MUNUSAMY & ORS.versusTHE MANAGING DIRECTOR, TAMIL NADU STATE TRANSPORT CORPORATION (VILLUPURAM) LTD.

                         [2018] 2 S.C.R. 629                             629


                       MUNUSAMY & ORS.                                   A
                                  v.
       THE MANAGING DIRECTOR, TAMIL NADU
 STATE TRANSPORT CORPORATION (VILLUPURAM) LTD.
             (Civil Appeal No. 1754 of 2018)
                                                                         B
                       FEBRUARY 09, 2018
      [DIPAK MISRA CJI, A. M. KHANWILKAR AND
             DR. D. Y. CHANDRACHUD, JJ.]
         Motor Vehicles – Motor Accident Claim – Compensation –
                                                                         C
Computation of – Claim for enhancement – Deceased, around 21
years of age, was riding a motorcycle along with his friend when
they collided with a bus belonging to respondent-Corporation –
Plea of appellants that compensation granted by High Court be
further enhanced as High Court did not provide for future prospects
while computing the compensation amount under the head ‘loss of          D
dependency’ – Held: Applying the dictum of Constitution Bench in
National Insurance Company Ltd. case, the claim of appellants for
grant of future prospects at the rate of 40% of the established income
is justified – High Court took the earning of deceased at the relevant
time as Rs.4,000/- p.m., but did not provide 40% towards future
                                                                         E
prospects on the established income of the deceased – Thus, in the
facts of the present case, monthly loss of dependency would be
Rs.4,000 + 1,600 = Rs.5,600/- – Amount awarded by High Court
towards loss of dependency accordingly stands modified from
Rs.4,32,000/- to Rs.6,04,800/- with interest @ 9% p.a. – Respondent
to deposit the entire award amount with interest @ 9% p.a., less the     F
amount already deposited if any – Appellants shall be entitled to
the compensation in the proportion specified by Tribunal.

      Allowing the appeal, the Court

      HELD: 1.1 Applying the dictum of the Constitution Bench            G
decision in National Insurance Company Ltd. case, the appellants
are justified in insisting for grant of future prospects at the rate
of 40% of the established income. The High Court had held that
the earning of the deceased at the relevant time could be taken
as Rs.4,000/- per month. The High Court did not provide 40%
                                                                         H
                                 629
630            SUPREME COURT REPORTS                       [2018] 2 S.C.R.


A     towards future prospects on the established income of the
      deceased. Thus, the monthly loss of dependency, in the facts of
      the present case would be Rs.4,000 + 1,600 = Rs.5,600/-. In other
      words, instead of amount awarded by the High Court towards
      loss of dependency in the sum of Rs.4,32,000/-, the same would
      stand modified to Rs.6,04,800/- along with interest at the rate of
B
      9% per annum. Other directions given by the High Court in
      respect of other heads are not being disturbed. Accordingly,
      respondent Transport Corporation must deposit the additional
      amount of compensation of Rs.1,72,800/- along with interest, as
      awarded, within a period of eight weeks from the date of receipt
C     of the copy of this judgment in the Court of Additional District &
      Sessions Judge, Fast Track Court-IV, Chennai (Motor Accident
      Claims Tribunal, Chennai). [Paras 5, 6][634-F-H]

            National Insurance Company Ltd. v. Pranay Sethi and
            Ors. AIR 2017 SC 5157– followed.
D
            1.2 The compensation awarded by the High Court is
      enhanced from Rs.5,01,500/- to Rs.6,74,300/- [Rupees six lakh
      seventy four thousand three hundred only]. The respondent
      Transport Corporation is directed to deposit the entire award
      amount as indicated above with interest at 9% (nine percent)
E
      per annum less the amount already deposited if any, within a period
      of eight weeks from the date of receipt of a copy of this judgment
      and the appellants shall be entitled to the compensation in the
      proportion specified by the Tribunal. [Para 8][635-C-E]

F                             Case Law Reference

            AIR 2017 SC 5157            followed              Para 5

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1754
      of 2018.
G
            From the Judgment and Order dated 16.04.2013 of the High Court
      of Judicature at Madras in C.M.A. No. 2819 of 2012.

            K. V. Jagdishvaran, Ms. G. Indira, Advs. for the Appellants.

H
      MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE                     631
             TRANSPORT CORPN.(VILLUPURAM) LTD.


         The Judgment of the Court was delivered by                             A
       A. M. KHANWILKAR, J. 1. This appeal emanates from the
judgment and order passed by the High Court of Judicature at Madras
dated 16.04.2013 in C.M.A. No.2819 of 2012. The High Court allowed
the prayer for grant of enhanced compensation amount in favour of the
appellants. The appellants seek further enhancement of compensation             B
amount on the ground that the High Court has not provided for future
prospects, while computing the compensation amount. The appellants
rely upon the recent decision of the Constitution Bench of this Court in
the case of National Insurance Company Ltd. Vs. Pranay Sethi and
Ors.1 to buttress their submission.
                                                                                C
       2. Before we deal with the grievance of the appellants, it is apposite
to reproduce the relevant extract of the impugned judgment which reads
thus:
         “7. We have heard the learned counsel for the respondent
         on the above submission.                                               D
         8.    In the absence of specific proof of employment, the
         Tribunal rightly has taken the earning of the deceased at
         Rs.4,000/- per month and deducted 50% towards personal
         expenses since the deceased were bachelors. However, the
         proper multiplier to be adopted in the case must be 18, since          E
         the deceased were 21 and 20 years respectively. A sum of
         Rs.20,000/- to each of the claimants towards loss of love and
         affection and a further sum of Rs.5,000/- towards transport
         expenses were granted.
         9.    Accordingly, in C.M.A. No.2819 of 2012 compensation              F
         payable would be as follows:
         (a)      Loss of Dependency           Rs.4,32,000/-
                  (Rs.4,000/-×12×18)
         (b)      Loss of love and affection   Rs. 60,000/-
         (c)      Transport                    Rs. 5,000/-                      G
         (d)      Funeral                      Rs. 2,000/-
         (e)      Loss of estate               Rs. 2,500/-
                 Total                   =     Rs.5,01,500/-”
1
    AIR 2017 SC 5157
                                                                                H
632            SUPREME COURT REPORTS                          [2018] 2 S.C.R.


A            3. On perusal of the judgment under appeal, it is evident that the
      High Court has not provided for future prospects while computing the
      compensation amount under the head ‘loss of dependency’. The
      necessity to provide future prospects has been expounded by the Con-
      stitution Bench of this Court in National Insurance Company Ltd.
      (supra). It will be useful to reproduce paragraph No.59 of the said
B
      judgment, which reads thus:
            “59. Having bestowed our anxious consideration, we are
            disposed to think when we accept the principle of
            standardization, there is really no rationale not to apply the
            said principle to the self-employed or a person who is on a
C           fixed 44 salary. To follow the doctrine of actual income at the
            time of death and not to add any amount with regard to future
            prospects to the income for the purpose of determination of
            multiplicand would be unjust. The determination of income
            while computing compensation has to include future prospects
D           so that the method will come within the ambit and sweep of
            just compensation as postulated under Section 168 of the Act.
            In case of a deceased who had held a permanent job with
            inbuilt grant of annual increment, there is an acceptable
            certainty. But to state that the legal representatives of a
            deceased who was on a fixed salary would not be entitled to
E           the benefit of future prospects for the purpose of computation
            of compensation would be inapposite. It is because the
            criterion of distinction between the two in that event would
            be certainty on the one hand and staticness on the other. One
            may perceive that the comparative measure is certainty on
F           the one hand and uncertainty on the other but such a
            perception is fallacious. It is because the price rise does affect
            a self-employed person; and that apart there is always an
            incessant effort to enhance one’s income for sustenance. The
            purchasing capacity of a salaried person on permanent job
            when increases because of grant of increments and pay
G           revision or for some other change in service conditions, there
            is always a 45 competing attitude in the private sector to
            enhance the salary to get better efficiency from the employees.
            Similarly, a person who is self-employed is bound to garner
            his resources and raise his charges/fees so that he can live
H           with same facilities. To have the perception that he is likely to
   MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE                  633
  TRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.]


      remain static and his income to remain stagnant is contrary         A
      to the fundamental concept of human attitude which always
      intends to live with dynamism and move and change with the
      time. Though it may seem appropriate that there cannot be
      certainty in addition of future prospects to the existing income
      unlike in the case of a person having a permanent job, yet
                                                                          B
      the said perception does not really deserve acceptance. We
      are inclined to think that there can be some degree of
      difference as regards the percentage that is meant for or
      applied to in respect of the legal representatives who claim
      on behalf of the deceased who had a permanent job than a
      person who is self-employed or on a fixed salary. But not to        C
      apply the principle of standardization on the foundation of
      perceived lack of certainty would tantamount to remaining
      oblivious to the marrows of ground reality. And, therefore,
      degree-test is imperative. Unless the degree-test is applied
      and left to the parties to adduce evidence to establish, it would
                                                                          D
      be unfair and inequitable. The degree-test has to have the
      inbuilt concept of 46 percentage. Taking into consideration
      the cumulative factors, namely, passage of time, the changing
      society, escalation of price, the change in price index, the
      human attitude to follow a particular pattern of life, etc., an
      addition of 40% of the established income of the deceased           E
      towards future prospects and where the deceased was below
      40 years an addition of 25% where the deceased was between
      the age of 40 to 50 years would be reasonable.”
Again, in the concluding paragraph No.61 the Court observed thus:
      “61. In view of the aforesaid analysis, we proceed to record        F
      our conclusions:-
       ***
       (iii) While determining the income, an addition of 50% of
      actual salary to the income of the deceased towards future          G
      prospects, where the deceased had a permanent job and was
      below the age of 40 years, should be made. The addition
      should be 30%, if the age of the deceased was 48 between 40
      to 50 years. In case the deceased was between the age of 50
      to 60 years, the addition should be 15%. Actual salary should
      be read as actual salary less tax.                                  H
634            SUPREME COURT REPORTS                          [2018] 2 S.C.R.


A           (iv) In case the deceased was self-employed or on a fixed
            salary, an addition of 40% of the established income should
            be the warrant where the deceased was below the age of 40
            years. An addition of 25% where the deceased was between
            the age of 40 to 50 years and 10% where the deceased was
            between the age of 50 to 60 years should be regarded as the
B
            necessary method of computation. The established income
            means the income minus the tax component.”
            4. On 03.03.2007, the deceased (Palani), who was only around
      21 years of age at the time, was riding a motorcycle bearing Registration
      No. TN-22 AP 5092 along with his friend, one Haridass as a pillion rider,
C     from Tambaram to Chengalpattu on GST Road, Maraimalai Nagar,
      opposite Vikram Hotel, when they collided with a bus bearing Registration
      No. TN-21 N 0943 belonging to the respondent Transport Corporation,
      which was driven in a rash and negligent manner. The deceased was
      unmarried and working as a contract worker in Hyundai Car Company,
D     Sriperumbudur. Applying the dictum of the Constitution Bench referred
      to above, the appellants are justified in insisting for grant of future
      prospects at the rate of 40% of the established income. The High Court
      has held that the earning of the deceased at the relevant time can be
      taken as Rs.4,000/- per month. The High Court did not provide 40%
      towards future prospects on the established income of the deceased.
E     Thus, the monthly loss of dependency, in the facts of the present case
      would be Rs.4,000 + 1,600 = Rs.5,600/-.
            5. In other words, instead of amount awarded by the High Court
      towards loss of dependency in the sum of Rs.4,32,000/-, the same will
      stand modified to Rs.6,04,800/- (Rupees six lakh four thousand eight
F     hundred only) along with interest at the rate of 9% (nine percent) per
      annum. We are not disturbing the other directions given by the High
      Court in respect of other heads.
            6. Accordingly, the respondent Transport Corporation must
      deposit the additional amount of compensation of Rs.1,72,800/- (Rupees
G     one lakh seventy two thousand eight hundred only) along with interest,
      as awarded in the preceding paragraph, within a period of eight weeks
      from the date of receipt of the copy of this judgment in the Court of
      Additional District & Sessions Judge, Fast Track Court-IV, Chennai
      (Motor Accident Claims Tribunal, Chennai).
H
   MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATE                      635
  TRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.]


     7. In other words, the compensation payable to the appellants            A
would be as follows:
     (a) Loss of Dependency                  Rs.6,04,800/-
          [Rs.5,600 – 50% of 5600)×12×18]
     (b) Loss of love and affection           Rs. 60,000/-
      (c) Transport                                  Rs.    5,000/-           B

      (d) Funeral                                    Rs.    2,000/-
      (e) Loss of estate                             Rs.    2,500/-
           Total                                =    Rs.6,74,300/-
                                                                              C
       8. As a result, the Appeal stands allowed. The compensation
awarded by the High Court is enhanced from Rs.5,01,500/- to
Rs.6,74,300/- [Rupees six lakh seventy four thousand three hundred only].
The respondent Transport Corporation is directed to deposit the entire
award amount as indicated above with interest at 9% (nine percent) per
annum less the amount already deposited if any, within a period of eight      D
weeks from the date of receipt of a copy of this judgment and the
appellants shall be entitled to the compensation in the proportion
specified by the Tribunal. The first and second appellants are entitled to
withdraw the amount deposited upon verification of due application and
the share of the third appellant (minor) shall be deposited in any of the
                                                                              E
nationalised banks till she attains majority and the second claimant/mother
is entitled to withdraw interest thereon once in three months towards
meeting the needs of the minor. Upon turning 18, the minor appellant is
entitled to withdraw her respective share.
      9. Accordingly, the appeal is allowed in the aforementioned terms
                                                                              F
with no order as to costs.


Divya Pandey                                                Appeal allowed.


                                                                              G




                                                                              H