Supreme Court of India
NATIONAL INSURANCE CO. LTD .versusGURUMALLAMMA & ANR.
- Citation
- 2009 INSC 941
- Decided
- 23 July 2009
- Disposal
- Case Partly allowed
- Bench
- S B SINHA
Holding
In fatal accident claims under Section 163A, the multiplier in the Second Schedule is inapplicable; compensation must be calculated per the Schedule using a notional income, resulting in a reduced award of Rs 4,22,000.
Summary
The mother of a 22‑year‑old deceased, who died in a motor‑vehicle accident, filed a claim under Section 163A of the Motor Vehicles Act, 1988. The Tribunal and the Karnataka High Court accepted the deceased’s alleged monthly income of Rs 3,300 and applied a multiplier of 17, awarding Rs 4,78,300 as compensation. On appeal, the Supreme Court held that the multiplier in the Second Schedule is only for disability claims, not for fatal accidents, and that the income of the deceased must be determined on proof, fixing it at Rs 24,000 per annum. Accordingly, compensation was fixed at Rs 4,22,000 after the statutory one‑third reduction for personal expenses. The Court partially allowed the appeal, setting aside the higher award and directing the revised compensation.
Issues considered
- The applicability of the Second Schedule of the Motor Vehicles Act, 1988 to claims under Section 163A for fatal accidents.
- Whether the multiplier provision in the Second Schedule applies to fatal accident compensation.
- How the income of the deceased should be ascertained when not proved.
- Whether the age of an unmarried deceased is relevant when the claimants are the parents.
Legislation cited
- Motor Vehicles Act, 1988s. 163A, s. Second Schedule
Subjects
Motor Vehicles ActSection 163AFatal accident compensationSecond ScheduleMultiplierIncome determinationLegal heirsInsurance liability
Judgment
[2009] 11 S.C.R. 298
... A
NATIONAL INSURANCE CO. LTD . ..
v.
. ·GURUMALLAMMA & ANR.
(ClVil Appeal No. 4644 of 2009)
. . ..
JULY 23, 2009
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ;]
Motor Vehicles Act, 1988 - s. 163A, Second Schedule
- Fatal accident - Claim petition u/s. 163A by mother of the
C deceased - Claimant 50 years of age - Income of deceased
stated to be Rs. 3,.3001- PM. - Tribunal and High Court,
accepted income of the deceased and applying multiplier of
17 determined the compensation at Rs. 4, 78, 300/ - On
appeal, held: Since the petition was filed u/s. f63A,
D compensation ·t o be determined by applying Second
Schedule - Multiplier was not required to be applied -
Multiplier is applicable only in case ·of disability and not in
case of fatal accident ~ However, the income of deceased as
stated by claimant, not proved, hence determined as· Rs.
E 24,0001~ PA. - Compensation determined at Rs. 4,22,0001-
- Compensation.
Ori account of fatal accident of a 22 year old boy, his
mother (respondent-claimant), aged 55 years, filed a
. petition uls. 163A of Motor Vehicles Act, 1988.
F
· The question for consideration in the present appeal
· was whether Second Schedule appended to the Act was
applicable in the facts of the case.
G Partly allowing the appeal, the Court
HELD: 1. Section 163A of Motor Vehicles Act, 1988
was inserted by Act No.54 of 1994 as a special measure
to ameliorate the difficulties of the family members of a
H 298
NATIONAL. INSURANCE CO. LTD. v. 299
- GURUMALLAMMA & ANR.
..,,.. deceased who died in use of a motor vehicle. It contains A
a non-obstante clause. It makes the owner of a motor
vehicle or the authorized insurer liable to pay in the case
of death, the amount of compensation as indicated in the
Second Schedule to his legal heirs. The Second
Schedule provides for the amount of compensation for B
third party Fatal Accident/Injury Cases Claims. It provides
for the .age of the victim and also provides for the
multiplier for arriving at the amount of compensation
which became payable to the heirs and legal
representatives of the deceased depending upon his c
annual income. The Second Schedule furthermore
-
provides that in a case of fatal accident, the amount of
claim shall be reduced by 1/3rd in consideration of the
expenses which the victim would have incurred upon
himself, had he been alive. It provides for the amount of
0
minimum compensation of Rs.50,000/-. It furthermore
provides for payment of general damages as specified in
Note 3 thereof. [Para 7] [302-D-G] _
2. Multiplier stricto sensu is not applicable in the case
of fatal accident. The multiplier would be applicable only E
in case of disability in non-fatal accidents as would
appear from Note 5 appended to the Second Schedule.
Thus, even if the application of multiplier is ignored in the
~ -
- ... present case and the income of the deceased is taken to
be Rs'.3,~00/- per month, the amount of compensation F
payable would be somewhat between 6,84,000/- to
Rs.7 ,60,000/-. As the Second Schedule provides for a
structured formula, the question of determination of
payment of compensation by application of judicial mind
which is otherwise necessary for a proceeding arising out G
of a claim petition filed u/s. 166 would not arise. The .
Tribunals in a proceeding u/s. 163A of the Act is required
to determine the amount of compensation as specified in
the Second Schedule. It is not required to apply the
H
300 SUPREME
I
COURT REPORTS [2009] 11 S.C.R.
A multiplier except in a case of injuries and disabilities.
[Para BJ (302-H; 303-A..:C]
3. The Parliament in laying down the amount of
compensation in the Second Schedule, in its wisdom,
provided for payment of some amount which should be
8
treated to be the minimum. It took into consideration the
fact that a person's potentiality to earn_ is highest, when
he ··Is aged between 25 and 30 years and that is why in
case of permanent disability multiplier of 18 has been ~
C specified. [Para 9J [303-0-E]
4. The deceased was running a hotel. He was,
therefore, having some income. No document, however,
was produce.d in support of the statement of the claimant
{the .mother of the deceased) that his income was 3,300/
D - per month. On what basis such a claim was made has
not been disclosed. No document was produced. The
deceased was not an income tax payee. Income of
Rs.3,300/- might have been chosen so as not to cross the
deadline of income of Rs.40,000/- per annum. Although
E both the Tribunal as also the High Court has accepted the
same, the income of the deceased should be determined
at Rs.24,000/- per annum. Applying the said principle, the
claimant would have been entitled to a compensation of
Rs.4,22,000/-. From that sum, one-third should be
F deducted. [Paras 10 and 11] [303-G-H; 304-A-B] ,
5. In a case of death of an unmarried person and
wherein the claimants are the parents of the deceased,
the age of the deceased shall be irrelevant factor for
applying the multiplier specified in the Second Schedule.
G [Para 12] [304-C-D]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. -...,
4644 of 2009.
H
NATIONAL INSURANCE CO. LTD. v. 301
GURUMALLAMMA & ANR.
-~
From the Judgment & Order dated 19.11.2007 of the High A
Court of Karnataka at Bangalore in M.F.A. No. 6627 of 2007
(MV).
Meenakshi Midha and B.K. Satija for the Appellants.
N_andkishor, N.R. Verma and Anjana Chandrashekarfor B
the Respondents.
~ The Judgment of the Court was delivered by
5.8. SINHA, J. 1. Le~ve granted. c
2. Application of the SecQnd Schedule appended to the
Motor Vehicles Act, 1988 (the Act) in the facts and
circumstances of this case is involved in this appeal which
arises out of a judgment and order dated 19.11.2007 passed
.,, by a Division Bench of the High Court of Karnataka at D
y Bangalore in MFA No.6627 of 2007 dismissing the appeal
preferred by the appellant insurance company from a judgment
and award dated 29.11.2006 passed in MVC No.982 of 2006
by the 16th Additional Judge, MACT, Bangalore, awarding
compensation for a sum of Rs.4,78,300/- by way of E
compensation.
3. Indisputably, one Nag raj, predecessor-in-interest of the
• responden,, died in an accident which took place on
14.12.2005. The deceased was travelling in an auto rickshaw
F
bearing registration No.KA-05-A/4240. It collided with a car,
bearing Registration No.KA-02-N/4605.
4. An application under Section 163A of the Act was filed.
The deceased, at the time of accident, was aged about 22
years; whereas the age of the claimant was 50 years. The G
,.c----( learned Tribunal as also the High Court, in determining the
amount of compensation, applied the multiplier of 17.
5. Ms. Meenakshi Midha, learned counsel appearing on
behalf of the appellant, would submit that the learned Tribunal H
302 SUPREME COURT REPORTS [2009] 11 S.C.R.
A as also the High Court committed a serious error in passing
the impugned judgment insofar as they failed to take into
consideration the fact that keeping in view the age ,of the
claimant, the multiplier of 13 should have been applied. It was
furthermore contended that no proof of income of the deceased
s having been brought on record, the Tribunal as also the High
Court committed a serious error in holding that his income was
Rs.3,300/- per month.
· 6. The deceased was a bachelor. He ·was running a small
hotel. Although there is some dispute in regard to the nature of
C the<claim petition, the learned Tribunal as, also the High Court
having proceeded oil the basis that the same was fried in terms
. of Section 163A of the Act, we see no reason to take a different
view.
D 7. Section 163A was inserted by Act No.54 of 1994 as a
special measure to ameliorate the difficulties of the family
members ofa deceased who died in use of a motor vehicle. It
contains a· non"'obstante clause. It make~ the owner ofa motor
vehicle or the authorized insurer liable to. pay in the case of
E death, the a'nlo.µnt of compensation as indicated in the Second
Schedule to his legal heirs. The Second Schedule provides for
the amount of compensatbn for third party Fatal Accident/Injury ·
Cases Claims. It providetI for the age of the victim.. and also
provides for the multiplier for arriving at the amount of
F compensation which became payable to. the heirs and legal
representatives of the deceased depending upon his annual
income. The Second Schedule furthermore provides that in a
case of fatal accident, the amount of claim.shall be reduced by
1/3rd in consideration of the expenses which the victinJ would·
have incurred upon himself; had he been ·alive. It provides for .
G the amount of minjmum compensation" of Rs,50,000/- .. It
furthermore provides for payment of general damages as
· specified in Note 3 thereof.
8. Multiplier stricto sensu is not app.litable in the case ()f
H fatal accident. The multiplier would be applicable only in case
NATIONAL INSURANCE CO. LTD. v. 303
GURUMALLAMMA & ANR [S.B. SINHA, J.]
I
of disability in non".'fatal accidents as would appear from the' A
~
Note 5 appended to the Second Schedule. Thus, even if the
application of multiplier is ignored in the ·present case and the
income of the deceased is taken to be Rs.3,300/- per month,
the amount of compensation payable would be somewhat
between 6,84,000/- to Rs.7,60,000/-. As the Second Schedule B
provides for a structured formula, the question of determination·
of payment of compensation by application of judicial mind
which is otherwise necessary for a proceeding arising out of a
.... claim petition filed under Section 166 would not '~rise. The
Tribunals in a proceeding under Section 163A of the Act is 1
c
required to determine the amount of compensation as specified
in the Second Schedule. It is not required to apply the multiplier
except in a case of injuries and disabilities.
9. The Parliament in laying down the amount o~
., compensation in the Second Schedule, as indicated D
y hereinbefore, in its wisdom, provided for payment of some
amount which should be treated to be the minimum. It took into
consideration the fact that a person's potentiality to earn is
highest when he is aged between 25 and 30 years and that is
why in case of permanent disability multiplier of 18 has been E
.specified. The very fact that even if the deceased had ari
·income of Rs.3,000/- per month, he being aged about 15 years
.· woµld receive a sum of Rs.60,000/-' but if his. income was
HsA0,000/:. per annum, hi.s legal heirs and representatives
would receive_ a sum of Rs.8,00,000/-, In t_he case of any non+- F
earning person, the notional income ha.s been fixed at
Rs.15,000/- per onnum.
10. The deceased was running a hotel. He was, therefore, .
.having some 'income. No document, however, was produced
.G
in support of the statement of the claimant (tl)e mother of the
~~ deceased) that his income was 3,300/- per month. On what
basis such a claim was made has not been disclosed. No
document was produced. The deceased was not an income
tax payee. Income of Rs.3,300/- might have been chosen so
H
304 SUPR~ME COURT REPORlS [2009] 11 8.C.Ft
'
A as not to cross the deadline of income of Rs.40,000/.. per
annum.
11. Although both the Tribunal as also the High Court has
accepted the same, in our opinion, the income of the deceased
8 should be determined at Rs.24,000/- pet annum. Applying the
said principle, the claimant would have been entitled to a
compensation of Rs.4,22,000/-. From that sum; one-third
should be deducted. )
'
12. In view of the aforementioned finding, we are of the /
C opinion that it is not necessary for us to take into consideration,
the decisions cited at the bar suggesting that in a case of death
of an unmarried person and wherein the claimants are the
parents of the deceased, the age of the deceased shall be
irrelevant factor for applying the multiplier specified in the
D Second Schedule.
13. To the aforementioned extent, this appeal is allowed.
In the facts and circum.stances of the case, however, there shall
be no order as to costs.
I
E K.K.T. Appeal partly allowed.
(
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