NATIONAL INSURANCE COMPANY LTD. versus MANNAT JOHAL & ORS. ETC. ETC. on 23 April 2019

[2019] 6 S.C.R. 683

NATIONAL INSURANCE COMPANY LTD.

v.

MANNAT JOHAL & ORS. ETC. ETC.

(Civil Appeal Nos.. 4079-4081 of 2019)

APRIL 23, 2019

[ABHAY MANOHAR SAPRE AND

DINESH MAHESHWARI, JJ.]

Motor Vehicles Act, 1988 – Offending vehicle, an oil tankerrammed into the car driven by one ‘RSJ’, with his wife and childrenalso in it, while coming from the opposite direction – ‘RSJ’ died –Claims filed by the parents of the deceased and wife and minorchildren of the deceased stating that the he was 38 yrs of age,working as General Manager (Marketing) with a Company, wasdrawing gross annual salary of Rs. 3,21,801.60 with perks justprior to the accident; and was due to be promoted as the AssociateVice President – Tribunal awarded Rs.37,71,000/- as compensationto the claimants inter alia with interest @ 12% p.a. – High Courtenhanced the compensation to Rs.47,95,000/- and rounded it up toRs. 48,00,000/- with interest @7.5% p.a. – On appeal, held: Awardmade by the Tribunal suffered from few fundamental errors andshortcomings as regards the assessment of multiplicand – Tribunal,instead of taking the last drawn emoluments of the deceased, choseto proceed on his enhanced projected emoluments after the expectedpromotion and pay revision but, did not provide for further futureprospects – Assessment made by the Tribunal not in conformity withthe principles in Pranay Sethi case – Assessment made by the HighCourt stands more or less in conformity with the principlesenunciated in Pranay Sethi case – Only doubtful area is that theHigh Court enhanced future prospects only at 40% on the last drawnemoluments of the deceased and not at 50% though he was shownto be in a settled employment with future chances of promotion asalso pay revision – However, on facts no modification made in theamount awarded by the High Court – Pecuniary loss assessed bythe High Court is reasonable and does not call for any interference– High Court modified the interest component at reasonable rate of7.5% p.a. – No reason to allow the interest at any rate higher than

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Athat – Amount ultimately receivable by the claimants in terms of thejudgment of the High Court remains that of just compensation – Nocase for interference made out.

Compensation – Ex-gratia amount received by the claimantsfrom employer of the deceased – If to be deducted from theBcompensation received by claimants – Plea of insurer relying onShashi Sharma case that the said ex-gratia amount so received by theclaimants be deducted from the compensation granted by the HighCourt – Held: Decision in Shashi Sharma would not apply to thefacts of the present case – No deduction in the amount awarded bythe High Court.C

Compensation – Vehicular accident – Assessment ofcompensation – Factors for – Discussed.

Dismissing the appeals, the Court

HELD: 1.1 The modified award made by the High Court inDthis case remains that of just compensation and no case forinterference is made out in either of these appeals. While dealingwith the question of quantification in a claim for compensationunder the Motor Vehicles Act, 1988, the endeavor has tobe to ensure awarding of just compensation to the claimant/s.E[Paras 7, 8][692-C-D]

Conclusion

1.2 In a case like the present one, relating to the death ofthe vehicular accident victim, any process of awarding “just”compensation involves assessment of such amount of pecuniaryloss which could be reasonably taken as the loss of dependencysuffered by the claimants due to the demise of the victim. In otherFwords, such a process, by its very nature, involves the assessmentof monetary contribution that the claimants were likely to receivefrom the deceased had he not met with the untimely end due tothe accident. For the purpose of such an assessment, while someof the basic facts, like the age, job and income of the deceasedGand the number of dependents with extent of their dependency,could be reasonably ascertained from the evidence on record,yet, several uncertain factors also, per force, come into play, likethe future prospects of the deceased coupled with variousimponderables related with a human life. As the process, by its H

very nature, involves a substantial deal of guess-work, this Court,over the years, has evolved and applied several principles so asto ensure that as far as possible, the methods for assessmentremain uniform, curbing against disparity in the amount ofcompensation to be awarded in similarly circumstanced cases.[Para 9][693-B-E]

1.3 The award made by the Tribunal suffered from a fewfundamental errors and shortcomings as regards the assessmentof multiplicand. The Tribunal, instead of taking the last drawnemoluments of the deceased, chose to proceed on his enhancedprojected emoluments after the expected promotion and payrevision. However, thereafter, the Tribunal did not provide forany further future prospects. The Tribunal also did not make anydeduction towards the tax component. Moreover, the Tribunaldeducted one-third towards personal expenses of the deceasedthough he had had five dependents. Then, the Tribunal appliedthe multiplier of 16. Apparently, the assessment made by theTribunal could not have been countenanced, for being not inconformity with the principles in Pranay Sethi case. The HighCourt, on the other hand, took the figure of the last drawnemoluments of the deceased and made the deduction towardsincome-tax. Thereafter, the High Court provided for futureprospects at 40% and made the deduction of one-fourth towardspersonal expenses. In this manner, the High Court arrived atthe figure of multiplicand at Rs. 3,15,000/-. On this multiplicand,the High Court applied the multiplier of 15 in view of the age ofdeceased at 38 years and hence, worked out the pecuniary lossat Rs. 47,25,000/-. The High Court further awarded Rs. 40,000/-towards loss of consortium, Rs. 15,000/- towards funeralexpenses, and Rs. 15,000/- towards loss to estate; and finallyassessed the total compensation at Rs, 47,95,000/-, rounded upto Rs. 48,00,000/-. [Paras 10, 11][695-H; 696-A-E]

1.4 The assessment so made by the High Court standsmore or less in conformity with the principles enunciated inPranay Sethi. The only doubtful area is that the High Courtprovided for enhancement towards future prospects only at 40%on the last drawn emoluments of the deceased and not at 50%though he was shown to be in a settled employment with future A

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Achances of promotion as also pay revision. However, on the factsand in the circumstances of the present case, any modification inthe amount awarded by the High Court is not considered for avariety of factors. [Para 11.1][696-F-G]

1.5 An amount of Rs.3,21,801/- was paid by the employerBto the claimants, being one year’s gross salary of the deceased.In Shashi Sharma’s case, a three-Judge Bench of Supreme Courtwas dealing with the payment received by the legal heirs of thedeceased in terms of Rule 5 of the Haryana CompassionateAssistance to the Dependents of Deceased GovernmentEmployees Rules, 2006 (‘Rules of 2006’) whereunder, on theCdeath of a government employee, the family would continue toreceive as financial assistance a sum equal to the pay and otherallowances that was last drawn by the deceased employee forperiods specified in the Rules and after the said period, the familywould be entitled to receive family pension. The family wouldDalso be entitled to retain the government accommodation for aperiod of one year in addition to payment of Rs. 25,000/- as exgratia. Decision in Shashi Sharma has been explained anddistinguished by another three-Judge Bench of Supreme Courtin Sebastiani Lakra. [Paras 12, 12.1][696-G-H; 697-A-D]

E1.6 In the present case too, it has not been shown if the exgratia amount received by the claimants had been under any Rulesof service and would be of continuous assistance,as had been thecase in Shashi Sharma. No deduction in the amount awarded bythe High Court appears necessary. The Tribunal had awardedinterest at the rate of 12% p.a. but the same had been too high aFrate in comparison to what is ordinarily envisaged in these matters.The High Court, after making a substantial enhancement in theaward amount, modified the interest component at a reasonablerate of 7.5% p.a. and no reason is found to allow the interest inthis matter at any rate higher than that allowed by High Court.GThe amount ultimately receivable by the claimants in terms ofthe judgment of the High Court remains that of just compensationand no case for interference is made out. [Paras 12.2, 13 &14][699-C-D; F-H; 700-A]

National Insurance Company Ltd. v. Pranay Sethi &Ors. 2017 ACJ 2700 (SC) - followed.

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Reliance General Insurance Company Ltd. v. ShashiSharma & Ors. 2016 ACJ 2723 (SC) – held inapplicable.

Sarla Verma and Ors. v. Delhi Transport Corporationand Anr. 2009 ACJ 1298 (SC) ; Sebastiani Lakra &Ors. v. National Insurance Company Ltd. & Ors. 2019ACJ 34 (SC) – referred to.

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Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4079-4081 of 2019.

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From the Judgment and Order dated 06.07.2018 of the HighCourt of Punjab and Haryana at Chandigarh in FAO Nos. 1136, 1434and 1435 of 2000.

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With

Civil Appeal Nos. 4082-4083 of 2019.

Abhishek Kumar, Sudhir Naagar, Arun Nagar, Ms. Tanuj Bagga,Advs. for the appearing parties..

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The Judgment of the Court was delivered by DINESH MAHESHWARI, J.

1. The application for substitution of legal representatives in thepetition filed on behalf of the claimants is allowed; the named legalrepresentative shall stand substituted in the both the petitions. Delaycondoned in the petition filed on behalf of the claimants.

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1.1. Leave granted in the both the petitions.

2. These cross-appeals relating to the vehicular accidentcompensation claims, respectively by the insurer of the offending vehicle H

Aand by the claimants, are directed against the common judgment andorder dated 06.07.2018, as passed in FAO No. 1136 of 2000 (O & M)and connected matters, whereby the High Court of Punjab and Haryanahas allowed the appeal for enhancement of compensation filed by theclaimants and has modified the common award dated 27.01.2000 asmade by the Motor Accident Claims Tribunal, Chandigarh in MACTBCase Nos. 80 of 1996 and 84 of 1996 that were filed respectively by theparents and by the wife and children of the deceased Shri Rajpal SinghJohal.

3. In the impugned judgment and order dated 06.07.2018, the HighCourt has made upward revision of the amount of compensation awardedCby the Tribunal and, in place of the amount of Rs. 37,71,000/- togetherwith interest @ 12% p.a. as awarded by the Tribunal, the High Courthas awarded a sum of Rs. 48,00,000/- together with interest @ 7.5%p.a. from the date of filing of the claim petition till the date of realisation.The High Court has allowed this enhancement essentially with referenceDto the principles enunciated by this Court in National InsuranceCompany Ltd. v. Pranay Sethi & Ors.: 2017 ACJ 2700 (SC) and inSarla Verma and Ors. v. Delhi Transport Corporation and Anr.:2009 ACJ 1298 (SC).

4. In these appeals, on one hand, the insurer of the offendingEvehicle has questioned the quantum of compensation so awarded,basically on the ground that while making assessment of pecuniary loss,the ex gratia amount received by the claimants from the employer of thedeceased deserves to be deducted while, on the other hand, the claimantshave questioned the reduction of the rate of interest by the High Court.

F4.1. Therefore, the basic question for consideration in these appealsis as to whether the amount of compensation as awarded by the HighCourt is that of just compensation or the same calls for any modification?5. The background aspects of the matter, so far relevant for thequestion at hand, may be noticed, in brief, as follows:G5.1. The vehicular accident in question occurred on 30.12.1995, G5.1. The vehicular accident in question occurred on 30.12.1995,at about 1 p.m., near the police out post Bagari (Assam), when thedeceased Shri Rajpal Singh Johal was driving a car, taking his wife andchildren along, from Kaziranga to Guwahati. The offending vehicle, beingan oil tanker bearing registration No. AS-01-9526, rammed into the cardriven by the deceased while coming from the opposite direction. TheH

deceased succumbed to the injuries sustained in this accident while hiswife was also injured and their two children suffered severe shock.

5.2. On account of demise of the victim Shri Rajpal Singh Johaldue to the injuries sustained in the accident aforesaid, two claimapplications came to be made before the Motor Accident Claims Tribunal,Chandigarh: one on 14.05.1996 by the parents of deceased, being MACTCase No. 80 of 1996; and another on 22.05.1996 by the wife and minorchildren of the deceased, being MACT Case No. 84 of 1996. The sumand substance of the allegations in claim applications had been that thedeceased met with his untimely end for the accident in question thatoccurred due to rash and negligent driving of the oil tanker in question. Itwas asserted that the deceased was 38 years of age; was working asGeneral Manager (Marketing) with Punjab Wireless System Limited,Mohali; was drawing gross annual salary of Rs. 3,21,801.60 with perksjust prior to the accident; and he was due to be promoted as the AssociateVice President in January 1996 whereby, his annual salary would havebeen enhanced to Rs. 3,50,000/-. While asserting their dependency onthe deceased, the claimants i.e., the parents, wife and children of thedeceased claimed compensation against the driver, owner and insurer ofthe offending vehicle. The cause of action being the same, these twoclaim petitions were consolidated, and were tried and decided togetherby way of the common award dated 27.01.2000.

5.3. Before the Tribunal, driver of the offending vehicle remainedex parte while its owner denied any negligence on part of the driver andrather alleged that the accident occured due to rash and negligent drivingby the deceased. On the other hand, insurer of the offending vehicledenied the factum of the accident and also alleged that the driver of theoffending vehicle did not possess a valid driving license.

5.4. On the pleadings, the Tribunal framed as many as 9 issues.After taking evidence, the Tribunal proceeded to determine the relevantissues in its impugned award dated 27.01.2000. The Tribunal decidedthe basic issues relating to the factum of accident and the responsibilityfor the same against the non-applicants while holding that the accidentin question occurred due to rash and negligent driving of the offendingoil tanker. The Tribunal also held that the wife and children of the deceasedwere dependent on him and further that the parents were marginallydependent on him.

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A5.5. On the question of quantification of compensation, the Tribunaltook note of the evidence led by the claimants as regards emoluments ofthe deceased as on 01.12.1995; the fact that his colleagues were promotedas Associate Vice President in the year 1995; that he too had theprospects of such promotion; and that emoluments of the Associate VicePresident were revised with effect from the month of December 1996.BTherefore, the Tribunal considered it just and reasonable to assess theincome of the deceased at Rs. 3,51,000/- p.a., as per the revisedemoluments for the post of Associate Vice President in the employercompany. Then, the Tribunal proceeded to deduct one-third towardspersonal expenses of the deceased and in this manner, took the annualCloss of dependency at Rs. 2,34,000/- and, after applying the multiplier of16, assessed the pecuniary loss of the claimants at Rs. 37,44,000/-. TheTribunal further awarded Rs. 25,000/- towards transportation of dead-body and Rs. 2,000/- towards other expenses and thus, finally awardeda sum of Rs. 37,71,000/- to the claimants. The Tribunal also allowedinterest at the rate of 12% p.a. from the date of filing of claim applicationDNo. 80 of 1996. The Tribunal allowed a sum of Rs. 1,00,000/- each tothe mother and father of the deceased while observing that they werein the age group of 78 years and were only marginally dependent on thedeceased; and apportioned the remaining amount amongst the wife andchildren of the deceased.E

5.6. Against the award so made by the Tribunal, the claimants inMACT Case No. 84 of 1996 preferred an appeal before the High Courtof Punjab and Haryana, seeking enhancement of the amount ofcompensation, while the insurance company preferred two separateappeals questioning the findings in the award and seeking reduction ofFthe amount of compensation.

5.7. The High Court, in its impugned judgment dated 06.07.2018,in the first place rejected the contentions urged on behalf of the insureras regards the factum and cause of accident and affirmed the findingsof the Tribunal. As regards quantum of compensation, the High CourtGproceeded to make enhancement over the amount awarded by theTribunal with reference to the decisions in Pranay Sethi and SarlaVerma (supra). The High Court did not accept the basis of assessmentof loss of income with reference to the likely enhanced emoluments ofdeceased on his expected promotion and subsequent revision of pay-scale in the year 1996. The High Court, therefore, took the base annualH

emoluments at Rs. 3,21,801.60 and, while deducting Rs. 20,000/- towardsincome-tax, rounded off the figure to Rs. 3,00,000/-. The High Court,thereafter, provided for enhancement of 40% towards future prospectsand then, looking to five number of dependents, deducted one-fourthtowards personal expenses of the deceased. In this manner, the HighCourt arrived at the multiplicand of Rs. 3,15,000/- and, while applyingthe multiplier of 15 in view of the age of the deceased at 38 years,worked out the pecuniary loss at Rs. 47,25,000/-. The High Court furtherawarded Rs. 40,000/- towards loss of consortium, Rs. 15,000/- towardsfuneral expenses and Rs. 15,000/- towards loss to estate. Accordingly,the High Court assessed the total compensation at Rs, 47,95,000/- androunded it up to Rs. 48,00,000/-. The High Court, however, allowedinterest at the rate of 7.5% p.a., while holding that the respondents relatedwith the offending vehicle were liable to make payment of compensation.As regards apportionment, the High Court allowed a sum of Rs.26,00,000/- to the wife of the deceased; Rs. 8,00,000/- to the son of thedeceased; Rs. 10,00,000/- to the daughter of the deceased; and Rs.2,00,000/- each to the mother and father of the deceased.

6. Assailing the impugned judgment of the High Court, learnedcounsel for the insurer has strenuously argued that the High Court haserred in not considering and applying the principles enunciated in RelianceGeneral Insurance Company Ltd. v. Shashi Sharma & Ors.: 2016ACJ 2723 (SC) and in not deducting the ex gratia amount received bythe claimants from the employer of the deceased. Learned counsel hasalso attempted to argue that the High Court has taken into considerationcertain payments like conveyance allowance, performance linked specialpay and company lease accommodation while making the calculation oftotal annual gross salary, though such allowances ought to have beendeducted. Per contra, learned counsel for the claimants would submitthat a clear case for enhancement over the modified award of the HighCourt is made out, particularly when the High Court reduced the annualincome figure of the deceased from Rs. 3,51,000/- to Rs. 3,21,801.60and further slashed it to Rs. 3,00,000/- and then, reduced the rate ofinterest at 7.5% p.a. as against the rate allowed by the Tribunal at 12%p.a. According to the learned counsel, the rate of interest as allowed bythe Tribunal was in conformity with the lending rates at the time ofaccident in the year 1995 and should not have been reduced. The learnedcounsel has also argued that a few components of allowances and benefits AB

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Aas taken into consideration for assessment of the annual income hadbeen the part of composite pay packet of the deceased and the claimantswere also the beneficiaries of such allowances while being dependenton the deceased. The learned counsel for the claimant has also counteredthe submissions as regards the ex gratia payment made by the employerwith the contentions that such an amount is not required to be deductedBfrom the total compensation, while relying on the decision in SebastianiLakra & Ors. v. National Insurance Company Ltd. & Ors. : 2019ACJ 34 (SC).

7. Having given anxious consideration to the rival submissionsand having examined the record, we are clearly of the view that theCmodified award made by the High Court in this case remains that of justcompensation and no case for interference is made out in either of theseappeals.

8. It remains trite, and need not be over-emphasised, that whiledealing with the question of quantification in a claim for compensationDunder the Motor Vehicles Act, 1988 (‘the Act of 1988’), the endeavorhas to be to ensure awarding of just compensation to the claimant/s. InShashi Sharma (supra), this Court reiterated on the basics regardingmeaning of the expression “just” in the context of the Act of 1988 in thefollowing:-E

“17. ........ the term “compensation” has not been defined inthe 1988 Act. By interpretative process, it has been understoodto mean to recompense the claimants for the possible losssuffered or likely to be suffered due to sudden and untimelydeath of their family member as a result of motor accident.FTwo cardinal principles run through the provisions of theMotor Vehicles Act of 1988 in the matter of determination ofcompensation. Firstly, the measure of compensation must bejust and adequate; and secondly, no double benefit shouldbe passed on to the claimants in the matter of award ofcompensation. Section 168 of the 1988 Act makes the firstGprinciple explicit. Sub-section (1) of that provision makes itclear that the amount of compensation must be just. The word“just” means—fair, adequate, and reasonable. It has beenderived from the Latin word “justus”, connoting right andfair. In para 7 of State of Haryana v. Jasbir Kaur, it has beenheld that the expression “just” denotes that the amount must H

be equitable, fair, reasonable and not arbitrary. In para 16of Sarla Verma v. DTC, this Court has observed that thecompensation “is not intended to be a bonanza, largesse orsource of profit”. That, however, may depend upon the factsand circumstances of each case, as to what amount would bea just compensation.”

9. In a case like the present one, relating to the death of thevehicular accident victim, any process of awarding “just” compensationinvolves assessment of such amount of pecuniary loss which could bereasonably taken as the loss of dependency suffered by the claimantsdue to the demise of the victim. In other words, such a process, by itsvery nature, involves the assessment of monetary contribution that theclaimants were likely to receive from the deceased had he not met withthe untimely end due to the accident. For the purpose of such anassessment, while some of the basic facts, like the age, job and incomeof the deceased and the number of dependents with extent of theirdependency, could be reasonably ascertained from the evidence onrecord, yet, several uncertain factors also, per force, come into play,like the future prospects of the deceased coupled with variousimponderables related with a human life. As the process, by its verynature, involves a substantial deal of guess-work, this Court, over theyears, has evolved and applied several principles so as to ensure that asfar as possible, the methods for assessment remain uniform, curbingagainst disparity in the amount of compensation to be awarded in similarlycircumstanced cases. It is not necessary for the present purpose totraverse through the large number of past decisions, particularly for thereason that the basic parameters stand explained and standardised withthe larger Bench decision in Pranay Sethi (supra), wherein this Courthas partly modulated the parameters enunciated in the two-Judge Benchdecision in Sarla Verma (supra), and has laid down the principles asfollows:- “59.3. While determining the income, an addition of 50%of actual salary to the income of the deceased towards futureprospects, where the deceased had a permanent job and wasbelow the age of 40 years, should be made. The additionshould be 30%, if the age of the deceased was between 40 to50 years. In case the deceased was between the age of 50 to60 years, the addition should be 15%. Actual salary shouldbe read as actual salary less tax.

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A59.4. In case the deceased was self-employed or on a fixedsalary, an addition of 40% of the established income shouldbe the warrant where the deceased was below the age of 40years. An addition of 25% where the deceased was betweenthe age of 40 to 50 years and 10% where the deceased wasbetween the age of 50 to 60 years should be regarded as theBnecessary method of computation. The established incomemeans the income minus the tax component.

59.5. For determination of the multiplicand, the deductionfor personal and living expenses, the tribunals and the courtsshall be guided by paras 30 to 32 of Sarla Verma which wehave reproduced hereinbefore.

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59.6. The selection of multiplier shall be as indicated inthe Table in Sarla Vermaread with para 42 of that judgment.

59.7. The age of the deceased should be the basis forapplying the multiplier.

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59.8. Reasonable figures on conventional heads, namely,loss of estate, loss of consortium and funeral expenses shouldbe Rs 15,000, Rs 40,000 and Rs 15,000 respectively. Theaforesaid amounts should be enhanced at the rate of 10% inevery three years.”

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9.1. For completion of the principles above-quoted, appropriatewould it to be to take note of paragraphs 30 to 32 as also paragraph 42in Sarla Verma (supra) which read as under:- “30. Though in some cases the deduction to be madetowards personal and living expenses is calculated on thebasis of units indicated in Trilok Chandra, the general practiceis to apply standardised deductions. Having consideredseveral subsequent decisions of this Court, we are of the viewthat where the deceased was married, the deduction towardspersonal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family membersis 2 to 3, one-fourth (1/4th) where the number of dependentfamily members is 4 to 6, and one-fifth (1/5th) where thenumber of dependent family members exceeds six.

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31. Where the deceased was a bachelor and the claimantsare the parents, the deduction follows a different principle.In regard to bachelors, normally, 50% is deducted as personaland living expenses, because it is assumed that a bachelorwould tend to spend more on himself. Even otherwise, there isalso the possibility of his getting married in a short time, inwhich event the contribution to the parent(s) and siblings islikely to be cut drastically. Further, subject to evidence to thecontrary, the father is likely to have his own income and willnot be considered as a dependant and the mother alone willbe considered as a dependant. In the absence of evidence tothe contrary, brothers and sisters will not be considered asdependants, because they will either be independent andearning, or married, or be dependent on the father.

32. Thus even if the deceased is survived by parents andsiblings, only the mother would be considered to be adependant, and 50% would be treated as the personal andliving expenses of the bachelor and 50% as the contributionto the family. However, where the family of the bachelor islarge and dependent on the income of the deceased, as in acase where he has a widowed mother and large number ofyounger non-earning sisters or brothers, his personal andliving expenses may be restricted to one-third and contributionto the family will be taken as two-third.

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42. We therefore hold that the multiplier to be used shouldbe as mentioned in Column (4) of the Table, which starts withan operative multiplier of 18 (for the age groups of 15 to 20and 21 to 25 years), reduced by one unit for every five years,that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for46 to 50 years, then reduced by two units for every five years,that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7for 61 to 65 years and M-5 for 66 to 70 years.”

10. Applying the principles aforesaid to the present case, we findthat the award made by the Tribunal suffered from a few fundamental AB

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Aerrors and shortcomings as regards the assessment of multiplicand. TheTribunal, instead of taking the last drawn emoluments of the deceased,chose to proceed on his enhanced projected emoluments after theexpected promotion and pay revision. However, thereafter, the Tribunaldid not provide for any further future prospects. The Tribunal also didnot make any deduction towards the tax component. Moreover, theBTribunal deducted one-third towards personal expenses of the deceasedthough he had had five dependents. Then, the Tribunal applied themultiplier of 16. Apparently, the assessment made by the Tribunal couldnot have been countenanced, for being not in conformity with the principlesin Pranay Sethi (supra).

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11. The High Court, on the other hand, took the figure of the lastdrawn emoluments of the deceased and made the deduction towardsincome-tax. Thereafter, the High Court provided for future prospects at40% and made the deduction of one-fourth towards personal expenses.In this manner, the High Court arrived at the figure of multiplicand at Rs.D3,15,000/-. On this multiplicand, the High Court applied the multiplier of15 in view of the age of deceased at 38 years and hence, worked out thepecuniary loss at Rs. 47,25,000/-. As noticed, the High Court furtherawarded Rs. 40,000/- towards loss of consortium, Rs. 15,000/- towardsfuneral expenses, and Rs. 15,000/- towards loss to estate; and finallyassessed the total compensation at Rs, 47,95,000/-, rounded up to Rs.E48,00,000/-.

11.1. The assessment so made by the High Court stands more orless in conformity with the principles enunciated in Pranay Sethi (supra).The only doubtful area is that the High Court provided for enhancementtowards future prospects only at 40% on the last drawn emoluments ofFthe deceased and not at 50% though he was shown to be in a settledemployment with future chances of promotion as also pay revision.However, on the facts and in the circumstances of the present case, weare not considering any modification in the amount awarded by the HighCourt for a variety of factors, as indicated infra.

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12. Taking up the question of ex gratia payment received by theclaimants from the employer of the deceased, it is noticed that an amountof Rs. 3,21,801/- was paid by the employer to the claimants, being oneyear’s gross salary of the deceased. While relying on the decision inShashi Sharma, it is contended on behalf of the insurer that the ex H

gratia amount so received by the claimants is required to be deducted.Noticeable it is that in Shashi Sharma’s case, a three-Judge Bench ofthis Court was dealing with the payment received by the legal heirs ofthe deceased in terms of Rule 5 of the Haryana CompassionateAssistance to the Dependents of Deceased Government EmployeesRules, 2006 (‘Rules of 2006’) whereunder, on the death of a governmentemployee, the family would continue to receive as financial assistance asum equal to the pay and other allowances that was last drawn by thedeceased employee for periods specified in the Rules and after the saidperiod, the family would be entitled to receive family pension. The familywould also be entitled to retain the government accommodation for aperiod of one year in addition to payment of Rs. 25,000/- as ex gratia[1].

12.1. The aforesaid decision in Shashi Sharma has been explainedand distinguished by another three-Judge Bench of this Court inSebastiani Lakra (supra) in the following:- “10. In Shashi Sharma’s case, 2016 ACJ 2723 (SC), thiscourt was dealing with the payments made to the legal heirs 1 Rule 5 of the Rules of 2006 taken into consideration in Shashi Sharma’s case had beenas under:

“5. Criteria for financial assistance.—(1) On the death of any government employee,the family of the employee would continue to receive as financial assistance a sum equalto the pay and other allowances that was last drawn by the deceased employee in thenormal course without raising a specific claim—

(a) for a period of fifteen years from the date of death of the employee, if the employeeat the time of his death had not attained the age of thirty-five years; (b) for a period of twelve years or till the date the employee would have retired fromgovernment service on attaining the age of superannuation, whichever is less, if theemployee at the time of his death had attained the age of thirty-five years but had notattained the age of forty-eight years;

(c) for a period of seven years or till the date the employee would have retired fromgovernment service on attaining the age of superannuation, whichever is less, if theemployee had attained the age of forty-eight years.

(2) The family shall be eligible to receive family pension as per the normal rules onlyafter the period during which he receives the financial assistance as above is completed.

(3) The family of a deceased government employee who was in occupation of agovernment residence would continue to retain the residence on payment of normalrent/licence fee for a period of one year from the date of death of the employee.

(4) Within fifteen days from the date of death of a government employee, an ex gratiaassistance of twenty-five thousand rupees shall be provided to the family of the deceasedemployee to meet the immediate needs on the loss of the bread earner.

(5) House rent allowance shall not be a part of allowance for the purposes ofcalculation of assistance.”

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of the deceased in terms of rule 5(1) of the HaryanaCompassionate Assistance to the Dependants of DeceasedGovernment Employees Rules, 2006 (for short ‘the saidRules’). Under rule 5 of the said Rules on the death of agovernment employee, the family would continue to receiveas financial assistance a sum equal to the pay and otherallowances that was last drawn by the deceased employeefor periods set out in the Rules and after the said period thefamily was entitled to receive family pension. The family wasalso entitled to retain the Government accommodation for aperiod of one year in addition to payment of Rs. 25,000 as exgratia. In this case, the three-Judge Bench adverted to theprinciples laid down in Helen C. Rebello’s case 1999 ACJ 10(SC), followed in Patricia Jean Mahajan’s case 2002 ACJ1441 (SC), and came to the conclusion that the decision inVimal Kanwar’s case 2013 ACJ 1441 (SC), did not take aview contrary to Helen C. Rebello or Patricia Jean Mahajancases (supra). The following observations are relevant:

“(12) The principle expounded in this decision in HelenC. Rebello’s case that the application of general principlesunder the common law to estimate damages cannot beinvoked for computing compensation under the MotorVehicles Act. Further, the ‘pecuniary advantage’ fromwhatever source must correlate to the injury or deathcaused on account of motor accident. The view so takenis the correct analysis and interpretation of the relevantprovisions of the Motor Vehicles Act of 1939, and must

apply proprio vigore to the corresponding provisions ofthe Motor Vehicles Act, 1988. This principle has been re-stated in the subsequent decision of the two-Judge Benchin Patricia Jean Mahajan’s case, 2002 ACJ 1441 (SC), toreject the argument of the insurance company to deductthe amount receivable by the dependants of the deceasedby way of ‘social security compensation’ and ‘lifeinsurance policy’.”

However, while dealing with the scheme the court held thatapplying a harmonious approach and to determine a just compensation payable under the Motor Vehicles Act it wouldbe appropriate to exclude the amount received under the saidRules under the head of ‘pay and other allowances’ last drawnby the employee. We may note that on principle this courthas not disagreed with the proposition laid down in Helen C.Rebello or in Patricia Jean Mahajan (supra), but whilearriving at a just compensation, it had ordered the deductionof the salary received under the statutory Rules.”

12.2. In the present case too, it has not been shown if the exgratia amount received by the claimants had been under any Rules ofservice and would be of continuous assistance, as had been the case inShashi Sharma (supra) as per the Rules of 2006 considered therein. Inan overall analysis and with reference to the decision in SebastianiLakra (supra), we are clearly of the view that the decision in ShashiSharma would not apply to the facts of the present case and no deductionin the amount awarded by the High Court appears necessary.

12.3. Apart from the above, as noticed, the High Court has evenotherwise provided for enhancement towards future prospects only at40% though the deceased was in a settled job and was not self-employedor on fixed salary. If at all an assertion is made that the assistancereceived by the claimants or a part of allowances received by the deceasedneed to be taken into consideration for making certain deductions, theenhancement by way of future prospects at 50% would be effectivelysetting off any such proposed deduction. In other words, in the ultimateanalysis, the amount of pecuniary loss as assessed by the High Courtremains reasonable and cannot be said to be either exorbitant or too lowso as to call for any interference.

13. The aforesaid features equally apply to the contentions urgedon behalf of the claimants as regards the rate of interest. The Tribunalhad awarded interest at the rate of 12% p.a. but the same had been toohigh a rate in comparison to what is ordinarily envisaged in these matters.The High Court, after making a substantial enhancement in the awardamount, modified the interest component at a reasonable rate of 7.5%p.a. and we find no reason to allow the interest in this matter at any ratehigher than that allowed by High Court.

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700SUPREME COURT REPORTS

[2019] 6 S.C.R.

A14. The upshot of the discussion aforesaid is that in our view, theamount ultimately receivable by the claimants in terms of the judgmentof the High Court remains that of just compensation and no case forinterference is made out.

15. Accordingly, both these appeals fail, and are dismissed.

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Divya Pandey

Appeals dismissed.

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