Insurance Co. Ltd. Vs. Kimlibai & Ors  INSC 1377 (4 August 2009)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5089 OF
2009 [Arising out of S.L.P.(C)No.15917 2006] National Insurance Company Ltd.
....Appellant Versus Khimlibai & Ors. ....
Vir Singh aged about 40 years, carpenter by profession met with a
motor accident on 24th May 1997, while he was travelling in a jeep bearing
No.MP11-4690 which was hit from behind by an offending truck, bearing
No.MP09-D-5665. He sustained injuries, was given first-aid in the hospital but
succumbed to the same at 5.00 p.m. on the same date.
Respondent nos.1 to 8 herein, claiming to be the widow, sons,
daughter and aged parents of the deceased, filed a Claim Petition under Section
166 of the Motor
Vehicles Act, 1988 (hereinafter referred to as 'the
Act') before Motor Accident Claims Tribunal, Jhabua, M.P. (for short, 'the
Tribunal') registered as Claim Case No.202 of 2003. They claimed a total
compensation of Rs.8,31,000/- against the respondents, i.e., insurance company
(appellant herein), owner and driver of the truck.
Both, the owner and the driver of the truck, were proceeded
ex-parte and they did not file any written statement.
The appellant herein, arrayed as respondent no.3 in the Claim
Case, filed its written statement generally denying the averments made in the
It was contended by the insurance company before the Tribunal that
respondent no.2-driver did not have a valid and proper licence to drive the
truck at the relevant point of time and no information was given to the
appellant nor was any claim form submitted. Therefore, it was not liable to pay
It further contended that the driver of the jeep, which was hit
from behind by the offending truck, also did not have a valid driving licence
and the deceased was travelling as a gratuitous passenger. Thus, in any case no
liability can be fastened on the appellant-insurance company and prayed for its
On the strength of the pleadings of the parties, the Tribunal
framed issues. It appears that the appellant did not lead any evidence in
rebuttal to the evidence that was led by the respondent-claimants.
From the voluminous material available on record, it has neither
been disputed before us, nor was it agitated in the High Court that the
accident was caused due to rash and negligent driving of the truck and at the
relevant point of time, it was owned by respondent no.9/10 and driven by
These facts having not been disputed before us, we have only to
consider whether the amount awarded by the Tribunal and as enhanced in appeal
by the Division Bench of the High Court of Madhya Pradesh, Indore Bench, was
proper or not.
On appreciation of evidence available on record, the Tribunal
awarded a total amount of Rs.2,32,762/- together with interest at the rate of
9% against the appellant and respondent nos.9, 10 and 11 herein. The said
figure was arrived at on the basis that the deceased was earning Rs.84/- per
day and adding certain expenses towards conventional heads and then applying
the multiplier of 15.
Feeling aggrieved by the said award and order passed by the
Tribunal on 20th February 2004, an appeal was carried under Section 173 of the
Act to the High Court.
In appeal, the High Court came to the conclusion that it can
safely be assumed that deceased Vir Singh, who was working as carpenter before
his death in the year 1997, must be earning Rs.100/- per day. Thus, his monthly
income would be Rs.3,000/-. Keeping in mind the large family of dependents, as
mentioned hereinabove, i.e., the widow, sons, daughter and aged parents, in all
8 persons, 1/4th of the total income so arrived at, was directed to be deducted
towards the amount which the deceased would have spent on himself and the
multiplier of 17 was applied. Thus, the High Court awarded compensation of
Rs.4,59,000/-. The High Court awarded an additional lump sum amount of
Rs.25,000/- under various conventional heads thereby making a total
compensation of Rs.4,84,000/- with further stipulation that the enhanced sum
would carry interest at the rate of 6% p.a. from the date of the application
till its realisation.
Appellant-insurance company is in appeal challenging the impugned
award and order primarily on the following two grounds :
the amount enhanced by the High Court is excessive and exorbitant, more so,
without there being any basis, it has been assessed that deceased could have earned
Rs.100/- per day; and (ii) that deduction of only 1/4th towards his personal
expenses from his total income has wrongly been allowed and it should have been
1/3rd of his total income.
In the light of the aforesaid, we have heard Ms. Pankaj Bala Verma,
learned counsel appearing for the appellant-insurance company; Mr. Vikas Mehta,
learned counsel appearing for respondent nos.1 to 8; and Mr. T.N. Singh,
learned counsel appearing for respondent nos.9 to 11.
It could not be disputed before us that deceased was working as a
carpenter. Thus, obviously working as such, even in the year 1997 he could have
comfortably earned Rs.100/- per day. This has also been admitted by P.W.3 with
whom the deceased was employed that he was being paid Rs.100/- per day. Even if
we assume that he was working only for six months in a year as carpenter and
for remaining six months he was working in his own field, that would not
materially affect his income. While he was working in his own field, he was
contributing to augment his income and thereby was saving Rs.100/- per day on
the labour that he would have spent, if he had not worked himself. Thus,
looking to the matter from that angle, it is clear that he would have continued
to earn Rs.100/- per day, whether he worked as a carpenter or in his own field.
As far as application of proper multiplier is concerned, looking
to the age of the deceased and that of the widow, in our opinion, multiplier of
17 which has been applied by the High Court is proper and does not call for
Thus, the first question is answered against the appellant.
As far as question no.2 is concerned, it stands proved that
deceased had left behind a large family to be looked after, who all were
dependents on his income. To reiterate, his widow, sons, daughter and aged
parents - total 8 members in the family.
Keeping in mind the family background, the High Court has deducted
1/4th amount as the amount which the deceased would have spent on himself. In
our opinion, the High Court committed no error in deducting only 1/4th amount
from the total income of the deceased towards the expenses which would have
been incurred on himself. It has also been held so in a recent judgment of this
Court in Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr.
(2009) 6 SCC 121 :
Though in some cases the deduction to be made towards personal and living
expenses is calculated on the basis of units indicated in U.P.SRTC v. Trilok
Chandra (1996) 4 SCC 362, the general practice is to apply standardised
deductions. Having considered several subsequent decisions of this Court, we
are of the view that where the deceased was married, the deduction towards
personal and living expenses of the deceased, should be one-third (1/3rd) where
the number of dependent family members is 2 to 3, one-fourth (1/4th) where the
number of dependent family members is 4 to 6, and one-fifth (1/5th) where the
number of dependent family members exceeds six."
further held in para 48 of the said judgment as under:
The appellants next contended that having regard to the fact that the family of
the deceased consisted of 8 members including himself and as the entire family
was dependent on him, the deduction 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 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 163-A read with
the Second Schedule to the MV Act). The percentage of deduction on account of
personal and living expenses can certainly vary with 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
In the light of the aforesaid discussion, we are of the opinion
that there is no substance in this appeal. It is accordingly hereby dismissed
with costs to be borne by the appellant.
Counsel fee assessed at Rs.10,000/-.
......................J. [S.B. SINHA]
.......................J. [DEEPAK VERMA]
August 04, 2009.