Holding

Under the Motor Vehicles Act, courts may award compensation exceeding the claimed amount, and the correct multiplier is 10, leading to a total compensation of Rs.2,60,000.

Summary

The appellant APSRTC filed an appeal against a Motor Accidents Claims Tribunal award of compensation for the death of its employee in a road accident. The Tribunal had based the award on a monthly salary of Rs.2,367 and a multiplier of 12, granting Rs.2,46,000 plus Rs.20,000 for non‑pecuniary damages. The High Court, noting that the claimants had not appealed, enhanced the compensation by increasing the monthly salary to Rs.3,536 while retaining the multiplier of 12 and reduced the interest rate to 9%. The corporation contended that the High Court could not increase the award in the absence of a claimant’s appeal and that the multiplier was excessive. The Supreme Court held that under the Motor Vehicles Act there is no restriction on a tribunal or court awarding compensation exceeding the amount claimed, as its function is to award "just" compensation based on evidence. It further directed that the appropriate multiplier is 10 and the monthly income should be taken as Rs.3,000 after a one‑third deduction, resulting in a total award of Rs.2,60,000. The appeal was partly allowed and the corporation was directed to pay the balance amount.

Issues considered

Whether a court may enhance the compensation awarded by a Motor Accidents Claims Tribunal beyond the amount claimed when the claimants do not file an appeal.
Whether the multiplier of 12 applied by the Tribunal and the High Court is appropriate under the Motor Vehicles Act.
What is the correct method of computing the monthly income and multiplier for compensation in a motor accident death case.

Legislation cited

Motor Vehicles Act, 1988s. 158, s. 166

Subjects

Motor Vehicles ActCompensationMultiplierMotor accident deathClaims TribunalJust compensationAppellate jurisdiction

Judgment

- -{
[2008] 2 S.C.R. 22

-i..

A THE APSRTC,. REP. BY ITS Gl!NERAL MANAGER
AND ANR.
v.
M. RAMADEVI AND ORS.
(Civil Appeal No. 682 of 2008)
B JANUARY 25, 2008
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.]

Motor Vehicles Act, 1988 - s. 166:
C Motor accident - Causing death of employee of
appellant-Corporation - MACT awarded compensation -
Appeal by Corporation before High Court - Claimants did not
prefer any appeal - High Court, holding that the award passed
by MACT was inadequate, enhanced compensation -
o Contention of Appellant-corporation that in absence of any
appeal by the claimants, High Court ought not to have
enhanced the compensation amount - Held: Under the Act,
there is no restriction that the MACT!Court cannot award· -,..
compensation amount exceeding the claimed amount -
E Function of the MACT!Court is to award 'Just" compensation
based on the evidence on record.
Motor accident - Causing death of 40 year old employee
of appellant-Corporation - Computation of compensation -
Multiplier - Held: Compensation to be awarded by adopting
F multiplier of 10 and not 12 as adopted by both MACT and
High Court. ~

Respondents filed claim petition under s.166 of the
Motor Vehicles Act, 1988 seeking compensation for death
of an employee of appellant-Corporation in a motor
G accident. The Claims Tribunal awarded compensation by
taking the age of deceased as 40 years and his salary as -.../.
Rs.2,367/- per month and thereafter applying the multiplier
of 12. The Tribunal further awarded an amount of
Rs.20,000/- for non-pecuniary damages and consortium.
H 22
_,,,_ .
,
THE APSRTC, REP. BY ITS GENERAL MANAGER 23
~ND ANR. v. M. RAMADEVI AND ORS.
):

The total compensation amount was directed to be paid A
with interest @ 12% p.a. Appellant-Corporation filed
appeal before High Court, but the claimants-Respondents
did not prefer any appeal. The High Court held that the
award passed by the Tribunal was inadequate and
enhanced the compensation amount by taking the B
monthly pay of deceased as Rs.3,536/- and thereafter
'"'
•, adopting the multiplier of 12. The Court affirmed the
additional award of Rs.20,000/- by Tribunal for non-
pecuniary damages and consortium but reduced the
interest payable on the total compensation amount from c
12% p.a. to 9% p.a.
The contention of Appellant-corporation is that in
absence of any appeal by the claimants-Respondents, the
High Court ought not to have enhanced the compensation
___. amount and that the High Court erred in adopting a higher D
multiplier.
..., Party allowing the appeal, the Court
~

HELD: 1. Under the Motor Vehicles Act, 1988 there is
-4 no restriction that the Tribunal/Court cannot award E
compensation amount exceeding the claimed amount.
The function of the Tribunal/Court is to award "just"
compensation which is reasonable on the basis of
evidence produced on record. As provided under sub-
,. section (4) to Section 166 of the Act, even the report F
I
submitted to the Claims Tribunal under sub-section (6) of
-i
-< Section 158 can be treated as an application for
compensation under the said Act. [Para 9] [26-C-E]
Nagappa v. Gurdial Singh and Ors. (2003) 2 SCC 27 4 -
relied on. ·G
~
r
2.1. Considering the figure in Ex.A/7, the monthly
~ income is taken at Rs.3,000/- and after deducting 1/3rd
therefrom the annual contribution is fixed at Rs.24,000/-.

. [Para 11] [26-G]
H
-f
24 SUPREME COURT REPORTS [2008] 2 S.C.R.

A 2.2. Adopting the multiplier of 10, the amount payable *
to the claimants comes to Rs.2,40,000/- to that shall be
added the amount of Rs.20,000/- fixed by the Tribunal for
non-pecuniary damages and consortium as there was no
challenge by the Corporation to the award of such
8 amounts. Therefore, the entitlement of the claimant comes
to Rs.2,60,000/-. The interest rate of 9% fixed by the High
Court does not warrant any interference. [Para 12] [26-H; '1
27-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 682
c of 2008.
From the final Judgment and Order dated 27.11.2003 of
the High Court of Judicature of Andhra Pradesh at Hyderabad
in Civil Misc. Appeal· No. 784 of 2002.

D Ms. K. Radha Rani, P. Vijay Kumar and D. Mahesh Babu
for the Appellants. ...
G.V.R. Choudary and K. Shivraj Chaudhuri for the
,..
Respondents.
r-
The Judgment of the Court was delivered by
E
Dr. ARIJIT PASAYAT, J. 1. Leave granted. .....
2. Challenge in this appeal is to the judgment of the learned ,
Single Judge of theAndhra Pradesh High Court. The appellant-
Corporation had filed an appeal before the High Court ,_
F questioning correctness of the award made by the Motor -{
·Accidents Claims Tribunal-cum-1st Addi. District Judge, R.R. '
District at Saroornagar, Hyderabad (hereinafter referred to as }-
the 'Tribunal'). •)
3. Background facts are as follows:
G
A claim petition under Section 166 of the Motor Vehicles -..(
I
F
Act, 1988 was filed by the respondents claiming compensation
of Rs.5,00,000/- on account of the death of M. Nageshwar Rao ~
(hereinafter referred to as the 'deceased') in an accident on
18.5.1998. The deceased was working as a driver of the
H
f.I
}--
THE APSRTC, REP. BY ITS GENERAL MANAGER 25
AND ANR. v. M. RAMADEVI AND ORS. [PASAYAT, J.]
~
appellant-Corporation. In the claim petition it was stated that A
the because of the rash and negligent driving of the bus
No.A.P.10 Z 998 belonging to the Corporation which was being
driven in a rash and negligent manner, the deceased lost his
{
•. life. It was claimed that the deceased was 38 years of age and
was an employee of the Corporation and was earning salary of B
Rs.4,467.50 p.m. The appellant-Corporation filed its objection
I
~ 't before the Tribunal taking the stand that it was not liable to pay
any compensation. The quantum of salary claimed and the age
was also disputed.
4. The Tribunal obseNed that the age of the deceased c
was 40 years of age and he was getting a salary of Rs.4,000/-
p.m. and after deduction his take home pay was Rs.2,367 /-and
the total emoluments was Rs.3,983/-. Applying the multiplier of
12 the entitlement was fixed at Rs.2, 16,000/-, in addition
Rs.15,000/- for non-pecuniary damages and Rs.5,000/- as D
consortium was awarded. Thus the total compensation awarded
was fixed at Rs.2,46,000/-. The same was directed to be paid
--:~
with interest@ 12% p.a.
5. The appellant-Corporation filed appeal before the High
Court. It is to be noted that the claimants did not prefer any E
appeal. The High Court held that the award as made was
inadequate and just compensation was not awarded.

6. The High Court was of the view that the pay of the
deceased was Rs.3,536/- and not Rs.2,367/- as noted by the
)' F
Tribunal. Accordingly, it fixed the basic pay of Rs.3,500/- after
deducting 113rd towards the personal expenses. The monthly
contribution was fixed at Rs.2,333/- and the annual contribution
at Rs.27,996/-. The multiplier was taken at 12. Accordingly,
entitlement was fixed at Rs.3,35,952/- to which was added the
sum of Rs.20,000/- additionally awarded by the Tribunal. G
r-
7. In support of the appeal, learned counsel for the
appellants submitted that when there was no appeal by the
claimants in the appeal filed by the appellant-corporation, the
High Court should not have enhanced the amount. It was also H
---+'
26 SUPREME COURT REPORTS [2008) 2 S.C.R.

--i
A submitted that the multiplier as adopted was high.
8. Learned counsel for the respondents on the other hand
submitted that there is no embargo on the Tribunal or the High
Court awarding compensation exceeding the amount claimed.
...
It was also submitted that the interest was reduced to 9% from
B 12% as fixed by the Tribunal. It was, therefore, submitted that \.
there was no infirmity in the High Court's order.
1
9. In Nagappa vs. Gurdial Singh and Ors. (2003 (2) SCC
274) para 21 as follows:
c "21. For the reasons discussed above, in our view, under
the MV Act, there is no restriction that the Tribunal/court
.
cannot award compensation amount. exceeding the
claimed amount. The function of the Tribunal/court is to
award "just" compensation which is reasonable on the J-

D basis of evidence produced on record. Further, in such
cases there is no question of claim becoming time-barred
or it cannot be contended that by enhancing the claim ,...
there would be change of cause of action. It is also to be
stated that as provided under sub-section (4) to Section
E 166, even the report submitted to the Claims Tribunal under
sub-section (6) of Section 158 can be treated as an
application for compensation under the MV Act. If required,
in appropriate cases, the court may permit amendment to
the claim petition." ',J

F 10. The other question that remains to be adjudicated is -..(
whether the income has been rightly adopted by the Tribunal
F
and the High Court was correct and whether the correct multiplier·
was adopted.
11. Considering the figure in the Ex.A/7 the monthly income
G
taken at Rs.3,000/- after deducting 1;3rct therefrom the annual -.(
contribution is fixed at Rs.24,000/-.
12. Adopting the multiplier of 10, the amount payable to
the claimants comes to Rs.2,40,000/- to that shall be added the
H amount of Rs.20,000/- fixed by the Tribunal for non-pecuniary
t-- THE APSRTC, REP. BY ITS GENERAL MANAGER 27
AND ANR. v. M. RAMADEVI AND ORS. [PASAYAT, J.]

damages and consortium as there was no challenge by the A
Corporation to the award of such amounts. Therefore, the
entitlement of the claimant comes to Rs.2,60,000/-. The interest
rate of 9% fixed by the High Court does not warrant any
interference. A sum of Rs.2,00,000/- has been deposited by
the Corporation pursuant to the direction given by this Court on s
19.7.2004. Admittedly, the same has been withdrawn by the
claimants. The balance amount shall be deposited by the
appellant-Corporation within six weeks from today. Tribunal shall
fix the terms for withdrawal/deposit of the amount in FDs as
deemed appropriate. c
13. The appeal is allowed to the aforesaid extent. No costs.
B.B.B. Appeal partly allowed.