The remaining question is only on multiplier. The High Court
following Santosh Devi (supra), has taken 13 as the multiplier.
Whether the multiplier should depend on the age of the dependants
or that of the deceased, has been hanging fire for sometime; but
that has been given a quietus by another three-Judge Bench
decision in Reshma Kumari (supra). It was held that the multiplier
is to be used with reference to the age of the deceased. One reason
appears to be that there is certainty with regard to the age of the
deceased but as far as that of dependants is concerned, there will
always be room for dispute as to whether the age of the eldest or
youngest or even the average, etc., is to be taken. To quote:
“36. In Sarla Verma, this Court has
endeavoured to simplify the otherwise complex
exercise of assessment of loss of dependency and
determination of compensation in a claim made
under Section 166. It has been rightly stated in Sarla
Verma that the claimants in case of death claim for
the purposes of compensation must establish (a) age
of the deceased; (b) income of the deceased; and (c)
the number of dependants. To arrive at the loss of
dependency, the Tribunal must consider (i)
additions/deductions to be made for arriving at the
income; (ii) the deductions to be made towards the
personal living expenses of the deceased; and (iii)
the multiplier to be applied with reference to the age
of the deceased. We do not think it is necessary for
us to revisit the law on the point as we are in full
agreement with the view in Sarla Verma.”
13. In Sarla Verma (supra), at paragraph-19, a two-Judge
Bench dealt with this aspect in Step 2. To quote:
“19. xxxxxx xxx
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and
period of 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 been
identified by this Court. The multiplier should be
chosen from the said table with reference to the age
Leave granted.
2. The never ending dispute on computation of compensation
under the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the
Act’), is the subject matter of this appeal as well.
3. In the absence of any statutory and a straight jacket formula,
there are bound to be grey areas despite several attempts made by
this Court to lay down the guidelines. Compensation would basically
depend on the evidence available in a case and the formulas shown
1
REPORTABLE
Page 2
by the courts are only guidelines for the computation of the
compensation. That precisely is the reason the courts lodge a caveat
stating “ordinarily”, “normally”, “exceptional circumstances”, etc.,
while suggesting the formula.
4. In the case before us, the appellants are the claimants
before the Motor Accidents Claims Tribunal, Karkardooma, Delhi in
M.A.C.T. No. 736/2008. They are the parents of late Satendra Kumar
Jain, aged 30 years, who died in a motor accident on 12.07.2008. He
was self-employed as Pandit. He was a bachelor. Hence, the claim by
the parents.
5. The appellants claimed an amount of Rs.95,50,000.00. The
Claims Tribunal awarded a total compensation of Rs.6,59,000.00
including loss of dependency to the tune of Rs.6,24,000.00 with
interest @ 7.5 per cent from the date of institution of the petition.
Dissatisfied, appellants approached the High Court of Delhi in MAC
APP. 687/2011 leading to the impugned judgment. The High Court
enhanced the compensation and fixed it at Rs.12,61,800.00 with
interest as ordered by the Claims Tribunal.
6. The High Court fixed the monthly income to Rs.12,000.00
and added 30% towards future prospects relying on Santosh Devi
2
Page 3
v. National Insurance Company Limited1. 50 per cent was
deducted towards personal expenditure and a multiplier of 13 was
applied. Still not satisfied, the claimants are before this Court.
7. On 08.02.2013, this Court issued notice … “confined to the
issues on application of correct multiplier and reduction of the
amount”. In other words, the Court intended to consider the appeal
limited to the question of application of multiplier and deduction on
account of personal and living expenses.
8. On the issue of deduction towards personal and living
expenses in Sarla Verma (Smt.) and others v. Delhi Transport
Corporation and another2, at paragraph-31, it was held that:
“31. … 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 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
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.”
9. The deduction ordinarily in the case of a bachelor at 50 %
1 (2012) 6 SCC 421
2 (2009) 6 SCC 121
3
Page 4
was approved recently by a three-Judge Bench decision in Reshma
Kumari and others v. Madan Mohan and another (2013) 9 SCC 65, holding that
the standard fixed in Sarla Verma (supra) on the aspect of
deduction for personal and living expenses … “must ordinarily be
followed unless a case for departure in the circumstances noted in
the preceding paragraph is made out”. Preceding paragraph-41
reads as follows:
“41. The above does provide guidance for the
appropriate deduction for personal and living
expenses. One must bear in mind that the proportion
of a man’s net earnings that he saves or spends
exclusively for the maintenance of others does not
form part of his living expenses but what he spends
exclusively on himself does. The percentage of
deduction on account of personal and living
expenses may vary with reference to the number of
dependent members in the family and the personal
living expenses of the deceased need not exactly
correspond to the number of dependants.”
10. In the case before us, there are no such exceptional
circumstances or compelling reasons for deviation on the basis of
evidence and therefore deduction of 50% towards the personal and
living expenses is not to be disturbed.
11. As far as future prospects are concerned, in Rajesh and
others v. Rajbir Singh and others (2013) 9 SCC 54, a three-Judge Bench of this
Print Page
following Santosh Devi (supra), has taken 13 as the multiplier.
Whether the multiplier should depend on the age of the dependants
or that of the deceased, has been hanging fire for sometime; but
that has been given a quietus by another three-Judge Bench
decision in Reshma Kumari (supra). It was held that the multiplier
is to be used with reference to the age of the deceased. One reason
appears to be that there is certainty with regard to the age of the
deceased but as far as that of dependants is concerned, there will
always be room for dispute as to whether the age of the eldest or
youngest or even the average, etc., is to be taken. To quote:
“36. In Sarla Verma, this Court has
endeavoured to simplify the otherwise complex
exercise of assessment of loss of dependency and
determination of compensation in a claim made
under Section 166. It has been rightly stated in Sarla
Verma that the claimants in case of death claim for
the purposes of compensation must establish (a) age
of the deceased; (b) income of the deceased; and (c)
the number of dependants. To arrive at the loss of
dependency, the Tribunal must consider (i)
additions/deductions to be made for arriving at the
income; (ii) the deductions to be made towards the
personal living expenses of the deceased; and (iii)
the multiplier to be applied with reference to the age
of the deceased. We do not think it is necessary for
us to revisit the law on the point as we are in full
agreement with the view in Sarla Verma.”
13. In Sarla Verma (supra), at paragraph-19, a two-Judge
Bench dealt with this aspect in Step 2. To quote:
“19. xxxxxx xxx
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and
period of 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 been
identified by this Court. The multiplier should be
chosen from the said table with reference to the age
of the deceased.”
The multiplier, in the case of the age of the deceased
between 26 to 30 years is 17.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4497 OF 2015
(Arising from S.L.P. (C) No. 8362/2013)
Munna Lal Jain and another … Appellant (s)
Versus
Vipin Kumar Sharma and others … Respondent (s)
Citation;(2015)6SCC347
KURIAN, J.:
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4497 OF 2015
(Arising from S.L.P. (C) No. 8362/2013)
Munna Lal Jain and another … Appellant (s)
Versus
Vipin Kumar Sharma and others … Respondent (s)
Citation;(2015)6SCC347
KURIAN, J.:
Leave granted.
2. The never ending dispute on computation of compensation
under the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the
Act’), is the subject matter of this appeal as well.
3. In the absence of any statutory and a straight jacket formula,
there are bound to be grey areas despite several attempts made by
this Court to lay down the guidelines. Compensation would basically
depend on the evidence available in a case and the formulas shown
1
REPORTABLE
Page 2
by the courts are only guidelines for the computation of the
compensation. That precisely is the reason the courts lodge a caveat
stating “ordinarily”, “normally”, “exceptional circumstances”, etc.,
while suggesting the formula.
4. In the case before us, the appellants are the claimants
before the Motor Accidents Claims Tribunal, Karkardooma, Delhi in
M.A.C.T. No. 736/2008. They are the parents of late Satendra Kumar
Jain, aged 30 years, who died in a motor accident on 12.07.2008. He
was self-employed as Pandit. He was a bachelor. Hence, the claim by
the parents.
5. The appellants claimed an amount of Rs.95,50,000.00. The
Claims Tribunal awarded a total compensation of Rs.6,59,000.00
including loss of dependency to the tune of Rs.6,24,000.00 with
interest @ 7.5 per cent from the date of institution of the petition.
Dissatisfied, appellants approached the High Court of Delhi in MAC
APP. 687/2011 leading to the impugned judgment. The High Court
enhanced the compensation and fixed it at Rs.12,61,800.00 with
interest as ordered by the Claims Tribunal.
6. The High Court fixed the monthly income to Rs.12,000.00
and added 30% towards future prospects relying on Santosh Devi
2
Page 3
v. National Insurance Company Limited1. 50 per cent was
deducted towards personal expenditure and a multiplier of 13 was
applied. Still not satisfied, the claimants are before this Court.
7. On 08.02.2013, this Court issued notice … “confined to the
issues on application of correct multiplier and reduction of the
amount”. In other words, the Court intended to consider the appeal
limited to the question of application of multiplier and deduction on
account of personal and living expenses.
8. On the issue of deduction towards personal and living
expenses in Sarla Verma (Smt.) and others v. Delhi Transport
Corporation and another2, at paragraph-31, it was held that:
“31. … 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 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
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.”
9. The deduction ordinarily in the case of a bachelor at 50 %
1 (2012) 6 SCC 421
2 (2009) 6 SCC 121
3
Page 4
was approved recently by a three-Judge Bench decision in Reshma
Kumari and others v. Madan Mohan and another (2013) 9 SCC 65, holding that
the standard fixed in Sarla Verma (supra) on the aspect of
deduction for personal and living expenses … “must ordinarily be
followed unless a case for departure in the circumstances noted in
the preceding paragraph is made out”. Preceding paragraph-41
reads as follows:
“41. The above does provide guidance for the
appropriate deduction for personal and living
expenses. One must bear in mind that the proportion
of a man’s net earnings that he saves or spends
exclusively for the maintenance of others does not
form part of his living expenses but what he spends
exclusively on himself does. The percentage of
deduction on account of personal and living
expenses may vary with reference to the number of
dependent members in the family and the personal
living expenses of the deceased need not exactly
correspond to the number of dependants.”
10. In the case before us, there are no such exceptional
circumstances or compelling reasons for deviation on the basis of
evidence and therefore deduction of 50% towards the personal and
living expenses is not to be disturbed.
11. As far as future prospects are concerned, in Rajesh and
others v. Rajbir Singh and others (2013) 9 SCC 54, a three-Judge Bench of this
Court held that in case of self-employed persons also, if the
deceased victim is below 40 years, there must be addition of 50% to
the actual income of the deceased while computing future
prospects. To quote:
“8. Since, the Court in Santosh Devi case actually
intended to follow the principle in the case of
salaried persons as laid down in Sarla Verma case
and to make it applicable also to the self-employed
and persons on fixed wages, it is clarified that the
increase in the case of those groups is not 30%
always; it will also have a reference to the age. In
other words, in the case of self-employed or persons
with fixed wages, in case, the deceased victim was
below 40 years, there must be an addition of 50% to
the actual income of the deceased while computing
future prospects. Needless to say that the actual
income should be income after paying the tax, if any.
Addition should be 30% in case the deceased was in
the age group of 40 to 50 years.”
The deceased being of the age of 30 years, 50% is the required
addition.
12. The remaining question is only on multiplier. The High Court
following Santosh Devi (supra), has taken 13 as the multiplier.
Whether the multiplier should depend on the age of the dependants
or that of the deceased, has been hanging fire for sometime; but
that has been given a quietus by another three-Judge Bench
decision in Reshma Kumari (supra). It was held that the multiplier
is to be used with reference to the age of the deceased. One reason
appears to be that there is certainty with regard to the age of the
deceased but as far as that of dependants is concerned, there will
always be room for dispute as to whether the age of the eldest or
youngest or even the average, etc., is to be taken. To quote:
“36. In Sarla Verma, this Court has
endeavoured to simplify the otherwise complex
exercise of assessment of loss of dependency and
determination of compensation in a claim made
under Section 166. It has been rightly stated in Sarla
Verma that the claimants in case of death claim for
the purposes of compensation must establish (a) age
of the deceased; (b) income of the deceased; and (c)
the number of dependants. To arrive at the loss of
dependency, the Tribunal must consider (i)
additions/deductions to be made for arriving at the
income; (ii) the deductions to be made towards the
personal living expenses of the deceased; and (iii)
the multiplier to be applied with reference to the age
of the deceased. We do not think it is necessary for
us to revisit the law on the point as we are in full
agreement with the view in Sarla Verma.”
13. In Sarla Verma (supra), at paragraph-19, a two-Judge
Bench dealt with this aspect in Step 2. To quote:
“19. xxxxxx xxx
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and
period of 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 been
identified by this Court. The multiplier should be
chosen from the said table with reference to the age
of the deceased.”
14. The multiplier, in the case of the age of the deceased
between 26 to 30 years is 17. There is no dispute or grievance on
fixation of monthly income as Rs.12,000.00 by the High Court.
15. Thus, the appellants are entitled to compensation of
Rs.18,36,000.00 towards loss of dependency, which is calculated as
follows –
CALCULATION TOTAL (IN
RS.)
Rs.12,000/- (Monthly Income)
add [50% of Rs.12,000/-(Future Prospects)] = 18,000.00
50% of [Rs.18,000/- (Deductions)] = 9,000.00
[Rs.9,000/-] multiply by [12(Annual Income)] = 1,08,000.00
[Rs.1,08,000/-] multiply by [17(Multiplier)] = 18,36,000.00
There shall be no change on the amounts awarded by the High Court
on other heads or on rate of interest.
7
Page 8
16. The appeal is allowed as above. There shall be no order as to
costs.
....…….…..…………J.
(ANIL R. DAVE)
....…….…..…………J.
(MADAN B. LOKUR)
...……………………J.
(KURIAN JOSEPH)
New Delhi;
May 15, 2015.
deceased victim is below 40 years, there must be addition of 50% to
the actual income of the deceased while computing future
prospects. To quote:
“8. Since, the Court in Santosh Devi case actually
intended to follow the principle in the case of
salaried persons as laid down in Sarla Verma case
and to make it applicable also to the self-employed
and persons on fixed wages, it is clarified that the
increase in the case of those groups is not 30%
always; it will also have a reference to the age. In
other words, in the case of self-employed or persons
with fixed wages, in case, the deceased victim was
below 40 years, there must be an addition of 50% to
the actual income of the deceased while computing
future prospects. Needless to say that the actual
income should be income after paying the tax, if any.
Addition should be 30% in case the deceased was in
the age group of 40 to 50 years.”
The deceased being of the age of 30 years, 50% is the required
addition.
12. The remaining question is only on multiplier. The High Court
following Santosh Devi (supra), has taken 13 as the multiplier.
Whether the multiplier should depend on the age of the dependants
or that of the deceased, has been hanging fire for sometime; but
that has been given a quietus by another three-Judge Bench
decision in Reshma Kumari (supra). It was held that the multiplier
is to be used with reference to the age of the deceased. One reason
appears to be that there is certainty with regard to the age of the
deceased but as far as that of dependants is concerned, there will
always be room for dispute as to whether the age of the eldest or
youngest or even the average, etc., is to be taken. To quote:
“36. In Sarla Verma, this Court has
endeavoured to simplify the otherwise complex
exercise of assessment of loss of dependency and
determination of compensation in a claim made
under Section 166. It has been rightly stated in Sarla
Verma that the claimants in case of death claim for
the purposes of compensation must establish (a) age
of the deceased; (b) income of the deceased; and (c)
the number of dependants. To arrive at the loss of
dependency, the Tribunal must consider (i)
additions/deductions to be made for arriving at the
income; (ii) the deductions to be made towards the
personal living expenses of the deceased; and (iii)
the multiplier to be applied with reference to the age
of the deceased. We do not think it is necessary for
us to revisit the law on the point as we are in full
agreement with the view in Sarla Verma.”
13. In Sarla Verma (supra), at paragraph-19, a two-Judge
Bench dealt with this aspect in Step 2. To quote:
“19. xxxxxx xxx
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and
period of 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 been
identified by this Court. The multiplier should be
chosen from the said table with reference to the age
of the deceased.”
14. The multiplier, in the case of the age of the deceased
between 26 to 30 years is 17. There is no dispute or grievance on
fixation of monthly income as Rs.12,000.00 by the High Court.
15. Thus, the appellants are entitled to compensation of
Rs.18,36,000.00 towards loss of dependency, which is calculated as
follows –
CALCULATION TOTAL (IN
RS.)
Rs.12,000/- (Monthly Income)
add [50% of Rs.12,000/-(Future Prospects)] = 18,000.00
50% of [Rs.18,000/- (Deductions)] = 9,000.00
[Rs.9,000/-] multiply by [12(Annual Income)] = 1,08,000.00
[Rs.1,08,000/-] multiply by [17(Multiplier)] = 18,36,000.00
There shall be no change on the amounts awarded by the High Court
on other heads or on rate of interest.
7
Page 8
16. The appeal is allowed as above. There shall be no order as to
costs.
....…….…..…………J.
(ANIL R. DAVE)
....…….…..…………J.
(MADAN B. LOKUR)
...……………………J.
(KURIAN JOSEPH)
New Delhi;
May 15, 2015.
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