SRI K.R. MADHUSUDHAN & ORS.versusTHE ADMINISTRATIVE OFFICER & ANR.

                     [2011) 2 S.C.R. 1061


              SRI K.R. MADHUSUDHAN & ORS.                         A
                               v.
          THE ADMINISTRATIVE OFFICER & ANR.
            (Civil Appeal No.1923-1924 of 2011)
                     FEBRUARY 18, 2011
                                                                  B
    [ASOK KUMAR GANGULY AND G.S. SINGHVI, JJ.]

       Motor Vehicles Act, 1988 - s. 166 - Fatal accident.- ·
  Deceased aged 53 years of age and working as a Senior
  Assistant in the State Electricity Board - Claim petition by his C
  three sons and paternal grand-mother - Tribunal applied a
  multiplier of 11 and awarded tot.al compensation of
  Rs. 14, 27, 4961- with interest@ 9% p.a. - High Court, however,
  reduced the compensation by adopting a split multiplier of 6
  - On appeal, held: High Court introduced the concept of split D
  multiplier and departed from the multiplier used by the
  Tribunal without disclosing any reason therefor - It also did
· not consider the clear and corroborative evidence about the
· prospect of future increment of the deceased - Judgment of
  High Court deserves to be set aside for it was perverse and E
  clea,dy contrary to the evidence on record - Respondents
  directed to pay compensation of Rs.18,00,0001- with the rate
  of interest as granted by the Tribunal.

      PW1 's father was crossing the road, when a Maruti
  Van (owned by the first respondent) came at a high speed F
  and dashed against him, causing severe injuries to him
  which ultimately led to his death. The deceased was 53
  years of age and was survived by his wife and three
  sons, the appellants. They filed a claim petition under
. Section 166 of the Motor Vehicles Act, 1988 claiming G
  Rs.20,00,0001- as compensation. The Motor Accident
  Claims Tribunal (MACT) found that the death of PW1 's -
  father was due to the rash and negligent driving of the
  van ~river (the second respondent).
                             1061                          H
    1062 SUPREME COURT REPORTS               [2011) 2 S.C.R.

A     The deceased was working as Senior Assistant in
  Karnataka Electricity Board (KEB) and his last drawn
  gross monthly salary was Rs.15,642/- i.e. Rs.1,87,704/-
  annually. The Tribunal applied a multiplier of 11 and
  awarded total compensation of Rs.14,27 ,496/- along with
B interest of 9% p.a. The Hig'1 Court reduced the
  compensation to Rs.11,82,000/- by adopting a split
  multiplier of 6.

      In the instant appeals, the appellants contended that
C while awarding compensation, the High Court erred in
  not considering the future prospects of the deceased and
  the revision in his salary and that it further erred in
  adopting a split multiplier.

        Allowing the appeals, the Court
D
       HELD: 1.1. The law regarding addition in income for
  future prospects has been clearly laid down in Sar/a
  Varma case. In the said case, the Court held that there
  should be no addition to income for future prospects
E where the age of the deceased is more than 50 years.
  The Bench called it a rule of thumb and it was developed .
  so as to avoid uncertainties in the outcomes of litigation.
  However, the Bench held that a departure can be made
  In rare and exceptional cases involving special
  circumstances. The rule of thumb evolved in Sar/a Verma
F Is to be applied to those cases where there is no concrete
  evidence on record of definite rise in income due to future
  prospects. The said rule was based on assumption and
  to avoid uncertainties and inconsistencies in the
  Interpretation of different courts, and to overcome the
G same. [Paras 8, 9) [1067-C; 1068-A-C]
        1.2. In the present case there is clear and
    incontrovertible evidence on record that the deceased
    was entitled and in fact bound to get a rise in income In
H
 K.R. MADHUSUDHAN & ORS. v. ADMINISTRATIVE 1063
              OFFICER & ANR.
the future, a fact which was corroborated by evidence on      A
record. Thus, the present case comes within the
'exceptional circumstances' and not within the purview
of rule of thumb laid down by the Sar/a Verma judgment.
Hence, even though the deceased was above 50 years
of age, he was entitled to increase in income due to future   B
prospects. [Para 10) (1068-D-E]

    Sar/a Varma (Smt.) & Others v. Delhi Transport
Corporation & Another (2009) 6 SCC 121 - referred to.

     2. The evidence of PW.1 is that there are four C
claimants, three of them are the sons of the deceased and
the other claimant is paternal grand-mother. Therein, he
stated that the deceased was the only bread earner of the
family. It was stated by PW.1 that if his father, the
deceased, would have been alive he could have got D
promotion and could have received a salary of Rs.20,000/
- per month. PW.3, a Senior Assistant in KEB, in his
evidence also stated that the deceased was 52 years of
age at the time of his death and he was having six years
of service left; that his annual increment was Rs.350/- E
and that in the year 2003 (which would have been year
of retirement), the basic pay of the deceased would have
been around Rs.16,000/- and in all he would have
obtained gross salary of Rs.20,000/- per month. PW.3
deposed that as per the Board Agreement for every five F
years their pay revision is compulsory. Both the
witnesses were cross-examined before the Tribunal but
the evidence leading to pay revision was not assailed.
Therefore, the consistent evidence before the Tribunal
was that if the deceased would have been alive he would G
have reached the gross salary of Rs.20,000/- per month.
[Paras 11 to 13) (1068-F-H; 1069-A]
    3. In view of this evidence, the Tribunal should have
considered the prospect of. future income while
                                                              H
   1064    SUPREME COURT REPORTS              [2011] 2 S.C.R.

A computing compensation but the Tribunal has not done
  that. 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
B had not given any reason. The High Court introduced the
  concept of split multiplier and departed from the
  multiplier used by the Tribunal without disclosing any
  reason therefor. The High Court also did not consider the
  clear and corroborative evidence about the prospect of
c future incremE'nt of the deceased. When the age of the
  deceased is between 51 and 55 years the multiplier is 11,
  which is specified in the II Column in the II Schedule in
  the Motor Vehicles Act, and the Tribunal had not
  committed any error by accepting the said multiplier. This
  Court also fails to appreciate why the High Court chose
D to apply the multiplier of 6. Thus, 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 for adopting a split multiplier method. [Paras 14, 15)
E [1069-C-G]

      4. The income of the deceased will be taken to be
  Rs.20,000/- p.m. which amounts to Rs.2,40,000/- p.a. After
  deduction of 1/3rd amount for personal expenses, the
F loss of notional income will be Rs.1,60,000/-. The
  multiplier of 11 will be applied, from which the loss of
  dependency will amount to Rs.17 ,60,000/-. Besides,
  award Rs.10,000/- for funeral and transport expenses,
  Rs.6,000/- for medical expenses prior to death and
G Rs.25,000/- for loss of love and affection is also awarded.
  Thus, the total compensation awarded amounts to
  Rs.18,01,000/- which is round off to Rs.18,00,000/-. The
  amount of compensation would thus be Rs.18,00,000/-
  with the rate of interest as granted by the Tribunal. [Paras
H 16, 17] [1069-H; 1070-A-C]
 K.R. MADHUSUDHAN & ORS. v. ADMINISTRATIVE 1065
              OFFICER & ANR.

                     Case Law Reference:                           A
    (2009) s sec 121             referred to          Para 8

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1923-1924 of 2011.
                                                                   B
    From the Judgment & Order dated 12.01.2009 of the High
Court of Karnataka at Bangalore in MFA No. 6476/2002(MV)
C/w M.F.A. No. 5596 of 2002.

    G.V. Chandrashekar for the Appellants.
                                                                   c
    The Judgment of the Court was delivered by

    GANGULY, J. 1. Delay condoned.

    2. Leave granted.
                                                                   D
     3. On 4.10.1998, at about 8.55 a.m., V. Rajagopalaiah was
crossing the road near Ashraya Hotel, B.M. Road,
Channapatna, when a Maruti Van (owned by the first
respondent) bearing registration No. KA-05-A-2535 came at
a high speed and dashed against the deceased, causing              E
severe injuries. He was taken to hospital, but he succumbed
to his injuries.

     4. The deceased was of 53 years of age and was survived
by his wife and three sons, the present appellants. They filed a   F
claim petition under Section 166 of the Motor Vehicles Act,
1988 claiming Rs.20,00,000/- as compensation. It was
contested by the respondents. _

    5. Motor Accident Claims Tribunal (hereinafter "MACr)
found that the death of V. Rajagopalaiah was due to the rash       G
and negligent driving of the van driver (the second respondent).
The deceased was working as Senior Assistant in Karnataka
Electricity Board (hereinafter "KEB") and his last drawn gross
monthly salary was Rs.15,642/- i.e. Rs.1,87,704/- annually. 1/
3rd was deducted for personal expenses, after which the            H
    1066    SUPREME COURT REPORTS                 [2011] 2 S.C.R.


A amount came to Rs.1,25, 136/-. As deceased was 53 years of
  age, a multiplier of 11 was applied. The Tribunal also awarded
  funeral and transport expenses amounting to Rs.10,000/-,
  medical expenses prior to death was Rs.6,000 and
  compensation for loss and affection at Rs.25,000/-.
B Accordingly, total compensation awarded was Rs.14,27,496/-
  along with interest of 9% p.a.

       6. The appellants and the respondents both appealed
  against the award of the Tribunal to the High Court of
C Karnataka. The appellants appeared for enhancement and the
  respondents for reduction of the amount awarded. The High
  Court, in its impugned judgment, reduced the compensation
  awarded by the Tribunal to the appellants to Rs.11,82,000/-. The
  relevant portion of High Court order reads as follows:

D       "The deceased was working as Senior Assistant in KEB
        getting a salary of Rs.15,642/-. After effecting deductions
        towards income tax, the net salary of the deceased would
        be Rs.14,000/-. The mother and sons of the deceased
        have filed claim petition. 1/5 is to be deducted towards
        personal expenses. Rs.11,200/- would enure to the benefit
        of the dependants. The deceased was aged about 52
        years. The deceased would have retired by 58 years. After
        superannuation, the deceased would get pensionary
        income in a sum of Rs.6000/-. 1/5 is to be deducted
F       towards personal expenses. Rs.4800/- would enure to the
        benefit of the dependants. Split multiplier would apply.
        After superannuation, multiplier 6 would apply. Therefore,
        the total loss of dependency before superannuation would
        be Rs.8,06,400/- (Rs.11200 (income) X 12 (months) X 6
        (multiplier). The total loss of dependency from the
G
        pensionary income would be Rs.3,45,600/- (Rs.4800/-
        (income) X 12 (months) X 6 (multiplier). The total loss of
        dependency would be Rs.11,52,000/- The petitioners are
        entitled for a sum of Rs.25,000/- towards loss of
        expectancy and Rs.10,000/- towards funeral expenses. In
H
 K.R. MADHUSUDHAN & ORS. v. ADMINISTRATIVE 1067
  OFFICER & ANR. [ASOK KUMAR GANGULY, J.]

    all the petitioners are entitled for a total sum of               A
    Rs.11,82,000/- as against Rs.14,27,496/- awarded by the
    Tribunal. The petitioners are entitled for interest at 6% p.a."

     7. Assailing the same, the appellants contend that the.
future prospects of the deceased and revision in salary were
                                                             8
not taken into consideration by the High Court and a split.
multiplier should not have been adopted.

    8. The law regarding addition in income for future
prospects has been clearly laid down in Sarla Varma (Smt.)
& Others v. Delhi Transport Corporation & Another [(2009) 6           C
sec 121] and the relevant portion reads as follows:
    "In Susamma Thomas this Court increased the income by
    nearly 100%, in Sarla Dixit the income was increased only
    by 50% and in Abati Bezbaruah the income was increased 0
    by a mere 7%. In view of the imponderables and
    uncertainties, we are in favour of adopting as a rule of
    thumb, an addition of 50% of actual salary to the actual
    salary income of the deceased towards future prospects,
    where the deceased had a permanent job and was below E
    40 years. [Where the annual income is in the taxable
    range, the words "actual salary" should be read as "actual
    salary less tax"]. The addition should be only 30% if the
    age of the deceased was 40 to 50 years. There should
    be no addition, where the age of deceased is more than F
    50 years. Though the evidence may indicate a different
    percentage of increase, it is necessary to standardize the
    addition to avoid different yardsticks being applied. or
    different methods of calculation being adopted. Where the
    deceased was self-employed or was on a fixed salary
    (without provision for annual increments etc.), the courts will G
    usually take only the actual income at the time of death. A
    departure therefrom should be made only in rare and
    exceptional cases involving· special circumstances."
    9. In the Sarla Verma (supra) judgment the Court has held         H
    1068    SUPREME COURT REPORTS                 [2011] 2 S.C.R.

A that there should be no addition to income for future prospects
  where the age of the deceased is more than 50 years. The
  learned Bench called it a rule of thumb and it was developed
  so as to avoid uncertainties in the outcomes of litigation.
  However, the Bench held that a departure can be made in rare
B and exceptional cases involving special circumstances. We are
  of the opinion that the rule of thumb evolved in Sar/a Verma
  (supra) is to be applied to those cases where there was no
  concrete evidence on record of definite rise in income due to
  future prospects. Obviously, the said rule was based on
c assumption and to avoid uncertainties and inconsistencies in
  the interpretation of different courts, and to overcome the same.

        10. The present case stands on different factual basis
  where there is clear and incontrovertible evidence on record
  that the deceased was entitled and in fact bound to get a rise
D in income in the future, a fact which was corroborated by
  evidence on record. Thus, we are of the view that the present
  case comes within the 'ex~eptional circumstances' and not
  within the purview of rule of thumb laid down by the Sar/a Verma
  (supra) judgment. Hence, even though the deceased was
E above 50 years of age, he shall be entitled to increase in
  income due to future prospects.

        11. We base our conclusion on our findings from the
  records of the case. The evidence of PW.1, the son of the
F deceased, is that there are four claimants, three of them are
  the sons of the deceased and the other claimant is paternal
  grand-mother. Therein, he stated that the deceased was the
  only bread earner of the family. It was stated by PW.1 that if
  his father, the deceased, would have been alive he could have
G got promotion and could have received the salary of Rs.20,000/
  - per month.
        12. PW.3, who was the Senior Assistant in KEB, in his
  evidence also stated that the deceased was 52 years of age
  at the time of his death and he was having six years of sen/ice
H left. The annual increment is Rs.350/-. In the year 2003 (which
   K.R. MADHUSUDHAN & ORS. v. ADMINISTRATIVE 1069
    OFFICER & ANR. [ASOK KUMAR GANGULY, J.]
                                                       •
. would have been year of retirement), the basic pay of the           A
  deceased would have been around Rs.16,000/- and in all he
  would have obtained gross. salary of Rs.20,000/- per month.
  PW.3 deposed that as per the Board Agreement for every five
  years their pay revision is compulsory. Both the witnesses were
  cross-examined before the Tribunal but the evidence leading         B
  to pay revision was not assailed.

     13. Therefore, the consistent evidence before the Tribunal
 was that if the deceased would have been alive he would have
 reached the gross salary of Rs.20,000/- per month.
                                                                      c
      14. In view of this evidence the Tribunal should have
 considered .the prospect of future income while computing
 compensation but the Tribunal has not done that. In the appeal,
 which was filed by the appellants before the High Court, the
 High Court instead of maintaining the amount of compensation,        D
 granted-by the Tribunal, reduced the same. In doing so, the
 High Court had not given any reason. The High Court introquced
 the concept of split multiplier and departed from the multiplier
 used by the Tribunal without disclosing any reason therefore.
 The High Court has also not considered the clear and                 E
 corroborative evidence about the prospect of future increment
 of the deceased. When the age of the deceased is between
 51 and 55 years the multiplier is 11, which is specified in the II
 Column in the II Schedule in the Motor Vehicles Act, and the
 Tribunal has not committed any error by accepting the said           F
 multiplier. This Court also fails to appreciate why the High Court
 chose to apply the multiplier 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           G
 considered the future prospects of the deceased and also for
 adopting a split multiplier method.           ·
     16. The income of the deceased will be taken to be
 Rs.20,000/- p.m. which amounts to Rs.2,40,000/- p.a. After           H
    1070     SUPREME COURT REPORTS               [2011] 2 S.C.R.


A deduction of 1/3rd amount for personal expenses, the loss of
  notional income will be Rs.1,60,000/-. The multiplier of 11 will
  be applied, from which the loss of dependency will amount to
  Rs.17,60,000/-. We also award Rs.10,000/- for funeral and
  transport expenses, Rs.6,000/- for medical expenses prior to
s death and Rs.25,000/- for loss of love and affection. Thus, the
  total compensation awarded amounts to Rs.18,01,000/- which
  we round off to Rs.18,00,000/-.

       17. The amount of compensation would thus be
  Rs.18,00,000/- with the rate of inte~est as granted by the
C Tribunal. The amount is to be deposited with the Tribunal within
  six weeks from date a~er deducting any amount, if already
  deposited.

        18. The appeals are, thus, allowed. No costs.
D
    B.B.B.                                     Appeals allowed.