr. P.P. Malhotra, Senior Advocate,
Amicus Curiae submitted that for just compensation the
multiplier should be enhanced to 24-25 years. Further,
accordiQg to him, while calculating the compensation, the
amount payable towards dependency should be increased as
the life expectancy is upto 70-75 years and secondly after 10 B
years of earning capacity it should be doubled in view of
escalation of cost of living and progressive increase in the
income.
52. Keeping in view the cost of living, the Central
Government is required to amend the Second Schedule [See C
Section 163A (3)]. The Second Schedule was enacted by Act
54 of 1994 w.e.f. 14th November, 1994. Now more than 19
years have passed but no amendment has been made. Cost
of living has gone up many fold.
53. In view of finding recorded above, we hold that Second D
Schedule as was enacted in 1994 has now become redundant,
irrational and unworkable, due to changed scenario including
the present cost of living and current rate of inflation and
increased life expectancy. ·
54. A letter dated 5th December, 2012 issued by the Joint E
Secretary, Ministry of Road Transport & Highways, New Delhi
has been brought to our notice by Mr. P.P. Malhotra. Giving
reference to the present case fherein, the officer has informed
that the Motor Vehicles (Amendment) Bill, 2012, inter alia, to
amend Section 163A of the Motor Vehicles Act, 1988 was F
passed by the Rajya Sabha on 8th May, 2012. The said Bill
proposes to substitute Section 163-A(3) of -the Act by
empowering the Central Government to revise the amount or
the multiplier specified in the Second Schedule after every three
years and furthermore, the Bill also seeks to substitute the
Second Schedule so as to provide that for death of non-earning G
p_ersons, a fixed compensation of Rs.1.,00,000 for children up
to 5 years of age and Rs.1,50,000/- for persons more than 5
years of age. It is informed that though the Bill has been passed
by the Rajya Sabha and it is still pending consideration before
the Lok Sabha for its approval. The letter dated 5th December, H
2012 reads as follows:
888 SUPREME COURT REPORTS [2013) 16 S.C.R.

A "No. RT-1102111912012-MVL Dated December 5th, 2012

Sub:- Special Leave Petition (Civil) No.4639 of 2010 filed
by Puttamma & Ors. v. K.L. Narayana Reddy & Anr.
before the Supreme Court of India.

B Sir,

Kindly refer to your D.O. letter No.117/Genl!ASG(PPM)I
2012 dated 29th November, 2012 regarding SLP(C)
No.4639 of 2010 titled as Puttamma & Ors. v. K.L.
Narayana Reddy & Anr. before the Supreme Court of
c India.

2. In this connection, I am to inform that the Motor
Vehicles (Amendment) Bill, 2012, inter alia, to amend
Section 163A of Motor Vehicles Act, 1988, was passed
by Rajya Sabha on 8.5.2012. The said Bill propose~ to
D substitute Section 163A(3) of the Act by the following
section:
"The Central Government keeping in view the cost of
living and the rise in the price index, may, by notification
in the Official Gazette, revise the amount or the multiplier
E specified in the Second Schedule after every three
years."
2. 1. Furthermore, the Bill also seeks to substitute the
Second Schedule so as to provide that far death of non-
earning persqns, a fixed compensation shall be payable
F
as under:-
(i) Rs.1,00,000 for children up to 5 years of age
(ii) Rs.1,50,0001- for persons more than 5 years of age.
The minimum amount payable is sought to be revised
G to Rs.1,00,000.
2. 2. The following steps have been proposed for working
out compensation:-
(a) The proven annual income of the victim is to be
H worked out:
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 889
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
(b) Appropriate multiplier (higher of the multiplier based A
on the age of the victim and the age of the surviving/
dependent parents/spouse/children) to be applied:

(c) Multiply the proven annual income by the appropriate
multiplier to arrive at compensation amount, subject to
~~~~~- B
(i) The amount of compensation payable for Permanent
Total Disablement as defined in Schedule 1 of the
Workmen's Compensation Act, 1923 (8of1923) shall be
determined b..y application of appropriate multiplier to C
proved income, subject to maximum ofRs.10 /akhs.

(i1) The amount of compensation so· arrived shall be
reduced by 1/3rd in respect of fatal accidents (reduction
of 1/3rd represents living expenses for deceased person,
had he been alive) D
2.4. The Bill is presently pending in Lok Sabha.

3. You are req4ested to place the above facts before the
Hon'ble Supreme Court of India. Further development in
this matter may please be intimated to this Ministry. E

Yours sincerely,
'
(Sanjay Bandopadhyaya)
Shri P.P. Malhotra,
Additional Solicitor General of India, F
Supreme Court of· India,
57 Lodhi Estate,
New Delhi - 110003."
· 55. From the proposed Bill we find that there is a proposal
to change the multiplier applicable for different age groups; it . G
does not contemplate schedule structure o.f compensation. The
factors to be considered for working out compensation are (a)
age of the victim (b) multiplier (c) annual income up to
Rs.1,00,000/- (the maximum annual income for calculation of
compensation will be deemed to be Rs.1,00,000/-even if the
H
890 SUPREME COURT REPORTS [2013] 16 S.C.R.

A income exceeds Rs.1,00,000i-). Separate provisions have
been made for grievous injury and non-grievous injury etc.
56. The Central Government was bestowed with duties to
amend the Second Schedule in view of Section 163-A(3), but
it failed to do so for 19 years in spite of repeated observations
B of this Court. For the reasons recorded above, we deem it
proper to issue specific direction to the Central Government
through the Secretary, Ministry of Road Transport & Highways
to make the proper amendments to the Second Schedule table
keeping in view the present cost of living, subject to amendment
C of Second Schedule as proposed or may be made by the
Parliament. Accordingly, we direct the Central Government to
do so immediately.' Tiii such amendment is made by the Central
Government in exercise of power vested under sub-section (3)
of Section 163A of Act, 1988 or amendment is made by the
Parliament, we hold and direct that for children upto the age of
·D 5 years shall be entitled for fixed compensation of Rs.1,00,000/
-(rupees one lakh) and persons· more than 5 years of age shalr
be entitled for fixed compensation of Rs.1,50,000/-(rupees one
lakh and fifty thousand) or the amount may be determined in
terms of Second Schedule whichever is higher. Such amount
E is to be paid if any application is filed under Section 163A of
the Act, 1988.
Grant of Interest
57. Section 171 of the Act, 1988 deals with the award of
interest where any claim is allowed, it reads as follows:
F
"171. Award of interest where any claim is allowed.-
Where any Claims Tribunal allows a claim for
compensation made under this Act, such Tribunal may
direct that in addition to the amount of compensation
simple interest shall also be paid at such rate and from
G such date not earlier than the date of making the claim
as it may specify in this behalf."
Under the said provision no rate of interest has been fixed
and its duty is bestowed upon the Tribunal to fix the rate of ·
interest.
H
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 891
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
58. The rate of interest provided and granted under A
different Acts is as under:
'
(a) The Section 4 (A) (3) qf the Workmen's Compensation
Act, 1923 provides payment of interest @12% per annum or
at such higher rate not exceeding the maximum of the lending
rate of the scheduled banks for the delayed payment of B
compensation.
(b) The Consumer Protection Act even though provides no
provision for grant of interest, this Court has granted interest
by invoking Section 3 of the Interest Act and Section 34 of the C
CPC and has awarded interest @ 12% to 18% for delayed
payment.
(c) The Land Acquisition Act provides for the interest for
delayed payment @ 9% for the first year and 15% for the rest
of the years. D
(d) The Arbitration and Conciliation Act, 1996 provides for
interest @ 18% per annum under Section 31 (7) of the Act.
59. This Court in Kaushnuma Begum v. New India
Assurance Co, Ltd. & Ors. (2001) 2 SCC -9 noticed that the E
Nationalized Banks are granting interest @ 9% on fixed deposit
for one year and held as follows:
"24. Now, we have to fix up the rate of interest. Section
171 of the MV Act empowers the Tribunal to direct that
"in addition to the amount of compensation simple F
interest shall also be paid at such rate and from such
date not earlier than the date of making the claim as may
be specified in this behalf'. Earlier, 12% was found to be
the reasonable rate of simple interest. With a change in
economy and the policy of Reserve Bank of India the
interest rate has been lowered. The nationalised banks G
are now granting interest at the rate of 9% on fixed
deposits for one year. We, therefore, direct that the
compensation amount fixed hereinbefore shall bear
interest at the rate of 9% per annum from the date of the
claim made by the appellants. The amount of Rs 50,000 H
892 SUPREME COURT REPORTS [2013] 16 S.C.R.

A paid by the Insurance Company under Section 140 shall
be deducted from the principal amount as on the date of
its payment, and interest would be recalculated on the
balance amount of the principal sum from such date."

60. This Court in Abati Bezbaruah v. Deputy Director
B General, Geological Survey of India & Anr. (2003) 3 SCC 148
noticed that varying rate of interest is being awarded by the
Tribunals, High Courts and this Court. In the said case, this
Court held that the rate of interest must be just and reasonable
depending on the facts and circumstances of the case and
c should be decided after taking into consideration relevant
factors like inflation, change in economy, policy being adopted
by the Reserve Bank of India from time to time, how long the
case is pending, loss of enjoyment of life etc.

61. In Supe Dei v. National Insurance Co. Ltd.& Anr.
D (2009) 4 SCC 513 this Court held that proper interest would
be 9% per annum.

62. In view of the aforesaid provisions of the Act, 1988
(Section 171) and the observation of this Court, as noticed
above, we keep this question open for Tribunals and Courts to
E decide the rate of interest after taking into consideration the
rate of interest allowed by this Court in similar case and -0ther
factors such as inflation, change in ~conomy, policy adopted
by the Reserve Bank of India from time to time and the period
since when the case is pending.

F Present Case

63. In the present case, the following fact emerges:

The deceased was drawing gross salary of Rs. 13,331/-
per month and he was paying a sum of Rs.789/- per month
G towards income tax and an amount of Rs. 100/- per month
towards professional tax. Thus he was paying total amount of
Rs.889/- per month towards tax and if that amount is deducted
from the gross income of the deceased it comes to Rs.12,442/
- per month.
H
•puTTAMMA & ORS. v. K. L. NARAYANA REDDY & 893
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

The deceased was 48 years old at the time of death. He A
would have continued in service for another 12 years and he
would have been entitled for pension. Therefore, if increase in
the future income is taken at 50% it will come to Rs.18,663/-
(Rs.•12,442/- +Rs. 6221).
As per decision in 'Sar/a Verma' the deducti~ towards B
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
family members is 4 to 6 and 011e-fifth (1/5th) where the number
of dependent family members exceeds 6. In the present case, C
there are four dependent family members. Therefore, the
deduction towards personal and living expenses of the
deceased should be 1/4th. If 1/4th amount is deducted from the
income of the deceased it will come to Rs.13,998/- (Rs. 12,442/
- + R~. 6,221 - Rs. 4665).
At the time of accident, the deceased was 48 years old, D
hence on the basis of decision in 'Sarla Verma' multiplier of
13 will be <Jpplicable. In that case the claimants should be
entitled to get the following benefits:
(i) Amount of compensation wi.th 12 Rs. 21,83,688/-
months salary ar:id 13 as multiplier E
(13,99.8/- x 12 x13)
(ii) Compensation to the· family Rs. 1,00,000/-
members (children and family
members other than wife) for loss
of love and affection, deprivation , F
of protection social security etc.
(iii) Compensation to the widow of the Rs. 50,000/-
deceased for loss of love and
affection, pains and sufferings,
loss of consortium, deprivation G
of protection, social security etc.
(iv) Cost incurred on account of funeral Rs. 10,000/-
and ritual expenses
Total Compensation Rs.23,43,688/- H
894 SUPREME COURT REPORTS [2013] 16 S.C.R.

A 64. In the appeal which was filed by the claimants before
the High Court, the High Court instead of deciding the just
compensation allowed meager enhancement of compensation.
In doing so, the High Court introduced the concept of split
multiplier and departed from the multiplier system generally
B used in light of the decision in Sar/a Verma (supra) case
without disclosing any reason. The High Court has also not
considered the question of prospect of future increase in salary
of the deceased though it noticed that the deceased would
have continued in pensionable services for more than 10 years.
When the age of the deceased was 48 years at the time of
C death it wrongly applied multiplier of 10 and not 13 as per
decision in 'Sarla Verma'. Thus, we fail to appreciate as to why
the High Court chose to apply split multiplier and applied
multiplier of 10. We, thus, find that the judgment of the High
Court is perverse and contrary to the evidence on record and
is fit to be set aside 'for having not considered the future
D prospects of the deceased and also for adopting split multiplier
method against the law laid down by this Court. In view of our
aforesaid finding, we hold that the judgment of the High Court
deserves to be set aside. We, accordingly, set aside the
impugned judgment and hold that the claimants are entitled for
E total compensation of Rs.23,43,688/-. They shall also get
interest on the enhanced compensation at the rate of 12% per
annum from the date of filing of the complaint petition.
Respondent No.2-lnsurance Company is directed to pay
enhanced/additional compensation and interest to the
claimants within a period of three months by getting prepared
F a demand draft in their name.

65. The Insurance Company is directed to submit its
compliance report in the Registry of the High Court of
Karnataka at Bangalore; the Registry shall place the same
G before an appropriate Bench for perusal. If the Bench finds that
the Insurance Company has failed to comply with the directions
contained in this judgment, it will be open to the Bench to initiate
action against the officers of the Company. The appeal is
allowed with aforesaid observations and directions.

H Bibhuti Bhushan Bose Appeal allowed.