Supreme Court of India
R.K. MALIK AND ANR.versusKIRAN PAL AND ORS.
- Citation
- 2009 INSC 833
- Decided
- 15 May 2009
- Disposal
- Disposed off
- Bench
- S B SINHA
Holding
The Supreme Court held that, in addition to pecuniary compensation calculated under the Second Schedule, an extra sum of Rs 75,000 per claimant must be awarded as compensation for the future prospects of the deceased children, and it upheld the High Court's interest rate of 7.5% per annum.
Summary
A school bus fell into the Yamuna River, killing 29 children. The parents filed claim petitions under Section 163A of the Motor Vehicles Act, 1988, seeking compensation. The Motor Accident Claims Tribunal awarded pecuniary compensation based on the Second Schedule multiplier method but no non‑pecuniary damages. The Delhi High Court enhanced the award by Rs 75,000 per claimant and increased the interest rate to 7.5% per annum. The Supreme Court affirmed the use of the Second Schedule for pecuniary loss, upheld the High Court's interest award, and held that an additional amount of Rs 75,000 should be granted to each claimant as compensation for the children’s future prospects, a form of non‑pecuniary loss.
Issues considered
- Whether the Second Schedule multiplier method under the Motor Vehicles Act, 1988 applies to calculate pecuniary compensation for deceased child victims.
- Whether compensation for the future prospects of the deceased children, as a non‑pecuniary loss, should be awarded.
- Whether the interest rate of 7.5% per annum awarded by the High Court is appropriate.
- Whether the High Court erred in not granting additional compensation for future prospects.
Legislation cited
- Motor Vehicles Act, 1988s. 163A, s. 166, s. 168
Subjects
Motor accident compensationPecuniary damagesNon‑pecuniary damagesFuture prospectsMultiplier methodLoss of dependencyInterest awardCompensation for loss of expectation of life
Judgment
[2009] 10 S.C.R. 87
,.,
-
I . A
R.K. MAUK AND ANR.
v.
KIRAN PAL AND ORS.
(Civil Appeal No. 3608 of 2009)
'
MAY 15, 2009
B
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.]
,.
Motor Vehicles Act, 1988 - ss. 163A and 166 rlw 168;
Second Schedule - Bus carrying school children met with
accident and fell into river from bridge - Death of 29 children c
- Most of them were in the age group of 10 to 18 years -
Claim for compensation by parents of deceased children -
Courts below awarded pecuniary compensation, on basis of
Second Schedule and relevant multiplier under the Act, which
in majority of the casAs ranged from Rs. 1, 55, 0001- to D
Rs.1,65,0001- - Though Tribunal did not award any non-
pecuniary compensation, the High Court awarded non-
pecuniary damages of Rs. 75, 0001- - On appeal, held:
Pecuniary damages seeks to compensate losses which_ can
be translated into money terms like loss of earnings, actual E
and prospective earning and other out of pocket expenses -
On facts, no reason to differ with Courts below in respect of
,,. award of pecuniary compensation - As regards non-pecuniary
damages, the same include immeasurable elements such as
pain, suffering, loss of amenity and enjoyment of life and on F
facts, High Court rightly enhanced compensation in this
category by Rs. 75,0001- - However, compensation must also
be granted with regard to future prospects of the children,
which aspect was overlooked by both the Courts below - The
records showed that the children were good in studies and
G
,. studying in a reasonably good school and naturally, their
).
future prospect was presumably good and bright and hence,
it would be appropriate to grant further amount of Rs. 75, 0001
- (which is roughly half the pecuniary compensation) as
87
88 SUPREME COURT REPORTS [2009] 10 S.C.R.
~ compensation for future prospects of the children.
A bus carrying school children met with accident and
fell into tihe Yamuna river from the bridge. Consequent to
the accident, 29 children died. The parents of the
-
deceased children i.e. the appellants filed claim petitions
3
on account of fault liability and sought for payment of
compensation under section 163A r/w Second Schedule
of the Motor Vehicles Act, 1988.
The Motor Accident Claims Tribunal held that the
~
_,accident took place due to negligence of the driver
(respondent no.1) and, therefore, he alongwith the owner
and the insurer (respondent nos.2 and 3) were jointly and
severally liable to pay compensation and thereafter •
awarded a sum of Rs.1,55,000/- in case of children
J between age group of 10 to 15 years and Rs.1,65,000/- in
case of children between 15 to 18 years. In case of
children aged less than 10 years, Rs.1,05,000/- was
awarded in one case and in two other cases Rs.1,30,000/
- and Rs!.1,31,000/- respectively was awarded. Additional
E Rs.1,000/- was awarded in case of the third child aged
less than 10 years, as in some other cases, for loss of
books. Tile compensation figure included Rs. 5,000/- each
towards funeral and last rites. As per the Second
Schedule of the Act, the balance amount was awarded
F for loss of dependency that was calculated on notional
income of Rs. 15,000/- per annum of which Rs. 5,000/-
was deducted towards personal living expenses. The
Tribunal applied multiplier of 15 for children below 15
years and multiplier of 16 for children between 16 and 18
G years respectively. It awarded interest @ 6% for four
years.
On appeal, the High Court, by the impugned
judgment, held that the appellants were entitled to
enhancement of compensation in all the cases by
H Rs.75,000/- and Rs.1000/- (if not already awarded by the
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 89
... Tribunal) and interest@ 7.5% p.a. from the date of filing A
""""- of the claim petition till payment.
Disposing of the appeals, the Court
HELD: 1.1. Compensation in law is paid to restore the
person, who has suffered damage or loss in the same B
position, if the tortuous act or the breach of contract had
not been committed. The law requires that the party
suffering should be put in the same position, if the
contract had been performed or the wrong had not been
committed. The law in all such matters requires payment C
of adequate, reasonable and just monetary
•
compensation. [Para 10) [99-F-G]
1.2. In cases of motor accidents the endeavour is to
put the dependents/claimants in the pre-accidental 0
position. Compensation in cases of motor accidents, as
in other matters, is paid for reparation of damages. The
damages so awarded should be adequate sum of money
that would put the party, who has suffered, in the same
position if he had not suffered on account of the wrong. E
Compensation is therefore required to be paid for
prospective pecuniary loss i.e. future loss of income/
dependency suffered on account of the wrongful act.
[Para 11) [99-H; 100-A-B)
1.3. However, no amount of compensation can F
restore the lost limb or the experience of pain and
suffering due to loss of life. Loss of a child, life or a limb
can never be eliminated or ameliorated completely.
Pecuniary damages cannot replace a human life or limb
lost. Therefore, in addition to the pecuniary losses, the G
law recognises that payment should also be made for
non pecuniary losses on account of, loss of happiness,
pain, suffering and expectancy of life etc. The Motor
Vehicles Act, 1988 provides for payment of "just
compensation" vide section 166 and 168. It is left to the H
90 SUPREME COURT REPORTS (2009) 10 S.C.R.
A courts to decide what would be "just compensation" in .
facts of a case. [Para 12] [100-B-D] ....
1.4. For calculating pecuniary loss or loss of
dependency, it is the multiplier method which should be
applied. The said method is based upon the principle that
B
the claimant must be paid a capital sum, which would
yield sufficient interest to provide material benefits of the
same standard and duration as the deceased would have
provided for the dependents, if the deceased had lived
and earned. The multiplier method is based upon the
c assessment that yearly loss of dependency should be
eq1,1al to interest that could be earned in normal course
on the capital sum invested. The capital sum would be the
compensation for loss of dependency or the pecuniary
loss suffered by the dependents. Uniform application of
D the multiplier method ensures consistency and certainty
and prevents different amounts being awarded in
different cases. [Para 13] [100-D-G]
1.5. For calculating the yearly loss of dependency the
E sta1rting point is the wages being earned by the deceased,
less his personal and living expenses. This provides a
basic figure. Thereafter, effect is given to the future
prospects of the deceased, inflation and general price rise ,
that erodes value and the purchasing power of money. .,.
F To the multiplicand so calculated, multiplier is to be
applied. The multiplier is decided and determined on the
basis of length of dependency, which must be estimated.
This tras to be necessarily discounted for contingencies
and uncertainties. [Para 14] [100-H; 101-A-B]
G Sar/a Dixit v. Ba/want Yadav (1996) 3 SCC 179;
Managing DirectorTNSTC Ltd. V. K. T. Bindu (2005) 8 sec ~
473; T. N. State Transpo1tCorp. Ltd. v. S. Rajapriya (2005) 6
SCC 236; New India Asst1renr:;eCo. Ltd. v. Charlie (2005) 10
SCC 720 and United India /nsuranceCo. Ltd. v. Patrica Jean
H Mahajan (2002) 6 SCC 281 - relie~· on.
92 SUPREME COURT REPORTS [2009J 10 S.C.R.
A dependency in the present cases. No fact and reason
was highlighted during the arguments why the Second
Schedule should not apply in the present cases. The
Second Schedule also provides for deduction of 1/3rd
consideration towards expenses; which the victim would
B have incurred on himself if he h.: j lived. As compensation
for loss of dependency is to be calculated on the basis
of notional income because the deceased was a child. It
by necessary implication takes into account future
prospects, inflation, price rise etc. Therefore keeping in
C view of Second Schedule of the Act, this Court do not see
any reason to differ with the view taken by the Tribunal
as well as the High Court in so far as award of pecuniary
compensation to the dependents/claimants is concerned.
(Paras 17 and 18] (102-0-G]
D 4.1. As regards non-pecuniary compensation, it is
extremely difficult to quantify the same as it is to a great
extent based upon the sentiments and emotions. But, the
same could not be a ground for non-payment of any
amount whatsoever by stating that it is difficult to quantify
E and pinpoint the exact amount payable with
mathematical accuracy. Human life cannot be measured
only in terms of loss of earning or monetary losses alone.
There are emotional attachments involved and loss of a
child can have a devastating effect on the family which
F can be easily visualized and understood. Perhaps, the
only mechanism known to law in this kind of situation is
to compensate a person who has suffered non-pecuniary
loss or damage as a consequence of the wrong done to
him by way of damages/monetary compensation. When
G a victim of a wrong suffers injuries he is entitled to
compensation including compensation for the
prospective life, pain and suffering, happiness etc., which
is sometimes described as compensation paid for "loss
of expectation of life". This head of compensation need
H not be restricted to a case where the injured person
__,
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 93
·--'. himself initiates action but is equally admissible if his
dependant brings about the action. [Para 24] [105-G-H; "'
106-A-D]
4.2. The injury inflicted by deprivation of the life of a
child is extremely difficult to quantify. In view of the E
uncertainties and contingencies of human life, what
would be an appropriate figure, an adequate solatium is
difficult to specify. The courts have therefore used the
expression "standard compensation" and "conventional
amount/sum" to get over the difficulty that arises in
quantifying a figure as the same ensures consistency
c
and uniformity in awarding compensations. [Para 25]
[106-E-F]
4.3. While quantifying and arriving at a figure for
"loss of expectation of life"; the Court have to keep in [
mind that this figure is not to be calculated for the
prospective loss or further pecuniary benefits that. has
been awarded under another head i.e. pecuniary loss.
The compensation payable under this head is for loss of
life and not los~ of future pecuniary prospects. Under this E
head, compensation is paid for 'termination of life, which
results in constant pain and suffering. This pain and
suffering does not depend upon the financial position of
' the victim or the claimant but rather on the capacity and
the ability of the deceased to provide happiness to the F
claimant. This compensation is paid for loss of
prospective happiness which the claimant/victim would
have enjoyed had the child not died at the tender age.
[Para 26] [106-G-H; 107-A-B]
R. D. Hattangadi v. Pest Control (India) (P) Ltd. (1995)1 c:
.....
SCC 551and Common Cause, A Registered Society v.
Union of India (1999)6 sec 667, relied on.
Ward v. James (1965) I All E R 563, referred to.
I-
94 SUPREME COURT REPORTS (2009] 10 S.C.R.
A Halsbury's Laws of England 4th Edition, Vol. 12, page
446, referred to.
5.1. In addition to awarding compensation for
pecumiary losses, compensation must also be granted
with regard to the future prospects of the children. It is
8
incumbent upon the Courts to con<>ider the said aspect
while awarding compensation. [Para 31] [108-G-H; 109-
A]
5.2. In the present case, the claim with regard to
C future prospect should have been addressed by the
cou1rts below. While considering such claims, child's
performance in school, the reputation of the school etc.
might be taken into consideration. In the present case,
records shows that the children were good in studies
0 -and studying in a reasonably good school. Naturally, their
future prospect would be presumed to be good and
bright. Since they were children, there is no yardstick to
meC11sure the loss of future prospects of these children.
But they were performing well in studies, natural
E consequence supposed to be a bright future. Therefore,
denying compensation towards future prospects seems
to be unjustified. Keeping this in background, facts and
circumstances of the present case, it would be
appropriate to grant compensation of Rs. 75,000/- (which
F is roughly half of the amount given on account of
pecuniary damages) as compensation for the future
prospects of the children, to· be paid to each claimant
within one month of the date of this decision. This amount
i.e. Rs. 75,000/- is over and above what has been awarded
G by the High Court. [Para 32] [109-8-G]
General Manager, Kera/a S.R. T. C. v. Susamma Thomas
(1994) 2SCC 176; Sar/a Dixit v. Ba/want Yadav (1996) 3 SCC
. ...
179; LataWadhwa v. State of Bihar (2001) 8 SCC 197;
MS.Grewal v. DeepChand Sood (2001) 8 SCC 151 and
H State of Haryana v. Jasbir Kaur, (2003) 7 SCC 484, relied
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 95
_, on. A
6. Pecuniary damages seeks to compensate those
losses which can be translated into money terms like
loss of earnings, actual and prospective earning and
other out of pocket expenses. In contrast, non-pecuniary B
damages include such immeasurable elements as pain
and suffering and loss of amenity and enjoyment of life.
In this context, it becomes duty of the court to award just
compensation for non-pecuniary loss. It is difficult to
quantify the non-pecuniary compensation, nevertheless, C.
the endeavour of the Court must be to provide a just, fair
and reasonable amount as compensation keeping in view
all relevant facts and circumstances into consideration.
The High Court in present case rightly enhanced the
compensation in this category by Rs. 75,000/-. [Para 34)
i.. [110-H; 111-A-E] D
7. With respect to the interest, the Tribunal had
directed for payment of interest for only four years at the
rate of 6% per annum from the date of filing of the claim
petition till the award and in case payment was not made E
within 30 days then further interest at the rate of 6% from
the date of award till payment. In appeal, the High Court·
awarded 7% % per annum from the date of filing of the
petition till payment. The interest awarded by the High
"' Court is just and proper, so the same need not be F
disturbed. [Para 35] [111-F-G]
Case Law Reference:
(2001) a sec 197 relied on Para 9
(1996) 3 sec 119 relied on Para 14 G
(2005) a sec 473 relied on Para 14
(2005) 6 sec 236 relied on Para 14
(2005) 1o sec 120 relied on Para 14 H
96 SUPREME COURT REPORTS (2009] 10 S.C.R.
A (2002) 6 sec 281 relied on Para 14 •
(1911-13) All Eng.Reporter 160 referred to Para 15
(2003) 3 sec 148 relied on Para 16
(2002) 6 sec 281 relied on - Para 16
B
(1996) 4 sec 362 relied on Para 16
(1965) I All E R 563 referred to Para 21
(1995) 1 sec 551 relied on Para 22
c
(1999) 6 sec 667 relied on Para 23
(2001) 8 sec 151 relied on Para 29
(1994) 2 sec 176 relied on Para 31
D (1996) 3 sec 119 relied on Para 31
(2003) 1 sec 484 relied on Para 33
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3608 of 2009.
E
From the Judgment & Order dated 17.5.2006 of the High
Court of Delhi at New Delhi MACT Nos. 194, 195, 196, 167,
199, 200, 201-202, 203-204, 207-208, 209-210, 213, 214, .,
215, 217, 221, 222, 228•229, 231-232, 233-234 and 742-743
F of 2005.
WITH
C.A. Nos. 3609 & 3607 of 2009.
Kailash Vasdev, T. Harish Kumar, Yudhister Singh, Ashok
G
Mathur (NP) and Rohit Minocha for the Appellants.
~
Pankaj Bala Verma (for Kiran Suri), P.R. Sikka, Dhiraj,
Reeta Dewan Puri, Mohd. Wasi (for P.N. Puri), Ravi Kumar
Tomar, (for Jitendra Kumar), and Vipin Gogia (for Jaspreet
H Gogia) for the Respondents.
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 97
-1
The Judgment of the Court was delivered by A
DR. MUKUNDAKAM SHARMA, J. 1. Leave granted.
2. Challenge in these appeals is made to the legality and
validity of the judgment and order dated 17.05.2006 rendered
by a Single Judge of Delhi High Court in a bunch of motor B
accident claims petitions bearing MACT Nos. 194, 195, 196,
197, 199, 200, 201-202, 203-204, 207-208, 209-210, 213,
214, 215, 217, 221, 222, 228-229, 231-232, 233-234 and 742-
743 of 2005, whereby and whereunder the High Court was
pleased to dispose of the claim petitions of the appellant$ c
herein.
3. In order to decide these appeals, it would be necessary
to state few basic facts. The appellants herein are claimants
whose children were studying in school. On 18.11.1997 when D
these children were proceeding to the school in a bus bearing
No. DL IP-1644, the bus after overrunning the road and breaking
the railing got drowned in Yamuna river at Wazirabad Yamuna
Bridge. Consequent to the accident, 29 children died.
4. The bus was being driven by Mr. Karan Pal (respondent E
No.1 herein) and was owned by Mr. Hari Kishan (respondent
No.2) and was insured with National Insurance Company Ltd.
{respondent No. 3). It was alleged that the driver was driving
the bus in a rash and negligent manner and at a very fast
speed. It was further alleged that the bus driver lost control of F
the bus and after breaking the railing of the bridge on left side,
the same fell into the river Yamuna .
. 5. The appellants filed claim petitions individually on
account of fault liability and sought for payment of G
compensation under Section 163-A read with Second
Schedule of the Motor Vehicle Act, 1988 (in short 'the Act'). It
was pleaded that the deceased-children would have earned
good amount per month in future and would have provided
H
98 SUPREME COURT REPORTS (2009] 10 S.C.R.
A financial assistance and pecuniary help to their parents-
appellants. The claim petitions of the appellants were heard
together by the Motor Accident Claims Tribunal, Delhi (in short
'the Tribunal').
6. During the course of trial before the Tribunal, several
8
witnesses were examined in support of the respective claims.
The appellants also examined themselves as witnesses. The
Tribunal by award dated 06.12.2004 held that the accident had
taken place due to the negligence of the driver (respondent No.
C 1) and, therefore, the said respondent along with respondent
Nos. 2 and 3 were jointly and severally liable to pay
compensation. The Tribunal by its common award awarded a
sum of Rs. 1, 55,000/- to the dependents of children between
age group of 10 to 15 years and Rs. 1, 65,000/- between 15
to 18 years. Three of the children namely Kailash Rathi, Neena
D Jain and Jatish Sharma were less than 10 years. In the case
of Kailash Rathi, compensation of Rs. 1, 05,000/- was awarded
and in the cases of Neena Jain and Jatish Sharma,
compensation of Rs. 1, 30,000/- and Rs. 1, 31,000/-
respectively was awarded. Additional Rs. 1000/- was awarded
E in the case of Jatish Sharma, as in some other cases, for loss
of books. The figures mentioned above include Rs. 5,000/-
each towards funeral and last rites. It awarded interest @ 6%
for four years. As per the Second Schedule of the Act, the
balqnce amount was awarded for loss of dependency that was
F calculated on notional income of Rs. 15,000/- per annum. Rs.
5,000/- was deducted towards personal living expenses. The
Tribunal applied multiplier of 15 for children below 15 years and
multiplil(r of 16 for children between 16 and 18 years
respectively.
G
7. Against the said order of the Tribunal, appeals were
filed before the High Court by the appellants who were heard
together by the High Court. It was submitted before the High
Court that the amount awarded by the Tribunal was not just and
reasonable and the Tribunal erred in not awarding interest from
H
R.K. MAUK AND ANR. v. KIRAN PAL AND ORS. 99
[DR. MUKUNDAKAM SHARMA, J.]
the date of petition till realization. A
8. The High Court by its common order held that the
appellants are entitled to enhancement of compensation in all
the cases by Rs. 75,000/- and Rs. 1000/- (if not already
awarded by the Tribunal) and interest@ 7.5% per annum from
8
the date of filling of the claim petition till payment. It was further
held that 50% of the enhanced compensation with interest shall
be paid and the balance 50% shall be kept in the form of fixed
deposit or in the post office for a period of six years. The High
Court directed that the dependents would be entitled to interest , C
but would not withdraw the principal amount during the lock-in
period of six years without the permission of the Tribunal.
9. Feeling aggrieved, the appellants have preferred the
present special leave petition contending that the High Court
ought to have applied the ratio of Lata Wadhwa v. State of D
Bihar, (2001) 8 sec 197 to the facts of the case and also that
it failed to award a fair and reasonable compensation. It was
submitted that the High Court ought to have awarded
compensation of Rs. 10, 00,0001-. It was the further contention
that the High Court erred in applying notional income of E
deceased child as Rs. 15,000/- per annum only. It was further
contended that the Tribunal ought to have enhanced the income
considering the rise in cost of living as well as inflation.
10. Undoubtedly, the compensation in law is paid to restore F
the person, who has suffered damage or loss in the same
position, if the tortuous act or the breach of contract had not
been committed. The law requires that the party suffering
should be put in the same position, if the contract had been
performed or the wrong had not been committed. The law in
all such matters requires payment of adequate, reasonable and G
just monetary compensation.
11. In cases of motor accidents the endeavour is to put
the dependents/claimants in the pre-accidental position.
Compensation in cases of motor accidents, as in other matters, H
100 SUPREME COURT REPORTS (2009] 10 S.C.R.
A is paid for reparation of damages. The damages so awarded
should be adequate sum of money that would put the party, who
has suffered, in the same position if he had not suffered on
account of the wrong. Compensation is therefore required to
be paid for prospective pecuniary loss i.e. future loss of income/
B dependency suffered on account of the wrongful act.
12. However, no amount of compensation can restore the
lost limb or the experience of pain and suffering due to loss of
life. Loss of a child, life or a limb can never be eliminated or
ameliorated completely. To put it simply-pecuniary damages
C cannot replace a human life or limb lost. Therefore, in addition
to the pecuniary losses, the law recognises that payment should
also be made for non pecuniary losses on account of, loss of
happiness, pain, suffering and expectancy of life etc. The Act
provides for payment of "just compensation" vide section 166
D and 168. It is left to the courts to decide what would be "just
compensation" in facts of a case.
13. For calculating pecuniary loss or loss of dependency,
this Court has repeatedly held that it is the multiplier method
E which should be applied. The said method is based upon the
principle that the claimant must be paid a capital sum, which
would yield sufficient interest to provide material benefits of the
same standard and duration as the deceased would have
pro~ided for the dependents, if the deceased had lived and
F earned. The multiplier method is based upon the assessment
that yearly loss of dependency should be equal to interest that
could be earned in normal course on the capital sum invested.
The capital sum would be the compensation for loss of
dependency or the pecuniary loss suffered by the dependents.
G Needless to say, uniform application of the multiplier method
ensures consistency and certainty and prevents different
amounts being awarded in different cases.
14. For calculating the yearly loss of dependency the
starting point is the wages being earned by the deceased, less
H his personal and living expenses. This provides a basic figure.
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 101
[DR. MUKUNDAKAM SHARMA, J.]
Thereafter, effect is given to the future prospects of the A
deceased, ioflation and general price rise that erodes value
and the purchasing power of money. To the multiplicand so
calculated, multiplier is to be applied. The multiplier is decided
and determined on the basis of length of dependency, which
must be estimated. This has to be necessarily discounted for B
contingencies and uncertainties. Reference in this regard may
be made to the judgments of this Court in the case of Sarfa
Dixitv. Ba/want Yadav, (1996) 3 SCC 179; Managing Director
TNSTC Ltd. v. K. T. Bindu, (2005) 8 SCC 473; T. N. State
Transport Corp. Ltd. v. S. Rajapriya, (2005) 6 SCC 236; New c
India Assurance Co. Ltd. v. Charlie, {2005) 10 SCC 720 and
United India Insurance Co. Ltd. v. Patrica Jean Mahajan
(2002) 6 sec 2a1.
15. The real problem that arises in the cases of death of
,, children is that they are not earning at the time of the accident. D
In most of the cases they were still studying and not working.
However, under no stretch of imagination it can be said that
the parents, who are appellants herein, have not suffered any
pecuniary loss. In fact, Loss of dependency by its very nature
is awarded for prospective or future loss. In this context, Lord E
Atkinson aptly observed in Taff Vale Rly. Co. v. Jenkins, (1911-
13) All England Reporter 160 as follows:
"In case of the death of an infant, there may have
been no actual pecuniary benefit derived by its parents F
during the child's lifetime. But this will not necessarily bar
the parents' claim and prospective loss will found a valid
claim provided that the parents establish that they had a
reasonable expectation of pecuniary benefit if the child had
lived."
G
16. Then, how does one calculate pecuniary compensation
for loss of future earnings and loss of dependency of the
parents, grand parents etc. in the case of non-working student?
Under the Second Schedule of the Act in case of a non earning
~erson, his income is notionally estimated at Rs. 15,000/- per H
102 SUPREME COURT REPORTS [2009) 10 S.C.R.
A annum. The Second Schedule is applicable to claim petitions
\.
filed under Section 163 A of the Act. The Second Schedule
provides for the multiplier to be applied in cases where the age
of the victim was less than 15 years and between 15 years but
not exceeding 20 years. Even when compensation is payable
B under Section 166 read with 168 of the Act, deviation from the
structured formula as provided in the Second Schedule is not
ordinarily permissible, except in exceptional cases. [see Abati
Bezbaruah v. Dy. Director General, Geological Survey of
India, (2003) 3 SCC 148); United India Insurance Company
c Ltd. v. Patricia Jean Mahajan, (2002) 6 SCC 281 and UP
State Road Transport Corp. v. Trilok Chandra, (1996) 4 SCC
362).
17. Reverting back to the factual position of the present
case, the date of accident is 18.11.1997. Prior to this, the
D Second Schedule of the Act was already introduced w. e. f. ,,
14.11.1994. Thus, the notional income mentioned in the
Second Schedule and the multiplier specified therein can form
.the basis for the pecuniary compensation for the loss of
dependency in the present cases. No fact and reason was
E highlighted during the arguments why the Second Schedule
should not apply in the present cases. The Second Schedule
also provides for deduction of 1/3rd consideration towards
expenses; which the victim would have incurred on himself if
he had lived. As compensation for loss of dependency is to be
F calculated on the basis of notional income because the
deceased was a child. It by necessary implication takes into
account future prospects, inflation, price rise etc.
1&. Therefore keeping in view of Second Schedule of the
Act, this 'court do not see any reason to differ with the view
G
taken by the Tribunal as well as the High Court in so far as
award of pecuniary compensation to the dependents/claimants
is concerned. We must point out here that the learned counsel
for the appellants had argued that the notional sum of Rs.
15,000/- should be enhaflred .ari_Q_i!lg~eased as the legislature
H
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 103
[DR. MUKUNDAKAM SHARMA, J.]
has not amended the Second Schedule and the same continues A
4
to be in existence since it was enacted on 14.11.1994. We are
... not examining and going into this aspect as the accident had
taken place in the present case nearly three years after the
enactment of the Second Schedule. The time difference
between the date of the enactment and the date of accident is B
not substantial.
19. The other issue is with regard to non-pecuniary
+ compensation to the appellants-dependents on the loss of
human life, loss of company, companionship, happiness, pain
and suffering, loss of expectation of life etc.
c
20. In the Halsbury's Laws of England, 4th Edition, Vol. 12,
page 446, it has been stated with regard to non-pecuniary loss'
as follows:
D
• "Non-pecuniary loss: the pattern. Damages awarded
for pain and suffering and loss of amenity constitute a
conventional sum which is taken to be the sum which
society deems fair, fairness being interpreted by the Courts
in the light of previous decisions. Thus there has been
E
evolved a set of conventional principles providing a
provisional guide to the comparative severity of different
injuries, and indicating a bracket of damages into which
-
" ~
a particular injury will currently fall. The particular
circumstance of the plaintiff, including his age and any
unusual deprivation he may suffer, is reflected in the actual
F
amount of the award.
The fall in the value of money leads to a continuing
reassessment of these awards and to periodic
reassessments of damages at certain key points in the G
pattern where the disability is readily identifiable and not
~
... subject to large variations in individual cases."
21. In the case of Ward v. James, (1965) I All E R 563, it
was observed:
H
·'
104 SUPREME COURT REPORTS [2009] 10 S.C.R.
A "Although you cannot give a man so gravely injured \-
much for his 'lost years', you can, however, compensate
him for his loss during his shortened, span, that is, during
...
his expected 'years of survival'. You can compensate him
for his loss of earnings during that time, and for the cost
B of treatment, nursing and attendance. But how can you
compensate him for being rendered a helpless invalid? He
may, owing to brain injury, be rendered unconscious for the
rest of his days, or, owing to a back injury, be unable to +
tise from his bed. He has lost everything that makes life
c worthwhile. Money is no good to him. Yet Judges and juries
have to do the best they can and give him what they think
is fair. No wonder they find it well nigh insoluble. They are
IJeing asked to calculable. The figure is bound to be for
the most part a conventional sum. The Judges have worked
out a pattern, and they keep it in line with the changes in
D
~he value of money." 1t
22. The Supreme Court in the case of R. D. Hattangadi
v. P~st Control (India) (P) Ltd., (1995) 1 SCC 551, at page
556, has observed as follows in para 9:
E
"9. Broadly speaking while fixing an amount of
compensation payable to a victim of an accident, the
damages have to be assessed separately as pecuniary
damages and special damages. Pecuniary damages are ~
those which the victim has actually incurred and which are
F
capable of being calculated in terms of money; whereas
non-pecuniary damages are those which are incapable of
being assessed by arithmetical calculations. In order to
appreciate two concepts pecuniary damages may include
~xpenses incurred by the claimant: (i) medical attendance;
G (ii) loss of earning of profit up to the date of trial; (iii) other
material loss. So far non-pecuniary damages are \,. '
concerned, they may include (i) damages for mental and
physical shock, pain and suffering, already suffered or likely
to be suffered in future; (ii) damages to compensate for .;
H
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 105
[OR. MUKUNDAKAM SHARMA, J.]
the loss of amenities of life which may include a variety of A
"' matters i.e. on account of injury the claimant may not be
,• <
able to walk, run or sit; (iii) damages for the loss of
expectation of life, i.e., on account of injury the normal
longevity of the per~on concerned is shortened; (iv)
inconvenience, hardship, discomfort, disappointment, B
frvstration and mentiOll stress in life."
In this case, the Court awarded non-pecuniary special damages
+
of Rs. 3, 00,000/- to the claimants.
23. In Common Cause, A Registered Society v. Union c
of India, (1999) 6 SCC 667 @ page 738, it was observed:
"128. The object of an award of damages is to give the
plaintiff compensation for damage, loss or injury he has
suffered. The elements of damage recognised by law are D
divisible into two main groups: pecuniary and non-
pecuniary. While the pecuniary loss is capable of being
arithmetically worked out, the non-pecuniary loss is not so
calculable. Non-pecuniary loss is compensated in terms
of money, not as a substitute or replacement for other
E
money, but as a substitute, what McGregor says, is
generally more important than money: it is the best that a
court can do. In Mediana, Re87 Lord Halsbury, L.C.
\, observed as under:-
""·
"How is anybody to measure pain and suffering in F
moneys counted? Nobody can suggest that you can by
arithmetical calculation establish what is the exact sum of
money which would represent such a thing as the pain and
suffering which a person has undergone by reason of an
accident. ... But nevertheless the law recognises that as a G
topic upon which damages may be given."
~ ~
24. It is extremely difficult to quantify the non pecuniary
compensation as it is to a great extent based upon the
sentiments and emotions. But, the same could not be a ground
~,
H
106 SUPREME COURT REPORTS (2009] 10 S.C.R.
A for non-payment of any amount whatsoever by stating that it is
~
difficult to quantify and pinpoint the exact amount payable with
•'
mathematical accuracy. Human life cannot be measured only
in terms of loss of earning or monetary losses alone. There are
emotional attachments involved and loss of a child can have a
B devastating effect on the family which can be easily visualized
and understood. Perhaps, the only mechanism known to law
in this kind of situation is to compensate a person who has
suffered non-pecuniary loss or damage as a consequence of
the wrong done to him by way of damages/monetary
c compensation. Undoubtedly, when a victim of a wrong suffers
injuries he is entitled to compensation including compensation
for the prospective life, pain and suffering, happiness etc., which
is sometimes described as compensation paid for "loss of
expectation of life". This head of compensation need not be
restricted to a case where the injured person himself initiates
D action but is equally admissible if his dependant brings about
the action.
25. That being the position, the crucial problem arises with
regard to the quantification of such compensation. The injury
E inflicted by deprivation of the life of a child is extremely difficult
to quantify. In view of the uncertainties and contingencies of
human life, what would be an appropriate figure, an adequate
solatium is difficult to specify. The courts have therefore used
the expression "standard compensation" and "conventional "'
F amount/sum" to get over the difficulty that arises in quantifying
a figure as the same ensures consistency and uniformity in
awarding compensations.
26. While quantifying and arriving at a figure for "loss of
expectation of life", the Court have to keep in mind that this
G
figure is not to be calculated for the prospective loss or further
pecuniary benefits that has been awarded under another head ,. .
i.e. pecuniary loss. The compensation payable under this head
is for loss of life and not loss of future pecuniary prospects.
Under this head, compensation is paid for termination of life,
H which results m constant pain and suffering. This pain and
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 107
[DR. MUKUNDAKAM SHARMA, J.]
suffering does not depend upon the financial position of the A
~- victim or the claimant but rather on the capacity and the ability
of the deceased to provide happiness to the claimant. This
compensation is paid for loss of prospective happiness which
the claimant/victim would have enjoyed had the child not died
at the tender age. B
27. In the case of Lata Wadhwa (supra), wherein several
+
persons including children lost their lives in a fire accident, the
Court awarded substantial amount as compensation. No doubt,
the Court noticed that the children who lost their lives were
studying in an expensive school, had bright prospects and c
belonged to upper middle class, yet it cannot be said that higher
compensation awarded was for deprivation of life and the pain
and suffering undergone on loss of life due to financial status.
The term "conventional compensation" used in the said case
has been used for non pecuniary compensation payable on D
account of pain and suffering as a result of death. The Court in
the said case referred to Rs.50, 000/- as conventional figure.
The reason was loss of expectancy of life and pain and suffering
on that account which was common and uniform to all
regardless of the status. Unless there is a specific case E
departing from the conventional formula, non-pecuniary
comp~nsation should not be fixed on basis of economic wealth
.... ! and background.
28. In Lala Wadhawa case (supra), wherein the accident
F
took place on 03.03.1989, the multiplier method was referred
to and adopted with approval. In cases of children between 5
to 10 years of age, compensation of Rs.1.50 lakhs was
awarded towards pecuniary compensation and in addition a
sum of Rs.50, 000/- was awarded towards 'conventional
compensation". In the case of children between 10 to 18 years G
+ compensation of Rs.4.10 lakhs was awarded including
"conventional compensation". While doing so the Supreme
Court held that contribution of each child towards family should
be taken as Rs.24, 000/- per annum instead of Rs.12, 000/-
H
108 SUPREME COURT REPORTS [2009] 10 S.C.R.
A per annum as recommended by Justice Y. V.Chandrachud
Committee. This was in view of the fact that the company in
question had an un-written rule that every employee can get one
of his children employed in the said company.
29. In the case of M. ~- IJrewa/ v. Deep Chand Sood,
B (2001) 8 SCC 151, wherein 14 .;tudents of a public school got
drowned in a river due to negligence of the teachers. On the
+
question of quantum of compensation, this Court accepted that
the multiplier method was normally to be adopted as a method
for assigning value of future annual dependency. It was
C \'.lmphasized that the Court must ensure that a just
compensation was awarded.
30. In Grewal case (supra), compensation of Rs.5 lakhs
was awarded to the claimants and the same was held to be
o justified. Learned Counsel for the respondent no.3, however,
pointed out that in the said case the Supreme Court had noticed
that the students belonged to an affluent school as was
apparent from the fee structure and therefore the compensation
· of Rs.5 lakhs as awarded by the High Court was not found to
E be excessive. It is no doubt true that the Supreme Court in the
said case noticed that the students belonged to an upper
middle class background but the basis and the principle on
which the compensation was awarded in that case would
equally apply to the present case.
F 31. A forceful submission has been made by the learned
counsels appearing for the claimants-appellants that both the
Tribunal as well as the High Court failed to consider the claims
of the appellants with regard to the future prospects of the
children. It has been submitted that the evidence with regard
G to the same has been ignored by the Courts below. On perusal
of the evidence on record, we find merit in such submission that
the Courts below have overlooked that aspect of the matter
while granting compensation. It is well settled legal principle that
in addition to awarding compensation for pecuniary losses,
H compensation must also be granted with regard to the future
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 109
[DR. MUKUND~KAM SHARMA, J.]
prospects of the children. It is incumbent upon the Courts to A
consider the said aspect while awarding compensation.
Reliance in this regard may be placed on the decisions
rendered by this Court in General Manager, Kera/a S. R. T.
C. v. Susamma Thomas, (1994) 2 SCC 176; Sar/a Dixit v.
Ba/want Yadav, (1996) 3 SCC 179; and Lata Wadhwa case B
(supra).
32. In view of discussion made hereinbefore, it is quite
clear the claim with regard to future prospect should have been
be addressed by the courts below. While considering such C
claims, child's performance in school, the reputation of the
school etc. might be taken into consideration. In the present
case, records shows that the children were good in studies and
studying in a reasonably good school. Naturally, their future
prospect would be presumed to be good and bright. Since they
were children, there is no yardstick to measure the loss of future D
• I
prospects of these children. But as already noted, they were
performing well in studies, natural consequence supposed to
be a bright future. In the case of Lata Wadhwa (supra) and M.
S. Grewal (supra), the Supreme Court recognised such future
prospect as basis and factor to be considered. Therefore, E
denying compensation towards future prospects seems to be
unjustified. Keeping this in background, facts and
circumstances of the present case, and following the decision
in Lata Wadhwa (supra) and M. S. Grewal (supra), we deem it
appropriate to grant compensation of Rs. 75,000/- (which is F
roughly half of the amount given on account of pecuniary
damages) as compensation for the future prospects of the
children, to be paid to each claimant within one month of the
date of this decision. We would like to clarify that this amount
i.e. Rs. 75,000/- is over and above what has been awarded by G
the High Court.
33. Besides, the Courts have been awarding
compensation for pain and suffering and towards non-
pecuniary damages. Reference in this regard can be made to H
110 SUPREME COURT REPORTS [2009] 10 S.C.R.
-
A R. D. Hattangadi case (supra). Further, the said compensation
must be just and reasonable. This Court has observed as
follows in State of Haryana v Jasbir Kaur, (2003) 7 SCC 484,
at 486:
"7. It has to be kept in view t'lat the Tribunal constituted
B
under the Act as provided in Section 168 is required to
make an award determining the amount of compensation
which is to be in the real sense "damages" which in turn •
appears to it to be "just and reasonable". It has to be borne
in mind that compensation for loss of limbs or life can
c hardly be weighed in golden scales. But at the same time
it has to be borne in mind that the compensation is not
expected to be a windfall for the victim. Statutory provisions
clearly indicate that the compensation must be "just" and
it cannot be a bonanza; not a source of profit; but the same
D should not be a pittance. The courts and tribunals have a
duty to weigh the various factors and quantify the amount
of compensation, which should be just. What would be
"just" compensation is a vexed question. There can be no
golden rule applicable to all cases for measuring the value
E of human life or a limb. Measure of damages cannot be
arrived at by precise mathematical calculations. It would
depend upon the particular facts and circumstances, and
attending peculiar or special features, if any. Every method
or mode adopted for assessing compensation has to be
F considered in the background of "just" compensation which
is the pivotal consideration. Though by use of the
expression "which appears to it to be just" a wide
discretion is vested in the Tribunal, the determination has
to be rational, to be done by a judicious approach and not
G the outcome of whims, wild guesses and arbitrariness. The
expression "just" denotes equitability, fairness and
reasonableness, and non-arbitrary. If it is not so it cannot
be just."
34. So far as the pecuniary damage is concerned we are
H
R.K. MALIK AND ANR. v. KIRAN PAL AND ORS. 111
[DR. MUKUNDAKAM SHARMA, J.]
of the considered view both the Tribunal as well as the High A
Court has awarded the compensation on the basis of Second
Schedule and relevant multiplier under the Act. However, we
may notice here that as far as non-pecuniary damages are
concerned, the Tribunal does not award any compensation
under the head of non-pecuniary damages. However, in appeal B
the High Court has elaborately discussed this aspect of the
matter and has awarded non-pecuniary damages of Rs.
75;000. Needless to say, pecuniary damages seeks to
compensate those losses which can be translated into money
terms like loss of earnings, actual and prospective earning and c
other out of pocket expenses. In contrast, non-pecuniary
damages include such immeasurable elements.as pain and
suffering and loss of amenity and enjoyment of life. In this
context, it becomes duty of the court to award just
compensation for non-pecuniary loss. As already noted it is D
1 difficult to quantify the non-pecuniary compensation,
nevertheless, the endeavour of the Court must be to provide a
just, fair and reasonable amount as compensation keeping in
view all relevant facts and circumstances into consideration. We
have noticed that the High Court in present case has enhanced E
the compensation in this category by Rs. 75, 000/- in all
connected appeals. We do not find any infirmity in that regard.
35. With respect to the interest, the Tribunal had directed
for payment of interest for only four years at the rate of 6% per
annum from the date of filing of the claim petition till the award F
and in case payment was not made within 30 days then further
interest at the rate of 6% from the date of award till payment.
In appeal, the High Court awarded 7 and % % per annum from
the date of filing of the petition till payment. We find the interest
awarded by the High Court as just and proper, so the same G
need not be disturbed.
36. The appeals are disposed of in terms of aforesaid
order.
B.B.B. Appeals disposed of. H
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