Supreme Court of India
NATIONAL INSURANCE COMPANY LTD.versusKHIMLIBHAI & ORS.
- Citation
- 2009 INSC 1000
- Decided
- 4 August 2009
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
The High Court’s award of Rs 4.84 lakh, based on a Rs 100 daily income, a multiplier of 17, and a one‑fourth deduction for personal expenses, is proper and the appeal is dismissed.
Summary
Vir Singh, a 40‑year‑old carpenter, died in a motor accident in 1997. His widow, children and parents (eight dependents) filed a claim under Section 166 of the Motor Vehicles Act for compensation. The Motor Accident Claims Tribunal awarded Rs 2.32 lakh based on a daily income of Rs 84 and a multiplier of 15. The Madhya Pradesh High Court enhanced the award to Rs 4.84 lakh, assuming a daily income of Rs 100, applying a multiplier of 17 and deducting only one‑fourth of the total income for the deceased’s personal expenses. The insurer appealed to the Supreme Court. The Court held that the assumed daily income of Rs 100 was reasonable, the multiplier of 17 appropriate for the deceased’s age, and that a one‑fourth deduction was correct given eight dependents, following established judicial practice. Consequently, the appeal was dismissed and the High Court’s award upheld.
Issues considered
- Whether the deceased’s daily income can be fixed at Rs 100 for compensation purposes.
- Whether a multiplier of 17 is the correct factor for a 40‑year‑old deceased and his widow.
- Whether the deduction for the deceased’s personal and living expenses should be one‑fourth of the total income in a family of eight dependents.
Legislation cited
- Motor Vehicles Act, 1988s. 163-A, s. 166, s. 173
Subjects
Motor accident compensationSection 166MultiplierPersonal expense deductionDaily incomeDependentsMotor Vehicles Act
Judgment
[2009) 12 S.C.R. 301
NATIONAL INSURANCE COMPANY LTD. A
v.
KHIMLIBHAI & ORS.
(Civil Appeal No. 5089 of 2009)
AUGUST 4, 2009
B
[S.B. SINHA AND DEEPAK VERMA, JJ.]
.__.. Motor Vehicles Act, 1988: s.166 - Personal expenditure
of deceased - Deduction of, from total income of deceased
for arriving at compensation amount - Carpenter - 40 years C
of age - Died in a motor accident - Family consisting of 8
dependents - High Court fixed Rs. 100 as daily income of
deceased, adopted multiplier of 17 and deducted 1/4th of total
income on account of personal expenditure of the deceased
and awarded compensation of Rs.4.84 lacs - Held: No o
.,. ~ infirmity in order of High Court.
The claimants, respondent 1 to 8 were widow, sons,
daughter and parents of deceased who died in motor
. accident. The deceased was 40 years old and carpenter E
by profession. Tribunal awarded compensation
amounting to Rs.2.32 lacs. On appeal, High Court held
.. that deceased was earning Rs.100 per day and since
deceased's family consisted of dependents in all 8
persons, directed to deduct 1/4th of the total income
towards personal expenditure of deceased. High Court F
awarded total compensation of Rs.4.84 lacs by adopting
multiplier of 17. The present appeaf is filed by the
Insurance Company.
Dismissing the appeal, the Court G
''
HELD: 1.1. Deceased was working as a carpenter.
Thus, working as such, even in the year 1997 he could
have comfortably earned Rs.100/- per day. This was also
admitted by P.W.3 with whom the deceased was H
301
302 SUPREME COURT REPORTS [2009] 12 S.C.R.
A employed that he was being paid Rs.100/- per day. Even
assuming that he was working only for six months in a
year as carpenter and for remaining six months he was
working in his own field, that would not materially affect
his income. While he was working in his own field, he was
B contributing to augment his income and thereby was
saving Rs.100/- per day on the labour that he would have
spent, if he had not workedl himself. Thus, looking to the
matter from that angle, it is clear that he would have
continued to earn Rs.100/- per day, whether he worked
c as a carpenter or in his own field. [Para 16] [305-G-H; 306-
A-C]
1.2. As far as application of proper multiplier is
concerned, looking at the ;;:ige of the deceased and that
of the widow multiplier of 17 which was applied by the
D High Court is proper and does not call for interference. t
[Para 17] [306-C]
1.3. It stands proved that deceased left behind a large
family to be looked after, who all were dependents on his
E income. Keeping in view the family background, High
Court committed no error in deducting only 1/4th amount
from the total income of the deceased towards the
expenses which would have been incurred on himself. "'t
[Paras 19 and 20] [306-E; ~106-F-G]
F
Sar/a Verma (Smt) & Ors. v. Delhi Transport Corporation
& Anr. (2009) 6 sec 121, rnlied on.
Case Law Reference:
(2009) 6 sec 121 relied on Para 20
G
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
5089 of 2009.
From the Judgment & Order dated 18.5.2006 of the High
Court of Madhya Pradesh Bench at Indore in M.A. No. 1492 of
H 2004.
NATIONAL INSURANCE COMPANY LTD. v. 303
KHIMLIBHAI & ORS.
;.- Pankaj Bala Verma, Kiran Suri for the Appellants. A
T.N. Singh, V.K. Singh, S.N. Singh, Vikas Mehta for the
Respondents.
The Judgment of the Court was delivered by
B
DEEPAK VERMA, J. 1. Leave granted.
2. Vir Singh aged about 40 years, carpenter by profession
I -1 met with a motor accident on 24th May 1997, while he was
travelling in a jeep bearing No.MP11-4690 which was hit from
behind by an offending truck, bearing No.MP09-D-5665. He
c
sustained injuries, was given first-aid in the hospital but
succumbed to the same at 5.00 p.m. on the same date.
3. Respondent nos.1 to 8 herein, claiming to be the widow,
sons, daughter and aged parents of the deceased, filed a Claim D
J Petition under Section 166 of the Motor Vehicles Act, 1988
)'
(hereinafter referred to as 'the Act') before Motor Accident
Claims Tribunal, Jhabua, M.P. (for short, 'the Tribunal')
registered as Claim Case No.202 of 2003. They claimed a total
'90mpensation ·Of Rs.8,31,000/- against the respondents, i.e., E
insurance company (appellant herein), owner and driver of the
truck.
-'r
4. Both, the owner and the driver of the truck, were
proceeded ex-parte and they did not file any written statement.
F
5. The appellant herein; arrayed as respondent no.3 in the
Claim Case, filed its written statement generally denying the
averments made in the Claim Case.
6. It was contended by the insurance company before the G
j, Tribunal that respondent no.2-driver did not have a valid and
proper licence to drive the truck at the relevant point of time
and no information was given to the appellant nor was any claim
form submitted. Therefore, it was not liable to pay any
compensation.
H
304 SUPREME COURT REPORTS [2009] 12 S.C.R.
A 7. It further contended that the driver of the jeep, which was
hit from behind by the offending truck, also did not have a valid
driving licence and the deceased was travelling as a gratuitous
passenger. Thus, in any case no liability can be fastened on
the appellant-insurance company and prayed for its
B exoneration.
8. On the strength of the pleadings of the parties, the
Tribunal framed issues. It appears that the appellant did not lead
any evidence in rebuttal to the evidence that was led by the
C respondent-claimants.
9. From the voluminous material available on record, it has
neither been disputed before us, nor was it agitated in the High
Court that the accident was caused due to rash and negligent
driving of the truck and at the relevant point of time, it was
D owned by respondent no.9/10 and driven by respondent no.11.
10.These facts having not been disputed before us, we
have only to consider whether the amount awarded by the
Tribunal and as enhanced in appeal by the Division Bench of
E the High Court of Madhya Pradesh, Indore Bench, was proper
or not.
11. On appreciation of evidence available on record, the
Tribunal awarded a total amount of Rs.2,32,762/- together with y-
interest at the rate of 9% against the appellant and respondent
F nos.9, 10 and 11 herein. The said figure was arrived at on the
basis that the deceased was earning Rs.84/- per day and
adding certain expenses towards conventional heads and then
applying the multiplier of 15.
G 12. Feeling aggrieved by the said award and order passed
by the Tribunal on 20th February 2004, an appeal was carried
under Section 173 of the Act to the High Court.
13. In appeal, the High Court came to the conclusion that
it can safely be assumed that deceased Vir Singh, who was
H working as carpenter before his death in the year 1997, must
NATIONAL INSURANCE COMPANY LTD. v. 305
KHIMLIBHAI & ORS. [DEEPAK VERMA, J.]
be earning Rs.100/- per day. Thus, his monthly income woulq A
be Rs.3,000/-. Keeping in mind the large family of dependents,
as mentioned hereinabove, i.e., the widow, sons, daughter and
aged parents, in all 8 persons, 1/4th of the total income so
arrived at, was directed to be deducted towards the amount
which the deceased would have spent on himself and the B
multiplier of 17 was applied. Thus, the High Court awarded
compensation of Rs.4,59,000/-. The High Court awarded an
additional lump sum amount of Rs.25,000/- under various
I ~ conventional heads thereby making a total compensation of
Rs.4,84,000/- with further stipulation that the enhanced sum
would carry interest at the rate of 6% p.a. from the date of the
c
application till its realisation.
14. Appellant-insurance company is in appeal challenging
the impugned award and order primarily on the following two
grounds: D
_.l
)' (i) that the amount enhanced by the High Court is
excessive and exorbitant, more so, without there
being any basis, it has been assessed that
deceased could have earned Rs.100/- per day; and E
(ii) that deduction of only 1/4th towards his personal
expenses from his total income has wrongly been
-'l'
allowed and it should have been 1/3rd of his total
income.
F
15. In the light of the aforesaid, we have heard Ms. Pankaj
Bala Verma, learned counsel appearing for the appellant-
insurance company; rv,r. Vikas Mehta, learned counsel
appearing for respondent nos.1 to 8; and Mr. T.N. Singh,
learned counsel appearing for respondent nos.9 to 11. G
16. It could not be disputed before us that deceased was
working as a carpenter. Thus, obviously working as such, even
in the year 1997 he could have comfortably earned Rs.100/-
per day. This has also been admitted by P.W.3 with whom the
H
306 SUPREME COURT REPORTS [2009) 12 S.C.R.
A. deceased was employed that he was being paid Rs.100/- per
day. Even if we assume that h19 was working only for six months
in a year as carpenter and for remaining six months he was
working in his own field, that'would not materially affect his
income. While he was working in his own field, he was
B contributing to augment his income and thereby was saving
Rs.100/- per day on the labour that he would have spent, if he
had not worked himself. Thus, looking to the matter from that
angle, it is clear that he would have continued to earn Rs.100/
- per day, whether he worked as a carpenter or in his own field. ;.. 1
c 17. As far as application of proper multiplier is concerned,
looking to the age of the deceased and that of the widow, in
our opinion, multiplier of 17 which has been applied by the High
Court is proper and does not call for interference.
o 18. Thus, the first question is answered against the
appellant. ~
19. As far as question no.2 is concerned, it stands proved
that deceased had left behind a large family to be looked after, ,
E who all were dependents on his income. To reiterate, his widow,
sons, daughter and aged parents - total 8 members in the
family.
20. Keeping in mind the family background, the High Court
has deducted 1/4th amount as the amount which the deceased
F would have spent on himself. In our opinion, the High Court
committed no error in deducting only 1/4th amount from the total
income of the deceased towards the expenses which would
have been incurred on himself. It has also been held so in a
recent judgment of this Court in Sar/a Verma (Smt) & Ors. v.
G Delhi Transporl Corporation & Anr. (2009) 6 SCC 121:
"30. Though in some cases the deduction to be made
towards personal and living expenses is calculated on the
basis of units indicated in U.P.SRTC v. Trilok Chandra
(1996) 4 sec 362, the general practice is to apply
H
/
NATIONAL INSURANCE COMPANY LTD. v. 307
. KHIMLIBHAI & ORS. [DEEPAK VERMA, J.]
,k standardised deductions. Having considered several A
subsequent decisions of this Court, we are of the view that
where the deceased was married, the deduction towards
personal and living expenses of the deceased, should be
one-third (1/3rd) where the number of dependent family
members is 2 to 3, one-fourth (1/4th) where the number of B
dependent family members is 4 to 6, and one-fifth (1/5th)
where the number of dependent family members exceeds
six."
, ~
It was further held in para 48 of the said judgment as
under: c
"48. The appellants next contended that having regard to
the fact that the family of the deceased consisted of 8
members including himself and as the entire family was
dependent on him, the deduction o.n account of personal D
. _. and living expenses of the deceased should be neither the
• standard one-third, nor one-fourth as assessed by the High
Court, but one-eighth. We agree with the contention that
the deduction on account of personal living expenses
cannot be at a fixed one-third in all cases (unless the E
calculation is under Section 163-A read with the Second
Schedule to the MV Act). The percentage of deduction on
~ >( account of personal and living expenses can certainly vary
with ref~rence to the number of dependant members in the
family. But as noticed earlier, the personal living expenses
F
of the deceased need not exactly correspond to the
number of dependants."
21.ln the light of the aforesaid discussion, we are of the
opinion that there is no substance in this appeal. It is
accordingly hereby dismissed with costs to be borne by the G
.....
appellant.
22. Counsel fee assessed at Rs.10,000/-.
D.G. Appeal dismissed.
H
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