N. JAYASREE & ORS. versus CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LTD. on 25 October 2021

[2021] 6 S.C.R. 1001

N. JAYASREE & ORS.

v.

CHOLAMANDALAM MS GENERAL INSURANCECOMPANY LTD.

(Civil Appeal No. 6451 of 2021)

OCTOBER 25, 2021

[S. ABDUL NAZEER AND KRISHNA MURARI, JJ.]

Motor Vehicles Act,1988: Legal representative – Meaning of– Mother in law of deceased – Claim petition, maintainability – Theterm ‘legal representative’ should be given a wider interpretationfor the purpose of Chapter XII of MV Act and it should not beconfined only to mean the spouse, parents and children of thedeceased – MV Act is a benevolent legislation enacted for the objectof providing monetary relief to the victims or their families –Therefore, the MV Act calls for a liberal and wider interpretation toserve the real purpose underlying the enactment and fulfil itslegislative intent – In order to maintain a claim petition, it is sufficientfor the claimant to establish loss of dependency – s.166 of the MVAct makes it clear that every legal representative who suffers onaccount of death of a person in a motor accident should have aremedy for realization of compensation – Materials on record clearlyestablish that mother-in-law of victim-deceased was residing withhim – She was dependent on him for her shelter and maintenance –It is not uncommon in Indian Society for the mother-in-law to livewith her daughter and son-in-law during her old age and bedependent upon her son-in-law for her maintenance – She may notbe a legal heir of the deceased, but she certainly suffered on accountof his death – Therefore, she is a “legal representative” under s.166of the MV Act and is entitled to maintain a claim petition.

Motor Vehicles Act, 1988: Split multiplier – Applicability of –At the time of calculation of the income, the Court has to considerthe actual income of the deceased and addition should be made totake into account future prospects – While the evidence in a givencase may indicate a different percentage of increase, standardizationof the addition for future prospects should be made to avoid differentyardsticks being applied or different methods of calculation being

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Aadopted – In Pranay Sethi, the Constitution Bench has directedaddition of 15% of the salary in case the deceased was between theage of 50 to 60 years as a thumb rule, where a deceased had apermanent job – In view of that, High Court was not justified inapplying split multiplier in the instant case.

BMotor Vehicles Act, 1988: s.166 – Deceased aged 52 yearsat the time of his death and having a permanent job – Applicablemultiplier is ‘11’ – 15% of his actual salary should be added towardsfuture prospectus – Four dependents left behind by the deceased –Hence, 1/4[th] of the income (actual salary + future prospects) shouldbe deducted towards his personal expenses – In Pranay Sethi, thisCCourt has awarded a total sum of Rs.70,000/- under conventionalheads, namely, loss of estate, loss of consortium and funeral expensesand the said sum should be enhanced at the rate of 10% in everythree years – The judgment in Pranay Sethi was rendered in the year2017 – Therefore, in the instant case, the claimants are entitled forD10% enhancement.

Allowing the appeal, the Court

HELD: 1. Whether the High Court was justified inprecluding the mother-in-law of the deceased (appellant no.4) ashis legal representative?E

Conclusion

1.1 The MV Act does not define the term ‘legalrepresentative’. Generally, ‘legal representative’ means a personwho in law represents the estate of the deceased person andincludes any person or persons in whom legal right to receivecompensatory benefit vests. A ‘legal representative’ may alsoFinclude any person who intermeddles with the estate of thedeceased. Such person does not necessarily have to be a legalheir. Legal heirs are the persons who are entitled to inherit thesurviving estate of the deceased. A legal heir may also be a legalrepresentative. The term ‘legal representative’ should be givenGa wider interpretation for the purpose of Chapter XII of MV Actand it should not be confined only to mean the spouse, parentsand children of the deceased. MV Act is a benevolent legislationenacted for the object of providing monetary relief to the victimsor their families. Therefore, the MV Act calls for a liberal and H

wider interpretation to serve the real purpose underlying theenactment and fulfil its legislative intent. In order to maintain aclaim petition, it is sufficient for the claimant to establish his lossof dependency. Section 166 of the MV Act makes it clear thatevery legal representative who suffers on account of the death ofa person in a motor vehicle accident should have a remedyfor realization of compensation. [Paras 14, 16][1011-D-E; G-H;1012-A]

1.2 It is settled that percentage of deduction for personalexpenses cannot be governed by a rigid rule or formula ofuniversal application. It also does not depend upon the basis ofrelationship of the claimant with the deceased. In some cases,the father may have his own income and thus will not be consideredas dependent. Sometimes, brothers and sisters will not beconsidered as dependents because they may either beindependent or earning or married or be dependent on the father.The percentage of deduction for personal expenditure, thus,depends upon the facts and circumstances of each case.[Para 17][1012-B-C]

Sarla Verma (Smt.) and Ors. v. Delhi TransportCorporation and Anr. (2009) 6 SCC 121 : [2009] 5SCR 1098; Gujarat State Road Transport Corporation,Ahmedabad v. Ramanbhai Prabhatbhai and Anr. (1987)3 SCC 234 : [1987] 3 SCR 404; Hafizun Begum (Mrs)v. Mohd. Ikram Heque and Ors.(2007) 10 SCC 715 :[2007] 8 SCR 487 – relied on.

Montford Brothers of St. Gabriel and Anr. v. UnitedIndia Insurance and Anr. (2014) 3 SCC 394 : [2014] 1SCR 835 – referred to.

1.3 Coming to the facts of the present case, the fourthappellant was the mother-in-law of the deceased. Materials onrecord clearly establish that she was residing with the deceasedand his family members. She was dependent on him for her shelterand maintenance. She may not be a legal heir of the deceased,but she certainly suffered on account of his death. Therefore,she is a “legal representative” under Section 166 of the MV Actand is entitled to maintain a claim petition. [Para 21][1014-G-H;1015-A-B]

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1004SUPREME COURT REPORTS

[2021] 6 S.C.R.

A2. Whether the High Court was justified in applying a splitmultiplier?

2.1 The deceased was aged 52 years at the time of theaccident. He was working as an Assistant Professor and gettinga monthly salary of Rs.83,831/-. The evidence on record showsBthat he was a meritorious man having the qualifications of M.Sc,M.Phil. He was a first-class holder in M.Sc. He was a SelectionGrade Lecturer in Mathematics and was a subject expert. Hewas also included in the panel of Mahatma Gandhi Universityand was appointed as Examiner in the Board of Examiners forCBCCSS Programme in Mathematics. Subsequently, he wasCappointed as Deputy Chairman of the Examiners Board. Evidenceon record also shows that there is acute shortage of lecturers inMathematics for appointment in colleges and retired MathematicsProfessors are appointed in so many colleges. It is commonknowledge that the teachers, especially Mathematics teachers,Dare employed even after their retirement in coaching centers.They may also hold private tuition classes. This would increasetheir income manifold after retirement. [Para 22][1015-B-E]

Reshma Kumari & Ors. v. Madan Mohan & Anr. (2013)9 SCC 65 : [2013] 2 SCR 706 ; K.R. MadhusudhanEand Ors. v. Administrative Officer and Anr. (2011) 4SCC 689 : [2011] 2 SCR 1061; Puttamma and Ors. v.K.L. Narayana Reddy and Anr. (2013) 15 SCC 45 :[2013] 16 SCR 831 – referred to.

2.2 At the time of calculation of the income, the Court hasto consider the actual income of the deceased and addition shouldFbe made to take into account future prospects. Further, whilethe evidence in a given case may indicate a different percentageof increase, standardization of the addition for future prospectsshould be made to avoid different yardsticks being applied ordifferent methods of calculation being adopted. In Pranay Sethi,Gthe Constitution Bench has directed addition of 15% of the salaryin case the deceased was between the age of 50 to 60 years as athumb rule, where a deceased had a permanent job. In view ofthe above, the High Court was not justified in applying splitmultiplier in the instant case. [Para 28][1017-H; 1018-A-B]H

3. (III) What is the amount of compensation that should beawarded to the appellants?

3.1 The deceased was working as Assistant Professor atDevaswom Board Pampa College, Paruamala, and was drawing amonthly income of Rs.83,381/- which is clear from his salarycertificate issued by the Principal of Devaswom Board PampaCollege, Paruamala. The salary slip received by the deceased forthe month of May 2011 also shows that his monthly salary wasRs.83,381/-. Thus, annual income of the deceased comes toRs.10,00,572/-. This Court in Sarla Verma has made it clear thatthe Annual Income of the deceased minus the income tax shouldbe taken into account at the time of his death for the purpose ofcalculation of loss of dependency. The deceased had to payRs.1,13,424/- towards income tax per annum. After deductingthe said amount the actual income of the deceased comes toRs.8,87,148/-. The deceased was aged 52 years at the time of hisdeath and had a permanent job. Having regard to the judgmentin Pranay Sethi, an addition of 15% of his actual salary should beadded towards future prospectus. Therefore, 15% of his actualsalary comes to Rs.1,33,072/-. [Paras 29, 30][1018-C-D, D-F]

3.2 Since the deceased was 52 years at the time of his death,the applicable multiplier is ‘11’. The total number of dependentsleft behind by the deceased is four. Hence, 1/4[th] of the income(actual salary + future prospects) should be deducted towardshis personal expenses. In Pranay Sethi, this Court has awarded atotal sum of Rs.70,000/- under conventional heads, namely, lossof estate, loss of consortium and funeral expenses. It was heldthat the said sum should be enhanced at the rate of 10% in everythree years. The judgment in Pranay Sethi was rendered in theyear 2017. Therefore, the claimants are entitled for 10%enhancement. Thus, a sum of Rs.16,500/- each is awardedtowards loss of estate and funeral expenses. [Paras 31, 32,33][1018-G-H; 1019-B, D-E]

3.3 A three-Judge Bench of this Court in United IndiaInsurance Co. Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors,after considering Pranay Seth, has awarded spousal consortiumat the rate of Rs.40,000/- and towards loss of parental consortiumto each child at the rate of Rs.40,000/-. The compensation under AB

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Athese heads also needs to be increased by 10%. Thus, the spousalconsortium is awarded at Rs.44,000/- and towards parentalconsortium at the rate of Rs.44,000/- each (Total Rs.88,000/-) isawarded to the two children. Thus, the appellants are entitled tocompensation of Rs. 85,81,815/-. The appellants are also entitledto interest on the said amount at the rate of 7.5% per annumBfrom the date of the claim petition till the date of its realization.[Paras 34, 35, 36][1019-E-H; 1020-A]

National Insurance Company Limited v. Pranay Sethiand Ors. (2017) 16 SCC 680 : [2017] 13 SCR 100;United India Insurance Co. Ltd. v. Satinder Kaur @CSatwinder Kaur and Ors. (2020) SCC Online SC 410: AIR 2020 SC 3076 – relied on.

Megjibhai Khimji Vira v. Chaturbhai Taljabhagujri AIR1977 Guj 195 ; Custodian of Branches of BancoNational Ultramarino v. Nalini Bai Naique 1989 SuppD(2) SCC 275 : [1989] 2 SCR 810; Sudama Devi v.Jogendra Choudhary AIR 1987 Pat 239 – referred to.

Case Law Reference

GCIVIL APPELLATE JURISDICTION: Civil Appeal No.6451 of2021.

From the Judgment and Order dated 09.08.2017 of the High Courtof Kerala at Ernakulam in MACA. No.1560 of 2013.

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Thomas P. Joseph, Sr. Adv., Bijo Mathew Joy, Dinny Thomas,Seshatalpa Sai Bandaru, Advs. for the Appellants.

Ms. Meenakshi Midha, Kapil Midha, Ms. Pritika Juneja, Ms.Versha Singh, Chander Shekhar Ashri, Advs. for the Respondent.

The Judgment of the Court was delivered by

S. ABDUL NAZEER, J.

1. Leave granted.

2. This appeal is directed against the judgment dated 09.08.2017passed by the High Court of Kerala at Ernakulam in MACA No. 1560of 2013. Through the impugned judgment, the High Court scaled downthe amount of compensation payable to the present appellants and therebymodified the award dated 26.04.2013 passed by the Motor AccidentClaims Tribunal, Kottayam (for short ‘MACT’) in OP(MV) No.843 of2011.

3. The appellants filed the aforesaid claim petition before theMACT seeking compensation on account of the death of N. VenugopalanNair in a motor vehicle accident which occurred on 20.06.2011. Appellantno.1 is the wife of the deceased, appellant nos. 2 and 3 are his daughtersand appellant no.4 is his mother-in-law.

4. There is no dispute as to the occurrence of the accident andthe liability of the respondent-insurer to pay the compensation. In viewof this admitted position, it is unnecessary to narrate the factual aspectsof the accident.

5. The deceased was aged 52 years at the time of the accident.The MACT took the annual salary of the deceased as Rs.8,87,148. Tothis, the MACT applied a multiplier of ‘11’ and deducted one-fourth (1/4[th]) of the income towards his personal expenses for the purpose ofcalculation of the compensation under the head of loss of dependency. Atotal sum of Rs.73,18,971/- (Rupees seventy-three lakhs eighteenthousand nine hundred seventy-one only) was awarded towards loss ofdependency. The MACT awarded a total sum of Rs.74,50,971/- (Rupeesseventy-four lakhs fifty thousand nine hundred seventy-one only) towardscompensation with interest @ 7.5 per cent per annum from the date ofthe claim petition till the date of realization. Thus, the amount awardedto the appellants is as under:

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6. However, the High Court held that appellant no.4 was not alegal representative of the deceased. Further, the High Court held thatDthe MACT ought to have applied split multiplier for the assessment ofthe dependency compensation. The High Court fixed monthly income ofthe deceased as Rs.40,000/- (Rupees forty thousand only) and deductedone-third (1/3[rd]) of the income towards his personal expenses. It appliedmultiplier ‘7’ for calculating dependency compensation for the post-retiralEperiod and, for the pre-retirement period, a multiplier of ‘4’ was applied.Accordingly, the High Court awarded compensation of Rs.23,65,728/-(Rupees twenty-three lakhs sixty-five thousand seven hundred twenty-eight only), towards loss of dependency for pre-retiral period and a sumof Rs.22,40,000/- (Rupees twenty-two lakhs forty thousand only) towardsloss of dependency for post-retiral period. A sum of Rs.1,00,000/- (RupeesFone lakh only) was awarded towards loss of consortium, Rs.25,000/-(Rupees twenty-five thousand only) towards funeral expenses, andRs.80,000/- (Rupees eighty thousand only) towards loss of love andaffection. In total, a sum of Rs.48,39,728/- (Rupees forty-eight lakhsthirty-nine thousand seven hundred twenty-eight only) was awarded asGcompensation by the High Court.

7. We have heard the learned counsel for the parties. Learnedcounsel for the appellants submits that the High Court was not justifiedprecluding appellant no.4 as legal representative of the deceased. She isthe mother-in-law of the deceased and was living with the deceased andhis family members. Therefore, she was entitled to be treated as a legalH

representative for the purpose of determination of compensation.Accordingly, 1/4[th] of the income of the deceased should have beendeducted towards his personal expenses. Further, it was contended thatthe High Court was not justified in applying a split multiplier having regardto the judgment of this Court in Sarla Verma (Smt.) and Ors. vs. DelhiTransport Corporation and Anr.[1] and the subsequent Constitution Benchjudgment of this Court in National Insurance Company Limited vs.Pranay Sethi and Ors.[2]. It was also argued that the deceased was ameritorious person who possessed the qualification of M.Sc. M.Phil.His monthly salary was Rs.83,831/- which is evident from the materialson record. The High Court took his monthly income as Rs.40,000/- forthe purpose of calculation of loss of dependency without any justification.In view of the above, the High Court was not justified in scaling downthe amount of compensation awarded by the MACT.

8. On the other hand, learned counsel for the respondent submitsthat the deceased was aged 52 years at the time of the accident. Hewould not have earned the same monthly income after his retirement. Inview of the same, the High Court applied a split multiplier for calculatingthe loss of dependency. It was also argued that appellant no.4, who isthe mother-in-law of the deceased, cannot be treated as his legalrepresentative. Further, it was contended that the High Court was justifiedin taking the monthly salary of the deceased as Rs.40,000/- and deducting1/3[rd] of the income towards the personal expenses, fair compensationhas been awarded towards loss of dependency.

9. In view of the above, the questions for consideration before usare: (I) whether the High Court was justified in precluding the mother-in-law of the deceased (appellant no.4) as his legal representative?(II) whether the High Court was justified in applying a split multiplier?(III) based on the findings on the preceding questions, what is the amountof compensation that should be awarded to the appellants?

(I) whether the High Court was justified in precluding themother-in-law of the deceased (appellant no.4) as his legalrepresentative?

10. The provisions of the Motor Vehicles Act, 1988 (for short,“MV Act”) gives paramount importance to the concept of ‘just and fair’

1 (2009) 6 SCC 121

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Acompensation. It is a beneficial legislation which has been framed withthe object of providing relief to the victims or their families. Section 168of the MV Act deals with the concept of ‘just compensation’ whichought to be determined on the foundation of fairness, reasonablenessand equitability. Although such determination can never be arithmeticallyexact or perfect, an endeavor should be made by the Court to award justBand fair compensation irrespective of the amount claimed by the applicant/s. In Sarla Verma[1], this Court has laid down as under:

“16. ...“Just compensation” is adequate compensation which isfair and equitable, on the facts and circumstances of the case, tomake good the loss suffered as a result of the wrong, as far asCmoney can do so, by applying the well-settled principles relatingto award of compensation. It is not intended to be a bonanza,largesse or source of profit.”

11. In Sarla Verma[1] it was further held that where the deceasedwas married, the deduction towards personal and living expenses of theDdeceased should be one-third (1/3[rd]) where the number of dependentfamily members is between 2 and 3, one-fourth (1/4[th]) where the numberof dependent family members is between 4 and 6, and one-fifth (1/5[th])where the number of dependent family members exceeds six.

12. In the instant case, the appellants have contended that theEmother-in-law of the deceased was staying with the deceased and hisfamily members since a long time. Taking into consideration the numberof dependents of the deceased including his mother-in-law (four innumber), the MACT had deducted one fourth (1/4[th]) of the incometowards his personal expenses. However, the High Court has held thatFappellant no.4 being the mother-in-law of the deceased, cannot bereckoned as a dependent of the deceased. The High Court, therefore,determined the number of dependents as 3 and accordingly deductedone-third (1/3[rd]) of the income of the deceased towards his personalexpenses.G13. Section 166 of the MV Act provides for filing of an applicationfor compensation. The relevant portion of the said Section is as under:

“166. Application for compensation. —

(1) An application for compensation arising out of an accident ofthe nature specified in sub-section (1) of section 165 may beHmade—

(a) by the person who has sustained the injury; or (b)by the owner of the property; or

(c) where death has resulted from the accident, by all or any ofthe legal representatives of the deceased; or (d)by any agent duly authorised by the person injured or all orany of the legal representatives of the deceased, as the case maybe:

Provided that where all the legal representatives of the deceasedhave not joined in any such application for compensation, theapplication shall be made on behalf of or for the benefit of all thelegal representatives of the deceased and the legal representativeswho have not so joined, shall be impleaded as respondents to theapplication.”

14. The MV Act does not define the term ‘legal representative’.Generally, ‘legal representative’ means a person who in law representsthe estate of the deceased person and includes any person or persons inwhom legal right to receive compensatory benefit vests. A ‘legalrepresentative’ may also include any person who intermeddles with theestate of the deceased. Such person does not necessarily have to be alegal heir. Legal heirs are the persons who are entitled to inherit thesurviving estate of the deceased. A legal heir may also be a legalrepresentative.

15. Indicatively for the present inquiry, the Kerala Motor VehicleRules, 1989, defines the term ‘legal representative’ as under:

“Legal Representative” means a person who in law is entitled toinherit the estate of the deceased if he had left any estate at thetime of his death and also includes any legal heir of the deceasedand the executor or administrator of the estate of the deceased.”

16. In our view, the term ‘legal representative’ should be given awider interpretation for the purpose of Chapter XII of MV Act and itshould not be confined only to mean the spouse, parents and children ofthe deceased. As noticed above, MV Act is a benevolent legislationenacted for the object of providing monetary relief to the victims or theirfamilies. Therefore, the MV Act calls for a liberal and wider interpretationto serve the real purpose underlying the enactment and fulfil its legislativeintent. We are also of the view that in order to maintain a claim petition, A

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Ait is sufficient for the claimant to establish his loss of dependency. Section166 of the MV Act makes it clear that every legal representative whosuffers on account of the death of a person in a motor vehicle accidentshould have a remedy for realization of compensation.

17. It is settled that percentage of deduction for personal expensesBcannot be governed by a rigid rule or formula of universal application. Italso does not depend upon the basis of relationship of the claimant withthe deceased. In some cases, the father may have his own income andthus will not be considered as dependent. Sometimes, brothers and sisterswill not be considered as dependents because they may either beindependent or earning or married or be dependent on the father. TheCpercentage of deduction for personal expenditure, thus, depends uponthe facts and circumstances of each case.

18. In the instant case, the question for consideration is whetherthe fourth appellant would fall under the expression ‘legal representative’for the purpose of claiming compensation. In Gujarat State RoadDTransport Corporation, Ahmedabad vs. Ramanbhai Prabhatbhai andAnr.[3 ]this Court while considering the entitlement of the brother of adeceased who died in a motor vehicle accident to maintain a claim petitionunder the provisions of the MV Act, held as under:

“13. We feel that the view taken by the Gujarat High CourtEis in consonance with the principles of justice, equity andgood conscience having regard to the conditions of theIndian society. Every legal representative who suffers onaccount of the death of a person due to a motor vehicleaccident should have a remedy for realisation ofFcompensation and that is provided by Sections 110-A to110-F of the Act. These provisions are in consonance with theprinciples of law of torts that every injury must have a remedy. Itis for the Motor Vehicles Accidents Tribunal to determine thecompensation which appears to it to be just as provided in Section110-B of the Act and to specify the person or persons to whomGcompensation shall be paid. The determination of the compensationpayable and its apportionment as required by Section 110-B ofthe Act amongst the legal representatives for whose benefit anapplication may be filed under Section 110-A of the Act have tobe done in accordance with well-known principles of law. We H3 (1987) 3 SCC 234

N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE[S. ABDUL NAZEER, J.]

should remember that in an Indian family brothers, sistersand brothers’ children and sometimes foster children livetogether and they are dependent upon the bread-winner ofthe family and if the bread-winner is killed on account of amotor vehicle accident, there is no justification to deny themcompensation relying upon the provisions of the FatalAccidents Act, 1855 which as we have already held has beensubstantially modified by the provisions contained in the Act inrelation to cases arising out of motor vehicles accidents. Weexpress our approval of the decision in Megjibhai Khimji Vira v.Chaturbhai Taljabhagujri[4] and hold that the brother of a personwho dies in a motor vehicle accident is entitled to maintain a petitionunder Section 110-A of the Act if he is a legal representative ofthe deceased.”

19. In Hafizun Begum (Mrs) vs. Mohd. Ikram Heque andOrs.[5] it was held that:

“7. …12. As observed by this Court in Custodian of Branchesof Banco National Ultramarino v. Nalini Bai Naique[6] thedefinition contained in Section 2(11) CPC is inclusive in characterand its scope is wide, it is not confined to legal heirs only. Instead,it stipulates that a person who may or may not be legal heir,competent to inherit the property of the deceased, canrepresent the estate of the deceased person. It includesheirs as well as persons who represent the estate evenwithout title either as executors or administrators inpossession of the estate of the deceased. All such personswould be covered by the expression ‘legal representative’. Asobserved in Gujarat SRTC v. Ramanbhai Prabhatbhai[3] a legalrepresentative is one who suffers on account of death of a persondue to a motor vehicle accident and need not necessarily be awife, husband, parent and child.”

20. In Montford Brothers of St. Gabriel and Anr. vs. UnitedIndia Insurance and Anr.[7] this Court was considering the claim petitionof a charitable society for award of compensation on account of the 4 AIR 1977 Guj 195

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Adeath of its member. The appellant-society therein was a registeredcharitable society and was running various institutions as a constituentunit of Catholic church. Its members, after joining the appellant-society,renounced the world and were known as ‘brother’. In this case, a ‘brother’died in a motor vehicle accident. The claim petition filed by the appellant-society seeking compensation on account of the death of aforesaidB‘brother’ was rejected by the High Court on the ground of itsmaintainability. This Court after examining various provisions of the MVAct held that the appellant-society was the legal representative of thedeceased ‘brother’. While allowing the claim petition it was observed asunder:C“17. A perusal of the judgment and order of the Tribunal disclosesthat although Issue 1 was not pressed and hence decided in favourof the appellant claimants, while considering the quantum ofcompensation for the claimants, the Tribunal adopted a verycautious approach and framed a question for itself as to whatDshould be the criterion for assessing compensation in such casewhere the deceased was a Roman Catholic and joined the churchservices after denouncing his family, and as such having no actualdependents or earning? For answering this issue, the Tribunal reliednot only upon judgments of American and English Courts but alsoupon Indian judgments for coming to the conclusion that even aEreligious order or an organisation may suffer considerable lossdue to the death of a voluntary worker. The Tribunal also went onto decide who should be entitled for compensation as legalrepresentative of the deceased and for that purpose it relied uponthe Full Bench judgment of Patna High Court in Sudama Devi v.

FJogendra Choudhary[8], which held that the term “legalrepresentative” is wide enough to include even “intermeddlers”with the estate of a deceased. The Tribunal also referred to someIndian judgments in which it was held that successors to thetrusteeship and trust property are legal representatives within themeaning of Section 2(11) of the Code of Civil Procedure.”G21. Coming to the facts of the present case, the fourth appellantwas the mother-in-law of the deceased. Materials on record clearlyestablish that she was residing with the deceased and his family members.She was dependent on him for her shelter and maintenance. It is not H8 AIR 1987 Pat 239

uncommon in Indian Society for the mother-in-law to live with her daughterand son-in-law during her old age and be dependent upon her son-in-lawfor her maintenance. Appellant no.4 herein may not be a legal heir of thedeceased, but she certainly suffered on account of his death. Therefore,we have no hesitation to hold that she is a “legal representative” underSection 166 of the MV Act and is entitled to maintain a claim petition.

(II) Whether the High Court was justified in applying a splitmultiplier?

(II) Whether the High Court was justified in applying a splitmultiplier?

22. The deceased was aged 52 years at the time of the accident.He was working as an Assistant Professor and getting a monthly salaryof Rs.83,831/- (Rupees eighty-three thousand eight hundred thirty-oneonly). The evidence on record shows that he was a meritorious manhaving the qualifications of M.Sc, M.Phil. He was a first-class holder inM.Sc. He was a Selection Grade Lecturer in Mathematics and was asubject expert. He was also included in the panel of Mahatma GandhiUniversity and was appointed as Examiner in the Board of Examinersfor CBCCSS Programme in Mathematics. Subsequently, he wasappointed as Deputy Chairman of the Examiners Board. Evidence onrecord also shows that there is acute shortage of lecturers in Mathematicsfor appointment in colleges and retired Mathematics Professors areappointed in so many colleges. It is common knowledge that the teachers,especially Mathematics teachers, are employed even after theirretirement in coaching centers. They may also hold private tuition classes.This would increase their income manifold after retirement.

23. In Sarla Verma[1], this Court has held that while calculatingthe compensation, the courts should take into consideration not only theactual income at the time of the death but should also make additions bytaking note of future prospects. It was further held that though theevidence may indicate a different percentage of increase, it is necessaryto standardize the addition to avoid disparate yardsticks being applied ordisparate methods of calculation being adopted.

24. In Reshma Kumari & Ors. vs. Madan Mohan & Anr.[9], athree-Judge Bench of this Court has approved the judgment in SarlaVerma[1].

25. In Pranay Sethi[2], this Court has not only approved theaforesaid observations made in Sarla Verma[1] but also held as under:

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A“59.3. While determining the income, an addition of 50% of actualsalary to the income of the deceased towards future prospects,where the deceased had a permanent job and was below the ageof 40 years, should be made. The addition should be 30%, if theage of the deceased was between 40 to 50 years. In case thedeceased was between the age of 50 to 60 years, the additionBshould be 15%. Actual salary should be read as actual salary lesstax.

59.4. In case the deceased was self-employed or on a fixed salary,an addition of 40% of the established income should be the warrantwhere the deceased was below the age of 40 years. An additionCof 25% where the deceased was between the age of 40 to 50years and 10% where the deceased was between the age of 50to 60 years should be regarded as the necessary method ofcomputation. The established income means the income minusthe tax component.”

D26. In K.R. Madhusudhan and Ors. vs. Administrative Officer and Anr.[10], this Court was considering a case where the High Court hadapplied split multiplier for the purpose of calculation of compensationtowards loss of dependency and held as under:

“8. In Sarla Verma[1] judgment the Court has held that there shouldEbe no addition to income for future prospects where the age ofthe deceased is more than 50 years. The learned Bench called ita rule of thumb and it was developed so as to avoid uncertaintiesin the outcomes of litigation. However, the Bench held that adeparture can be made in rare and exceptional cases involvingFspecial circumstances.

9. We are of the opinion that the rule of thumb evolved in SarlaVerma[1] is to be applied to those cases where there was no concreteevidence on record of definite rise in income due to futureprospects. Obviously, the said rule was based on assumption andGto avoid uncertainties and inconsistencies in the interpretation ofdifferent courts, and to overcome the same.”

27. In Puttamma and Ors. vs. K.L. Narayana Reddy and Anr.[11], thisCourt was again considering a case where split multiplier for the purpose 10 (2011) 4 SCC 689H11 (2013) 15 SCC 45

N. JAYASREE v. CHOLAMANDALAM MS GENERAL INSURANCE[S. ABDUL NAZEER, J.]

of calculation of dependency compensation was applied. It was heldthus:

“32. For determination of compensation in motor accident claimsunder Section 166 this Court always followed multiplier method.As there were inconsistencies in the selection of a multiplier, thisCourt in Sarla Verma[1] prepared a table for the selection of amultiplier based on the age group of the deceased/victim. The1988 Act, does not envisage application of a split multiplier.

33. In K.R. Madhusudhan v. Administrative Officer[10] this Courtheld as follows: (SCC p. 692, paras 14-15)

“14. In the appeal which was filed by the appellants before theHigh Court, the High Court instead of maintaining the amount ofcompensation granted by the Tribunal, reduced the same. In doingso, the High Court had not given any reason. The High Courtintroduced the concept of split multiplier and departed from themultiplier used by the Tribunal without disclosing any reasontherefor. The High Court has also not considered the clear andcorroborative evidence about the prospect of future increment ofthe deceased. When the age of the deceased is between 51 and55 years the multiplier is 11, which is specified in the 2nd columnin the Second Schedule to the Motor Vehicles Act, and the Tribunalhas not committed any error by accepting the said multiplier. ThisCourt also fails to appreciate why the High Court chose to applythe multiplier of 6.

15. We are, thus, of the opinion that the judgment of the HighCourt deserves to be set aside for it is perverse and clearly contraryto the evidence on record, for having not considered the futureprospects of the deceased and also for adopting a split multipliermethod.

34. We, therefore, hold that in absence of any specific reasonand evidence on record the tribunal or the court should not applysplit multiplier in routine course and should apply multiplier as perdecision of this Court in Sarla Verma[1] as affirmed in ReshmaKumari[9].”

28. From the above discussion it is clear that at the time ofcalculation of the income, the Court has to consider the actual income ofthe deceased and addition should be made to take into account future A

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Aprospects. Further, while the evidence in a given case may indicate adifferent percentage of increase, standardization of the addition for futureprospects should be made to avoid different yardsticks being applied ordifferent methods of calculation being adopted. In Pranay Sethi[2], theConstitution Bench has directed addition of 15% of the salary in casethe deceased was between the age of 50 to 60 years as a thumb rule,Bwhere a deceased had a permanent job. In view of the above, the HighCourt was not justified in applying split multiplier in the instant case.

(III) What is the amount of compensation that should beawarded to the appellants?

C29. That takes us to the award of compensation. We have alreadynoticed that the deceased was working as Assistant Professor atDevaswom Board Pampa College, Paruamala, and was drawing amonthly income of Rs.83,381/- which is clear from his salary certificate(Ex.A-5) issued by the Principal of Devaswom Board Pampa College,Paruamala. The salary slip received by the deceased for the month ofDMay 2011 (Ex.A-6) also shows that his monthly salary was Rs.83,381/-. These documents have been marked in evidence through the Principalof the said College who was examined as PW-1. Thus, annual incomeof the deceased comes to Rs.10,00,572/-. This Court in Sarla Verma[1]has made it clear that the Annual Income of the deceased minus theEincome tax should be taken into account at the time of his death for thepurpose of calculation of loss of dependency. The deceased had to payRs.1,13,424/- towards income tax per annum. After deducting the saidamount the actual income of the deceased comes to Rs.8,87,148/-.

30. The deceased was aged 52 years at the time of his death andFhad a permanent job. Having regard to the judgment in Pranay Sethi[2],an addition of 15% of his actual salary should be added towards futureprospectus. Therefore, 15% of his actual salary comes to Rs.1,33,072/-

31. Since the deceased was 52 years at the time of his death, theapplicable multiplier is ‘11’. As we have held that appellant no.4, theGmother-in-law of the deceased is also a dependent and a “legalrepresentative” under Section 166 of the MV Act, the total number ofdependents left behind by the deceased is four. Hence, 1/4[th] of the income(actual salary + future prospects) should be deducted towards his personalexpenses. Thus, the total compensation payable towards loss ofdependency is as under:H

32. In Pranay Sethi[2], this Court has awarded a total sum ofRs.70,000/- (Rupees seventy thousand only) under conventional heads,namely, loss of estate, loss of consortium and funeral expenses. It washeld that the said sum should be enhanced at the rate of 10% in everythree years. It was held thus:

“59.8. Reasonable figures on conventional heads, namely, loss ofestate, loss of consortium and funeral expenses should be Rs15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaidamounts should be enhanced at the rate of 10% in every threeyears.”

33. The judgment in Pranay Sethi[2] was rendered in the year2017. Therefore, the claimants are entitled for 10% enhancement. Thus,a sum of Rs.16,500/- each is awarded towards loss of estate and funeralexpenses.

34. A three-Judge Bench of this Court in United India InsuranceCo. Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors[12], afterconsidering Pranay Sethi[2], has awarded spousal consortium at the rateof Rs.40,000/- (Rupees forty thousand only) and towards loss of parentalconsortium to each child at the rate of Rs.40,000/- (Rupees forty thousandonly). The compensation under these heads also needs to be increasedby 10%. Thus, the spousal consortium is awarded at Rs.44,000/- (Forty-four thousand only), and towards parental consortium at the rate ofRs.44,000/- each (Total Rs.88,000/-) is awarded to the two children.

35. Thus, the appellants are entitled to compensation as under:

12 (2020) SCC Online SC 410 : AIR 2020 SC 3076

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A36. The appellants are also entitled to interest on the said amountat the rate of 7.5% per annum from the date of the claim petition till thedate of its realization. The respondent is accordingly directed to depositthe above amount with accrued interest thereon at the rate of 7.5% perannum from the date of claim petition till the date of deposit, afterdeducting amounts, if any, deposited by the respondent, within eight weeksBfrom today.

37. Resultantly, the appeal is allowed in the aforesaid terms. Partiesare directed to bear their respective costs.

38. Pending applications, if any, shall also stand disposed of.

C

Devika Gujral

Appeal allowed.

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