Holding

Future prospects may be accounted for by adding 50% of actual salary for a deceased under 40, pay revisions after death are excluded, personal expense deduction is one‑fifth, and the multiplier to be used is the one prescribed in column 4 of the Court’s table (15 for a 38‑year‑old), leading to an enhanced compensation of Rs 1,65,246.

Summary

The appellant, the widow of a scientist who died in a 1988 bus accident, sought higher compensation than awarded by the Motor Accident Claims Tribunal and enhanced by the Delhi High Court. The Supreme Court examined whether future prospects of the deceased could be factored into income, whether pay revisions occurring after death should be considered, the appropriate deduction for personal and living expenses, and the correct multiplier to apply. It held that a standard addition of 50% of actual salary may be made for future prospects for a deceased under 40, but pay revisions after death are irrelevant; the deduction for personal expenses should be one‑fifth of income; and the multiplier must follow the table derived from Susamma Thomas, Trilok Chandra and Charlie, giving a multiplier of 15 for a 38‑year‑old. Applying these principles, the Court recalculated the loss of dependency as Rs 8,64,870, added statutory sums, and allowed an enhancement of Rs 1,65,246 over the High Court award. The enhanced amount is to be paid exclusively to the widow.

Issues considered

Whether future prospects of the deceased can be taken into account for determining income and, if so, whether pay revisions occurring during the pendency of the claim may be considered.
Whether the deduction for personal and living expenses of the deceased should be less than one‑fourth as claimed by the appellants or one‑third as contended by the respondents.
Whether the High Court erred in fixing the multiplier at 13.
What the correct quantum of compensation should be.

Legislation cited

Motor Vehicles Act, 1988s. 163A, s. 166

Subjects

motor accident compensationloss of dependencyfuture prospectsmultiplier methodpersonal expenses deductionMotor Vehicles ActSection 163Astandardization of compensation

Judgment

[2009] 5 S.C.R. 1098

A SMT. SARLA VERMA & ORS.
v.
DELHI TRANSPORT CORPORATION & ANR.
(Civil Appeal No. 3483 OF 2008)
APRIL 15, 2009
B
[R.V. RAVEENDRAN AND LOKESHWAR SINGH
PANTA, JJ.)

MOTOR VEHICLES ACT, 1988:
c
Motor vehicle accident - Compensation awarded by
Tribunal - Enhanced by High Court - On appeal, Held:
Income of the deceased towards future prospects could be
taken into account - Standardization thereof - Deduction
o towards personal and living expenses - Guidelines given -
Selection of multiplier - Criteria laid down - Computation of
compensation taking into account future pay revisions - ff
claimants delay the proceedings they can rely upon revised
higher pay scales that may come into effect during such
E pendency - However, promptness cannot be punished in this
manner - Hence revision in pay scale subsequent to death
and before final hearing cannot be taken into account for
determining the income for calculating compensation -
Personal and living expenses determined - Enhancement of
F compensation and interest thereon allowed - Enhanced
compensation awarded to be taken by the widow exclusively.

The appeal has been filed against the High Court
judgment. It sought higher compensation. On the basis
of the contentions raised by the appellants and
G respondents, the following questions arose for
\.
consideration:

(i) Whether the future prospects can be taken into

H 1098
SARLA VERMA & ORS. v. DELHI TRANSPORT 1099
) CORPORATION & ANR.
account for determining the income of the deceased ? If A
so, whether pay revisions that occurred during the
pendency of the claim proceedings or appeals therefrom
should be taken into account ?

(ii) Whether the deduction towards personal and B
living expenses of the deceased should be less than one-
fourth (1/4th) as contended by the appellants, or should
be one-third (1/3rd) as contended by the respondents ?

(iii) Whether the High Court erred in taking the
multiplier as 13 ? c
(iv) What should be the compensation ?

Partly allowing the appeal, the Court
Di
HELD:1. Lack of uniformity and consistency in
awarding compensation has been a matter of grave
concern. Every district has one or more Motor Accident
Claims Tribunal/s. If different Tribunals calculate
compensation differently on the same facts, the claimant,
E
the litigant, the common man will be confused, perplexed
and bewildered. If there is significant divergence among
Tribunals in determining the quantum of compensation
on similar facts, it will lead to dissatisfaction and distrust
in the system. [Para 8) [1113-F-G]
F
General Manager, Kera/a State Road Transport
Corporation v. Susamma Thomas 1994 (2) SCC 176 and UP
State Road Transport Corporation vs. Trilok Chandra 1996 (4)
sec 362, relied on.
G
Nance v. British Columbia Electric Rly. Co. Ltd. [1951 AC
601 and Davies v. Powell Duffryn Associated Collieries Ltd.,
1942 AC 601, referred to.

H
1100 SUPREME COURT REPORTS [2009] 5 S.C.R.

A 2. 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 money can
do so, by applying the well settled principles relating to
B award of compensation. It is not intended to be a
bonanza, largesse or source of profit. Assessment of
compensation though involving certain hypothetical
considerations, should nevertheless be objective. Justice
and justness emanate from equality in treatment,
c consistency and thoroughness in adjudication, and
fairness and uniformity in the decision making process
and the decisions. While it may not be possible to have
mathematical precision or identical awards, in assessing
compensation, same or similar facts should lead to
0 awards in the same range. When the factors/inputs are
the same, and the formula/legal principles are the same,
consistency and uniformity, and not divergence and
freakiness, should be the result of adjudication to arrive
at just compensation. [Para 8] [1114-G-H; 1115-A]
E 3. Basically only three facts need to be established
by the claimants for assessing compensation in the case
of death : (a) age of the deceased; {b) income of the
deceased; and the (c) the number of dependents. The
issues to be determined by the Tribunal to arrive at the
F loss of dependency are (i) additions/deductions to be
made for arriving at the income; (ii) the deduction to be
made towards the personal living expenses of the
deceased; and (iii) the multiplier to be applied with
reference of the age of the deceased. If these
G determinants are standardized, there will be uniformity
dnd consistency in the decisions. There will lesser need
for detailed evidence. It will also be easier for the
insurance companies to settle accident claims without

H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1101
) CORPORATION & ANR.
delay. To have uniformity and consistency, Tribunals A
should determine compensation in cases of death, by the
following well settled steps, viz. Step 1 (Ascertaining the
multiplicand); Step 2 (Ascertaining the multiplier) and
Step 3 (Actual calculation). [Para 9] [1115-C-F; 1116-C]
B
4. In view of imponderables and uncertainties, this
Court is 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 c
years. [Where the annual income is in the taxable 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 deceased is more than 50
D
years. Though the evidence may indicate a different
percentage of increase, it is necessary to standardize the
addition to avoid different yardsticks being applied or
different methods of calculations being adopted. Where
the deceased was self-employed or was on a fixed salary
E
(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.
[Para 11] [1117-F-H; 1118-A-B]
F
Sar/a Dixit v. Ba/want Yadav 1996 (3) SCC 179 and
Abati Bezbaruah v. Dy. Director General, Geological Survey
of India 2003 (3) sec 148, relied on.

5.1. No evidence need be led to show the actual G
expenses of the deceased. In fact, any evidence in that
behalf will be wholly unverifiable and likely to be
unreliable. Claimants will obviously tend to claim that the
deceased was very frugal and did not have any
H
1102 SUPREME COURT REPORTS [2009] 5 S.C.R.
l

A expensive habits and was spending virtually the entire
income on the family. In some cases, it may be so. No
claimant would admit that the deceased was a
spendthrift, even if he was one. It is also very difficult for
the respondents in a claim petition to produce evidence
B to show that the deceased was spending a considerable
part of the income on himself or that he was contributing
only a small part of the income on his family. Therefore,
it became necessary to standardize the deductions to be
made under the head of personal and living expenses of
c the deceased. This lead to the practice of deducting
towards personal and living expenses of the deceased,
one-third of the income if the deceased was married, and
one-half (50%) of the income if the deceased was a
bachelor. This practice was evolved out of experience,
o logic and convenience. In fact one-third deduction, got
statutory recognition under Second Schedule to the Act,
in respect of claims under Section 163A of the Motor '
Vehicles Act, 1988. But, such percentage of deduction is
not an inflexible rule and offers merely a guideline. In view
E of the special features of the case, this Court however
restricted the deduction towards personal and living
expenses to one-third of the income. [Para 12 and 13)
[1118-D-H; 1119-A; 1120-D]

5.2. Where the deceased was married, the deduction
F 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 dependant family members is 4 to
6, and one-fifth (1/5th) where the number of dependant
G family members exceed six. [Para 14) [1120-F]

5.3. Where the deceased was a bachelor and the
claimants are the parents, the deduction follows a
different principle. In regard to bachelors, normally, 50%
H is deducted as personal and living expenses, because it
SARLA VERMA & ORS. v. DELHI TRANSPORT 1103
CORPORATION & ANR.
is assumed that a bachelor would tend to spend more on A
himself. Even 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 B
J_, be considered as a dependant and the mother alone will
. be considered as a dependent. In the absence of
evidence to the contrary, brothers and sisters will not be
' considered as dependents, because they will either be

'
independent and earning, or married, or be dependant on c
the father. 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 contribution to the family. However, where D
) family of the bachelor is large and dependant 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 brothers, his personal and living
expenses may be restricted to one-third and contribution E
to the family will be taken as two-third. [Para 15) [1120-G-
H; 1121-A-D]

General Manager, Kera/a State Road Transport
Corporation v. Susamma Thomas 1994 (2) SCC 176; Abati
F
Bezbaruah v. Dy. Dir~tor General, Geological Survey of India
2003 (3) SCC 148 and Fakeerappa vs. Karnataka Cement
Pipe Factory 2004 (2) SCC 473, referred to.

6. The multiplier to be used should be as mentioned
in column (4) of the Table (prepared by applying G
Susamma Thomas, Trilok Chandra and Charlie), which
-'-
starts with an operative multiplier of 18 (for the age
groups of 15 to 20 and 21 to 25 years), reduced by one
unit for every five years, that is M-17 for 26 to 30 years,
H
1104 SUPREME COURT REPORTS l2UU9] 5 S.C.R.

A M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for
41 to 45 years, and M-13 for 46 to 50 years, then reduced
by two units for every five years, that is, M-11 for 51 to
55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years
and M-5 for 66 to 70 years. [Para 21] [1126-0-E]
B
General Manager, Kera/a State Road Transport
Corporation v. Susamma Thomas 1994 (2) SCC 176; New
India Assurance Co. Ltd. vs. Charlie 2005 (10) SCC 720
and UP State Road Transport Corporation vs. Trilok
Chandra 1996 (4) SCC 362 - relied on.
c
Oriental Insurance Co. Ltd. vs. Meena Variyal 2007 (5)
SCC 428; TN State Road Transport Corporation Ltd. vs.
Rajapriya 2005 (6) SCC 236 and UP State Road Transport
Corporation vs. Krishna Bala 2006 (6) SCC 249, referred to.
D
I
7.1. The assumption of the appellants that the actual
future pay revisions should be taken into account for the
purpose of calculating the income is not sound. As
against the contention of the appellants that if the
E deceased had been alive, he would have earned the
benefit of revised pay scales, it is equally possible that if
he had not died in the accident, he might have died on
account of ill health or other accident, or lost the
employment or met some other calamity or disadvantage.
F The imponderables in life are too many. Another
significant aspect is the non-existence of such evidence
at the time of accident. In this case, the accident and
death occurred in the year 1988. The award was made by
the Tribunal in the year 1993. The High Court decided the
G appeal in 2007. The pendency of the claim proceedings
and appeal for nearly two decades is a fortuitous
circumstance and that will not entitle the appellants to .:.
rely upon the two pay revisions which took place in the
course of the said two decades. If the claim petition filed
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1105
.J CORPORATION & ANR.
in 1988 had been disposed of in the year 1988-89 itself A
and if the appeal had been decided by the High Court in
the year 1989-90, then obviously the compensation
would have been decided only with reference to the scale
of pay applicable at the time of death and not with
reference to any future revision in pay scales. If the B
contention urged by the claimants is accepted, it would
lead to the following situation: The claimants could only
rely upon the pay scales in force at the time of the
accident, if they are prompt in conducting the case. But
if they delay the proceedings, they can rely upon the c
/
' revised higher pay scales that may come into effect
during such pendency. Surely, promptness cannot be
-._...
punished in this manner. (Para 24] (1127-D-H;. 1128-A-B]
~

7.2. The percentage of deduction on account of
D
personal and living expenses can certainly vary with
reference to the number of dependant members in the
family. But as noticed earlier, the personal living
expenses of the deceased need not exactly correspond
to the number of dependants. As an earning member, the
E
deceased would have spent more on himself than the
other members of the family apart from the fact that he
would have incurred expenditure on travelling/
transportation and other needs. Therefore, interest of
justice would be met if one-fifth is deducted as the
F
personal and living expenses of the deceased. After such
deduction, the contribution to the family (dependants) is
determined as Rs.57,658/- per annum. The multiplier will
be 15 having regard to the age of the deceased at the
time of death (38 years). Therefore the total loss of
dependency would be Rs.57,658 x 15 = Rs.8,64,870/-. G
[Para 25] (1128-E-G]

8. In addition, the claimants will be entitled to a sum
of Rs.5,000/- under the head of 'loss of estate' and
H
1106 SUPREME COURT REPOk I'> lt:u09] 5 S.C.R.

A Rs.5000/- towards funeral expenses. The widow will be
entitled to Rs.10,000/- as loss of consortium. Thus, the
total compensation will be Rs.8,84,870/-. After deducting
Rs. 7, 19,624/- awarded by the High Court, the
enhancement would be Rs.1,65,246/-. Thus, the
B appellants will be entitled to the said sum of Rs.165,246/
- in addition to what is already awarded, with interest at
the rate of 6% per annum from the date of petition till the
date of realization. The increase in compensation
awarded by this Court shall be taken by the widow
c exclusively. [Para 26 and 27] (1128-H; 1129-A-C]
...
y

Case Law Reference:
r
1994 (2) sec 176 relied on Para 7

D 1994 (2) sec 176 referred to Para 7

1996 (4) sec 362 relied on Para 7

1951 AC 601 referred to Para 7

E 1942 AC 601 referred to Para 7

1996 (3) sec 119 relied on Para 10

2003 (3) sec 148 relied on Para 10

F 2003 (3) sec 148 referred to Para 10

2004 (2) sec 473 referred to Para 13

2001 (5) sec 428 referred to Para 18

G 2oos (10) sec 120 referred to Para 19

2005 (6) sec 236 referred to Para 19

2006 (6) sec 249 referred to Para 19
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1107
CORPORATION & ANR.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. A
3483 of 2008.

From the Judgment & Order dated 15.02.2007 of the High
Court of Delhi at New Delhi in FAO No. 220/1993.
B
Ashok K. Mahajan for the Appellant.

Dr. Monika Gusain for the Respondents.

The Order of the Court was delivered by
c
ORDER

R.V. RAVEENDRAN, J. 1. The claimants in a motor
accident claim have filed this appeal by special leave seeking
.increase in compensation.
D
2. One Rajinder Prakash died on account of injuries
sustained in a motor accident which occurred on 18.4.1988
involving a bus bearing No.OLP 829 belonging to the Delhi
Transport Corporation. At the time of the accident and untimely
death, the deceased was aged 38 years, and was working as E
a Scientist in the Indian Council of Agricultural Research (ICAR)
on a monthly salary of Rs.3402/- and other benefits. His widow,
three minor children, parents and grandfather (who is no more)
filed a claim for Rs.16 lakhs before the Motor Accidents Claims
Tribunal, New Delhi. An officer of ICAR, examined as PW-4, F
gave evidence that the age of retirement in the service of ICAR
was 60 years and the salary received by the deceased at the
time of his death was Rs.4004/- per month.

3. The Tribunal by its judgment and award dated 6.8.1993 G
allowed the claim in part. The Tribunal calculated the
compensation by taking the monthly salary of the deceased as
Rs.3402. It deducted one-third towards the personal and living
expenses of the deceased, and arrived at the contribution to
H
1108 SUPREME COURT REPORTS [2009] 5 S.C.R.

A the family as Rs.2250 per month (or Rs.27,000/- per annum).
In view of the evidence that the age of retirement was 60 years,
it held that the period of service lost on account of the untimely
death was 22 years. Therefore it applied the multiplier of 22
and arrived at the loss of dependency to the family as
B Rs.5,94,000/-. It awarded the said amount with interest at the
rate of 9% per annum from the date of petition till the date of
realization. After deducting Rs.15000/- paid as interim
compensation, it apportioned the balance compensation among
the claimants, that is, Rs.3,00,000/- to the widow, Rs.75000/-
C to each of the two daughters, Rs.50000/- to the son, Rs.19000/
- to the grandfather and Rs.30000/- to each of the parents. ,t

4. Dissatisfied with the quantum of compensation, the
appellants filed an appeal. The Delhi High Court by its judgment <"
D dated 15.2.2007 allowed the said appeal in part. The High
Court was of the view that though in the claim petition the pay
was mentioned as Rs.3,402 plus other benefits, the pay should
be taken as Rs.4,004/- per month as per the evidence of PW-
4. Having regard to the fact that the deceased had 22 years of
service left at the time of death and would have earned annual
E increments and pay revisions during that period, it held that the
salary would have at least doubled (Rs.8008/- per month) by
the time he retired. It therefore determined the income of the
deceased as Rs.6006/- per month, being the average of
Rs.4,004/- (salary which he was getting at the time of death)
F and Rs.8,008/- (salary which he would have received at the time
of retirement). Having regard to the large number of members
in the family, the High Court was of the view that only one fourth
should be deducted towards personal and living expenses of
the deceased, instead of the standard one-third deduction. After
G such deduction, it arrived at the contribution to the family as
Rs.4,504/- per month or Rs.54,048/- per annum. Having regard
to the age of the deceased, the High Court chose the multiplier
of 13. Thus it arrived at the loss of dependency as Rs. 702,624/
-. By adding Rs.15,000/- towards loss of consortium and
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1109
CORPORATION & ANR. [RV. RAVEENDRAN, J.]
Rs.2,000/- as funeral expenses, the total compensation was A
determined as Rs. 7, 19,624/-. Thus it disposed of the appeal
by increasing the compensation by Rs.1,25,624/- with interest
at the rate of 6% P.A. from the date of claim petition.

5. Not being satisfied with the said increase, the B
appellants have filed this appeal. They contend that the High
Court erred in holding that there was no evidence in regard to
future prospects; and that though there is no error in the method
adopted for calculations, the High Court ought to have taken a
higher amount as the income of the deceased. They submit that c
two applications were filed before the High Court on 2.6.2000
and 5.5.2005 bringing to the notice of the High Court that having
regard to the pay revisions, the pay of the deceased would have
been Rs.20,890/- per month as on 31.12.1999 and Rs.32,678/
-as on 1.10.2005, had he been alive. To establish the revisions 0
in pay scales and consequential re-fixation, the appellants
produced letters of confirmation dated 7.12.1998 and
28.10.2005 issued by the employer (ICAR). Their grievance is
that the High Court did not take note of those indisputable
documents to calculate the income and the loss of dependency. E
They contend that the monthly income of the deceased should
be taken as Rs.18341/- being the average of Rs.32,678/-
(income shown as on 1.10.2005) and Rs.4,004/- (income at the
time of death). They submit that only one-eighth should have

- been deducted towards personal and living expenses of the F
deceased. They point out that even if only one fourth (Rs.4585/
-) was deducted therefrom towards personal and living
expenses of the deceased, the contribution to the family would
have been Rs.13,756/- per month or Rs.1,65,072/- per annum.
They submit that having regard to the Second Schedule to the G
Motor Vehicles Act, 1988 ('Act' for short), the appropriate
multiplier for a person dying at the age of 38 years would be
16 and therefore the total loss of dependency would be
Rs.26,41, 152/-. They also contend that Rs.1,00,000/- should be
added towards pain and suffering undergone by the claimants.
H
1110 SUPREME COURT REPORTS [2009] 5 S.C.R.

A They therefore submit that Rs.27,47, 152/- should be determined
as the compensation payable to them.

6. The contentions urged by the parties give rise to the
following questions:
B
(i} Whether the future prospects can be taken into
account for determining the income of the
deceased ? If so, whether pay revisions that
occurred during the pendency of the claim
proceedings or appeals therefrom should be taken
c into account ?

(ii) Whether the deduction towards personal and living
expenses of the deceased should be less than one-
fourth (1/4th) as contended by the appellants, or
D should be one-third (1/3 rd) as contended by the
respondents ?

(iii) Whether the High Court erred in taking the multiplier
as 13?.
E
(iv) What should be the compensation?

. The general principles

7. Before considering the questions arising for decision,
F it would be appropriate to recall the relevant principles relating
to assessment of compensation in cases of death. Earlier, there
-
used to be considerable variation and inconsistency in the
decisions of courts Tribunals on account ofsome adopting the
Nance method enunciated in Nance v. British Columbia
G Electric Rly. Co. Ltd. [1951 AC 601] and some adopting the
Davies method enunciated in Davies v. Powell Duffryn
Associated Collieries Ltd., [1942 AC 601]. The difference
..
betwe1~n the two methods was considered and explained by
this Court in General Manager, Kera/a State Road Transport
H Corporation v. Susamma Thomas [1994 (2) SCC 176]. After
) SARLA VERMA & ORS. v. DELHI TRANSPORT 1111
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
exhaustive consideration, this Court preferred the Davies A
method to Nance method. We extract below the principles laid
down in Susamma Thomas:

"In fatal accident action, the measure of damage is the
pecuniary loss suffered and is likely to be suffered by each B
dependant as a result of the death. The assessment of
damages to compensate the dependants is beset with
difficulties because from the nature of things, it has to take
into account many imponderables, e.g., the life expectancy
of the deceased and the dependants, the amount that the c
deceased would have earned during the remainder of his
life, the amount that he would have contributed to the
dependants during that period, the chances that the
deceased may not have lived or the dependants may not
live up to the estimated remaining period of their life D
expectancy, the chances that the deceased might have got
better employment or income or might have lost his
employment or income altogether."

"The matter of arriving at the damages is to ascertain the
net income of the deceased available for the support of E
himself and his dependants, and to deduct therefrom such
part of his income as the deceased was accustomed to
spend upon himself, as regards both self-maintenance and
pleasure, and to ascertain what part of his net income the
deceased was accustomed to spend for the benefit of the F
dependants. Then that should be capitalized by multiplying
it by a figure representing the proper number of year's
purchase."

"The multiplier method involves the ascertainment of the G
loss of dependency or the multiplicand having regard to
the circumstances of the case and capitalizing the
multiplicand by an appropriate multiplier. The choice of the
multiplier is determined by the age of the deceased (or that
H
1112 SUPREME COURT REPORTS [2009] 5 S.C.R.

A of the claimants whichever is higher) and by the calculation
as to what capital sum, if invested at a rate of interest
appropriate to a stable economy, would yield the
multiplicand by way of annual interest. In ascertaining this,
regard should also be had to the fact that ultimately the
B capital sum should also be consumed-up over the period
for which the dependency is expected to last."

"It is necessary to reiterate that the multiplier method is
logically sound and legally well-established. There are
some cases which have proceeded to determine the
c compensation on the basis of aggregating the entire future
earnings for over the period the life expectancy was lost,
deducted a percentage therefrom towards uncertainties of
future life and award the resulting sum as compensation.
This is clearly unscientific. For instance, if the deceased
D
was, say 25 year of age at the time of death and the life
expectancy is 70 years, this method would multiply the loss
of dependency for 45 years - virtually adopting a multiplier
of 45 - and even if one-third or one-fourth is deducted
therefrom towards the uncertainties of future life and for
E immediate lump sum payment, the effective multiplier
would be between 30 and 34. This is wholly
impermissible."

In UP State Road Transport Corporation vs. Trilok Chandra
F [1996 (4) SCC 362], this Court, while reiterating the preference
to Davies method followed in Susamma Thomas, stated thus :

"In the method adopted by Viscount Simon in the case of
Nance also, first the annual dependency is worked out and
G then multiplied by the estimated useful life of the deceased.
This is generally determined on the basis of longevity. But
then, proper discounting on various factors having a
bearing on the uncertainties of life, such as, premature
death of the deceased or the dependent, remarriage,
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1113
.i
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
accelerated payment and increased earning by wise and A
prudent investments, etc., would become necessary. It was
generally felt that discounting on various imponderables
made assessment of compensation rather complicated
and cumbersome and very often as a rough and ready
measure, one-third to one-half of the dependency was B
reduced, depending on the life-span taken. That is the
reason why courts in India as well as England preferred
the Davies' formula as being simple and more realistic.
Ho'A'.ever, as observed earlier and as pointed out in
Susamma Thomas' case, usually English courts rarely C
exceed 16 as the multiplier. Courts in India too followed
the same pattern till recently when Tribunals/Courts began
to use a hybrid method of using Nance's method without
making deduction for imponderables ........ Under the
formula advocated by Lord Wright in Davies, the loss o
has to be ascertained by first determining the monthly
income of the deceased, then deducting therefrom the
amount spent on the deceased, and thus assessing the
loss to the dependents. of the deceased. The annual
dependency assessed in this manner is then to be E
multiplied by the use of an appropriate multiplier."

[emphasis supplied]

8. The lack of uniformity and consistency in awarding
compensation has been a matter of grave concern. Every F
district has one or rnore Motor Accident Claims Tribunal/s. If
different Tribunals calculate compensation differently on the
same facts, the claimant, the litigant, the common man will be
confused, perplexed and bewildered. If there is significant
divergence among Tribunals in determining the quantum of G
compensation on similar facts, it will lead to dissatisfaction and
distrust in the system, We may refer to the following
observations in Trilok Chandra:

·we thought it necessary to reiterate the method of working H
1114 SUPREME COURT REPORTS [2009] 5 S.C.R.

A out just' compensation because, of late, we have noticed
from the awards made by Tribunals and Courts that the
principle on which the multiplier method was developed
has been lost sight of and once again a hybrid method
based on the subjectivity of the Tribunal/Court has
B surfaced, introducing uncertainty and lack of reasonable
uniformity in the matter of determination of compensation.
It must be realized that the Tribunal/Court has to determine
a fair amount of compensation awardable to the victim of
an accident which must be proportionate to the injury
C caused."

Compensation awarded does not become 'just compensation'
merely because the Tribunal considers it to be just. For
example, if on the same or similar facts (say deceased aged
40 years having annual income of 45,000/- leaving him surviving
0
wife and child), one Tribunal awards Rs.10,00,000/- another
awards Rs.5,00,000/-, and yet another awards Rs.1,00,000/-,
all believing that the amount is just, it cannot be said that what
is awarded in the first case and last case, is just compensation.
E 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 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. Assessment of compensation
F though involving certain hypothetical considerations, should
nevertheless be objective. Justice and justness emanate from
equality in treatment, consistency and thoroughness in
adjudication, and fairness and uniformity in the decision making
process and the decisions. While it may not be possible to have
G mathematical precision or identical awards, in assessing
compensation, same or similar facts should lead to awards in .
the same range. When the factors/inputs are the same, and the
formula/legal principles are the same, consistency and
uniformity, and not divergence and freakiness, should be the
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1115
CORPORATION & ANR. [R.V. RAVEENDRAN,\J.]
result of adjudication to arrive at just compensation. In A
Susamma Thomas, this Court stated :

"So the proper method of comP.utation is the multiplier
method. Any departure, except in exceptional and extra-
ordinary cases, would introduce inconsistency of principle, 8
lack of uniformity and an element of unpredictability, for the
assessment of compensation."

9. Basically only three facts need to be established by the
claimants for assessing compensation in the case of death : C
(a) age of the deceased; (b) income of the deceased; and the
(c) the number of dependents. The issues to be determined by
the Tribunal to arrive at the loss of dependency are (i) additions/
deductions to be made for arriving at the income; (ii) the
deduction to be made towards the personal living expenses of
the deceased; and (iii) the multiplier to be applied with D
reference of the age of the deceased. If these determinants are
standardized, there will be uniformity and consistency in the
decisions. There will lesser need for detailed evidence. It will
also be easier for the insurance companies to settle accident
claims without delay. To have uniformity and consistency, E
Tribunals should determine compensation in cases of death,
by the following well settled steps:

Step 1 (Ascertaining the multiplicand)
F
The income of the deceased per annum should be
determined. Out of the said income a deduction should be
made in regard to the amount which the deceased would
have spent on himself by way of personal and living
expenses. The balance, which is considered to be the G
contribution to the dependant family, constitutes the
multiplicand.

Step 2 (Ascertaining the multiplier)

Having regard to the age of the deceased and period of H
1116 SUPREME COURT REPORTS (2009) 5 S.C.R.

A '
active career, the appropriate multiplier should be selected.
This does not mean ascertaining the number of years he
would have lived or worked but for the accident. Having
regard to several imponderables in life and economic
factors, a table of multipliers with reference to the age has
B been identified by this Court. The multiplier should be
chosen from the said table with reference to the age of the
deceased.

Step 3 (Actual calculation)
c The annual contribution to the family (multiplicand) when
multiplied by such multiplier gives the 'loss of dependency'
to the family.

Thereafter, a conventional amount in the range of Rs. 5,000/
D - to Rs.10,000/- may be added as loss of estate. Where
the deceased is survived by his widow, another
conventional amount in the range of 5,000/- to 10,000/-
should be added under the head of loss of consortium. But
no amount is to be awarded under the head of pain,
E suffering or hardship caused to the legal heirs of the
deceased.

The funeral expenses, cost of transportation of the body
(if incurred) and cost of any medical treatment of the
F deceased before death (if incurred) should also added.

Question (i) - addition to income for future prospects

10. Generally the actual income of the deceased less
income tax should be the starting point for calculating the
G compensation. The question is whether actual income at the
ti"11e of death should be taken as the income or whether any
addition should be made by taking note of future prospects. In
Susamma Thomas, this Court held that the future prospects
'
of advancement in life and career should also be sounded in
H terms of money to augment the multiplicand (annual contribution
SARLA VERMA & ORS. v. DELHI TRANSPORT 1117
• CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
to the dependants); and that where the deceased had a stable A
job, the court can take note of the prospects of the future and it
will be unreasonable to estimate the loss of dependency on the
actual income of the deceased at the time of death. In that case,
the salary of the deceased, aged 39 years at the time of death,
was Rs.1032/- per month. Having regard to the evidence in B
regard to future prospects, this Court was of the view that the
higher estimate of monthly income could be ma9e at Rs.2000/
- as gross income before deducting the personal living
expenses. The decision in Susamma Thomas was followed in
Sarfa Dixit v. Ba/want Yadav [1996 (3) SCC 179], where the c
deceased was getting a gross salary of Rs.1543/- per month.
Having regard to the future prospects of promotions and
increases, this Court assumed that by the time he retired, his
earning would have nearly doubled, say Rs.3000/-. This court
took the average of the actual income at the time of death and D
the projected income if he had lived a normal life period, and
determined the monthly income as Rs.2200/- per month. In
Abati Bezbaruah v. Dy. Director General, Geological Survey
of India [2003 (3) sec 148], as against the actual salary
income of Rs.42,000/- per annum, (Rs.3500/- per month) at the E
time of accident, this court assumed the income as Rs.45,000/
- per annum, having regard to the future prospects and career
advancement of the deceased who was 40 years of age .
.,.,
11. In Susamma Thomas, this Court increased the income
F
by nearly 100%, in sarta Dixit, the income was increased only
by 50% and in Abati Bezbaruah the income was increased by
a mere 7%. In view of imponderables and 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 G
permanent job and was below 40 years. [Where the annual
• income is in the taxable 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
H
1118 SUPREME COURT REPORTS [2009] 5 S.C.R.

A should be no addition, where the age of deceased is more than
50 years. Though the evidence may indicate a different -·
percentage of increase, it is necessary to standardize the
addition to avoid different yardsticks being applied or different
methods of calculations being adopted. Where the deceased
B was self-employed or was on a fixed 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.
c Re : Question (ii) - deduction for personal and living
expenses

12. We have already noticed that the personal and living
expenses of the deceased should be deducted from the
D income, to arrive at the contribution to the dependents. No
evidence need be led to show the actual expenses of the
deceased. In fact, any evidence in that behalf will be wholly
unverifiable and likely to be unreliable. Claimants will obviously
tend to claim that the deceased was very frugal and did not
E have any expensive habits and was spending virtually the entire
income on the family. In some cases, it may be so. No claimant
would admit that the deceased was a spendthrift, even if he was
one. It is also very difficult for the respondents in a claim petition
to produce evidence to show that the deceased was spending
F a considerable part of the income on himself or that he was
contributing only a small part of the income on his family.
Therefore, it became necessary to standardize the deductions
to be made under the head of personal and living expenses of
the deceased. This lead to the practice of deducting towards
G personal and living expenses of the deceased, one-third of the
i!'lcome if the deceased was a married, and one-half (50%) of
the income if the deceased was a bachelor. This practice was
•
evolved out of experience, logic and convenience. In fact one-
third deduction, got statutory recognition under Second
H Schedule to the Act, in respect of claims under Section 163A
SARLA VERMA & ORS. v. DELHI TRANSPORT 1119
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
of the Motor Vehicles Act, 1988 ('MV Act' for short). A
13. But, such percentage of deduction is not an inflexible
rule and offers merely a guideline. In Susamma Thomas, it was
observed that in the absence of evidence, it is not unusual to
deduct one-third of the gross income towards the personal living B
expenses of the deceased and treat the balance as the amount
:l likely to have been spent on the members of the family/
~ dependants. In UPSRTC v. Trilok Chandra [1996 (4) SCC
<
362], this Court held that if the number of dependents in the
..
I

family of the deceased was large, in the absence of specific c
evidence in regard to contribution to the family, the Court may
adopt the unit method for arriving at the contribution of the
deceased to his family. By this method, two units is allotted to
each adult and one unit is allotted to each minor, and total
number of units are determined. Then the income is divided by
D
- ~ the total number of units. The quotient is multiplied by two to
arrive at the personal living expenses of the deceased. This
Court gave the following illustration:
...
"X, male, aged about 35 years, dies in an accident. He
leaves behind his widow and 3 minor children. His monthly E
income was Rs. 3500. First, deduct the amount spent on
X every month. The rough and ready method hitherto
adopted where no definite evidence was forthcoming, was
-I
to break up the family into units, taking two units for and
adult and one unit for a minor. Thus X and his wire make F
_,
--<
2+2=4 units and each minor one unit i.e. 3 units in all,
totaling 7 units. Thus the share per unit works out to Rs.
3500/7=Rs. 500 per month. It can thus be assumed that
Rs. 1000 was spent on X. Since he was a working
member some provision for his transport and out-of-pocket G
expenses has to be estimated. In the present case we

- estimate the out-of-pocket expense at Rs. 250. Thus the
amount spent on the deceased X works out to Rs. 1250
per month per month leaving a balance of Rs. 3500-
1250=Rs.2250 per month. This amount can be taken as H
1120 SUPREME COURT REPORTS [2009] 5 S.C.R.

A the monthly loss of X's dependents."

In Fakeerappa vs Kamataka Cement Pipe Factory - 2004 (2)
sec 473, while considering the appropriateness of 50%
deduction towards personal and living expenses of the
8 deceased made by the High Court, this Court observed:
"What would be the percentage of deduction for personal
expenditure cannot be governed by any rigid rule or formula
of universal application. It would depend upon
circumstances of each case. The deceased undisputedly
c was a bachelor. Stand of the insurer is that after marriage,
the contribution to the parents would have been lesser and,
therefore, taking an overall view the Tribunal and the High
Court were justified in fixing the deduction.·

D In view of the special features of the case, this Court however I
restricted the deduction towards personal and living expenses
to one-third of the income.

14~ Though in some cases the deduction to be made
E towards personal and living expenses is calculated on the basis
of units indicated in Trilok Chandra, the general practice is to
apply standardized deductions. Having considered several
subsequent decisions of this court, we are of the view that where
the deceased was married, the deduction towards personal
f and living expenses of the deceased, should be one-third (1/3
j

1d) where the number of dependent family members is 2 to 3,
one-fourth (1/4 th) where the number of dependant family
members is 4 to 6, and one-fifth (1/5 th) where the number of
dependant family members exceed six.
G 15. 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 otherwise, there is
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1121
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
also the possibility of his getting married in a short time, in which A
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 dependant and the mother alone will be
considered as a dependent. In the absence of evidence to the B
contrary, brothers and sisters will not be considered as
dependents, because they will either be independent and
earning, or married, or be dependant on the father. Thus even
if the deceased is survived by parents and siblings, only the
mother would be considered to be a dependant, and 50% c
• would be treated as the personal and living expenses of the
bachelor and 50% as the contribution to the family. However,
-1 where family of the bachelor is large and dependant 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 D
brothers, his personal and living expenses may be restricted
to one-third and contribution to the family will be taken as two-
third.

Re :Question (iii) - selection of multiplier
E
16. In Susamma Thomas, this Court stated the principle
relating to multiplier thus:

"The multiplier represents the number of years' purchase
on which the loss of dependency is capitalized. Take for F
instance a case where annual loss of dependency is
Rs.10,000. If a sum of Rs.1,00,000 is invested at 10%
annual interest, the interest will take care of the
dependency, perpetually, the multiplier in this case work
out to 10. If the rate of interest is 5% per annum and not G
10% then the multiplier needed to capitalize the loss of the
.. annual dependency at Rupees 10,000 would be 20. Then

-- the multiplier, i.e. the number of years' purchase of 20 will
yield the annual dependency perpetually. Then allowance
to scale down the multiplier would have to be made taking H

\
1122 SUPREME COURT REPORTS i2009] 5 S.C.R.

A into account the uncertainties of the future, the allowances
for immediate lumpsum payment, the period over which the
dependency is to last being shorter and the capital feed
also to be spent away over the period of dependency is
to last etc., Usually in English Courts the operative
B multiplier rarely exceeds 16 as maximum. This will come
down accordingly as the age of the deceased person (or
that of the dependents, whichever is higher) goes up."

17. The Motor Vehicle Act, 1988 was amended by Act 54
c of 1994, inter alia inserting Section 163A and the Second
Schedule with effect from 14.11.1994. Section 163A of the MV
Act contains a special provision as to payment of
compensation on structured formula basis, as indicated in the
Second Schedule to the Act. The Second Schedule contains
..
a Table prescribing the compensation to be awarded with
D
reference to the age and income of the deceased. It specifies
the amount of compensation to be awarded with reference to
the annual income range of Rs.3,000/- to Rs.40,000/-. It does
not specify the quantum of compensation in case the annual
income of the deceased is more than Rs.40,000/-. But it
E
provides the multiplier to be applied with reference to the age
of the deceased. The table starts with a multiplier of 15, goes
upto 18, and then steadily comes down to 5. It also provides
the standard deduction as one-third on account of personal
living expenses of the deceased. Therefore, where the
F application is under section 163A of the Act, it is possible to
calculate the compensation on the structured formula basis,
even where compensation is not specified with reference to the
annual income of the deceased, or is more than Rs.40,000/-,
by applying the formula : (2/3 x Al x M), that is two-thirds of the
G annual income multiplied by the multiplier applicable to the age
of the deceased would be the compensation. Several principles

-
+
of tortious liability are excluded when the claim is under section
163A of MV Act. There are however discrepancies/errors in the
multiplier scale given in the Second Schedule Table. It
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1123
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
prescribes a lesser compensation for cases where a higher A
multiplier of 18 is applicable and a larger compensation with
reference to cases where a lesser multiplier of 15, 16,'or 17 is
applicable. From the quantum of compensation specified in the
table, it is possible to infer that a clerical error has crept in the
Schedule and the 'multiplier' figures got wrongly typed as 15, B
16, 17, 18, 17, 16, 15, 13, 11, 8, 5 & 5 instead of 20, 19, 18,
17, 16, 15, 14, 12, 10, 8, 6 and 5. Another noticeable incongruity
is, having prescribed the notional minimum income of non-
earning persons as Rs.15,000/- per annum, the table

- prescribes the compensation payable even in cases where the
annual income ranges between Rs.3000/- and Rs.12000/-. This
leads to an anomalous position in regard to applications under
c

Section 163A of MV Act, as the compensation will be higher
in cases where the deceased was idle and not having any
income, than in cases where the deceased was honestly D
l
earning an income ranging between Rs.3000/- and Rs.12,000/
- per annum. Be that as it may.

18. The.principles relating to determination of liability and
quantum of compensation are different for claims made under
E
section 163A of MV Act and claims under section 166 of MV
Act. (See : Oriental Insurance Co. Ltd. vs. Meena Variyal -
2007 (5) SCC 428). Section 163A and Second Schedule in
terms do not apply to determination of compensation in
applications under Sectic;m 166. In Trilok Chandra, this Court,
after reiterating the principles stated in Susamma Thomas, F
however, held that the operative (maximum) multiplier, should
be increased as 18 (instead of 16 indicated in Susamma
Thomas), even in cases under section 166 of MV Act, by
borrowing the principle underlying section 163A and the
Second Schedule. This Court observed: G

~
"Section 163-A begins with a non obstante clause and
~ provides for payment of compensation, as indicated in the
Second Schedule, to the legal representatives of the
deceased or injured, as the case may be. Now if we turn H
.-
1124 SUPREME COURT REPORTS [2009) 5 S.C.R. '

A to the Second Schedule, we find a table fixing the mode
of calculation of compensation for third party accident
injury claims arising out of fatal accidents. The first column
gives the age group of the victims of accident, the second
column indicates the multiplier and the subsequent
B horizontal figures indicate the quantum of compensation
in thousand payable to the heirs of the deceased victim.
According to this table the multiplier varies from 5 to 18
depending on the age group to which the victim belonged.
Thus, under this Schedule the maximum multiplier can be
c up to 18 and not 16 as was held in Susamma Thomas
case ..... Besides, the selection of multiplier cannot in all
cases be solely dependent on the age of the deceased.
For example, if the deceased, a bachelor, dies at the age
of 45 and his dependents are his parents, age of the
D parents would also be relevant in the choice of the
multiplier...... What we propose to emphasise is that the
multiplier cannot exceed 18 years' purchase factor. This
is the improvement over the earlier position that ordinarily
it should not exceed 16... "
E 19. In New India Assurance Co. Ltd. vs. Charlie [2005 (10)
sec 720), this Court noticed that in respect of claims under
section 166 of the MV Act, the highest multiplier applicable was
18 and that the said multiplier should be applied to the age
group of 21 to 25 years (commencement of normal productive
F years) and the lowest multiplier would be in respect of persons
in the age group of 60 to 70 years (normal retiring age). This
was reiterated in TN State Road Transport Corporation Ltd.
vs. Rajapriya [2005 (6) SCC 236) and UP State Road
Transport Corporation vs. _Krishna Bala [2006 (6) SCC 249].
G The multipliers indicated in Susamma Thomas, Trilok Chandra
and Charlie (for claims under section 166 of MV Act) is given ~

below in juxtaposition with the multiplier mentioned in the ......
Second Schedule for claims under section 163A of MV Act
(with appropriate deceleration after 50 years) :
H
~
SARLA VERMA & ORS. v. DELHI TRANSPORT 1125
- j
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
- A
Age of the Multiplier Multiplier Multiplier · Multiplier Multiplier
deceased scale as scale as scale in specified actually
envisaged adopted Trilok in used in
in by Trilok Chandra second Schedule
Susamma Chandra as clari- column to MV Act
Thomas fied in in the (as seen
B
Cha rile Table in from the
II Sche- quantum of
dule to com pen-
MV Act sation)
(1) (2) (3) (4) (5) (6)
.... Upto 15 yrs - - . 15 20 c
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 D
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
51 to 55 yrs. 9 11 11 11 10 E
56 to 60 yrs. 8 10 09 8 8
61 to 65 yrs. 6 08 07 5 6
Above 65 yrs. 5 05 05 5 5

F
20. Tribunals/courts adopt and apply different operative
multipliers. Some follow the multiplier with reference to
Susamma Thomas (set out in column 2 of the table above);
some follow the multiplier with reference to Trilok Chandra, (set
out in column 3 of the table above); some follow the multiplier G
with reference to Charlie (Set out in column (4) of the Table
... above); many follow the multiplier given in second column of
- the Table in the Second Schedule of MV Act (extracted in
column 5 of the table above); and some follow the multiplier
actually adopted in the Second Schedule while calculating the H
1126 SUPREME COURT REPORTS [2009] 5 S.C.R. I ~

A quantum of compensation (set out in column 6 of the table
above). For example if the deceased is aged 38 years, the
multiplier would be 12 as per Susamma Thomas, 14 as per
Trifok Chandra, 15 as per Charlie, or 16 as per the multiplier
given in column (2) of the Second schetlule to the MV Act or
B 15 as per the multiplier actually adopted in the second Schedule
to MV Act. Some Tribunals, as in this case, apply the multiplier
of 22 by taking the balance years of service with reference to
the retiring age. It is necessary to avoid this kind of
inconsistency. We are concerned with cases falling under
c section 166 and not under section 163A of MV Act. In cases
falling under section 166 of the MV Act, Davies method is
...
applicable.

21. We therefore hold that the multiplier to be used should
be as mentioned in column (4) of the Table above (prepared
D by applying Susamma Thomas, Trilok Chandra and Charlie),
which starts with an operative multiplier of 18 (for the age
groups of 15 to 20 and 21 to 25 years), reduced by one unit
for every five years, that is M-17 for 26 to 30 years, M-16 for
31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45
E years, and M-13 for 46 to 50 years, then reduced by two units
for every five years, that is, M-11 for 51 to 55 years, M-9 for 56
to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.

Question {iv} - Com~utation of com~ensation
F 22. In this case as noticed above the salary of the
deceased at the time of death was Rs.4,004. By applying the
principles enunciated by this Court to the evidence, the High
Court concluded that the salary would have at least doubled
(Rs.8008/-) by the time of his retirement and consequently,
G determined the monthly income as an average of Rs.4004/- and
Rs.8008/- that is Rs.6006/- per month or Rs.72072/- per
annum. We find that the said conclusion is in conformity with
the legal principle that about 50% can be added to the actual
...
...
salary, by taking note of future prospects.
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1127
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
23. Learned counsel for the appellants contended that when A
actual figures as to what would be the income in future, are
available it is not proper to take a nominal hypothetical increase
of only 50% for calculating the income. He submitted that
though the deceased was receiving Rs.4004/- per month at the
time of death, as per the certificates issued by the employer 8
(produced before High Court), on the basis of pay revisions and
increases, his salary would have been Rs.32,678/- in the year
2005 and there is no reason why the said amount should not
be considered as the income at the time of retirement. It was
contended that the income which is to form the basis for C
calculation should not.therefore be the average of Rs.4004/-
. and Rs.8008/-, but the average of Rs.4004/- and Rs.32,678/-.

24. The assumption of the appellants that the actual future
pay revisions should be taken into account for the purpose of
calculating the income is not sound. As against the contention D
of the appellants that if the deceased had been alive, he would ·
have earned the benefit of revised pay scales, it is equally
possible that if he had not died in the accident, he might have
died on account of ill health or other accident, or lost the
employment or met some other calamity or disadvantage. The E
.. imponderables in life are t<;>o many. Another significant aspect
is the non-existence of such evidence at the time of accident.
In this case, the accident and death occurred in the year 1988.
The award was made by the Tribunal in the year 1993. The High
Court decided the appeal in 2007. The pendency of the .cl.aim F
proceedings and appeal for nearly two decades is a fortuitous
circumstance and that will not entitle the appellants to rely upon
the two pay revisions which took place in the course of the said
two decades. If the claim petition filed in 1988 had been
disposed of in the year 1988-89 itself and if the appeal had G
been decided by the High Court in the year 1989-90, then
obviously the compensation would have been decided only with
reference to the scale of pay applicable at the time of death
and not with reference to any future revision in pay scales. If
the contention urged by the claimant.s is accepted, it would lead H
1128 SUPREME COURT REPORTS [2009) 5 S.C.R.

A to the following situation: The claimants only could rely upon the
pay scales in force at the time of the accident, if they are prompt
in conducting the case. But if they delay the proceedings, they
can rely upon the revised higher pay scales that may come into
effect during such pendency. Surely, promptness cannot be
B punished in this manner. We therefore reject the contention that
the revisions in pay scale subsequent to the death and before
the final hearing should be taken note of for the purpose of
determining the income for calculating the compensation.

25. The appellants next contended that having regard to
C the fact that the family of deceased consisted of 8 members
including himself and as the entire family was dependent on
him, the deduction on account of personal 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
D 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 calculation is under section 163A read with
Second Schedule to the MV Act). The percentage of deduction
on account personal and living expenses can certainly vary with
E reference to the number of dependant members in the family.
But as noticed earlier, the personal living expenses of the
deceased need not exactly correspond to the number of
dependants. As an earning member, the deceased would have
-
spent more on himself than the other members of the family
F apart from the fact that he would have incurred expenditure on
travelling/transportation and other needs. Therefore we are of
the view that interest of justice would be met if one-fifth is
deducted as the personal and living expenses of the deceased.
After such deduction, the contribution to the family (dependants)
G is determined as Rs.57,658/- per annum. The multlplier will be
15 having regard to the age of the deceased at the time of
·death (38 years). Therefore the total loss of dependency would
be Rs.57,658 x 15 =Rs.8,64,870/-.

26. In addition, the claimants will be entitled to a sum of
H
SARLA VERMA & ORS. v. DELHI TRANSPORT 1129
CORPORATION & ANR. [R.V. RAVEENDRAN, J.]
Rs.5,000/- under the head of 'loss of estate' and Rs.5000/- A
towards funeral expenses. The widow will be entitle a· to
Rs.10,000/- as loss of consortium. Thus, the total compensation
will be Rs.8,84,870/-. After deducting Rs.7, 19,624/- awarded
by the High Court, the enhancement would be Rs.1,65,246/-.
B
27. We allow the appeal in part accordingly. The appellants
will be entitled to the said sum of Rs.165,246/- in addition to
what is already awarded, with interest at the rate of 6% per
annum from the date of petition till the date of realization. The
increase in compensation awarded by us shall be taken by the C
widow exclusively.

Parties to bear respective costs.

G.N. Appeal partly allowed.