MUNUSAMY & ORS. versus THE MANAGING DIRECTOR, TAMIL NADU STATE TRANSPORT CORPORATION (VILLUPURAM) LTD. on 9 February 2018

[2018] 2 S.C.R. 629

MUNUSAMY & ORS.

v.

THE MANAGING DIRECTOR, TAMIL NADUSTATE TRANSPORT CORPORATION (VILLUPURAM) LTD.

(Civil Appeal No. 1754 of 2018)

FEBRUARY 09, 2018

[DIPAK MISRA CJI, A. M. KHANWILKAR ANDDR. D. Y. CHANDRACHUD, JJ.]

Motor Vehicles – Motor Accident Claim – Compensation –Computation of – Claim for enhancement – Deceased, around 21years of age, was riding a motorcycle along with his friend whenthey collided with a bus belonging to respondent-Corporation –Plea of appellants that compensation granted by High Court befurther enhanced as High Court did not provide for future prospectswhile computing the compensation amount under the head ‘loss ofdependency’ – Held: Applying the dictum of Constitution Bench inNational Insurance Company Ltd. case, the claim of appellants forgrant of future prospects at the rate of 40% of the established incomeis justified – High Court took the earning of deceased at the relevanttime as Rs.4,000/- p.m., but did not provide 40% towards futureprospects on the established income of the deceased – Thus, in thefacts of the present case, monthly loss of dependency would beRs.4,000 + 1,600 = Rs.5,600/- – Amount awarded by High Courttowards loss of dependency accordingly stands modified fromRs.4,32,000/- to Rs.6,04,800/- with interest @ 9% p.a. – Respondentto deposit the entire award amount with interest @ 9% p.a., less theamount already deposited if any – Appellants shall be entitled tothe compensation in the proportion specified by Tribunal.

Allowing the appeal, the Court

HELD: 1.1 Applying the dictum of the Constitution Benchdecision in National Insurance Company Ltd. case, the appellantsare justified in insisting for grant of future prospects at the rateof 40% of the established income. The High Court had held thatthe earning of the deceased at the relevant time could be takenas Rs.4,000/- per month. The High Court did not provide 40%

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630SUPREME COURT REPORTS

[2018] 2 S.C.R.

Atowards future prospects on the established income of thedeceased. Thus, the monthly loss of dependency, in the facts ofthe present case would be Rs.4,000 + 1,600 = Rs.5,600/-. In otherwords, instead of amount awarded by the High Court towardsloss of dependency in the sum of Rs.4,32,000/-, the same wouldstand modified to Rs.6,04,800/- along with interest at the rate ofB9% per annum. Other directions given by the High Court inrespect of other heads are not being disturbed. Accordingly,respondent Transport Corporation must deposit the additionalamount of compensation of Rs.1,72,800/- along with interest, asawarded, within a period of eight weeks from the date of receiptCof the copy of this judgment in the Court of Additional District &Sessions Judge, Fast Track Court-IV, Chennai (Motor AccidentClaims Tribunal, Chennai). [Paras 5, 6][634-F-H]

National Insurance Company Ltd. v. Pranay Sethi andOrs. AIR 2017 SC 5157– followed.D

1.2 The compensation awarded by the High Court isenhanced from Rs.5,01,500/- to Rs.6,74,300/- [Rupees six lakhseventy four thousand three hundred only]. The respondentTransport Corporation is directed to deposit the entire awardamount as indicated above with interest at 9% (nine percent)Eper annum less the amount already deposited if any, within a periodof eight weeks from the date of receipt of a copy of this judgmentand the appellants shall be entitled to the compensation in theproportion specified by the Tribunal. [Para 8][635-C-E]

Case Law ReferenceF

AIR 2017 SC 5157 followedPara 5

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1754of 2018.

From the Judgment and Order dated 16.04.2013 of the High Courtof Judicature at Madras in C.M.A. No. 2819 of 2012.

K. V. Jagdishvaran, Ms. G. Indira, Advs. for the Appellants.

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The Judgment of the Court was delivered by A

A. M. KHANWILKAR, J. 1. This appeal emanates from thejudgment and order passed by the High Court of Judicature at Madrasdated 16.04.2013 in C.M.A. No.2819 of 2012. The High Court allowedthe prayer for grant of enhanced compensation amount in favour of theappellants. The appellants seek further enhancement of compensationamount on the ground that the High Court has not provided for futureprospects, while computing the compensation amount. The appellantsrely upon the recent decision of the Constitution Bench of this Court inthe case of National Insurance Company Ltd. Vs. Pranay Sethi andOrs.[1]to buttress their submission.

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2. Before we deal with the grievance of the appellants, it is appositeto reproduce the relevant extract of the impugned judgment which readsthus:

“7. We have heard the learned counsel for the respondenton the above submission.

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8. In the absence of specific proof of employment, theTribunal rightly has taken the earning of the deceased atRs.4,000/- per month and deducted 50% towards personalexpenses since the deceased were bachelors. However, theproper multiplier to be adopted in the case must be 18, sincethe deceased were 21 and 20 years respectively. A sum ofRs.20,000/- to each of the claimants towards loss of love andaffection and a further sum of Rs.5,000/- towards transportexpenses were granted.

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9. Accordingly, in C.M.A. No.2819 of 2012 compensationpayable would be as follows:

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(a) Loss of DependencyRs.4,32,000/- (Rs.4,000/-×12×18)(b)Loss of love and affectionRs. 60,000/-(c)TransportRs. 5,000/-G(d)FuneralRs. 2,000/-(e)Loss of estateRs. 2,500/- Total=Rs.5,01,500/-”

1AIR 2017 SC 5157

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A3. On perusal of the judgment under appeal, it is evident that theHigh Court has not provided for future prospects while computing thecompensation amount under the head ‘loss of dependency’. Thenecessity to provide future prospects has been expounded by the Con-stitution Bench of this Court in National Insurance Company Ltd.(supra). It will be useful to reproduce paragraph No.59 of the saidBjudgment, which reads thus:

“59. 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 44 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 the Act.In case of a deceased who had held a permanent job withinbuilt 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 to C

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the 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 45 competing attitude in the private sector toenhance the salary to get better efficiency from the employees.Similarly, a person who is self-employed is bound to garnerhis resources and raise his charges/fees so that he can livewith same facilities. To have the perception that he is likely to F

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MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATETRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.]

remain static and his income to remain stagnant is contraryto the fundamental concept of human attitude which alwaysintends to live with dynamism and move and change with thetime. Though it may seem appropriate that there cannot becertainty in addition of future prospects to the existing incomeunlike in the case of a person having a permanent job, yetthe said perception does not really deserve acceptance. Weare inclined to think that there can be some degree ofdifference as regards the percentage that is meant for orapplied to in respect of the legal representatives who claimon behalf of the deceased who had a permanent job than aperson who is self-employed or on a fixed salary. But not toapply the principle of standardization on the foundation ofperceived lack of certainty would tantamount to remainingoblivious to the marrows of ground reality. And, therefore,degree-test is imperative. Unless the degree-test is appliedand left to the parties to adduce evidence to establish, it wouldbe unfair and inequitable. The degree-test has to have theinbuilt concept of 46 percentage. Taking into considerationthe cumulative factors, namely, passage of time, the changingsociety, escalation of price, the change in price index, thehuman attitude to follow a particular pattern of life, etc., anaddition of 40% of the established income of the deceasedtowards future prospects and where the deceased was below40 years an addition of 25% where the deceased was betweenthe age of 40 to 50 years would be reasonable.”

Again, in the concluding paragraph No.61 the Court observed thus:

“61. In view of the aforesaid analysis, we proceed to recordour conclusions:-

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(iii) 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 additionshould be 30%, if the age of the deceased was 48 between 40to 50 years. In case the deceased was between the age of 50to 60 years, the addition should be 15%. Actual salary shouldbe read as actual salary less tax.

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

4. On 03.03.2007, the deceased (Palani), who was only around21 years of age at the time, was riding a motorcycle bearing RegistrationNo. TN-22 AP 5092 along with his friend, one Haridass as a pillion rider,Cfrom Tambaram to Chengalpattu on GST Road, Maraimalai Nagar,opposite Vikram Hotel, when they collided with a bus bearing RegistrationNo. TN-21 N 0943 belonging to the respondent Transport Corporation,which was driven in a rash and negligent manner. The deceased wasunmarried and working as a contract worker in Hyundai Car Company,DSriperumbudur. Applying the dictum of the Constitution Bench referredto above, the appellants are justified in insisting for grant of futureprospects at the rate of 40% of the established income. The High Courthas held that the earning of the deceased at the relevant time can betaken as Rs.4,000/- per month. The High Court did not provide 40%towards future prospects on the established income of the deceased.EThus, the monthly loss of dependency, in the facts of the present casewould be Rs.4,000 + 1,600 = Rs.5,600/-.

5. In other words, instead of amount awarded by the High Courttowards loss of dependency in the sum of Rs.4,32,000/-, the same willstand modified to Rs.6,04,800/- (Rupees six lakh four thousand eightFhundred only) along with interest at the rate of 9% (nine percent) perannum. We are not disturbing the other directions given by the HighCourt in respect of other heads.

6. Accordingly, the respondent Transport Corporation mustdeposit the additional amount of compensation of Rs.1,72,800/- (RupeesGone lakh seventy two thousand eight hundred only) along with interest,as awarded in the preceding paragraph, within a period of eight weeksfrom the date of receipt of the copy of this judgment in the Court ofAdditional District & Sessions Judge, Fast Track Court-IV, Chennai(Motor Accident Claims Tribunal, Chennai).H

MUNUSAMY & ORS. v. THE MANAGING DIRECTOR, T. N. STATETRANSPORT CORPN.(VILLUPURAM) LTD. [A. M. KHANWILKAR, J.]

7. In other words, the compensation payable to the appellantswould be as follows:

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8. As a result, the Appeal stands allowed. The compensationawarded by the High Court is enhanced from Rs.5,01,500/- toRs.6,74,300/- [Rupees six lakh seventy four thousand three hundred only].The respondent Transport Corporation is directed to deposit the entireaward amount as indicated above with interest at 9% (nine percent) perannum less the amount already deposited if any, within a period of eightweeks from the date of receipt of a copy of this judgment and theappellants shall be entitled to the compensation in the proportionspecified by the Tribunal. The first and second appellants are entitled towithdraw the amount deposited upon verification of due application andthe share of the third appellant (minor) shall be deposited in any of thenationalised banks till she attains majority and the second claimant/motheris entitled to withdraw interest thereon once in three months towardsmeeting the needs of the minor. Upon turning 18, the minor appellant isentitled to withdraw her respective share.

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9. Accordingly, the appeal is allowed in the aforementioned termswith no order as to costs.

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Divya Pandey

Appeal allowed.

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