M/S. ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LTD. versus MANDALA YADAGARI GOUD & ORS. on 9 April 2019

[2019] 6 S.C.R. 941

M/S. ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LTD.

MANDALA YADAGARI GOUD & ORS.

(Civil Appeal No.6600 of 2015)

APRIL 09, 2019

[S. A. BOBDE, SANJAY KISHAN KAUL ANDMOHAN M. SHANTANAGOUDAR, JJ.]

Motor Vehicles Accident – Calculation of a multiplier – Wherethere is death of a person, who is a bachelor, in that case themultiplier is to be calculated on basis of the age of deceased or ageof the dependents – Appellant contended that it is the age of thedependents which has to be taken into account – Held: This issue issettled by the judgments of three Judge Bench of Supreme Court inSube Singh & Anr. v. Shyam Singh (Dead) & Ors., Munna Lal Jain &Anr. v. Vipin Kumar Sharma & Ors., Reshma Kumari & Ors. v. MadanMohan & Anr. and also judgment of the Constitution Bench inNational Insurance Company Ltd. v. Pranay Sethi & Ors. that it is theage of the deceased which has to be taken into account and not theage of the dependents – Motor Vehicles Act, 1988 – s.140.

Disposing of the appeals, the Court

HELD : 1. The judicial pronouncements of this Court haveendeavoured to devise a standard formula, so far as possible, inrespect of the calculation of the amount of compensation quavarious components. The amount of compensation determinedis to be paid to the claimants who are dependents in case of adeath of a person based on what the deceased would havecontributed to their support. The amount thus received by thedependents in turn becomes a part of the estate as they may livelonger or may be younger than the age limits taken into accountfor calculation of a multiplier to be applied in such a situation. Inthe context of liability to pay compensation on the principle of nofault, as enunciated under Section 140 of the Motor Vehicles Act,1988, thus, it was observed by this Court that even if there is noloss of dependency, the quantification cannot be below that amount

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Aand to that extent the amount would form a part of the estate ofthe deceased.[Para 8][946-C-E]

2. The focus for determination of such claim is the deceasedand what would be his contribution towards the dependents wouldhe to be alive, for the benefits of the dependents. It is trite toBsay, and in fact conceded by the learned counsel for the insurancecompany, that in case the deceased is a married person, it is theage of the deceased which is to be taken into account. Thequestion is whether in case the deceased is a bachelor, a differentprinciple for calculation of the multiplier should be applied byshifting the focus to the age of the claimants? This Court is ofCthe view that the answer to this question should be in the negative.[Para 9][946-F-G]

3. A reading of the judgment in Sube Singh & Anr. v. ShaymSingh (Dead) & Ors. shows that where a three Judge Bench hascategorically taken the view that it is the age of the deceased andDnot the age of the parents that would be the factor for the purposesof taking the multiplier to be applied. This judgment undoubtedlyrelied upon the case of Munna Lal Jain & Anr. v. Vipin KumarSharma & Ors. which is also a three Judge Bench judgment inthis behalf. The relevant portion of the judgment has also beenEextracted. Once again the extracted portion in turn refers to thejudgment of a three Judge Bench in Reshma Kumari & Ors. v.Madan Mohan & Anr. The relevant portion of Reshma Kumari inturn has referred to Sarla Verma (Smt.) & Ors. v. Delhi TransportCorporation & Anr. and given its imprimatur to the same. Theloss of dependency is thus stated to be based on : (i) additions/Fdeductions to be made for arriving at the income; (ii) thedeductions to be made towards the personal living expenses ofthe deceased; and (iii) the multiplier to be applied with referenceto the age of the deceased. It is the third aspect which is ofsignificance and Reshma Kumari categorically states that it doesGnot want to revisit the law settled in Sarla Verma case in thisbehalf. [Para 11][947-A-D]

Sube Singh & Anr. v. Shaym Singh (Dead) & Ors.(2018) 3 SCC 18 : [2018] 1 SCR 636; M/S. ROYAL SUNDARAM ALLIANCE INSURANCECO. LTD v. MANDALA YADAGARI GOUD

Munna Lal Jain & Anr. v. Vipin Kumar Sharma & Ors.(2015) 6 SCC 347 : [2015] 7 SCR 207 ; Reshma Kumari& Ors. v. Madan Mohan & Anr. (2013) 9 SCC 65 :[2013] 2 SCR 706 – relied on.

Sarla Verma (Smt.) & Ors. v. Delhi TransportCorporation & Anr. (2009) 6 SCC 121 : [2009] 5 SCR1098 – referred to.

4. Thus, there is no need to once again take up this issuesettled by the aforesaid judgments of three Judge Bench andalso relying upon the Constitution Bench that it is the age of thedeceased which has to be taken into account and not the age ofthe dependents. [Para 13][947-E-F]

C.A.No.1953/2019 @ SLP(C)NO.19797/2015

5. In view of the judgment delivered in Civil AppealNo.6600/2015 titled as M/s. Royal Sundaram Alliance InsuranceCompany Ltd. Vs. Mandala Yadagari Gold & Ors., opining that itis the age of the deceased and not such of the dependents in caseof the death of a bachelor which is to be the basis for the multiplier.[Para 17][948-B-C]

C.A.No.178/2017

6. In view of the judgment delivered in Civil AppealNo.6600/2015 titled as M/s. Royal Sundaram Alliance InsuranceCompany Ltd. v. Mandala Yadagari Gold & Ors., the multiplier inthe present case will be 16, and not as per the impugned order,based on the age of the deceased. [Para 18][948-D]

National Insurance Company Ltd. v. Pranay Sethi &Ors. (2017) 16 SCC 680 – followed.

New India Assurance Company Ltd. v. Shanti Pathak(Smt.) & Ors. (2007) 10 SCC 1 : [2007] 8 SCR 237;Manjuri Bera (Smt) v. Oriental Insurance Company Ltd.And Anr. (2007) 10 SCC 643 : [2007] 4 SCR 590 –referred to.

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Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6600of 2015

From the Judgment and Order dated 23.01.2014 of the High CourtDof Judicature of Andhra Pradesh at Hyderabad in M.A.C.M.A. No.2339 of 2011

With

Civil Appeal Nos.1953, 1954 of 2019 and 178 of 2017.

G. Balaji, Yunus Malik, Anish Maheshwari, Ms. Saroj Bala, AmanEMalik, Sanjeev Agarwal, Karri Venkata Reddy, Ashutosh KumarSrivastava, Shivnath Tripathi, Satyendra Kumar Chauhan, Arvind S.Avhad, Advs. for the Appellant.

K. K. Bhat, Ranjan Kumar Pandey, Ms. Garima Prashad, J.D.N.Shahi, M. K. Dua, Advs. for the Respondent.F

The Judgment of the Court was delivered by SANJAY KISHAN KAUL, J.

C.A.No.6600/2015 & C.A. NO.1954/2019 @ SLP(C)5603/2019@ CC No.11685/2016G

1. The only legal issue canvassed before us in these matters, whichare in the nature of cross appeals, is that in the case of a motor accidentwhere there is death of a person, who is a bachelor, whether the age ofthe deceased or the age of the dependents would be taken into accountfor calculating the multiplier.

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2. The appellant in C.A.No.6600/2015 is the insurance company,whose counsel submits that it is the age of the dependents which has tobe taken into account and thus the High Court has fallen into an error bytaking the multiplier on the basis of the age of the deceased.

3. To support his contention, learned counsel, for referencepurposes, filed two compilations of judgments one against him and onein his favour. We put a specific query to the learned counsel as towhether there are any three Judge Bench decisions dealing with theissue, as there was no purpose in looking at multiplicity of judgments,and what was the last view adopted by this Court in this behalf.

4. Learned counsel conceded that a three Judge bench of thisCourt in Sube Singh & Anr. Vs. Shaym Singh (Dead) & Ors.[1], lookedinto this issue and has opined that it is the age of the deceased whichshould be the basis of the multiplier. However, his contention is that areading of this judgment would show that reliance has been placed onthe earlier judgment in Munna Lal Jain & Anr. Vs. Vipin Kumar Sharma& Ors.[2], to come to this conclusion. Munna Lal Jain (supra) in turnrelied upon the judgment in Sarla Verma (Smt.) & Ors. Vs. DelhiTransport Corporation & Anr.[3], which view is stated to have beenaffirmed by the Constitution Bench in National Insurance CompanyLtd. Vs. Pranay Sethi & Ors.[4] It was submitted that a sequentialerror has taken place as Sarla Verma (supra) did not deal with the caseof a deceased bachelor and thus, the imprimatur given in Pranay Sethicase could be of no avail. Thus, a mere affirmation of the views in SubeSingh (supra) also does not settle this legal position. On the other hand,there are two Judge Bench judgments taking a contra view that the ageof the dependents is what has to be the basis for multiplier and not theage of the deceased in the case of death of a bachelor. He also made areference to one order of a three Judge Bench in New India AssuranceCompany Ltd. Vs. Shanti Pathak (Smt.) & Ors.[5], but that one isindisputably an adjudication on given facts.

5. Insofar as the appeal filed by the claimants are concerned, it isnot in dispute that 50% has been granted for future prospects, and that 1(2018) 3 SCC 182(2015) 6 SCC 3473(2009) 6 SCC 1214(2017) 16 SCC 680

5(2007) 10 SCC 1

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Ais the only aspect before us seeking an enhancement of the same. Inthis behalf it is pointed out to us that actually 40% ought to have beenawarded in terms of Pranay Sethi case (supra).

6. We have given our thoughtful consideration to the matters inissue.

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7. The concept of insurance for a motor vehicle is to cover risk incase of an accident. The insurance policy covers personal risk ofinjury or death, including for third parties. The premium charged in thisbehalf is uniform.

8. The judicial pronouncements of this Court have endeavouredCto devise a standard formula, so far as possible, in respect of thecalculation of the amount of compensation qua various components. Theamount of compensation determined is to be paid to the claimants whoare dependents in case of a death of a person based on what the deceasedwould have contributed to their support. The amount thus received byDthe dependents in turn becomes a part of the estate as they may livelonger or may be younger than the age limits taken into account forcalculation of a multiplier to be applied in such a situation. In the contextof liability to pay compensation on the principle of no fault, as enunciatedunder Section 140 of the Motor Vehicles Act, 1988, thus, it was observedby this Court that even if there is no loss of dependency, the quantificationEcannot be below that amount and to that extent the amount would forma part of the estate of the deceased[6].

9. The focus for determination of such claim is the deceased andwhat would be his contribution towards the dependents would he to bealive, for the benefits of the dependents. It is trite to say, and in factFconceded by the learned counsel for the insurance company, that incase the deceased is a married person, it is the age of the deceasedwhich is to be taken into account. The question is whether in case thedeceased is a bachelor, a different principle for calculation of the multipliershould be applied by shifting the focus to the age of the claimants? WeGare of the view that the answer to this question should be in the negative.

10. We may also note the importance of applying uniform settledprinciple to such cases. Certainty of law is important. Once the law issettled, it should not be repeatedly changed as that itself causes confusion 6See Manjuri Bera (Smt) v. Oriental Insurance Company Ltd. And Anr.,(2007) 10HSCC 643

and litigation. It is with this objection that this Court has endeavoured tosettle legal principles in respect of the matter in question.

11. A reading of the judgment in Sube Singh (supra) shows thatwhere a three Judge Bench has categorically taken the view that it isthe age of the deceased and not the age of the parents that would be thefactor for the purposes of taking the multiplier to be applied. This judgmentundoubtedly relied upon the case of Munna Lal Jain (supra) which isalso a three Judge Bench judgment in this behalf. The relevant portionof the judgment has also been extracted. Once again the extractedportion in turn refers to the judgment of a three Judge Bench in ReshmaKumari & Ors. Vs. Madan Mohan & Anr.[7]. The relevant portion ofReshma Kumari in turn has referred to Sarla Verma (supra) case andgiven its imprimatur to the same. The loss of dependency is thus statedto be based on : (i) additions/deductions to be made for arriving at theincome; (ii) the deductions to be made towards the personal livingexpenses of the deceased; and (iii) the multiplier to be applied withreference to the age of the deceased. It is the third aspect which is ofsignificance and Reshma Kumari categorically states that it does notwant to revisit the law settled in Sarla Verma case in this behalf.

12. Not only this, the subsequent judgment of the Constitutionbench in Pranay Sethi (supra) has also been referred to in Sube Singhfor the purpose of calculation of the multiplier.

13. We are convinced that there is no need to once again take upthis issue settled by the aforesaid judgments of three Judge Bench andalso relying upon the Constitution Bench that it is the age of the deceasedwhich has to be taken into account and not the age of the dependents.

14. The aforesaid being the only issue which has been raised bythe insurance company, we find the appeal filed by the insurance companywithout merit.

15. We have already noticed that insofar as the claimants areconcerned, they have already been granted more than a reasonableamount for future prospects and on that account also no interference iscalled for in the impugned judgment.

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A16. The result is that both the appeals are dismissed leaving theparties to bear their own costs. Pending application, if any, standsdisposed of.

C.A.No.1953/2019 @ SLP(C)NO.19797/2015 :

17. In view of the judgment delivered today in Civil AppealBNo.6600/2015 titled as M/s. Royal Sundaram Alliance InsuranceCompany Ltd. Vs. Mandala Yadagari Gold & Ors., opining that it isthe age of the deceased and not such of the dependents in case of thedeath of a bachelor which is to be the basis for the multiplier, this appealis also liable to be dismissed as this is the only plea urged. PendingCapplication, if any, stands disposed of.

C.A.No.178/2017

18. In view of the judgment delivered today in Civil AppealNo.6600/2015 titled as M/s. Royal Sundaram Alliance InsuranceCompany Ltd. Vs. Mandala Yadagari Gold & Ors., the multiplier inDthe present case will be 16, and not as per the impugned order, based onthe age of the deceased. The amount now payable in view thereofwould be as under :

M/S. ROYAL SUNDARAM ALLIANCE INSURANCE

CO. LTD v. MANDALA YADAGARI GOUD [SANJAY KISHAN KAUL, J.]

19. We may note that learned counsel appearing for the respondentalso sought to canvas that the only change being on account of themultiplier, that plea was not even raised in the appeal. We, however,find that ground (4) of the special leave petition is wide enough to coverthat issue. The appeal is thus allowed to the aforesaid extent. Pendingapplication, if any, stands disposed of.

Ankit Gyan

Appeals disposed of.

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