Holding

A mother‑in‑law who is financially dependent on the deceased is a legal representative under Section 166 of the Motor Vehicles Act, the split multiplier is not permissible, and compensation must be calculated using the standard multiplier with a 15% addition for future prospects and the prescribed enhancements.

Summary

The deceased, a 52‑year‑old Assistant Professor, died in a motor vehicle accident, leaving behind his wife, two daughters and his mother‑in‑law who lived with the family and was financially dependent on him. The appellants filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, but the Kerala High Court excluded the mother‑in‑law as a legal representative and applied a split multiplier to calculate loss of dependency, reducing the compensation awarded by the Motor Accident Claims Tribunal. The Supreme Court examined whether a mother‑in‑law can be deemed a legal representative, whether the split multiplier was permissible, and how the compensation should be computed. It held that the term “legal representative” must be given a liberal interpretation to include dependents such as the mother‑in‑law, and that the split multiplier is not justified where the Act provides a standard multiplier. Applying the standard multiplier of 11, a 15% addition for future prospects, and the appropriate enhancements, the Court fixed the total compensation at Rs.85,81,815 with interest. The appeal was allowed and the respondent was directed to pay the amount with interest.

Issues considered

Whether the mother‑in‑law of the deceased qualifies as a legal representative under Section 166 of the Motor Vehicles Act, 1988.
Whether the Kerala High Court was justified in applying a split multiplier in calculating loss of dependency.
What is the correct quantum of compensation payable to the dependents, including loss of dependency, conventional heads and interest.

Legislation cited

Motor Vehicles Act, 1988s. 166, s. 168

Subjects

legal representativeMotor Vehicles Actdependencysplit multipliercompensationmother-in-lawmotor accident claimloss of dependency

Judgment

[2021] 6 S.C.R. 1001 1001

N. JAYASREE & ORS. A
v.
CHOLAMANDALAM MS GENERAL INSURANCE
COMPANY LTD.
(Civil Appeal No. 6451 of 2021) B
OCTOBER 25, 2021
[S. ABDUL NAZEER AND KRISHNA MURARI, JJ.]
Motor Vehicles Act,1988: Legal representative – Meaning of
– Mother in law of deceased – Claim petition, maintainability – The
C
term ‘legal representative’ should be given a wider interpretation
for the purpose of Chapter XII of MV Act and it should not be
confined only to mean the spouse, parents and children of the
deceased – MV Act is a benevolent legislation enacted for the object
of providing monetary relief to the victims or their families –
Therefore, the MV Act calls for a liberal and wider interpretation to D
serve the real purpose underlying the enactment and fulfil its
legislative intent – In order to maintain a claim petition, it is sufficient
for the claimant to establish loss of dependency – s.166 of the MV
Act makes it clear that every legal representative who suffers on
account of death of a person in a motor accident should have a
E
remedy for realization of compensation – Materials on record clearly
establish that mother-in-law of victim-deceased was residing with
him – She was dependent on him for her shelter and maintenance –
It is not uncommon in Indian Society for the mother-in-law to live
with her daughter and son-in-law during her old age and be
dependent upon her son-in-law for her maintenance – She may not F
be a legal heir of the deceased, but she certainly suffered on account
of his death – Therefore, she is a “legal representative” under s.166
of the MV Act and is entitled to maintain a claim petition.
Motor Vehicles Act, 1988: Split multiplier – Applicability of –
At the time of calculation of the income, the Court has to consider G
the actual income of the deceased and addition should be made to
take into account future prospects – While the evidence in a given
case may indicate a different percentage of increase, standardization
of the addition for future prospects should be made to avoid different
yardsticks being applied or different methods of calculation being
H
1001
1002 SUPREME COURT REPORTS [2021] 6 S.C.R.

A adopted – In Pranay Sethi, the Constitution Bench has directed
addition of 15% of the salary in case the deceased was between the
age of 50 to 60 years as a thumb rule, where a deceased had a
permanent job – In view of that, High Court was not justified in
applying split multiplier in the instant case.
B Motor Vehicles Act, 1988: s.166 – Deceased aged 52 years
at the time of his death and having a permanent job – Applicable
multiplier is ‘11’ – 15% of his actual salary should be added towards
future prospectus – Four dependents left behind by the deceased –
Hence, 1/4th of the income (actual salary + future prospects) should
be deducted towards his personal expenses – In Pranay Sethi, this
C Court has awarded a total sum of Rs.70,000/- under conventional
heads, namely, loss of estate, loss of consortium and funeral expenses
and the said sum should be enhanced at the rate of 10% in every
three years – The judgment in Pranay Sethi was rendered in the year
2017 – Therefore, in the instant case, the claimants are entitled for
D 10% enhancement.
Allowing the appeal, the Court
HELD: 1. Whether the High Court was justified in
precluding the mother-in-law of the deceased (appellant no.4) as
his legal representative?
E
1.1 The MV Act does not define the term ‘legal
representative’. Generally, ‘legal representative’ means a person
who in law represents the estate of the deceased person and
includes any person or persons in whom legal right to receive
compensatory benefit vests. A ‘legal representative’ may also
F include any person who intermeddles with the estate of the
deceased. Such person does not necessarily have to be a legal
heir. Legal heirs are the persons who are entitled to inherit the
surviving estate of the deceased. A legal heir may also be a legal
representative. The term ‘legal representative’ should be given
G a wider interpretation for the purpose of Chapter XII of MV Act
and it should not be confined only to mean the spouse, parents
and children of the deceased. MV Act is a benevolent legislation
enacted for the object of providing monetary relief to the victims
or their families. Therefore, the MV Act calls for a liberal and

H
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1003

wider interpretation to serve the real purpose underlying the A
enactment and fulfil its legislative intent. In order to maintain a
claim petition, it is sufficient for the claimant to establish his loss
of dependency. Section 166 of the MV Act makes it clear that
every legal representative who suffers on account of the death of
a person in a motor vehicle accident should have a remedy
B
for realization of compensation. [Paras 14, 16][1011-D-E; G-H;
1012-A]
1.2 It is settled that percentage of deduction for personal
expenses cannot be governed by a rigid rule or formula of
universal application. It also does not depend upon the basis of
relationship of the claimant with the deceased. In some cases, C
the father may have his own income and thus will not be considered
as dependent. Sometimes, brothers and sisters will not be
considered as dependents because they may either be
independent or earning or married or be dependent on the father.
The percentage of deduction for personal expenditure, thus, D
depends upon the facts and circumstances of each case.
[Para 17][1012-B-C]
Sarla Verma (Smt.) and Ors. v. Delhi Transport
Corporation and Anr. (2009) 6 SCC 121 : [2009] 5
SCR 1098; Gujarat State Road Transport Corporation, E
Ahmedabad v. Ramanbhai Prabhatbhai and Anr. (1987)
3 SCC 234 : [1987] 3 SCR 404; Hafizun Begum (Mrs)
v. Mohd. Ikram Heque and Ors.(2007) 10 SCC 715 :
[2007] 8 SCR 487 – relied on.
Montford Brothers of St. Gabriel and Anr. v. United F
India Insurance and Anr. (2014) 3 SCC 394 : [2014] 1
SCR 835 – referred to.
1.3 Coming to the facts of the present case, the fourth
appellant was the mother-in-law of the deceased. Materials on
record clearly establish that she was residing with the deceased G
and his family members. She was dependent on him for her shelter
and maintenance. She may not be a legal heir of the deceased,
but she certainly suffered on account of his death. Therefore,
she is a “legal representative” under Section 166 of the MV Act
and is entitled to maintain a claim petition. [Para 21][1014-G-H;
1015-A-B] H
1004 SUPREME COURT REPORTS [2021] 6 S.C.R.

A 2. Whether the High Court was justified in applying a split
multiplier?
2.1 The deceased was aged 52 years at the time of the
accident. He was working as an Assistant Professor and getting
a monthly salary of Rs.83,831/-. The evidence on record shows
B that he was a meritorious man having the qualifications of M.Sc,
M.Phil. He was a first-class holder in M.Sc. He was a Selection
Grade Lecturer in Mathematics and was a subject expert. He
was also included in the panel of Mahatma Gandhi University
and was appointed as Examiner in the Board of Examiners for
CBCCSS Programme in Mathematics. Subsequently, he was
C appointed as Deputy Chairman of the Examiners Board. Evidence
on record also shows that there is acute shortage of lecturers in
Mathematics for appointment in colleges and retired Mathematics
Professors are appointed in so many colleges. It is common
knowledge that the teachers, especially Mathematics teachers,
D are employed even after their retirement in coaching centers.
They may also hold private tuition classes. This would increase
their income manifold after retirement. [Para 22][1015-B-E]
Reshma Kumari & Ors. v. Madan Mohan & Anr. (2013)
9 SCC 65 : [2013] 2 SCR 706 ; K.R. Madhusudhan
E and Ors. v. Administrative Officer and Anr. (2011) 4
SCC 689 : [2011] 2 SCR 1061; Puttamma and Ors. v.
K.L. Narayana Reddy and Anr. (2013) 15 SCC 45 :
[2013] 16 SCR 831 – referred to.
2.2 At the time of calculation of the income, the Court has
F to consider the actual income of the deceased and addition should
be made to take into account future prospects. Further, while
the evidence in a given case may indicate a different percentage
of increase, standardization of the addition for future prospects
should be made to avoid different yardsticks being applied or
different methods of calculation being adopted. In Pranay Sethi,
G the Constitution Bench has directed addition of 15% of the salary
in case the deceased was between the age of 50 to 60 years as a
thumb rule, where a deceased had a permanent job. In view of
the above, the High Court was not justified in applying split
multiplier in the instant case. [Para 28][1017-H; 1018-A-B]
H
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1005

3. (III) What is the amount of compensation that should be A
awarded to the appellants?
3.1 The deceased was working as Assistant Professor at
Devaswom Board Pampa College, Paruamala, and was drawing a
monthly income of Rs.83,381/- which is clear from his salary
certificate issued by the Principal of Devaswom Board Pampa B
College, Paruamala. The salary slip received by the deceased for
the month of May 2011 also shows that his monthly salary was
Rs.83,381/-. Thus, annual income of the deceased comes to
Rs.10,00,572/-. This Court in Sarla Verma has made it clear that
the Annual Income of the deceased minus the income tax should
be taken into account at the time of his death for the purpose of C
calculation of loss of dependency. The deceased had to pay
Rs.1,13,424/- towards income tax per annum. After deducting
the said amount the actual income of the deceased comes to
Rs.8,87,148/-. The deceased was aged 52 years at the time of his
death and had a permanent job. Having regard to the judgment D
in Pranay Sethi, an addition of 15% of his actual salary should be
added towards future prospectus. Therefore, 15% of his actual
salary comes to Rs.1,33,072/-. [Paras 29, 30][1018-C-D, D-F]
3.2 Since the deceased was 52 years at the time of his death,
the applicable multiplier is ‘11’. The total number of dependents E
left behind by the deceased is four. Hence, 1/4th of the income
(actual salary + future prospects) should be deducted towards
his personal expenses. In Pranay Sethi, this Court has awarded a
total sum of Rs.70,000/- under conventional heads, namely, loss
of estate, loss of consortium and funeral expenses. It was held
that the said sum should be enhanced at the rate of 10% in every F
three years. The judgment in Pranay Sethi was rendered in the
year 2017. Therefore, the claimants are entitled for 10%
enhancement. Thus, a sum of Rs.16,500/- each is awarded
towards loss of estate and funeral expenses. [Paras 31, 32,
33][1018-G-H; 1019-B, D-E] G
3.3 A three-Judge Bench of this Court in United India
Insurance Co. Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors,
after considering Pranay Seth, has awarded spousal consortium
at the rate of Rs.40,000/- and towards loss of parental consortium
to each child at the rate of Rs.40,000/-. The compensation under H
1006 SUPREME COURT REPORTS [2021] 6 S.C.R.

A these heads also needs to be increased by 10%. Thus, the spousal
consortium is awarded at Rs.44,000/- and towards parental
consortium at the rate of Rs.44,000/- each (Total Rs.88,000/-) is
awarded to the two children. Thus, the appellants are entitled to
compensation of Rs. 85,81,815/-. The appellants are also entitled
to interest on the said amount at the rate of 7.5% per annum
B
from the date of the claim petition till the date of its realization.
[Paras 34, 35, 36][1019-E-H; 1020-A]
National Insurance Company Limited v. Pranay Sethi
and Ors. (2017) 16 SCC 680 : [2017] 13 SCR 100;
United India Insurance Co. Ltd. v. Satinder Kaur @
C Satwinder Kaur and Ors. (2020) SCC Online SC 410
: AIR 2020 SC 3076 – relied on.
Megjibhai Khimji Vira v. Chaturbhai Taljabhagujri AIR
1977 Guj 195 ; Custodian of Branches of Banco
National Ultramarino v. Nalini Bai Naique 1989 Supp
D (2) SCC 275 : [1989] 2 SCR 810; Sudama Devi v.
Jogendra Choudhary AIR 1987 Pat 239 – referred to.
Case Law Reference
[2009] 5 SCR 1098 relied on para 7
E [2017] 13 SCR 100 relied on para 7
[1987] 3 SCR 404 relied on para 18
[2007] 8 SCR 487 relied on para 19
[1989] 2 SCR 810 referred to para 19
F [2014] 1 SCR 835 referred to para 20
[2013] 2 SCR 706 referred to para 24
[2011] 2 SCR 1061 referred to para 26
[2013] 16 SCR 831 referred to para 27
G
CIVIL APPELLATE JURISDICTION: Civil Appeal No.6451 of
2021.
From the Judgment and Order dated 09.08.2017 of the High Court
of Kerala at Ernakulam in MACA. No.1560 of 2013.
H
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1007

Thomas P. Joseph, Sr. Adv., Bijo Mathew Joy, Dinny Thomas, A
Seshatalpa Sai Bandaru, Advs. for the Appellants.
Ms. Meenakshi Midha, Kapil Midha, Ms. Pritika Juneja, Ms.
Versha Singh, Chander Shekhar Ashri, Advs. for the Respondent.
The Judgment of the Court was delivered by
B
S. ABDUL NAZEER, J.
1. Leave granted.
2. This appeal is directed against the judgment dated 09.08.2017
passed by the High Court of Kerala at Ernakulam in MACA No. 1560
of 2013. Through the impugned judgment, the High Court scaled down C
the amount of compensation payable to the present appellants and thereby
modified the award dated 26.04.2013 passed by the Motor Accident
Claims Tribunal, Kottayam (for short ‘MACT’) in OP(MV) No.843 of
2011.
3. The appellants filed the aforesaid claim petition before the D
MACT seeking compensation on account of the death of N. Venugopalan
Nair in a motor vehicle accident which occurred on 20.06.2011. Appellant
no.1 is the wife of the deceased, appellant nos. 2 and 3 are his daughters
and appellant no.4 is his mother-in-law.
4. There is no dispute as to the occurrence of the accident and E
the liability of the respondent-insurer to pay the compensation. In view
of this admitted position, it is unnecessary to narrate the factual aspects
of the accident.
5. The deceased was aged 52 years at the time of the accident.
The MACT took the annual salary of the deceased as Rs.8,87,148. To F
this, the MACT applied a multiplier of ‘11’ and deducted one-fourth (1/
4th) of the income towards his personal expenses for the purpose of
calculation of the compensation under the head of loss of dependency. A
total sum of Rs.73,18,971/- (Rupees seventy-three lakhs eighteen
thousand nine hundred seventy-one only) was awarded towards loss of
dependency. The MACT awarded a total sum of Rs.74,50,971/- (Rupees G
seventy-four lakhs fifty thousand nine hundred seventy-one only) towards
compensation with interest @ 7.5 per cent per annum from the date of
the claim petition till the date of realization. Thus, the amount awarded
to the appellants is as under:
H
1008 SUPREME COURT REPORTS [2021] 6 S.C.R.

A S.No. Head of Claim Amount Amount Basis vital details in a nut
Claimed Awarded (in shell
(in rupees) rupees)
1. Transportation 5,000/- 4,000/- In view of the transportation
charges
2. Funeral expenses 10,000/- 7,000/- Nominal amount
3. Damage to clothings 1,500/- 1,000/- …do……
4. Loss of dependency 1,06,82,100/- 73,18,971/- (8,87,148-2,21,787)×11
B =73,18,971/-
5. Pain and sufferings 10,000/- 15,000/- In view of the pain suffered
by the victim before his death
6. Loss of l ove and affection 1,00,000/- 70,000/- Petitioners 2,3 and 4 have
lost the love and affection of
the victim
7. Loss of consortium 1,00,000/- 25,000/- The first petition has lost the
companionship of her
C husband
8. Loss of estate 1,00,000/- 10,000/- Nominal amount
9. Loss of expectation of life 2,00,000/- Not allowed Other heads allowed
TOTAL 1,12,08,600/- 74,50,971/- ……………

6. However, the High Court held that appellant no.4 was not a
legal representative of the deceased. Further, the High Court held that
D the MACT ought to have applied split multiplier for the assessment of
the dependency compensation. The High Court fixed monthly income of
the deceased as Rs.40,000/- (Rupees forty thousand only) and deducted
one-third (1/3rd) of the income towards his personal expenses. It applied
multiplier ‘7’ for calculating dependency compensation for the post-retiral
E period and, for the pre-retirement period, a multiplier of ‘4’ was applied.
Accordingly, the High Court awarded compensation of Rs.23,65,728/-
(Rupees twenty-three lakhs sixty-five thousand seven hundred twenty-
eight only), towards loss of dependency for pre-retiral period and a sum
of Rs.22,40,000/- (Rupees twenty-two lakhs forty thousand only) towards
loss of dependency for post-retiral period. A sum of Rs.1,00,000/- (Rupees
F one lakh only) was awarded towards loss of consortium, Rs.25,000/-
(Rupees twenty-five thousand only) towards funeral expenses, and
Rs.80,000/- (Rupees eighty thousand only) towards loss of love and
affection. In total, a sum of Rs.48,39,728/- (Rupees forty-eight lakhs
thirty-nine thousand seven hundred twenty-eight only) was awarded as
G compensation by the High Court.
7. We have heard the learned counsel for the parties. Learned
counsel for the appellants submits that the High Court was not justified
precluding appellant no.4 as legal representative of the deceased. She is
the mother-in-law of the deceased and was living with the deceased and
his family members. Therefore, she was entitled to be treated as a legal
H
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1009
[S. ABDUL NAZEER, J.]

representative for the purpose of determination of compensation. A
Accordingly, 1/4th of the income of the deceased should have been
deducted towards his personal expenses. Further, it was contended that
the High Court was not justified in applying a split multiplier having regard
to the judgment of this Court in Sarla Verma (Smt.) and Ors. vs. Delhi
Transport Corporation and Anr.1 and the subsequent Constitution Bench
B
judgment of this Court in National Insurance Company Limited vs.
Pranay Sethi and Ors.2. It was also argued that the deceased was a
meritorious person who possessed the qualification of M.Sc. M.Phil.
His monthly salary was Rs.83,831/- which is evident from the materials
on record. The High Court took his monthly income as Rs.40,000/- for
the purpose of calculation of loss of dependency without any justification. C
In view of the above, the High Court was not justified in scaling down
the amount of compensation awarded by the MACT.
8. On the other hand, learned counsel for the respondent submits
that the deceased was aged 52 years at the time of the accident. He
would not have earned the same monthly income after his retirement. In D
view of the same, the High Court applied a split multiplier for calculating
the loss of dependency. It was also argued that appellant no.4, who is
the mother-in-law of the deceased, cannot be treated as his legal
representative. Further, it was contended that the High Court was justified
in taking the monthly salary of the deceased as Rs.40,000/- and deducting
1/3rd of the income towards the personal expenses, fair compensation E
has been awarded towards loss of dependency.
9. In view of the above, the questions for consideration before us
are: (I) whether the High Court was justified in precluding the mother-
in-law of the deceased (appellant no.4) as his legal representative?
(II) whether the High Court was justified in applying a split multiplier? F
(III) based on the findings on the preceding questions, what is the amount
of compensation that should be awarded to the appellants?
(I) whether the High Court was justified in precluding the
mother-in-law of the deceased (appellant no.4) as his legal
representative? G
10. The provisions of the Motor Vehicles Act, 1988 (for short,
“MV Act”) gives paramount importance to the concept of ‘just and fair’

1
(2009) 6 SCC 121
2
(2017) 16 SCC 680 H
1010 SUPREME COURT REPORTS [2021] 6 S.C.R.

A compensation. It is a beneficial legislation which has been framed with
the object of providing relief to the victims or their families. Section 168
of the MV Act deals with the concept of ‘just compensation’ which
ought to be determined on the foundation of fairness, reasonableness
and equitability. Although such determination can never be arithmetically
exact or perfect, an endeavor should be made by the Court to award just
B
and fair compensation irrespective of the amount claimed by the applicant/
s. In Sarla Verma1, this Court has laid down as under:
“16. ...“Just compensation” is adequate compensation which is
fair and equitable, on the facts and circumstances of the case, to
make good the loss suffered as a result of the wrong, as far as
C money can do so, by applying the well-settled principles relating
to award of compensation. It is not intended to be a bonanza,
largesse or source of profit.”
11. In Sarla Verma1 it was further held that where the deceased
was married, the deduction towards personal and living expenses of the
D deceased should be one-third (1/3rd) where the number of dependent
family members is between 2 and 3, one-fourth (1/4th) where the number
of dependent family members is between 4 and 6, and one-fifth (1/5 th)
where the number of dependent family members exceeds six.
12. In the instant case, the appellants have contended that the
E mother-in-law of the deceased was staying with the deceased and his
family members since a long time. Taking into consideration the number
of dependents of the deceased including his mother-in-law (four in
number), the MACT had deducted one fourth (1/4 th) of the income
towards his personal expenses. However, the High Court has held that
F appellant no.4 being the mother-in-law of the deceased, cannot be
reckoned as a dependent of the deceased. The High Court, therefore,
determined the number of dependents as 3 and accordingly deducted
one-third (1/3rd) of the income of the deceased towards his personal
expenses.

G 13. Section 166 of the MV Act provides for filing of an application
for compensation. The relevant portion of the said Section is as under:
“166. Application for compensation. —
(1) An application for compensation arising out of an accident of
the nature specified in sub-section (1) of section 165 may be
H made—
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1011
[S. ABDUL NAZEER, J.]

(a) by the person who has sustained the injury; or A
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of
the legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all or B
any of the legal representatives of the deceased, as the case may
be:
Provided that where all the legal representatives of the deceased
have not joined in any such application for compensation, the
application shall be made on behalf of or for the benefit of all the C
legal representatives of the deceased and the legal representatives
who have not so joined, shall be impleaded as respondents to the
application.”
14. The MV Act does not define the term ‘legal representative’.
Generally, ‘legal representative’ means a person who in law represents D
the estate of the deceased person and includes any person or persons in
whom legal right to receive compensatory benefit vests. A ‘legal
representative’ may also include any person who intermeddles with the
estate of the deceased. Such person does not necessarily have to be a
legal heir. Legal heirs are the persons who are entitled to inherit the
surviving estate of the deceased. A legal heir may also be a legal E
representative.
15. Indicatively for the present inquiry, the Kerala Motor Vehicle
Rules, 1989, defines the term ‘legal representative’ as under:
“Legal Representative” means a person who in law is entitled to
F
inherit the estate of the deceased if he had left any estate at the
time of his death and also includes any legal heir of the deceased
and the executor or administrator of the estate of the deceased.”
16. In our view, the term ‘legal representative’ should be given a
wider interpretation for the purpose of Chapter XII of MV Act and it
should not be confined only to mean the spouse, parents and children of G
the deceased. As noticed above, MV Act is a benevolent legislation
enacted for the object of providing monetary relief to the victims or their
families. Therefore, the MV Act calls for a liberal and wider interpretation
to serve the real purpose underlying the enactment and fulfil its legislative
intent. We are also of the view that in order to maintain a claim petition, H
1012 SUPREME COURT REPORTS [2021] 6 S.C.R.

A it is sufficient for the claimant to establish his loss of dependency. Section
166 of the MV Act makes it clear that every legal representative who
suffers on account of the death of a person in a motor vehicle accident
should have a remedy for realization of compensation.
17. It is settled that percentage of deduction for personal expenses
B cannot be governed by a rigid rule or formula of universal application. It
also does not depend upon the basis of relationship of the claimant with
the deceased. In some cases, the father may have his own income and
thus will not be considered as dependent. Sometimes, brothers and sisters
will not be considered as dependents because they may either be
independent or earning or married or be dependent on the father. The
C percentage of deduction for personal expenditure, thus, depends upon
the facts and circumstances of each case.
18. In the instant case, the question for consideration is whether
the fourth appellant would fall under the expression ‘legal representative’
for the purpose of claiming compensation. In Gujarat State Road
D Transport Corporation, Ahmedabad vs. Ramanbhai Prabhatbhai and
Anr.3 this Court while considering the entitlement of the brother of a
deceased who died in a motor vehicle accident to maintain a claim petition
under the provisions of the MV Act, held as under:
“13. We feel that the view taken by the Gujarat High Court
E is in consonance with the principles of justice, equity and
good conscience having regard to the conditions of the
Indian society. Every legal representative who suffers on
account of the death of a person due to a motor vehicle
accident should have a remedy for realisation of
F compensation and that is provided by Sections 110-A to
110-F of the Act. These provisions are in consonance with the
principles of law of torts that every injury must have a remedy. It
is for the Motor Vehicles Accidents Tribunal to determine the
compensation which appears to it to be just as provided in Section
110-B of the Act and to specify the person or persons to whom
G compensation shall be paid. The determination of the compensation
payable and its apportionment as required by Section 110-B of
the Act amongst the legal representatives for whose benefit an
application may be filed under Section 110-A of the Act have to
be done in accordance with well-known principles of law. We
H 3
(1987) 3 SCC 234
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1013
[S. ABDUL NAZEER, J.]

should remember that in an Indian family brothers, sisters A
and brothers’ children and sometimes foster children live
together and they are dependent upon the bread-winner of
the family and if the bread-winner is killed on account of a
motor vehicle accident, there is no justification to deny them
compensation relying upon the provisions of the Fatal
B
Accidents Act, 1855 which as we have already held has been
substantially modified by the provisions contained in the Act in
relation to cases arising out of motor vehicles accidents. We
express our approval of the decision in Megjibhai Khimji Vira v.
Chaturbhai Taljabhagujri4 and hold that the brother of a person
who dies in a motor vehicle accident is entitled to maintain a petition C
under Section 110-A of the Act if he is a legal representative of
the deceased.”
19. In Hafizun Begum (Mrs) vs. Mohd. Ikram Heque and
5
Ors. it was held that:
“7. …12. As observed by this Court in Custodian of Branches D
of Banco National Ultramarino v. Nalini Bai Naique 6 the
definition contained in Section 2(11) CPC is inclusive in character
and its scope is wide, it is not confined to legal heirs only. Instead,
it stipulates that a person who may or may not be legal heir,
competent to inherit the property of the deceased, can E
represent the estate of the deceased person. It includes
heirs as well as persons who represent the estate even
without title either as executors or administrators in
possession of the estate of the deceased. All such persons
would be covered by the expression ‘legal representative’. As
observed in Gujarat SRTC v. Ramanbhai Prabhatbhai3 a legal F
representative is one who suffers on account of death of a person
due to a motor vehicle accident and need not necessarily be a
wife, husband, parent and child.”
20. In Montford Brothers of St. Gabriel and Anr. vs. United
India Insurance and Anr.7 this Court was considering the claim petition G
of a charitable society for award of compensation on account of the
4
AIR 1977 Guj 195
5
(2007) 10 SCC 715
6
1989 Supp (2) SCC 275
7
(2014) 3 SCC 394 H
1014 SUPREME COURT REPORTS [2021] 6 S.C.R.

A death of its member. The appellant-society therein was a registered
charitable society and was running various institutions as a constituent
unit of Catholic church. Its members, after joining the appellant-society,
renounced the world and were known as ‘brother’. In this case, a ‘brother’
died in a motor vehicle accident. The claim petition filed by the appellant-
society seeking compensation on account of the death of aforesaid
B
‘brother’ was rejected by the High Court on the ground of its
maintainability. This Court after examining various provisions of the MV
Act held that the appellant-society was the legal representative of the
deceased ‘brother’. While allowing the claim petition it was observed as
under:
C “17. A perusal of the judgment and order of the Tribunal discloses
that although Issue 1 was not pressed and hence decided in favour
of the appellant claimants, while considering the quantum of
compensation for the claimants, the Tribunal adopted a very
cautious approach and framed a question for itself as to what
D should be the criterion for assessing compensation in such case
where the deceased was a Roman Catholic and joined the church
services after denouncing his family, and as such having no actual
dependents or earning? For answering this issue, the Tribunal relied
not only upon judgments of American and English Courts but also
upon Indian judgments for coming to the conclusion that even a
E religious order or an organisation may suffer considerable loss
due to the death of a voluntary worker. The Tribunal also went on
to decide who should be entitled for compensation as legal
representative of the deceased and for that purpose it relied upon
the Full Bench judgment of Patna High Court in Sudama Devi v.
F Jogendra Choudhary 8, which held that the term “legal
representative” is wide enough to include even “intermeddlers”
with the estate of a deceased. The Tribunal also referred to some
Indian judgments in which it was held that successors to the
trusteeship and trust property are legal representatives within the
meaning of Section 2(11) of the Code of Civil Procedure.”
G
21. Coming to the facts of the present case, the fourth appellant
was the mother-in-law of the deceased. Materials on record clearly
establish that she was residing with the deceased and his family members.
She was dependent on him for her shelter and maintenance. It is not

H 8
AIR 1987 Pat 239
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1015
[S. ABDUL NAZEER, J.]

uncommon in Indian Society for the mother-in-law to live with her daughter A
and son-in-law during her old age and be dependent upon her son-in-law
for her maintenance. Appellant no.4 herein may not be a legal heir of the
deceased, but she certainly suffered on account of his death. Therefore,
we have no hesitation to hold that she is a “legal representative” under
Section 166 of the MV Act and is entitled to maintain a claim petition.
B
(II) Whether the High Court was justified in applying a split
multiplier?
22. The deceased was aged 52 years at the time of the accident.
He was working as an Assistant Professor and getting a monthly salary
of Rs.83,831/- (Rupees eighty-three thousand eight hundred thirty-one C
only). The evidence on record shows that he was a meritorious man
having the qualifications of M.Sc, M.Phil. He was a first-class holder in
M.Sc. He was a Selection Grade Lecturer in Mathematics and was a
subject expert. He was also included in the panel of Mahatma Gandhi
University and was appointed as Examiner in the Board of Examiners
for CBCCSS Programme in Mathematics. Subsequently, he was D
appointed as Deputy Chairman of the Examiners Board. Evidence on
record also shows that there is acute shortage of lecturers in Mathematics
for appointment in colleges and retired Mathematics Professors are
appointed in so many colleges. It is common knowledge that the teachers,
especially Mathematics teachers, are employed even after their E
retirement in coaching centers. They may also hold private tuition classes.
This would increase their income manifold after retirement.
23. In Sarla Verma1, this Court has held that while calculating
the compensation, the courts should take into consideration not only the
actual income at the time of the death but should also make additions by F
taking note of future prospects. It was further held that though the
evidence may indicate a different percentage of increase, it is necessary
to standardize the addition to avoid disparate yardsticks being applied or
disparate methods of calculation being adopted.
24. In Reshma Kumari & Ors. vs. Madan Mohan & Anr.9, a G
three-Judge Bench of this Court has approved the judgment in Sarla
Verma 1.
25. In Pranay Sethi 2, this Court has not only approved the
aforesaid observations made in Sarla Verma1 but also held as under:
9
(2013) 9 SCC 65 H
1016 SUPREME COURT REPORTS [2021] 6 S.C.R.

A “59.3. While determining the income, an addition of 50% of actual
salary to the income of the deceased towards future 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 between 40 to 50 years. In case the
deceased was between the age of 50 to 60 years, the addition
B
should be 15%. Actual salary should be read as actual salary less
tax.
59.4. 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
C
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 necessary method of
computation. The established income means the income minus
the tax component.”
D
26. In K.R. Madhusudhan and Ors. vs. Administrative Officer and
Anr.10, this Court was considering a case where the High Court had
applied split multiplier for the purpose of calculation of compensation
towards loss of dependency and held as under:
“8. In Sarla Verma1 judgment the Court has held that there should
E
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 and exceptional cases involving
F special circumstances.
9. We are of the opinion that the rule of thumb evolved in Sarla
Verma1 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 assumption and
G to avoid uncertainties and inconsistencies in the interpretation of
different courts, and to overcome the same.”
27. In Puttamma and Ors. vs. K.L. Narayana Reddy and Anr.11, this
Court was again considering a case where split multiplier for the purpose
10
(2011) 4 SCC 689
H 11
(2013) 15 SCC 45
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1017
[S. ABDUL NAZEER, J.]

of calculation of dependency compensation was applied. It was held A
thus:
“32. For determination of compensation in motor accident claims
under Section 166 this Court always followed multiplier method.
As there were inconsistencies in the selection of a multiplier, this
Court in Sarla Verma1 prepared a table for the selection of a B
multiplier based on the age group of the deceased/victim. The
1988 Act, does not envisage application of a split multiplier.
33. In K.R. Madhusudhan v. Administrative Officer10 this Court
held as follows: (SCC p. 692, paras 14-15)
“14. In the appeal which was filed by the appellants before the C
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 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 D
therefor. The High Court has also not considered the clear and
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 2nd column
in the Second Schedule to the Motor Vehicles Act, and the Tribunal
has not committed any error by accepting the said multiplier. This E
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 considered the future F
prospects of the deceased and also for adopting a split multiplier
method.
34. We, therefore, hold that in absence of any specific reason
and evidence on record the tribunal or the court should not apply
split multiplier in routine course and should apply multiplier as per G
decision of this Court in Sarla Verma1 as affirmed in Reshma
Kumari 9.”
28. From the above discussion it is clear that at the time of
calculation of the income, the Court has to consider the actual income of
the deceased and addition should be made to take into account future H
1018 SUPREME COURT REPORTS [2021] 6 S.C.R.

A prospects. Further, while the evidence in a given case may indicate a
different percentage of increase, standardization of the addition for future
prospects should be made to avoid different yardsticks being applied or
different methods of calculation being adopted. In Pranay Sethi2, the
Constitution Bench has directed addition of 15% of the salary in case
the deceased was between the age of 50 to 60 years as a thumb rule,
B
where a deceased had a permanent job. In view of the above, the High
Court was not justified in applying split multiplier in the instant case.
(III) What is the amount of compensation that should be
awarded to the appellants?
C 29. That takes us to the award of compensation. We have already
noticed that the deceased was working as Assistant Professor at
Devaswom Board Pampa College, Paruamala, and was drawing a
monthly income of Rs.83,381/- which is clear from his salary certificate
(Ex.A-5) issued by the Principal of Devaswom Board Pampa College,
Paruamala. The salary slip received by the deceased for the month of
D May 2011 (Ex.A-6) also shows that his monthly salary was Rs.83,381/-
. These documents have been marked in evidence through the Principal
of the said College who was examined as PW-1. Thus, annual income
of the deceased comes to Rs.10,00,572/-. This Court in Sarla Verma1
has made it clear that the Annual Income of the deceased minus the
E income tax should be taken into account at the time of his death for the
purpose of calculation of loss of dependency. The deceased had to pay
Rs.1,13,424/- towards income tax per annum. After deducting the said
amount the actual income of the deceased comes to Rs.8,87,148/-.
30. The deceased was aged 52 years at the time of his death and
F had a permanent job. Having regard to the judgment in Pranay Sethi2,
an addition of 15% of his actual salary should be added towards future
prospectus. Therefore, 15% of his actual salary comes to Rs.1,33,072/-
31. Since the deceased was 52 years at the time of his death, the
applicable multiplier is ‘11’. As we have held that appellant no.4, the
G mother-in-law of the deceased is also a dependent and a “legal
representative” under Section 166 of the MV Act, the total number of
dependents left behind by the deceased is four. Hence, 1/4th of the income
(actual salary + future prospects) should be deducted towards his personal
expenses. Thus, the total compensation payable towards loss of
dependency is as under:
H
N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE 1019
[S. ABDUL NAZEER, J.]

(1) (i) Annual Salary Rs.10,00,572 A
(ii) less Tax Rs.1,13,424
(iii) Actual Salary : Rs.8,87,148
(2) Future Prospects :15% of Actual Salary Rs.1,33,072
(3) Loss of dependency : Rs.84,16,815
(1) 8,87,148 + (2) 1,33,072 – ¼ i.e. Rs.2,55,055 x 11

32. In Pranay Sethi2, this Court has awarded a total sum of B
Rs.70,000/- (Rupees seventy thousand only) under conventional heads,
namely, loss of estate, loss of consortium and funeral expenses. It was
held that the said sum should be enhanced at the rate of 10% in every
three years. It was held thus:
“59.8. Reasonable figures on conventional heads, namely, loss of C
estate, loss of consortium and funeral expenses should be Rs
15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaid
amounts should be enhanced at the rate of 10% in every three
years.”
33. The judgment in Pranay Sethi2 was rendered in the year D
2017. Therefore, the claimants are entitled for 10% enhancement. Thus,
a sum of Rs.16,500/- each is awarded towards loss of estate and funeral
expenses.
34. A three-Judge Bench of this Court in United India Insurance
Co. Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors 12, after E
considering Pranay Sethi2, has awarded spousal consortium at the rate
of Rs.40,000/- (Rupees forty thousand only) and towards loss of parental
consortium to each child at the rate of Rs.40,000/- (Rupees forty thousand
only). The compensation under these heads also needs to be increased
by 10%. Thus, the spousal consortium is awarded at Rs.44,000/- (Forty- F
four thousand only), and towards parental consortium at the rate of
Rs.44,000/- each (Total Rs.88,000/-) is awarded to the two children.
35. Thus, the appellants are entitled to compensation as under:
(i) Towards Loss of dependency Rs.84,16,815/-
(ii) Loss of Estate Rs.16,500/- G
(iii) Funeral Expenses Rs.16,500/-
(iv) Spousal Consortium Rs.44,000/-
(v) Parental Consortium Rs.88,000/-
Total Rs.85,81,815/-
12
(2020) SCC Online SC 410 : AIR 2020 SC 3076 H
1020 SUPREME COURT REPORTS [2021] 6 S.C.R.

A 36. The appellants are also entitled to interest on the said amount
at the rate of 7.5% per annum from the date of the claim petition till the
date of its realization. The respondent is accordingly directed to deposit
the above amount with accrued interest thereon at the rate of 7.5% per
annum from the date of claim petition till the date of deposit, after
deducting amounts, if any, deposited by the respondent, within eight weeks
B
from today.
37. Resultantly, the appeal is allowed in the aforesaid terms. Parties
are directed to bear their respective costs.
38. Pending applications, if any, shall also stand disposed of.
C
Devika Gujral Appeal allowed.

D

E

F

G

H