Full Judgment Text
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8127 OF 2002
RAMZAN KHAN & ANR. .......APPELLANT(S)
Versus
NATIONAL INSURANCE CO. LTD. .....RESPONDENT(S)
O R D E R
This 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
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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 years only.
2. The 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 five
years.
3. It 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/-
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towards loss of estate and Rs.5000/- towards funeral
expenses. Therefore, the total compensation will be
Rs.1,11,400/-.
4. Insofar 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.
5. We 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.
6. We allow this appeal in part and increase the
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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.
...........................J.
( R.V. RAVEENDRAN )
...........................J.
( LOKESHWAR SINGH PANTA )
New Delhi;
September 30, 2008.