UNITED INDIA INSURANCE CO. LTD. versus SATINDER KAUR @ SATWINDER KAUR & ORS. on 30 June 2020

[2020] 5 S.C.R. 669

UNITED INDIA INSURANCE CO. LTD.

v.

SATINDER KAUR @ SATWINDER KAUR & ORS.

(Civil Appeal No. 2705 of 2020)

JUNE 30, 2020

[S. ABDUL NAZEER, INDU MALHOTRA ANDANIRUDDHA BOSE, JJ.]

Motor Vehicles Act, 1988 – Motor vehicle accident – Death –Compensation – Computation of – Person living in Qatar since 1984was visiting India in Nov. 1998 when he met with an accident whileriding a scooter, with his wife as pillion rider, with a Maruti carcoming from opposite direction – Tribunal calculated thecompensation at Rs.1,90,000 with interest @ 9% p.a. – High Courtcomputed the total compensation at Rs.96,78,000 with interest @7.5% p.a. – Held: In the absence of any other evidence producedby the Claimants, the income of the deceased computed by takinghis base salary at 750 Qatari Riyal p.m. in 1984 as a skilled labourer,as reflected in his Employment Contract Form – By taking anincrement of 10% p.a from 1984 till 1998, the notional income ofthe deceased is fixed at 2590 Qatari Riyal p.m, rounded off to 2600Qatari Riyal p.m. – Exchange rate prevailing in 1998- 1 QatariRiyal was equivalent to 12.41 INR – Income of the deceased-2600 x 12.41= Rs. 32,266 p.m. i.e. Rs. 3,87,192 p.a. – High Courtrightly deducted 50% of his income towards personal and livingexpenses – Further, as per the judgment of Constitution Bench inPranay Sethi, future prospects @ 30% are to be awarded – Thus,multiplicand for computing the compensation is Rs. 3,87,192 - 50%+ 30% = Rs.2,51,675 – Deceased was 40 years of age at the timeof his death, accordingly, the multiplier of 15 would be theappropriate multiplier as per Sarla Verma case. Loss of dependencyis Rs.2,51,675 x 15= Rs.37,75,125 – Amounts awarded underconventional heads also – Deduction of 50% by MACT and theHigh Court towards contributory negligence is affirmed – Totalcompensation of Rs.19,82,563/- awarded – Dependants have beenpursuing legal proceedings since the past 22 years – Interest @12%p.a. be paid on total compensatio n from the date of filing the claimpetition, till realization – Claimant No.1, widow of the deceased

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Asuffered permanent disability of 25% in this accident – Single-handedly raised her three minor children, and eked out her livelihoodthrough agricultural activity – 50% of the total compensation(inclusive of interest) be given to her and the balance 50% be dividedequally between the three children.

BDisposing of the appeals, the Court

HELD 1.1 The income of the deceased in 1984 as per hisEmployment Contract Form dated 21.08.1984, was 750 QatariRiyal p.m. This document was duly certified by the Indian Embassyat Doha. In the absence of any other evidence being produced byCthe Claimants, the income of the deceased would be required tobe computed by taking his base salary at 750 Qatari Riyal p.m. in1984 as a skilled labourer, as reflected in his EmploymentContract Form. A perusal of the passport entries of the deceasedreveal that he had continued to remain in employment for a periodof over 14 years in Qatar till he passed away in 1998. He wasDevidently doing fairly well, since there are numerous entries offoreign travel in his passport during the 14 years of his stay inDoha. By taking an increment of 10% per annum from 1984 till1998, the notional income of the deceased could be fixed at 2590Qatari Riyal p.m., which can be rounded off to 2600 Qatari RiyalEp.m. As per the exchange rate prevailing in 1998, 1 Qatari Riyalwas equivalent to 12.41 INR. Accordingly, the income of thedeceased would work out to 2600 x 12.41 = Rs. 32,266 p.m. i.e.Rs. 3,87,192 p.a. Even though in Sarla Verma, it was held that thededuction towards personal and living expenses should be 1/4th,if the number of dependant family members is four, in the presentFcase, 50% of the income of the deceased would be required tobe deducted, since he was living in a foreign country. Thedeceased had to maintain an establishment there, and incurexpenditure for the same in commensurate with the high cost ofliving in a foreign country. Therefore, the High Court rightlyGdeducted 50% of his income towards personal and livingexpenses. [Paras 9.1, 9.2][688-H; 689-A; 690-D-H; 691-A-B]

Sarla Verma & Ors. v. Delhi Transport Corporation &Anr. (2009) 6 SCC 121 : [2009] 5 SCR 1098 – reliedon.

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1.2 In the present case, the courts below failed to awardany amount towards future prospects. The deceased was just over40 years of age at the time of his death. As per the judgment ofthe Constitution Bench in Pranay Sethi, future prospects @30%are to be awarded for computing the compensation payable tothe Claimants. The multiplicand for computing the compensationwould therefore, work out to Rs. 3,87,192 – 50% + 30% =Rs. 2,51,675. The deceased Satpal Singh was 40 years of age atthe time of his death. Accordingly, the multiplier of 15 would bethe appropriate multiplier as per the table set out in Sarla Verma.Multiplying the multiplicand of Rs. 2,51,675 by the multiplier of15, the loss of dependency payable to the Claimants would workout to Rs. 37,75,125. Insofar as the conventional heads areconcerned, the deceased Satpal Singh left behind a widow andthree children as his dependants. On the basis of the judgmentsin Pranay Sethi and Magma General, the following amounts areawarded under the conventional heads :-

i) Loss of Estate: Rs. 15,000

ii) Loss of Consortium:

a) Spousal Consortium: Rs. 40,000

b) Parental Consortium: 40,000 x 3 = Rs. 1,20,000

iii) Funeral Expenses : Rs. 15,000

The deduction of 50% made by the MACT and the HighCourt towards contributory negligence is affirmed. [Paras 9.3 –9.8][691-C-H; 692-A]

National Insurance Co. Ltd. v. Pranay Sethi & Ors.(2017) 16 SCC 680 : [2017] 13 SCR 100 – followed.

Magma General Insurance Co. Ltd. v. Nanu Ram & Ors.

(2018) 18 SCC 130 – relied on.

1.3 Claimants are awarded compensation of Rs. 19,82,563.The deceased Satpal Singh had died on 18.11.1998. Hisdependants have been pursuing legal proceedings for grant ofcompensation since the past 22 years. As a consequence, Interest@12% p.a. be paid on the total compensation awarded, from thedate of filing the claim petition, till realization. The Claimant No.

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A1 i.e. widow of the deceased has suffered permanent disability of25% in this accident. She has single-handedly raised her threeminor children, and eked out her livelihood through agriculturalactivity. 50% of the total compensation (inclusive of interest) begiven to the Claimant No. 1 i.e. widow of the deceased, and thebalance 50% be divided equally between the three children.B[Paras 10, 13 and 14][692-A; 693-A-B]

Reshma Kumari & Ors. v. Madan Mohan & Anr. (2013)9 SCC 65; Munna Lal Jain & Ors. v. Vipin KumarSharma & Ors. (2015) 6 SCC 347 : [2015] 7 SCR 207;Royal Sundaram Alliance Insurance Co. Ltd. v. MandalaCYadagari Goud & Ors. (2019) 5 SCC 554 : [2019] 6SCR 941 – relied on.

General Manager, Kerala S.R.T.C., Trivandrum v.Susamma Thomas & Ors. (1994) 2 SCC 176;U.P.S.R.T.C. & Ors. v. Trilok Chandra & Ors. (1996) 4DSCC 362 : [1996] 2 Suppl. SCR 443; New IndiaAssurance Co. Ltd. v. Charlie & Ors. (2005) 10 SCC720 : [2005] 2 SCR 1173; Sube Singh & Ors. v. ShyamSingh (dead) & Ors. (2018) 3 SCC 18 : [2018] 1 SCR636; Sunita Tokas and Ors. v. New India Insurance Co.ELtd. and Ors. 2019 (11) SCALE 24 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2705

of 2020.

From the Judgment and Order dated 10.03.2014 of the High Courtof Punjab and Haryana at Chandigarh in FAO No. 2294 of 2001.

With

Civil Appeal No. 2706 of 2020.

Ravi Bakshi, Yash Pal Dhingra, Gagan Gupta, Ananth Mishra,Advs. for the appearing parties.

The Judgment of the Court was delivered by INDU MALHOTRA, J.

Leave granted.

1. The deceased – Satpal Singh was residing in Doha, Qatar since1984. The Employment Contract Form of the deceased dated 21.08.1984revealed that he was engaged as a labourer initially for a period of oneyear on a salary of 750 Qatari Riyal p.m., and continued to live in Qatarwhere he was employed, till he passed away in a motor vehicle accidentin India in 1998.

2. Satpal Singh was visiting India in November, 1998. On18.11.1998, he was riding a scooter, with his wife as the pillion rider,when he met with an accident with a Maruti car bearing No. CH-01-M-6284 coming from the opposite direction.

FIR No. 204 dated 18.11.1998 was lodged u/S. 304A, 279, 337,427 IPC at P.S. Sadar, Rajpura against the driver and owner of theoffending car.

The FIR was lodged on the statement of Satinder Kaur – widowof the deceased, wherein she had stated that the accident had occurreddue to the rash and negligent driving of the driver of the Maruti car. Itwas further stated that the accident took place while her husband wasover-taking a tractor-trolley, when the Maruti car was coming at a highspeed from the opposite side. This led to the accident, and caused thedeath of Satpal Singh on the spot.

The Claimant No. 1 i.e. wife of the deceased was also seriouslyinjured. Her right leg and jaw were fractured. The Claimant No. 1remained in hospital for over a month. A rod was inserted in her leg, and

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Aremained in plaster for about 7 to 8 months. The accident led to 25%permanent disability, which is borne out from the Disability Certificateissued by the Civil Surgeon, Patiala.

3. Claim Petition bearing M.A.C. Application No. 152 was filedbefore the MACT, Patiala (Punjab) on 24.12.1998 u/S. 166 of the MotorBVehicles Act, 1988 by the widow of the deceased, on behalf of herselfand her 3 minor children for compensation on the death of her husband.The Claimants prayed for compensation of Rs. 50 lacs, alongwith Interest@18% p.a. to be paid jointly and severally by the Insurance Company,and the driver and owner of the Maruti car.

C3.1.A copy of the FIR was placed before the MACT, as alsothe Post Mortem Report which recorded the serious headinjuries caused by the road accident on the deceased.

3.2. The Claimants filed a photocopy of the Employment ContractForm dated 10.07.1984 certified by the Indian Embassy atDDoha, which records the engagement of the deceased as alabourer by the firm Ali Al Fayyad Trading Contracting Est.,Doha on a salary of 750 Qatari Riyal p.m., when he firstshifted to Qatar.

3.3. The Claimants also placed on record a letter datedE27.06.1997 purported to have been issued by his employer– the High Speed Group to the Counsellor, New ZealandConsulate for issuance of a visa. It was stated that theGeneral Manager of their company, Mr. Satpal HarbansSingh was intending to spend his annual vacation duringJune – August 1997 in New Zealand, and had been employedFby this organization since 1984, and was now drawing asalary of $ 6,700 p.m.

It is relevant to note that this letter was not attested bythe Indian Embassy at Doha.

3.4. The Claimants placed on record the Passport of theGdeceased, which reveals his date of birth as 10.08.1958.The deceased was a little over 40 years of age at the timeof the accident.

The passport entries reveal frequent foreign travel duringthe period 1986 till 1998 when he expired.H

4. The MACT vide Award dated 30.03.2001 held that a perusalof the first statement made by Claimant No. 1 – widow of the deceasedin the FIR, revealed that her husband was over-taking a tractor–trolleywhen the accident occurred, because the Maruti car was coming at ahigh speed from the opposite side. Consequently, the MACT held that itwas a case of contributory negligence on the part of the deceased SatpalSingh, as also on the part of the driver of the Maruti car.

4.1. The MACT applied the multiplier of 13, since the deceasedwas a little over 40 years of age at the time of his death.

4.2. With respect to the income of the deceased, the MACTheld that the letter dated 27.06.1997 issued by the HighSpeed Group, had not been proved by the Claimants, norwas it attested by the Indian Embassy at Doha, and thereforerefused to take it into consideration.

4.3. The MACT assumed that the income of the deceased SatpalSingh should be assessed just as an ordinary skilled worker,and assessed his income at Rs. 4,000 p.m. The amount ofdependency was taken as Rs. 2,500 p.m. x 12 x 13 =Rs. 3.90 lacs. Since it was a case of contributory negligence,the compensation was reduced by 50%, which worked outto Rs. 1.80 lacs. An amount of Rs. 10,000 was awardedtowards funeral expenses.

The compensation of Rs. 1,90,000 would carry Interest@ 9% p.a. from the date of filing the claim, till the date ofpayment.

4.4. The MACT held all three respondents i.e. the driver of theMaruti car, the owner of the car, and the Insurance Companyliable to pay the compensation awarded, jointly and severally.

5. Aggrieved by the aforesaid Judgment, the Claimants filed anAppeal being F.A.O. No. 2294/2001 before the High Court for furtherenhancement.

5.1. The High Court vide the impugned Judgment and Orderdated 10.03.2014 upheld the findings of the MACT regardingcontributory negligence.

5.2. With respect to the income of the deceased, the High Courtproceeded on the basis of the letter dated 27.06.1997 issued A

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by the High Speed Group, , wherein it was stated that SatpalSingh was working as a General Manager, and drawing asalary of $ 6,700 p.m. which would be equivalent toRs. 2,68,000 p.m. at the time when the claim was filed.

5.3. The High Court assessed the compensation on the basis ofthe income at Rs. 2,68,000 p.m. and adopted the multiplierof 12.

The contribution to the family was fixed at 50% of hisincome, which would approximately be Rs. 1,34,000 p.m.

Rs. 50,000 was awarded towards loss of estate, andRs. 10,000 towards funeral expenses.

On this basis, the total compensation payable to theClaimants was computed at Rs. 96,78,000 after making apartial abatement of 50% towards contributory negligence.

The High Court held that since 50% of the income wasprovided to the wife and children, it was not necessary toprovide for loss of consortium, and loss of love and affection.

5.4. The High Court held the Insurance Company to be liable topay the compensation, which would be distributed equallybetween the widow and children of the deceased. Theenhanced amount of compensation would carry Interest@7.5% p.a. from the date of filing the claim, till realization.

6. The Appellant – Insurance Company filed SLP (Civil) No. 28548/2014 to challenge the impugned Judgment.

The Claimants also filed an SLP bearing SLP (Civil) No. 12520/2015 claiming further enhancement of compensation.

7. We have perused the pleadings and the documentary evidenceplaced on record before the Courts below, and have considered the oralsubmissions made by the Counsel for the parties.

We are of the view that the judgments of both the MACT and theHigh Court are liable to be set aside, and the compensation is required tobe awarded in accordance with the law expounded by this Court invarious decisions.

8. Relevant principles for assessment of compensation incases of death as evolved by judicial dicta.

The criteria which are to be taken into consideration for assessingcompensation in the case of death, are : (i) the age of the deceased atthe time of his death; (ii) the number of dependants left behind by thedeceased; and (iii) the income of the deceased at the time of his death.

In Sarla Verma & Ors. v. Delhi Transport Corporation & Anr.,[1]this Court held that to arrive at the loss of dependency, the tribunal oughtto take into consideration three factors :–

i)Additions/deductions to be made for arriving at the income;

ii) The deduction to be made towards the personal living expensesof the deceased; and

iii) The multiplier to be applied with reference to the age of thedeceased.

In order to provide uniformity and consistency in awardingcompensation, the following steps are required to be followed :–

“Step 1 (Ascertaining the multiplicand)

The income of the deceased per annum should be determined.Out of the said income a deduction should be made in regardto the amount which the deceased would have spent on himselfby way of personal and living expenses. The balance, whichis considered to be the contribution to the dependant family,constitutes the multiplicand.

Step 2 (Ascertaining the multiplier)

Having regard to the age of the deceased and period of activecareer, the appropriate multiplier should be selected.This doesnot mean ascertaining the number of years he would havelived or worked but for the accident. Having regard to severalimponderables in life and economic factors, a table ofmultipliers with reference to the age has been identified bythis Court. The multiplier should be chosen from the said tablewith reference to the age of the deceased.

1 (2009) 6 SCC 121.

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SUPREME COURT REPORTS

AStep 3 (Actual calculation)

The annual contribution to the family (multiplicand) whenmultiplied by such multiplier gives the ‘loss of dependency’ tothe family. Thereafter, a conventional amount in the range of--Rs. 5,000/ to Rs. 10,000/ may be added as loss of estate.BWhere the deceased is survived by his widow, another--conventional amount in the range of 5,000/ to 10,000/should be added under the head of loss of consortium.Butno amount is to be awarded under the head of pain, sufferingor hardship caused to the legal heirs of the deceased.

CThe funeral expenses, cost of transportation of the body (ifincurred) and cost of any medical treatment of the deceasedbefore death (if incurred) should also added.”

(a) Deduction for personal and living expensesD

The personal and living expenses of the deceased should bededucted from the income, to arrive at the contribution to the family. InSarla Verma (supra) (paras 30, 31 and 32), this Court took the viewthat it was necessary to standardize the deductions to be made underthe head personal and living expenses of the deceased.EAccordingly, it was held that :

•where the deceased was married, the deduction towardspersonal and living expenses should be 1/3[rd] if the number ofdependant family members is two to three; F•1/4[th] if the number of dependant family members is four to six;and •1/5[th] if the number of dependant family members exceeds six.

•If the deceased was a bachelor, and the claim was filed by theparents, the deduction would normally be 50% as personal andGliving expenses of the bachelor.

Subject to evidence to the contrary, the father was likelyto have his own income, and would not be considered to be adependant. Hence, the mother alone will be considered to be adependant.

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In the absence of any evidence to the contrary, brothersand sisters of the deceased bachelor would not be consideredto be dependants, because they would usually either beindependent and earning, or married, or dependant on the father.

Thus, even if the deceased was survived by parentsand siblings, only the mother would be considered to be adependant. The deduction towards personal expenses of abachelor would be 50%, and 50% would be the contribution tothe family.

• However, in a case where the family of the bachelor was largeand dependant on the income of the deceased, as in a casewhere he had a widowed mother, and a large number ofyounger non-earning sisters or brothers, his personal and livingexpenses could be restricted to 1/3[rd], and contribution to thefamily be taken as 2/3[rd].

A three-judge bench in Reshma Kumari & Ors. v. Madan Mohan& Anr.,[2] affirmed the standards fixed in Sarla Verma (supra) with respectto the deduction for personal and living expenses, and held that thesestandards must ordinarily be followed, unless a case for departure ismade out. The Court held :

“41. The above does provide guidance for the appropriatededuction for personal and living expenses. One must bearin mind that the proportion of a man’s net earnings that hesaves or spends exclusively for the maintenance of othersdoes not form part of his living expenses but what he spendsexclusively on himself does. The percentage of deduction onaccount of personal and living expenses may vary withreference to the number of dependant members in the familyand the personal living expenses of the deceased need notexactly correspond to the number of dependants.

42. In our view, the standards fixed by this Court in SarlaVerma 2009 (6) SCC 121 on the aspect of deduction forpersonal living expenses in paragraphs 30, 31 and 32 mustordinarily be followed unless a case for departure in thecircumstances noted in the preceding para is made out.”

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[2020] 5 S.C.R.

A43. In what we have discussed above, we sum up ourconclusions as follows:

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43.6. Insofar as deduction for personal and living expenses is concerned, it is directed that the Tribunals shall ordinarilyBfollow the standards prescribed in paragraphs 30, 31 and 32of the judgment in Sarla Verma 2009 (6) SCC 121 subject tothe observations made by us in para 38 above.…”

A Constitution Bench of this Court in National Insurance Co.CLtd. v. Pranay Sethi & Ors.,[3] held that the standards fixed in SarlaVerma (supra) would provide guidance for appropriate deduction towardspersonal and living expenses, and affirmed the conclusion in para 43.6of Reshma Kumari (supra).

D(b) Determination of Multiplier

With respect to the multiplier, the Court in Sarla Verma (supra),prepared a chart for fixing the applicable multiplier in accordance withthe age of the deceased, after considering the judgments in GeneralManager, Kerala S.R.T.C., Trivandrum v. Susamma Thomas & Ors.,[4]U.P.S.R.T.C. & Ors. v. Trilok Chandra & Ors.,[5]and New IndiaEAssurance Co. Ltd. v. Charlie & Ors.[6]

The relevant extract from the said chart i.e. Column 4 has beenset out hereinbelow for ready reference :–

3 (2017) 16 SCC 680.

4 (1994) 2 SCC 176.

5 (1996) 4 SCC 362.

H6 (2005) 10 SCC 720.

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The Court in Sarla Verma (supra) held :–

“42. We therefore hold that the multiplier to be used shouldbe as mentioned in column (4) of the Table above(preparedby applying Susamma Thomas, Trilok Chandra and Charlie),which starts with an operative multiplier of 18 (for the agegroups of 15 to 20 and 21 to 25 years), reduced by one unitfor every five years, that is M-17 for 26 to 30 years, M-16for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to45 years, and M-13 for 46 to 50 years, then reduced by twounits for every five years, that is, M-11 for 51 to 55 years,M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for66 to 70 years.”

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In Reshma Kumari (supra), this Court affirmed Column 4 of thechart prepared in Sarla Verma (supra), and held that this would provideuniformity and consistency in determining the multiplier to be applied.The Constitution Bench in Pranay Sethi (supra) affirmed the chartfixing the multiplier as expounded in Sarla Verma (supra), and held :–

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“44. At this stage, we must immediately say that insofar as theaforesaid multiplicand/multiplier is concerned, it has to beaccepted on the basis of income established by the legalrepresentatives of the deceased. Future prospects are to beadded to the sum on the percentage basis and “income” meansactual income less than the tax paid. The multiplier has alreadybeen fixed in Sarla Verma which has been approved in ReshmaKumari with which we concur.

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59.6. The selection of multiplier shall be as indicated in theTable in Sarla Verma read with paragraph 42 of thatjudgment.”

(c) Age of the deceased must be the basis for determiningBthe multiplier even in case of a bachelor.

In Sarla Verma (supra), this Court held that the multiplier shouldbe determined with reference to the age of the deceased. This wassubsequently affirmed in Reshma Kumari (supra), and followed in aline of decisions.

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A three-judge bench in Munna Lal Jain & Ors. v. Vipin KumarSharma & Ors.,[7] held that the issue had been decided in Reshma Kumari(supra), wherein this Court held that the multiplier must be with referenceto the age of the deceased. The decision in Munna Lal Jain (supra)was followed by another three-judge bench of this Court in Sube SinghD& Ors. v. Shyam Singh (dead) & Ors.[8]

The Constitution Bench in National Insurance Company Limitedv. Pranay Sethi & Ors.,[9] affirmed the view taken in Sarla Verma (supra)and Reshma Kumari (supra), and held that the age of the deceasedshould be the basis for applying the multiplier.

Another three-judge bench in Royal Sundaram AllianceInsurance Co. Ltd. v. Mandala Yadagari Goud & Ors.,[10] traced outthe law on this issue, and held that the compensation is to be computedbased on what the deceased would have contributed to support thedependants. In the case of the death of a married person, it is an acceptedFnorm that the age of the deceased would be taken into account. Thus,even in the case of a bachelor, the same principle must be applied.

The aforesaid legal position has recently been re-affirmed by thisCourt in Sunita Tokas and Ors. v. New India Insurance Co. Ltd. andOrs.[11]

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7 (2015) 6 SCC 347.8 (2018) 3 SCC 18.9 (2017) 16 SCC 680.10 (2019) 5 SCC 554.H11 2019 (11) SCALE 24.

(d) Future Prospects

In the wake of increased inflation, rising consumer prices, andgeneral standards of living, future prospects have to be taken intoconsideration, not only with respect to the status or educationalqualifications of the deceased, but also other relevant factors such ashigher salaries and perks which are being offered by private companiesthese days. The dearness allowance and perks from which the familywould have derived monthly benefit, are required to be taken intoconsideration for determining the loss of dependency.

In Sarla Verma (supra), this Court held :

“24. In Susamma Thomas, this Court increased the income bynearly 100%, in Sarla Dixit, the income was increased onlyby 50% and in Abati Bezbaruah the income was increased bya mere 7%. In view of imponderables and uncertainties, weare in favour of adopting as a rule of thumb, an addition of50% of actual salary to the actual salary income of thedeceased towards future prospects, where the deceased hada permanent job and was below 40 years. [Where the annualincome is in the taxable range, the words ‘actual salary’should be read as ‘actual salary less tax’]. The additionshould be only 30% if the age of the deceased was 40 to 50years. There should be no addition, where the age of deceasedis more than 50 years. Though the evidence may indicate adifferent percentage of increase, it is necessary to standardizethe addition to avoid different yardsticks being applied ordifferent methods of calculations being adopted. Where the-deceased was selfemployed or was on a fixed salary (withoutprovision for annual increments etc.), the courts will usuallytake only the actual income at the time of death. A departuretherefrom should be made only in rare and exceptional casesinvolving special circumstances.”

In Pranay Sethi (supra), the Constitution Bench evaluated allthe judicial precedents on the issue of future prospects including SarlaVerma (supra), and devised a fixed standard for granting future prospects.It was held :

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“57. Having bestowed our anxious consideration, we aredisposed to think when we accept the principle ofstandardization, there is really no rationale not to apply thesaid principle to the self-employed or a person who is on afixed salary. To follow the doctrine of actual income at thetime of death and not to add any amount with regard to futureprospects to the income for the purpose of determination ofmultiplicand would be unjust. The determination of incomewhile computing compensation has to include future prospectsso that the method will come within the ambit and sweep ofjust compensation as postulated Under Section 168 of theAct.In case of a deceased who had held a permanent jobwith inbuilt grant of annual increment, there is an acceptablecertainty. But to state that the legal representatives of adeceased who was on a fixed salary would not be entitled tothe benefit of future prospects for the purpose of computationof compensation would be inapposite. It is because thecriterion of distinction between the two in that event wouldbe certainty on the one hand and staticness on the other. Onemay perceive that the comparative measure is certainty onthe one hand and uncertainty on the other but such aperception is fallacious. It is because the price rise does affecta self-employed person; and that apart there is always anincessant effort to enhance one’s income for sustenance. Thepurchasing capacity of a salaried person on permanent jobwhen increases because of grant of increments and payrevision or for some other change in service conditions, thereis always a competing attitude in the private sector to enhancethe salary to get better efficiency from the employees. Similarly,a person who is self-employed is bound to garner his resourcesand raise his charges/fees so that he can live with samefacilities. To have the perception that he is likely to remainstatic and his income to remain stagnant is contrary to thefundamental concept of human attitude which always intendsto live with dynamism and move and change with the time.Though it may seem appropriate that there cannot be certaintyin addition of future prospects to the existing income unlikein the case of a person having a permanent job, yet the saidperception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regardsthe percentage that is meant for or applied to in respect ofthe legal representatives who claim on behalf of the deceasedwho had a permanent job than a person who is self-employedor on a fixed salary. But not to apply the principle ofstandardization on the foundation of perceived lack ofcertainty would tantamount to remaining oblivious to themarrows of ground reality. And, therefore, degree-test isimperative. Unless the degree-test is applied and left to theparties to adduce evidence to establish, it would be unfairand inequitable. The degree-test has to have the inbuilt conceptof percentage. Taking into consideration the cumulativefactors, namely, passage of time, the changing society,escalation of price, the change in price index, the humanattitude to follow a particular pattern of life, etc., an additionof 40% of the established income of the deceased towardsfuture prospects and where the deceased was below 40 yearsan addition of 25% where the deceased was between the ageof 40 to 50 years would be reasonable.

59. The controversy does not end here. The question stillremains whether there should be no addition where the ageof the deceased is more than 50 years.Sarla Verma thinks itappropriate not to add any amount and the same has beenapproved in Reshma Kumari. Judicial notice can be taken ofthe fact that salary does not remain the same. When a personis in a permanent job, there is always an enhancement due toone reason or the other. To lay down as a thumb Rule thatthere will be no addition after 50 years will be an unacceptableconcept. We are disposed to think, there should be an additionof 15% if the deceased is between the age of 50 to 60 yearsand there should be no addition thereafter. Similarly, in case-of selfemployed or person on fixed salary, the addition shouldbe 10% between the age of 50 to 60 years. The aforesaidyardstick has been fixed so that there can be consistency inthe approach by the tribunals and the courts.

59. In view of the aforesaid analysis, we proceed to recordour conclusions:

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A59.3. While determining the income, an addition of 50% ofactual 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 addition shouldbe 30%, if the age of the deceased was between 40 to 50 years.In case the deceased was between the age of 50 to 60 years,Bthe addition should be 15%. Actual salary should be read asactual salary less tax.

59.4. 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 40Cyears. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased wasbetween the age of 50 to 60 years should be regarded as thenecessary method of computation. The established incomemeans the income minus the tax component.…”

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(e) Three Conventional Heads

In Pranay Sethi (supra), the Constitution Bench held that in deathcases, compensation would be awarded only under three conventionalEheads viz. loss of estate, loss of consortium and funeral expenses.

The Court held that the conventional and traditional heads, cannotbe determined on percentage basis, because that would not be anacceptable criterion. Unlike determination of income, the said heads haveto be quantified, which has to be based on a reasonable foundation. Itwas observed that factors such as price index, fall in bank interest,Fescalation of rates, are aspects which have to be taken into consideration.The Court held that reasonable figures on conventional heads, namely,loss of estate, loss of consortium and funeral expenses should beRs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The Court wasof the view that the amounts to be awarded under these conventionalGheads should be enhanced by 10% every three years, which will bringconsistency in respect of these heads.

a) Loss of Estate – Rs. 15,000 to be awarded

b) Loss of Consortium

Loss of Consortium, in legal parlance, was historically given anarrow meaning to be awarded only to the spouse i.e. the right of thespouse to the company, care, help, comfort, guidance, society, solace,affection and sexual relations with his or her mate. The loss ofcompanionship, love, care and protection, etc., the spouse is entitled toget, has to be compensated appropriately. The concept of non-pecuniarydamage for loss of consortium is one of the major heads for awardingcompensation in various jurisdictions such as the United States ofAmerica, Australia, etc. English courts have recognised the right of aspouse to get compensation even during the period of temporarydisablement.

In Magma General Insurance Co. Ltd. v. Nanu Ram & Ors.,[12]this Court interpreted “consortium” to be a compendious term, whichencompasses spousal consortium, parental consortium, as well as filialconsortium. The right to consortium would include the company, care,help, comfort, guidance, solace and affection of the deceased, which isa loss to his family. With respect to a spouse, it would include sexualrelations with the deceased spouse.

Parental consortium is granted to the child upon the prematuredeath of a parent, for loss of parental aid, protection, affection, society,discipline, guidance and training.

Filial consortium is the right of the parents to compensation in thecase of an accidental death of a child. An accident leading to the deathof a child causes great shock and agony to the parents and family of thedeceased. The greatest agony for a parent is to lose their child duringtheir lifetime. Children are valued for their love and affection, and theirrole in the family unit.

Modern jurisdictions world-over have recognized that the valueof a child’s consortium far exceeds the economic value of thecompensation awarded in the case of the death of a child. Mostjurisdictions permit parents to be awarded compensation under loss ofconsortium on the death of a child. The amount awarded to the parentsis the compensation for loss of love and affection, care and companionshipof the deceased child.

12 (2018) 18 SCC 130.

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The Motor Vehicles Act, 1988 is a beneficial legislation which hasbeen framed with the object of providing relief to the victims, or theirfamilies, in cases of genuine claims. In case where a parent has losttheir minor child, or unmarried son or daughter, the parents are entitledto be awarded loss of consortium under the head of Filial Consortium.

BParental Consortium is awarded to the children who lose the careand protection of their parents in motor vehicle accidents.

The amount to be awarded for loss consortium will be as per theamount fixed in Pranay Sethi (supra).

At this stage, we consider it necessary to provide uniformity withCrespect to the grant of consortium, and loss of love and affection. SeveralTribunals and High Courts have been awarding compensation for bothloss of consortium and loss of love and affection. The Constitution Benchin Pranay Sethi (supra), has recognized only three conventional headsunder which compensation can be awarded viz. loss of estate, loss ofDconsortium and funeral expenses.

In Magma General (supra), this Court gave a comprehensiveinterpretation to consortium to include spousal consortium, parentalconsortium, as well as filial consortium. Loss of love and affection iscomprehended in loss of consortium.

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The Tribunals and High Courts are directed to award compensationfor loss of consortium, which is a legitimate conventional head. There isno justification to award compensation towards loss of love and affectionas a separate head.

c) Funeral Expenses – Rs. 15,000 to be awarded F

The aforesaid conventional heads are to be revised every threeyears @10%.

9. We will now apply the law laid down by this Court in the aforesaidjudgments, to compute the compensation payable to the dependants ofthe deceased Satpal Singh in the present case.G

9.1. We will first deal with the issue of assessing the income ofthe deceased. The MACT assumed that the deceased wasa skilled worker, and fixed his income at Rs. 4,000 p.m.

It is pertinent to note that the income of the deceased in1984 as per his Employment Contract Form dated H

21.08.1984, was 750 Qatari Riyal p.m. This document wasduly certified by the Indian Embassy at Doha.

The accident occurred on 18.11.1998, which is 15 yearsafter he shifted to Doha. The MACT could not haveassumed the income of the deceased to have remained atRs. 4,000 p.m. after having worked for over 14 years inDoha.

The High Court has also erroneously awardedcompensation on the basis of the letter dated 27.06.1997purported to have been written by the High Speed Group tothe Counselor, New Zealand Consulate for issuance of avisa to the deceased Satpal Singh who was engaged bytheir organization since 1984, and was drawing a salary of$ 6,700 p.m.

The Insurance Company has seriously disputed theauthenticity of this letter.

We have perused the said letter, and are inclined toaccept the submission made on behalf of the InsuranceCompany, that the said document was not attested by theIndian Embassy at Doha, as per the Diplomatic & ConsularOffices Oaths and Fees Act, 1948.

The said document was not proved by the Claimants,and cannot form the basis of computing the income of thedeceased.

The letter dated 27.06.1997 seems to be suspicious fortwo other grounds. One, as per the Employment ContractForm dated 21.08.1984 certified by the Indian Embassy atDoha, the deceased was engaged by the firm Ali Al FayyadTrading Contracting Est., Doha in 1984. The letter dated27.06.1997 issued by the High Speed Group, stated that thedeceased was employed with them since 1984. This leadsto a serious doubt about the authenticity of the letter.Furthermore, the salary is mentioned in U.S. Dollars, ratherthan Qatari Riyal, even though the High Speed Group is alocal company in Qatar.

Second, the letter dated 27.06.1997 was addressed tothe Counselor, New Zealand Consulate for a visa to be AB

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issued to the deceased for his annual vacation to NewZealand during the period June – August, 1997. The passportentries however, do not show that the deceased travelledto New Zealand.

Consequently, we have serious doubts about theauthenticity and veracity of the letter dated 27.06.1997, anddecline to make it the basis for computing the income ofthe deceased at the time of his death.

The High Court by relying on the letter dated 27.06.1997,awarded an amount of Rs. 1,93,56,000 to the Claimants,which after reducing by 50% on account of contributorynegligence, worked out to Rs. 96,78,000. It is pertinent tonote that the Claimants had prayed for an amount of Rs. 50lacs as compensation in their claim petition before theMACT. The High Court has committed an error in awardingsuch an exorbitant amount on the basis of an unverifieddocument, the authenticity of which was seriously disputed.

In the absence of any other evidence being producedby the Claimants, the income of the deceased would berequired to be computed by taking his base salary at 750Qatari Riyal p.m. in 1984 as a skilled labourer, as reflectedin his Employment Contract Form.

A perusal of the passport entries of the deceased revealthat he had continued to remain in employment for a periodof over 14 years in Qatar till he passed away in 1998. Hewas evidently doing fairly well, since there are numerousentries of foreign travel in his passport during the 14 yearsof his stay in Doha. By taking an increment of 10% perannum from 1984 till 1998, the notional income of thedeceased could be fixed at 2590 Qatari Riyal p.m., whichcan be rounded off to 2600 Qatari Riyal p.m. As per theexchange rate prevailing in 1998, 1 Qatari Riyal wasequivalent to 12.41 INR. Accordingly, the income of thedeceased would work out to 2600 x 12.41 =Rs. 32,266 p.m. i.e. Rs. 3,87,192 p.a.

9.2. Even though in Sarla Verma (supra), it was held that thededuction towards personal and living expenses should be

1/4[th], if the number of dependant family members is four, inthe present case, we feel that 50% of the income of thedeceased would be required to be deducted, since he wasliving in a foreign country.

The deceased had to maintain an establishment there,and incur expenditure for the same in commensurate withthe high cost of living in a foreign country. Therefore, weare of the view that the High Court rightly deducted 50%of his income towards personal and living expenses.

9.3. In the present case, the courts below failed to award anyamount towards future prospects. The deceased SatpalSingh was just over 40 years of age at the time of his death.As per the judgment of the Constitution Bench in PranaySethi (supra), future prospects @30% are to be awardedfor computing the compensation payable to the Claimants.

9.4. The multiplicand for computing the compensation wouldtherefore, work out to Rs. 3,87,192 – 50% + 30% =Rs. 2,51,675.

9.5. The deceased Satpal Singh was 40 years of age at the timeof his death. Accordingly, the multiplier of 15 would be theappropriate multiplier as per the table set out in Sarla Verma(supra).

9.6. Multiplying the multiplicand of Rs. 2,51,675 by the multiplierof 15, the loss of dependency payable to the Claimants wouldwork out to Rs. 37,75,125.

9.7. Insofar as the conventional heads are concerned, thedeceased Satpal Singh left behind a widow and three childrenas his dependants. On the basis of the judgments in PranaySethi (supra) and Magma General (supra), the followingamounts are awarded under the conventional heads :-

i)Loss of Estate: Rs. 15,000

ii) Loss of Consortium:

a) Spousal Consortium: Rs. 40,000

b) Parental Consortium: 40,000 x 3 = Rs. 1,20,000

iii) Funeral Expenses : Rs. 15,000

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692SUPREME COURT REPORTS

[2020] 5 S.C.R.

A9.8. We affirm the deduction of 50% made by the MACT andthe High Court towards contributory negligence.

10. In light of the aforesaid discussion, the Claimants are awardedcompensation as follows :

11. This Court vide Order dated 13.10.2014 had stayed theoperation of the impugned judgment subject to the Appellant – InsuranceGCompany depositing a sum of Rs. 10 lacs before the Trial Court. TheClaimants were granted liberty to withdraw the same.

12. The Appellant – Insurance Company is directed to pay thebalance amount of compensation within a period of twelve weeks’ fromthe date of this judgment.H

13. The deceased Satpal Singh had died on 18.11.1998. Hisdependants have been pursuing legal proceedings for grant ofcompensation since the past 22 years. As a consequence, we deem itappropriate to direct that Interest @12% p.a. be paid on the totalcompensation awarded, from the date of filing the claim petition, tillrealization.

14. The Claimant No. 1 i.e. widow of the deceased has sufferedpermanent disability of 25% in this accident. She has single-handedlyraised her three minor children, and eked out her livelihood throughagricultural activity.

We direct that 50% of the total compensation (inclusive of interest)be given to the Claimant No. 1 i.e. widow of the deceased, and thebalance 50% be divided equally between the three children.

15. The Civil Appeals are disposed of in the aforesaid terms.

Divya Pandey

Appeals disposed of.

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