National Insurance
Co., Ltd. Vs. Saroj & Ors. [2009] INSC 1037 (12 May 2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3483 OF 2009 (Arising
out of SLP (C) No.18250 of 2007) National Insurance Company Ltd. ... Appellant
Versus Smt. Saroj & Ors. ... Respondents
2 S.B. Sinha, J.
1.
Leave
granted.
2.
Appellant
is before us aggrieved by and dissatisfied with a judgment and order dated
29.05.2007 passed by a learned Single Judge of the High Court of Punjab and
Haryana at Chandigarh in FAO No.2041 of 2006 whereby and whereunder a First
Appeal preferred by the appellant herein against a judgment and award dated
03.2.2006 passed by the Motor Accident Claims Tribunal, Rohtak directing the
appellant herein to pay compensation with interest to the respondent, was
dismissed.
3.
One
Joginder Singh, husband of respondent No.1 and father of respondent Nos. 2 to
4, while riding a two wheeler met with an accident on 29.11.2003 as it collided
with a truck. The said truck was insured with the appellant by its owner who is
respondent No.5 herein.
4.
A
claim petition was filed before the Motor Vehicles Accident Claims Tribunal
claiming a sum of Rs.20,00,000/-. The deceased was an employee of Maruti Udyog
Limited and had been drawing a sum of Rs.16,110/- per month. The Tribunal
determined his income at Rs.17,244/- per month by its award dated 3.2.2006. His
age was determined as 41 years 10 months and 93 days. A multiplier of 16 was
applied to arrive at the amount of compensation at a sum of Rs.22,12,200/-.
5.
A
First Appeal preferred by the appellant has been dismissed by the High Court by
reason of the impugned judgment dated 29.05.2007.
6.
Dr.
Meera Agarwal, learned counsel appearing on behalf of the appellant, would urge
:
1) The Tribunal and
consequently the High Court should have restricted the award of compensation
only to the sum claimed by the claimant in the claim petition.
2) Provisions of
Schedule II attached to Section 163-A being applicable strictly in cases where
the income of the deceased does not exceed Rs.40,000/- per annum, the
multiplier specified therein should not have been applied.
3) The claimants
having not disclosed as to what amount they had received from the insurance
company and who was the insurer of the scooter driven by the deceased, the
impugned judgment should not be sustained.
7.
Mr.
A.V. Rao, learned counsel appearing on behalf of the respondents, on the other
hand, supported the impugned judgment.
8.
The
deceased was occupying the post of Technical in a Weld Shop Work in Maruti
Udyog Limited. His net salary was Rs.16,110/- per month.
Both the courts
below, however, in terms of the evidences brought on record found salary
payable to the deceased at Rs.17,244.95 per month.
This finding of the
Tribunal had not been questioned before the High Court.
Indisputably, again
the age of the deceased at the time of death was found to be 41 years 10 months
and 9 days.
9.
It
has not been denied or disputed that the multiplier method can be applied for
the purpose of determination of the amount of compensation in a motor accident
in terms of the provisions of the Motor Vehicles Act, 1988.
We have, however, do
not mean to suggest that the multiplier specified in the Second Schedule should
be applied automatically.
In Rani Gupta v.
United India Insurance Company & Ors. [2009 (5) SCALE 439] this Court
observed that in an appropriate case, the matter may require consideration by
larger Bench keeping in view paragraphs 5 and 6 of the Note appended to the
Second Schedule of the Act in terms where of the multiplier was to be adopted
only in a case of permanent total or partial disability.
10.
The
Second Schedule provides for a new pre-determined formula for payment of
compensation to road accident victims on the basis of age/income in a more
liberal or rational way.
If that be so, a
question arises as to why the injured claimant and/or heirs and legal
representatives of the victim in a case of death on proof of negligence on the
part of the driver of a motor vehicle would get a lesser amount than the one
specified in the Second Schedule although both are similarly situated. Such a
dichotomy, in our opinion, could be resolved by finding the applicability of
multiplier in the cases where the victims have suffered injuries resulting in
permanent total disablement or permanent partial disablement.
Probably, it is in
that view of the matter, there is some sort of a cleavage of opinion in the
matter of application of multiplier. Whereas in one set of decisions multiplier
specified in the Second Schedule has been applied, in another set of decisions,
a lesser multiplier was applied. In either set of the decisions sometimes, no
principle of law has been laid down. It is, however, accepted at the Bar that
the multiplier specified in the Second Schedule should be taken to be the
guidelines.
11.
We
may notice a few precedents in this behalf.
In Rani Gupta
(supra), it is stated:
"18. By and
large, therefore, the Court had proceeded on the basis that the multiplier
mentioned in the Second Schedule should be taken to be the guide but it may not
be.
19. The multiplier
specified in the Second Schedule may not be decisive for calculating
compensation in cases of death. In fact, the word multiplier has been used only
for the purpose of calculating damages in the case of permanent disability and
not in the case of death as would appear from note 5 and 6 appended thereto.
20. The Second Schedule
provides for payment of the amount of compensation to the persons whose income
is from Rs.3,000/- to Rs.40,000/- per annum, depending upon the age of the
deceased; as for example if the age of the deceased is 15 years, the amount of
compensation payable would be 60,000/-, but where the annual income is
Rs.3,000/-, a sum of Rs.50,000/- has been specified therefor even if the age of
the deceased is between 35 to 65 years.
21. The Parliament
had, therefore, thought that Rs.50,000/- should be the minimum amount of
compensation payable to legal representatives of those persons whose annual
income is Rs.3,000/- per month. For the said purpose, the multiplier specified
in the Second Schedule has no role to 7 play. Even in absence of the
multiplier in the Second Schedule, the amount of compensation payable would be
the same irrespective of the multiplier specified therein."
12.
Recently,
in United India Insruance Co. Ltd. v. Bindu & Ors. [JT 2009(4) SC 315],
this Court applied the multiplier of 13 where the age of the deceased was 32
years. The Court referring to Mallett v. Mc Mongle [1969 (2) All ER 178] and
other decisions preceding the same, opined :
"11. In both
General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma
Thomas (Mrs.) and Ors. [1994 (2) SCC 176] and U.P. State Road Transport
Corporation and Ors. v. Trilok Chandra and Ors. [JT 1996 (5) SC 356;
1996 (4) SCC 362],
the multiplier appears to have been adopted by this Court taking note of the
prevalent banking rate of interest.
12. In fact in Trilok
Chand's case (supra), after reference to Second Schedule to the Act, it was
noticed that the same suffers from many defects. It was pointed out that the
same is to serve as a guide, but cannot be said to be invariable ready reckoner.
However, the appropriate highest multiplier was held to be 18. The highest
multiplier has to be for the age group of 21 years to 25 years when an ordinary
Indian Citizen starts independently earning and the lowest would be in respect
of a person in the age group of 60 to 70, which is the normal retirement age.
13. Keeping in view
the parameters indicated above it would be appropriate to fix the multiplier at
13 and the rate of interest at 6% p.a. The MACT shall work out the entitlements
on the aforesaid basis."
13.
Reliance
has been placed by Dr. Agarwal on a decision of this Court in United India
Insurance Co. Ltd. Etc. v. Patricia Jean Mahajan & Ors. [(2002) 6 SCC 281],
wherein multiplier of 10 has been used where the deceased used to get salary in
US $. Yet again in The Managing Director, TNSTC Ltd. v. K.I. Bindu & Ors.
[(2005) 8 SCC 473], this Court held :
"14. The
multiplier method involves the ascertainment of the 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 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 capital sum should also be consumed-up over the period for
which the dependency is expected to last."
Reliance has also
been placed on Tamil Nadu State Transport Corporation Ltd. v. S. Rajapriya and
two Ors. [(2005) 6 SCC 236], wherein it was held:
9 "12. The
multiplier method involves the ascertainment of the 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 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 capital sum should also be consumed-up over the period for
which the dependency is expected to last."
14.
The
amount of compensation which is required to be determined by the Tribunal must
be just. In certain situations as for example in the case of the death of only
son to a mother, no monetary compensation would be sufficient. Whereas the
court, while determining the amount of compensation, should consider the amount
of monetary loss which had been and would be suffered by the heirs and legal
representatives of the deceased, the same should not be a windfall. It is for
the aforementioned purpose, not only the take home salary is to be taken into
consideration but also other allowance and perks which would have benefited the
entire family. [See National Insurance Co. Ltd. v. Indira Srivastava & Ors.
[(2008) 2 SCC 763].
15.
The
prospective loss of future earnings should also be borne in mind.
The quantum of
compensation must be determined on certain legal principles. The deceased might
have a bright future prospect. He would have been, in normal situation,
considered for promotion immediately.
Although rigid tests
are difficult to be laid down, any kind of hypothesis, as far as possible
should be avoided.
In Abati Bezbaruah v.
Dy. Director General Geological Survey of India & Anr. [(2003) 3 SCC 148],
this Court observed :
"11. It is now a
well settled principle of law that the payment of compensation on the basis of
structured formula as provided for under the Second Schedule should not
ordinarily be deviated from. Section 168 of the Motor Vehicles Act lays down
the guidelines for determination of the amount of compensation in terms of
Section 166 thereof. Deviation of the structured formula, however, as has been
held by this Court, may be resorted to in exceptional cases. Furthermore, the
amount of compensation should be just and fair in the facts and circumstances
of each case."
In this case, the
deceased was a technician employed in a Multinational company. The Tribunal as
also the High Court while determining the amount of compensation did not bestow
its consideration to future prospects. It is trite that the Court should look
into the circumstances of each and every case for arriving at a just
compensation. His future prospect has not been taken into consideration. In
case of this nature, therefore, we do not think that application of multiplier
of 16 was on a higher side.
16.
Submission
of Mr. Agarwal that the Court should have awarded only the sum claimed by the
claimant, in our opinion, is not correct.
17.
Contention
raised on behalf of the appellant that the claimant had not disclosed as to
what amount they had received from the insurance company with whom the scooter
driven by the deceased was insured cannot be considered by us for the first
time as no such contention has been raised before the courts below. The legal
representatives of the deceased examined themselves as witnesses. They should
have cross-examined on the said question. The insurance company could have
found out from other insurance company also as to whether, in fact, a claim had
been advanced and whether insurance company paid any amount to them.
18.
For
the reasons aforementioned, there is no merit in the appeal. It is dismissed
accordingly with costs. Counsel's fee assessed at Rs.10,000/-.
.....................................J.
12 [S.B. Sinha]
.....................................J.
[Dr. Mukundakam Sharma]
New
Delhi;
Back
Pages: 1 2 3