Supreme Court of India
RANI GUPTA & ORS.versusM/S. UNITED INDIA INSURANCE CO. LTD. & ORS.
- Citation
- 2009 INSC 469
- Decided
- 8 April 2009
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
The multiplier of 10 is permissible and the High Court’s award of Rs.12.5 lakh is correct; the passenger is covered under the policy and the schedule multiplier is a non‑mandatory guide.
Summary
The husband of the appellant died as a gratuitous passenger in a friend’s car that was covered by a Private Car Package Policy. The Motor Vehicles Accidents Claims Tribunal awarded compensation using a multiplier of 13, but the High Court reduced the multiplier to 10 and awarded Rs.12.5 lakh. The insurer appealed on the multiplier and the heirs appealed on the amount. The Supreme Court examined how to compute loss of dependency, the relevance of the schedule multiplier, and whether a passenger is a "third party" under Sections 146 and 147 of the Motor Vehicles Act. It held that the schedule multiplier is only a guide, that a multiplier of 10 is permissible, and that the High Court’s award is correct. The Court also affirmed that a gratuitous passenger is covered by the policy and that the Act must be interpreted liberally but not to permit unjust enrichment.
Issues considered
- Whether a gratuitous passenger in a private car is covered as a third party under Section 147 of the Motor Vehicles Act and the Private Car Package Policy.
- What multiplier should be applied for calculating loss of dependency in death cases – whether the schedule multiplier of 13 is mandatory or a lower multiplier such as 10 is acceptable.
- How to determine the average gross future income of the deceased, including deduction of personal expenses and inclusion of benefits.
- Whether the remaining loss can be recovered by the family from capital assets.
- Interpretation of the Motor Vehicles Act as a beneficial legislation.
Legislation cited
- Motor Vehicles Act, 1988s. 146, s. 147, s. 173
Subjects
Motor Vehicles Actloss of dependencymultipliercompensationthird party insuranceprivate car policyfuture income calculationliberal interpretationunjust enrichment
Judgment
"/
[2009) 5 S.C.R. 721
RANI GUPTA & ORS. A
v.
M/S. UNITED INDIA INSURANCE CO. LTD. & ORS.
(Civil Appeal No. 2241 of 2009)
APRIL 8, 2009
a
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]
MOTOR VEHICLES ACT, 1988:
Income of deceased - Computing of - Future income - c
Appropriate multiplier to be adopted - Held: In order to assess
loss of dependency, an average gross future monthly income
must be arrived at by adding the actual gross income at the
'1 time of death, to the maximum which the deceased might
have got had he not met the premature death - Tribunal D
having considered the age of deceased as 46 years and the
fact that he had paid up the bank loan, correctly held that the
income of deceased would have doubled at the time of his
death- Multiplier of 10 applied by High Court cannot be said
to be bad in law.
E
..-!
ss.146 and 147- Person travelling in his friend's car died
due to car accident - Car insured under "Private Car Package
Policy" - Held - Insurer would be liable - Interpretation of
<; ; Statutes.
F
INSURANCE
"Private Car Package Policy" - Section 11- Clause (1 )(i)
- Liability to Third Party - Person travelling in car - Not
carried for hire or reward - Liability of Insurer - Explained.
G
INTERPRETATION OF STATUTES: Motor Vehicles Act
- HELD: is a beneficial legislation - Its provisions should be
interpreted liberally but it does not contemplate unjust
enrichment.
721 H
722 SUPREME COURT REPORTS [2009) 5 S.C.R.
A The husband of the appellant, a businessman, while
travelling in his friend's car which was insured under
'Private Car Package Policy', died as a result of the car
accident. The Tribunal assessed the annual income of
the deceased at Rs.1,89,500, and keeping in view that the
B deceased was 46 years of age and the fact that the
children had attained the age of Majority, applied
multiplier of 13. The Tribunal deducting 1/3 towards
personal expenses, awarded a total compensation of
Rs.17,40,000/-. On the appeal filed by the Insurer, the High
c Court applied the multiplier of 10, assessed loss of
dependency at Rs. 1,87 ,500 per annum, apportioned 2/
3rd as labour input, i.e. personal input of the deceased
in business and treated 1/3rd as yield from capital asset
and held loss due to death to be Rs.12,50,000/-. It further
held that the remaining loss of Rs.6,25,000/- could be t
D
made good by the family out of y'ield from capital asset.
In the appeal filed by the heirs of the deceased, it
was contended that the High Court erred in applying
multiplier of 10 instead of 13. It was submitted that for the
-
E purpose of annual dependency, High Court should have
taken into account that the deceased had paid up the
loan of Rs. 14,00,000/- with which he had purchased an
industrial plot.
-\ ...
F Dismissing the appeal, the Court
HELD: 1.1. Determination of the amount of
compensation arising out of loss of life of a person, who
was the earning member of the family, would depend
upon a large number of factors; one of them being the
G nature of job or business he was doing. For the said
purpose, an average gross future monthly income must
be arrived at by adding the actual gross income at the
time of his death to the maximum which he might have
got, had he not met a pre-mature death. [Para 12] [729-F]
H
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 723
LTD. & ORS .
..;
1.2. The Tribunal, keeping in view the fact that within A
a short time, the deceased had been able to wipe off the
entire loan taken by him from the bank and, thus, became
the owner of an industrial plot and furthermore in view ..
of the fact that he was only aged 46 years at the relevant
time, thought that his income would have doubled at the B
time of his death. The approach of the Tribunal was
correct. [Para 12] [729-G, H; 730-A]
Sar/a Dixit v. Ba/want Yadav (1996) 3 SCC 179, relied
on
c
1.3. Average life expectancy in India also is one of
the factors which must be taken into consideration for the
-~
. purpose of calculating the average gross future monthly
income. The average life expectancy in India is now 60-
-f 61 years. It is necessary to subtract personal and living D
expenses and other statutory liabilities like payment of
income tax etc. Ordinarily, and subject to just exceptions,
a lump sum amount equivalent to 1/3rd of the income of
the deceased, i.e., living and miscellaneous expenses
from the income, should be deducted. In a case of E
permanent disability, where the injured even for a very
!""" small thing would have to depend on the services of
another, a direction to deduct the said amount may not
be insisted upon. Deduction of 1/3rd is, thus, the ordinary
-- j rule. Upon applying the relevant principle, the multiplicant F
would be annual dependency multiplied by life
expectancy minus age of the deceased. [Paras 14 and 15]
[730-F; 731-H; 732-A; 732-A-C]
National Insurance Co. Ltd. v. Indira Srivastava (2008)
2 SCC 763 and Sunil Kumar v. Ram Singh Gaud & Ors. G
(2007) 12 SCALE 792, relied on
1.4. The multiplier specified in the Second Schedule
should be taken to be the guide but may not be decisive
for calculating compensation in cases of death. In fact, H
724 SUPREME COURT REPORTS (2009] 5 S.C.R.
A the word multiplier has been USE!d only for the purpose
of calculating damages in the case of permanent
disability and not in the case of death as would appear
from notes 5 and 6 appended thereto. However, in a given
case even in terms of the Second Schedule where the
s compensation is payable on the basis of a no-fault
liability, the amount of compensation may be higher than
the one which has been specified in the Second
Schedule in case of a fault liability. [Paras 19 and 22] [735-
H; 736-A; 736-F]
C Helen C. Rebello v. Maharashtra S.R.T.C. (1999) 1 SCC
90 and Davies v. Powell Duffryn Associated Collieries Ltd.
(1942 (1) ALL ELR 657, referred to
Halsbury's Laws of England Vol.34, referred to.
D United India Insurance Co. Ltd. Vs. Patricia Jean
Mahajan (2002) 6 SCC 281; General Manager, Kera/a
S.R. T.C. v. Susamma Thomas (1994) 2 SCC 176 and New
India Assurance Company Ltd. v. Charlie (2005) 10 SCC 720,
relied on.
E
1.5. In the instant case, the deceased was a
businessman. What was the actual loss of dependency
to the family was his contribution to run the business.
The assets of the business remained. The amount of
F compensation, therefore, was required to be determined
keeping in view that factor in mind. Application of the
multiplier of 10, therefore, cannot be said to be bad in law,
in terms whereof the amount of compensation would
come out to Rs.12,50,000/-. Although the High Court
might not, thus, be entirely correct in opining that the
G remaining loss could be made good., but this Court need
not delve into the said question any further as the ultimate
decision of the High Court is correct. [Paras 24 and 25]
[736-H; 737-A; 737-A-B]
H 2. The legislation (Motor Vehicles Act) being a
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 725
LTD. & ORS.
j
beneftcient one, the provisions thereof should be A
interpreted liberally but it is also well settled that it does
not contemplate unjust enrichment. [Para 17) [734-E]
Case Law Reference:
(1996) 4 sec 362 referred to para 9 8
(2007) 2 SCALE 227 referred to para 9.
(1996) 3 sec 119 relied on para 13
(2008) 2 sec 763 relied on para 14 c
(2007) 12 SCALE 792 relied on . para 15
(1942 (1) ALL ELR 657 referred to para 17
(1999) 1 sec 90 referred to para 17
... D
(2005) 10 sec 120 relied on para 17
(2002) s sec 281 relied on para 17
(1994) 2 sec 116 relied on para 17
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2241 of 2009.
From the Judgment & Order dated 31.5.2007 of the High
Court of Delhi at New Delhi in MAC Appeal No. 986 of 2006.
~ j F
Ashok K. Mahajan and Shantha Devi Raman for the
Appellants.
A.I<. De, Rajesh Diwedi, Pbitra Diswal and Debasis Misra
for the Respondents.
G
The Judgment of the Court was delivered by
; S.B. SINHA, J. 1. Leave granted.
2. This appeal is directed against the judgment and order
dated 31.5.2007 passed by the High Court of Delhi in MAC H
726 SUPREME COURT REPORTS [2009] 5 S.C.R.
A No.986 of 2006 whereby and whereunder an appeal preferred "
by the first respondent herein under Section 173 of the Motor
Vehicles Act, 1988 (for short, 'the Act') was allowed.
3. Appellant filed an application before the Motor Vehicles
Accidents Claims Tribunal praying for payment of compensation
B
for the death of her husband Praveen Kumar Gupta who was
travelling in a private lndica Car driven by his friend Shri Avtar
Singh.
Shri Ankit and Shri Rajendra Jindal (the deceased) were
c returning from Agra after attending some business promotion
work. The accident took place as the said car ran into a tree.
Praveen Kumar Gupta and Rajendra Jindal died on the spot.
Ankit suffered injuries.
D 4. Before the learned Tribunal, one of the questions which
was raised is as to whether a passenger in a car which was
being driven negligently would be covered by the policy of
insurance.
5. The learned Tribunal, applying the principle of Res lpsa
E Loquitor, opined that Shri Avtar Singh was driving the car rashly
and negligently. Having regard to the income tax returns filed
by the deceased, the learned Tribunal arrived at the finding that
his annual income was Rs.1,87,500/-. In view of the age of the
deceased and the children having attained the age of majority,
F multiplier of 13 was applied in determining the amount of ~
compensation. Upon deducting 1/3rd of the annual income '
towards personal use from his annual income, the total amount
of compensation, thus, was arrived at in the following terms :
G "Annual Income Rs. 1,25,000
Future Increase in income Rs. 2.50.000
Rs. 3,75,000
H Mean/Average income Rs. 1,87,500
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 727
LTD. & ORS. [S.B. SINHA, J.]
Less: 1/3rd towards personal use A
An consumption Rs. 62.500
Annual Dependency Rs. 1,25,000
Hence B
(a) Loss of Financial dependency Rs. 16,25,000
(1,25,000 x 13)
b) Loss of consortium Rs. 25,000
c
c) Loss of love and affection Rs. 75,000
x
(25,000 3)
d) Funeral expenses Rs. 15.000
~
TOTAL COMPENSATION Rs .17,40 ,000" D
6. First Respondent preferred an appeal thereagainst.
7. The question raised before the High Court was as to
whether the deceased having been travelling as a gratuitous E
passenger in a private car would fall within the meaning of 'third
party' and, thus, would be covered by the statutory policy under
Section 147 of the Act.
J The learned Judge noticed that the policy was "Private Car
Package Policy" as notified by the Tariff Advisory Committee F
with effect from 1.7.2002, the terms and conditions whereof are:
"SECTION II - LIABILITY TO THIRD PARTY
1.. Subject to the limits of liability as laid down in the G
Schedule hereto the Company will indemnify the insured
in the event of an accident caused by or arising out of the
use of the vehicle against all sums which the insured shall
become legally liable to pay in respect of :
(i) death of or bodily injury to any person including H
728 SUPREME COURT REPORTS [2009) 5 S.C.R.
A occupants carried in the vehicle (provided such
occupants are not carried for hire or reward) but
except so far as it is necessary to meet the
requirements of Motor Vehicles Act, the Company
shall not be liable where such death or injury arises
B out of and in the course of the employment of such >--
person by the insured.
(ii) Damage to property other than property belonging
to the insured or held in trust or in the custody or
control of the insured."
c
8. It was furthermore opined that the object and purpose
of Section 146 and 147 is that policy of insurance should cover
liability in respect of death or bodily injury of a person including
owner of the goods or its authorized representative who may
D be carried in a goods vehicle/carriage as defined in Section ;.
2(14) of the Act.
9. The learned Judge, however, having regard to several
decisions of this Court in particular UP State Road Transport
Corporation v. Tri/ok Chand [(1996) 4 SCALE 22 =(1996) 4
E
SCC 362), as also various other decisions including New India
Assurance Co. v. Ka/pana & Ors. [(2007) 2 SCALE 227),
opined that appropriate multiplier to be adopted was 10. On
the aforementioned premise loss of dependency was
determined at Rs.1,87,500/- per annum. The learned Judge
F further apportioned 2/3rd as labour input, i.e., personal input of '
the deceased in business and treated 1/3rd as yield from the
capital asset, loss occasioned due to death of the deceased •
was held to be Rs.12,50,000/-, stating :
G 'The remaining loss of Rs.6,25,000/- could be made good
by the family by renting out the factory or after liquidating
the capital asset investing the money in an annuity yielding
income by way of interest."
10. Mr. Ashok K. Mahajan, learned counsel appearing on
H
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 729
LTD. & ORS. [S.S. SINHA, J.]
behalf of the appellant, would contend that the High Court A
committed a serious error in applying the multiplier of 10 only
as in terms of the Second Schedule appended to the Act, the
appropriate multiplier which should have been applied is 13. It
was urged that for the purpose of calculation of annual
dependency, in a case of this nature, the High Court should B
have been kept in view the backdrop of events, namely, the
deceased who took loan for a sum of Rs.14,00,000/- from the
bank for the purpose of purchasing an industrial plot in NOIDA
in 1985, had paid up the same.
11. Mr. AK. De, learned counsel appearing on behalf of C
the respondent, on the other hand, contended that the income
of the deceased can only be assessed on net earnings and
what was actually lost is his labour and other's contributions to
run his business, and, thus, the loss of dependency should be
determined on the value of such services or contribution of D
labour being in the nature of skill and knowledge that he had
been contributing thereto. It was urged that indicator of the value
of his services could only be the profitability of the business
which must be shown and established upon bringing on
appropriate materials on record. E
12. Determination of the amount of compensation arising
out of loss of life of a person, who was the earning member of
the family, would depend upon a large number of factors; one
of them being the nature of job or business he was doing. For F
the said purpose, an average gross future monthly income must
be arrived at by adding the actual gross income at the time of
his death to the maximum which he might have got, had he not
met a pre-mature death.
The learned Tribunal, keeping in view the fact that within a G
short time, appellant had been able to wipe off the entire loan
taken by him from the bank and, thus, became the owner of an
industrial plot and furthermore in view of the fact that he was
only aged 46 years at the relevant time, thought that his income
H
730 SUPREME COURT REPORTS [2009] 5 S.C.R.
A would have doubled at the time of his death. We think that the
approach of the learned Tribunal was correct.
13. This Court in Sar/a Dixit v. Ba/want Yadav ((1996) 3
sec 179] took into consideration the future prospect of the
deceased in great details. It was held that multiplier method
8
involving the ascertainment of the loss of dependency should
be applied in appropriate case. It took into consideration the
decision of English Courts to opine that the said method is
appropriate. It opined that only in rare cases, the said method
C should be departed from. As re!~ards adoption of proper
multiplier, it was held :
"7. So far as the adoption of the proper multiplier is
concerned, it was observed that the future prospects of
advancement in life and career should also be sounded
D in terms of money to augment the multiplicand. While the
chance of the multiplier is determined by two factors,
namely, the rate of interest appropriate to a stable
economy and the age of the deceased or of the claimant
whichever is higher, the ascertainment of the multiplicand
E is a more difficult exercise. Indeed, many factors have to
be put into the scales to evaluate the contingencies of the
future. All contingencies of the future need not necessarily
be baneful."
14. Average life expectancy in India also is one of the
F factors which must be taken into consideration for the purpose
of calculating the average gross future monthly income. The
average life expectancy in India is now 60-61 years. It is
necessary to subtract personal and living expenses and other
statutory liabilities like payment of income tax etc.
G
This Court in National Insurance Co. Ltd. v. Indira
Srivastava ((2008) 2 SCC 763], held : ,
"17. This Court in Asha did not address itself the questions
raised before us. It does not appear that any precedent
H
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 731
LTD. & ORS. [S.B. SINHA, J.]
was noticed nor the term "just compensation" was A
considered in the light of the changing societal condition
as also the perks which are paid to the employee which
may or may not attract income tax or any other tax. What
would be "just compensation" must be determined having
regard to the facts and circumstances of each case. The B
basis for considering the entire pay-packet is what the
dependants have lost due to death of the deceased. It is
in the nature of compensation for future loss towards the
family income.
19. The amounts, therefore, which were required to be paid c
to the deceased by his employer by way of perks, should
be included for computation of his monthly income as that
would have been added to his monthly income by way of
contribution to the family as contradistinguished to the
ones which were for his benefit. We may, however, hasten D
to add that from the said amount of income, the statutory
amount of tax payable thereupon must be deducted.
21. If the dictionary meaning of the word "income" is taken
to its logical conclusion, it should include those benefits, E
either in terms of money or otherwise, which are taken into
consideration for the purpose of payment of income tax or
professional tax although some elements thereof may or
may not be taxable or would have been otherwise taxable
but for the exemption conferred thereupon under the F
statute.
25. The expression "just" must also be given its logical
meaning. Whereas it cannot be a bonanza or a source of
profit but in considering as to what would be just and
equitable, all facts and circumstances must be taken into G
consideration."
.;
15. Ordinarily and subject to just exceptions, a lump sum
amount equivalent to 1/3rd of the income of the deceased, i.e.,
living and miscellaneous expenses from the income should be H
732 SUPREME COURT REPORTS [2009] 5 S.C.R.
\
A deducted. [See Sunil Kumar v. Ram Singh Gaud & Ors.
[(2007). 12 SCALE 792].
16. We may, however, note that in a case of permanent
disability, where the injured even for a very small thing would
have to depend on the services of another, a direction to
8
deduct the said amount may not be insisted upon.
17. Deduction of 1/3rd is, thus, the ordinary rule.
Upon applying the aforementioned principle, the
c multiplicant would be annual depe~ndency multiplied by life
expectancy minus age of the deceased.
On the aforementioned premise, we may consider the
applicability of multiplier method for the purpose of calculating
the amount of compensation. The said method was applied in
D Davies v. Powell Duffryn Associated Collieries Ltd. [1942 (1)
All ELR 657], wherein it was held :
"The starting point is the amount of wages which the
deceased was earning, the ascertainment of which to
E some extent may depend on the regularity of his
employment. Then there is an estimate of how much was
required or expended for his own personal and living
expenses. The balance will give a datum or basic figure
which will generally be turned into a lump sum by taking a
F certain number of years' purchase. That sum, however, has
to be taxed down by having due regard to uncertainties,
for instance, that the widow might have again married and
thus ceased to be dependant, and other like matters of
speculation and doubt."
G In Trilok Chand (supra), this Court noticed as under:
"7. The same principles were recalled by this Court in the
case of Municipal Corpn. of Delhi v. Subhagwanti. In this
case the claim for compensation arose on account of loss
H of life caused by the collapse of the Clock Tower abutting
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 733
-r LTD. & ORS. [S.B. SINHA, J.]
a highway. The Court referred to both the aforementioned A
judgments, and extracted the following passage from the
judgment in the case of Davies :
"The starting point is the amount of wages which the
deceased was earning, the ascertainment of which B
to some extent may depend upon the regularity of
his employment. Then there is an estimate of how
much was required or expended for his own
personal and living expenses. The balance will give
a datum or basic figure which will generally be
turned into a lump sum by taking a certain number
c
of years' purchase. That sum, however, has to be
taxed down by having due regard to uncertainties,
for instance, that the widow might have again
married and thus ceased to be dependant, and
other like matters of speculation and doubt." D
In Helen C. Rebello v. Maharashtra S.R. T.C. ((1999) 1
SCC 90], this Court stated the law, thus :
32. So far as the general principle of estimating damages E
under the common law is concerned, it is settled that the
pecuniary loss can be ascertained only by balancing on
one hand, the loss to the claimant of the future pecuniary
benefits that would have accrued to him but for the death
;I with the "pecuniary advantage" which from whatever source
F
comes to him by reason of the death. In other words, it is
the balancing of loss and gain of the claimant occasioned
by the death. But this has to change its colour to the extent
a statute intends to do.".
In regard to the choice of the multiplier, Halsbury's Laws G
of England in Vol. 34, states, thus:
"However, the multiplier is a figure considerably less than
the number of years taken as the duration of the
expectancy. Since the dependants can invest their H
734 SUPREME COURT REPORTS [2009] 5 S.C.R.
A damages, the lump sum award in respect of future loss
must be discounted to reflect their receipt of interest on
invested funds, the intention being that the dependants will
each year draw interest and some capital (the interest
element decreasing and the capital drawings increasing
B with the passage of years), so that they are compensated
each year for their annual loss, and the fund will be
exhausted at the age which the court assesses to be the
correct age, having regard to all contingencies. The
contingencies of life such as illness, disability and
c unemployment have to be taken into account. Actuarial
evidence is admissible, but the courts do not encourage
such evidence. The calculation depends on selecting an
assumed rate of interest. In practice about 4 or 5 per cent
is selected, and inflation is disregarded. It is assumed that
the return on fixed interest bearing securities is so much
D
higher than 4 to 5 per cent that rough and ready allowance
for inflation is thereby made. The multiplier may be
increased where the plaintiff is a high taxpayer. The
multiplicand is based on the rate of wages at the date of
trial. No interest is allowed on the total figure."
E
The legislation being a beneficient one, the provisions
thereof should be interpreted liberally but it is also well settled
that it does not contemplate unjust enrichment. We may,
however, notice that in New India Assurance Company Ltd. v.
F Charlie [(2005) 10 SCC 720], this Court held:
"14. The multiplier method involves the ascertainment of
the loss of dependency or the multiplicand having regard
• to the circumstances of the case and capitalising the
multiplicand by an appropriate multiplier. The choice of the
G
multiplier is determined by the age of the deceased (or that
of the claimants, whichever is higher) and by the
calculation as to what capital sum, if invested at a rate of
interest appropriate to a stable economy, would yield the
multiplicand by way of annual interest. In ascertaining this,
H
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 735
LTD. & ORS. [S.8. SINHA, J.]
regard should also be had to the fact that ultimately the A
capital sum should also be consumed up over the period
~-
for which the dependency is expected to last."
In United India Insurance Co. Ltd. v. Patricia Jean
Mahajan [(2002) 6 SCC 281], however, this Court following the B
earlier decisions in General Manager, Kera/a S.R. T.C. v.
Susamma Thomas [(1994) 2 SCC 176] as also Trilok Chand
(supra), held:
"16. What thus emerges from the above decisions is that
the court must adhere to the system of multiplier in arriving c
at the proper amount of compensation, and also with a view
to maintain uniformity and certainty. Use of higher multiplier
has been deprecated and it is emphasized that it cannot
exceed 18. The multiplier, as would be evident from the
~.
observations quoted earlier, may differ in the peculiar facts D
> and circumstances of a particular case as according to the
example cited, where a bachelor dies at the age of 45, the
age of his dependent parents may be relevant for selecting
a proper multiplier. Meaning thereby that a multiplier less
than what is provided in the Schedule could be applied in E
the special facts and circumstances of a case. In the later
cases also this Court has taken the same view that
multiplier system is a more appropriate and proper method
for calculating the amount of compensation. Lata Wadhwa
v. State of Bihar may be referred to. Decision in the case F
..... A of Susamma Thomas and other English decisions
considered in the judgments referred earlier, namely,
Davies v. Taylor, Davies v. Powell Duffryn Associated
Collieries Ltd. and Mallett v. McMonagle have been
referred to."
G
18. By and large, therefore, the Court had proceeded on
the basis that the multiplier mentioned in the Second Schedule
should be taken to be the guide but it may not be.
19. The multiplier specified in the Second Schedule may H
736 SUPREME COURT REPORTS [2009] 5 S.C.R.
A not be decisive for calculating compensation in cases of death.
In fact, the word multiplier has been used only for the purpose -""'
of calculating damages in the case of permanent disability and
not in the case of death as would appear from note 5 and 6
appended thereto.
B
20. The Second Schedule provides for payment of the
amount of compensation to the persons whose income is from
Rs.3,000/- to Rs.40,000/- per annum, depending upon the age
of the deceased; as for example if the age of the deceased is
15 years, the amount of compensation payable would be
c 60,0001-, but where the annual income1 is Rs.3,000/-, a sum of
Rs.50,000/- has been specified therefor even if the age of the
deceased is between 35 to 65 years.
21. The Parliament had, therefore, thought that Rs.50,000/ .....
._
D - should be the minimum amount of compensation payable to
legal representatives of those persons whose annual income
is Rs.3,000/- per month. For the said purpose, the multiplier
specified in the Second Schedule has no role to play. Even in
absence of the multiplier in the Second Schedule, the amount
E of compensation payable would be the same irrespective of the
multiplier specified therein.
22. We may, however, notice that in a given case even in
terms of the Second Schedule where the compensation is
payable on the basis of a no fault liability, the amount of
F compensation may be higher than the one which has been
specified in the Second Schedule in case of a fault liability.
~'
...
23. The question, in an appropriate case, may require
consideration by a larger Bench.
G
24. In this case, however, the deceased was a
businessman. What was the actual loss of dependency to the
family was his contribution to run the business. The assets of
the business remained. The amount of compensation,
therefore, was required to be determined keeping in view that
H
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 737
LTD. & ORS. [S.B. SINHA, J.]
factor in mind. A
25. Application of the multiplier of 10, therefore, cannot be
said to be bad in law. In terms whereof the amount of
compensation would come out to Rs.12,50,000/-, although the
"""· High Court, in our opinion, might not, thus, be entirely correct 8
in opining that the remaining loss could be made good. We,
however, need not delve into the said question any further as
we are of the opinion that the ultimate decision of the High Court
is correct.
26. We, therefore, do not find any merit in this appeal, C
which is dismissed accordingly. However, in the facts and
circumstances of the case, there shall be no order as to costs.
R.P. Appeal dismissed.
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