Ramzan Khan & ANR
Vs. National Insurance Co Ltd  INSC 1670 (30 September 2008)
JURISDICTION CIVIL APPEAL NO. 8127 OF 2002 RAMZAN KHAN & ANR.
O R D E R
is claimant's appeal. Habib, the son of the appellants died in a motor accident
which occurred on 24.11.1988. The deceased was a bachelor aged about 23 years.
He was working as a driver and earning Rs.1050/- p.m. as salary apart from
daily batta. The claimants who were the parents were aged 58 years and 45 years
respectively. The claimants prayed for award of compensation of Rs.4,10,000/-.
The tribunal awarded a compensation of Rs.50,000/-. On appeal, the High Court
by its judgment dated 2.7.1998 increased the compensation to Rs.80,000/- with
interest at 12% p.a. for a period of five years only. For arriving at the
compensation, the High Court calculated the annual contribution to the family
as Rs.7800 (Rs.650 x 12). By applying multiplier of 10, the tribunal arrived at
the total loss of dependency as 2 Rs.78,000/- and by adding Rs.2000/- towards
funeral expenses came to the conclusion that Rs.80,000/- should be the
compensation. The judgment of the High Court was rendered on 2.7.1998. The High
Court felt that the insurer was not responsible for the long pendency of
litigation and therefore restricted the award of interest for a period of five
said judgment is challenged by the claimants on two grounds: (a) the multiplier
applied is erroneous, and (b) the interest should not have been restricted to
is now well-settled that where the deceased is a bachelor and the claimants are
the parents, the multiplier should be determined not with reference to the age
of the deceased but with reference to the age of the parents, in particular the
age of the mother. In this case, the mother was aged 45 years. Therefore, the
appropriate multiplier was 13 and not 10. The High Court apparently determined
the multiplier with reference to the age of the father who was 58 years which
is erroneous. There is no dispute in regard to the annual dependency of
Rs.7800/- arrived at by the High Court. In the circumstances, the loss of
dependency will be 7800 x 13 = 1,01,400/-. The claimants will also be entitled
to a sum of Rs.5000/- 3 towards loss of estate and Rs.5000/- towards funeral
expenses. Therefore, the total compensation will be Rs.1,11,400/-.
as interest is concerned, the reasoning of the High Court that due to long
pendency of the litigation the liability of the insurer should be restricted
only for a period of five years is not sound. While it is true that the insurer
is not responsible for the pendency of the litigation, it is equally true that
the claimants were also not responsible for the pendency of the litigation.
If the insurer had
voluntarily worked out and paid the just compensation when the accident
occurred there would be no reason to fasten any liability for interest on the
insurer. Therefore, it would be unjust to deny the claimants, interest for the entire
period either on the ground that the litigation was pending for long or the
hearing of the case was delayed.
therefore hold that the claimants are entitled to interest from the date of
claim petition till the date of payment. It is stated that the amount awarded
by the High Court with interest was calculated and a sum of Rs.1,41,682 was
deposited on 3.12.2002. Be that as it may.
allow this appeal in part and increase the 4 compensation from Rs.80,000/- to
Rs.1,11,400/- Insofar as the interest is concerned, the claimant will be
entitled to interest @ 12% p.a. on Rs.80,000/- from the date of claim petition
till the date of deposit. Insofar as the amount of compensation increased by
this Court, namely Rs.31,400/-, it shall carry interest at the rate of 6% p.a.
from the date of claim petition till the date of payment. The insurer is given
three months' time to deposit the difference amount with the tribunal. The
insurer shall also pay Rs.2500/- as costs to the appellants.
( R.V. RAVEENDRAN )
( LOKESHWAR SINGH PANTA )