Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6724 OF 2021
Smt. Meena Pawaia & Ors. ..Appellant (S)
VERSUS
Ashraf Ali & Ors. ..Respondent (S)
J U D G M E N T
M. R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned
judgment and order dated 18.02.2020 passed by the High
Court of Madhya Pradesh Bench at Gwalior in MA No. 1319
of 2016, by which the High Court has partly allowed the said
appeal preferred by the Union of India/Railways and has
Signature Not Verified
reduced the amount of compensation from Rs.12,85,000/
Digitally signed by R
Natarajan
Date: 2021.11.18
16:51:28 IST
Reason:
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(awarded by the claims tribunal) to Rs.6,10,000/, the
original claimants have preferred the present appeal.
2. In an accident which occurred on 12.09.2012, the son of the
original claimants, Mr. Prashant died. The deceased at the
time of accident was a bachelor, aged 21 years and was
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studying in 3 year of B.E. The original claimants – mother,
father, brother and sister of the deceased filed the claim
petition before the Motor Accident Claims Tribunal (MACT),
being MACT case No.1/2013 claiming Rs.25 lakhs as
compensation on different heads. It was the case on behalf of
the original claimants that the deceased at the relevant time
was earning Rs.8,000/ per month as he was engaged in
tuition of other students. On appreciation of evidence the
learned Tribunal held that the deceased died due to rash and
negligence on the part of the driver of the truck involved in
the accident. The learned Tribunal assessed the monthly
income of the deceased as Rs.15,000/ per month,
disbelieving the case on behalf of the claimants that he was
getting Rs.25,000/ as salary from one Nectal Construction
Company. Learned Tribunal also disbelieved the fact about
earning of Rs.8,000/ by the deceased per month from
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private tuition. However considering the young age and the
educational qualification, the learned Tribunal keeping in
mind the nature of work to be done by him in future and his
future prospect, considered the future loss of income at
Rs.15,000/ per month. The learned Tribunal deducted ½
over his own personal expenses as he was a bachelor.
However, the learned Tribunal applied the multiplier on the
basis of the age of the parents of the deceased and
consequently applied the 14 multiplier and awarded
Rs.12,60,000/ towards future loss of income. The learned
Tribunal also awarded Rs.25,000/ under other head,
namely on the head of the last rites of the deceased. Learned
Tribunal in all awarded Rs.12,85,000/ with 7.5% interest
per annum.
3. Feeling aggrieved and dissatisfied with the judgment and
award dated 16.09.2016 passed by the learned Tribunal,
both, the original claimants as well as Union of India
preferred separate appeals before the High Court. Union of
India preferred MA No. 1276 of 2016 and original claimants
preferred MA No.1319 of 2016. By the impugned judgment
and order, the High Court has reduced the amount of
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compensation from Rs.12,85,000/ to Rs.6,10,000/
assessing the income of the deceased at Rs.5,000/ per
month instead of Rs.15,000/ per month as determined and
awarded by the learned Tribunal. The High Court corrected
the error committed by the learned Tribunal and applied the
multiplier considering the age of the deceased and applied
the multiplier of 18 and has awarded Rs.5,40,000/ under
the head of future loss of income. Thereafter it has further
awarded Rs.15,000/ as loss of estate; Rs.15,000/ as
funeral expenses and Rs.40,000/ as loss of love and
affection. The High Court has awarded a total sum of
Rs.6,10,000/ instead of Rs.12,85,000/ as awarded by the
learned Tribunal.
4. Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the High Court reducing the
amount of compensation from Rs.12,85,000/ to
Rs.6,10,000/, determining the future loss of income at
Rs.5,000/ per month, original claimants have preferred the
present appeal.
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5. Learned counsel appearing on behalf of the appellants
original claimants has vehemently submitted that looking to
the educational qualification and the bright future, the High
Court has committed a grave error in considering the income
of the deceased at Rs.5,000/ per month only
5.1 It is submitted that the deceased at the time of accident was
aged 2122 years and was studying in B.E. and considering
the fact that even the labourers were getting Rs.5,000/ per
month even under the Minimum Wages Act in the year 2012,
the High Court ought not to have considered the income of
deceased at Rs.5,000/ per month.
5.2 It is further submitted that the High Court has not
considered the future rise in income while awarding the
future loss of income.
6. Leaned counsel appearing on behalf of the Union of India is
not in a position to support the impugned judgment and
order passed by the High Court awarding the future loss of
income considering the income of the deceased at Rs.5,000/
per month. However, it is submitted that as the deceased was
not earning anything at the time of accident and as the case
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on behalf of the claimants that he was earning Rs.25,000/
as a salary from Nectal Construction Company and that he
was earning Rs.8,000/ from private tuition has been
disbelieved and thereby he was not earning at all at the time
of death, there shall not be any future rise in income while
determining the future loss of income. It is further submitted
by the learned counsel appearing on behalf of the Union of
India that in the execution proceedings the entire amount as
awarded by the High Court is paid, the claimants have stated
that they accept the same as full and final settlements and
therefore the present appeal may not be entertained.
7. We have heard the learned counsel appearing on behalf of
the respective parties at length.
8. At the outset, it is required to be noted that deceased at the
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time of accident was aged 2122 years and that he was a 3
year student in civil engineering. Therefore, it can be said
that looking to his educational qualification he was having a
bright future. Learned Tribunal assessed the income of
deceased at Rs.15,000/ per month for the purpose of
awarding compensation under the head of future economic
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loss. However, by the impugned judgment and order, the
High Court has reduced the compensation and determined
the income of the deceased at Rs.5,000/ per month.
Awarding the future economic loss to the claimants
considering the income of the deceased as Rs.5,000/ is not
sustainable at all. Even the labourers/skilled labourers were
getting Rs.5,000/ per month under the Minimum Wages Act
rd th
in the year 2012. As the deceased was studying in the 3 /4
semester of civil engineering, he cannot be considered worse
than the labourers/skilled labourers. Even the counsel
appearing on behalf of the Union of India has fairly conceded
that assessing the income of deceased at Rs.5,000/ per
month for the purpose of awarding the compensation under
the head of future economic loss can be said to be at lower
side and as such is not justifiable. While awarding the future
economical loss, when the deceased died at the young age
2122 years and was not earning at the time of
death/accident, as per catena of decisions of this court, the
income for the purpose of determining the future economic
loss is always done on the basis of guesswork considering
many circumstances namely the educational qualification
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and background of the family, etc. Therefore looking to the
educational qualification and the family background and as
observed herein above, the deceased was having a bright
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future studying in the 3 year of civil engineering, we are of
the opinion that the income of the deceased at least ought to
have been considered at least Rs.10,000/ per month, more
particularly considering the fact that the labourers/skilled
labourers were getting Rs.5,000/ per month even under the
Minimum Wages Act in the year 2012.
9. The next question which is posed for the consideration before
this court is whether anything further is required to be added
towards the future rise in income? It is submitted that on
behalf of the Union of India that as the deceased was not
serving and earning at the time of accident/death nothing
further is to be added towards the future prospect/future
rise in income. The aforesaid cannot be accepted.
10. At this stage, the decision of this court in the case of
National Insurance Company Limited vs. Pranay Sethi
and Others (2017) 16 SCC 680, on addition of future
prospects to determine the multiplicand is required to be
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referred to and considered. In the aforesaid decision the
Constitution Bench of this court had an occasion to consider
in detail the justification for addition of future prospects. In
the aforesaid decision it is observed and held that while
determining the income, an addition of 50% of actual salary
to the income of the deceased towards future prospects,
where the deceased had a permanent job and was below the
age of 40 years, should be made. The addition should be
30%, if the age of the deceased was between 40 to 50 years.
In case the deceased was between the age of 50 to 60 years,
the addition should be 15%. Actual salary should be read as
actual salary less tax. It is also further held that in case the
deceased was selfemployed or on a fixed salary, an addition
of 40% of the established income should be the warrant
where the deceased was below the age of 40 years. An
addition of 25% where the deceased was between the age of
40 to 50 years and 10% where the deceased was between the
age of 50 to 60 years should be regarded as the necessary
method of computation. It is also further held that the
established income means the income minus the tax
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component. While holding so in paras 54 to 57, it is observed
and held as under:
In Santosh Devi [Santosh Devi v. National Insurance
“54.
Co. Ltd., (2012) 6 SCC 421] the Court has not accepted
as a principle that a selfemployed person remains on a
fixed salary throughout his life. It has taken note of the
rise in the cost of living which affects everyone without
making any distinction between the rich and the poor.
Emphasis has been laid on the extra efforts made by this
category of persons to generate additional income. That
apart, judicial notice has been taken of the fact that the
salaries of those who are employed in private sectors also
with the passage of time increase manifold. In Rajesh
case [Sarla Verma v. DTC, (2009) 6 SCC 121], the Court
had added 15% in the case where the victim is between
the age group of 15 to 60 years so as to make the
compensation just, equitable, fair and reasonable. This
addition has been made in respect of selfemployed or
engaged on fixed wages.
55. Section 168 of the Act deals with the concept of “just
compensation” and the same has to be determined on the
foundation of fairness, reasonableness and equitability
on acceptable legal standard because such determination
can never be in arithmetical exactitude. It can never be
perfect. The aim is to achieve an acceptable degree of
proximity to arithmetical precision on the basis of
materials brought on record in an individual case. The
conception of “just compensation” has to be viewed
through the prism of fairness, reasonableness and non
violation of the principle of equitability. In a case of
death, the legal heirs of the claimants cannot expect a
windfall. Simultaneously, the compensation granted
cannot be an apology for compensation. It cannot be a
pittance. Though the discretion vested in the tribunal is
quite wide, yet it is obligatory on the part of the tribunal
to be guided by the expression, that is, “just
compensation”. The determination has to be on the
foundation of evidence brought on record as regards the
age and income of the deceased and thereafter the
apposite multiplier to be applied. The formula relating to
multiplier has been clearly stated in Sarla Verma [ Sarla
Verma v. DTC , (2009) 6 SCC 121] and it has been
approved in Reshma Kumari [ Reshma Kumari v. Madan
Mohan , (2013) 9 SCC 65]. The age and income, as stated
earlier, have to be established by adducing evidence. The
tribunal and the courts have to bear in mind that the
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basic principle lies in pragmatic computation which is in
proximity to reality. It is a wellaccepted norm that
money cannot substitute a life lost but an effort has to be
made for grant of just compensation having uniformity of
approach. There has to be a balance between the two
extremes, that is, a windfall and the pittance, a bonanza
and the modicum. In such an adjudication, the duty of
the tribunal and the courts is difficult and hence, an
endeavour has been made by this Court for
standardisation which in its ambit includes addition of
future prospects on the proven income at present. As far
as future prospects are concerned, there has been
standardisation keeping in view the principle of certainty,
stability and consistency. We approve the principle of
“standardisation” so that a specific and certain
multiplicand is determined for applying the multiplier on
the basis of age.
56. The seminal issue is the fixation of future prospects
in cases of deceased who are selfemployed or on a fixed
salary. Sarla Verma [ Sarla Verma v. DTC , (2009) 6 SCC
121] has carved out an exception permitting the
claimants to bring materials on record to get the benefit
of addition of future prospects. It has not, per se, allowed
any future prospects in respect of the said category.
57. Having bestowed our anxious consideration, we are
disposed to think when we accept the principle of
standardisation, there is really no rationale not to apply
the said principle to the selfemployed or a person who is
on a fixed salary. To follow the doctrine of actual income
at the time of death and not to add any amount with
regard to future prospects to the income for the purpose
of determination of multiplicand would be unjust. The
determination of income while computing compensation
has to include future prospects so that the method will
come within the ambit and sweep of just compensation
as postulated under Section 168 of the Act. In case of a
deceased who had held a permanent job with inbuilt
grant of annual increment, there is an acceptable
certainty. But to state that the legal representatives of a
deceased who was on a fixed salary would not be entitled
to the benefit of future prospects for the purpose of
computation of compensation would be inapposite. It is
because the criterion of distinction between the two in
that event would be certainty on the one hand and
staticness on the other. One may perceive that the
comparative measure is certainty on the one hand and
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uncertainty on the other but such a perception is
fallacious. It is because the price rise does affect a self
employed person; and that apart there is always an
incessant effort to enhance one's income for sustenance.
The purchasing capacity of a salaried person on
permanent job when increases because of grant of
increments and pay revision or for some other change in
service conditions, there is always a competing attitude
in the private sector to enhance the salary to get better
efficiency from the employees. Similarly, a person who is
selfemployed is bound to garner his resources and raise
his charges/fees so that he can live with same facilities.
To have the perception that he is likely to remain static
and his income to remain stagnant is contrary to the
fundamental concept of human attitude which always
intends to live with dynamism and move and change with
the time. Though it may seem appropriate that there
cannot be certainty in addition of future prospects to the
existing income unlike in the case of a person having a
permanent job, yet the said perception does not really
deserve acceptance. We are inclined to think that there
can be some degree of difference as regards the
percentage that is meant for or applied to in respect of
the legal representatives who claim on behalf of the
deceased who had a permanent job than a person who is
selfemployed or on a fixed salary. But not to apply the
principle of standardisation on the foundation of
perceived lack of certainty would tantamount to
remaining oblivious to the marrows of ground reality.
And, therefore, degreetest is imperative. Unless the
degreetest is applied and left to the parties to adduce
evidence to establish, it would be unfair and inequitable.
The degreetest has to have the inbuilt concept of
percentage. Taking into consideration the cumulative
factors, namely, passage of time, the changing society,
escalation of price, the change in price index, the human
attitude to follow a particular pattern of life, etc., an
addition of 40% of the established income of the deceased
towards future prospects and where the deceased was
below 40 years an addition of 25% where the deceased
was between the age of 40 to 50 years would be
reasonable.”
11. We see no reason why the aforesaid principle may not be
applied, which apply to the salaried person and/or deceased
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self employed and/or a fixed salaried deceased, to the
deceased who was not serving and/or was not having any
income at the time of accident/death. In case of a deceased,
who was not earning and/or not doing any job and/or self
employed at the time of accident/death, as observed herein
above his income is to be determined on the guesswork
looking to the circumstances narrated hereinabove. Once
such an amount is arrived at he shall be entitled to the
addition over the future prospect/future rise in income. It
cannot be disputed that the rise in cost of living would also
affect such a person. As observed by this court in the case of
Pranay Sethi (Supra), the determination of income while
computing compensation has to include future prospects so
that the method will come within the ambit and sweep of just
compensation as postulated under Section 168 of the Motor
Vehicles Act. In case of a deceased who had held a
permanent job with inbuilt grant of annual increment and/or
in case of a deceased who was on a fixed salary and /or self
employed would only get the benefit of future prospects and
the legal representatives of the deceased who was not serving
at the relevant time as he died at a young age and was
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studying, could not be entitled to the benefit of the future
prospects for the purpose of computation of compensation
would be inapposite. Because the price rise does affect them
also and there is always an incessant effort to enhance one's
income for sustenance. It is not expected that the deceased
who was not serving at all, his income is likely to remain
static and his income would remain stagnant. As observed in
Pranay Sethi (Supra) to have the perception that he is likely
to remain static and his income to remain stagnant is
contrary to the fundamental concept of human attitude
which always intends to live with dynamism and move and
change with the time. Therefore we are of the opinion that
even in case of a deceased who was not serving at the time of
death and had no income at the time of death, their legal
heirs shall also be entitled to future prospects by adding
future rise in income as held by this court in the case of
Pranay Sethi (supra) i.e. addition of 40% of the income
determined on guesswork considering the educational
qualification, family background etc., where the deceased
was below the age of 40 years.
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12. In light of the above, in the present case, the claimants shall
be entitled to future economic loss at Rs.14,000/ per month.
The deceased at the time of accident was aged between 2122
years. Therefore, the multiplier has to be adopted/applied
considering the age of the deceased and not the age of the
parents thus, multiplier 18 would apply. Therefore, the
claimants shall be entitled to Rs.15,12,000/ towards the
future economic loss. Claimants shall also be entitled to
Rs.15,000/ towards loss of estate, Rs.15,000/ towards
funeral expenses and Rs.40,000/ towards loss of love and
affection. Thus, the claimants shall be entitled in all a sum
of with interest thereon at the rate of 7% per
Rs.15,82,000/
annum from the date of claims petition till realization.
13. Now so far as the submission on behalf of the Union of India
that as in the execution proceedings the claimants accepted
the amount due and payable under the impugned judgment
and order and accepted the same as full and final settlement,
thereafter the claimants ought not to have preferred appeal
for enhancement of the compensation is concerned, the
aforesaid cannot be accepted. The claimants are entitled to
just compensation. Merely because in the execution
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proceedings they might have accepted the amount as
awarded by the High Court, may be as full and final
settlement, it shall not take away the right of the claimants
to claim just compensation and shall not preclude them from
claiming the enhanced amount of compensation which they
as such are held to be entitled to. As such, the Motor
Vehicles Act is a benevolent Act and as observed hereinabove
the claimants are entitled to just compensation. As such, the
Union of India ought not to have taken such a plea/defence.
14. In view of the above and for the reasons stated above, the
present appeal succeeds in part. Impugned judgment and
order passed by the High Court is modified and it is held that
the claimants shall be entitled a total sum of Rs.15,82,000/
with interest thereon at the rate of 7% from the date of
claims petition till the date of realization.
15. Now the appellants to deposit the balance enhanced amount
of compensation as per the present judgment and order with
the learned Tribunal within a period of six weeks from today
and also deposit the enhanced amount of compensation to be
invested by the learned Tribunal in the name of the parents
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in fixed deposit in any Nationalized Bank for a period of 3
years however, the parents shall be entitled to the periodical
interest on the same.
16. Present appeal is partly allowed to the aforesaid extent with
token cost which is quantified at Rs.10,000/ to be paid to
the original claimants also to be deposited in the learned
Tribunal within a period of six weeks from today and the
same may be paid to the original claimants.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(SANJIV KHANNA)
New Delhi,
November 18, 2021.
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