SMT. SUNITA TOKAS & ANR. versus NEW INDIA INSURANCE CO. LTD. & ANR. on 16 August 2019

1. The present Civil Appeal has been filed to challenge the finalJudgment and Order dated 01.08.2017 passed by the High Court ofEDelhi in MAC. APP. No. 323 of 2017.

The Appellants herein have filed the present Civil Appeal forenhancement of the compensation granted by the Motor Accident ClaimsTribunal, Patiala House Courts, New Delhi (“MACT”) and the HighCourt.

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2. The factual matrix in which the present Civil Appeal arises isbriefly stated as under :–

2.1. The son of the Appellants viz. Pradeep Tokas was astudent who was a trained swimmer, and had won prizesin State-level events.

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2.2. On 11.05.2004, Pradeep Tokas was sitting on a two-wheeler as a pillion rider, while travelling on the UpperRidge Road towards Karol Bagh, New Delhi.

At 1:05 a.m., the said two-wheeler met with anaccident with a stationary Truck bearing Registration H

SMT. SUNITA TOKAS v. NEW INDIA INSURANCE CO. LTD.[INDU MALHOTRA, J.]

No. HR-51-GA-0525, which was not visible at night.The truck was standing in the middle of the road withoutany indicator lights on. The two-wheeler dashed againstthe stationary truck, and both Pradeep Tokas and thedriver died on the spot. Pradeep Tokas was 21 years oldat the time of his death.

2.3. The Appellants herein are the parents of the deceased,who filed the Claim Petition before the MACT, PatialaHouse Courts, New Delhi claiming compensation on thedeath of their son.

2.4. The MACT vide Award dated 25.05.2009 grantedcompensation of Rs. 14,87,140/- along with interest@7% p.a. to the Appellant -Claimants.

The compensation was awarded under the followingheads :–

(i) The notional income of the deceased wasassessed @Rs. 16,246/- p.m. after adding FutureProspects @50%;

(ii) Deduction of 50% towards personal expenseswas made from the notional income of thedeceased, since he was a bachelor;

(iii) The MACT applied the Multiplier of 15 on thebasis of the age of the mother of the deceased;(iv)Rs. 25,000/- was awarded towards loss of loveand affection;

(v) Rs. 10,000/- was awarded towards loss ofestate and consortium;

(vi) Rs. 5,000/- was awarded towards funeralexpenses.

2.5. Aggrieved by the aforesaid Award, the Appellants filedMAC. APP. 323 of 2017 before the Delhi High Courtfor enhancement of compensation.

The Respondent – Insurance Company also filed across-Appeal for reduction of compensation.

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The High Court vide the impugned common Judgmentand Order dated 01.08.2017 dismissed the Appeal filedby the Appellant – Claimants, and allowed the Appealfiled by the Respondent – Insurance Company in part.

The High Court reduced the amount of compensationawarded by the MACT to Rs. 9,25,000/-. The HighCourt awarded the following amounts under variousheads :

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(i) The notional income of the deceased wasassessed @Rs. 7,500/- p.m.; C

(ii) Deduction of 50% was made from the notionalincome of the deceased towards personalexpenses, since the deceased was a bachelor;

(iii) Multiplier of 15 was applied on the basis of theage of the mother of the deceased; D

(iv) Rs. 2,00,000/- was awarded towards loss of loveand affection;

(v) Rs. 50,000/- was awarded towards loss ofestate and funeral expenses.

E3. Aggrieved by the aforesaid Judgment, the Appellant – Claimantshave filed the present Civil Appeal for enhancement of the compensationawarded.

We have heard the learned Counsel for the Appellants and theRespondent – Insurance Company.

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3.1. The Counsel for the Appellants inter alia submitted thatthe MACT and the High Court had erroneously appliedthe wrong Multiplier of 15, on the basis of the age of themother of the deceased.

It was submitted that the Multiplier of 18 ought to havebeen applied on the basis of the age of the deceased, asper the table set out in the judgment of this Court inSarla Verma & Ors. v. Delhi Transport Corporation& Anr.[1]

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3.2. It was further submitted that the High Court erred inAfixing the notional income of the deceased @7,500/- p.m.,and did not award Future Prospects.

3.3. On the other hand, the Counsel for the InsuranceCompany inter alia submitted that the Courts belowwere justified in applying the Multiplier of 15 as per theBage of the mother of the deceased, and not the age ofthe deceased who was a bachelor. Reliance was placedon the decision in New India Assurance Co. Ltd. v.Shanti Pathak & Ors.[2]

4. We have perused the judgments of the Courts below, and findthat the Multiplier has been fixed on the basis of the age of the mother ofthe deceased boy.

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The issue with respect to whether the Multiplier to be applied inthe case of a bachelor, should be computed on the basis of the age of thedeceased, or the age of the mother, is no longer res integra. There area catena of judgments rendered by this Court, wherein it has been heldthat the Multiplier has to be applied on the basis on the age of the deceased,and not on the basis of the age of the dependants.

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4.1. In Sarla Verma (supra), this Court held that :

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“19. … Having regard to the age of the deceasedand period of active career, the appropriate multipliershould be selected. This does not mean ascertainingthe number of years he would have lived or workedbut for the accident. Having regard to severalimponderables in life and economic factors, a tableof multipliers with reference to the age has beenidentified by this Court. The multiplier should bechosen from the said table with reference to the ageof the deceased.”

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4.2. In Reshma Kumari & Ors. v. Madan Mohan & Ors.,[3]a three judge bench of this Court held that :

2 (2007) 10 SCC 1.

3 (2013) 9 SCC 65.

622SUPREME COURT REPORTS

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A“36. In Sarla Verma, this Court has endeavoured tosimplify the otherwise complex exercise of assessmentof loss of dependancy and determination ofcompensation in a claim made under Section 166. Ithas been rightly stated in Sarla Verma 2009 (6) SCC121 that claimants in case of death claim for theBpurposes of compensation must establish (a) age ofthe deceased; (b) income of the deceased; and (c)the number of dependants. To arrive at the loss ofdependency, the Tribunal must consider (i) additions/deductions to be made for arriving at the income;C(ii) the deductions to be made towards the personalliving expenses of the deceased; and (iii) themultiplier to be applied with reference to the age ofthe deceased. We do not think it is necessary for usto revisit the law on the point as we are in fullagreement with the view in Sarla Verma 2009 (6) SCCD121.”

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4.3. In Amrit Bhanu Shali & Ors. v. National InsuranceCo. Ltd. & Ors.,[4] this Court held that the selection ofEmultiplier is based on the age of the deceased, and noton the basis of the age of the dependants. There may bea number of dependants of the deceased, whose ageswould vary. Therefore, the age of the dependants wouldhave no nexus with the computation of compensation.

F4.4.Another three judge bench of this Court in Munna LalJain & Ors. v. Vipin Kumar Sharma & Ors.,[5] discussedthe issue as to whether the multiplier should depend onthe age of the dependants, or that of the deceased. ThisCourt held that the issue had been decided in ReshmaKumari (supra), wherein it was held that the multiplierGto be used, must be with reference to the age of thedeceased. The Court cited para 36 of the judgment inReshma Kumari (supra), and held that :

4 (2012) 11 SCC 738.H5 (2015) 6 SCC 347.

SMT. SUNITA TOKAS v. NEW INDIA INSURANCE CO. LTD.[INDU MALHOTRA, J.]

“11. The remaining question is only on multiplier.The High Court following Santosh Devi (supra), hastaken 13 as the multiplier. Whether the multipliershould depend on the age of the dependants or thatof the deceased, has been hanging fire for sometime;but that has been given a quietus by another three-Judge Bench decision in Reshma Kumari (supra). Itwas held that the multiplier is to be used withreference to the age of the deceased. One reasonappears to be that there is certainty with regard tothe age of the deceased but as far as that ofdependants is concerned, there will always be roomfor dispute as to whether the age of the eldest oryoungest or even the average, etc., is to be taken.”

4.5. The decision in Munna Lal Jain (supra) was followedby another three judge bench of this Court in Sube Singh& Ors. v. Shyam Singh (dead) & Ors.[6]

4.6. The Constitution Bench in National InsuranceCompany Limited v. Pranay Sethi & Ors.,[7] affirmedthe view taken in Sarla Verma (supra) and ReshmaKumari (supra), and recorded in the conclusions asunder :

“59.7. The age of the deceased should be the basisfor applying the multiplier.”

4.7. Recently the legal issue whether in case of a motoraccident of a bachelor, the age of the deceased, or theage of the dependants, would be taken into account, forcalculating the multiplier, came up for considerationbefore a three judge bench of this Court in RoyalSundaram Alliance Insurance Co. Ltd. v. MandalaYadagari Goud & Ors.[8]

The Court referred to the earlier three judge benchdecision rendered in Munna Lal Jain (supra), which in 6 (2018) 3 SCC 18.

7 (2017) 16 SCC 680.

8 (2019) 5 SCC 554

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turn relied upon the judgment in Sarla Verma (supra),which has been affirmed by the Constitution Bench inPranay Sethi (supra). The Court also referred to thethree judge bench decision in Sube Singh (supra).

The Court after perusing all earlier judgments,observed that the judicial pronouncements had deviseda standard formula for calculation of the compensationqua various components. The amount of compensationis to be paid to the claimants who are dependants in theevent of the death of a person, based on what thedeceased would have contributed to their support. Theamount received by the dependants becomes a part ofthe estate, as they may live longer, or may be youngerthan the age limits taken into account for calculation ofthe multiplier to be applied in such a situation. In thecase of the death of a married person, it is an acceptednorm that the age of the deceased would be taken intoaccount. The Court held that even in the case of abachelor, the same principle must be applied. The Courtheld that once the law is settled, it should not repeatedlybe changed, since certainty of law is of crucialimportance, to avoid any confusion.

4.8. In the present case, since the deceased was 21 yearsold, the Multiplier of 18 was applicable as per the tableset out in the Sarla Verma case.

4.9. The High Court erred in reducing the notional incomeof the deceased from Rs. 16,246/- as awarded by theMACT, and reduced it to Rs. 7,500/.

The deceased was a trained swimmer who had wonseveral State-level competitions. His mother runs aSwimming/Gym Centre at Air Force Station (CentralSchool), Gurgaon. Therefore, the deceased certainly hadthe potential to earn a living by utilizing his skills. In suchcircumstances, we deem it appropriate to fix the notionalincome of the deceased @Rs. 12,000/- p.m.

4.10. The Courts below failed to grant Future Prospects@40% of the notional income of the deceased, as per the judgment of the Constitution Bench in Pranay Sethi(supra).

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4.11. The amounts awarded by the High Court under theheads of loss of love and affection, loss of estate, funeralexpenses, and the Interest awarded by the MACT, arehowever, maintained.

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5. In light of the aforesaid discussion, the compensation awardedto the Appellants is being enhanced as follows :

i)Income :Rs. 12,000/-ii)Future Prospects :Rs. 4,800/-(i.e. 40% of the income)Ciii) Deduction towards personal expenses :50%iv) Total income :Rs. 8,400/-(i.e. 50% of 12,000 + 4,800)v) Multiplier :18vi) Loss of future income : Rs. 18,14,400/-D(i.e. 8,400 x 12 x 18)vii) Loss of love and affection :Rs. 2,00,000/-viii) Loss of estate and funeral expenses :Rs. 50,000/-Total :Rs. 20,64,400/-Enhanced amount : Rs. 11,39,400/-(i.e. 20,64,400 – 9,25,000)E

6. The Respondent – Insurance Company is directed to pay theenhanced amount of Rs. 11,39,400/- to the Appellants within 1 monthfrom the date of this judgment.

The enhanced amount shall carry Simple Interest @7% p.a. fromthe date of filing the Claim Petition till the date of realization.

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The Civil Appeal is allowed in the aforesaid terms. All pendingApplications, if any, are accordingly disposed of.

Ordered accordingly.

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Devika Gujral

Appeal allowed.

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