Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
Reserved on: 21 December, 2011
rd
Pronounced on: 3 January, 2012
+ MAC.APP. 1148/2011
VIJAY LAXMI & ANR. ..... Appellants
Through: Mr. Anuj Jain, Advocate.
versus
BINOD KUMAR YADAV & ORS. .... Respondents
Through: Nemo.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
J U D G M E N T
G. P. MITTAL, J.
1. The Appellants who are the parents of the deceased Nitant
Lakhanpal seek enhancement of compensation for the
deceased’s death in a motor accident which took place on
13.02.2007. By the impugned judgment, the Motor Accident
Claims Tribunal (the Tribunal) took the deceased salary as
given in the Salary Certificate Ex.PW-1/10 to be ` 6123/- per
month, deducted ` 800/- which was being paid as conveyance
allowance, added 50% towards future prospects and on
deducting 50% towards the personal living expenses (in the case
`
of a bachelor) computed the loss of dependency as 5,43,500/-.
After adding notional sums under conventional heads of funeral
expenses, loss of estate, loss of love and affection an overall
MAC APP 1148/2011 Page 1 of 14
compensation of ` 6,13,500/- was awarded. It is not in dispute
that at the time of the accident the deceased was working as a
Team Member with M/s. Omnia BPO Service Ltd. for a salary
of ` 6123/- per month and was pursuing B.Com from School of
Open Learning, University of Delhi.
2. The award is challenged on the two grounds:-
(i) The Tribunal applied the multiplier of 11 as per the age of
the mother which was 52 years. Since the deceased was
about 25 years, the multiplier of 18 should have been
applied; and
(ii) The Tribunal deducted 50% of the deceased’s income
towards his personal living expenses, which should have
been one-third.
3. In support of his contention, learned counsel for the Appellants
relied on the following judgments:-
(1) Smt. Sarla Verma & Ors. v. Delhi Transport Corporation
& Anr., 2009 (6) SCC 121,
(2) Mohd. Ameeruddin v. United India Insurance Co. Ltd.,
2010 (12) SCALE 155,
(3) P.S. Somanathan v. District Insurance Officer, I (2011)
ACC 659,
MAC APP 1148/2011 Page 2 of 14
(4) Bilkish v. United India Insurance Co. Ltd. & Anr., 2008
(4) SCALE 25,
(5) National Insurance Co. Ltd. v. Azad Singh & Ors., 2010
ACJ 2384,
(6) Oriental Insurance Co. Ltd. v. Deo Patodi & Ors., 2009
ACJ 2359, and
(7) Divisional Manager, New India Assurance Co. Ltd. v. T.
Chelladurai & Ors., 2010 ACJ 382.
4. As far as the selection of multiplier is concerned, the law is
settled that the choice of multiplier is determined by the age of
the deceased or that of the claimants whichever is higher. There
is a three Judges Bench judgment of the Supreme Court in U.P.
State Road Transport Corporation & Ors. v. Trilok Chandra &
Ors., (1996) 4 SCC 362, where the Supreme Court relied on
G.M., Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176 and
reiterated that the choice of the multiplier is determined by the
age of the deceased or that of the claimants whichever is more.
Para 12 of the report is extracted hereunder:-
“12. For concluding the analysis it is necessary
now to refer to the judgment of this Court in the
case of General Manager, Kerala State Road
Transport, v. Susamma Thomas: (1994) 2 SCC
176. In that case this Court culled out the basic
principles governing the assessment of
compensation emerging from the legal authorities
cited above and reiterated that the multiplier
MAC APP 1148/2011 Page 3 of 14
method is the sound method of assessing
compensation. The Court observed:
“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.
The principle was explained and illustrated by a
mathematical example:
“The multiplier represents the
number of Years' purchase on which
the loss of dependency is capitalised.
Take for instance a case where
annual loss of dependency is Rs.
10,000. If a sum of Rs.1,00,000 is
invested at 10% annual interest, the
interest will take care of the
dependency, perpetually. The
multiplier in this case works out to 10.
If the rate of interest is 5% per annum
and not 10% then the multiplier
needed to capitalise the loss of the
MAC APP 1148/2011 Page 4 of 14
annual dependency at Rs.10,000
would be 20. Then the multiplier i.e.,
the number of Years' purchase of 20
will yield the annual dependency
perpetually. Then allowance to scale
down the multiplier would have to be
made taking into account the
uncertainties of the future, the
allowances for immediate lump sum
payment, the period over which the
dependency is to last being shorter
and the capital feed also to be spent
away over the period of dependency is
to last etc. Usually in English Courts
the operative multiplier rarely
exceeds 16 as maximum. This will
come down accordingly as the age of
the deceased person (or that of the
dependents, whichever is higher) goes
up.”
5. There is another three Judges’ decision of the Supreme Court in
New India Assurance Company Ltd. v. Shanti Pathak (Smt.) &
Ors., (2007) 10 SCC 1 , where in the case of the death of a
bachelor, who was aged only 25 years, the multiplier of 5 was
applied according to the age of the mother of the deceased, who
was about 65 years at the time of the accident. Para 6 of the
report is extracted hereunder:-
“6. Considering the income that was taken, the
foundation for working out the compensation
cannot be faulted. The monthly contribution was
fixed at Rs.3,500/-. In the normal course we would
have remitted the matter to the High Court for
consideration on the materials placed before it.
MAC APP 1148/2011 Page 5 of 14
But considering the fact that the matter is pending
since long, it would be appropriate to take the
multiplier of 5 considering the fact that the mother
of the deceased is about 65 years at the time of the
accident and age of the father is more than 65
years. Taking into account the monthly
contribution at Rs.3,500/- as held by the Tribunal
and the High Court, the entitlement of the claim
would be Rs.2,10,000/-. The same shall bear
interest @ 7.5% p.a. from the date of the
application for compensation. Payment already
made shall be adjusted from the amount due.”
6. Learned counsel for the Appellant referred to Sarla Verma
(supra 1) in support of the proposition that age of the deceased
is to be taken into consideration for selection of the multiplier.
As an example the multiplier taken in various cases such as in
Susamma Thomas (supra), U.P. SRTC v. Trilok Chandara,
(1996) 4 SCC 362 as clarified in New India Assurance Co. Ltd.
v. Charlie, (2005) 10 SCC 720 and the multiplier as mentioned
in Second Schedule to the Motor Vehicles Act were compared
and it was held that the multiplier as per Column No.4 in the
said table was appropriate for application. Sarla Verma (supra)
related to the death of one Rajinder Prakash who had left behind
his widow, three minor children apart from his parents and the
grandfather. Obviously, the age of the deceased was taken into
consideration for the purpose of selection of the multiplier as
the deceased left behind a widow younger to him, apart from
three minor children. It was not laid down as a proposition of
law that irrespective of the age of the claimants, the age of the
MAC APP 1148/2011 Page 6 of 14
deceased is to be taken into consideration for selection of the
multiplier for calculation of the loss of dependency. It is true
that in Mohd. Ameeruddin (supra 2) and P.S. Somanathan
(supra 3) and National Insurance Company Ltd. v. Azad Singh
(supra 5), the Hon’ble Supreme Court applied the multiplier
according to the age of the deceased, yet in view of Trilok
Chandra (supra) and Shanti Pathak (supra) decided by the three
Judges of the Supreme Court, the judgment in Mohd.
Ameeruddin (supra 2), P.S. Somanathan (supra 3) and Azad
Singh (supra 5) cannot be taken as a precedent for selection of
the multiplier.
7. In the latest judgment of the Supreme Court in National
Insurance Company Ltd. v. Shyam Singh & Ors., (2011) 7 SCC
65, decided on 04.07.2011, the Supreme Court referred to
Ramesh Singh & Anr. v. Satbir Singh & Anr., (2008) 2 SCC 667
and held that the multiplier as per the age of the deceased or the
claimant whichever is higher would be applicable. Para 9 and
10 of the report are apposite:-
“9. This Court in the case of Ramesh Singh &
Anr. v. Satbir Singh & Anr., (2008) 2 SCC 667,
after referring to the earlier judgments of this
Court, in detail, dealt with the law with regard to
determination of the multiplier in a similar
situation as in the present case. The said findings
of this Court are as under:-
“6. We have given anxious
consideration to these contentions
MAC APP 1148/2011 Page 7 of 14
and are of the opinion that the same
are devoid of any merits. Considering
the law laid down in New India
Assurance Co. Ltd. v. Charlie, AIR
2005 SC 2157, it is clear that the
choice of multiplier is determined by
the age of the deceased or claimants
whichever is higher. Admittedly, the
age of the father was 55 years. The
question of mother's age never
cropped up because that was not the
contention raised even before the
Trial Court or before us. Taking the
age to be 55 years, in our opinion, the
courts below have not committed any
illegality in applying the multiplier of
th
8 since the father was running 56
year of his life.”
10. In our view, the dictum laid down in Ramesh
Singh (supra) is applicable to the present case on
all fours.
Accordingly, we hold that the Tribunal had
rightfully applied the multiplier of 8 by taking the
average of the parents of the deceased who were
55 and 56 years.”
8. Similarly in Manam Saraswathi Sampoorna Kalavathi & Ors.,
v. The Manager, APSRTC, Tadepalligudem A.P. & Anr., (2010)
5 SCC 785, decided on 26.03.2010, the multiplier of 13 was
applied in case of death of a young bachelor where the mother
was 47 years of age.
MAC APP 1148/2011 Page 8 of 14
9. Thus, there is no escape from the conclusion that the multiplier
has to be selected as per the age of the deceased or that of the
claimants whichever is higher.
10. Turning to the facts of the case, the multiplier of 11 was applied
according to the age of the deceased’s mother who was 52
years. The Tribunal’s finding in this regard cannot be faulted.
11. Turning to the contention that one-third of the deceased’s
income ought to have been deducted towards his personal and
living expenses, the Supreme Court in Mohd. Ameeruddin
(supra 2) held that the deduction of one-third should have been
made towards the personal living expenses as the deceased was
bachelor.
12. In Sarla Verma (supra 1), relied upon by the learned counsel for
the Appellant, the Hon’ble Supreme Court considered Susamma
Thomas (supra), Trilok Chandra (supra), Fakeerappa v.
Karanataka Cement Pipe Factory, (2004) 2 SCC 473 and
examined the questions of deduction of the personal living
expenses of the deceased in detail in various circumstances.
Para 27 to 32 of the report are extracted hereunder:-
“27. In Susamma Thomas, it was observed that in
the absence of evidence, it is not unusual to deduct
one-third of the gross income towards the personal
living expenses of the deceased and treat the
balance as the amount likely to have been spent on
the members of the family/dependants.
MAC APP 1148/2011 Page 9 of 14
28. In UPSRTC v. Trilok Chandra (1996) 4 SCC
362, this Court held that if the number of
dependents in the family of the deceased was
large, in the absence of specific evidence in regard
to contribution to the family, the Court may adopt
the unit method for arriving at the contribution of
the deceased to his family. By this method, two
units is allotted to each adult and one unit is
allotted to each minor, and total number of units
are determined. Then the income is divided by the
total number of units. The quotient is multiplied by
two to arrive at the personal living expenses of the
deceased. This Court gave the following
illustration:-
“15….X, male, aged about 35 years,
dies in an accident. He leaves behind
his widow and 3 minor children. His
monthly income was Rs. 3500. First,
deduct the amount spent on X every
month. The rough and ready method
hitherto adopted where no definite
evidence was forthcoming, was to
break up the family into units, taking
two units for and adult and one unit
for a minor. Thus X and his wire make
2+2=4 units and each minor one unit
i.e. 3 units in all, totaling 7 units.
Thus the share per unit works out to
Rs. 3500/7=Rs. 500 per month. It can
thus be assumed that ` 1000 was spent
on X. Since he was a working member
some provision for his transport and
out-of-pocket expenses has to be
estimated. In the present case we
estimate the out-of-pocket expense at
Rs. 250. Thus the amount spent on the
deceased X works out to Rs.1250 per
month per month leaving a balance of
MAC APP 1148/2011 Page 10 of 14
Rs.3500-1250=Rs.2250 per month.
This amount can be taken as the
monthly loss of X's dependents.”
29. In Fakeerappa v. Karnataka Cement Pipe
Factory (2004) 2 SCC473, while considering the
appropriateness of 50% deduction towards
personal and living expenses of the deceased made
by the High Court, this Court observed:-
“7. What would be the percentage
of deduction for personal expenditure
cannot be governed by any rigid rule
or formula of universal application. It
would depend upon circumstances of
each case. The deceased undisputedly
was a bachelor. Stand of the insurer
is that after marriage, the
contribution to the parents would
have been lesser and, therefore,
taking an overall view the Tribunal
and the High Court were justified in
fixing the deduction.”
In view of the special features of the case, this
Court however restricted the deduction towards
personal and living expenses to one-third of the
income.
30. Though in some cases the deduction to be
made towards personal and living expenses is
calculated on the basis of units indicated in Trilok
Chandra, the general practice is to apply
standardized 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
rd
(1/3 ) where the number of dependent family
th
members is 2 to 3, one-fourth (1/4 ) where the
MAC APP 1148/2011 Page 11 of 14
number of dependant family members is 4 to 6, and
th
one-fifth (1/5 ) where the number of dependant
family members exceed six.
31. Where the deceased was a bachelor and the
claimants are the parents, the deduction follows a
different principle. 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
dependent. In the absence of evidence to the
contrary, brothers and sisters will not be
considered as dependents, because they will either
be independent and earning, or married, or be
dependant on the father.
32. Thus even if the deceased is survived by
parents and siblings, only the mother would be
considered to be a dependant, and 50% would be
treated as the personal and living expenses of the
bachelor and 50% as the contribution to the
family. However, where family of the bachelor is
large and dependant on the income of the
deceased, as in a case where he has a widowed
mother and large number of younger non-earning
sisters or brothers, his personal and living
expenses may be restricted to one-third and
contribution to the family will be taken as two-
third.”
13. It may be seen that though it was laid down as a general
principle that normally in the case of death of a bachelor 50%
MAC APP 1148/2011 Page 12 of 14
would be treated as his personal and living expenses, however,
where the family of the bachelor is large and dependant on the
income of the deceased as in a case where he has a widowed
mother and a large number of younger non-earning brothers and
sisters, his personal living expenses should be restricted to one-
third. Thus, as per Sarla Verma (supra 1) the deduction of
personal living expenses in case of death of a bachelor dying in
an accident would vary from case to case.
14. The line of approach in Sarla Verma (supra 1) was followed in
Arun Kumar Agrawal & Anr. v. National Insurance Company
Ltd. & Ors., (2010) 9 SCC 218 and Shakti Devi v. New India
Insurance Company Ltd. & Anr., (2010) 11 SCALE 571.
15. In Shakti Devi (supra), the Supreme Court referred to Sarla
Verma (supra 1) , Susamma Thomas (supra), Trilok Chandra
(supra) and Fakeerappa (supra) and it was held that “if the
deceased was survived by parents and siblings, only the mother
would be considered to be a dependant, and 50% would be
treated as the personal and living expenses of the bachelor and
50% as the contribution to the family. However, where the
family of the bachelor is large and dependent on the income of
the deceased, as in a case where he had a widowed mother and
large number of younger non-earning sisters or brother, his
personal and living expenses may be restricted to one-third and
contribution to the family will be taken as two-third.”
MAC APP 1148/2011 Page 13 of 14
16. In the instant case, the deceased left behind his parents. It was
not the Appellants’ case that there were younger brothers and
sisters dependant on the deceased. In the circumstances, the
Tribunal rightly made deduction of 50% of the deceased’s
income towards his personal and living expenses.
17. The overall compensation of ` 6,13,500/- awarded by the
Tribunal is just and reasonable.
18. The Appeal is devoid of any merit; the same is accordingly
dismissed in limini.
19. A copy of this judgment shall be circulated to all the Officers of
Delhi Higher Judicial Services for information.
(G.P. MITTAL)
JUDGE
JANUARY 03, 2012
vk
MAC APP 1148/2011 Page 14 of 14