SHAKTI DEVIversusNEW INDIA INSURANCE CO. LTD. & ANR.

                [2010] 13 (ADDL.) S.C.R. 574


A                          SHAKTI DEVI
                                  V.
           NEW INDIA INSURANCE CO. LTD. & ANR.
               (Civil Appeal No. 3660 of 2006)
                       NOVEMBER 09, 2010
B
             [AFTAB ALAM AND R.M. LODHA, JJ.)

       Motor Vehicles Act, 1988 - s. 166 - Compensation -
  Claim for - Fatal motor accident - Deceased aged 22 years
C - Tribunal awarding Rs. 35,0001- with 10% simple interest
  p.m. from date of award till realisation - Compensation
  computed at Rs. 60, 0001- and Rs. 25, 0001- adjusted as paid
  to claimant for no-fault liability - Upheld by High Court - On
  appeal held: Deceased was 22 years old and was not married,
D and was earning about Rs. 1,0001- p.m. - Evidence on record
  that deceased would have got government job in future - In
  view of the facts, taking annual loss of dependency as Rs.
  12, 0001- and applying multiplier of 11, keeping in view the age
  of claimant, compensation enhanced to Rs. 1,32,0001- with
E simple interest of 10% p.a.

       One 'P' died in the accident caused by the bus and
  the truck due to the negligent driving by the drivers. He
  was 22 years old and was earning about Rs. 1000/- per
  month. The parents of 'P' filed a claim petition under
F Section 166 of the Motor Vehicles Act, 1988. The tribunal
  applying the multiplier of 8, computed the compensation
  at Rs. 60,000/- from which Rs. 25,000/- , paid to the
  claimant towards no-fault liability, was adjusted and the
  claimant was awarded a sum of Rs. 35,000/- with simple
G interest @ 10% p.a. from the date of the award till its
  realisation. The award was equally apportioned between
  the insurance companies. The High Court upheld the
  order passed by the tribunal. Aggrieved, the appellant

H                                574
 SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD.           575
                   & ANR.
filed the instant appeal challenging the quantum of           A
compensation.

    Partly allowing the appeal, the Court

    HELD: 1.1 In the instant case, at the time of accident,
the deceased was 22-year old and not married. He was          B
running a general store from his house and earning
about Rs. 1000/- per month from the business. In *Sar/a
Verma's case, this Court stated that where the deceased
was self-employed, the court would usually take only the
actual income at the time of death; a departure from there    C
should be made only in rare and exceptional cases
involving special circumstances. The instant case
involves special circumstances. There is evidence that
the deceased was to get employment in the forest
department after the retirement of his father. The evidence   D
is based on the government policy. The deceased, thus,
had a reasonable expectation of the government
employment in near future. In the circumstances, the
actual income at the time of deceased's death is revised
and taking into consideration the special circumstances       E
of the case, the monthly income of the deceased
deserves to be fixed at Rs. 2000/-. [Para 12] [584-A-D]

     1.2 As regards the personal expenses, since the .
deceased was not married, the principle in *Sar/a Verma's
case that 50% should be treated as the personal and F
living expenses of the bachelor may be applied. Thus, the
annual loss of dependency would come to Rs. 12,000/-.
The tribunal applied the multiplier of 8. It cannot be said
that the multiplier of 18 should have been applied
keeping in view the age of the deceased. In a case where G
the age of the claimant is higher than the age of the
deceased, the age of claimant and not the age of the
deceased has to be taken into account for the
capitalization of the lost dependency. It is so because the
choice of multiplier is determined by the age of the H
    576    SUPREME COURT REPORTS [2010] 13 (ADOL.) S.C.R.


A deceased or that of the claimant, whichever is higher. The
  exact age of the claimant has not come on record. The
  age of the claimant on the date of the accident would be
  about 54-55 years. As per the table prepared in *Sar/a
  Verma's case, the multiplier of 11 would, therefore, be
B applicable. By multiplying the annual loss of dependency
  (Rs.12000/-) with the multiplier of 11, the claimant is
  entitled to the compensation in the sum of Rs. 1,32,000/-
  . The compensation determined by the tribunal at Rs.
  60,000/- and upheld by the High Court in the appeal is
c manifestly erroneous, and is enhanced to Rs. 1,32,000/-.
  which would be paid by the insurance companies to the
  appellant with the simple interest of 10% per annum from
  the date of judgment of the tribunal till the actual payment,
  apportioned equally in the manner directed by the
  tribunal, within the stipulated period. [Paras 12 and 13)
0
  [584-E-H; 585-A-D]

        *Sar/a Verma (Smt.) and Ors. v. Delhi Transport
    Corporation and Anr. (2009) 6 SCC 121 - relied on.

E      General Manager, Kera/a State Road Transport
  Corporation, Trivandrum v Susamma Thomas (Mrs.) and Ors.
  (1994) 2 SCC 176; Davies. and Anr. v Powell Duffryn
  Associated Collieries Ltd. (1942) 1 All ER 657; Sar/a Dixit
  (Smt) and Anr. v. Ba/want Yadav and Ors. (1996) 3 SCC 179;
F Abati Bezbaruah v. Dy. Director General, Geological Survey
  of India and Anr. (2003) 3 SCC 148; U.P. State Road
  Transport Corporation and Ors. v. Trilok Chandra and
  Ors.(1996) 4 SCC 362; Fakeerappa and Anr. v. Kamataka
  Cement Pipe Factory and Ors. (2004) 2 SCC 473; New India
G Assurance Co. Limited v. Charlie and Anr. (2005) 10 SCC
  720 - referred to.
                         Case Law Reference:
          (1994) 2 sec 176      Referred to          Para 7
H         (1942) 1 All ER 657   Referred to          Para 7
SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD. 577
                  &ANR.
    (2009) 6 sec 121         Relied on            Para 8      A
    (1996) 3 sec 119         Referred to          Para 9
    (2003) 3 sec 148         Referred to          Para 9
    (1996) 4 sec 362         Referred to         Para 10
                                                              B
    (2004) 2 sec 473         Referred to         Para 10
    (2005) 1o sec 120        Referred to         Para 11

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3660 of 2006.                                                 c
    From the Judgment & Order dated 05.12.2003 of the High
Court of Jharkhand at Ranchi in M.A. No. 157 of 2000 (R).

    Braj Kishore Mishra, Aparna Jha, Abhishek Yadav for the   D
Appellant.

    Sanjay Jain, Debasis Misra for the Respondents.

    The Judgment of the Court was delivered by                E
     R.M. LODHA, J. 1. A mother who lost her 22-year old son
in a motor accident is in appeal, by special leave, aggrieved
by the inadequate compensation awarded to her. The appellant
and her husband Sachidanand Sinha lived at Badom Bazaar F
in Hazaribagh and their son Pravin Kumar Sinha resided with
them. Pravin Kumar Sinha had done B. Com (Honours) and was
earning about Rs.1000/- per month from a general store being
run from the house. On February 26, 1991 Pravin Kumar Sinha
and his father travelled in a bus (UP 72-9015) to Ranchi. When G
the bus reached near Karmahi forest, a truck (PAX 4785)
coming from the opposite direction collided with it. Both
vehicles at that time were being driven rashly and negligently.
As a result of the accident, two persons died 011 the spot and
appellant's son Pravin Kumar Sinha suffered grievous injuries. H
    578   SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A He was taken to Nawjiwan hospital, Tumbagara, Manika where
  he died after few days.

       2. The appellant and her husband filed a claim petition
  under Section 166 of the Motor Vehicles Act, 1988 (for short,
B 'the 1988 Act') before the Motor Vehicle Accident Claims
  Tribunal, Palamau, Daltonganj (for short, 'the Tribunal') claiming
  compensation for the death of their son in the sum of Rs. 2 lacs
  from the owners and insurers of the two vehicles. The appellant's
  husband died during the pendency of claim petition and,
C accordingly, his name was struck off.

        3. The owners of the two vehicles who were impleaded as
  opposite party Nos. 1 and 2 neither appeared nor filed any
  written statement. The insurance companies filed separate
D written statement and contested the claim petition. The
  opposite party no. 3 - the insurer of the bLis - blamed the truck
  for the accident while the opposite party no. 4 - insurer of the
  truck - stated that it was due to the rash and negligent driving
  of the bus driver that the accident occurred.
E
       4. The Tribunal held that the claimant's son died in the
  accident caused by the bus (UP 72-9015) and the truck (PAX
  4785) due to the negligent driving by the drivers of the vehicles.
  As regards the quantum of compensation, the Tribunal pegged
F the earning of the deceased at Rs. 1000/- per month and after
  deducting personal expenses to the extent of 1/3rd, fixed the
  annual dependency at Rs. 7920/-. The Tribunal applied the
  multiplier of 8 and held that the compensation so computed
  would come to Rs. 63,360/-. The Tribunal then made it a round
G figure of Rs. 60,000/- and after adjusting Rs. 25,000/- which
  was paid to the Claimant towards no-fault liability held that the
  claimant was entitled to a further sum of Rs. 35,000/- and
  awarded her simple interest @ 10% p.a. from the date of the
  award dated June 6, 2000 till its realization. The Tribunal
H
SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD. & 579
              ANR. [R.M. LODHA, J.]
apportioned the award equally between the insurance                   A
companies.

     5. The appellant challenged the award passed by the
Tribunal before the High Court of Jharkhand, Ranchi. However,
her appeal was dismissed by the High Court on December 5,             8
2003.

     6. The only issue for consideration in this appeal is with
regard to the quantum of compensation. Mr. Braj Kishore
Mishra, learned counsel for the appellant argued that the
compensation of Rs. 60,000/- for the death of a 22-year old boy       C
in a motor accident is too low and meager and the High Court
seriously erred in maintaining the award although the Tribunal
erred in arriving at the dependency as well as in applying the
multiplier.
                                                                      D
      7. It must be stated at the outset that the multiplier method
has been consistently applied by this Court in the claim cases
arising out of the Motor Vehicles Act, 1939 as well as the 1988
Act. This Court emphasized in the case of General Manager,
Kera/a State Road Transport Corporation, Trivandrum v                 E
Susamma Thomas (Mrs.) and Ors. 1 that the multiplier method
is logically sound and legally well established and must be
followed; a departure from which can only be justified in rare
and extraordinary circumstances and very exceptional cases.           F
We reiterate that the multiplier method should remain the only
method, as it has been, for assessing the compensation under
the 1988 Act. The multiplier method involves capitalization of
the loss of annual dependency (i.e. multiplicand) by an
appropriate multiplier. Thus, in an action under Section 166 of       G
the 1988 Act, the Tribunal is required to first assess the annual
value of the lost dependency. The first step in calculating the
annual value of the loss of dependency is at the date of the

1.   (1994) 2 sec 176.                                                H
    580     SUPREME COURT REPORTS (2010] 13 (ADDL.) S.C.R.


A deceased's death. The value of the dependency at the date of
  the deceased's death could then be revised in the light of the
  likely changes in the deceased's income that would have
  occurred taking into account future increase in the income. In
  Davies & Anr. v Powell Duffryn Associated Collieries Ltd. 2,
B Lord Wright stated, "the starting point is the amount of wages
  which the deceased was earning, the ascertainment of which
  to some extent may depend on the regularity of his employment.
  Then there is an estimate of how much was required or
  expanded for his own personal and living expenses. The
C balance will give a datum or basic figure which will generally
  be turned into a lump sum by taking a certain number of years'
  purchase". It is not necessary for us to further delve into the
  matter in this regard. Suffice, however to say that above
  statement of Lord Wright in [)avies case2 has been applied
0
  by this Court in large number of cases.

        8. Recently in the case of Sar/a Verma (Smt.) and Ors. v.
    Delhi Transport Corporation and Anr, 3 this Court observed in
    para 20 of the report as follows :
E
          "20. Generally the actual income of the deceased less
          income tax should be the starting point for calculating the
          compensation. The question is whether actual income at
          the time of death should be taken as the income or whether
F         any addition should be made by taking note of future
          prospects."

      9. The Court in Sarla Verma 3 then considered the
  decisions of this Court in Susamma Thomas 1 , Sar/a Dix it
G (Smt) & Anr. v. Ba/want Yadav & Ors. 4 , Abati Bezbaruah v. Dy.
  Director General, Geological Survey of India & Anr. 5 and in
    2.   (1942) 1 All ER 657.
    3.   (2009) 6 sec 121.
    4    (1996) 3 sec 179.
H 5.     (2003) 3 sec 148.
SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD. &581
              ANR. [R.M. LODHA, J.]
paragraph 24 of the report held thus :                            A

      "24. In Susamma Thomas this Court increased the income
      by nearly 100%, in Sar/a Dix it the income was increased
      only by 50% and in Abati Bezbaruah the income was
      increased by a mere 7%. In view of the imponderables and B
      uncertainties, we are in favour of adopting as a rule of
      thumb, an addition of 50% of actual salary to the actual
      salary income of the deceased towards future prospects,
      where. the deceased had a permanent job and was below
      40 years. (Where the annual income is in the taxable C
      range, the words "actual salary" should be read as "actual
      salary less tax"). The addition should be only 30% if the
      age of the deceased was 40 to 50 years. There should
      be no addition, where the age of the deceased is more
      than 50 years. Though the evidence may indicate a D
      different percentage of increase, it is necessary to
      standardise the addition to avoiq different yardsticks being
      applied or different methods of calculation being adopted.
      Where the deceased was self-employed or was on a fixed E
      salary (without provision for annual increments, etc.), the
      courts will usually take only the actual income at the time
      of death. A departure therefrom should be made only in
      rare and exceptional cases involving special
      circumstances."                                              F
     10. Then with regard to deduction for personal and living
expenses, in Sar/a Verma 3 this Court again considered
Susamma Thomas1, UP. State Road Transport Corporation
& Ors. v. Tri/ok Chandra & Ors. 6 and Fakeerappa and Another G
v. Karnataka Cement Pipe Factory and Others 7 and held as
under:

6.   (1996) 4 sec 362.
1.   (2004) 2 sec 473.
                                                                  H
    582     SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A         "31. Where the deceased was a bachelor and the
          claimants are the parents, the deduction follows a different
          principle. In regard to bachelors, normally, 50% is deducted
          as personal and living expenses, because it is assumed
          that a bachelor would tend to spend more on himself. Even
B         otherwise, there is also the possibility of his getting married
          in a short time, in which event the contribution to the
          parent(s) and siblings is likely to be cut drastically. Further,
          subject to evidence to the contrary, the father is likely to
          have his own income and will not be considered as a
c         dependant and the mother alone will be considered as a
          dependant. In the absence of evidence to the contrary,
          brothers and sisters will not be considered as dependants,
          because they will either be independent and earning, or
          married, or be dependent on the father.
D
          32. Thus even if the deceased is survived by parents and
          siblings, only the mother would be considered to be a
          dependant, and 50% would be treated as the personal and
          living expenses of the bachelor and 50% as the
E
          contribution to the family. However, where the family of the
          bachelor is large and dependent on the income of the
          deceased, as in a case where he has a widowed mother
          and large number of younger non-earning sisters or
F         brothers, his personal and living expenses may be
          restricted to one-third and contribution to the family will be
          taken as two-third."

       11. As regards selection of multiplier, in Sar/a, Verma 3 , this
G Court on consideration of the earlier decisions in Susamma
  Thomas 1 , Trilok Chandra 6 and New India Assurance Co.
  Limited v. Charlie and Anr. 8 prepared the following table:


    a.   c2oos) 10 sec 720.
H
SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD. & 583
              ANR. [R.M. LODHA, J.]

Age of the      Multiplier   Multiplier   Multiplier     Multiplier   Multiplier   A
Deceased        Scale as     scale as     scale in       specified    actually
                envisaged    adopted      Trilok         in           used in
                in           by Trilok    Chandra        Second       Second
                Susamma      Chandra      as             Column       Sched-
                Thomas                    clarified in   the          ule to
                                          Charlie        Table        the MV       B
                                                         in           Act (as
                                                         Second       seen
                                                         Schedule     from the
                                                         to the       quantum
                                                         MV Act       of
                                                                      compe-       c
                                                                      nsation)

    (1)           (2)            (3)         (4)            (5)          (6)

Upto 15 yrs        -              -           -             15           20
                                                                                   D
15 to 20 yrs       16             18         18             16            19

21 to 25 yrs       15             17         18             17            18

26 to 30 yrs       14             16         17             18            17

31 to 35 yrs       13             15         16             17            16       E

36 to 40 yrs       12             14         15             16            15

41 to 45 yrs       11             13         14             15            14

46 to 50 yrs       10             12         13             13            12
                                                                                   F
51 to 55 yrs       9              11         11             11            10

56 to 60 yrs       8              10         09              8            8

61 to 65 yrs       6              08         07              5            6
                                                                                   G
Above 65 Yrs       5              05         05              5            5


    In the light of the above table, this Court held that in claim
cases under Section 166 of the 1988 Act, the multiplier as
mentioned in column 4 should be applied.                                           H
    584    SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A         12. So far as the present case is concerned, at the time
    of accident, the deceased was 22-year old and not married.
    He was running a general store from his house and earning
    about Rs. 1000/- per month from the business. In Sarla Verma 3 ,
    this Court stated that where the deceased was self-employed,
B   the court shall usually take only the actual income at the time
    of death; a departure from there should be made only in rare
    and exceptional cases involving special circumstances. Does
    the present case involve special circumstances? In our view, it
    does. The evidence has come that the deceased was to get
c   employment in the forest department after the retirement of his
    father. Obviously the evidence is based on the government
    policy. The deceased, thus, had a reasonable expectation of
    the government employment in near future. In the circumstances,
    the actual income at the time of deceased's death needs to
    be revised and taking into consideration the special
0
    circumstances of the case, in o~,r view,. the monthly incpme of
    the deceased deserves to be fixed at Rs. 2000/-. As regards
    the personal expenses, since the deceased was not married,
    we are satisfied that the principle stated in Sar/a Verma 3 that
    50% should be treated as the personal and living expenses of
E   the bachelor may be applied. Seen thus, the annual loss of
    dependency would come to Rs. 12,000/-. Insofar as multiplier
    is concerned, the Tribunal applied the multiplier of 8. Learned
    counsel for the appellant argued that the multiplier of 18 should
    have been applied keeping in view the age of the deceased.
F   The argument is devoid of any substance. In a case where the
    age of the claimant is higher than the age of the deceased, the
    age of claimant and not the age of the deceased has to be
    taken into account for the capitalization of the lost dependency.
    It is so because the choice of multiplier is determined by the
G   age of the deceased or that of the claimant, whichever is
    higher. The exact age of the claimant has not come on record.
    As per the evidence of AW1 (Pankaj Kumar Sinha), on the date
    of his deposition, the claimant's age was about 63 years. The
    date of deposition of AW-1 is not available. The accident
H   occurred in 1991 and the date of decision of the Tribunal is
SHAKTI DEVI v. NEW INDIA INSURANCE CO. LTD. & 585
              ANR. [R.M. LODHA, J.]
June 6, 2000. Ordinarily, the Tribunal would not have taken much   A
time after the evidence was complete. We may assume that
the statement of AW-1 was recorded somewhere in 1998 or
1999. If that be so, the age of the claimant on the date of the
accident would be about 54-55 years. As per the table prepared
in Sar/a Verma 3 , the multiplier of 11 would, therefore, be       s
applicable. By multiplying the annual loss of dependency
(Rs.12000/-) with the multiplier of 11, the claimant becomes
entitled to the compensation in the sum of Rs. 1,32,000/-. The
compensation determined by the Tribunal at Rs. 60,000/- and
confirmed by the High Court in the appeal is manifestly            c
erroneous and is enhanced to Rs. 1,32,000/-.

       13. The appeal is allowed to the above extent. The
enhanced compensation shall be paid by the insurance
companies to the appellant with the simple interest of 10% per
annum from the date of Judgment of the Tribunal (June 6, 2000)     D
till the actual payment apportioned equally in the manner
directed by the Tribunal within two months from today. The
parties shall bear their own costs.

N.J.                                    Appeal partly allowed.     E